OFFERING MEMORANDUM Global Offering of up to ... - Nordex

OFFERING MEMORANDUM 

Oberhausen, Germany 

Global Offering of up to 36,000,000 Ordinary Bearer Shares 

without par value of Nordex AG 

Nordex Aktiengesellschaft, a stock corporation organized under the laws of the Federal Republic of Germany (‘‘Nordex 

AG’’, ‘‘Nordex’’ or the ‘‘Company’’), and its existing shareholders are offering an aggregate of 31,300,000 of Nordex’s 

ordinary bearer shares without par value having a calculated nominal value (rechnerischer Nennbetrag) of E1.00 per 

share (the ‘‘Offered Shares’’) (up to 36,000,000 Offered Shares if the over-allotment option referred to below is exercised 

in full). The Offered Shares are being offered in a public offering in Germany, in private placements outside Germany 

and the United States to non-U.S. persons in reliance on Regulation S under the United States Securities Act of 1933, as 

amended (the ‘‘Securities Act’’), and in the United States in reliance on Rule 144A under the Securities Act (‘‘Rule 144A’’) 

to ‘‘qualified institutional buyers’’ only (as defined in such rule) (the ‘‘Offering’’). 

Prior to the Offering, there has been no public market for the Offered Shares. The Offered Shares have been admitted to 

the regulated market (Geregelter Markt), for trading on the Neuer Markt segment, of the Frankfurt Stock Exchange. The 

Offer Price is E9 per Offered Share. 

INVESTING IN THE OFFERED SHARES INVOLVES RISKS. SEE ‘‘RISK FACTORS’’ BEGINNING ON PAGE 18. 

Offer Price E9 

Nordex’s existing shareholders, Borsig Energy GmbH and Nordvest A/S (the ‘‘Selling Shareholders’’), have granted 

Dresdner Kleinwort Wasserstein an option, exercisable for the account of the Managers for 30 days after the 

commencement of trading of the Offered Shares on the Neuer Markt, to purchase up to 4,700,000 additional Offered 

Shares at the Offer Price, solely to cover over-allotments, if any (the ‘‘Over-allotment Option’’). 

The Offered Shares have not been and will not be registered under the Securities Act and are being offered and 

sold outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act 

(‘‘Regulation S’’) and in the United States only to ‘‘qualified institutional buyers’’ in reliance on Rule 144A. 

Prospective purchasers are hereby notified that the seller of the Shares may be relying on the exemption from the 

provisions of Section 5 of the Securities Act provided by Rule 144A. The Offered Shares are not transferable 

except in accordance with the restrictions described under ‘‘Notice to Investors’’. 

The Offered Shares are offered severally by the Managers (as defined in ‘‘Underwriting and Sale’’) subject to receipt and 

acceptance by them and subject to their right to reject any order in whole or in part. It is expected that the delivery of 

the Offered Shares will be made on or about April 4, 2001 in book-entry form through the facilities of Clearstream 

Banking AG. 

JOINT LEAD MANAGERS 

Dresdner Kleinwort Wasserstein 

Sole Bookrunner 

Co-Managers 

BHF-BANK COMMERZBANK 

SECURITIES 

The date of this Offering Memorandum is March 30, 2001 

WestLB Panmure 

HypoVereinsbank

This Offering Memorandum (the ‘‘Offering Memorandum’’) is for use exclusively in connection with the 

offer and sale of the Offered Shares to investors outside the Federal Republic of Germany. 

In connection with the Offering, no dealer, salesman or any other person has been authorized to give 

any information, or to make any representation, other than those contained in this Offering 

Memorandum, and, if given or made, such information or representation must not be relied upon as 

having been authorized by Nordex or any Manager. Neither the delivery of this Offering Memorandum 

at any time nor any sale made hereunder shall, under any circumstances, create any implication that 

there has been no change in the affairs of Nordex since the date hereof or that the information set 

forth herein is correct as of any date subsequent to the date hereof. No representation or warranty, 

express or implied, is made by the Managers as to the accuracy or completeness of the information 

contained herein. In making an investment decision, prospective investors must rely on their own 

examination of Nordex and the terms of the Offering, including the merits and risks involved. Any 

reproduction or distribution of this Offering Memorandum, in whole or in part, and any disclosure of its 

contents or use of any information herein for any purpose, other than considering an investment in the 

Offered Shares offered hereby, is prohibited. Each offeree of the Offered Shares, by accepting delivery 

of this Offering Memorandum, agrees to the foregoing. 

This Offering Memorandum does not constitute an offer to sell or a solicitation of an offer to buy, nor 

shall there be any sale of, any Offered Shares to any person in any circumstances or in any jurisdiction 

in which it is unlawful to make such an offer, solicitation or sale. For a description of certain further 

restrictions on the offer and sale of the Offered Shares (see ‘‘The Offering — General Information’’). In 

addition, for a description of the transfer restrictions imposed, and the representations and 

acknowledgments that each person acquiring Shares will be deemed to make, with respect to the 

delivery of Offered Shares to investors in the Offering and in subsequent resales or other transfers, see 

‘‘Notice to Investors’’. Investors should be aware that they may be required to bear the financial risks of 

this investment for an indefinite period of time. 

THE OFFERED SHARES OFFERED IN THE OFFERING HAVE NOT BEEN RECOMMENDED BY OR APPROVED 

BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER FEDERAL OR STATE 

SECURITIES COMMISSION OR REGULATORY AUTHORITY OF OR IN THE UNITED STATES, NOR HAS ANY 

SUCH AUTHORITY REVIEWED OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING 

MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE UNDER THE LAWS 

OF THE UNITED STATES. 

No action has been or will be taken to permit a public offering in any jurisdiction other than Germany, 

where action would be required for that purpose. This Offering Memorandum may not be distributed in 

any jurisdiction except in accordance with the legal requirements applicable in such jurisdiction. 

This Offering Memorandum has not been approved as an investment advertisement pursuant to 

section 57 of the Financial Services Act 1986 and may not be issued or passed on in the United 

Kingdom except to a person who is of a kind described in Article 11(3) of the Financial Services Act 

(Investment Advertisements) (Exemptions) Order 1996. 

Notice to New Hampshire Residents 

Neither the fact that a registration statement or an application for a license has been filed under this 

chapter with the state of New Hampshire nor the fact that a security is effectively registered or a 

person is licensed in the state of New Hampshire constitutes a finding by the secretary of state that 

any document filed under RSA 421-B is true, complete and not misleading. Neither any such fact nor 

the fact that an exemption is available for a security or a transaction means that the secretary of state 

has passed in any way upon the merits or qualifications of or recommended or given approval to any 

person, security or transaction. It is unlawful to make, or cause to be made, to any prospective 

purchaser, customer or client any representation inconsistent with the provisions of this paragraph. 

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Forward-looking Information 

This Offering Memorandum includes ‘‘forward-looking statements’’ within the meaning of Section 27A of 

the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical 

facts included in this Offering Memorandum, including, without limitation, those regarding the Company’s 

financial position, business strategy, plans and objectives of management for future operations (including 

development plans and objectives relating to the Company’s products), are forward-looking statements. 

Such forward-looking statements involve known and unknown risks, uncertainties and other factors which 

may cause the actual results, performance or achievements of the Company or industry results to be 

materially different from any future results, performance or achievements expressed or implied by such 

forward-looking statements. Such forward-looking statements are based on numerous assumptions 

regarding the Company’s present and future business strategies and the environment in which the 

Company will operate in the future. Among the important factors that could cause the Company’s actual 

results, performance or achievements to differ materially from those in the forward-looking statements 

include, among others, ‘‘Reorganization of the Nordex Group’’, ‘‘Organizational Structure, Accounting, 

Management of Growth’’, ‘‘Dependence on Outside Suppliers’’, ‘‘Establishment of In-house Production of 

Rotor Blades’’ and ‘‘Dependence on a Key Product’’, in conjunction with ‘‘Governmental Regulation’’. 

Additional factors that could cause actual results, performance or achievements to differ materially 

include, but are not limited to, those discussed under ‘‘Risk Factors’’. These forward-looking statements 

speak only as of the date of this Offering Memorandum. The Company expressly disclaims any obligation or 

undertaking to release publicly any updates or revisions to any forward-looking statement contained 

herein to reflect any change in the Company’s expectations with regard thereto or any change in events, 

conditions or circumstances on which any such statement is based. 

Presentation of Financial Information 

The Pro Forma Consolidated Financial Statements for the fiscal years ended September 30, 1998, 1999 

and 2000 (the ‘‘IAS Pro Forma Consolidated Financial Statements’’) and the Pro Forma Consolidated 

Interim Financial Statements as of December 31, 2000 (the ‘‘IAS Pro Forma Consolidated Interim 

Financial Statements’’), contained in the Offering Memorandum have been prepared in accordance with 

the accounting principles set forth in the International Accounting Standards (‘‘IAS’’) issued by the 

International Accounting Standards Committee. IAS differs in certain significant respects from 

generally accepted accounting principles in the United States (‘‘US GAAP’’) and from the accounting 

principles specified by the German Commercial Code (Handelsgesetzbuch) (‘‘HGB’’). Certain differences 

among IAS and US GAAP and HGB are discussed herein under ‘‘Summary of Certain Differences Among 

German (HGB), United States (US GAAP) and International (IAS) Accounting Principles’’. 

The comparative figures for the first quarter of fiscal year 1999/2000, contained in the IAS Pro Forma 

Consolidated Interim Financial Statements and also included in the Offering Memorandum under 

‘‘Financial Information’’, are based solely upon the Company’s internal statistical records, which have 

been provided because the Company’s information technology system was converted to SAP R3 during 

the first quarter of fiscal year 1999/2000. It is also possible that, for the same reason, the Company will 

not present complete IAS previous year comparative figures in its quarterly report for the period from 

January 1, 2001 to March 31, 2001. 

In this Offering Memoradum, references to ‘‘DM’’ or Deutsche Mark are to the legal currency of the 

Federal Republic of Germany; references to ‘‘$’’ or ‘‘U.S. dollar’’ are to the legal currency of the United 

States; references to ‘‘ESP’’ are to pesetas, the legal currency of Spain; references to ‘‘FRF’’ are to francs, 

the legal currency of France; references to ‘‘GRD’’ are to drachmas, the legal currency of Greece; and 

references to ‘‘euro’’, ‘‘E’’ or ‘‘EUR’’ are to the legal currency of the member states of the European 

Union participating in the Economic and Monetary Union. The legally fixed conversion rate of 

E1.00=DM 1.95583 was fixed on December 31, 1998. 

Exchange Rate Information 

On January 1, 1999, the euro became the common currency of the eleven member states of the 

European Union’s Economic and Monetary Union, which includes Germany. In these countries, the 

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national currency (in Germany, the Deutsche Mark) will remain legal tender until January 1, 2002. From 

January 1, 2002 through June 30, 2002, both the euro and the respective national currencies will be 

legal tender. After June 30, 2002, the euro will be the sole legal tender in these countries. From 

January 1, 1999, the relative value of the Deutsche Mark to the euro has been fixed at DM 1.95583 per 

euro. This rate will remain unchanged for as long as the Deutsche Mark continues to be legal tender in 

Germany. Thus, the developments of the euro and Deutsche Mark exchange rates will be in absolute 

parallel from January 1, 1999. 

The euro is a fully convertible currency. Except in limited embargo circumstances, there are no legal 

restrictions in Germany on international capital movements and foreign exchange transactions. In 

theory, the euro has freely floating exchange rates against currencies outside the euro zone, although 

central banks sometimes try to limit short-term exchange rate fluctuations by intervening in foreign 

exchange markets. Prices quoted for the Offered Shares on the Neuer Markt segment of the Frankfurt 

Stock Exchange are, and are expected to continue to be, quoted in euro. 

Solely for convenience purposes, the table below sets forth, for the periods and dates indicated, certain 

information concerning the noon buying rates in the City of New York for cable transfers as certified 

for customs purposes by the Federal Reserve Bank of New York (the ‘‘Noon Buying Rate’’) for the euro 

expressed in U.S. dollars per E1.00: 

Noon Buying Rates for euro per U.S. dollar 

High Low Period Average (1) 

Period End 

1999 1.1812 1.0023 1.0588 1.0072 

2000 1.0335 0.8270 0.9207 0.9388 

2001 (through March 30, 2001) 0.9535 0.8794 0.9260 0.8794 

(1) The average of the Noon Buying Rates on the last business day of each full month during the relevant period. 

Notice to Investors 

Because of the following restrictions, purchasers in the United States are advised to consult legal 

counsel prior to making any offer, resale, pledge or transfer of Offered Shares. Terms used in this 

section that are defined in Rule 144A or in Regulation S are used herein as defined therein. 

The Offered Shares have not been, and will not be, registered under the Securities Act or under the 

securities or ‘‘blue sky’’ laws of any State of the United States and may not be offered, sold or delivered, 

directly or indirectly, in the United States except pursuant to an effective registration statement or in 

accordance with an applicable exemption from the registration requirements of the Securities Act and 

in accordance with any applicable securities or ‘‘blue sky’’ laws of any State. Accordingly, the Offered 

Shares are being offered and sold (i) in the United States only to ‘‘qualified institutional buyers’’ within 

the meaning of Rule 144A (each, a ‘‘QIB’’) and (ii) outside the United States to non-U.S. persons 

pursuant to Regulation S. For the purposes hereof, the term ‘‘United States’’ shall have the meaning 

given by Regulation S. 

Each purchaser of Offered Shares within the United States pursuant to Rule 144A, whether in the 

Offering or thereafter, by accepting delivery of this Offering Memorandum, will be deemed to have 

represented, agreed and acknowledged that: 

(1) It is a QIB within the meaning of Rule 144A and is acquiring such Offered Shares for its own 

account or for the account of a QIB; it is aware, and each beneficial owner of such Offered Shares 

has been advised, that the sale of such Offered Shares to it is being made in reliance on Rule 144A, 

and it is aware that such Offered Shares are restricted securities under the Securities Act and may 

not be deposited into any unrestricted depositary facility, unless at the time of such deposit such 

Offered Shares are no longer restricted securities. 

(2) It understands that the Offered Shares have not been and will not be registered under the Securities Act 

and agrees that if it should sell or transfer Offered Shares it will do so only in compliance with the 

Securities Act and only (A)(i) pursuant to Rule 144A to an institutional investor that the seller 

reasonably believes is a QIB within the meaning of Rule 144A purchasing for its own account or for the 

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account of a QIB, whom the seller has informed, in each case, that the resale or transfer is being made in 

reliance on Rule 144A; (ii) in an offshore transaction in compliance with Rule 903 or Rule 904 of 

Regulation S; (iii) pursuant to an exemption from the registration requirements of the Securities Act 

provided by Rule 144 thereunder (if available), subject, in each such case, to the receipt by Nordex of an 

opinion of counsel or such other evidence that it may reasonably require that such sale or transfer is in 

compliance with the Securities Act; or (iv) pursuant to an effective registration statement under the 

Securities Act and (B) in accordance with all applicable securities laws of the States of the United States. 

No representation can be made as to the availability of the exemption provided by Rule 144 under the 

Securities Act for the resale of Offered Shares. 

(3) If it is acquiring Offered Shares for the account of one or more QIBs, it represents that it has sole 

investment discretion with respect to each such account and that it has full power to make the 

foregoing acknowledgments, representations and agreements on behalf of each such account. 

(4) It acknowledges that Nordex, the Managers, the Selling Shareholders, their affiliates and others will 

rely upon the truth and accuracy of the foregoing acknowledgments, representations and 

agreements. 

Prospective investors are not to construe the contents of this Offering Memorandum as legal, business 

or tax advice. Each prospective investor should consult its own legal advisor, business advisor and tax 

advisor as to legal, business and tax related matters concerning the transaction. 

In making an investment decision, investors must rely on their own examination of Nordex and the 

terms of the Offering, including the merits and risks involved. The Offered Shares have not been 

recommended by any federal or state securities commission or other regulatory authority. Furthermore, 

the foregoing authorities have not confirmed the accuracy or determined the adequacy of this 

document. Any representation to the contrary is a criminal offense under the laws of the United States. 

Investors should be aware that they may be required to bear the financial risks of this investment for 

an indefinite period. 

Until 40 days after the later of the commencement of the Offering and the last closing date of the 

Offering, an offer, sale or transfer of Offered Shares within the United States by any dealer (including 

dealers who are not participating in the Offering) may violate the registration requirements of the 

Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A thereunder. 

Due to the restrictions on the offer and sale of securities in the United States under United States 

securities laws and regulations, there can be no assurance that any offer of pre-emptive rights to 

shareholders of Nordex to subscribe for and acquire Offered Shares will be open to U.S. holders of 

Offered Shares. 

IN CONNECTION WITH THE OFFERING, DRESDNER KLEINWORT WASSERSTEIN AND ANY OF ITS 

AFFILIATES, ON BEHALF OF THE MANAGERS, MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH 

STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OFFERED SHARES AT A PRICE WHICH MIGHT NOT 

OTHERWISE PREVAIL. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. SUCH 

STABILIZATION TRANSACTIONS, IF CARRIED OUT, MAY BE EFFECTED ON THE FRANKFURT STOCK 

EXCHANGE, THE OVER-THE-COUNTER MARKET OR OTHERWISE IN ACCORDANCE WITH GERMAN LAW 

AND MARKET PRACTICES, WHICH MAY DIFFER SIGNIFICANTLY FROM THE RULES AND PRACTICES 

GOVERNING STABILIZATION TRANSACTIONS IN OTHER COUNTRIES. 

Available Information 

If, at any time, Nordex is neither subject to Section 13 or 15(d) of the United States Securities Exchange 

Act of 1934, as amended (the ‘‘Exchange Act’’), nor exempt from reporting pursuant to Rule 12g3-2(b) 

thereunder, it will furnish, upon request, to any owner of Offered Shares offered hereby, or any 

prospective purchaser designated by any such owner, the information required to be delivered 

pursuant to Rule 144A(d)(4) under the Securities Act. Nordex will also furnish to each such owner all 

notices of shareholders’ meetings and other reports and communications that are made generally 

available to shareholders by Nordex. 

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Service of Process and Enforcement of Judgements 

The Company is organized under the laws of Germany. Most of the assets of the Company are located 

outside the United States. In addition, all of the members of the Company’s management board 

(Vorstand) and of the supervisory board (Aufsichtsrat) reside outside the United States and all or 

substantially all of their assets are located outside the United States. Investors in the Offered Shares 

may not be able to effect service of process in the United States upon the Company and upon the 

members of the Company’s management board and supervisory board. As a result, it may not be 

possible for investors to enforce judgments of United States courts predicated upon the civil liability 

provisions of United States laws against the Company, the members of the Company’s management 

board and supervisory board and their assets. The Company has been advised by its German legal 

counsel that there is doubt as to the enforceability in Germany of judgments of United States courts of 

civil liabilities predicated solely upon the laws of the United States. In addition, awards of punitive 

damages in actions brought in the United States or elsewhere may be unenforceable in Germany. 

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Nordex AG 


Offering Memorandum 

March 30, 2001 

for 

18,000,000 bearer shares 

– with a stated value of E1.00 per share – 

from the capital increase against cash contributions 

resolved at the Company’s General Shareholders’ Meeting 

on February 21, 2001 

and for 



to be sold by the Selling Shareholders 

as well as for up to 



to be sold by the Selling Shareholders, if required pursuant to the 

Over-allotment Option granted to Dresdner Bank Aktiengesellschaft 

each carrying full dividend entitlement for fiscal year 2000/2001 

– German Securities Identification Code (WKN) 587 357 – 

– ISIN DE 000 587 357 4 – 

– Expected stock exchange symbol ‘‘NDX’’ – 

and

Company Report 

in respect of 



(aggregate share capital) 

Nos. 00,000,001 – 52,050,000 

each carrying full dividend entitlement for fiscal year 2000/2001 

i.e., from October 1, 2000 

composed of 

18,000,000 placed bearer shares 



resolved at the Company’s General Shareholders’ Meeting on February 21, 2001 

and 



from the holdings of Selling Shareholders 

– German Securities Identification Code (WKN) 587 357 – 

and 

20,750,000 bearer shares subject to lock-up 



of which up to 



from the holdings of Selling Shareholders have been loaned to 

Dresdner Bank Aktiengesellschaft 

in connection with an Over-allotment Option granted to Dresdner Bank Aktiengesellschaft, 

which will for this purpose be released under a freely tradeable securities identification code 

and 

400,000 bearer shares 


from the holdings of a Selling Shareholder made available to Dresdner Bank Aktiengesellschaft and 

Westdeutsche Landesbank Girozentrale 

as a loan in their capacity as Designated Sponsors, 

which will for this purpose be released under a freely tradeable securities identification code 

– German Securities Identification Code (WKN) 621058 – 

as well as for up 



relating to subscription rights for ordinary bearer shares 

from the conditional capital increase resolved at the Company’s General Shareholders’ Meeting 

on February 21, 2001, relating to share subscription rights 

of 

Nordex Aktiengesellschaft 


for admission to the Geregelter Markt (Regulated Market) 

and to trading on the 

Neuer Markt 

of the Frankfurter Wertpapierbörse (Frankfurt Stock Exchange) 

2

Table of Contents 

Notice to New Hampshire Residents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2 

Forward-looking Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3 

Presentation of Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3 

Exchange Rate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3 

Notice to Investors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-4 

Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-5 

Service of Process and Enforcement of Judgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6 

General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 

Responsibility for the Contents of this Offering Memorandum/Company Report. . . . . . . . . . 6 

Inspection of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 

Subject of the Offering Memorandum/Company Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 

Summary of the Offering Memorandum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

Overview of the Nordex Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

Selected Financial Data of the Nordex Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 

Earnings per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 

The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

Allotment Principles, Reserved Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

Designated Sponsors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

Stock Exchange Listing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

Lock-up Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

Stabilization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 

Selling Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 

Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 

German Takeover Code and Principles for the Allocation of Share Issues to Private 

Investors and Recognition of the Neuer Market Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 

Certification of Shares, Payment Date and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 

Dividend Rights and Transferability of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 

Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 

Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 

Risks Related to the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 

Risks Inherent in the Market and Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 

Legal Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 

Risks in Connection with the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 

Market Environment and Regulatory Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 

Environmental Policy – Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 

Regulatory Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 

Introduction and Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 

The History of the Nordex Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 

Structure of the Nordex Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 

The Wind Turbine Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 

Competition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 

Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 

Products and Production. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 

Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 

Sales and Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 

Logistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 

Customers and Suppliers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 

Material Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 

Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 

Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 

Management and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 

Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 

3

Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 

Real Estate and Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 

Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 

Relationships with Principal Shareholders, the Babcock Borsig Group and the 

Pedersen Family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 

Relationships with Babcock Borsig Group Companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 

Agreements with Associated Companies of the Pedersen Brothers. . . . . . . . . . . . . . . . . . . . . . . . . 67 

General Information on the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 

Formation, Development and Reorganization of the Group Structure. . . . . . . . . . . . . . . . . . . . . . 68 

Additional Company-law Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 

Company Name, Registered Office, Fiscal Year and Duration of the Company . . . . . . . . . . . . 70 

Objects of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 

Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 

Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 

Free Float . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 

Earnings per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 

Application of Profits and Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 

Notices, Paying and Depositary Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 

Termination and Dissolution of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 

Formation Auditor and Auditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 

Auditor for the Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 

Information on the Company’s Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 

Nordex Energy GmbH, Ostseebad Rerik . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 

Südwind Energy GmbH, Oberhausen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 

Nordex Rotor GmbH, Rostock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 

Nordex Automation GmbH, Oberhausen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 

Nordex Planungs- und Vertriebsgesellschaft mbH, Bad Essen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 

Executive Bodies of the Company, Employee and Management Share Scheme . . . . . . . . . . 79 

General Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 

Management Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 

Supervisory Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 

Employee and Management Share Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 

Management’s Discussion and Analysis of Financial Condition and Results of 

Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 

Historical Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 

Overview of the Nordex Group Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 

Companies Included in the Consolidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 

Comparison of Fiscal Years 1999/2000, 1998/1999 and 1997/1998 . . . . . . . . . . . . . . . . . . . . . . . . 89 

First Quarter of Fiscal Year 2000/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 

Taxation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 

Taxation of Company Profits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 

Taxation of Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 

Taxation of Capital Gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 

Special Rules for Credit Institutions, Financial Services Institutions and Financial 

Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 

Inheritance and Gift Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 

Other Taxes in Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 

4

Financial Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1 

Combined Pro Forma Consolidated Financial Statements of Taifun AG for the twelve 

months ended September 30, 1998, 1999 and 2000, according to IAS . . . . . . . . . . . . . . . . . . . . F-3 

Annual Financial Statements for the Abbreviated Fiscal Year from August 25 to 

September 30, 2000, according to HGB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-35 

Pro Forma Consolidated Interim Statements of Taifun AG (now Nordex AG) as of 

December 31, 2000, according to IAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-41 

Annual Financial Statements of Nordex GmbH (now Nordex Energy GmbH) for the 

Fiscal Year ended September 30, 2000, according to HGB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-64 

Recent Developments and Outlook. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1 

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1 

Summary of Certain Differences Among German (HGB), United States (US GAAP) and 

International (IAS) Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1 

Fundamental Differences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1 

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1 

Tangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2 

Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2 

Pension Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-3 

Certain U.S. Federal Income Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4 

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4 

Sale or other Disposition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-5 

Passive Foreign Investment Company Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6 

Backup Withholding and Information Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6 

Underwriting and Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-7 

5

General Information 

Responsibility for the Contents of this Offering 

Memorandum/Company Report 

Nordex Aktiengesellschaft, Oberhausen, (‘‘Nordex AG’’, ‘‘Nordex’’ or the ‘‘Company’’ or, together with its 

consolidated subsidiaries, the ‘‘Nordex Group’’ or the ‘‘Group’’) and the underwriters (the ‘‘Managers’’) as 

defined in ‘‘The Offering—General Information’’ of this offering memorandum/company report (the 

‘‘Offering Memorandum’’) assume liability for the contents of this Offering Memorandum pursuant to 

Section 13 of the Verkaufsprospektgesetz (German Sales Prospectus Act) and Section 77 of the 

Börsengesetz (German Stock Exchange Act) (each in conjunction with Sections 45 et seq. of the 

Börsengesetz) and represent that, to the best of their knowledge, the information contained in this 

Offering Memorandum is correct and that no material information has been omitted. 

Inspection of Documents 

All documents that are publicly available, referred to in this Offering Memorandum insofar as they 

relate to the Company as well as all future annual and interim reports are available for inspection at 

the Company’s registered office, Centroallee 265, 46049 Oberhausen, Germany, and at the offices of 

Dresdner Bank Aktiengesellschaft, Jürgen-Ponto-Platz 1, 60301 Frankfurt am Main (‘‘Dresdner Bank’’), 

during regular business hours. 

Subject of the Offering Memorandum/Company Report 

This Offering Memorandum is issued in respect of 18,000,000 new bearer shares from the capital 

increase against cash contributions resolved at the Ordinary General Shareholders’ Meeting of the 

Company on February 21, 2001 (the ‘‘New Shares’’) and 13,300,000 bearer shares from the holdings of 

Borsig Energy GmbH, Oberhausen, and Nordvest A/S, Give, Denmark (the ‘‘Selling Shareholders’’) (see 

‘‘The Offering—Selling Shareholders’’) and up to 4,700,000 bearer shares from the holdings of the 

Selling Shareholders (see ‘‘The Offering—General Information’’), which will initially be made available by 

way of a loan to Dresdner Bank for the purpose of allotment of a greater number of shares in the 

placement, if bids are submitted for more than 31,300,000 Shares (the ‘‘Over-allotment Option’’). All 

Shares carry full dividend entitlement for fiscal year 2000/2001, which commenced on October 1, 2000. 

This Offering Memorandum also serves as a Company Report in respect of the Company’s aggregate 

share capital amounting to EUR 52,050,000, comprised of 52,050,000 bearer shares with a stated value 

of EUR 1.00 each (the ‘‘Aggregate Share Capital’’), each carrying full dividend entitlement for fiscal year 

2000/2001 which commenced on October 1, 2000, and up to 3,400,000 bearer shares relating to 

subscription rights for bearer shares from the conditional capital increase resolved by the General 

Meeting of the Company on February 21, 2001. 

All of the bearer shares of the Company have a stated value of EUR 1.00 per bearer share and are 

hereinafter referred to as ‘‘Nordex Shares’’. 

Amounts contained in this Offering Memorandum in ‘‘DM’’, ‘‘Deutsche Mark’’, ‘‘EUR’’, ‘‘euro’’ or ‘‘E’’ refer 

to the legal currency of the Federal Republic of Germany. The legally fixed conversion rate of 

EUR 1 = DM 1.95583 was fixed on December 31, 1998. 

6

Summary of the Offering Memorandum 

The following is a summary of certain information contained in this Offering Memorandum and should 

be read in conjunction with the more detailed information and the financial statements of the 

Company, including the notes thereto (see ‘‘Financial Information’’) appearing elsewhere in this 

Offering Memorandum. As this summary may not contain all of the key information needed by 

investors, the entire Offering Memorandum should be read carefully. 

Overview of the Nordex Group 

The Nordex Group, comprising six domestic German and five foreign companies, develops and produces 

technologically advanced wind turbines with an emphasis on high performance turbines, in particular 

megawatt turbines. The Company regards itself as a systems developer, focused on its key capabilities: 

the development and engineering of large wind turbines, the development and production of controls 

and electrical technology for its wind turbines and the development and manufacture of rotor blades 

for megawatt wind turbines. In addition, the Nordex Group has positioned itself as a provider of 

services such as the technical planning of wind farm systems, from the identification of suitable sites 

to the technical implementation of wind farms, including connection to the grid, as well as the 

servicing of wind turbines. 

In the fiscal year ended September 30, 2000, the Nordex Group had an average of 573 employees and 

generated sales revenues of approximately E273 million and EBIT (earnings before interest and taxes) 

of approximately E13.2 million based on the IAS Pro Forma Consolidated Financial Statements. 

Nordex’s overall strategy is to increase its worldwide market share through a combination of organic 

and external growth and to be one of the world’s top three manufacturers of wind turbines. To this 

end, the Nordex Group intends to build upon its technological advantage in the megawatt segment and 

also to further expand its international presence. Nordex’s strategy also focuses on increasing 

profitability through the introduction of more intensively industrial manufacturing. 

The Offering 

Offered Shares: The offering (the ‘‘Offering’’) consists of 36,000,000 shares (the 

‘‘Offered Shares’’): 

(a) 18,000,000 New Shares from the capital increase against 

cash contributions resolved at the Ordinary General 

Shareholders’ Meeting on February 21, 2001 which was 

entered in the commercial register on March 30, 2001 and 

(b) 13,300,000 shares from the holdings of the Selling 

Shareholders, as well as 

(c) up to 4,700,000 shares from the holdings of the Selling 

Shareholders as part of the Over-allotment Option granted 

to Dresdner Bank (the ‘‘Option Shares’’). 

Lead manager: Dresdner Bank, with Westdeutsche Landesbank Girozentrale as 

co-lead manager. 

The Offering, Offering Period, Price 

Range and Offer Price: 

The Offering consists of a public offering of the Offered Shares in 

the Federal Republic of Germany, an international private 

placement outside the Federal Republic of Germany and the 

United States (the ‘‘United States’’) to non-US persons in reliance 

on Regulation S of the United States Securities Act of 1933, as 

amended (the ‘‘Securities Act’’) and a private placement in 

reliance on Rule 144A of the Securities Act (‘‘Rule 144A’’) to 

institutional investors in the United States by way of a 

7

ookbuilding process. The initial price range (the ‘‘Price Range’’) 

within which offers could be placed was E11 to E14 per Offered 

Share and was announced on March 19, 2001 at Dresdner Bank 

and published in the Frankfurter Allgemeine Zeitung on March 

20, 2001 and subsequently in the Bundesanzeiger (German 

Federal Gazette). The Price Range was subsequently reduced to 

E9 to E11.50. The offer period (the ‘‘Offer Period’’) within which 

offers could be made was from March 20, 2001 to March 30, 

2001. The offer price (the ‘‘Offer Price’’) at which all Offered 

Shares will be settled was fixed on March 30, 2001 and will be 

published in the Frankfurter Allgemeine Zeitung on April 2, 2001 

and subsequently in the Bundesanzeiger. 

Allotment: The Offered Shares are expected to be allotted on or before 

April 2, 2001. 

Share capital: Prior to the capital increase in connection with the Offering, the 

Company’s share capital amounted to E34,050,000, represented 

by 34,050,000 bearer shares with a nominal value of E1.00 per 

share; following the implementation of the capital increase in 

connection with the Offering, the Company’s share capital 

amounts to E52,050,000 and is represented by 52,050,000 

bearer shares with a nominal value of E1.00 per share. 

Over-allotment Option: Dresdner Bank has been granted an option to acquire up to 

4,700,000 shares loaned by the Selling Shareholders to cover the 

Over-allotment Option in full or in part on the same terms 

applying to the 31,300,000 Offered Shares within 30 calendar 

days following the commencement of trading of the Offered 

Shares for trading on the Neuer Markt of the Frankfurt Stock 

Exchange. 

Stabilization: In connection with this Offering, Dresdner Bank, as stabilization 

agent, may, on behalf of the Managers and in accordance with 

general market practice, exercise the Over-allotment Option or 

perform other transactions affecting the Company’s shares and/ 

or any derivatives relating to the shares which might stabilize 

the market price of the shares or any derivatives relating to the 

shares or maintain the price at a level that would not be possible 

without the implementation of such measures. Dresdner Bank 

will be responsible for the technical implementation of such 

measures; stabilization measures may not be undertaken any 

later than 30 days after trading has begun in the Company’s 

shares. These measures may be discontinued at any time. 

Preferential subscription 

rights: 

Up to 2,760,000 of the Offered Shares, representing up to 8.8% 

of the Offered Shares, excluding the Option Shares, were 

reserved for preferential subscription by the shareholders of 

BDAG Balcke-Dürr AG in Oberhausen (‘‘Bakcke-Dürr AG’’), with 

the exception of Babcock Borsig Beteiligungs GmbH 

shareholders. Balcke-Dürr AG shareholders have the 

preferential right to acquire one share in Nordex AG for every 

two shares they hold in Balcke-Dürr AG. 

Preferential allocation: Up to a total of 626,000 additional shares, representing up to 2% 

of the Offered Shares (excluding the Option Shares), were offered 

to the employees of the Nordex Group, the members of the 

8

Management Board of Nordex AG and the managing directors of 

Nordex AG subsidiaries and business partners by way of a 

preferential allotment; an offer of preferential allotment was not 

made to members of the Supervisory Board of the Company. 

Listing: There has been no public trading of shares of Nordex AG prior to 

the Offering. The shares of Nordex AG were admitted to the 

Geregelter Markt on March 30, 2001 for trading on the Neuer 

Markt of the Frankfurt Stock Exchange. Trading on the Neuer 

Markt is expected to commence under the symbol ‘‘NDX’’ on April 

2, 2001. 

Use of proceeds: Nordex plans to use the net proceeds of the Offering for general 

business purposes, primarily to strengthen its position on the 

global market through further developments in technology and 

the development of new products, as well as through internal 

and external growth. In addition, the proceeds will be used to 

reduce the Group’s liabilities. 

In particular, substantial funds from the net proceeds of the 

Offering will be used in the further development of the Nordex 

Group’s technologies and invested in the development of new 

products. Nordex AG also intends to use a further substantial 

proportion of the net proceeds of the Offering to expand the 

Nordex Group’s production capacity and to increase production 

of rotor blades. Of the Company’s approximately E92.6 million 

liabilities to the Babcock Borsig Group, E75 million are intended 

to be repaid out of the net proceeds of the Offering. The 

remaining E17.6 million will not be repaid any earlier than the 

date six months from the first day of trading of the Offered 

Shares on the Neuer Markt. In the Company’s opinion, 

repayment of these debts will not affect its planned growth 

for the period through fiscal year 2002/2003. Finally, Nordex 

intends to finance possible acquisitions from the proceeds of the 

Offering, provided and to the extent that individual acquisitions 

are not financed by granting shares to the seller. 

The pro rata proceeds from the Offering of the shares will be 

paid to the Selling Shareholders after the costs to be borne by 

them have been deducted. 

Lock-up Agreements: Nordex AG has irrevocably agreed with Deutsche Börse AG, and 

the Selling Shareholders of the Company have irrevocably agreed 

with Nordex AG that, in accordance with the relevant provisions 

of the German Stock Corporation Act, they will not either directly 

or indirectly offer any Nordex shares on or off a stock exchange, 

sell or market any Nordex shares nor take any other measures 

which have the economic effect of a sale for a period of six 

months commencing on the first day of trading of the Offered 

Shares on the Neuer Markt, expected to take place on April 2, 

2001. 

In addition, the Company has agreed with Dresdner Bank, for an 

additional period of six months to neither (a) directly or 

indirectly issue, sell, offer, contract to sell or otherwise dispose of 

or make an offer relating to any shares of the Company or other 

securities or uncertified rights which are convertible into or 

9

Entitlement 

to dividends: 

exchangeable for shares of the Company or which represent the 

right to receive shares of the Company, in particular (i) to utilize 

authorized capital or (ii) propose a capital increase to the 

General Shareholders’ Meeting, nor (b) to conclude any 

transactions (including derivatives transactions) that have the 

same economic effect as a sale of the Company’s shares, without 

the prior written approval of Dresdner Bank, which can only be 

withheld for good cause. 

The Selling Shareholders have also agreed, for a period of 12 

months commencing on the first day of trading of the Offered 

Shares on the Neuer Markt, to (a) neither initiate nor approve the 

measures named in the preceding paragraph and to (b) neither 

directly nor indirectly offer, sell or market the shares of the 

Company remaining in their possession or other securities that 

are convertible into or exchangeable for shares of the Company 

or which represent the right to receive shares of the Company 

(or any other transactions that have the same economic effect 

as a sale, including derivatives transactions), without the prior 

written approval of Dresdner Bank, which can only be withheld 

for good cause. 

This agreement (the ‘‘Lock-up Agreement’’) does not apply to (i) 

the Company’s capitalization measures, which the Frankfurt 

Stock Exchange has exempted from the lock-up according to 

Section 7.3.9 of the rules and regulations of the Neuer Markt or 

to (ii) the sale of shares of the Company by the Selling 

Shareholders to one or more strategic investors, insofar as the 

purchasers subject themselves to the lock-up for the remainder 

of the term of the Lock-up Agreement. 

The Offered Shares have full dividend rights from the fiscal year 

2000/2001 (i.e., as of October 1, 2000). 

Voting rights: Each Nordex share entitles the holder to one vote at the General 

Shareholders’ Meeting. 

Payment and delivery: The delivery of the shares, in book-entry form, against payment 

of the Offer Price plus the usual securities commission is 

expected to be made on April 4, 2001 through Clearstream 

Banking AG, Frankfurt am Main. 

Designated Sponsors 

for the Neuer Markt: 

German Securities 

Code Number (WKN): 

10 

Dresdner Bank and Westdeutsche Landesbank Girozentrale. 

The German Securities Code (WKN) for the shares admitted to 

immediate trading is 587 357, the interim German Securities 

Code (WKN) for the shares from the holdings of the Selling 

Shareholders that are subject to the Lock-up Agreement is 

621 058. The ISIN-Code is DE 000 587 357 4.

Selected Financial Data of the Nordex Group 

The following overview of selected financial data of the Nordex Group should be read in 

conjunction with the section ‘‘Management’s Discussion and Analysis of Financial Condition and 

Results of Operations’’ and the financial data contained in the ‘‘Financial Information’’ of this 

Offering Memorandum, which contain more detailed information. The selected financial data is 

based on the IAS Pro Forma Consolidated Financial Statements and the IAS Pro Forma 

Consolidated Interim Financial Statements, each of which have been prepared in accordance 

with International Accounting Standards (‘‘IAS’’). BDO Deutsche Warentreuhand 

Aktiengesellschaft audited the Company’s IAS Pro Forma Consolidated Financial Statements 

and issued these with an audit opinion. BDO Deutsche Warentreuhand Aktiengesellschaft 

reviewed the IAS Pro Forma Consolidated Interim Financial Statements prepared by the Company 

as of December 31, 2000. Due to the migration of the Company’s IT systems to SAP R3, the 

comparative figures as of December 31, 1999 contained in these IAS Consolidated Financial 

Statements are based solely on the Company’s subsequent statistical records. These comparative 

figures were not reviewed by BDO Deutsche Warentreuhand Aktiengesellschaft. The historical 

results presented only provide a limited indication of the results which can be expected in the 

future since Nordex has only existed in its current legal form for a short time and the statements 

were thus prepared on the basis of assumptions (see ‘‘Management’s Discussion and Analysis of 

Financial Condition and Results of Operations – Companies included in the consolidation’’ and 

‘‘Risk factors – Reorganization of the Nordex Group’’). 

Income statement 

September 30, 

1998 

IAS Pro Forma Consolidated 

Financial Statements as of 

September 30, 

1999 

(audited) 

September 30, 

2000 

thousands of euro (E) 

IAS Pro Forma 

Consolidated 

Interim Financial 

Statements as of 

December 31, 

2000 

(unaudited, 

reviewed) 

Net sales 82,477 223,743 272,670 63,004 

Total operating performance 85,260 232,624 270,191 69,129 

Cost of materials 66,594 188,880 203,777 50,766 

Personnel expenses 6,000 12,751 19,206 5,695 

Interest and similar expenses 406 989 3,381 954 

Profit from ordinary operations 2,481 10,123 10,349 1,005 

Balance sheet 

Fixed assets 4,479 12,822 21,447 41,803 

Current assets 24,873 86,954 129,785 125,536 

Total assets 29,395 81,994 153,101 169,847 

Equity 7,146 12,663 16,014 37,134 

Current liabilities and accruals 

(Maturity up to 1 year) 21,574 65,708 133,966 129,422 

Long-term accruals and liabilities 0 720 316 0 

Other financial obligations, (Maturity 1-5 years) 797 2,750 2,178 1,135 

Earnings per Share 

The Company was founded on August 25, 2000 and was entered in the commercial register on 

September 19, 2000. Under the assumption that 34,050,000 bearer shares had already been issued at 

the beginning of the fiscal year 1997/1998, the earnings per share would have been as follows: 

Fiscal year 1997/ 

1998 


1999 


2000 

Net profit in E millions 1.60 6.53 6.43 

Number of Nordex AG’s shares 34,050,000 34,050,000 34,050,000 

Earnings per share in E 0.05 0.19 0.19 

11

The Offering 

General Information 

The 18,000,000 New Shares from the capital increase against cash contributions resolved by the 

Ordinary General Shareholders’ Meeting on February 21, 2001, for which Selling Shareholders’ statutory 

subscription rights were excluded, and the 13,300,000 bearer shares from the holdings of Selling 

Shareholders, of which 10,636,305 are from the holdings of Borsig Energy GmbH and 2,663,695 are 

from the holdings of Nordvest A/S and – to the extent that the Over-allotment Option is exercised – up 

to 4,700,000 Option Shares (of which up to 3,758,694 are from the holdings of Borsig Energy AG and 

up to 1,941,306 are from the holdings of Nordvest A/S) were offered for sale without obligation by the 

Managers under the leadership of Dresdner Bank and Westdeutsche Landesbank Girozentrale as Joint 

Lead Managers and by BHF-BANK Aktiengesellschaft, COMMERZBANK Aktiengesellschaft and 

Bayerische Hypo-und Vereinsbank Aktiengesellschaft (the ‘‘Managers’’) during the Offer Period from 

March 20, 2001 to March 30, 2001 in the Federal Republic of Germany by way of a public offering and 

outside the Federal Republic of Germany and the United States by way of an international private 

placement in reliance on Regulation S of the Securities Act and to institutional investors (qualified 

institutional buyers) in the United States to non-U.S. persons by way of a private placement in reliance 

on Rule 144A in the context of a bookbuilding process within a Price Range of E9 to E11.50 per offered 

share, following a reduction of the Price Range from E11 to E14 per offered share. The Price Range 

was initially announced on March 19, 2001 during a press conference at Dresdner Bank and published 

in the Frankfurter Allgemeine Zeitung on March 20, 2001 and subsequently in the Bundesanzeiger 

(German Federal Gazette). The reduction of the Price Range was published on March 27, 2001 in the 

Frankfurter Allgemeine Zeitung and subsequently in the Bundesanzeiger. 

Purchase offers were accepted for whole shares only, in quantities of at least 50 shares, and could be 

submitted without a limit or with limits denominated in 25 cents, 50 cents, 75 cents or whole euro 

amounts within the applicable Price Range. Unlimited purchase offers were treated as limited purchase 

offers at the upper end of the Price Range. Upon submission of their purchase offers, prospective 

investors obligated themselves to purchase shares at a price below their price limit. The Offer Price of 

E9 per offered share, at which the 18,000,000 New Shares and the 13,300,000 shares from the 

holdings of the Selling Shareholders and – if the Over-allotment Option is exercised – the 4,700,000 

Option Shares will be settled was determined on March 30, 2001 on the basis of purchase offers 

received by the end of the Offer Period. The Offer Price is expected to be published in the Frankfurter 

Allgemeine Zeitung on April 2, 2001 and subsequently in the Bundesanzeiger. Purchase offers were 

received without obligation by the Managers during normal business hours and subject to the entry 

into the commercial register of the capital increase against cash contributions. In particular, in the 

event that the number of Offered Shares is insufficient to cover all purchase orders at the Offer Price, 

the Managers reserve the right to reject purchase orders, in whole or in part. Investors who have 

submitted a bid through one of the Managers may obtain information on the number of shares 

allocated to them from that Manager as from April 2, 2001. 

Dresdner Bank has been granted an Over-allotment Option to acquire up to 4,700,000 shares loaned by 

the Selling Shareholders to cover the Over-allotment Option in full or in part on the same terms 

applying to the 31,300,000 Offered Shares within 30 calendar days following the commencement of 

trading of the Offered Shares on the Neuer Markt of the Frankfurt Stock Exchange. 

The 18,000,000 New Shares were acquired by Dresdner Bank in exchange for payment of their issue 

price of E1.00 per share, for the account of the Managers, with the obligation to ensure their 

placement at the Offer Price. 

The difference between the issue price and the Offer Price of the 18,000,000 New Shares less the 

commission and expenses of the Managers to be borne by the Company, will be paid to the Company 

(see ‘‘—Use of Proceeds’’). The proceeds from the offer of the 13,300,000 shares from the holdings of 

Selling Shareholders and the up to 4,700,000 Option Shares made available as a loan from the holdings 

of the Selling Shareholders – if the Over-allotment Option is exercised – will be paid to the Selling 

12

Shareholders. In each case, the costs of this offer will be deducted before the proceeds of the Offering 

are made available. 

The up to 36,000,000 Nordex shares offered for sale, and a further 400,000 shares which will be loaned 

to Dresdner Bank in its capacity as Designated Sponsor by a Selling Shareholder, have been assigned 

the German Securities Code (WKN) 587 357 and ISIN DE 000 587 357 4. The 16,050,000 bearer shares, 

which are subject to Lock-up Agreements in accordance with the Neuer Markt rules and regulations in 

the same way as the 400,000 shares released by their Securities Code Number for the activities of a 

Designated Sponsor, will be offered under German Securities Code Number 621 058. 

The nominal value of each bearer share is E1.00. 

Allotment Principles, Reserved Amount 

No agreements relating to the allotment procedure existed between Nordex AG and Dresdner Bank at 

the beginning of the Offer Period, except for the preferred allotment for preferential subscription rights 

and preferential allotment described below. The Company and the Managers will observe the ‘‘Principles 

for the Allocation of Share Issues to Private Investors’’ (the ‘‘Principles of Allotment’’) published by 

Germany’s Börsensachverständigenkommission (Stock Exchange Committee) at the Bundesministerium 

der Finanzen (German Federal Finance Ministry) on June 7, 2000. Nordex AG and the Managers expect 

to determine the detailed provisions of the allotment principles by April 2, 2001 and expect to publish 

them as required by the Principles of Allotment on April 4, 2001. 

Up to 2,760,000 shares were reserved for preferential subscription rights to be granted to the 

shareholders of Balcke-Dürr AG, with the exception of Babcock Borsig Beteiligungs GmbH shareholders, 

representing up to 8.8% of the Offered Shares, excluding the Over-allotment Option and if the Overallotment 

Option is exercised in full, 7.7% of the Offered Shares. The shareholders of Balcke-Dürr AG 

were offered one share in Nordex AG, under the conditions of the Offering for every two shares they 

hold in Balcke-Dürr AG. Details on exercising the preferential subscription rights were published by 

Balcke-Dürr AG on March 17, 2001 in the Frankfurter Allgemeine Zeitung and in 

Wertpapiermitteilungen, and on March 20, 2001, in the Bundesanzeiger and were also 

communicated to Balcke-Dürr AG’s shareholders through their custodial banks. 

Up to 626,000 shares were reserved for preferential allotment to the employees of the Nordex Group, 

the Company’s Management Board, the managing directors of Nordex AG’s subsidiaries and business 

partners. This represents up to 2% of the Offered Shares (excluding the Over-allotment Option) and up 

to 1.73% of the Offered Shares if the Over-allotment Option is exercised in full. No offer of preferential 

allotment was made to the Company’s Supervisory Board members. If the employees of the Nordex 

Group and the members of the Management Board of Nordex AG took advantage of the opportunity to 

acquire preferential allotments, they were offered a preferential allotment of Nordex shares, depending 

on their respective purchase offers, with a total selling price of a maximum of E10,000 per recipient. 

Business partners were granted the opportunity to subscribe for Nordex shares under this preferential 

allotment up to a selling price of E15,000 per recipient. 

Otherwise, the general terms of sale, including the Offer Price to be paid by all other investors, also 

applied to the preferential allotment. 

Designated Sponsors 

Dresdner Bank and Westdeutsche Landesbank Girozentrale have been appointed by the Company as 

designated sponsors (the ‘‘Designated Sponsors’’) for the Neuer Markt. 

Stock Exchange Listing 

Application has was for admission to the Geregelter Markt for trading on the Neuer Markt all of Nordex 

AG’s original capital amounting to E52,050,000 and the up to 3,400,000 bearer shares with regard to 

option rights for bearer shares from the contingent capital increase against cash contributions resolved 

by the General Shareholders’ Meeting on February 21, 2001. The admission for trading was approved 

on March 30, 2001 by the Listing Committee of the Frankfurt Stock Exchange and trading on the Neuer 

Markt is expected to commence under the symbol ‘‘NDX’’ on April 2, 2001. 

13

Of the bearer shares to be admitted for trading, 16,050,000 shares from the holdings of the Selling 

Shareholders with German Securities Code (WKN) 621 058 and the 4,700,000 Option Shares and a 

further 400,000 shares which have been loaned for the Over-allotment Option and for the activities of 

the Designated Sponsor and released by their Securities Code are subject to a Lock-up Agreement in 

accordance with the Neuer Markt rules and regulations and to the Lock-up Agreement agreed between 

Dresdner Bank and the Selling Shareholders (see ‘‘—Lock-up Agreements’’). The 16,050,000 shares held 

by the Selling Shareholders and – to the extent that the Over-allotment Option is not exercised – the 

4,700,000 Option Shares will be listed under this Securities Code until the lock-up period expires and 

will not be included in the initial listing scheduled for April 2, 2001. On the day the lock-up period 

expires, which is expected to be October 3, 2001, these shares will be assigned the German Securities 

Code (WKN) 587 357 and subsequently included in the listing. 

Lock-up Agreements 

Nordex AG has irrevocably agreed with Deutsche Börse AG, and the Selling Shareholders have 

irrevocably agreed with Nordex AG that, in accordance with the relevant provisions of the German 

Stock Corporation Act, they will not either directly or indirectly offer any Nordex shares on or off a 

stock exchange, sell or market any Nordex shares or take any other measures which have the economic 

effect of a sale for a period of six months commencing on the first day of trading of the Offered Shares 

on the Neuer Markt, expected to be April 2, 2001. In the case of an infringement of the Lock-up 

Agreements, the Selling Shareholders have agreed with Deutsche Börse AG to pay a contractual 

penalty. This penalty is calculated as the difference between the Offer Price and the proceeds of the 

sale or, where the proceeds of such sale do not exceed the Offer Price, the difference between the 

acquisition cost and the Offer Price. 

In accordance with Sections 7.2.9 and 2. 2. (1) of the Neuer Markt rules and regulations, Deutsche 

Börse AG may exempt Nordex AG from the lock-up on the basis of a justified application by the 

Company. 

In addition, the Company has agreed with Dresdner Bank, in accordance with the provisions of the 

German Stock Corporation Act, for an additional period of six months, to neither (a) directly or 

indirectly issue, sell, offer, contract to sell or otherwise dispose of or make an offer relating to any 

shares of the Company or other securities or uncertified rights which are convertible into or 

exchangeable for shares of the Company or which represent the right to receive shares of the 

Company, in particular (i) to utilize authorized capital or (ii) propose a capital increase to the General 

Shareholders’ Meeting, nor (b) to conclude any transactions (including derivatives transactions) that 

have the same economic effect as a sale of shares, without the prior written approval of Dresdner 

Bank, which can only be withheld for good cause. This Lock-up Agreement does not apply to the 

Company’s capitalization measures (e.g. capital increases against non-cash contributions), which the 

Frankfurt Stock Exchange has exempted from the lock-up pursuant to Section 7.3.9 of the rules and 

regulations of the Neuer Markt, provided the purchaser of any such new shares agrees to comply with 

the lock-up rules for the remainder of the term of the Lock-up Agreement. 

The Selling Shareholders have also agreed with Dresdner Bank, for a period of 12 months, commencing 

on the first day of trading of the Offered Shares on the Neuer Markt, to (a) neither initiate nor approve 

the measures named in the preceding paragraph and not to (b) offer, sell or market the shares 

remaining in their possession or other securities that are convertible into or exchangeable for shares of 

the Company or which represent the right to receive shares of the Company without the prior written 

approval of Dresdner Bank, which can only be withheld for good cause; this restriction also applies to 

any other transactions that have the same economic effect as a sale, including derivatives transactions. 

This Lock-up Agreement does not apply to the Company’s capitalization measures (e.g. capital increases 

against non-cash contributions) or the sale of Nordex shares by the Selling Shareholders to one or 

more strategic investors, insofar as the purchasers subject themselves to the lock-up rules for the 

remainder of the term of the Lock-up Agreement. 

The Nordex shares held by the Selling Shareholders – to the extent that they are not made available to 

the Designated Sponsors to fulfill their duties as sponsors and are released for this by their Securities 

14

Code – will be held under a separate Securities Code (WKN 621 058) and will not be included in the 

initial listing expected on April 2, 2001. 

Selling Shareholders can also make Nordex shares available to the Designated Sponsors as a loan at 

any time against remuneration, if requested by the Designated Sponsors. These shares, which will be 

released by their Securities Code Number in this case, may only be used by the Designated Sponsors to 

perform their duties and will be reassigned to the Selling Shareholders after the expiration of the 

securities loan. 

The granting of stock options in the context of the Company’s employee and management equity 

compensation plan is not affected by the restrictions outlined above. 

Stabilization 

In conjunction with this Offering, Dresdner Bank, as the stabilization agent, may, on behalf of the 

Managers and in accordance with general market practice, exercise the Over-allotment Option or 

perform other transactions affecting the Company’s shares and/or any derivatives relating to the 

shares which might stabilize the market price of the shares or any derivatives relating to the shares or 

maintain the price at a level that would not be possible without the implementation of such measures. 

Dresdner Bank will be responsible for the technical implementation of such measures; stabilization 

measures may not be undertaken any later than 30 days after trading has begun in the Company’s 

shares. These measures may be discontinued at any time. 

Selling Shareholders 

Nordex AG is owned by Borsig Energy GmbH (80.5%) and Nordvest A/S (19.5%). Following the Offering, 

not including the exercise of the Over-allotment Option and the related capital increase, the interests in 

the share capital of Nordex AG held by Borsig Energy GmbH and Nordvest A/S will decline to 

approximately 32.22% and approximately 7.64%, respectively. 

If the Over-allotment Option is exercised in full, Borsig Energy GmbH and Nordvest A/S will hold 

approximately 25.00% and approximately 5.84% of the share capital of Nordex AG, respectively. 

Borsig Energy GmbH is a wholly-owned subsidiary of Balcke-Dürr AG, a listed company. In turn, 

Babcock Borsig AG, a listed company, holds an interest of approximately 67% in Balcke-Dürr AG. 

Use of Proceeds 

The proceeds from the placement of the 18,000,000 New Shares offered by the Company amount to 

approximately E162 million. The total costs of the Offering, including commissions paid to the 

Managers amounting to approximately E13.6 million, will amount to approximately E19 million, of 

which, approximately E9.5 million will be borne by the Company. 

The net proceeds of approximately E152.5 million will be used for general business purposes, primarily 

to strengthen Nordex’s position on the global market through further developments in technology and 

development of new products, as well as through internal and external growth. In addition, a portion of 

the net proceeds will be used to reduce Group’s liabilities. 

In particular, substantial funds from the net proceeds of the Offering will be used in the further 

development of the Nordex Group’s technologies and invested in the development of new products. 

Nordex AG also intends to use a further substantial proportion of the net proceeds of the Offering to 

expand the Nordex Group’s production capacity and to increase production of rotor blades. Of the 

Company’s approximately E92.6 million liabilities to the Babcock Borsig Group, E75 million are 

intended to be repaid out of the net proceeds of the Offering. The remaining E17.6 million will not be 

repaid any earlier than the date six months from the first day of trading of the Offered Shares on the 

Neuer Markt. In the Company’s opinion, the repayment of these liabilities will not affect the growth 

forecast for the entire forecast period of the business plan, i.e. through fiscal year 2002/2003. Finally, 

15

Nordex intends to finance possible acquisitions from the net proceeds of the Offering, provided and to 

the extent that individual acquisitions are not financed by granting shares to the seller. 

The net proceeds from the placement of the shares belonging to the Selling Shareholders, and of the 

Option Shares, will accrue to the Selling Shareholders. 

Approximately E119.7 million, less the costs to be borne by them, will accrue to the Selling 

Shareholders from the sale of their 13,300,000 existing shares. If the Over-allotment Option granted to 

Dresdner Bank is exercised in full, the Selling Shareholders will receive, in addition, up to approximately 

E42.3 million from the sale of the up to 4,700,000 Option Shares made available by them. The costs of 

the placement of the existing shares and the Option Shares will be borne by the Selling Shareholders. 

German Takeover Code and Principles for the Allocation of Share 

Issues to Private Investors and Recognition of the Neuer Market 

Regulations 

In accordance with Neuer Markt regulations, Nordex AG has recognized the Übernahmekodex (German 

Takeover Code) issued by the German Stock Exchange Committee at the German Federal Finance 

Ministry and has agreed to observe the Principles of Allocation. In addition, the Company has agreed 

with Deutsche Börse AG to recognize the current version of the Neuer Markt regulations as binding. 

Certification of Shares, Payment Date and Delivery 

The shares are represented by global certificates, lodged with Clearstream Banking AG, Frankfurt am 

Main as the securities clearing and deposit bank. The shares will be credited to the shareholders in 

collective securities accounts. In accordance with the Articles of Association, shareholders are not 

entitled to physical shares certificates. The delivery of the shares, in book-entry form, against payment 

of the Offer Price plus the usual securities commission is expected to be made on April 4, 2001 through 

Clearstream Banking AG, Frankfurt am Main. 

Dividend Rights and Transferability of Shares 

The shares offered in this Offering Memorandum have full dividend rights from the current fiscal year 

2000/2001 (i.e., as of October 1, 2000) and are freely transferable bearer shares. 

16

Capitalization 

The following table presents the capitalization of the Company as of September 30, 2000 and as of 

December 31, 2000, in accordance with IAS. 

The table should be read in conjunction with 

– the sections in this Offering Memorandum entitled ‘‘Management’s Discussion and Analysis of 

Financial Condition and Results of Operations’’ and 

– the HGB financial statements of Taifun AG (now Nordex AG), in respect of which an audit report 

was issued, the audited IAS Pro Forma Consolidated Financial Statements and the unaudited IAS 

Pro Forma Consolidated Interim Financial Statements, both of which have been reviewed by the 

auditors, included elsewhere in this document. 


HGB 

(audited) 

Nordex Energy 

GmbH (IAS) 

(unaudited) 

Group 

Pro Forma 

(audited) 

as of Sept. 30, 2000 as of Dec. 31, 2000 

EUR thousand 

Group 

Pro Forma 

(unaudited, 

reviewed) As Adjusted 1 

Total long-term liabilities 0 0 317 0 0 

Subscribed capital 50 53 307 34,050 52,050 

Capital reserves 0 6,047 6,047 3,577 147,577 

Accumulated profits/losses -2 10,518 9,660 -493 -493 

Equity 48 16,618 16,014 37,134 199,134 

Total capital reserves 48 16,618 16,331 37,134 199,134 

1 

Reflects the capitalization of the Nordex Group as of December 31, 2000 as adjusted to reflect the issue of the 18 million New Shares in 

the Offering, as if the Offering had occured on December 31, 2000. 

17

Risk Factors 

Prospective investors should carefully consider the specific risk factors set forth below, in 

addition to the other information contained in this Offering Memorandum, before making a 

decision to purchase Offered Shares in the Offering. 

Risks Related to the Company 

Reorganization of the Nordex Group 

The Nordex Group has only existed in its current legal form for a short time. After the formation of 

Nordex AG on August 25, 2000, several companies from the wind energy systems division of the 

Balcke-Dürr Group were merged into the Group with the aim of consolidating the Balcke-Dürr Group’s 

wind energy activities under the centralized management of Nordex AG as a holding company. 

Accordingly, Nordex Automation GmbH’s business activities that were not related to wind energy were 

spun-off to a Babcock Borsig Group company by way of a transfer of net assets. The Nordex Group, 

therefore, has no historical financial data as a consolidated group, and its IAS Pro Forma Consolidated 

Financial Statements are therefore only of limited value for comparisons. 

The new corporate structure, which was necessary in order to integrate the merged companies under 

the centralized management of Nordex AG, including company-wide internal and external planning, 

financial control and reporting systems, is still being established. As is commonly the case with young, 

high-growth companies, this effort will require a high level of human and financial resources. There 

can be no assurance that the rapid integration of these companies will succeed or will have the desired 

effect over the long term. If this effort were to be unsuccessful or delayed, the business, financial 

condition and results of operations of the Nordex Group could be materially adversely affected. 

Holding Structure and Profit and Loss Transfer Agreements 

The Nordex Group in its current corporate structure was recently formed from the merger of several of 

the Group’s affiliates (see ‘‘General Information on the Company—Formation, Development and 

Reorganization of the Group Structure’’). Nordex AG, which was formed in August 2000, currently 

functions solely as a holding company. The Company’s assets, therefore, currently consist primarily of 

interests in its operating subsidiaries. As a result, Nordex AG is principally dependent on the receipt of 

dividends and distributions from its operating subsidiaries to cover its operating and other expenses 

and, if necessary, to pay dividends and distributions to its shareholders. For this reason, Nordex AG has 

concluded profit transfer and, in some cases, control agreements with its five directly held subsidiaries. 

In addition, Nordex AG has also undertaken to cover possible losses incurred by its subsidiaries, which 

could lead to a reduction in Nordex AG’s net profits available for distribution as dividends. As a result of 

these arrangements, if the dividends and distributions Nordex AG receives from its subsidiaries are 

lower than anticipated, this could have a material adverse effect on Nordex AG’s business, financial 

condition and results of operations. 

Organizational Structure, Accounting, Management of Growth 

Because the Nordex Group was created very recently, the management and organizational structure of 

the Group is still being established. The Chairman of Nordex AG’s Management Board, Dr. Dietmar 

Kestner, the Chief Financial Officer Rudolf Schulz, and the Vice-President for Sales, Carsten Pedersen, 

who has been active in the wind energy sector since the mid-1980s, have only been employed by 

Nordex AG since the end of 2000. 

In addition, due to the reporting requirements necessitated by the Offering, the Company’s financial 

and accounting systems will be subject to increased demands in the future, as the Company complies 

with International Accounting Standards. The Group’s accounting and bookkeeping systems, its 

reporting systems and the cost accounting data on which these systems are based do not yet 

completely meet these increased demands (see ‘‘Management’s Discussion and Analysis of Financial 

Condition and Results of Operations – First Quarter of Fiscal Year 2000/2001’’). Because the Nordex 

Group was not restructured until the end of 2000, it has so far only been able to adapt certain of its 

18

organizational structures to meet these demands. This has resulted in a strong dependence on human 

and technical resources from outside the Nordex Group, in particular from Borsig Energy GmbH. In 

addition, problems could arise with respect to the Group’s ability to recruit suitable professional staff, 

which could have adverse consequences for the rapid establishment of the necessary structures. 

The planned internal and external growth of the Nordex Group also requires the continual adaptation 

of its organizational structures. In order to be able to manage this planned growth, the Management 

Board and Supervisory Board intend to develop their human resources and technical and 

organizational structures, especially in terms of accounting, planning and operational and financial 

control systems. Moreover, the Company’s risk management system for early identification of adverse 

developments has not yet been set up completely. 

The Company will be faced with considerable organizational challenges to its ability to effectively 

manage its current and future growth. There can be no assurance that delays in adapting and 

expanding existing structures, and in introducing new organizational measures or new internal 

systems, will not have adverse effects on the business, financial condition and results of operations of 

the Nordex Group. Furthermore, there can be no assurance that additional structural measures beyond 

those currently planned will not prove necessary, a situation that could result in an increase in the 

operating expenses of the Nordex Group, which in turn could have a material adverse effect on its 

business, financial condition and results of operations. 

Dependence on a Key Product 

The future development of the Nordex Group will depend on the acceptance of wind turbines, which 

are comparatively new products. Nordex AG’s subsidiaries have focused on the development and 

manufacture of wind turbines since 1985. The future market acceptance of the Group’s products is 

difficult to assess, particularly in the case of the newly-developed Nordex N-80, currently the world’s 

largest production wind turbine. The N-80 was first offered for sale in Spring 2000, and, as of February 

28, 2001, only four units had been completed and put into commission. In addition, the potential sales 

that could be generated from wind turbines produced by the Nordex Group are largely dependent on 

governmental support for power generation from wind energy (see ‘‘—Legal Risks—Governmental 

Regulation’’). There can be no assurance that the Company’s efforts to market its products, which will 

result in it incurring considerable costs, will bring anticipated results or that the Company will reach its 

strategic goal of establishing this new technology as the standard for the wind energy sector. If the 

Company is unable to reach its goal of selling its new products in a greater scope than previously 

achieved, and thereby improve its market position, the Company’s business, financial condition and 

results of operations could be materially adversely affected. 

Technical Risks and Technologies Utilized 

The operation of wind turbines is subject to technical and physical risks, especially considering that for 

some models, such as the Nordex N-80, there is no experiential data on long-term, full-time operation. 

For this reason, no definitive statements can be made about the service life of such wind turbines or 

their components, or about their long-term operational reliability. While the direct risk from limited 

operational reliability and reduced life of wind turbines is borne by the wind farm operator, disputes 

between wind turbine manufacturers and wind farm operators based on actual or alleged product 

defects are relatively common (see ‘‘—Legal Risks—Litigation Risk’’). 

Because the Nordex Group sources key components for the wind turbines it produces and sells from 

outside suppliers, without having any control over the production process, the Group is subject to the 

risk that components manufactured by outside suppliers could be defective. Whether or not the Nordex 

Group is able to assert claims against its outside suppliers resulting from such defects is not only 

dependent on the respective contractual agreements, but also on the creditworthiness of the relevant 

outside supplier. Such defects, particularly if the Nordex Group is unable to assert claims for damages 

against its outside suppliers, could have a long-term adverse effect on the business, financial condition 

and results of operations of the Company. 

19

The repeated occurrence of technical problems could adversely affect the profitability of planned wind 

farms as well as Nordex AG’s market position, due to the resulting deterioration of the Company’s 

reputation. For this reason, there can be no assurance that technical and physical risks will not have an 

adverse effect on the business, financial condition and results of operations of the Nordex Group. 

Dependence on Outside Suppliers 

The Company has established strategic relationships with a number of suppliers in order to concentrate 

its efforts on its core competencies. As a result, the Nordex Group is substantially dependent on the 

timely deliveries of high-quality components by outside suppliers. If the Group’s orders increase, 

deliveries by suppliers to the Nordex Group could be delayed, which would result in the Group being 

unable to complete the orders on time. Accordingly, the business, financial condition and results of 

operations of the Company could be materially adversely affected. 

Furthermore, the Company’s ability to provide products may be adversely affected by capacity 

constraints and defective components from outside suppliers. The Group is generally unable to switch 

outside suppliers immediately, because some components are custom developed and produced by 

suppliers for the Group. Although the Company pursues a strategy of maintaining at least two to three 

outside suppliers for each component, the market is dominated by just a few suppliers, particularly for 

rotor blades. Only two rotor blade manufacturers currently meet the Nordex Group’s delivery and 

quality requirements, so the Company is in the process of setting up in-house rotor blade 

manufacturing operations at its Nordex Rotor GmbH subsidiary. However, there is a risk that the 

Nordex Group may still have to depend on these few rotor blade manufacturers. A possible price 

increase resulting from the fact that the number of manufacturers is limited, or a shortage of the highquality 

rotor blades required by Nordex, could materially adversely affect the business, financial 

condition and results of operations of the Company. 

Establishment of In-House Production of Rotor Blades 

The Nordex Group did not begin setting up in-house production of rotor blades, through Nordex Rotor 

GmbH, until early 2000, and as a result, the Company has limited experience in this area. There can be 

no assurance that new production facilities will not continue to require substantial financial and 

human resources, or that producing rotor blades in-house will not cost more than purchasing such 

blades from outside suppliers. Greater independence from individual suppliers will temporarily impact 

the Company’s resources. This is because, while the Company will have to maintain its in-house 

production of rotor blades to reduce its dependence on the few global rotor blade manufacturers, it will 

also especially have to develop the product expertise the Company considers necessary for megawatt 

rotor blades. If it were necessary for the Company to manufacture small series of rotor blades under 

unprofitable conditions for a longer period than anticipated, this would materially adversely affect the 

business, financial condition and results of operations of the Company. 

Move to a New Production Site 

Nordex Rotor GmbH aims to move its production activities to new assembly plants in Fall 2001. The 

Company will carefully plan this move with Nordex Rotor GmbH. However, there can be no assurance 

that this move will not result in production stoppages or a temporary reduction in production capacity. 

In addition, there can be no assurance that there will be no initial technical and/or organizational 

problems with the production of rotor blades at the new production facility. This could reduce 

production capacity, increase production costs and produce defects. Such problems could have a 

material adverse effect on the business, financial condition and results of operations of the Company. 

Risks Inherent in Future Acquisitions of Companies and Equity Interests, and their Integration 

into the Nordex Group 

The Company plans to acquire additional complementary companies or equity interests, and to grow 

organically, in order to strengthen its position in the German and international markets. A portion of 

the proceeds of the Offering is expected to be used for this purpose. Although Nordex AG will perform 

due diligence on potential targets with the care required by prudent business policy, acquisitions carry 

a significant business risk which could have material adverse effects on the business, financial 

20

condition, results of operations and continued existence of the Company. The success of these 

acquisitions and participations, and the improvement of the Company’s market position, depends, in 

part, on the integration into the Nordex Group of acquired companies. Even if the Company 

investigates the financial and legal risks associated with target companies to be acquired, agrees price 

adjustment clauses and receives adequate warranties from the sellers, there can be no assurance that 

future occurrences would not result in specific acquisitions or equity interests losing their value 

considerably or entirely. Such consequences could have material adverse effects on the business, 

financial condition and results of operations of the Nordex Group. 

Risk of Entry into New Markets 

In the fiscal year 1999/2000, the Nordex Group generated approximately 44% of its revenue outside 

Germany; the majority of this share was generated in Denmark, Egypt, the United States, China, Spain 

and Portugal. The limited number of wind turbine facilities available in Germany requires the Company 

to expand its business activities within and outside of Europe and to consider forming foreign 

subsidiaries and sales alliances. As the Company develops its global operations, it faces numerous 

challenges, including the burden and expense of complying with a wide variety of foreign laws and 

regulatory requirements, potentially adverse tax consequences, tariffs and other trade barriers, 

difficulties in staffing and managing foreign operations, cultural and language differences, fluctuations 

in currency exchange rates, increasingly complex legal product requirements and related liability issues. 

If the Company does not appropriately anticipate changes and continue to adapt its practices to meet 

these challenges, its growth could be impeded. If the Company’s entry into new markets were delayed 

or even unsuccessful, this could materially adversely affect the business, financial condition and results 

of operations of the Company. 

Dependence on Senior Executives 

The financial success of the Nordex Group is largely attributable to the efforts of the managing 

directors of Nordex AG’s subsidiaries and the leadership of senior executives employed by Borsig 

Energy GmbH. The future financial success of the Nordex Group depends on highly qualified managers 

continuing to work for the Nordex Group and furthering its interests in the long term. If such managers 

were to leave the Group, this could have a material adverse affect on the Group’s business, financial 

condition and results of operation of the Group. 

Recruiting and Employees 

The successful attainment of the Nordex Group’s corporate goals is heavily dependent on its ability to 

recruit, retain and train highly qualified employees, particularly in the areas of mechanical engineering, 

electrical engineering and rotor blade development. Extremely important for Nordex’s continued 

success are employees who, in addition to training in the above-mentioned areas, have experience in 

designing and developing wind turbines. Suitable marketing and sales employees, who should generally 

have a technical background and knowledge of the particulars of wind turbine construction, are equally 

in demand. There is a risk that due to overall growth, particularly of the market for wind turbines, and 

the resulting demand for suitably trained professionals, retaining an insufficient number of qualified 

employees could become a barrier to growth for the Nordex Group and prevent it from reaching its 

goals. This could materially adversely affect the business, financial condition and results of operations 

of the Group. 

Research and Development 

The Nordex Group invests substantial resources in the development of its products. However, the Group 

does not undertake its own research activities. The Group is further developing the mechanical and 

electronic components of its wind turbines, in order to reduce the costs of producing electricity by 

building larger, more powerful and thus more efficient turbines (see ‘‘Business—Research and 

Development’’). Specifically, the Group plans to make significant investments in the coming fiscal years 

in the development of a five megawatt offshore wind turbine. There can be no assurance that new 

products and the further development of existing wind turbines will be technically successful, will not 

experience delays, will not incur higher costs than originally expected, or will succeed on the market. 

21

No assessment can be made based on the basis of current information available today as to whether 

the development of a five megawatt turbine will be technically successful. If this development were 

unsuccessful, the Company could be faced with substantial development costs with the possibility of 

no related future earnings to offset these costs. This would have material adverse effects on the 

business, financial condition and results of operations of the Nordex Group. 

Fluctuations in Quarterly Results 

In the past, the sales revenue and results from business activities of Nordex AG and its subsidiaries 

have significantly fluctuated each quarter. The Company believes the quarterly results of its business 

will continue to vary from quarter to quarter due to a number of factors, such as strong fluctuations in 

incoming orders or the timing of new or improved product launches. A large portion of the Nordex 

Group’s operating expenses are fixed costs and cannot be adjusted according to short-term 

fluctuations in business activities. As a result, a decrease in sales revenue in a given quarter can have a 

negative impact on the results of the Nordex Group for that quarter. For this reason, there is a risk that 

the results from business activities of the Nordex Group in future quarters will fall below the analysts’ 

and investors’ expectations. As a result, the market price of the Offered Shares could be materially 

adversely affected. 

Tax Situation 

Nordex AG, which was formed on August 25, 2000, and the consolidated Nordex Group, have not been 

subject to any tax audits to date. However, some of its subsidiaries were subject to tax audits for the 

period from 1993 to 1995. These audits covered corporation, trade and value added tax as well as 

investment grants. The most recent tax audit was at Nordex Energy GmbH and took place in August 

1997. Nordex Automation GmbH received notification of a pending audit, but no audit was performed, 

and the right reserved by the authorities to re-audit the company has since been rescinded. No audits 

have taken place at NPV Planungs- & Vertriebsgesellschaft mbH, Südwind Energy GmbH or Nordex 

Rotor GmbH. An income tax audit was performed at Nordex Automation GmbH for the period from 

December 1, 1991 to December 31, 1995, however, the audit did not result in any assessments. An 

income tax audit was also performed at NPV Planungs- & Vertriebsgesellschaft mbH for the period 

from August 1, 1997 to September 30, 1999, which resulted in a request for payment of additional tax 

amounting to E1,000. The Company believes that the tax returns submitted were complete and correct, 

and that the tax assessments/provisions for taxes reflect the actual circumstances, and therefore does 

not anticipate any significant changes to tax assessments already made resulting in the payment of 

additional tax in the event of an internal audit. However, the tax authorities have the right to request 

the payment of additional tax at a later date due to differing interpretations of the facts, which could 

have material adverse effects on the business, financial condition and results of operations of the 

Company. 

22

Risks Inherent in the Market and Competition 

Competition and Market Acceptance 

The wind turbine business varies greatly depending on the region, but is highly competitive in certain 

markets. The key factors defining this competition are the capacity, reliability and quality of products, 

technological edge over the competition, price, the ability to fulfill local market requirements and the 

scope and quality of maintenance and training services. Some of the current or potential competitors 

of the Nordex Group have access to greater financial, technical, human, marketing, purchasing and 

other resources. These competitors could react more quickly to new or emerging technologies or to 

changes in customer requirements, or invest more resources in product development and sales, or 

deliver competitive products more rapidly or at a lower price than the Nordex Group (see 

‘‘Business—Competition’’). In addition, competitors could form alliances through equity investments or 

cooperation deals, thus making their offerings more attractive and intensifying the competition 

further. Such competition could lead to a decline in prices, reduced sales revenue and profit margins, 

and a decline in the Company’s market share, which could have material adverse effects on the Nordex 

Group and its business, financial condition and results of operations. 

The level of demand for the Company’s products continues to be dependent on among other things, 

the development of the market for wind turbines, the performance of services and the type of power 

generation used to satisfy demand for electricity. A key factor for the success of power generation from 

wind energy is the cost at which the electricity can be produced and the scope of financial support for 

this type of power generation (see ‘‘—Legal Risks—Governmental Regulation’’). There can be no 

assurance that such costs can be kept low, or that there will be continued financial support for this 

power generation. Discontinued support could have material adverse effects on the Company’s 

business, financial condition and results of operations. 

Technological Change 

There is a trend in the Company’s markets toward larger and more powerful wind turbines, increased 

efficiency and ease of maintenance, and the continuing technical development of wind turbines. The 

further development of products featuring new technologies by Nordex or its competitors could cause 

the Group’s existing products to be regarded as outdated and unsaleable. The future success of the 

Nordex Group will depend on its ability to continually and quickly develop and launch new and 

improved products, which are also in step with technological developments and new standards, and 

meet the constantly increasing requirements of its customers. Due to uncertainty in assessing future 

technological developments, it is uncertain whether such products will be successful. A substantial 

delay in launching new products could significantly impact the ultimate success of a product and other 

related products, and also impede the further sale of predecessor products. There can be no assurance 

that the Nordex Group will succeed in launching timely, new products, that the new products launched 

will be accepted to any significant degree in their respective markets, or that such acceptance will 

endure. Each of these circumstances could have material adverse effects on the business, financial 

condition and results of operations of the Nordex Group. 

Internationalization and Foreign Exchange Factors 

The Nordex Group already generates a portion of its revenue and earnings in markets outside the 

European Union’s Economic and Monetary Union, particularly in Denmark (approximately 39% of 

foreign revenue) in China (approximately 25%) and in the United States (approximately 14%). The 

subsidiaries active in foreign markets and the Chinese equity interest held by Nordex Energy GmbH 

have not yet been consolidated either because they were of minor importance or because Nordex did 

not exercise the level of control specified by the principle of control according to IAS 27. The Nordex 

Group generally minimizes risks from exchange rate fluctuations through applicable rate hedging 

transactions. In the past, the Company’s receivables and liabilities in foreign currencies were 

inconsequential. Declining exchange rates for relevant foreign currencies could, however, affect the 

financial condition and results of operations adversely in the future, if the planned expansion of the 

Company’s business abroad leads to a corresponding increase in receivables and liabilities denominated 

in foreign currencies, and if the rate hedging transactions do not completely cover the risk in question. 

23

Legal Risks 

Litigation Risk 

Various Nordex Group companies are currently involved in a number of legal disputes, either pending 

or threatened, with a variety of customers or suppliers, including: Aerpac Aerodynamics-Product and 

Consultancy B.V.; ITA S.A., through a former subsidiary of Nordex Energy GmbH, Ekter Aioliki S.A.; 

Energiekontor Windkraft GmbH; BOREAS Energie GmbH; Wehrle Werk AG; and Atlas Energieanlagen 

GmbH and Gothaer Versicherungsbank VVAG, seeking recourse on guarantees or asserting claims for 

damages. The conflict with ITA S.A. was resolved in an out-of-court settlement, following which the 

pending lawsuits were withdrawn. (see ‘‘Business—Litigation’’). 

The outcome of these disputes is unclear. No forecast can be made as to whether the threatened 

litigation can be settled out of court and whether damages will be incurred. The Company or the 

relevant Nordex Group companies could be found liable or required to pay considerable damages as a 

result of out-of-court negotiations in an amount exceeding provisions, or to pay substantial costs for 

the repair of defective wind turbines or wind turbine components. In addition, the Company may have 

to pay its own and the other party’s legal costs. 

The Company’s majority shareholder, Borsig Energy GmbH, has indemnified the Company from 

obligations to third parties arising from disputes currently known to it with respect to Aerpac 

Aerodynamic Products and Consultancy B.V., including the necessary costs of the retrofit program 

developed for this purpose up to an agreed maximum of DM 20 million (plus the costs of the retrofit 

program). The indemnity also covers claims asserted by the Danish buyer of Ekter Aioliki S.A., due to its 

dispute with ITA S.A. and the Companies contractually related to ITA S.A. respectively, and from 

disputes with Wehrle Werk AG, Energiekontor Windkraft GmbH, BOREAS Energie GmbH and Atlas 

Energieanlagen GmbH & Co. KG Windpark Neuruppin. 

Obligations to pay damages and repair turbines could have a material adverse effect on the Company’s 

reputation, and therefore indirectly or directly, for example in the event that the maximum amount of 

the indemnity is exceeded, have an adverse effect on the business, financial condition and results of 

operations of the Company. 

No predictions can be made about the outcome of disputes in which the Nordex Group is suing third 

parties on warranties or asserting claims for damages (see ‘‘Business—Litigation’’). If the Group 

companies’ claims are unsuccessful, the considerable expenses already paid for repairs to wind turbines 

would not be recovered. In addition, it is possible that the court costs incurred would have to be borne 

by Nordex Group companies. This could have material adverse effects on the business, financial 

condition and results of operations of the Company. 

Product Defect Risk, Product Liability 

The Nordex Group generally gives its customers warranties on its wind turbines, covering capacity 

range, maximum noise level and servicing of delivered wind turbines. Compliance with capacity range 

and noise level are demonstrated when wind turbines are delivered, and Nordex provides servicing for a 

period of two to five years from the time the turbine is delivered. 

There is a risk that the wind turbines developed, manufactured and sold by the Nordex Group could be 

defective. Although the wind turbines are tested comprehensively before delivery and ongoing 

production is subject to quality assurance measures, there can be no assurance that defects will not 

arise during the operation of wind turbines that would entitle the respective wind turbine operators to 

seek compensation based on warranties. The Nordex Group carries warranty insurance on its machines, 

generally for the duration of the warranty for the wind turbines delivered. The insurance policies cover 

claims by customers arising from warranties. If the problem is caused by a defective component from 

an outside supplier, Nordex can seek compensation from the relevant supplier (see ‘‘—Risks Related to 

the Company—Technical Risks and Technologies Utilized’’). However, if no claim can be asserted against 

a supplier, and the defect affects a large number of the relevant product or products from various wind 

turbine series, claims by customers based on warranties could have a material adverse effect on the 

business, financial condition and results of operations of the Nordex Group. 

24

In addition, there is a risk that product liability claims could also be filed against the Company or one of 

its subsidiaries if third parties are harmed by defective products that were offered for sale by a Nordex 

Group company. 

Claims for damages against a Nordex Group company could have material adverse effects on the 

business, financial position and results of operations of the Company, particularly when these claims 

were not covered or not completely covered by the insurance policies purchased by the Company (see 

‘‘Business—Insurance Policies’’). In addition, malfunctions could damage the reputation of the products 

developed by the Company and therefore impair the marketability of its products. 

Insurability of Risks 

The Nordex Group holds insurance policies for the wind turbines it sells, which generally cover 

construction, manufacturing and assembly defects for which the relevant Nordex Group company is 

liable. Such insurance normally covers the first two years of operation of the wind turbines. Due to the 

Nordex Group’s past high insurance claim record, there can be no assurance that the Nordex Group will 

be able to obtain similar insurance coverage in the future at the same or not significantly higher cost. 

Higher insurance premiums, or the inability to use insurance to cover expenses for repairing defective 

products, would have a material adverse effect on the business, financial condition and results of 

operations of Nordex AG, provided the Nordex Group is not able to pass on increased expenses to 

customers through higher prices for wind turbines. 

Governmental Regulation 

Depending on location, power generation from renewable energies can be more expensive than 

producing electricity from coal, natural gas, oil or nuclear fuel, so the suppliers and producers of 

electricity from renewable sources are often dependent on political support—whether financial or legal 

(see ‘‘Market Environment and Regulatory Background’’). Any changes in the relevant regulatory 

environment could have an adverse effect on the markets served by the Nordex Group, which in turn 

would have a material adverse effect on the business, financial condition and results of operations of 

Nordex AG. 

In the past, the decrease or elimination of governmental grants and support in a country has had a 

sustained negative impact on the wind energy market share in that country. Although governmental 

development programs will likely be in effect until the ratio of wind energy-produced power to total 

power usage has reached a level consistent with political goals, no forecasts can be made about when 

this level will be reached in each country. If government support were terminated, this could make 

producing electricity from wind energy unprofitable. The opportunities for the Nordex Group to sell 

wind turbines would drop sharply, which in turn would have material adverse effects on the business, 

financial condition and results of operations of the Company. 

There can be no assurance that the currently regulations will not be amended, specifically with respect 

to minimum prices or undertakings to purchase a minimum volume of energy in accordance with the 

Act on Granting Priority to Renewable Energies (EEG). This could have a material adverse effect on the 

business, financial condition and results of operations of the Company. 

General Legal Environment and Suitable Sites 

Wind turbines emit noise, light effects (such as rotating shadows and reflected flashes of light from the 

rotor blades when the sun is shining), and ice throws in winter. Wind turbines also are sometimes 

regarded as detrimental to the beauty of the local environment, particularly by residents of neighboring 

residential areas. 

Laws and other regulatory measures govern the construction and operation of wind turbines (in terms 

of allowable noise levels, distance from buildings, and permissibility of construction projects in nature 

reserves). Due to these legal regulations, and the widely different wind conditions in various regions, 

only a limited number of suitable sites are available for wind turbines in Germany and a number of 

other countries. There can be no assurance that changes in regulations will not be made and that the 

number of suitable sites will not decline further. This could lead to a decline in investment 

25

opportunities for wind turbine and wind farm operators, which could adversely affect the sale of wind 

turbines and the business, financial condition and results of operations of the Company. 

The EU directive amending the directive on the assessment of the effects of certain public and private 

projects on the environment (Directive 97/11/EC of March 3, 1997) will strengthen, and has intensified 

in those states where the directive has been converted into national law, the regulatory framework for 

the erection of wind farms. It requires that the member states of the European Union either introduce a 

case by case assessment which decides whether the assessment of the effects on the environment is 

necessary or, at their discretion, determine criteria or thresholds upon fulfilment of which an 

assessment of environmental compliance is required prior to the erection of a wind farm. On the basis 

of this directive the Federal Republic of Germany plans to introduce a regulation within this year which 

will provide for a preliminary examination prior to the erection of a wind farm with three or more wind 

turbines to ascertain whether this could have a negative impact on the environment. Among the 

criteria of this regulation, the legislator plans to distinguish between wind farms with three to five and 

wind farms with six or more wind turbines. If the proposed wind farm is found likely to have a material 

impact on the environment, an assessment of the effects on the environment will be prepared, 

generally taking up to several months. It cannot be excluded that the introduction of this regulation 

could lead to delays or even render impractical currently planned wind power projects. 

Infringement of Third-party Rights 

There is the risk that the Nordex Group could be involved in legal disputes based on alleged 

infringement of intellectual property rights claimed by third parties. Claims asserted by third parties 

and the resulting legal proceedings could, if successful, result in substantial claims for damages against 

the Group. Nordex does not have insurance to cover any such claims. Legal disputes with third parties 

concerning patents or other intellectual property rights could also result in the Nordex Group being 

required to limit or halt the manufacture, sale or use of products in which Nordex utilizes the infringed 

or allegedly infringed third-party intellectual property right. If the Nordex Group were affected by such 

disputes, this could have a material adverse effect on its business, financial condition and results of 

operations. 

Due to a patent application filed by a US-based competitor for variable-speed wind turbines, the 

Nordex Group is currently unable to sell a portion of the wind turbines it produces in the United States. 

However, the Company believes that the Group can still penetrate this market, because it can market 

and sell wind turbines in the United States that are not affected by this limitation. In addition, the 

Company believes that it could sell the affected turbines in the United States without infringing upon 

another company’s patent by making certain technical adaptations to these turbines which could be 

possible with a reasonable amount of effort. 

Risks in Connection with the Offering 

Influence of Selling Shareholders, Sale of Shares 

After the capital increase and placement of the shares in the course of the Offering, Borsig Energy 

GmbH and Nordvest A/S will together hold up to approximately 40% of Nordex AG’s share capital if the 

Over-allotment Option is not exercised. 

Borsig Energy GmbH and Nordvest A/S will, therefore, still be able to exert substantial influence on the 

Company. Borsig Energy GmbH and Nordvest A/S, especially operating together, are in a position, 

depending on the attendance at future General Shareholders’ Meetings of the Company, to strongly 

influence the outcome of decisions governed by the German Public Companies Act, independent of the 

votes of other shareholders. These decisions include matters such as the resolution on the utilization of 

net profits, the election and removal of Supervisory Board members, the appointment of an auditor, 

and corporate actions and changes to the Articles of Association. This could materially adversely affect 

the Company’s business, financial condition and results of operations. 

Two of the six members of the Company’s Supervisory Board are presently nominated by the Babcock 

Borsig Group and one of the six by Nordvest A/S, which is controlled by the Pedersen family. Borsig 

Energy GmbH and Nordvest A/S have agreed to exercise their rights in the Company’s General 

26

Shareholders’ Meeting of Nordex AG in such a way that the candidate nominated by Nordvest A/S is 

elected to the Supervisory Board (see ‘‘Relationships with Principal Shareholders, the Babcock Borsig 

Group and the Pedersen Family’’). 

After the expiry of the lock-up period for shareholders and the Lock-up Agreements entered into with 

Dresdner Bank (see ‘‘The Offering—Lock-up Agreements’’), the Selling Shareholders will be able to sell 

their shares. If the Selling Shareholders divest extensively, this could lead to an increased number of 

Nordex shares available, which could be detrimental to the market price of the Company’s shares. 

Valuation of the Nordex Group as part of the Planned Merger 

As part of the merger of Balcke-Dürr AG and Babcock Borsig AG, which was reported in the press and is 

scheduled for the second half of 2001, a valuation will be performed of the Balcke-Dürr Group in which 

the value of the interest held by Balcke-Dürr AG in Nordex AG will be determined. The Company 

anticipates that a preliminary valuation report for Balcke-Dürr AG will be published (expected at the 

beginning of April 2001), initially without the valuation of Nordex AG. In a second step, the value of 

Nordex AG will be included, taking into account the valuation established as part of the bookbuilding 

process and included in the above report. The valuation of Nordex AG in this expert opinion could differ 

from the Offer Price determined on the basis of pre-marketing and bookbuilding by Nordex AG in 

consultation with the Joint Lead Managers and the Selling Shareholders, and from the market price 

that develops following the listing, due, inter alia, to the differing legal premise behind the valuation 

required for the merger. Such discrepancies in valuations could have a material adverse effect on the 

future development of the market price of Nordex shares. 

High Volatility on the Neuer Markt, no Public Market for the Company’s Shares 

The Company has applied for admission to trading on the Neuer Markt of the Frankfurt Stock 

Exchange, a market segment established on March 10, 1997, for innovative growth companies in 

Germany. The companies listed on the Neuer Markt typically have a comparatively high risk-reward 

ratio. For this reason, the share prices and trading turnover of such companies have often been subject 

to considerable volatility in the past, which is often either unrelated to the business success of such 

companies or not related to the degree implied by such fluctuations. The considerable volatility of 

shares on the Neuer Markt could have a material adverse effect on the Company’s share price. 

Before the Offering, there was no public market for the Company’s shares. The Offer Price will be 

determined by Dresdner Bank in consultation with the Company and the Selling Shareholders following 

completion of the bookbuilding process. There can be no assurance that the Offer Price will correspond 

to the price at which the Offered shares are traded subsequent to the Offering, nor that active trading 

in the Company’s shares will develop and be sustained after the Offering. This could have a material 

adverse effect on the market price of the Company’s shares. 

27

Market Environment and Regulatory Background 

The market environment for the manufacture and sale of wind turbines is characterized by a range of 

environmental and regulatory factors, some of which vary greatly at a regional and national level. 

Factors having a significant effect upon the market environment are: the local wind conditions (wind 

regime), as wind turbines can only be operated economically in regions with appropriate wind 

conditions (see ‘‘Business—Technical Background’’), and state subsidies provided for generating 

electricity from wind energy. 

The costs of generating electricity using wind energy can currently only compete with the costs of 

generating electricity from non-renewable energy sources in regions with excellent wind conditions, 

such as the coastal regions of Denmark and the UK. It is not possible to predict if and when the costs of 

generating electricity using wind energy in non-coastal regions, such as Germany, will be able to 

compete with the costs of generating electricity from conventional energy sources. In most regions, 

accordingly, electricity generation depends on state support for wind turbine operators to be able to 

run their farms economically. This support depends on the relevant environmental policies and on 

specific wind conditions in the region. 

Furthermore regional markets are at varying degrees of maturity – although there are already a large 

number of wind turbines in operation in Germany, Denmark, The Netherlands and the US that have 

been erected over the last 10 years, the market for wind turbines in Spain, Greece, Egypt and China has 

grown, inter alia, in the last 2-3 years as these countries have introduced subsidies. The nominal output 

required by the various markets corresponds to the relevant market’s degree of maturity. In Germany, 

for example, the greatest demand is for turbines with a high nominal output, whereas in markets 

where the electricity generation by way of wind turbines is still in its early stages, demand is for smaller 

turbines with a lower nominal output. In this regard, it should also be taken into consideration that 

establishing and operating high output wind turbines, such as the Nordex N-80 model, requires 

sophisticated infrastructure such as fully developed road connections, heavy lifting cranes, etc. (see 

‘‘Business—Logistics’’). 

Globally, the market for wind turbines depends on a small number of international manufacturers of 

wind turbines and accordingly, other local manufacturers have a large number of operators as 

potential customers (see ‘‘Business—Competition’’). 

Environmental Policy – Background 

The Earth does not have an unlimited supply of fossil energy sources such as oil and gas which are 

used currently, and generating electricity from fossil energy sources releases carbon dioxide (CO2), 

which is thought to be responsible for the so-called greenhouse effect. 

In order to combat the greenhouse effect at a global level, the Kyoto Climate Summit was held in 1997 

to further implement the commitments agreed upon at the Rio Earth Summit in Rio de Janeiro, Brazil. 

According to the minutes of the Kyoto Summit, the participating countries agreed to a long-term 

reduction of their CO 2 emissions. The minutes contain, inter alia, a resolution which provides that by 

2010, all countries signing the minutes would reduce their CO2 emissions by an average of 5% 

compared to the level of emissions for 1990. In addition, countries of the European Union entered into 

an agreement to reduce CO2 emissions in 1998. As a result, the Federal Republic of Germany has to 

reduce its CO2 emissions by up to 21% by 2010. In order to reach this target, the Gesetz über den 

Vorrang erneuerbarer Energien (The Act on Granting Priority to Renewable Energies (EEG)) came into 

effect in Germany on April 1, 2000. At European level, the Altener Program was implemented on 

February 28, 2000 (Decision No. 646/2000/EC of the European Parliament and the European Council). 

This long-term program introduced a comprehensive concept for the promotion of renewable energy. 

In contrast to fossil energy sources and nuclear energy, wind power is clean, inexhaustible and freely 

available. As a result, with the exception of investment costs, the costs of operating wind turbines are 

comparatively low. In the Company’s view, wind energy thus represents a promising future market. 

28

Nordex AG believes that generating energy using wind power will become an important alternative to 

generating electricity using fossil fuels. The Company attributes this to a number of factors: the fact 

that generating electricity using wind power will receive long-term state support because of political 

pressure; the fact that prices for fossil fuels will rise due to their increasing scarcity; and the fact that 

lower prices for wind turbines will cause the costs of generating electricity using wind power to 

continue to fall. In this regard, the Company believes that the performance of turbines will increase, 

and wind farms with as many as 20 turbines will be able to contribute significantly to electricity supply. 

Even today, a Nordex N-80 wind turbine in a location with excellent wind conditions (e.g. coastal 

regions in Denmark or the UK) can generate up to 8.5 million kWh per year, while at an equivalent 

location in Germany a similar turbine can generate approximately 6.5 million kWh per year. These 

figures correspond to the average consumption of approximately 1,600 and 1,200 households 

respectively, or approximately 6,500 to approximately 8,500 tonnes of CO 2 emissions if the same 

quantity of electricity were to be generated by burning coal. (Source: German Wind Energy Association 

– 25 Facts) 

Regulatory Background 

Opportunities for the sale of wind turbines produced by the Nordex Group also depend to a significant 

extent on the relevant legal framework for erecting and operating these facilities in Germany and many 

other countries. For example, legal requirements may restrict the erection and operation of turbines. In 

Germany in particular, legal construction and noise emission requirements must be complied with, 

which can mean actual or legal restrictions on erecting or operating wind turbines in certain locations. 

On the other hand, certain legal incentives (those provided for by the EU in Germany, for example) 

could lead to an increased demand for wind turbines. The regulatory framework created by the EU in 

Germany, for instance, led to a substantial increase in the sale of new wind turbines in 2000. 

Regulatory Framework for Supplying Electricity into Networks and Promoting Renewable Energy 

Renewable energy is promoted in line with relevant national laws. Support ranges from regulations on 

supplying electricity to the network which prescribe fixed prices for electricity generated by renewable 

energy sources (e.g. Germany and Spain), tax credits (e.g. US) through to green certificate systems (e.g. 

Denmark). 

Promotion in Germany 

In Germany, the Act on Granting Priority to Renewable Energies (EEG) dated March 29, 2000, which 

superseded the Stromeinspeisungsgesetz (German Act on Supplying Electricity from Renewable 

Energies into the Public Grid) dated December 7, 1990 with effect from April 1, 2000, is of key 

importance to the construction of facilities for the generation of renewable energy. According to 

Section 1 of the EEG, the Act aims to protect the climate and the environment by enabling the growth 

of long-term energy supply and to substantially increase the contribution of electricity supply 

generated by renewable energy. The European Court of Justice has in a judgment of March 13, 2001, 

held that the German Act on Supplying Electricity from Renewable Energies into the Public Grid is not 

contrary to European Law. The Company therefore believes that it is not likely that the EEG, which 

supersedes that Act is contrary to European Law. The Act regulates the supply of and payment for 

electricity generated from wind energy and other sources (Section 2 of the EEG). In the case of such 

supply, the Act requires grid operators, i.e. electricity suppliers that operate grids for general supply, to 

connect plants that generate electricity from renewable energy sources to the grid. These suppliers 

must purchase electricity and pay the legally stipulated amount as prescribed by Sections 4 to 8 of the 

EEG. Section 7 of the EEG applies to electricity from wind energy. The Section prescribes a payment of 

DM 0.178 (approximately EUR 0.09) per kWh for a period of five years from the date the plant 

commences operations. Once this period has expired, the payment requirement becomes subject to 

other regulations, but continues in effect. The minimum payment prescribed by Section 7 (1) of the EEG 

is reduced by 1.5% each year, starting on January 1, 2002, and applies to all plants that commence 

operations after such date. A specific regulation is in place for plants located at least three nautical 

miles from the coast and which are due to continue in operation up to and including December 31, 

29

2006. The period of operation for these plants according to Section 7 paragraph 1 no. 1 of the EEG and 

Section 7 paragraph 2 no. 2 of the EEG, is nine years. 

According to Section 12 of the EEG, the Bundesministerium für Wirtschaft und Technologie (the Federal 

Ministry of Economy and Technology) is required to issue a report to the German parliament on the 

implementation of the Act by June 30 every second year following the implementation of the Act 

(initially on June 30, 2002) in conjunction with other ministries. In particular, ministries must make 

recommendations regarding any changes in payment methods to be taken into account from 

technological developments and market developments for new plants. A change in payment rates is 

possible by passing an amendment to the Act. 

The transmission of electricity generated using wind turbines is generally unproblematic for plant 

operators. This is because wind turbine operators are paid by grid operators for the electricity they 

supply in line with the EEG, and they are not involved in the resale and marketing of electricity once it 

has been fed into the grid. As a result, wind turbine operators do not therefore need to negotiate terms 

for the transmission of wind generated electricity (this has been known to result in litigation). Wind 

turbine operators will face this problem according to the EEG, if they decide not to supply electricity to 

the grid in order to supply customers directly. In such exceptional circumstances, plant operators may 

demand that grid operators transmit electricity in accordance with Section 6 of the 

Energiewirtschaftsgesetz (EnWG – Energy Industry Act) and Section 19 (4) no. 4 of the Gesetz 

gegen Wettbewerbsbeschränkungen (GWB – Act Against Restraints on Competition). Plant operators 

are then required to pay grid operators for electricity transmission. In the majority of cases, this 

method is not economically viable as electricity prices currently attainable are far below minimum 

compensation rates prescribed by Section 7 of the EEG. Nevertheless, if electricity generated using wind 

energy were to be subject to special marketing methods, for example as ‘‘green’’ electricity, in theory it 

could be possible for the price achieved to be higher than from the amount currently prescribed by law 

plus transmission fees. 

Promotion in other countries 

In other countries, in particular in Europe, legal regulations on electricity supply and the promotion of 

renewable energy that are comparable or similar to German regulations already exist (e.g. in Spain) or 

are being promulgated (e.g. in France). In some countries, generating electricity through wind energy is 

also being promoted by a system of green certificates, which the wind turbine operators receive and 

which they can sell to electricity suppliers, thereby enabling them to meet obligations to generate a 

portion of the electricity they sell in an environmentally acceptable manner. 

In Spain an act similar to the EEG exists (last amended in 1999), which requires electricity suppliers to 

purchase electricity and to make payments at a level set by the state. The price of supply is adjusted in 

line with changes in the price of electricity for end users, the price of oil, gas and interest rates. As a 

consequence, the act resulted in a price level of ESP 10.43 per kWh in 2000, or approximately DM 

0.123, and no changes are due in 2001. 

In France, an act on supplying electricity to the grid, comparable to the EEG in Germany, is in the 

process of being enacted. This act is scheduled to take effect in 2001, and prescribes a price of FRF 0.55 

per kWh, or approximately DM 0.164, for supplying electricity to the grid for an initial period of five 

years. 

In the UK and Ireland, electricity generated from wind energy is promoted by a commitment by energy 

suppliers to purchase a certain minimum quantity of electricity from renewable energy sources. A 

purchasing organization representing energy suppliers organizes tenders for this purpose, which allow 

technically certified wind farm projects that can supply cost-effective electricity to be selected; these 

wind farms are awarded long-term electricity supply contracts. Because large areas of the UK and 

Ireland that offer excellent wind conditions are environmentally protected areas (national parks), 

developing wind farm projects is problematic, although a range of directives have been promulgated to 

regulate and promote the planning of such projects. 

30

The US provides federal support for operating wind turbines by providing tax credits — so-called 

Production Tax Credit. This credit amounts to approximately E0.161 per kWh generated from renewable 

energy. The US regime of granting tax benefits is scheduled to continue until the end of 2001. The 

Company expects this to be extended. At an individual state level, the US also supports the expansion 

of generating electricity using wind energy as part of a so-called Renewable Portfolio System (RPS), 

and promotes such generation by stipulating a legally fixed proportion of electricity that must be 

generated from renewable sources. 

A similar system is also implemented in Denmark and the UK, among others. In these cases Energy 

suppliers can elect to either generate electricity from renewable sources directly, or to fulfill this 

commitment by purchasing so-called green certificates from wind farm operators. These green 

certificates need to be freely tradable, in order to encourage a market for trading in certificates. 

However, establishing and maintaining such a trading system can run into problems when it comes to 

practical implementation. For example, Denmark has postponed introducing green certificates until 

January 2002, and has stipulated a fixed price of 1.3 Eurocents per kWh of electricity supply 

(approximately E0.013) until such time. 

Promotion of renewable energy in developing countries 

In developing countries, electricity generation from renewable energy sources is promoted in part by 

national development aid programs from industrial nations, which either fully or partially finance wind 

farm projects in developing countries or which grant interest-free or low-interest loans for specific 

purposes. In addition to national programs, the World Bank and international development aid 

institutions also fund programs. An additional method of advancing electricity generation from 

renewable energy in developing countries is granting state guarantees to safeguard the delivery of 

wind turbines. During the fiscal year 1999/2000 approximately 20% of all wind turbines sold by the 

Nordex Group were supplied under development aid programs. 

Legal Requirements for Constructing and Operating Wind Turbines 

The current legal framework does not permit wind turbines to be erected in all locations with sufficient 

wind conditions. 

In order to erect a wind turbine in Germany, a turbine must initially comply with construction, planning 

and building regulations, and must comply with the provisions of the Baugesetzbuch (BauGB – Federal 

Building Code), the Baunutzungsverordnung (BauNVO – Federal Land Utilization Ordinance) and the 

relevant state building regulations. In addition, the erection of a turbine must also meet the 

requirements imposed by the Bundesimmissionsschutzgesetz (BimSchG – German Pollution Control 

Act) and regulations relating to the preservation of nature and the environment. Whether or not these 

regulations are fulfilled depends on the individual case. However, according to Section 35 paragraph 1 

no. 6 of the BauGB, wind turbines are granted special privileges, which means that they comply with 

the law on planning building projects even if they are erected outside an area subject to construction 

planning law, where they would otherwise generally not be approved. Approval can, for example, be 

withheld because of side effects caused by wind turbines, such as increased noise levels. The maximum 

permissible noise levels are set out in the Technische Anleitung zum Schutz gegen Lärm (Technical 

Instructions on Noise Abatement). Maximum levels of permissible shadow cast by the wind turbines are 

also imposed. In future, an environmental audit will have to be carried out in certain circumstances, 

prior to the construction of wind farms (See ‘‘Risk Factors — Legal Risk — General Legal Environment 

and Suitable Sites’’). 

Specifications imposed by building law and other public law legal requirements for constructing and 

operating wind turbines also exist in many other European and Non-European countries. 

In Spain, for example, the entitlement to build wind turbines is regulated differently in different 

regions. In most of the Spanish federal states (autonomías) a legal framework for the construction of 

wind farms is now in place. Requirements imposed by pollution control legislation generally play a 

lesser role in the approval process, as the population density in most coastal regions is lower in 

comparison to Germany. Environmental studies and special permission are required for the 

31

construction of wind turbines in remote areas (declaración de utilidad publica). During the approval 

process several public announcements, have to be made concerning the relevant wind project. 

Announcements issued by the authorities on the technical environmental impact of wind turbines are a 

decisive factor in whether planning permission (dictamen medioambiental) will be granted or not. 

32

Business 

Introduction and Overview 

The Nordex Group develops and produces technologically advanced wind turbines with an emphasis on 

high performance turbines, in particular megawatt turbines. The Company regards itself as a systems 

developer, focused on its key capabilities: the development and engineering of large wind turbines, the 

development and production of controls and electrical technology for its wind turbines, and the 

development and manufacture of rotor blades for megawatt wind turbines. In addition, the Nordex 

Group has positioned itself as a provider of services such as the technical planning of wind farm 

systems, from the identification of suitable sites to the technical implementation of wind farms, 

including connection to the grid, as well as the servicing of wind turbines. The Nordex Group does not 

operate its own wind turbines, except for prototypes which it uses for its own development purposes. 

Nordex AG is a holding company. It directly holds 100% of the share capital of each of its five 

subsidiaries. It has a management role which involves it in exercising on a group-wide basis functions 

such as planning and strategy, the coordination of purchasing and sales, development and other 

central administrative functions. 

In recent years, the Nordex Group has focused on the development and production of key components 

for wind turbines (namely controls, grid connections and, more recently, rotor blades for megawatt 

wind turbines). The Group has also established a supply management function for some of the other 

components which are available on the open market, such as masts, gears, rotor blades (to the extent 

the Group does not produce these itself), the production of each of which is contracted to two to three 

leading outside suppliers, predominantly on the basis of long-term supply agreements. Although the 

Nordex Group has only been manufacturing rotor blades since early 2000, it has already succeeded in 

recruiting development personnel with a high level of technical expertise. 

The turnkey production of wind turbines and wind farms as well as their maintenance and servicing are 

carried out by Nordex Energy GmbH and Südwind Energy GmbH. Nordex and Südwind turbines are 

manufactured by Nordex Energy GmbH in Rostock, Germany. Nordex Rotor GmbH produces some of 

the rotor blades required for the wind turbines produced by the Nordex Group, particularly for the N-80 

and N-62 models. Nordex Automation GmbH develops and produces electronic controls and the 

‘‘Nordex Control’’ control software for the majority of the wind turbines Nordex manufactures, and also 

develops and produces electrical and electronic components for wind farms, including grid 

connections. NPV Planungs- & Vertriebsgesellschaft mbH handles the technical planning of wind 

farms as well as sales of the Nordex Group’s wind turbines, principally in Germany, The Netherlands, 

Switzerland, Belgium and Austria. The Nordex Group’s activities therefore cover most aspects of the 

wind power industry, other than wind farm operations from the development of sites for wind turbines 

through to the turnkey construction of wind farms. 

The Nordex Group’s product line comprises turbines of all performance classes currently on the market, 

ranging from small wind turbines to the most powerful wind turbine in production in the world today, 

the N-80, which has a rotor diameter of 80m and a nominal output of 2.5 megawatts (see ‘‘—Products 

and Production’’). Besides the Federal Republic of Germany, the Nordex Group’s main established 

markets are Denmark, Spain and China. The Nordex Group has also been successful recently in selling 

its products in France, Greece, North America and in Egypt, where the Nordex Group is the dominant 

supplier of wind turbines in what is still a relatively small market. 

In the fiscal year ended September 30, 2000, the Nordex Group had an average of 523 employees and 

generated sales revenues of approximately E273 million and EBIT (earnings before interest and taxes) 

of approximately E13.2 million based on the IAS Pro Forma Consolidated Financial Statements. 

As of February 20, 2001 Nordex had produced 1,528 wind turbines. The total nominal output of these 

turbines is equivalent to approximately 1,013 megawatts. 

33

The History of the Nordex Group 

The Nordex Group’s wind energy business traces its roots back to Nordex A/S, which was founded in 

1985 by the Pedersen brothers, one of whom, Carsten Pedersen, is currently a member of the 

Management Board of Nordex AG. In 1996, the Balcke-Dürr Group acquired a 51% stake in Nordex 

Energy GmbH, and thus entered the market for wind turbine production. 

The following are the significant milestones in the Company’s development: 

1985 Formation of Nordex A/S in Give, Denmark, by the Pedersen brothers. Construction of the 

first turbine with a capacity of 75 kW. 

1987 Launch by Nordex A/S of the N-27/250 kW, the largest production wind turbine on the 

world market at the time. 

1991 Formation of Nordex Energy GmbH under the name. Nordex Energie Anlagen GmbH as a 

sales company in Rinteln, Germany. 

1992 Establishment of production facilities in Rerik, Germany. Installation of the 100th Nordex 

wind turbine. 

1995 Construction by Nordex Energy GmbH of the N-54, world’s first series production wind 

turbine in the megawatt that is now the market standard – 157 N-54 wind turbines had 

been built by January 10, 2001. 

1996 Acquisition by the Balcke-Dürr Group of a 51% stake in Nordex Energy GmbH. 

1997 Opening by Nordex of sales offices in Spain and China. 

1998 Construction of the first N-60 prototype, a further development of the N-54, with a 

capacity of 1,300 kW. Construction of the 1000th megawatt turbine. Formation of a joint 

venture in China. The Balcke-Dürr Group increased its stake in Nordex Energy GmbH to 

75% and also acquired NPV Planungs- & Vertriebsgesellschaft mbH. Opening by Nordex of 

a sales office in Turkey. 

1999 Installation by Nordex of its 1000th wind turbine. Formation of Südwind Energy GmbH 

and Nordex Rotor GmbH. Establishment of the production center in Rostock, Germany. 

Formation of Nordex Ibérica Borsig Energy S.A. 

2000 Construction by Nordex of the first N-80, 2,500 kW turbine (currently the largest and most 

powerful series production wind turbine in the world) and the first S-70, 1,500 kW turbine. 

Formation of Nordex USA, Inc. and establishment of branch offices in Egypt and Greece. 

Restructuring of the Nordex Group by transfer of the current subsidiaries into Nordex AG 

(previously Taifun AG). 

2001 Intended placement and listing of the Company’s Shares. 

Structure of the Nordex Group 

Nordex AG, founded as ‘‘Taifun AG’’ in 2000, functions as the strategic holding company of the Nordex 

Group. Nordex AG manages and coordinates the business activities of its five wholly-owned 

subsidiaries and is responsible, in particular, for coordinating purchasing, sales and development 

activities on a world-wide basis, as well as for making decisions on the location of production sites. 

Further, Nordex AG provides the entire Nordex Group with cost-efficient services achieved through the 

centralization of management and coordination activities such as corporate planning, finance and 

foreign exchange management, tax planning, patent and industrial property right management, and 

investor and public relations, as well as management and personnel functions. 

The Nordex Group has organized its various business areas into five wholly-owned subsidiaries. It has 

done so in order to tailor the various components it produces on the supply-side to suit each of the 

34

manufacturers, customers and suppliers active in the market, to enable each aspect of the business to 

have its own market presence and to be able to respond quickly to market developments through small 

manageable and flexible units. 

Nordex Energy GmbH, Rostock (moving to Norderstedt), which produces medium-sized predominantly 

stall-regulated and large predominantly pitch-regulated wind turbines (see ‘‘—Products and 

Production’’) and constructs turnkey wind farms, has four subsidiaries of its own, all of which are 

wholly-owned except for Xi’an Nordex Windturbines Co. Ltd., China in which it holds a 40% stake. 

Südwind Energy GmbH, Oberhausen, Germany also produces and sells wind turbines, although these 

are exclusively the pitch-regulated variant (see ‘‘—Products and Production’’). The Nordex Group 

believes that it is advantageous for it to maintain a two-pronged market presence with its two 

different brands, ‘‘Nordex’’ and ‘‘Südwind’’. 

Nordex Rotor GmbH in Rostock has been producing rotor blades, a key component of wind turbines, 

since February 2000. The production of rotor blades constitutes, together with the engineering and 

specification of the turbines, the principal area of technical knowhow involved in the manufacture of 

wind turbines. Nordex Rotor GmbH is also responsible for servicing and maintaining the rotor blades it 

manufactures. 

NPV Planung & Vertrieb GmbH in Norderstedt, Germany is responsible for planning wind farm projects 

and for selling Nordex and Südwind turbines in Germany, other German-speaking countries, Belgium 

and The Netherlands. 

Nordex Automation GmbH, Oberhausen, Germany develops and produces electronic controls, including 

software, and all electrical components up to the grid connection for wind turbines and wind farms. 

The reason for Nordex Automation GmbH’s having a separate market presence is that the company 

handles orders for Nordex Group customers directly in addition to developing and producing 

components for the Nordex Group’s own wind turbines. 

The following Chart shows the current structure of the Group: 

Nordex Ibérica 

Borsig Energy S.A. 

Barcelona, Spain 

Nordex 

Hellas e.p.e 

Athens, Greece 

Nordex Omnical 

Energy Services 

(Shanghai) Co Ltd. 

Shanghai, China 


Energy GmbH 

Nordersted/Rerik 

Xi'an Nordex 

Windturbines* 

Corp. Ltd, Xi'an, China 


USA Inc. 

Dallas, USA 

Südwind 

Energy GmbH 

Oberhausen 


Oberhausen 


Rotor GmbH 

Rostock 

NPV Planung & 

Vertrieb GmbH 

Bad Essen/Nordersted 

* All companies are wholly-owned with the exception of Nordex Energy GmbH’s 40% interest in Xi’an Nordex Windturbines. 


Automation GmbH 

Oberhausen 

Nordex Energy GmbH’s subsidiaries, Nordex Ibérica Borsig Energy S.A., Nordex Hellas e.p.e., Nordex 

Ominical Energy Services (Shanghai) Co Ltd., Nordex USA Inc. and Xi’an Nordex Windturbines Corp. Ltd., 

are not included in the consolidated financial statements of Nordex AG. 

35

The Wind Turbine Market 

Supply of the global market for wind turbines is dominated by a small number of companies while 

demand is highly fragmented on a global, national and regional level. The wind turbine market is a 

growth market and has experienced rapid growth at times, particularly during the 1990s. As a result of 

extraordinary factors, growth in the United States and Spain, two major wind energy markets, declined 

in 2000 due to tax-related issues and unusually lengthy approval processes. In 2001, however, wind 

turbine manufacturers expect growth to recover strongly, both in terms of the number of turbines sold 

and in terms of revenues. 

Key factors driving growth in recent years were continuous improvement in the efficiency of wind 

turbines and a trend toward increasingly large and powerful turbines as well as a favorable climate in 

terms of tax legislation and environmental laws. As there is a limited number of suppliers of wind 

turbines, so the number of outside suppliers of complex components for wind turbines, such as rotor 

blades, is also limited. Consolidation has occurred in the area of outside suppliers as well, to such an 

extent that the entry into the market or the insolvency of a major outside supplier can have a 

noticeable knock-on effect on the price structure of individual manufacturers of wind turbines. 

The wind turbine market is closely linked with the market for electricity from renewable sources. In the 

past, the share of electricity used in Germany produced from renewable energy sources increased from 

approximately 4.6% in 1997 to approximately 6% in 1999, and amounted to approximately 5,528 

million kW/h (Elektrizitätswirtschaft, 1999 (2000) vol. 24). 

According to a study by BTM Consult ApS 1 dated March 2000, newly installed megawatt capacity 

worldwide is expected to grow from 3,922 megawatts in 1999 to 9,175 megawatts in 2004, an increase 

of approximately 234%. This study also anticipates that increased cost-efficiency of wind turbines, 

taking account of environmental factors, will result in average annual growth of approximately 18.8% 

worldwide. 

According to a study by the Paris-based International Energy Agency (IEA) (World Energy Outlook 

2000), global electricity consumption is expected to increase by approximately 32% in the period 

between 2000 and 2010 to approximately 19,989 TWh. According to the provisional figures from the 

study by BTM Consult ApS relating to 2000 (which has not yet been published), the production of 

electricity from wind power is expected to increase from a forecast level of 40.73 TWh in 2000 to 

approximately 392.45 TWh in 2010. A comparison of these two studies suggests that the proportion of 

electricity from wind energy will increase from approximately 0.27% in 2000 to approximately 1.96% in 

2010. 

Market Development from 1997 to 1999 and in 2000 

The aggregate megawatt capacity of wind turbines sold worldwide grew from approximately 7,636 

megawatts in 1997 to 10,153 megawatts in 1998 and 13,932 megawatts in 1999. This statistic shows 

an acceleration in the increase in megawatt capacity sold and reflects the trend toward wind turbines 

with increasingly large nominal outputs. Whereas megawatt capacity sold rose by 33% from 1997 to 

1998, it increased by 37% from 1998 to 1999. 

1 BTM Consult ApS describes itself as an independent consulting firm focusing on renewable energy sources and was formed in 1986 with 

its registered office in Denmark. The company’s employees have, in some cases, up to twenty years experience in the wind energy market. 

Five years ago, BTM began producing an annual survey of the wind energy market. The sources of BTM’s market data include relevant 

professional energy sector journals and estimates by consultants, top employees of wind turbine manufacturing companies and 

governmental institutions. The figures used in this document are based on a market study conducted by BTM in March 2000 relating to 

1999 and the provisional figures provided by BTM from the market study relating to 2000, which is expected to be published at the 

beginning of April 2001. 

36

The following table illustrates the annual worldwide development of newly installed megawatt capacity 

as well as the aggregate installed megawatt capacity for wind turbines in the past three years: 

1997 1998 1999 

Average growth 

1997 to 1999 2000 1) 

Newly installed megawatt capacity 1,566 2,597 3,922 4,500 

Annual growth 21% 66% 51% 50.1% 15% 

Aggregate installed capacity (as at year-end) 7,636 10,153 13,932 18,432 

Growth of aggregate installed megawatt capacity as 

compared to prior year 26% 33% 37% 27.5% 32% 

(Source: BTM Consult ApS – March 2000) 

1) Provisional figures from an as yet unpublished study by BTM Consult ApS relating to 2000 

According to the provisional figures from a draft study currently being prepared by BTM Consult ApS 

relating to 2000, which has not yet been published (BTM Consult ApS – February 2001 (draft)), a total 

capacity of 4,500 megawatts was newly installed worldwide in 2000, representing an increase of 15% 

on the previous year. The increase in 2000 was thus at a substantially lower rate than in previous years. 

In the opinion of BTM Consult ApS, this slowdown was due, in part, to developments in the US, where 

tax subsidies via Production Tax Credits expire at the end of 2001, and where there is currently 

uncertainty as to whether and in what manner electricity generation using wind energy will continue 

to be subsidized. However, the Company expects that the current tax subsidies will be extended. 

Elsewhere, the development of the Spanish market, where installations reached only approximately 

1,100 megawatts, contributed to the predicted overall low increase for 2000. BTM Consult ApS believes 

that, in the US in particular, installed megawatt capacity will again increase considerably (source: BTM 

Consult ApS – February 2001 (draft)). 

Of the 3,922 megawatt capacity which was newly installed worldwide in 1999 (prior year: 2,597 

megawatts), 3,192 megawatts, or approximately 81% (prior year: 68%) was installed in Europe. In 

1999, Germany was the leading European country with 1,568 megawatts of newly installed capacity 

(prior year: 793 megawatts), followed by Spain with 932 megawatts and Denmark with 325 megawatts. 

These countries thus accounted for approximately 88.5% of newly installed capacity in Europe in 1999. 

Asian countries accounted for only 115 megawatts in 1999 (approximately 2%; prior year: 147 

megawatts, or approximately 5%). In 1999 in the United States, the third largest single market 

worldwide, new installations amounted to 477 megawatts, which was lower than the total in 1998 

(577 megawatts). This 477 megawatts of new installations in the United States in 1999 represented 

87% of newly installed capacity for the whole of the American continent, which totaled 548 

megawatts (1998: 658 megawatts). 

37

The following table illustrates newly installed megawatt capacity in selected countries and regions from 

1997 to 1999 and in 2000: 

Total installed 

megawatt Newly installed 

Newly installed megawatt capacity 

capacity to end 

1999 

megawatt 

capacity (1) 

Country/Region Year Year Year 

1997 1998 1999 1999 2000 

Germany 533 793 1,568 4,442 1,665 

United States 29 577 477 2,445 N/A 

Spain 262 368 932 1,812 1,100 

Denmark 285 310 325 1,738 600 

India 120 82 43 1,035 N/A 

UK 55 10 24 362 N/A 

China 67 54 25 262 N/A 

Greece 0 26 103 158 N/A 

Portugal 20 13 10 61 N/A 

France 8 8 4 25 N/A 

Turkey N/A 9 0 9 N/A 

Europe (total) 1,318 1,766 3,192 9,737 N/A 

Asia (total) 196 147 115 1,376 N/A 

American continent (total) 43 658 548 2,667 N/A 


(1) Provisional figures from an as yet unpublished study by BTM Consult ApS relating to 2000 

According to the provisional figures from the as yet unpublished draft study relating to 2000 currently 

being prepared by BTM Consult ApS, Germany, Spain and Denmark were in 2000 once again the most 

important global markets, accounting for approximately 80% of total megawatt capacity installed in 

2000. BTM Consult ApS forecasts that newly installed megawatt capacity in the United States in 2000 

will prove to have been significantly lower than in the previous year (source: BTM Consult ApS – 

February 2001 (draft)). 

Total megawatt capacity installed worldwide up to the end of 1999 was 13,932 megawatts (prior year: 

10,153 megawatts), distributed across a total of 43,545 wind turbines (prior year: approximately 38,761 

wind turbines) at the end of 1999, corresponding to an average capacity per wind turbine installed 

worldwide in 1999 of approximately 320 kW (prior year: c. 262 kW) (source: BTM Consult ApS – March 

2000). 

A comparison of total installed kilowatt capacity to total installed turbines shows on the one hand that 

the average capacity of wind turbines installed has increased significantly in recent years, but also that 

there are considerable country-specific differences with regard to the size of turbines installed. 

Whereas in Germany the average capacity of all wind turbines operated increased from an average of 

623 kW in 1997 to 919 kW in 1999, the average capacity in Spain increased only from 422 kW in 1997 

to 589 kW in 1999 (source: BTM Consult ApS – March 2000). 

The following table illustrates the development of the average nominal output of installed wind 

turbines in selected countries: 

Development of average nominal output 

(per turbine) in kW 

Country Year 

1997 1998 1999 

Germany 623 783 919 

Sweden 550 590 775 

Denmark 560 687 750 

United States 707 723 720 

UK 514 615 617 

Spain 422 504 589 


38

According to the provisional figures from the as yet unpublished draft study currently being prepared 

by BTM Consult ApS relating to 2000, this trend toward higher capacity wind turbines increased further 

in 2000. Based on its provisional figures for 2000, BTM Consult ApS estimates that the average turbine 

size in the German market was approximately 1,100 kW. 

The reason for the rise in average capacity is the trend toward installing increasingly powerful wind 

turbines. The number of megawatt turbines rose from around 128 in 1997 to over 800 in 1999 and the 

share of the total market for megawatt wind turbines increased from approximately 9.7% in 1997 and 

16% in 1998 to approximately 26.8% in 1999. 

The following table illustrates the number of megawatt wind turbines – which constitute the core 

business of the Nordex Group – installed up to 1997 and in 1998 and 1999 and the megawatt capacity 

represented by these turbines and the share of the global market of each class: 

Development of the installation of 

megawatt turbines 

Year 

up to 1997 1998 1999 

Number of megawatt wind turbines per year 128 332 802 

Installed megawatt capacity per year 153 417 1,076 


Of the 5,519 new wind turbines installed worldwide in 1999, 802 were megawatt wind turbines, 

representing a share of the wind turbine market of approximately 14.5%. In terms of installed capacity, 

1,076 megawatts out of the 4,021 megawatts of newly installed capacity in 1999 represented 

megawatt turbines, a market share of approximately 26.8%. 

The following table gives an overview of new wind turbines installed worldwide in 1999 by capacity: 

Capacity range 

(in kW) 

No. of 

wind turbines 

Installed 

capacity 

Market share 

(by capacity) 

Avg. capacity 

per wind 

turbine 

Comments on 

market trend 

Small wind turbines C500 kW 666 198 4.9% 297kW declining 

Medium-sized wind turbines 500-999 kW 4,051 2,748 68.3% 678kW 

stable/declining 

slightly 

MW-class D1MW 802 1,076 26.8% 1,342 kW increasing 

Total 5,519 4,022 100% 729 kW 


Projected Market Development up to 2003 

For the coming years, the BTM Consult ApS study of March 2000 expects a further increase in the 

worldwide installed megawatt generating capacity from wind turbines to a total of 38,300 megawatts 

in 2003. This would represent an increase of approximately 175% in installed megawatt capacity 

compared to the position at the end of 1999. In Europe this study anticipates growth of approximately 

192%, from 9,737 megawatts to 28,427 megawatts during the same period. In Asia, the study 

anticipates an increase from 1,376 megawatts (at the end of 1999) to 3,346 megawatts (at the end of 

2003), which would represent an increase of approximately 143%. 

According to the provisional figures taken from the as yet unpublished draft study currently being 

prepared for 2000, BTM Consult ApS forecasts an annual growth rate in the number of installed wind 

turbines of at least 15% for the years 2001 to 2005. In this forecast, BTM Consult ApS anticipates a 

substantial increase in installed wind turbines in the US in 2001, but stagnation of new installations in 

2001 in the Danish and German markets. According to BTM Consult ApS, this stagnation should start to 

give way from 2002 on, due to planned offshore installations. BTM Consult ApS forecasts that growth 

markets, such as Turkey, France and Italy will make a tangible contribution to the total number of 

turbines installed in Europe from 2002 onwards. In addition, BTM Consult ApS also expects a slight 

increase in the number of installations in China and India. According to BTM Consult ApS’s initial 

39

forecasts, Northern Africa, primarily Egypt, Morocco and Tunisia are expected to show stable growth in 

the number of installations. 

The following table contains information taken from the BTM Consult ApS report for 2000 and 

illustrates the market forecast up to 2003 based for installed megawatt capacity for selected countries 

and regions, which are important to the Company: 

Country/Region 

Total 

installed 

MW at end 

of 1999 

Newly 

installed 

MW in 

1999 Forecast 2000 to 2003 in MW 

Newly 

installed Total 

MW from installed 

2000 to MW at end 

2003 of 2003 

1999 1999 2000e 2001e 2002e 2003e Subtotal Total 

Germany 4,442 1,568 1,400 1,600 1,200 1,500 5,700 10,142 

Spain 1,812 932 1,500 1,500 1,500 1,800 6,300 8,112 

Denmark 1,738 325 300 200 300 400 1,200 2,938 

UK 362 24 50 100 200 300 650 1,012 

Greece 158 103 100 100 150 150 500 658 

Portugal 61 10 30 30 40 50 150 211 

France 25 4 75 100 125 200 500 525 

Turkey 9 0 20 100 100 150 370 379 

United States 2,445 477 300 600 400 500 1,800 4,245 

China 262 25 150 150 200 300 800 1,062 

India 1,035 43 100 150 200 300 750 1,785 

Europe (total) 9,737 3,192 4,010 4,445 4,615 5,620 18,690 28,427 

American 

continent 

(total) 2,667 548 400 800 600 750 2,550 5,217 

Asia (total) 1,376 115 330 380 530 730 1,970 3,346 


The Company anticipates that the cost of electricity generated from wind energy as compared with 

conventional energy sources will decline significantly, although the price of wind-generated electricity 

is strongly influenced by the location of the turbines. The Company believes that in a few years’ time, 

wind turbines in favorable coastal locations will be able to produce electricity more economically than 

gas-powered plants. The Company bases this belief on the continued decrease in the cost of producing 

power from wind energy per kWh, and on increases as in the price of fossil fuels. The Company believes 

that the reduction in the cost of producing power from wind energy will come from a reduction in 

investment costs of wind turbines per kW of installed capacity. In the period from 1991 to 2000, 

investment costs per kW of installed capacity declined by approximately 40% (source: BTM Consult 

ApS-March 2000). According to the March 2000 study by BTM Consult ApS, costs per installed kW are 

expected to fall by another 15%-20% in the next five years. 

The Company believes that the falling investment costs per installed kW are principally the result of the 

continually increasing kW capacity per turbine, which is increasing faster than turbine manufacturing 

costs. In the coming years, the Company believes that the nominal output of wind turbines will 

increase further. 

Competition 

The competitive position of the Nordex Group is characterized by strong market concentration of 

manufacturers of wind turbines. In 1999 approximately 92% of the global market for wind turbines, 

measured by installed capacity, was accounted for by only eight manufacturers, including the Nordex 

Group (source: BTM Consult ApS – March 2000). Some individual regional markets such as China, Egypt 

or The Netherlands are dominated by just two or three suppliers. The Nordex Group’s primary 

competitors in the wind turbine manufacturing market are the Danish producers, NEG Micon A/S, 

40

Vestas Wind Systems A/S and Bonus Energy, the Spanish manufacturers Gamesa Eólica and Made, the 

German company Enercon GmbH and the US manufacturer Enron Wind Corp. (Tacke/Zond). 

The following diagram illustrates the market shares of the Nordex Group and its competitors based on 

the number of new turbines installed worldwide in 1999: 

Bonus 

8.6% 

Made 

5.6% 

Enron 

(Tacke/Zond) 

9.2% 


7.8% 


Market share 1999 

Other 

7.7% 

Gamesa 

12.6% 

NEG Micon 

19.4% 

Vestas 

16.6% 

Enercon 

12.5% 

According to the provisional results of the study by BTM Consult ApS relating to 2000, the Nordex 

Group increased its market share from 7.8% in 1999 to approximately 8.4% in 2000 (Source: BTM 

Consult ApS – February 2001 (draft)). 

NEG Micon A/S, a listed company, was created in the mid-1990s from the merger of the Danish 

manufacturers Nordtank Energy Group and Micon, which had both been active in the market since the 

early 1980s, and the acquisition of another Danish manufacturer, Windworld. NEG Micon was the 

global market leader in 1999 in terms of total installed capacity (source: BTM Consult ApS – March 

2000). 

Vestas Wind Systems A/S, also a listed company, is a Danish manufacturer that has been in the wind 

energy business since it first developed and has wind turbines installed in countries around the world. 

Vestas produces the key components of its wind turbines such as rotor blades, controls and some 

masts (source: BTM Consult ApS – March 2000). 

Gamesa Eólica, a joint venture between the Gamesa Group, Vestas and Sodena, was formed in the early 

1990s. Gamesa is the largest wind turbine manufacturer in Spain and has been a listed company since 

2000 (source: BTM Consult ApS – March 2000). 

Enercon GmbH, which was formed in the mid-1980s, is the leading German wind turbine manufacturer 

in terms of installed turbines. Enercon uses a particularly high percentage of components produced inhouse 

in its wind turbines (source: BTM Consult ApS – March 2000). 

Enron Wind Corp. (Tacke/Zond) is a subsidiary of the US-based Enron Group, one of the world’s largest 

suppliers of gas technology. In the mid-1990s, Enron launched its activities in the wind energy sector 

with the acquisition of Zond Systems Inc., a company which had formerly focused exclusively on 

developing wind turbines, and Tacke GmbH, a German turbine manufacturer (source: BTM Consult ApS 

– March 2000). 

Bonus Energy is a Danish manufacturer that also has decades of experience in the wind turbine market. 

Bonus is a pioneer in the area of active stall regulation (source: BTM Consult ApS – March 2000). 

Made Energias Renovables is a wholly-owned subsidiary of the Spanish energy group Grupo Endesa 

and has a market presence in Tunisia and China as well as Spain (source: BTM Consult ApS – March 

2000). 

41

The main characteristics that distinguish the Nordex Group from its competitors are the fact that it 

manufactures both stall-regulated and pitch-regulated (variable and constant rotational speed) wind 

turbines and that it can provide the entire range of services itself, from the development of key turbine 

components through to the manufacture of rotor blades and controllers to grid connection. Another 

feature which distinguishes it from its competitors is that Nordex has a policy of acquiring in the 

market other standardized components with relatively low margins instead of manufacturing these 

components more expensively in-house, (see ‘‘—Products and Production—Production Sites and 

Capacity’’). 

The following table shows a comparison of the types of wind turbine produced by the Nordex Group 

and its main competitors: 

Manufacturer Primary wind turbine type produced: 

Nordex Stall-regulated wind turbines with constant rotational speed and variable-speed pitchregulated 

wind turbines 

Bonus Energy Stall-regulated wind turbines with constant rotational speed and with active stall 

regulation 

Enercon GmbH Variable-speed pitch-regulated wind turbines and multiple generators 

Enron Wind Corp. Variable-speed pitch-regulated wind turbines 

Gamesa Eólica Variable-speed pitch-regulated wind turbines 

Made Stall-regulated wind turbines with constant rotational speed 

NEG Micon A/S Stall-regulated wind turbines with constant rotational speed and pitch-regulated wind 

turbines 

Vestas Wind Systems A/S Pitch-regulated wind turbines with OptiSlip (variable-speed) 

The total market for wind turbines increased by approximately 46% in 1999 as compared to 1997 in 

terms of newly installed capacity. As one of the leading companies in the megawatt, the Nordex Group 

was able to increase its global share of this growing market from approximately 4.3% in 1997, to 

approximately 5.0% in 1998, and further to approximately 7.8% in 1999. This corresponds to an 

average increase of approximately 28% per year (source: BTM Consult ApS – March 2000). According to 

the provisional results of the BTM study for 2000, the Nordex Group held a market share of 8.4% in 

2000 (source: BTM Consult ApS – February 2001 (draft)). In terms of megawatt turbines, which in 1999 

reached a 26.8% share of the total market based on newly installed capacity (prior year: 16%), the 

Nordex Group had a market share of 20.4% in 1999 calculated on the basis of installed capacity. 

Enercon also captured a market share of approximately 20.4%, while Bonus held approximately 18.7% 

(source: BTM Consult ApS – March 2000). 

The following diagram illustrates the market share held by the Nordex Group and its competitors in the 

megawatt segment in terms of installed capacity in 1999: 

Market share in the megawatt in 1999 

Enron 

(Tacke/Zond) 

15.5% 

Vestas 

17.7% 


42 

Other 

7.3% 

Bonus 

18.7% 


20.4% 

Enercon 

20.4%

Strategy 

Nordex’s overall strategy is to increase its worldwide market share through a combination of internal 

and external growth and to be one of the world’s top three manufacturers of wind turbines. To this 

end, the Nordex Group intends to build upon its technological advantage in the megawatt segment and 

also to further expand its international presence. Nordex’s strategy also focuses on increasing 

profitability through the introduction of more intensive industrial manufacturing. Measures planned 

for the implementation of this strategy include: 

Expansion of Nordex’s Technological Advantage in the Megawatt-Class 

The Nordex Group believes that it has a technological lead in the construction of large-scale, megawatt 

turbines and plans to increase this lead through the introduction of new megawatt wind turbines to its 

product range and continued development of its existing types of wind turbines. The particular focus in 

this area will be on the development of a new blade technology for rotor blades with a length of more 

than 40m, and the construction of new wind turbines with a capacity of over 2.5 megawatts. 

As a further long term objective, the Company plans to develop offshore wind turbines, i.e. wind 

turbines that can be operated in wind farms on the open sea up to 40km from the coast. In order to 

serve the needs of the offshore market, which has already begun to develop with smaller turbines 

closer to shore, the Company plans, in the medium term, to develop an offshore version of the N-80. 

The Company believes that there will be market demand in the long term for larger, higher capacity 

turbines for operation in offshore wind farms out at sea. For this reason, the Company has entered into 

a joint venture with Jacobs Energie GmbH, a manufacturer of wind turbines, and pro + pro 

Energiesysteme GmbH & Co. KG, a development company, for the development of a 5-megawatt model 

with a rotor diameter of up to 120m. Plans for the development of such offshore wind turbines are 

currently at a very early stage, however, due to the highly exacting technical and physical requirements 

and the demanding conditions in which such turbines would operate. 

Improvement in the Cost-efficiency of Generating Power from Wind Energy 

The Company aims to improve substantially the cost-efficiency of power generation from wind energy 

by reducing significantly the cost of generating electricity per kWh from the turbines it manufactures 

and sells. Nordex plans to achieve this goal both by cutting manufacturing and assembly costs, and by 

reducing operating costs of its wind turbines and infrastructure costs. Series production of wind 

turbines, turbine weight reduction and the cutting of installation costs through a time-saving plugand-play 

assembly are primary factors in reducing manufacturing and assembly costs. 

In order to reduce the operating costs of its wind turbines, the Company is developing a Condition 

Monitoring System currently as an addition to its Nordex Control system. This system will enable 

operators to diagnose errors early while the turbines are in operation and is intended to help prevent 

breakdowns, lengthen maintenance intervals for wind turbines in operation, and thus reduce 

maintenance costs. 

The Company believes that these measures, together with the planned increase in capacity rating, will 

further improve the cost-effectiveness of generating power from wind energy. 

Consistent and Early Presence in International Growth Markets 

In order to increase its share of the world market, the Nordex Group plans to focus on expansion 

overseas while continuing to expand within Germany, and aims, therefore, to increase its presence in 

regional markets where it is already active and at the same time build up a presence in new regional 

markets. The Company considers the most interesting future markets to be: Spain in particular, due to 

the existing law regarding the supply of electricity into the public grid and its good wind conditions; 

the UK, due to especially good wind conditions and the availability of tax credits for electricity 

generated from renewable sources; the United States, also due to good wind conditions and tax 

subsidies for wind turbines; France, where a law on power from renewable energies is being drafted; 

and China, where the level of demand for energy is high and where the Nordex Group already has a 

strong presence. 

43

The Nordex Group has already established its own sales subsidiaries or offices in Germany and 

Denmark, as well as nearly all of its important growth markets such as Spain, China and the United 

States. In order to expand its existing presence in regional markets, the Company is pursuing a multipronged 

strategy tailored to each market: whereas in Germany the Nordex Group is focusing on the 

sale of large, megawatt turbines and the completion of large scale projects, in other markets it will 

concentrate on the sale of mid-sized turbines (such as the N-50/N-60) and the expansion of regional 

sales (e.g. in Spain and France) and the establishment of its own sales structures (e.g. in the UK). In 

China, the Company’s goal is to secure its market position by utilizing locally provided servicing and by 

manufacturing wind turbines through its joint venture. In addition to growing organically, the 

Company intends to acquire competitors or enter into strategic partnerships in order to move into new 

markets. 

Reinforcement of Servicing Activities 

The Company plans to increase customer loyalty in its established markets through the building up of a 

customer-oriented, international servicing network, thereby securing and building up a further 

advantage over its competitors. A key element in reinforcing the Nordex Group’s servicing activities — 

in addition to the further expansion of service centers — is its own control technology, Nordex Control. 

This control technology monitors and controls wind turbines continuously through built-in sensors. In 

the future, the data will not only be reported to the Nordex Group’s control center electronically, but 

will also be available for customers to view via a Web browser. 

In order to increase the quality of its services further, the Company has put in place an ongoing 

program to improve the level of qualification of its employees. A Servicing Academy was founded at 

the end of 2000 for this purpose, which is also open to employees of partner companies. 

Products and Production 

The core competency of the Nordex Group is the development and engineering of large wind turbines, 

the development and manufacture of control systems for wind turbines, including grid connections, 

and the development and manufacture of rotor blades for megawatt wind turbines. 

Technical Background 

A wind turbine comprises a mast, a nacelle, which contains the essential mechanical and electrical 

parts, and a rotor. However, the generation of electricity by a state-of-the-art wind turbine is a result 

of the specific interplay of various highly developed and synchronized components. 

The technical achievement in developing a wind turbine lies in harnessing the wind, the speed of which 

changes continually from minute to minute, and the power of which fluctuates depending on the air 

temperature, to generate a stable level of power whatever the wind conditions. The goal of the 

technical efforts and optimization, therefore, is to generate the highest constant level of power output 

possible from all possible wind conditions. The keys to achieving this are: the rotor blades must extract 

the maximum amount of energy from the wind and convert it into torque, the drive train along with 

the gear and the generator must efficiently convert the captured energy to electricity with as little 

capacity lost as possible, the power output of the wind turbine itself must be limitable to prevent 

damage to the turbine and adjustable to cope with the entire range of possible wind speeds, the 

controlling electronics of variable-speed wind turbines must control the interplay of all components 

and optimize the amount of energy captured from the wind, the wind turbine and its individual 

components must be highly robust to withstand the forces acting on it and to seek to achieve problemfree 

operation for as long as possible. 

44

The following figure illustrates the key components of a wind turbine: 

The rotor blades 

The rotor blades form the motor of the wind turbine. The wind turbine uses the rotor blades to collect 

kinetic energy from the wind and to convert this energy into a rotation of the rotor. The area swept by 

the rotor blades (length of the rotor blade *p), the aerodynamic profile of the rotor blades and the 

rotational speed of the rotor are the key factors determining the capacity of the wind turbine. In 

turbines with stall-regulation, the rotor blades are fixed to the hub, whereas in turbines with pitchregulation, 

they are attached so that they can rotate along their longitudinal axis. Wind turbines are 

manufactured today almost exclusively with three rotor blades. 

Energy conversion via the drive train and generator 

The rotor blades are attached to the hub, which in turn is connected to the rotor shaft. The rotor shaft 

transfers the revolutions of the rotor to a gear, which itself is linked to the generator of the wind 

turbine by way of a coupling. The unit comprising the rotor shaft, gear and generator is termed the 

drive train of the wind turbine. 

The generator at the end of the drive train converts the revolutions of the rotor blades into electrical 

power. The wind turbine’s gear serves to increase the rotational speed of the rotor to match the speed 

of the generator. Depending on the technical design, the generator can be operated either at a 

constant rotational speed (stall regulation) or at a variable speed. 

Power regulation and limitation (stall and pitch regulation) 

Depending on the technique employed to regulate and limit their capacity, wind turbines are generally 

classified as stall-regulated or pitch-regulated. 

Stall regulation 

In a wind turbine with stall regulation, power regulation is achieved by causing the air flow to stall by 

means of the aerodynamic profile of the blade when a certain wind speed is exceeded, preventing the 

wind turbine from capturing an increasing amount of energy. In order to increase the energy yield in 

lower power classes, it is possible to design the generator in such a way that it can operate two 

different nominal rotational speeds in order to generate power more efficiently at various wind speeds. 

Stall-regulated wind turbines are braked through the front 1.5m to 3m of the relevant rotor blade 

which can be rotated around its longitudinal axis. This is achieved through a hydraulic mechanism 

45

which can turn the blade tip ‘‘out of the wind’’, acting as a type of aerodynamic brake similar to the 

landing flaps of an airplane. The brakes in every wind turbine serve as emergency brakes and — 

similarly to the hand brake in a car — to immobilize and secure the mechanical components. 

Pitch regulation 

In a wind turbine with pitch regulation, power regulation is achieved by mounting the rotor blades on 

the hub so that they can be rotated around their longitudinal axis, in order to control their 

aerodynamic properties and thus their capacity to capture energy according to the wind conditions. 

When wind speeds (and thus the wind’s energy content) are low, the rotor blades can be turned ‘‘into 

the wind’’ so that their angle of attack is maximized and, when a strong air flow creates too much 

energy, they can be turned out of the wind. Pitch-regulated wind turbines are braked by allowing the 

rotor blades to flap like flags in the wind. 

In addition, the nominal rotational speed of the generator in wind turbines with pitch regulation can be 

adjusted to the prevailing wind conditions. These turbines are therefore also described as variablespeed 

wind turbines. In these units, an inverter is installed between the generator and the power grid, 

which enables the generator to generate electricity at different frequencies. 

The electronic controls in variable-speed wind turbines 

In variable-speed wind turbines with pitch regulation, the electronic controls are the ‘‘brain’’ of the 

turbine and adjust the angle of incidence of the rotor blades with the generator to keep them working 

smoothly together. A key element of the Nordex Group’s expertise is comprised in its electronic 

controls. The electronic controls measure the generator’s power output and, through the pitch 

regulation adjust the angle of incidence of the rotor blades accordingly. If the generator’s power output 

appears to be dropping, the rotor blades are turned slightly more into the wind, but if the generator’s 

power output exceeds a pre-defined maximum limit, the electronic controls cause the pitch regulation 

system to turn the rotor blades out of the wind. 

The use of pitch regulation and the related control options ensures that the wind turbine produces the 

maximum possible energy output from the wind in all wind conditions, taking into account not only 

variable wind speeds, but also the energy density of the wind. The colder the air, i.e. the denser the air 

surrounding the wind turbine, the higher the energy density. Consequently, cold wind blowing at the 

same speed as a warm wind carries more kinetic energy than the warm wind. In order to obtain optimal 

energy output, the angle of incidence of the rotor blades can be adjusted as necessary. The advantages 

inherent in this method for the optimization of output, in turbines with a capacity of approximately 1.5 

megawatts or more or in regions with particularly difficult wind conditions, outweigh the substantial 

additional costs of-pitch regulated systems. 

Other wind turbine components 

Another component in the development of which the Nordex Group has considerable expertise is the 

support system, i.e. the mast of the wind turbine. Strong forces act on the mast over the entire life of 

the wind turbine; the nacelle of Nordex’s largest turbine, the N-80, weighs approximately 84 tonnes, 

and the rotor weighs approximately 49 tonnes. The turbine’s mast has to withstand these forces and 

provide a secure foundation to the nacelle and the rotor without swaying due to changes in wind force, 

as this would result in the destruction of the turbine. The support systems used by the Nordex Group 

are manufactured by various outside suppliers to the specifications of Nordex Energy GmbH. 

The power generated by the wind turbine, usually at a voltage of 700 volts, is converted by a 

transformer to a ‘‘medium’’ voltage of 10 to 30,000 volts—depending on the grid operator—and 

supplied into the grid. When several wind turbines are operated together on a wind farm, the operator 

must ensure that turning on or stopping the wind turbines does not cause electrical surges to be fed 

into the utility’s power grid, which could cause damage when the electricity reaches power customers. 

The Nordex Group’s Product Range 

The Nordex Group’s product range covers the range of wind turbine types currently available on the 

market, from the N-29 with 250 kW nominal output to the N-80 with 2,500 kW nominal output, which, 

46

due to their various sizes and nominal outputs, are suitable for use in the most varied economic and 

geographical circumstances. The following table provides an overview of the types of wind turbines 

currently offered by the Nordex Group: 

Type of 

wind turbine Nominal output 

NORDEX N-29 250 kW 29 m / 660 m 2 

NORDEX N-43 600 kW 43 m / 1,452 m 2 

NORDEX N-50 800 kW 50 m / 1,963 m 2 

Rotor diameter/ 

swept area Mast height 

Year first 

installed 

Number of 

installed 

units (1) 

30-50 m 1987 287 

40-78 m 1995 420 

46-70 m 1999 53 

NORDEX N-54 1,000 kW 54 m / 2,290 qm 60-70 m 1995 163 

NORDEX N-60/62 1,300 kW 60/62 m / 2,828-3,018 m 2 

Südwind S-70/77 1,500 kW 70/77 m / 3,848-4,656 m 2 

NORDEX N-80 2,500 kW 80 m / 5,025 m 2 

(1) As of February 20, 2001 

46-85 m 1997 293 

60-100 m 2000 21 

60-100 m 2000 4 

The prices for Nordex and Südwind turbines range from DM 0.4 million to DM 4.05 million, depending 

on the model and specifications. 

Apart from their nominal output and size, the various wind turbines comprising the Nordex Group’s 

product range vary primarily in the technology used for output regulation. Whereas for its smaller 

turbines the Nordex Group principally uses the less complex stall regulation technology, the larger 

Nordex turbines, starting at 1.5 megawatt capacity, are equipped with pitch regulation. The Company 

believes that the advantages offered by the higher energy yield of these models compensate for the 

higher costs associated with pitch regulation. 

The following overview illustrates the distribution of Nordex turbines in the Group’s most important 

sales markets as of February 20, 2001: 

Country N-27/29 N-43 N-46 N-50 N-54 N-60/62 S-70/77 N-80 Total 

China 30 84 4 114 

Denmark 31 30 44 34 139 

Egypt 105 105 

France 1 28 29 

Germany 196 102 27 9 150 223 21 4 721 

Greece 1 35 36 

India 263 263 

Japan 5 6 1 12 

Spain 25 25 

United States 1 1 10 8 20 

Other 19 4 3 23 49 

Total 547 420 27 53 163 293 21 4 1,528 

Capacity (MW) 116.45 252.00 16.65 42.40 163.00 380.90 31.50 10.00 1,012.90 

In addition to smaller wind turbines with capacity of less than one megawatt, the Nordex Group 

primarily develops and produces megawatt wind turbines. Particularly notable in the Nordex Group’s 

product range are the N-80, the largest wind turbine in series production, the smaller S-70 and the 

stall-regulated N-54 and N-60 turbines. 

The 2.5 megawatt Nordex N-80 

Nordex’s N-80 is the world’s largest and most powerful wind turbine currently in series production. The 

rotor of the variable-speed N-80 consists of three rotor blades, each approximately 39m long, with 

pitch-regulated angle of incidence adjustment. The rotor blades are made of glass fiber-reinforced 

polyester using carbon fibers and can, by using a double-fed asynchronous generator and electrical 

pitch regulation as well as an inverter, be operated at a variable rotational speed of 10 to 19 

revolutions per minute, which corresponds to wind speeds of 3m/s to 25m/s. The turbine is controlled 

47

through a programmable logic control and is equipped with the ‘‘Nordex Control’’ remote monitoring 

system, which allows all essential operating parameters to be transmitted to the Nordex control center. 

The relatively low rotational speed, which due to the variable-speed design can be reduced to 10 

revolutions per minute, ensures a comparatively low noise level for a turbine of this size without 

compromising capacity. In addition, the low rotational speed of the rotor is not perceived as disturbing 

by bystanders, because only rotational speeds that are faster than the human heart beat are often 

perceived as disturbing. 

The 1.5 megawatt Südwind S-70 

Südwind Energy GmbH’s S-70 is the ‘‘little sister’’ of the N-80 and is technically very similar. With a 

rotor diameter of 70m and tower heights of 65 – 85m, the pitch-regulated, variable-speed S-70 

achieves a nominal output of 1.5 megawatts, which can be reached at wind speeds as low as 14 m/s. 

The S-70 is produced and sold, pursuant to a licensing agreement between Südwind Energy GmbH and 

pro + pro Energiesysteme GmbH & Co. KG (see ‘‘—Intellectual Property Rights – Patents, Trademarks 

and Licenses’’). 

Nordex N-54 and N-60 

The Nordex N-54 and the N-60, which was developed from the N-54, are designed to a different 

underlying technical concept from the N-80 and S-70. The N-54 and N-60, which are among the best 

selling wind turbines produced by the Nordex Group, are stall-regulated, and the generator units are 

comprised of a pole-changeable asynchronous generator. The pole-changeable function of the 

asynchronous generator enables the N-54 and N-60 to operate at two different nominal rotational 

speeds which can be switched while the turbine is in operation, thus increasing the energy yield in 

variable wind conditions. 

The N-54 generates a nominal output of 1,000 kW at wind speeds between 14 m/s and 25 m/s with a 

rotor diameter of 54m and tower heights of 60m to 70m. 

The N-60 generates a nominal output of 1.3 megawatts with a rotor diameter of 60m or 62m and 

tower heights of 60m to 85m. The N-60 can be operated at wind speeds of between 3 m/s and 25 m/s. 

Production Sites and Capacity 

The Nordex Group’s strategy is to develop and manufacture key components of wind turbines in-house, 

while at the same time coordinating the sourcing of low margin components commonly available on 

the open market from outside suppliers. The Nordex Group concentrates its production on key 

components such as rotor blades for its N-80 and N-60 large-scale wind turbines, control systems and 

electrical components including the grid connection, as well as the engineering of its turbines. The 

remaining components are sourced from other manufacturers of which some belong to the Babcock 

Borsig Group (see ‘‘—Material Contracts’’ and ‘‘Relationships with the Majority Shareholders, the 

Babcock Group and the Pedersen family’’). In addition to various small parts, third-party components 

principally include towers, molded parts, rotor blades, generators and mechanical components (gears, 

pitch bearings, shafts, brakes, etc.). 

The rotor blades produced in-house for the N-80 and N-60 models are manufactured for Nordex by 

Nordex Rotor GmbH in Rostock, the production facilities for which are still in the process of being 

fitted out. The Nordex Group currently manufactures only 30m and 40m rotors for the N-60 and N-80 

models, while some of the rotor blades for the N-60 are sourced from other manufacturers. Nordex 

Rotor GmbH had 74 employees as of December 31, 2001. 

The control systems including the related software and electrical components, including switch 

cabinets, are produced by Nordex Automation GmbH in Rostock. 

Nordex Energy GmbH’s completed wind turbines are assembled at the Rostock and Give, Denmark sites 

as well as in a joint venture in Xi’an, China. Südwind Energy GmbH does not manufacture any 

components, but instead outsources the production of its wind turbines primarily to Nordex Energy 

GmbH and to a lesser degree to other production facilities. Südwind Energy GmbH maintains an 

assembly plant in Lichtenau (near Paderborn) for servicing and maintenance. 

48

The maximum weekly production capacity of Nordex Energy GmbH currently amounts to 12-14 

megawatt wind turbines and 7-8 smaller wind turbines. Wind turbines for entire wind farms are 

produced in series at a production speed which is coordinated to the assembly speed of completed 

turbines at the construction site. Assembly of the individual wind turbines at the construction site takes 

three to four days. Producing the wind turbines in this manner enables the Nordex Group to avoid 

having to maintain an interim warehouse facility for fully assembled turbines and thus to save 

warehouse space and costs. 

The Nordex Group employed 401 people in its production activities as of December 31, 2000. 

Nordex pursues a strategy of having several suppliers in order to ensure that required components are 

available at all times (see ‘‘—Customers and suppliers ‘‘). The majority of components are delivered justin-time 

to avoid unnecessary warehousing costs. 

As of February 20, 2001, the Nordex Group produced a total of 1,528 wind turbines. The total nominal 

output of these turbines amounts to approximately 1,013 megawatts. 

Services 

The Nordex Group’s aim is to cover the entire technical value chain with its products and services, from 

the identification of suitable sites and the planning of wind farms to their technical implementation. In 

addition to the production of wind turbines, this involves the provision of an extensive list of services 

such as: 

Planning of wind farm systems Planning wind farm systems includes identifying suitable sites, 

inspecting the sites, calculating capacity and sound levels, and 

analyzing safety and network capacity. These services are 

provided by NPV Planungs- & Vertriebsgesellschaft GmbH for 

Nordex. 

Development and technical 

design of wind farms 

The overall design process of a wind farm involves bringing 

together the individual turbines and electrical components into a 

total solution while taking into account safety and capacity 

factors. These services are also provided by NPV Planungs- & 

Vertriebsgesellschaft mbH for Nordex. 

Construction of wind turbines The construction of wind turbines or entire wind farms is 

undertaken by the Nordex Group, with the exception of sitepreparation 

and foundation work. First the tower is erected, after 

which the masts, nacelle and rotor blades are positioned and 

assembled with the aid of cranes. The final steps are the 

installation of electrical components, grid connections and 

commissioning. 

Maintenance and service Nordex offers maintenance services for its wind turbines, which 

include around-the-clock remote monitoring and maintenance 

and repair of the units. Nordex’s full-service package currently 

includes a five-year guarantee on the wind turbine and five years 

of free maintenance including the cost of materials. The prices 

for these packages amount to between DM 16,000 (N-50) and 

DM 48,000 (N-80) per year. 

49

Sales and Marketing 

Nordex AG manages and coordinates the sales and marketing activities of the Nordex Group, but does 

not itself sell any products due to its function as a holding company and therefore does not generate 

any significant revenue directly. 

The Nordex Group’s sales activities are divided according to the following geographical regions: 

Northern Europe, Southern Europe/South America, China/India and North America. The companies of 

the Nordex Group have built a strong international sales network and maintain sales branches or 

representative offices in the following locations: 

City Country Activity 

Norderstedt Germany Sales 

Give Denmark Sales/Production 

Beijing, Xi’an China Sales/Production* 

Victoria Australia Sales 

Cairo Egypt Sales 

La Plaine St.-Denis France Sales 

Athens Greece Sales 

Tokyo Japan Sales 

Lower Hutt New Zealand Sales 

Molde Norway Sales 

Barcelona Spain Sales 

Kalix Sweden Sales 

Istanbul Turkey Sales 

Dallas United States Sales 

*Joint venture 

The Nordex Group thus has a local presence in the key growth markets of Germany, Spain, Denmark, 

the United States and China. 

As of December 31, 2000, the Nordex Group employed 59 people in sales, of whom 22 were employed 

by Nordex Planungs- und Vertriebsgesellschaft mbH, 36 by Nordex Energy GmbH, and one by Südwind 

Energy GmbH. 

The wind turbines produced by the Nordex Group are primarily sold by companies of the Group, the 

foreign sales and marketing companies owned by Nordex Energy GmbH and to a lesser degree, 

particularly in the case of Südwind turbines, through sales partnerships and alliances. In Germany and 

other German-speaking countries, The Netherlands and Belgium, turbines are sold by Nordex Planungsund 

Vertriebsgesellschaft mbH, in Spain they are sold by Nordex Ibérica Borsig Energy S.A. (a subsidiary 

of Nordex Energy GmbH), in China by Nordex Omnical Energy Services (Shanghai) Co. Ltd. (also a 

subsidiary of Nordex Energy GmbH), and in Denmark and Egypt by branch offices of Nordex Energy 

GmbH. In the United States, sales are handled by Nordex USA Inc., Dallas, a wholly-owned subsidiary of 

Nordex Energy GmbH. The Nordex Group also maintains sales offices or representations in Australia, 

France, Greece, Japan, New Zealand, Norway and Sweden. A significant proportion of sales is 

conducted with approximately 20 ‘‘key accounts’’. 

In the past, the Nordex Group was able to take advantage of international outlook of the Babcock 

Borsig Group and the Balcke-Dürr Group in establishing its own international sales network. The 

Company believes that the Nordex Group’s separation from the Babcock Borsig Group will not have any 

adverse effects on Nordex’s sales activities. 

Nordex’s sales activities are also supported to a lesser degree by its own sales companies and offices — 

by sales alliances and independent sales partners. Nordex Energy GmbH has entered into a sales 

alliance with Thyssen Mannesmann Industries S.A. in Paris for the French market. The Nordex Group 

plans to expand its sales activities further in the future (see ‘‘—Strategy’’). 

50

The Company’s marketing is mainly through advertisements placed in professional industry journals, 

attendance at national and international energy fairs such as the Hanover Fair, PowerGen, WindTech 

Husum and PowerExpo as well as conferences and professional seminars (e.g. the AWEA and BWEA 

conferences). 

Logistics 

The delivery and assembly of wind turbines can, at times, constitute a considerable logistical challenge 

for the Nordex Group. A complete wind turbine (including tower and rotor blades) weighs up to 310 

tonnes (N-80 with 80m tower). A single rotor blade from the Nordex N-80 weighs around 10 tonnes 

and measures approximately 39m long; the nacelle weighs approximately 84 tonnes. Insofar as 

technically possible and economically feasible, the wind turbines are, prior to delivery, broken down 

into separate components that can be assembled quickly and cost-effectively at the construction site. 

Separating the wind turbine into individual components is, however, subject to technical and economic 

limitations. 

These technical and economic constraints put high demands on the logistical operations of the Nordex 

Group, particularly in terms of transport vehicles and the state of transport routes. These logistical 

challenges can create considerable problems for the Nordex Group, above all in regions with less well 

developed infrastructures. The Nordex Group therefore investigates technical feasibility before 

accepting a contract. The costs of transport and assembly, which can total up to 10% of the order 

volume, can make the delivery of wind turbines over a certain size substantially more expensive in 

certain regions. The Company can partly reduce transport costs for the wind turbines by sourcing 

components commonly available on the market, such as towers for the wind turbines, from local 

suppliers. 

Customers and Suppliers 

The Nordex Group’s customers are mainly wind turbine operators, which include retail investment 

funds, set up for the purpose of operating wind farms, and some publicly traded companies such as 

Energiekontor AG and Plambeck Neue Energien AG, which exclusively or chiefly produce electricity 

from renewable energies. 

In fiscal year 1999/2000, the Nordex Group generated approximately 54% of its revenues 

(approximately EUR 147 million) from its ten biggest customer, and the share of revenues 

attributable to the biggest customer for that year was approximately 10.2%. The Nordex Group’s 

biggest customers include in particular Prokon GmbH, Windpark Ihlewitz and Boreas Energie GmbH, 

which together generated approximately 25% of the Group’s revenue in fiscal year 1999/2000, with 

Prokon GmbH accounting for approximately 10.2%, Windpark Ihlewitz for approximately 7.6% and 

Boreas Energie GmbH for approximately 7.2% of this revenue. In the fiscal year 1998/1999 the three 

biggest customers (Energiekontor, Prokon and seeba) accounted for approximately 19.7% of the 

Group’s revenue. 

In the production of its wind turbines Nordex uses mainly standard components, which it purchases 

from several different manufacturers or dealers. The Company pursues a strategy of having several 

suppliers in order to have at least two suppliers for each component, thus reducing its dependence on 

individual suppliers and allowing it to operate with a comparatively low level of resources. 

For rotor blades, however, the Nordex Group faces a market situation that is quasi-monopolistic. The 

Nordex Group primarily purchases its rotor blades from LM Glasfiber A/S, the market leader for rotor 

blades, since this company, together with NOI Rotortechnik GmbH, meets the Company’s requirements 

as to quality and financial soundness. 

The Nordex Group follows an intelligent supply management system by which the majority of the 

components are delivered just-in-time in order to avoid unnecessary warehousing costs, and which 

combines the in-house manufacture of certain complex product parts and core components of its wind 

turbines with the outsourcing of project-specific series production and the procurement of lower 

margins components commonly available on the open market. 

51

The chief suppliers of towers are Welcon A/S, a company in which the Pedersen family holds an 

interest, and OMNICAL GmbH, a Babcock Borsig Group company. The main suppliers of gears are A. 

Friedrich Flender AG, a former Babcock Borsig Group company, and Eickhoff Maschinenfabrik. The main 

suppliers of generators are Loher AG, also a former Babcock Borsig Group company, and VA Tech ELIN 

EB9 Motoren GmbH. The Group mainly purchases electrical components and inverters from Integral 

Drive Systems AG and Schaltanlagen-Elektronik-Geräte GmbH & Co. KG and hubs and turbine frames 

for its wind turbines from, among others, Babcock Gießerei GmbH. See also the section entitled 

‘‘Relationships with the Principal Shareholders, the Babcock Group and the Pedersen family’’ for more 

information on the companies belonging to the Babcock Borsig Group or the Pedersen family’s 

holdings. The Company is of the opinion that the agreements with Babcock Borsig Group companies 

and companies in which the Pedersen family holds interests were concluded on standard market terms 

and conditions on an arm’s-length basis. 

Material Contracts 

In addition to standard agreements for the purchase or supply of components and the sale of wind 

turbines, the Nordex Group has concluded the following agreements with associated companies (see 

‘‘Relationships with Principal Shareholders, the Babcock Borsig Group and the Pedersen family’’). 

Service agreement between Nordex AG and Borsig Energy GmbH 

On January 1, 2001, Nordex AG and Borsig Energy GmbH entered into a service agreement stipulating 

that Nordex AG can utilize the employees and resources of Borsig Energy GmbH in the areas of law, 

taxation, investments, financing, personnel consulting, accounting and reporting, information services, 

and auditing. Remuneration is set at cost of documented expenses plus a margin of 2%. The agreement 

is unlimited in term and can be terminated by Borsig Energy GmbH with six months’ notice, no earlier 

than December 31, 2001, and by Nordex AG at the end of a quarter with one month’s notice. 

Master agreement between Nordex Energy GmbH and Omnical GmbH 

On October 1, 1998, Nordex Energy GmbH and Omnical GmbH, a Babcock Borsig Group company, 

entered into a master agreement pursuant to which Nordex Energy GmbH undertakes to purchase from 

Omnical GmbH at least 50% of the tubular steel towers for wind turbines ordered from Nordex Energy 

GmbH, a subsidiary of Nordex Energy GmbH, or another Group company or licensee. This purchase 

undertaking applies to all wind turbines installed in Scandinavia, the Benelux countries or Germany, or 

in any other country insofar as Nordex Energy GmbH does not procure the tubular steel towers from 

another manufacturer in that country. Omnical GmbH is not obliged to accept orders from Nordex 

Energy GmbH. If it does not, Nordex Energy GmbH is free to award the contracts to third parties. The 

agreement is unlimited in term and can only be terminated for good cause. Good cause will exist in 

particular if Omnical or any of its affiliates no longer belongs to the Balcke-Dürr Group. 

Master agreement between Nordex Energy GmbH and Welcon A/S 

On October 1, 1998, Nordex Energy GmbH and Welcon A/S, a company belonging to the Pedersen 

Brothers’ holdings, entered into a master agreement in which Nordex Energy GmbH undertakes to 

purchase from Welcon A/S at least 50% of the tubular steel towers for wind turbines ordered from 

Nordex Energy GmbH, a subsidiary of Nordex Energy GmbH or another Group company, or a licensee. 

The agreement can only be terminated for good cause. 

Master agreements between Nordex Energy GmbH/Südwind Energy GmbH and Loher AG 

On October 1, 2000, Nordex Energy GmbH and Loher AG, a former Babcock Borsig Group company, 

entered into a master agreement covering the supply of generators by Loher AG, particularly for N-43, 

N-50, N-54, N-60 and N-80 wind turbines, and all other components ordered by Nordex Energy GmbH 

from Loher AG. There is no purchase requirement on behalf of Nordex Energy GmbH. Nordex 

guarantees to purchase at least 70% of the total euro value of its requirement for individual types of 

generators per fiscal year from Loher AG on the condition that the generators offered by Loher AG are 

competitive in terms of price, quality, warranty, availability and dependability of after-sale service. The 

value of the generators purchased from Loher AG in any given fiscal year may not exceed 80% of the 

52

total value of its requirement for generators in the prior fiscal year. The agreement may be terminated 

no earlier than September 30, 2010. After that, the agreement can be terminated at the end of a year 

with six months’ notice. The agreement applies to all controlled subsidiaries of Nordex Energy GmbH, 

i.e. all subsidiaries in which Nordex Energy GmbH holds an interest of more than a 25% blocking 

minority, except Südwind Energy GmbH, with which a separate agreement has been concluded. 

An agreement relating to the Südwind S-70 with the same terms and conditions was also entered into 

on October 1, 2000 between Südwind Energy GmbH and Loher AG. 

Master agreements between Nordex Energy GmbH/Südwind Energy GmbH and A. Friedrich Flender AG 

On October 1, 2000, Nordex Energy GmbH and A. Friedrich Flender AG, a former Babcock Borsig Group 

company, entered into a master agreement on the supply of gears, particularly for N-43, N-50, N-54, 

N-60 and N-80 wind turbines, as well as all other components ordered by Nordex Energy GmbH from 

A. Friedrich Flender AG. There is no purchase requirement on behalf of Nordex Energy GmbH. Nordex 

guarantees to purchase at least 70% of the total euro value of its requirement for individual types of 

gears per fiscal year from A. Friedrich Flender AG on the condition that the gears offered by A. Friedrich 

Flender AG are competitive in terms of price, quality, warranty, availability and dependability of aftersale 

service. The value of the gears purchased from A. Friedrich Flender AG in a given fiscal year may 

not exceed 80% of the total value of its requirement for gears in the prior fiscal year. The agreement 

may be terminated no earlier than September 30, 2010. After that, the agreement can be terminated at 

the end of a year with six months’ notice. The agreement applies to all controlled subsidiaries of Nordex 

Energy GmbH, i.e. all subsidiaries in which Nordex Energy GmbH holds an interest in excess of a 25% 

blocking minority, except Südwind Energy GmbH, with which a separate agreement has been 

concluded. 

An agreement with the same terms and conditions relating to the Südwind S-70 was entered into on 

October 1, 2000 between Südwind Energy GmbH and A. Friedrich Flender AG. 

Licensing agreement between Südwind Energy GmbH and pro + pro Energiesysteme GmbH & Co. KG 

On January 24, 2000, Südwind Energy GmbH and pro + pro Energiesysteme GmbH & Co. KG entered 

into a non-exclusive licensing agreement limited to Germany for the manufacture and sale of S-70 

wind turbines (see ‘‘Business – Intellectual property rights – Patents, trademarks and licenses’’). 

Master agreements between Nordex Energy GmbH/Südwind GmbH and Babcock Gießerei GmbH 

On August 7 and 18, 2000, Südwind Energy GmbH and Babcock Gießerei GmbH entered into a master 

agreement for the supply of hubs. This agreement does not stipulate a minimum volume and applies to 

all deliveries up to December 31, 2001. On March 7, 2001, Nordex Energy GmbH and Babcock Gießerei 

GmbH entered into a corresponding agreement which provides for a fixed term until December 31, 

2003, with the option to extend the agreement until December 31, 2005. 

The Company is of the opinion that the agreements described above contain standard market terms 

and conditions and were entered into on arm’s-length terms. 

Research and Development 

The Nordex Group places great emphasis on continued development work. Mastery of the construction 

of wind turbines in their entirety requires a precise interplay among the individual component parts 

and ensures the efficiency of the products. However, the Nordex Group does not conduct its own 

research. 

The core components of wind turbines, in particular the control technology (including software), the 

rotor blades, electrical components and the pitch regulation system, determine the quality of the 

overall turbine and therefore are developed and improved primarily by the Company’s own employees. 

The Nordex Group’s internal know-how ranges from the technical design of the wind turbine, to the 

functioning of the blades, to control and inverter technology. 

53

As of December 31, 2000, the Nordex Group’s research and development department employed a total 

of 34 people, 14 of whom worked in mechanical engineering, ten in technology, five in product 

optimization and offshore development, and five in other areas of research and development. 

The following table gives an overview of the Company’s research and development expenses and the 

percentage represented by these expenses of overall revenue for fiscal years 1997/1998, 1998/1999 

and 1999/2000 (all figures are based on the IAS Pro Forma Consolidated Financial Statements): 

Research and development 

Fiscal year 

1997/1998 

Fiscal year 

1998/1999 

EUR thousand 

Fiscal year 

1999/2000 

Nordex Energy GmbH 1,060.4 2,498.2 4,042.3 

Nordex Rotor GmbH 0 0 0 

Südwind Energy GmbH 0 0 0 

Nordex Planungs- und Vertriebsgesellschaft mbH 0 0 0 

Nordex Automation GmbH 0 0 0 

Total 1,060.4 2,498.2 4,042.3 

in % of revenue for the relevant fiscal year 1.28% 1.11% 1.48% 

The technical development of a wind turbine prototype, which takes approximately one-and-a-half 

years, is generally followed by field testing lasting approximately one year, certification and type 

approval. The process of approval serves to document the structural engineering required for 

construction permit and to prevent the requirement to audits of individual turbines. To receive type 

approval, the construction principles of the wind turbine are first tested and certified by an expert body 

for wind turbines. This certification then serves as the basis for type approval. 

During field testing, the prototype is installed on a suitable windy site and tested under normal 

operating conditions. Depending on the length of this test phase and the type of wind turbine, the 

Company can incur considerable costs, although the electricity generated during the field test can in 

part defray these costs. 

54

Intellectual Property Rights 

Patents, Trademarks and Licenses 

Most of the components and processes the Nordex Group uses to develop and manufacture wind 

turbines are state-of-the-art, and therefore free of third-party intellectual property rights claims. In 

certain cases the Nordex Group protects itself further by concluding licensing agreements for the use 

of components and processes to which third parties hold intellectual property rights. Insofar as legally 

possible, the Nordex Group protects the components and processes it develops in-house. 

The Nordex Group holds the following intellectual property rights: 

Description Type Number Date of application 

Nordex Energy GmbH 

Process for controlling electricity fed into 

the grid by wind turbines and the 

corresponding circuitry 

Process for controlling electricity fed into 

the grid by wind turbines and the 

corresponding circuitry 

Device for improving grid compatibility of 

wind turbines with asynchronous 

generators 

European patent 

application filed 

National patent 

application filed 

EP 0 877 475 A1 Apr. 29, 1998 

DE 197 19 308 May 7, 1997 

National utility patent DE 296 21 449 U1 Dec. 10, 1996 

‘‘Nordex Control’’ trademark /logo National trademark DE 300 23 078 Mar. 24, 2000 

‘‘Nordex Control’’ logo Community trademark 158 4077 Mar. 22, 2000 

‘‘Nordex’’ trademark National trademark DE 300 76 017 Oct. 13, 2000 

On January 24, 2000, Südwind Energy GmbH and pro + pro Energiesysteme GmbH & Co. KG entered 

into a non-exclusive licensing agreement limited to Germany for the manufacture and sale of S-70 

wind turbines. The licensing agreement was entered into for an initial fixed term ending on September 

30, 2001 and will be extended until September 30, 2003 if Südwind Energy GmbH has paid to the 

licensor the licensing fees for at least 25 wind turbines by September 30, 2001. Provided that Südwind 

Energy GmbH pays the licensing fees for an additional 75 wind turbines by September 30, 2003, the 

agreement will be extended by an additional two years. If Südwind Energy GmbH has paid licensing 

fees for more than 100 wind turbines by September 30, 2005, the licensing agreement will be extended 

indefinitely with the licensor reserving the right to terminate the agreement if Südwind Energy GmbH 

pays licensing fees for less than five wind turbines in any period of 12 months. To the extent that 

Südwind Energy GmbH sold S-70 wind turbines outside of Germany in the past, it obtained the 

licensor’s approval prior to each delivery by notifying pro & pro Energiesysteme GmbH & Co. KG of its 

intention to make such delivery. The Company believes that pro & pro Energiesysteme GmbH & Co. KG 

will continue to grant individual approvals to sell the wind turbines outside the license territory to 

Südwind Energy GmbH in the future. In addition, the Company is of the opinion that pro & pro 

Energiesysteme GmbH & Co. KG will give Südwind Energy GmbH timely notice if it intends to grant 

licenses to third parties abroad and will offer Südwind Energy GmbH the opportunity to acquire such 

license. 

Internet Domain Names 

Internet domain names may only be registered once due to the current organization of the World Wide 

Web. Registration, therefore, grants the holder exclusive rights of use. The registration of a domain 

does not, however, grant exclusive property rights against the use of the domain by third parties. 

Moreover, third parties that hold older rights to trademarks or names used in the registered domain 

can prohibit others from using such domain. 

55

The Nordex Group has registered the following Internet domain names, among others: 

nordex.ag nordex.de nordex.dk 

nordex-online.de nordex-online.dk nordex-online.com 

nordex-energy.com suedwind.com suedwind-online.de 

suedwind-online.com suedwind-energy.com npv-online.com 

npv-planungundvertrieb-de nordex-automation.com nordex-rotor.com 

nordex-windenergie.de nordex-windkraftanlagen.de nordex-windpower.com 

nordex-windturbines.com nordex-aktie.de nordex-ipo.de 

Management and Employees 

The Nordex Group had an average of 523 employees in fiscal year 1999/2000. The following table lists 

the average number of employees by activity over the past three fiscal years. 

Fiscal year 1997/ Fiscal year 1998/ Fiscal year 1999/ 

Activity 

1998 

1999 

2000 

Production 72 195 325 

Research and development 6 20 32 

Sales and marketing 18 28 31 

Administration 49 97 135 

Total 145 340 523 

As of September 30, 2000, the Nordex Group employed approximately 137 people overseas. The 

majority, approximately 128 employees, worked in manufacturing at Nordex Energy GmbH in Give, 

Denmark. Other employees of the Nordex Group were employed in sales and marketing companies and 

offices in countries including Spain, Greece, the United States, Turkey, France and China. 

As of December 31, 2000, the Nordex Group had a total of 634 employees, 401 of whom were 

employed in production, 34 in research and development, 59 in sales and 140 in administrations, i.e. in 

the areas of purchasing, technical settlement and services, accounting and human resources. In 

addition, as of December 31, 2000, the Nordex Group had an additional 15 trainees, 14 of whom were 

employed by Nordex Energy GmbH and one by Nordex Automation GmbH. 

For the Nordex Group to achieve its strategic aims (see ‘‘—Strategy’’), highly qualified personnel must be 

employed at all levels of the Group. The employees of the Nordex Group therefore continually undergo 

training and professional development. As part of the Offering, the employees in Germany will have the 

option to acquire Nordex shares and thus to participate in the financial success the Nordex Group aims 

to achieve. The issue of stock options as part of an employee and management equity compensation 

plan is intended to further increase the attractiveness of the Nordex Group to qualified managers and 

professionals, in that these employees will profit from future increases in the Company’s value (see 

‘‘Executive Bodies of the Company—Employee and Management Share Scheme’’). There have been no 

work interruptions at Nordex AG to date. 

The Nordex Group is managed by the Management Board of the Company, which currently comprises 

three members (see ‘‘Executive Bodies of the Company—Employee and Management Share Scheme 

and—Management Board’’). The next level of management consists of other managers at Nordex AG as 

well as managing directors of Nordex subsidiaries. 

Due to the short period of time Nordex Group has existed in its current legal form, no Group works 

council has been formed to date at Nordex AG itself. Work councils are in existence for Nordex Energy 

GmbH and Nordex Automation GmbH. No works councils have been formed at Nordex Rotor GmbH, 

Südwind Energy GmbH and Nordex Planungs- und Vertriebsgesellschaft mbH. 

No collective bargaining agreements are currently in place at Nordex AG. Collective bargaining 

agreements exist at Nordex Automation GmbH in relation to the relocation of the registered office and 

works holiday rules. 

56

Since it ceased being a member of the Babcock Borsig Group, Nordex AG has not been subject to codetermination 

regulations. The Supervisory Board of Nordex AG therefore comprises only shareholder 

representatives. 

Investments 

The following table is an overview of the Nordex Group’s investments, taking into account subsidies 

received, for the past three fiscal years in thousands of euro. This table is prepared on the basis of the 

IAS Pro Forma Consolidated Financial Statements: 

Investments 

Fiscal year 

1997/1998 

Fiscal year 

1998/1999 

EUR thousand 

Fiscal year 

1999/2000 

Intangible assets 893 2,369 4,457 

Property, plant and equipment 1,241 7,601 9,267 

Financial assets 0 774 240 

Total 2,134 10,744 13,964 

Of the investments in intangible assets totaling approximately EUR 7,719 thousand in the past three 

fiscal years, approximately EUR 2,125 thousand were related to the type approval for wind turbines and 

software purchases (EUR 404 thousand in fiscal year 1997/1998; EUR 567 thousand in fiscal year 1998/ 

1999; EUR 1,154 thousand in fiscal year 1999/2000). Other investments related to development costs 

for new wind turbines totaling approximately EUR 3,328 thousand (EUR 489 thousand in fiscal year 

1997/1998; EUR 1,528 thousand in fiscal year 1998/1999; EUR 1,312 thousand in fiscal year 1999/ 

2000) and licenses and similar assets totaling EUR 2,266 thousand (EUR 290 thousand in fiscal year 

1998/1999; EUR 1,976 thousand in fiscal year 1999/2000). 

Investments in property, plant and equipment in the past three fiscal years amounting to 

approximately EUR 18,109 thousand primarily comprise investments in the assembly plant in Rostock 

of approximately EUR 2,546 thousand (EUR 41 thousand in fiscal year 1998/1999; EUR 2,505 thousand 

in fiscal year 1999/2000). In addition, of the investments in property, plant and equipment in the last 

three fiscal years, EUR 1,128 thousand was spent on the purchase of jigs (EUR 239 thousand in fiscal 

year 1997/1998; EUR 763 thousand in fiscal year 1998/1999; EUR 126 thousand in fiscal year 1999/ 

2000), EUR 1,260 thousand (in fiscal year 1998/1999) on financing the purchase of a mobile crane, EUR 

1,199 thousand on operating and office equipment in fiscal year 1999/2000 and approximately EUR 

4,377 thousand on exhibiting prototypes (EUR 229 thousand in fiscal year 1997/1998; EUR 1,812 

thousand in fiscal year 1998/1999; EUR 2,336 thousand in fiscal year 1999/2000). Other investments in 

property, plant and equipment primarily related to wind turbines, processing equipment, assembly and 

transport equipment and other technical plant and equipment as well as workshop fittings, vehicles, 

tools and office and operating equipment. 

Investments in financial assets in the past three fiscal years amounting to approximately EUR 1,014 

thousand mainly related to Nordex Energy GmbH’s equity investments in China in the Xi’an Nordex 

Windturbines Corp. Ltd. (in fiscal year 1998/1999) and in Nordex Omnical Energy Services (Shanghai) 

Co Ltd. in Shanghai (in fiscal year 1998/1999). 

These investments were mainly financed through the Babcock Borsig Group’s clearing system, which 

will be maintained up to the Offering and is scheduled to be discontinued on April 4, 2001. 

The Company plans to invest approximately EUR 21 million in the current fiscal year, approximately 

EUR 14.7 million of which will be earmarked for the construction of Nordex Rotor GmbH’s new 

assembly plants in Rostock on the GVZ site (see ‘‘—Real Estate and Real Property’’). This undertaking is 

being subsidized with a 35% investment grant from the federal state of Mecklenburg-Vorpommern. 

The net investment by the Company will amount to approximately EUR 10 million. Furthermore, Nordex 

AG also intends to invest in the further development of wind turbines, particularly in the construction 

of prototypes, software implementation, expansion of the production facilities in Rostock and 

expansion of sites abroad. In the first quarter of the current fiscal year to December 31, 2000, the 

57

Company has already invested approximately EUR 2,931 thousand in Nordex Energy GmbH and Nordex 

Rotor GmbH, principally in property, plant and equipment. Future investments will be financed 

primarily from funds accruing from the Offering. 

Insurance Policies 

The Company believes that the companies of the Nordex Group have adequate insurance coverage. The 

Nordex Group has insurance coverage for fire/loss of business due to fire, legal liability, transport and 

automobile risks through master agreements concluded by Babcock Borsig AG for itself and all of its 

affiliated companies. These affiliate agreements remain in effect unchanged from the time the Nordex 

Group ceases to be a member of the Babcock Borsig Group until the next annual maturity date on 

September 30, 2001, although Nordex AG may terminate the policies earlier if desired. The Company 

believes that it will be able to conclude new insurance policies with the same or similar terms and 

conditions. In addition, Nordex Energy GmbH and Südwind Energy GmbH have concluded an assembly 

insurance agreement. Nordex Energy GmbH and Südwind Energy GmbH have two year warranty 

insurance for all wind turbines. These insurance policies cover damage such as material construction 

and assembly faults, to the extent the Nordex Group is liable (see ‘‘Risk Factors—Legal Risk—Insurability 

of Risks’’). 

Real Estate and Real Property 

The administrative office of Nordex AG is located in rented offices at Bornbrach 2, 22848 Norderstedt 

(near Hamburg), Germany. Nordex Energy GmbH’s production facilities are located at Erich- 

Schlesinger-Str. 50, 18059 Rostock, Germany and 7323 Give, Svindbaek, Denmark. Nordex Rotor 

GmbH’s manufacturing plant for rotor blades is also located at Erich-Schlesinger-Str. 50, 18059 

Rostock. 

58

The following table provides an overview of the location, purpose and approximate area of all key real 

estate rented by the Nordex Group (totaling approximately 61,600m 2 ): 

Location Purpose Approx. area in m 2 


Norderstedt Administration 2,862 

Rostock Production 21,825 

Give, Denmark Sales/Manufacturing 13,434 

Nordex Planungs- und Vertriebsgesellschaft mbH 

Bad Essen Sales 280 

Rerik Sales 250 

Ergenzingen Sales 110 

Nordex Rotor GmbH 


Nordex Automation GmbH 

Oberhausen Administration/Sales 599 


Südwind Energy GmbH 

Oberhausen Administration 450 

Lichtenau Service/Training 1,100 

Nordex Ibérica Borsig Energy S.A. 

Barcelona Sales 260 

Nordex Omnical Energy Services (Shanghai) Co Ltd. 

Shanghai Sales /Servicing 350 

Nordex Hellas e.p.e 

Athens Sales 70 

Nordex USA inc. 

Dallas Sales 220 

In addition to the rented facilities for production and administration, Nordex Energy GmbH also owns 

two properties in Rerik measuring approximately 1,606m 2 and 5,082m 2 , including an office building, 

assembly plant and an office block. In addition, the Nordex Group also operates a test turbine on the 

smaller of the two properties. Nordex Energy GmbH plans to sell this property as part of moving the 

Company’s administration to Norderstedt (near Hamburg). 

The Nordex Group also maintains a number of sales offices and branch offices (see ‘‘—Sales and 

Marketing’’) and approximately 13 service centers which provide maintenance for wind turbines for 

which Nordex is responsible. 

On October 16, 2000 Nordex Rotor GmbH entered into a purchase agreement with the city of Rostock 

to acquire four adjacent lots with a total area of approximately 40,000m 2 in 18146 Rostock, Große 

Rampe (‘‘GVZ Property’’), for the construction of a new assembly plant. Rotor blade manufacture is 

scheduled to start on site in the fourth quarter of 2001. Pursuant to this purchase agreement, Nordex 

Rotor GmbH undertook to develop the property itself and use it for commercial purposes. The purchase 

agreement stipulates that the property is to be used for the building of a production facility for 

industrial equipment, particularly wind turbines and wind turbine components. Nordex Rotor GmbH is 

59

not authorized to construct other buildings not serving this purpose. To secure development and 

ensure utilization of the property in line with the agreement, the city of Rostock has reserved the right 

to repurchase the property. In the event that Nordex Rotor GmbH sells the property within five years 

after its acquisition, Nordex Rotor GmbH must pay over any profit made on the sale to the city of 

Rostock. 

On September 27, 1999, Nordex Energy GmbH made a notarized offer valid from August 31, 2004, to 

October 31, 2004, to purchase 32,395m 2 of land on Erich-Schlesinger-Straße, Rostock, which it has 

been renting since September 1, 1999. Rental payments made up to the date of purchase will be 

deducted from the purchase price. Therefore the parties understand that the entire purchase price will 

have been paid by the time the offer can be accepted. A notice of exemption pursuant to Article 1, 

Section 4, Paragraph 3 of the Umweltrahmengesetz (Environmental Framework Act) of June 29, 1999, 

in the form laid down by Article 12 of the Gesetz zur Beseitigung von Hemmnissen bei der 

Privatisierung von Unternehmen und zur Förderung von Investitionen (Act for the Removal of Barriers 

to the Privatisation of Companies and the Promotion of Investment) of March 22, 1999, was issued to 

the former owner of the aforementioned site. This notice exempts 90% of the overall costs of measures 

necessary for averting risks caused by residual waste. The exemption is expected to be transferred to 

Landesgesellschaft Mecklenburg-Vorpommern and thereafter to Nordex Energy GmbH. If this occurs, 

Nordex Energy GmbH will be required to bear 10% of the costs for measures to avert the risk caused by 

residual waste. For measures to avert the risk caused by residual waste, which arose after July 1, 1990 

and prior to September 1, 1999, Nordex Energy GmbH will assume the first DM 500,000 of the costs for 

such measures. Landesgesellschaft Mecklenburg-Vorpommern will assume any costs between 

DM 500,001 and DM 1 million. Costs exceeding DM 1 million will be borne by Nordex Energy GmbH. 

Litigation 

Except for the matters detailed below, neither the Company nor its subsidiaries have been involved in 

any legal or arbitration proceedings that have had or could have a material influence on the economic 

position of the Company or on its subsidiaries in the past two fiscal years or since their formation. With 

the exception of the matters detailed below, to the best of the Company’s knowledge and that of its 

subsidiaries, no such proceedings are currently threatened. 

In an agreement dated November 22, 2000, Borsig Energy GmbH undertook to release the Company 

from obligations resulting from litigation with Aerpac Aerodynamic Products and Consultancy B.V. 

(including the costs required for the retrofit program agreed for this purpose – up to an agreed 

maximum amount), from the claims made by the Danish purchaser of Ekter Aioliki S.A. due to this 

company’s litigation with ITA S.A., and from claims arising out of disputes with Wehrle Werk AG, 

Energiekontor Windkraft GmbH, BOREAS Energie GmbH and Atlas Energieanlagen GmbH & Co. KG 

Windpark Neuruppin. These disputes and litigation are described below. With the exception of the costs 

for the retrofit program, this liability release undertaking applies up to a maximum total amount of DM 

20 million. In the light of the current status of the disputes and litigation, including a settlement 

agreed with ITA S.A., the Company believes that this amount is sufficient. 

Litigation with Aerpac Aerodynamic Products and Consultancy B.V. 

Aerpac Aerodynamic Products and Consultancy B.V. (‘‘Aerpac’’) is one of Nordex Energy GmbH’s longstanding 

suppliers for rotor blades. Nordex Energy GmbH concluded a master supply agreement for the 

supply of rotor blades with this company in early 1999. In this contract, Nordex Energy GmbH 

undertook to purchase at least one set of blades per week. The contract was to run until December 31, 

2003. 

Having ascertained material technical defects, Nordex Energy GmbH, having given notice and 

threatened to reject future shipments, terminated the agreement for good cause on October 25, 2000. 

Nordex Energy GmbH cancelled the orders it had already given under the contract. 

Aerpac asserts that the termination of the agreement was not based on good cause and that the 

defects were not development or manufacturing defects, but rather damage resulting from blade 

vibration due to the rotor being overburdened. Aerpac therefore demands that Nordex Energy GmbH 

60

accept and pay for the rotor blades it has ordered (including the cancelled orders) in fulfilment of the 

master supply agreement, and that Nordex Energy GmbH settle its invoices for rotor blades that have 

already been supplied. The demands made by Aerpac in an out-of-court letter from its lawyers total 

DM 10,551,124. 

The Company believes that Nordex Energy GmbH properly terminated the agreement, and the demand 

that it accept and pay for rotor blades is therefore unfounded. It has rejected the claim for payment for 

the rotor blades already supplied on the grounds that Aerpac was committed to supplying the rotor 

blades free of charge according to a number of agreements concluded by the contracting parties and 

as a result of warranty obligations. To date neither Aerpac nor Aerpac’s insolvency administrator have 

challenged the termination in court or sued for payment. 

In addition, Nordex Energy GmbH believes that, due to the alleged defects in the rotor blades supplied 

by Aerpac, it has a claim against Aerpac for the costs of necessary repairs and restoration work on the 

rotor blades (a so-called retrofit program) which it carried out itself, which it could offset against any 

claims made by Aerpac. However, it is not likely that this claim will be realized, as insolvency 

proceedings were commenced in relation to Aerpac’s assets at the end of January 2001. 

Litigation in connection with Ekter Aioliki S.A. 

Several claims have been brought in court in Greece against Nordex Energy GmbH’s former subsidiary, 

Ekter Aioliki S.A. (‘‘Ekter’’), Athens, by ITA S.A. (‘‘ITA’’). In addition, claims were also brought against other 

defendants including Nordex Energy GmbH. 

All of these disputes relate to a 15 turbine wind power project in Tourla, Greece, in respect of which 

Ekter acquired various rights from ITA, in particular, a letter of engagement relating to land leases, a 

partial authorization from the local authorities to erect wind turbines as well as planning documents. 

Nordex Energy GmbH held a 90% interest in Ekter, which acted as the project company for this project 

until December 1999. On the basis of these planning documents, and with ITA’s assistance, Ekter 

acquired the authorization to erect a wind park. For this assistance, ITA received compensation under 

an agreement entered into between Ekter and ITA prior to the acquisition of Ekter by Nordex Energy 

GmbH, which stipulated, inter alia, that a certain other manufacturer’s wind turbines should be erected. 

This, however, is no longer planned, due to Nordex Energy GmbH’s acquisition of Ekter. Instead, Nordex 

wind turbines are planned to be erected. The agreement provides for a reassignment of the rights 

arising from the letter of engagement relating to the land leases in such an event. In addition, the 

agreement provides for an automatic transfer of these rights to ITA against repayment of certain 

amounts paid to ITA by Ekter in the event that a subsidy is not granted by the Greek state to Ekter. 

Ekter’s subsidy application was refused. However, a corresponding subsidy application by a Danish 

company, to which Nordex Energy GmbH in December, 1999, had sold all its shares in Ekter, was 

successful. 

The business purchase agreement included an indemnity obligation from Nordex Energy GmbH to the 

purchaser, which extends to any possible litigation against Ekter. The outcome of the above 

proceedings is of interest to Nordex Energy GmbH, as any damages can be recovered by the purchaser 

directly from Nordex Energy GmbH. 

Initially, ITA brought a claim for reassignment of all rights relating to the wind power project to an 

arbitration tribunal in Athens. ITA asserted that, inter alia, Ekter had negligently not fulfilled its 

obligation to obtain the subsidy which was a condition precedent for the transfer of the rights relating 

to the wind power project. Therefore, under the terms of the contract, Ekter was obliged to assign all 

rights in the wind power project to ITA. Ekter contested the claim. In an arbitral award dated May 31, 

2000, the arbitrator found in favour or ITA. Ekter lodged an appeal with a court of appeals on June 16, 

2000, against this arbitral award. The appeal was rejected by a court order dated February 28, 2001. 

Ekter plans to lodge a further appeal, on the basis of procedural errors, with the Areopag, the Greek 

supreme civil court. 

In addition, ITA sued Ekter as well as 12 other defendants, with which it had contractual relations, 

including Nordex Energy GmbH, for damages in an amount of GRD 1,883.7 million, (approximately DM 

61

10.8 million). Ekter disputes the claim with respect to its legal basis and amount. The claim is split into 

an amount of GRD 1,584 million, (representing approximately DM 9.1 million) for lost subsidies and 

GRD 299.7 million, (representing approximately DM 1.7 million) for commissions lost because of the 

use of Nordex wind turbines instead of the wind turbines of a certain other manufacturer as initially 

stipulated. Although they were obliged by the arbitral award to reassign all the rights in the wind 

power project, ITA asserts that both claims arose because the defendants had taken control of the wind 

power project fraudulently and had obtained an authorization for the wind power project by fraud. In 

respect of the damages claim relating to the lost subsidies, ITA alleges that it would have received these 

subsidies if it had developed the project. Ekter, however, is of the opinion that Greek subsidy law only 

provides for the granting of subsidies to investors in a project and not to a project developer such as 

ITA. In respect of the lost commissions, ITA argues that it would have been paid by the other wind 

turbine manufacturer, if its wind turbines had been erected instead of Nordex wind turbines, as is now 

envisaged. In addition, ITA bases its claim for damages, inter alia, on alleged criminal conduct by 

members of the board of Ekter. However, the department of the state prosecutor of Athens has rejected 

criminal proceedings initiated by ITA against these board members. 

In a second action, ITA claims damages in an aggregate amount of GRD 3,883.7 million (approximately 

DM 22.3 million) from seven defendants, including Ekter and Nordex Energy GmbH, as joint debtors. A 

proportion of the damages claimed (GRD 1,883.7 million) covers the same claims as the first action. 

With respect to the claim of GRD 1,883.7 million, ITA asserts that the defendants had moved ahead 

with the project despite the arbitral award and ITA thereby suffered a loss of commissions and profits 

that it could otherwise have expected to have received for performance of the project. The defendants 

are of the opinion that the arbitral award in respect of the assignment of the authorization to erect 

wind turbines in particular is unenforceable and Ekter may therefore continue with the project. 

Furthermore, ITA claims a further GRD 2 billion (approximately DM 11.5 million), asserting that the 

defendants had sought to obtain an advantage by way of unfair competition by erecting their wind 

turbines. ITA has not yet substantiated the damage with respect to the amount of GRD 2 billion. 

However, no Nordex wind turbines have been erected. 

In a provisional injunction proceeding, ITA tried to prevent Ekter as well as four other defendants from 

beginning construction work on the site in Tourla. However, ITA’s motion was dismissed by the district 

court of Chalkida, Greece, in a court order dated September 13, 2000. The court stated that Ekter had 

no other obligation than to pay to ITA the contractual compensation and to erect wind turbines of a 

certain manufacturer. Furthermore, the authorization to erect wind turbines, which was addressed to 

Ekter, was not assignable. 

Meanwhile, Ekter itself has brought claims for damages of GRD 299.985 million (approximately DM 1.7 

million) against ITA, asserting that ITA unjustly obtained the arbitral award by deceiving the arbitrator 

in Athens with misstatements and by inducing the witnesses to give misstatements. The damages 

claimed by Ekter relate to the damage to its reputation. 

In the meantime, the conflicts described above have as of March 27, 2001 been fully resolved pursuant 

to an out-of-court settlement between (i) Nordex Energy GmbH and Ekter and (ii) ITA and other 

companies contractually related to ITA to which certain claims had been transferred. The out-of-court 

settlement was validly entered into, however, in order to ensure its continued effectiveness under 

Greek law, it needs to be registered with the Greek tax authorities. This can be effected by Ekter and will 

be done shortly. In this settlement, Nordex Energy GmbH has agreed to make a compensatory payment 

of a mid-seven-digit million Deutsche Mark amount to ITA and the companies that are contractually 

related to ITA, which has already partly been paid. This compensatory payment is in line with the 

amount which the Company calculated as representing the potential risk involved in this conflict. Ekter 

also agreed to withdraw it lawsuit against ITA. In return, ITA and the companies that are contractually 

related to it have agreed, with Ekter and Nordex Energy GmbH, to waive their rights under the arbitral 

award of May 31, 2000 and all claims under the contract dated October 23, 1997 between Ekter and 

ITA. ITA has also agreed to withdraw the pending lawsuits, and the formal withdrawal of the lawsuits 

has been initiated. Finally, ITA and the companies contractually related to it have agreed to recognize 

Ekter as being solely entitled to the Tourla wind energy project and not to assert any claims in 

connection with the project in the future. 

62

Before construction of the wind park can begin, the Greek authorities must set a new deadline for the 

erection of the park, which was interrupted by the lawsuits. The Company believes that this decision 

will be made in Ekter’s favor. Should this not be the case, and should Ekter be hindered in continuing 

the wind energy project, the Danish acquirer could assert claims for millions of Deutsche Marks in 

damages for non-performance, particularly with respect to consequential damages, against Nordex 

Energy GmbH. However, the Company believes that any such claims would be exaggerated, because, in 

the Company’s opinion, the contract with the Danish acquirer excludes potential consequential losses. 

Litigation with Wehrle-Werk AG 

Nordex Automation GmbH is currently involved in an out-of-court dispute with Wehrle-Werk AG 

(‘‘Wehrle’’), Emmendingen, Germany. This dispute relates to a contract which was concluded by Babcock 

Prozeßautomation GmbH with Wehrle in 1999 concerning the planning, delivery, disassembly and 

assembly of the electrical engineering and control technology of a furnace. This contract predates the 

spin off by Babcock Prozeßautomation GmbH of its ‘‘non-wind activities’’ (see ‘‘ Relationships with 

Principal Shareholders, the Babcock Borsig Group and the Pedersen Family’’). 

Nordex Automation GmbH demands final payment under this contract together with payment for 

additional services performed. Wehrle demands that Nordex Automation GmbH pay a contractual 

penalty for delay as well as reimbursement for costs for repairing defects itself. The Company believes 

that if this dispute should be taken to court, and if the court were to accept Wehrle’s argument, then 

there is a risk that Nordex Automation GmbH would have to pay up to DM 510,000 to Wehrle, 

irrespective of its own claim amounting to DM 306,258, as well as the costs of litigation. 

Litigation with Gothaer Versicherungsbank VVAG 

Gothaer Versicherungsbank has made an out-of-court claim against Nordex Energy GmbH for the 

reimbursement of insurance payments totaling DM 142,488.83 made by Gothaer Versicherung to its 

policyholder, under a business interruption insurance policy, for damage to a wind turbine allegedly 

due to Nordex Energy GmbH’s negligence in repairing a defect. Nordex Energy GmbH disputes that it 

acted negligently, and refers to a provision in the contract excluding liability. Gothaer 

Versicherungsbank has indicated that it believes this provision is invalid. 

Disputes Resulting from Warranties 

In the course of the Nordex Group’s ongoing business activities, warranty claims are made against the 

Company for defects in wind turbines. Depending on the type of defect claimed, the number of 

turbines affected and the period for which these claims are asserted (provided that the defects are 

covered by the warranty) some of the Company’s customers assert that they have substantial claims 

against the Company. 

Some of the claims may prove to be unsubstantiated, and some will be settled by repair work 

conducted by the Company, as provided for in the contracts. 

The principal warranty claims currently being made against Nordex Group are set out below. The 

Company believes that these could result in litigation. 

Dispute with Energiekontor Windkraft GmbH 

Nordex Energy GmbH constructed three wind farms with a total of 50 wind turbines for three limited 

partnerships, for which Energiekontor EK GmbH had arranged the provision of the capital, and which 

are managed by Energiekontor Windkraft GmbH (together ‘‘Energiekontor’’). In an out-of-court dispute, 

Energiekontor asserts that some of the wind turbines supplied do not meet contractually guaranteed 

qualities, which will, or could, result, inter alia, in reduced reliability of individual turbines. To the extent 

Nordex Energy GmbH accepts the validity of these assertions, it has been undertaking, and is 

continuing with, improvement and optimization work on the affected wind turbines. In the Company’s 

opinion, further potentially more far-reaching, substantial claims presented thus far by Energiekontor 

are not sufficiently substantiated. 

63

Disputes with BOREAS Energie GmbH 

Nordex Energy GmbH constructed three wind farms with a total of 18 N-60 and N-62 wind turbines for 

BOREAS Energie GmbH and a group of limited partnerships (the ‘‘wind-farm operating companies’’), for 

which BOREAS Energie GmbH is responsible for project management and general management 

(together ‘‘BOREAS’’). BOREAS has demanded out-of-court that Nordex Energy GmbH repair defects in 

the controls and the rotor blades of the wind turbines it has supplied. In three agreements in January 

2001, Nordex Energy GmbH and these wind-farm operating companies have agreed, inter alia, that 

various defects will be repaired by Nordex, that the output data for individual turbines will be 

examined, and that Nordex Energy GmbH will pay compensation for any resulting lower capacity in line 

with the contract. 

Litigation with Atlas Energieanlagen GmbH & Co. KG Windpark Neuruppin 

Südwind Energy GmbH supplied and erected a total of four wind turbines to Atlas Energieanlagen 

GmbH & Co. KG Windpark Neuruppin (‘‘Atlas’’) for a wind farm in Neuruppin. Atlas has sued Südwind 

Energy GmbH for performance in connection with the delivery, construction and commissioning of one 

turbine, and has also sued for damages totaling DM 168,209.08 plus 9.5% interest from the time the 

claim was made, and has also sued for reimbursement of all further damages resulting from the total 

loss of one turbine. Atlas asserts that Südwind Energy GmbH negligently caused the total loss of a wind 

turbine supplied to Atlas. If Atlas should succeed in this litigation, Südwind Energy GmbH would be 

obliged to erect the wind turbine free of charge for Atlas and to pay the damages claimed, together 

with interest and all further damages resulting from the loss of the wind turbine. 

64

Relationships with Principal Shareholders, the Babcock 

Borsig Group and the Pedersen Family 

In the past, the Nordex Group companies were closely integrated with the Babcock Borsig Group, and 

maintained a series of business relationships with the Pedersen family, which held a 25% interest in 

Nordex Energy GmbH until the contribution of its interest to Nordex AG. The Pedersens have been 

active in the wind energy business since the mid-80’s. 

Relationships with Babcock Borsig Group Companies 

Position within the Group 

The Nordex Group companies, with the exception of Nordex AG, were formerly part of the Balcke-Dürr 

Group. Balcke-Dürr AG is an indirect subsidiary of Babcock Borsig AG. Babcock Borsig AG (together 

with its subsidiaries, the ‘‘Babcock Borsig Group’’) is listed on the official market (Amtlicher Handel) of 

the Berlin, Düsseldorf, Frankfurt, Hamburg and Munich stock exchanges. With revenues of over EUR 6 

billion (55% generated abroad) and approximately 30,600 employees worldwide, the Babcock Borsig 

Group is a major international mechanical and plant engineering, energy and environmental 

technologies group (financial data refers to the fiscal year ended September 30, 2000). Its subsidiary 

Balcke-Dürr AG is listed on the official market of the Frankfurt, Berlin and Düsseldorf stock exchanges 

and its business is in the area of energy systems. Balcke-Dürr AG had approximately 5,900 employees 

as of September 30, 2000 and generated consolidated revenues of over EUR 1.4 billion in the fiscal year 

September 30, 2000. 

Prior to the Offering, Babcock Borsig AG (through its subsidiary Balcke-Dürr AG and Balcke-Dürr AG’s 

wholly-owned subsidiary Borsig Energy GmbH) held approximately 80.5% of the share capital of 

Nordex AG. Subsequent to the Offering, assuming that the Over-allotment Option is exercised in full, 

Borsig Energy GmbH will hold just over 25% (if the Over-allotment Option is not exercised, 

approximately 32%) of the voting rights and Shares of the Company. The Babcock Borsig Group will 

therefore continue to hold an interest of approximately 25% (if the Over-allotment Option is not 

exercised, approximately 32%) of Nordex AG. This shareholding will enable the Babcock Borsig Group, 

through its subsidiary Borsig Energy GmbH, to block important decisions of the Company (in particular, 

amendments to the Articles of Association) and thereby influence the business development of Nordex 

AG (see ‘‘Risk Factors—Influence of Selling Shareholders, Sale of Shares’’). 

In addition, two of the members of the supervisory board of Nordex AG also hold additional positions 

within the Babcock Borsig Group: these are Dr. Hans W. Fechner, the supervisory board chairman, who 

is a Generalbevollmächtigter (general manager) of Babcock Borsig AG and deputy managing board 

chairman of Balcke-Dürr AG and Supervisory Board member Michael von Cappeln, who is inter alia a 

deputy managing board member of Babcock Borsig AG and managing board member of Balcke-Dürr 

AG. 

The Nordex Group companies also made up a significant portion of the Balcke-Dürr Group. For this 

reason, the General Meeting of Balcke-Dürr AG gave authority to the Management Board until August 

30, 2001 to instruct Borsig Energy GmbH to implement the necessary measures for the listing and 

public offering of Nordex AG on March 15, 2001, in which external shareholders of Balcke-Dürr AG 

(apart from Babcock Borsig Beteiligungs GmbH, a subsidiary of Babcock Borsig AG) would be given the 

opportunity to acquire shares in Nordex as part of a preferred allotment (see ‘‘The Offering—Allotment 

Principles, Reserved Amount’’). 

Contractual and Other Relationships with the Babcock Borsig Group Companies 

The subsidiaries of Nordex AG were subsidiaries within the Balcke-Dürr Group before its wind energy 

operations were transferred to and brought under the management of Nordex AG and Borsig Energy 

GmbH had entered into profit transfer agreements or control and profit transfer agreements with 

Südwind Energy GmbH, Nordex Automation GmbH, Nordex Planungs- und Vertriebsgesellschaft mbH 

and Nordex Rotor GmbH, which were terminated with good cause by Borsig Energy GmbH on 

65

December 14, 2000, the date on which the notification of their contribution to Nordex AG became valid 

by entry of the capital increase in the commercial register. The subsidiaries of Nordex AG also 

terminated certain inter-company agreements on January 25, 2001 (see ‘‘General Information on the 

Company — Additional Company-law Matters’’). 

As a consequence of its former position in the Balcke-Dürr Group, Nordex AG and its subsidiaries are 

still a party to numerous service agreements with the Balcke-Dürr Group companies and the Babcock 

Borsig Group companies, which are still in effect. 

Most of these agreements concern the supply of key wind turbine components and the provision of 

management and administrative resources as well as the provision of office space. 

The following are some of the principal agreements (see also ‘‘Business—Material Contracts’’): 

– Service agreement between Nordex AG and Borsig Energy GmbH dated February 22, 2001 covering 

the provision of employees and administrative resources; 

– Master agreement between Nordex Energy GmbH and Omnical GmbH dated September 30, 1998 

covering the delivery of tubular towers; 

– Master agreement between Nordex Energy GmbH and Loher AG dated August 24/25, 2000 

covering the delivery of wind generators; 

– Master agreement between Nordex Energy GmbH and A. Friedrich Flender AG dated August 24/25, 

2000 covering the delivery of transmission gears; 

– Master agreement between Südwind Energy GmbH and Loher AG dated August 24/25, 2000 

covering the delivery of wind generators; 

– Master agreement between Südwind Energy GmbH and A. Friedrich Flender AG dated August 24/ 

25, 2000 covering the delivery of transmission gears; and 

– Master agreement between Nordex Energy GmbH/Südwind GmbH and Babcock Gießerei GmbH 

covering the delivery, processing and painting of rotor hubs and frames dated March 7, 2001 and 

August 7/18, 2000, respectively. 

Nordex Automation GmbH, formerly Babcock Prozeßautomation GmbH, and Borsig Prozeßautomation 

GmbH, Oberhausen, also entered into an agreement on November 15, 2000 concerning the hiving off 

of non-wind activities from the Nordex Group. This agreement provided for the process automation for 

the power plants division (comprising the project planning, sales, technical and commercial 

management, and project engineering units), which was previously a part of Nordex Automation 

GmbH’s business in addition to its wind turbine business, to be transferred with all rights and 

responsibilities from Nordex Automation GmbH to Borsig Prozeßautomation GmbH. This transfer 

included, in particular, the uncompleted delivery and contracts for works and services of Nordex 

Automation GmbH, as well as those still covered by guarantees. Because the contractual partners of 

Nordex Automation GmbH were not requested to consent to the transfer of the legal rights and 

responsibilities contained within those contracts, Nordex Automation GmbH remains liable for any 

liability arising therefrom. The Company estimates that the total risk of having to fulfil any claims or 

recourse from guarantees amounts to less than EUR 1 million. In addition, there is a risk that Nordex 

Automation GmbH could be faced with claims by guarantors who provided sureties or guarantees in 

connection with delivery contracts or contracts for works and services to customers of Nordex 

Automation GmbH in respect of certain risks. To cover the two risks mentioned above, Balcke-Dürr AG 

and Nordex AG signed an indemnification agreement on November 22, 2000, pursuant to which 

Balcke-Dürr AG will indemnify Nordex AG and its subsidiaries in the event any claims are raised. 

No geographic or sector-specific restrictions on competition are imposed on Nordex AG, in relation to 

either former or current Babcock Borsig Group companies. The Company believes that the agreements 

with the Babcock Borsig Group companies were concluded on the basis of standard market terms and 

conditions on arm’s-length terms. 

66

Agreements with Associated Companies of the Pedersen Brothers 

The Nordex Group also maintains business relationships with companies controlled by Nordvest A/S, a 

company majority-owned by Carsten Pedersen and Jens Pedersen. In particular, Nordex Energy GmbH 

and Welcon A/S, the parent company of Nordvest A/S, concluded a master agreement dated September 

30, 1998, covering the delivery of steel tubing masts. Carsten Pedersen is also a managing board 

member of Nordex AG and Jens Pedersen holds general power of attorney for Nordex Energy GmbH 

and Nordex AG. 

The Pedersen brothers, Nordvest A/S, Welcon A/S, Nordex Energy GmbH, Borsig Energy GmbH and 

Nordex AG entered into an agreement dated 23 November 2000. This agreement provides inter alia, 

that, with effect from November 11, 2000, Nordex Energy GmbH will pay to Welcon A/S DM 500 for 

each wind turbine with a rotor diameter between 33m and 50m and DM 1,000 for each wind turbine of 

over 50m manufactured by or for the account of Nordex Energy GmbH, or by or for the account of one 

of its subsidiaries or another Group company or licensee. This obligation results from an earlier 

shareholder agreement among the parties dated September 25, 1998, which has otherwise expired. 

Nordex Energy GmbH has agreed to pay these amounts in return for the transfer of all Welcon A/S’s 

intellectual property rights to Nordex Energy GmbH, and the transfer of know-how to Welcon A/S. The 

obligation applies up to a ceiling of DM 3 million during the term of the agreement. 

In addition, it was agreed that Borsig Energy GmbH will, within the legal limits, exercise its rights in 

Nordex AG’s General Shareholders’ Meeting to ensure that a candidate nominated by Nordvest A/S is 

elected to the supervisory board. 

No geographic or sector-specific restrictions on competition are imposed on Nordex AG, in relation to 

either former or currently existing companies forming part of the Pedersen brothers holdings. 

67

General Information on the Company 

Overview 

Nordex AG was founded on August 25, 2000 as ‘‘Taifun AG’’, with the principal object of acting as a 

holding company for all of the Balcke-Dürr Group’s wind power activities, which included Nordex 

Energy GmbH, including its foreign subsidiaries, Südwind Energy GmbH, Nordex Automation GmbH, 

Nordex Rotor GmbH and Nordex Planungs- und Vertriebsgesellschaft mbH. The economic origins of the 

Nordex Group date back to 1991, when Nordex Energy GmbH was formed as ‘‘Nordex Energieanlagen 

GmbH’’. Since its formation, this company has been active in the fields of manufacturing and selling 

wind turbines. 

Formation, Development and Reorganization 

of the Group Structure 

Nordex AG is entered in the commercial register of the Oberhausen Local Court under the number HRB 

3659. The general meeting of the Company which took place on February 21, 2001 passed a resolution 

to relocate the Company’s registered office to Rostock; this decision has not yet been registered with 

the commercial register. The Company expects to apply for registration of the relocation of its 

registered office in April 2001 after the capital increase for the Offering has been registered (see 

‘‘Capitalization’’). At the time this Offering Memorandum was approved, the Company’s share capital 

totaled EUR 34,050,000.00. 

Nordex AG was formed by Borsig Energy GmbH, Oberhausen, Germany, as ‘‘Taifun AG’’ (hereinafter 

referred to as ‘‘Nordex AG’’) with the adoption of its Articles of Association on August 25, 2000. The 

Company was registered in the commercial register of Oberhausen Local Court on September 19, 2000 

under the number HRB 3659 with share capital of EUR 50,000.00. The share capital comprised 50,000 

no-par value bearer shares with a nominal value of EUR 1.00 each. Since the Company’s formation its 

registered office has been in Oberhausen. 

Borsig Energy GmbH, Nordvest A/S, Give, Denmark and the Company agreed, pursuant to a 

contribution and share transfer agreement that Borsig Energy GmbH and Nordvest A/S would 

contribute all of the interests which they held in their respective companies active in the wind power 

sector to Nordex AG, then ‘‘Taifun AG’’, in return for the issue of new shares in Nordex AG. In the 

contribution and share transfer agreement, Borsig Energy GmbH transferred to Nordex AG all of the 

interests it held in Nordex Energy GmbH (registered office in Rerik), in Südwind Energy GmbH 

(registered office in Oberhausen), in Nordex Rotor GmbH (registered office in Rostock), in Nordex 

Automation GmbH (registered office in Oberhausen) and in Nordex Planungs- und Vertriebsgesellschaft 

mbH (registered office in Bad Essen). Nordvest A/S transferred all of the interests it held in Nordex 

Energy GmbH to the Company, which now holds all the shares in the companies named above. In all 

cases, these transfers were conditional upon the entry in the commercial register of the capital increase 

and the performance of the post-formation acquisition within the meaning of section 52 of the 

Aktiengesetz (German Public Companies Act). 

In order to implement the contribution and share transfer agreement, Nordex AG’s General Meeting on 

November 23, 2000 resolved to increase the Company’s share capital by EUR 34,000,000 from EUR 

50,000 to EUR 34,050,000 in exchange for non-cash contributions by issuing 34,000,000 bearer shares. 

Shareholders statutory preemption rights were excluded. Of the 34,000,000 new shares, Borsig Energy 

GmbH subscribed for and acquired 27,357,500 bearer shares against the following contributions: an 

equity interest with a nominal value of DM 78,000 (75% of the ordinary share capital) in Nordex Energy 

GmbH, four equity interests with a total nominal value of DM 100,000 (100% of the ordinary share 

capital) in Nordex Planungs- und Vertriebsgesellschaft mbH, an equity interest with a nominal value of 

EUR 25,000 (100% of the ordinary share capital) in Nordex Rotor GmbH, an equity interest with a 

nominal value of EUR 25,000 (100% of the ordinary share capital) in Südwind Energy GmbH and an 

equity interest with a nominal value of DM 200,000 (100% of the ordinary share capital) in Nordex 

Automation GmbH. Nordvest A/S acquired 6,642,500 new shares against a contribution of two equity 

68

interests it held with a total nominal value of DM 26,000 in Nordex Energy GmbH. As Nordex AG’s 

capital increase in exchange for non-cash contributions exceeded 10% of the capital in place at the 

time the resolution was passed and because this capital increase was implemented within two years of 

the Company’s formation, it was subject to the post-formation acquisition provisions laid down by 

section 52 of the Aktiengesetz (German Stock Corporations Act). The Supervisory Board accordingly 

submitted its post-formation report on December 5, 2000. The Duisburg-based firm of auditors Fasselt 

und Partner has been appointed by the local court of Oberhausen to audit the non-cash contribution 

and post-formation acquisition. Fasselt und Partner submitted a report on the non-cash contribution 

and post-formation acquisition dated December 8, 2000. The auditor’s report concluded with the 

finding: 

‘‘On completion of our audit in accordance with professional standards and in compliance with 

sections 34 and 52 (4) of the Aktiengesetz (AktG – German Stock Companies Act), we certify that, 

on the basis of the documents, books and written records, together with the declaration and 

evidence provided to us, that the audit of the post-formation acquisition for Taifun AG did not give 

rise to any reservations, and that the information contained in the post-formation acquisition 

report by the Supervisory Board of Taifun AG is in line with statutory provisions. The value of the 

non-cash contributions totaled the theoretical nominal value of EUR 34,000,000 of the bearer 

shares to be granted.’’ 

In addition, the General Meeting on November 23, 2000 resolved authorized capital (see 

‘‘Capitalization—Authorized Capital’’). 

The Extraordinary General Meeting of Nordex AG on December 8, 2000 accepted the non-cash 

contribution agreement as a post-formation acquisition contract. 

The capital increase, the post-formation acquisition and the authorized capital were filed with the 

commercial register on December 8, 2000 and were entered in the commercial register on December 

14, 2000. 

Additional Company-law Matters 

On January 26, 2001, the Extraordinary General Meeting of Nordex AG resolved, among other matters, 

to change the Company’s name from ‘‘Taifun AG’’ to ‘‘Nordex AG’’, to change the objects of the 

Company and to amend the rest of the Company’s Articles of Association, in particular with regard to 

the size of the Supervisory Board, the location of the General Meeting and the Management Board’s 

powers of representation. The resolutions were filed with the commercial register and were registered 

on February 12, 2001. 

On February 1, 2001 Nordex AG concluded profit transfer agreements with its subsidiaries Nordex 

Energy GmbH, Südwind Energy GmbH, Nordex Automation GmbH, Nordex Planungs- und 

Vertriebsgesellschaft mbH and Nordex Rotor GmbH as well as control contracts with some of these 

companies, which were approved by Borsig Energy GmbH and the companies’ shareholders’ meetings 

on February 21, 2001 and by Nordex AG’s Ordinary General Meeting on February 21, 2001. In order to 

avoid any uncertainty as to when agreements which had previously existed with Borsig Energy GmbH 

had been terminated, Borsig Energy GmbH and Nordex AG agreed that they would each put the other 

in the position that they would have been in, had the relevant agreements between Borsig Energy 

GmbH and the subsidiaries of Nordex AG been terminated as of October 1, 2000 and had such 

agreements been entered into, at the same time, between Nordex AG and its subsidiaries. As a result, 

Borsig Energy GmbH waived its profit participation right and – insofar as direct-control contracts 

applied – it also waived the exercise of its right of control. In return, Nordex AG made an undertaking 

to reimburse Borsig Energy GmbH for any losses that may occur. The company agreements with 

Südwind Energy GmbH and Nordex Automation GmbH were filed with the Commercial Register on 

March 8, 2001. The company agreements between Südwind Energy GmbH and Nordex Automation 

GmbH were declared at the commercial register on March 8, 2001 and entered in the commercial 

register on March 26, 2001 and March 22, 2001 respectively. The Agreement with Nordex Planungsund 

Vertriebsgesellschaft mbH will shortly be declared at the commercial register. 

69

In addition to the approval of the company agreements with Nordex AG’s direct subsidiaries, the 

Company’s Ordinary General Meeting on February 21, 2001 passed a resolution to discharge the 

Management Board and Supervisory Board for the short period ending September 30, 2000, elected six 

new members of the Supervisory Board (see ‘‘Executive Bodies of the Company, Employee and 

Management Share Scheme—Supervisory Board’’), appointed BDO Deutsche Warentreuhand 

Aktiengesellschaft to audit the Company’s financial statements for the fiscal year to September 30, 

2001 and resolved to increase the share capital by up to EUR 18,000,000 with regard to the Offering, as 

well as to create authorized capital and contingent capital for employee share option schemes (see 

‘‘Capitalization’’ and ‘‘Executive Bodies of the Company, Employee and Management Share Scheme— 

Employee and Management Share Scheme’’). In addition, this general meeting resolved to relocate the 

Company’s registered office to Rostock (see ‘‘General Information on the Company—Company Name, 

Registered Office, Fiscal Year and Duration of the Company’’) and to amend Article 17 of the Articles of 

Association (Remuneration of the Supervisory Board). 

Company Name, Registered Office, Fiscal Year and Duration 

of the Company 

The Company bears the name Nordex AG. 

The Company has its registered office in Oberhausen, where the Company was founded. The Company 

intends to relocate its registered office to Rostock, where the principal production site of the Nordex 

Group is located, after the Offering. The Company’s ordinary general meeting passed a resolution to 

this effect on February 21, 2001, which will only be entered in the commercial register after the capital 

increase of up to EUR 18,000,000, which was resolved on February 21, 2001, has been entered in the 

commercial register, in line with the instructions issued to the Management Board by the general 

meeting. The relocation is scheduled to be entered in the commercial register in April 2001. 

The fiscal year of the Company commences on October 1 each year, and ends on September 30 of the 

following year. In 2000, the Company had a short fiscal period from August 25, 2000 to September 30, 

2000. 

The Company was incorporated for an unlimited duration. 

Objects of the Company 

According to the Company’s Articles of Association, its objects are to manage, run, acquire and dispose 

of companies in Germany and abroad that focus on the areas of industrial production, sales and 

services, in particular in the field of ‘‘alternative energy’’. The Company may also conduct its own 

activities in these business areas. The Company may establish branches in Germany and abroad and 

acquire stakes in German and foreign companies. It may also carry out all activities that are conducive 

to promoting the Company’s business purpose. In addition, the Company is authorized to spin-off its 

operations either fully or in part to associated companies or to transfer these operations to associated 

companies. 

Capital 

Prior to the implementation of the capital increase in connection with the Offering, the Company’s 

share capital totaled EUR 34,050,000 and was composed of 34,050,000 bearer shares with a calculated 

nominal value of EUR 1.00 each. The form of the share certificates and the profit participation 

certificates and renewal coupons is determined by the Management Board in agreement with the 

Supervisory Board. Claims by shareholders for individual or other certification are excluded. 

The Ordinary General Meeting resolved on February 21, 2001 to increase the share capital against cash 

contributions by up to EUR 18,000,000 from EUR 34,050,000 to up to EUR 52,050,000 in order to 

create new shares, by issuing up to 18,000,000 New Shares each with a nominal value of EUR 1.00 in 

the ordinary share capital. The New Shares carry profit participation rights from October 1, 2000. The 

shareholders’ preemption rights have been excluded. Dresdner Bank is to underwrite and acquire the 

shares at their issue price of EUR 1.00 per share, subject to an undertaking to offer the shares, via an 

70

underwriting syndicate lead-managed by Dresdner Bank, to interested investors in the Federal Republic 

of Germany as part of a public offering and in countries outside the Federal Republic of Germany as 

part of a private placement at a placement price which had yet to be determined. The difference 

between the issue price of EUR 1.00 and the placement price is to be transferred to the Company. The 

increase in share capital will only be implemented to the extent that Dresdner Bank subscribes for all of 

the New Shares subject to the conditions mentioned above on one occasion by May 31, 2001. The 

resolution for the increase in share capital would have become invalid if such subscription had not 

taken place by May 31, 2001. The Management Board is authorized, with the approval of the 

Supervisory Board, to determine further details of the capital increase and its implementation. The 

General Meeting waived the report of the Management Board on the reason for the exclusion of 

preemption rights to be submitted to it. In addition, the Supervisory Board is authorized to amend 

Article 4 (1) of the Articles of Association (Amount and split of share capital) with effect from the time 

at which the implementation of the capital increase is registered so that it is in line with the 

implemented capital increase. The capital increase in the amount of EUR 18,000,000, and the 

corresponding amendment of § 4 of the Company’s Articles of Association, which is expected to be 

entered in the commercial register on April 2, 2001. 

Authorized Capital 

The ordinary general meeting on February 21, 2001 resolved on the one hand to amend the existing 

authorized capital totaling EUR 17,025,000 created by the extraordinary general meeting of the 

Company on November 23, 2000, by making a corresponding amendment to Article 4 (2) of the Articles 

of Association (authorized capital I) and, on the other hand, to create additional authorized capital 

totaling EUR 9,000,000 by adding a new paragraph (4) to Article 4 of the Articles of Association 

(authorized capital II). 

According to the provisions relating to authorized capital I, the Management Board is authorized to 

increase the Company’s ordinary share capital on one or several occasions by March 1, 2005, with the 

approval of the Supervisory Board, by issuing new shares in exchange for cash or non-cash 

contributions up to a maximum amount of EUR 17,025,000. The new shares carry profit participation 

rights from the start of the fiscal year in which they are issued (authorized capital I). In addition, after 

approval by the Supervisory Board, the Management Board is also authorized to decide on the 

exclusion of the shareholders’ statutory preemption rights. Preemption rights may be excluded in the 

case of capital increases in exchange for non-cash contributions, in particular for the purpose of 

acquiring companies, parts of companies and equity interests, in the case of capital increases in 

exchange for cash contributions for an amount of up to EUR 3,405,000 in order to issue the new shares 

at an amount which is not materially below the quoted price (section 186 (3) of the Aktiengesetz), and 

also in order to issue shares to employees of the Company and its associated companies. Insofar as the 

Management Board does not utilize these powers to exclude preemption rights, the shareholders’ 

preemption rights can only be excluded for transactions involving fractional amounts. The 

Management Board is also authorized, with the approval of the Supervisory Board, to have the new 

shares underwritten by a credit institution or an underwriting syndicate with an undertaking that these 

are offered to shareholders for subscription by way of an indirect subscription right. The Management 

Board is authorized, with the approval of the Supervisory Board, to determine further details relating to 

the capital increases relating to authorized capital I and their implementation. 

According to the provisions relating to authorized capital II, the Management Board is authorized to 

increase the Company’s ordinary share capital on one or several occasions until March 1, 2005, with 

the approval of the Supervisory Board, by issuing new shares against cash or non-cash contributions 

by a maximum of EUR 9,000,000. The new shares carry profit participation rights from the start of the 

fiscal year in which they are issued (authorized capital II). In addition, after approval by the Supervisory 

Board the Management Board is also authorized to decide on the exclusion of the shareholders’ 

statutory subscription rights. Subscription rights may be excluded in the case of capital increases 

against non-cash contributions, in particular with the purpose of acquiring companies, parts of 

companies and equity interests, in the case of capital increases against cash contributions for an 

amount of up to EUR 1,800,000 in order to issue the new shares at an issuing amount which is not 

substantially below the listed price (section 186 (3) of the Aktiengesetz), and also in order to issue 

71

shares to employees of the Company and its associated companies. Insofar as the Management Board 

does not utilize these powers to exclude subscription rights, the shareholders’ subscription rights can 

only be excluded for fractions. The Management Board is also authorized, with the approval of the 

Supervisory Board, to have the new shares underwritten by a credit institution or an underwriting 

syndicate with an undertaking that these are offered to shareholders for subscription by way of an 

indirect subscription right. The Management Board is authorized, with the approval of the Supervisory 

Board, to determine further details relating to the capital increases from authorized capital II and their 

implementation. 

The changes to the authorized capital I and the authorized capital II are scheduled to be entered in the 

commercial register on April 2, 2001. 

Conditional Capital 

The ordinary general meeting of the Company passed a resolution on February 21, 2001 to create 

conditional capital for the purposes of an employee share scheme as follows: 

The share capital of the Company has been conditionally increased by EUR 3,400,000 by issuing up to 

3,400,000 bearer shares. The conditional capital increase serves to safeguard shareholder’s preemption 

rights which will be issued by the Company by March 31, 2005 as a result of the authorization of the 

Management Board and Supervisory Board on February 21, 2001. Such Board approval is an express 

condition for an issue of conditional capital. The conditional capital increase is only to be implemented 

to the extent that the preemption rights are issued and exercised. The New Shares carry dividend rights 

from the start of the fiscal year in which the preemption rights can be exercised (see ‘‘Executive Bodies 

of the Company, Employee and Management Share Scheme’’). 

The conditional capital increase was entered in the commercial register on March 22, 2001. 

Shareholders 

The following table shows the Company’s shareholder structure and the forecast breakdown of 

ownership pre- and post-Offering taking into account the Over-allotment Option. 

Share capital post-Offering Share capital post-Offering 

(excluding Over-allotment (after Over-allotment Option 

Share capital pre-Offering 

Option) 

has been fully exercised) 

Shareholder Shares (approx.)% Shares (approx.)% Shares (approx.)% 

Borsig Energy GmbH 27,407,500 80.49 16,771,195 32.22 13,012,501 25.00 

Nordvest A/S 6,642,500 19.51 3,978,805 7.64 3,037,499 5.84 

Total Selling Shareholders 34,050,000 100.00 20,750,000 39.87 16,050,000 30.84 

Preferred allotment (Friends and Family) 

max. 626,000 1.20 626,000 1.20 

Free float 30,674,000 58.93 35,374,000 67.96 

of which preferred subscription by 

shareholders of Balcke-Dürr AG max. 2,760,000 5.30 2,760,000 5.30 

Total 34,050,000 100.00 52,050,000 100.00 52,050,000 100.00 

Free Float 

If all of the shares offered are placed, approximately 69.16% of the share capital of Nordex AG will be 

held by the general public (including the approximately 5.30% of shares acquired by the shareholders 

of Balcke-Dürr AG under a preferred allotment and an additional amount of approximately 1.20% held 

by shareholders who were offered Shares by way of a preferred allotment). If the Over-allotment 

Option is not exercised, approximately 60.13% of Nordex AG’s share capital will be held by the general 

public, including the approximately 5.30% of shares acquired by to the shareholders of Balcke-Dürr AG 

by way of a preferred subscription and an additional amount of approximately 1.20% of shares held by 

the shareholders who were offered Shares by way of a preferred allotment as part of the Friends and 

Family program. 

72

Earnings per Share 

The following table shows the Nordex Group’s earnings per share for the last three fiscal years based 

on the IAS Pro Forma Consolidated Financial Statements. In order to allow comparisons to be made 

over the period, this table assumes an imputed number of 34,050,000.0 shares (i.e. the number of 

shares prior to the capital increase for the Offering); however, the Company did not actually exist for 

the entire period nor did it have any issued capital that would have corresponded to this number of 

shares. 

Fiscal year 

1997/1998 

Fiscal year 

1998/1999 

Fiscal year 

1999/2000 

Imputed number of shares 34,050,000 34,050,000 34,050,000 

Net profit for the period in EUR 1,595,195.27 6,530,252.18 6,434,596.58 

Imputed earnings per share in EUR 0.05 0.19 0.19 

Dividends 

No dividends were paid in respect of the short fiscal period in 2000 (August 25, 2000 to September 30, 

2000). The Company has not paid any dividends in the past. 

Application of Profits and Dividend Policy 

The general meeting decides on the application of accumulated profits. In so doing, it is bound by the 

adopted financial statements of Nordex AG, which must be prepared in line with the provisions of the 

Handelsgesetzbuch (HGB – German Commercial Code). When approving the financial statements, the 

Management Board and the Supervisory Board can also transfer more than half of the accumulated 

profits to other retained earnings. The accumulated profits are distributed to the shareholders insofar 

as this is resolved by the general meeting. As the shares of the Company are deposited exclusively in 

clearing systems, dividends are paid out in accordance with the rules of the relevant clearing system. In 

general, dividend payments are made to shareholders via their custodial bank’s clearing account. 

In the event of a capital increase, the dividend rights for new shares may depart from those described 

in section 60 of the Aktiengesetz. 

Profit transfer agreements exist between Nordex AG and Nordex Energy GmbH, Nordex Planungs- und 

Vertriebsgesellschaft mbH and Nordex Rotor GmbH, and direct-control agreements and profit transfer 

agreements exist with Südwind Energy GmbH and Nordex Automation GmbH (see ‘‘—Additional 

Company-law Matters’’). 

The Company’s ability to pay dividends and the amount of the relevant dividends will depend on the 

earnings generated in the relevant fiscal year and the dividends of the Company’s subsidiaries as well 

as on the financial position of the Company and, in particular, its subsidiaries. Any future dividends will 

therefore depend on the Company’s and its subsidiaries’ operating results as well as the liquidity 

requirements of the Nordex Group; its tax-related and regulatory circumstances will also affect the 

Company’s ability to pay dividends in the future. At present, the Company intends to retain the bulk of 

its future profits. 

Notices, Paying and Depositary Agents 

In accordance with the Company’s Articles of Association, notices by the Company are published solely 

in the Bundesanzeiger (German Federal Gazette). Notices relating to the shares must also be published 

in at least one national journal of record approved by the Frankfurt Stock Exchange. 

The depositary function will be transferred to the underwriting banks listed at the end of this Offering 

Memorandum, to which shareholders may submit certificates from their custodial bank or Clearstream 

Banking AG concerning the proper deposit of the shares in return for the issue of admission cards for 

the General Meeting. 

73

The paying agency function, which is centralized at Dresdner Bank, will also be transferred to the 

underwriting banks. The exercise of preemption rights may also take place at the underwriting banks. 

Termination and Dissolution of the Company 

Other than in the event of insolvency, the Company may be liquidated by a resolution of the general 

meeting passed by a majority of 75% of the represented share capital. The assets of the Company 

remaining after liabilities have been discharged will be distributed among the shareholders 

proportionately according to the number of shares held by each shareholder. The Company was 

incorporated for an unlimited duration. 

Formation Auditor and Auditor 

The founders prepared a report on the Company’s formation and the members of the managing board 

and the supervisory board audited the formation. In their formation audit report of August 25, 2000, 

the members of the Management Board and the supervisory Board state: 

‘‘According to our findings, the formation complies with statutory provisions. The disclosures of the 

founder relating to the acquisition of shares and contributions to the share capital are accurate 

and complete. The Articles of Association do not contain any stipulations relating to special 

benefits for individual shareholders or to any compensation or remuneration for the formation or 

its preparation. According to Article 27 of the Articles of Association, the Company assumed the 

formation costs, which are estimated at EUR 1,000. There are no objections to the method adopted 

in relation to the formation costs.’’ 

No external formation audit by a court-appointed formation auditor was conducted in accordance with 

section 33 (2) of the Aktiengesetz as none of the conditions which require that an external formation 

audit be carried out within the meaning of the Aktiengesetz be conducted applied. 

BDO Deutsche Warentreuhand Aktiengesellschaft, Konrad-Adenauer-Ufer 79-81, 50668 Cologne, 

audited the financial statements of Nordex AG (founded as ‘‘Taifun AG’’) according to the 

Handelsgesetzbuch for the abbreviated fiscal year from August 25, 2000 to September 30, 2000 and 

issued these with an unqualified audit report which can be found in the financial section of this 

Offering Memorandum. 

In addition, BDO Deutsche Warentreuhand Aktiengesellschaft, Konrad-Adenauer-Ufer 79-81, 50668 

Cologne, audited Nordex AG’s (founded as ‘‘Taifun AG’’) IAS Pro Forma Consolidated Financial 

Statements for the fiscal years ended September 30, 1998, 1999 and 2000 and issued an audit report in 

respect thereof which can be found in the financial section of this Offering Memorandum. BDO 

Deutsche Warentreuhand, Konrad-Adenauer-Ufer 79-81, 50668 Cologne, reviewed the IAS Pro Forma 

Consolidated Interim Financial Statements prepared by the Company as of December 31, 2000. The 

comparative figures as of December 31, 1999 included in these consolidated interim financial 

statements were not reviewed. 

The IAS Pro Forma Consolidated Financial Statements for the fiscal years ended September 30, 1998, 

1999 and 2000, the IAS Pro Forma Consolidated Interim Financial Statements as of December 31, 2000, 

the non-consolidated financial statements of Nordex AG produced in accordance with the provisions of 

the Handelsgesetzbuch for the abbreviated fiscal year from August 25, 2000 to September 30, 2000 

and non-consolidated financial statements of Nordex GmbH (now Nordex Energy GmbH) produced in 

accordance with the provisions of the Handelsgesetzbuch for the fiscal year 1999/2000 are all included 

in the financial section of this Offering Memorandum. 

BDO Deutsche Warentreuhand Aktiengesellschaft, Konrad-Adenauer-Ufer 79-81, 50668 Cologne, was 

appointed by the Ordinary General Meeting of the Company on February 21, 2001 as the auditor for 

the fiscal year ending September 30, 2001. 

74

Auditor for the Subsidiaries 

The fiscal year of each subsidiary of Nordex AG commences on October 1 each year and ends on 

September 30 of the following year. 

The financial statements of Nordex GmbH (now Nordex Energy GmbH) produced in accordance with 

the provisions of the Handelsgesetzbuch for the fiscal years 1997/1998, 1998/1999 and 1999/2000 

were audited by BDO Deutsche Warentreuhand Aktiengesellschaft and were each issued with an 

unqualified audit report. 

The financial statements (HGB) of Südwind Borsig Energy GmbH (now Südwind Energy GmbH) for the 

short fiscal period from March 22, 1999 to September 30, 1999 and for the fiscal year 1999/2000 were 

audited by BDO Deutsche Warentreuhand Aktiengesellschaft and were each issued with an unqualified 

audit report. 

The financial statements (HGB) of Borsig Rotortechnik GmbH (now Nordex Rotor GmbH) for the fiscal 

year 1999/2000 were audited by BDO Deutsche Warentreuhand Aktiengesellschaft and were issued 

with an unqualified audit report. 

The financial statements (HGB) of Babcock Prozeßautomation GmbH (now Nordex Automation GmbH) 

for the fiscal years 1997/1998, 1998/1999 and 1999/2000 were audited by BDO Dr. Vonderreck und 

Schulte GmbH Wirtschaftsprüfungsgesellschaft and were each issued with an unqualified audit report. 

The financial statements (HGB) of Nordex Planungs- und Vertriebsgesellschaft mbH (in future: NPV 

Planung & Vertrieb GmbH) for the fiscal years 1997/1998, 1998/1999 and 1999/2000 were audited by 

BDO Deutsche Warentreuhand Aktiengesellschaft and were each issued with an unqualified audit 

report. 

75

Information on the Company’s Subsidiaries 

Nordex AG is a holding company which has held a 100% interest in five companies since acquiring 

their shares from Borsig Energy GmbH in fiscal year 2000/2001. These five companies focus on 

different areas of the development, manufacture and marketing of wind turbines. 

Unless otherwise stated, the following information refers to the IAS Pro Forma Consolidated Financial 

Statements of Taifun AG (now Nordex AG) as of September 30, 2000. 

Nordex Energy GmbH, Ostseebad Rerik 

As part of the Nordex Group, Nordex Energy GmbH develops, engineers and manufactures wind 

turbines under the ‘‘Nordex’’ brand name. It also produces turnkey wind farms and services and 

maintains wind turbines. 

Interest: 100% (following acquisition of the interest held by Borsig Energy 

GmbH in fiscal year 2000/2001) 

Activity: The object of the company is to develop, manufacture and 

market environmentally friendly power generation facilities. 

Managing Directors: Dr Dietmar J. Kestner (Chairman of the management), Carsten 

Pedersen, Dr Thomas Tschiesche, Theo Becker and Ulrich Kossak. 

Employees at the balance 

sheet date: 

405 

Net sales: EUR 248,438 thousand 

Capital stock: EUR 54 thousand, the conversion of the ordinary share capital to 

the Euro was entered into the commercial register on 

January 18, 2001 

Reserves: EUR 6,047 thousand 

Reserves for treasury shares: - 

Net earnings: EUR 10,518 thousand 

Net income: EUR 3,983 thousand 

Book value of shares in Nordex AG 

as of December 31, 2000: 

Receivables from/liabilities to 

Nordex AG: 

EUR 16,693 thousand 

0 

Südwind Energy GmbH, Oberhausen 

As part of the Nordex Group, Südwind Energy GmbH engineers wind turbines under the brand name 

‘‘Südwind’’. It also maintains and services wind turbines. 



Activity: The object of the company is to develop, manufacture and 

market energy systems of all types, in particular wind turbines. 

Managing Directors: Wilhelm Hecking 

Employees at the balance sheet 

date: 


76 

26

Capital stock: EUR 25 thousand 

Reserves: EUR 0 

Net earnings: EUR 83 thousand 






EUR 63 thousand 

0 

Nordex Rotor GmbH, Rostock 

Nordex Rotor GmbH, whose production facilities are under construction, currently manufactures rotor 

blades exclusively for the Nordex Group and performs services such as repairing rotor blades produced 

in-house as well as those purchased from the Nordex Group by third parties. 



Activity: The object of the company is to design and manufacture rotor 

blades for wind turbines and to perform all accompanying 

business. 

Managing Directors: Heinz Jörg Glahr, Dietmar Knünz 


date: 



Reserves: 0 

Net accumulated loss: EUR (534) thousand 

Net loss: EUR (690) thousand 





57 

EUR 25 thousand 

0 

Nordex Automation GmbH, Oberhausen 

Nordex Automation GmbH produces electronic controls, including software and electrical components 

for wind turbines, as well as the electrical equipment for entire wind farms up to and including grid 

connection. In some cases, Nordex Automation GmbH also implements orders directly for customers of 

Nordex Energy GmbH. 



Activity: The object of the company is to implement process engineering 

technology in electrical, process control and automation 

equipment, to supply the associated equipment components 

and to assemble and operate them. The purpose of the company 

is also to deliver planning, consulting and project management 

77

Managing Directors: Gerd Beckert 


date: 

50 



Reserves: 0 

Net accumulated loss: EUR (649) thousand 






services as well as expert opinions in the above-mentioned areas 

in Germany and abroad. 


0 

Nordex Planungs- und Vertriebsgesellschaft mbH, Bad Essen 

As part of the Nordex Group, Nordex Planungs- und Vertriebsgesellschaft mbH, the general 

shareholders’ meeting of which has resolved to change the company name to NPV Planung & Vertrieb 

GmbH and which change was entered in the commercial register on March 19, 2001, plans wind farm 

projects and markets Nordex and Südwind turbines primarily in Germany, in other German-speaking 

countries and in Belgium. 



Activity: The object of the company is to plan, operate and market 

environmentally-friendly energy production facilities. 

Managing Directors: Jörg Hempel and Dr. Thomas Tschiesche 


date: 

20 


Capital stock: EUR 52 thousand (the conversion to euro was entered in the 

commercial register on March 19, 2001). 

Reserves: 0 

Net earnings: EUR 86 thousand 






78 


0

Executive Bodies of the Company, Employee and 

Management Share Scheme 

General Meetings 

The General Meetings of the Company are convened either at the Company’s headquarters or in a city 

of at least 100,000 inhabitants in the Federal Republic of Germany. General Meetings are convened by 

the Management Board. Notice of the agenda of a General Meeting must be published at least one 

month prior to the last day on which shareholders may deposit their shares. The day of publication and 

the last day for deposit shall not be counted towards this one-month period. If all of the shareholders 

are present, General Meetings can pass resolutions without having to observe the provisions in the 

Company’s Articles of Association concerning the location and convening of the meeting, provided that 

no shareholders object to the resolution. 

The right to attend and vote at General Meetings is accorded to those shareholders who deposit their 

shares with the Company, a German notary public, a securities clearing and deposit bank or with one of 

the other agents whose details are given in the notice of the meeting. The deposit of shares must be 

done by the end of the fifth working day before the date of the General Meeting and the shares must 

remain so deposited until the end of the general meeting. For this purpose Saturday is not considered a 

working day. The requirement to deposit the shares can also be satisfied if, with the approval of the 

depositary, another credit institution blocks the shares from the last day of deposit until the end of the 

general meeting. If the last day for deposit is a Saturday, Sunday or a public holiday then the last day 

for deposit shall fall on the following working day. In the event that the shares are deposited with a 

German notary public or a securities clearing and deposit bank, the deposit certificate to be issued by 

this agent must be submitted to the Company no later than the first working day (excluding Saturdays) 

after the last day on which shares can be deposited. 

Each share entitles the holder to one vote at the General Meeting. Unless otherwise stipulated by the 

Aktiengesetz, resolutions at general meetings are passed by a simple majority of the votes cast. To the 

extent that the Aktiengesetz also requires a majority of the share capital represented to pass 

resolutions, a simple majority of the capital represented is sufficient insofar as this is permitted by law. 

The General Meeting is chaired by the Chairman of the Supervisory Board or, in his absence, by another 

member of the Supervisory Board appointed by the Chairman. If neither the Chairman of the 

Supervisory Board nor the deputy appointed by him chair the meeting, the Supervisory Board elects a 

shareholder representative to chair the General Meeting. In the election process for the Chairman of 

the general meeting, if a simple majority is not reached in the first round of voting, a second round of 

voting is held between the two people who received the highest numbers of votes in the first round. A 

tie is decided by drawing lots. The Chairman has the discretion to change the order in which items on 

the agenda will be discussed from the order in which they appear in the published agenda for the 

meeting. The chairman also determines the type of voting procedure and the form in which it will take 

place. 

Management Board 

The Management Board is made up of at least two members. The Supervisory Board appoints the 

members of the Management Board and stipulates their number. The Supervisory Board may appoint 

replacement members of the Management Board, and may appoint one member of the Management 

Board to be the chairman of the Management Board. 

Resolutions of the Management Board are passed by a majority of votes cast. If a Chairman has been 

appointed, he or she will have the casting vote in the event of a tied vote. The Management Board will 

agree on the by-laws it will operate under to the extent that these have not been laid down by the 

Supervisory Board. 

The Company is legally represented by two members of the Management Board or by one member of 

the Supervisory Board together with an authorized signatory (Prokurist). The Supervisory Board may 

79

exempt individual Management Board members from the restrictions contained in section 181 BGB so 

that such Management Board members are able to conduct legal transactions involving the Company 

as a representative of a third party (multiple representation). The Company’s Management Board is 

currently made up of the following members, all of whom can be reached via Nordex AG, Centroallee 

265, 46049 Oberhausen, Germany: 

Name Position 

Dr. Dietmar J. Kestner Production, supply management, technology and service 

Carsten Pedersen Sales 

Rudolf H. Schulz Finance 

Dr. Dietmar J. Kestner (age 44) is the current Chairman of the Company’s Management Board. After 

studying engineering, Dr. Kestner took a doctorate in the field of energy and power station technology 

at the University of Essen. He started his career with Vereinigte Kesselwerke AG as a project engineer 

and subsequently worked for Riley Stoker Corp. in the US, where he was employed as Product Manager 

and Director International Sales and Marketing then for StandardKessel GmbH, where he held the 

position of Head of Sales. He then went on to work for Babcock-Omnical Industrie Kessel GmbH where 

he was the spokesman for the Management Board and, in 1997, he moved to Turbo-Lufttechnik GmbH 

where he was the Chairman of the Management Board. In 2000 he became Chairman of the 

Management Board of Borsig Energy GmbH. Dr. Kestner has been a member of Nordex AG’s 

Management Board since the Company’s formation on August 25, 2000. He became the Chairman of 

the Management Board on January 22, 2001. 

Carsten Pedersen (age 37) is a member of Nordex AG’s Management Board and is responsible for 

sales. After completing his education at the Herning Technical School in Herning, Denmark, Mr. 

Pedersen began his professional career with Brande Beholder og Kedel Fabrik in Give, Denmark. Mr. 

Pedersen commenced his studies at the Herning Business College in 1984. Carsten Pedersen became a 

managing partner of Nordex Energy GmbH in 1987 and has been a member of Nordex AG’s 

Management Board since December 21, 2000. 

Rudolf H. Schulz (age 33) is a member of Nordex AG’s Management Board and is responsible for 

finance. He studied at the Universities of Kaiserslautern, Germany and Glasgow, Scotland from 1988 to 

1994, and graduated with a degree in management and engineering. In 1995, he started his 

professional career with Babcock Borsig AG and, in 1996, moved to DB Management Consulting AG to 

become a project manager, returning to Babcock Borsig AG in 1997 as assistant to the Chairman of the 

Management Board. He became Managing Director of Balcke Dürr Energietechnik GmbH in February 

1999 and simultaneously became Executive Vice President of BDT Engineering Corp., United States, a 

position he held until December 2000. He became a member of Nordex AG’s Management Board on 

December 21, 2000. 

In addition to their duties as members of the Management Board, Dietmar Kestner and Carsten 

Pedersen are also managing directors of Nordex Energy GmbH. 

None of the members of the Management Board conducts any significant activities outside the Nordex 

Group that are of importance to the Company. Mr. Pedersen is a member of the Supervisory Board of 

the listed company Gentech A/S in Copenhagen. 

The members of the Company’s Management Board did not receive any remuneration for their duties 

in the short fiscal period which ran from August 25 to September 30, 2000. In the current fiscal year 

2000/2001, the total remuneration for the members of the Management Board is expected to total 

approximately EUR 950,000. As part of the Offering, the members of the Management Board were 

offered preferential subscription rights for shares in the Company at their issue price up to a total 

value of EUR 10,000. Only Dr. Kestner took up this opportunity and subscribed for shares in the amount 

of E10,000 – i.e. 1,110 shares. In addition, as part of the Offering, the members of the Management 

Board will be granted subscription rights to shares in the Company. The members of the Company’s 

Management Board received approximately 166,667 stock options pursuant to the Option Terms and 

Conditions 2001 (see ‘‘—Employee and Management Share Scheme’’). 

80

The Company has not granted any loans to members of the Management Board nor has it assumed any 

guarantees or issued any similar assurance for the benefit of the members of the Management Board.] 

Supervisory Board 

The Company’s first Supervisory Board was made up of three members, who were elected in 

accordance with section 1 30 (3) of the Aktiengesetz. The Supervisory Board was discharged on 

February 21, 2001 following the short fiscal period. The Extraordinary General Meeting held on January 

26, 2001 resolved to increase the number of Supervisory Board members. As a result, the Supervisory 

Board is now made up of six members. It is composed in accordance with statutory provisions. 

Supervisory Board members are elected for a period of four years which runs until the end of the 

General Meeting in the fourth fiscal year at which shareholders pass a resolution formally approving 

the actions of the Management Board and the Supervisory Board, unless a resolution to the contrary is 

passed by the General Meeting. The fiscal year in which the Supervisory Board members are elected is 

not taken into account when calculating this period. Members of the Supervisory Board may be reelected. 

Replacement members may be elected. If a Supervisory Board member resigns before the end 

of his term of office without being replaced, the next General Meeting must hold a by-election to fill 

the post for the remainder of the resigned member’s term of office. The same applies if an elected 

member declines to assume the position to which he has been elected. Each member of the Supervisory 

Board can resign his or her office, subject to a notice period of one month, by way of a written 

declaration to the Chairman of the Supervisory Board or to the Management Board. The Supervisory 

Board may waive this notice period. A resolution of the General Meeting passed by a simple majority is 

sufficient to revoke the appointment of a member of the Supervisory Board, elected by the General 

Meeting without having been nominated by the shareholders prior to the end of this member’s term of 

office, provided that this resolution is proposed jointly by the Managing and Supervisory Boards. 

The Supervisory Board elects a Chairman and Deputy Chairman from among its members for the 

duration of the elected member’s term of office on the Supervisory Board. If the Chairman or Deputy 

Chairman retires before the end of his term of office, the Supervisory Board must elect a replacement 

for the remaining term without delay. The Chairman of the Supervisory Board only delegates the 

making of declarations of intent by the Supervisory Board and its committees to his deputy in the 

event that he is unable to make such declaration himself. 

The Supervisory Board will adopt its own by-laws in line with statutory provisions and those of the 

Company’s Articles of Association. The Supervisory Board is authorized to make amendments to the 

Articles of Association. 

The Company’s Supervisory Board is currently made up of the following members, who can all be 

reached via Nordex AG, Centroallee 265, 46049 Oberhausen, Germany: 

Name Main activities, Place of residence 

Dr. Hans W. Fechner (Chairman) 

Flemming Pedersen (Deputy Chairman) 

Hans Berger 

Michael von Cappeln 

Member of the Management Board of Babcock Borsig AG, 

Ratingen, Düsseldorf, Germany 

Director of Brande Investerings & Finanzierungsselkas, Give, 

Denmark 

Deputy Chairman of the Management Board of Landesbank 

Schleswig Holstein, Kiel, Germany 

Deputy Chairman of the Management Board of BDAG Balcke- 

Dürr AG, Krefeld, Germany 

Dr. Gerd Jäger Member of the Management Board of RWE AG Essen, Germany 

Bernd Sattig Management Consultant, Leonberg, Germany 

Dr. Hans W. Fechner (age 47) 

Mr Fechner is the Chairman of the Supervisory Board of the Company. After studying for a degree in 

Electrical Engineering and Nuclear Reactor Technology at the Technical Rheinisch-Westfälische 

University in Aachen, he started his career as a development engineer with Rössel Meßtechnic GmbH. 

After that he worked as a research and product engineer at the Centre for Nuclear Research in Jülich 

81

which he left in 1989 to join the Vereinte Kesselwerke AG, Düsseldorf as Head of Division. In 1991, Mr 

Fechner was appointed Speaker of the Management Board of Babcock Prozeßautomation GmbH, 

Oberhausen. In 1997 he became a Director of Balcke-Dürr AG. Since 2000 he has been the Managing 

Director of Babcock Borsig Power GmbH, Oberhausen, responsible for the energy technology sector of 

the Babcock Borsig Group. In 2000 Mr Fechner also became a deputy member of the Management 

Board of Babcock Borsig AG and Chairman of the Board of Balcke-Dürr AG. Mr Fechner is also a 

member of the Supervisory Boards of BBP Service GmbH, Austrian Energy GmbH and Loher AG. 

Flemming Pedersen (age 66) 

Mr Pedersen is the Deputy Chairman of the Supervisory Board of the Company. Following a commercial 

training he started his career in 1963 as a self-employed man when he founded the company Brande 

Beholder & Kedel Fabrik. In 1984 he developed the first prototype of a 85 kilowatt wind turbine. In 1985 

he founded Welcon A/S as ‘‘Nordex A/S’’, which took over the know-how relating to the manufacture of 

wind turbines developed by Brande Beholder & Kedel Fabrik. Mr Pedersen does not sit on any other 

Supervisory Board. 

Michael von Cappeln (age 48) 

Having obtained a degree in Economics from the University of Duisburg, Mr von Cappeln started work 

in 1980 at Deutsche Babcock AG. In 1984 he left to become Head of the Finance and Accounts 

Department of DB Thermal PTY Ltd in Johannesburg (South Africa), from where he returned to Balcke- 

Dürr GmbH as Head of Controlling in 1987. Other posts held by him during his career were Head of the 

Finance and Accounts Department of Balcke-Dürr AG and Commercial Management Director of Balcke- 

Dürr GmbH. Since 2000 Mr von Cappeln has been the Deputy Chairman of the Supervisory Board of 

Balcke-Dürr AG. Mr von Cappeln also holds a post in the Supervisory Boards of the following 

companies: Babcock Industrierohrleitungsbau GmbH (Chairman), Borsig GmbH (member), Krantz-TKT 

(member), Pirp-Tec GmbH (Deputy Chairman). 

Hans Berger (age 51) 

Following his bank apprenticeship, Mr Berger occupied numerous positions with Sparkasse Kiel. He 

stopped work in order to study at the Institute for Savingsbanks and Credit in Bonn (Lehrinstitut für 

das kommunale Sparkassen—und Kreditwesen), where he graduated in the field of business 

administration of savingsbanks. He returned to Sparkasse Kiel, where in 1983 he became Divisional 

Director and, in 1986, a member of the Management Board. Since 1996 Mr Berger has been the Deputy 

Chairman of the Management Board of Landesbank Schleswig-Holstein, Kiel. In addition Mr Berger is 

on the Supervisory Board of dvg Hannover Datenverarbeitungsgesellschaft mbH in Hannover, 

Hamburgische Landesbank Girozentrale in Hamburg, Flender Werf AG, Deka Deutsche 

Kapitalanlagegesellschaft mbH in Frankfurt am Main and S-online Schleswig-Holstein GbR in Kiel. 

Mr Berger is also Honorary Consul for the Republic of Iceland in Schleswig-Holstein. 

Dr.-Ing. Gerd Jäger (age 49) 

Mr Jäger studied engineering at the Technical University of Rheinisch-Westfalia (Rheinisch- 

Westfälische Technische Hochschule) in Aachen and then started work at Rheinisch-Westfälische 

Elektrizitätswerke AG (RWE), where he has held numerous positions since 1977. In 1992 he was 

appointed Head of Controlling and Central Administration and held this post until he was elected to 

the Management Board of RWE Energie Aktiengesellschaft. Since 2000 Mr Jäger has been a member of 

the Management Board of RWE Power Aktiengesellschaft. 

Bernd Sattig (age 58) 

Mr Sattig studied business administration at the Polytechnik of Pforzheim. Having finished his studies 

in 1966, he started work at Deutsche Dunlop-Gruppe in Hanau, where, until 1973, he held a number of 

posts in the human resources department, his last being that of Head of Human Resources. 

In 1973 he joined the ITT Automotive-Gruppe, initially as Head of Human Resources of Alfred Teves 

GmbH (Frankfurt am Main) and then as Managing Director when in 1978 he joined SWF Auto-Electric 

GmbH in Bietigheim-Bissingen as Director of Operations. Other positions held within the ITT 

82

Automotive-Gruppe were, from 1993, Director of Operations and member of the Management Board of 

ITT Automotive Europe GmbH (Frankfurt am Main) and from 1994, Managing Director of the Electrical 

Systems Division of ITT Automotive Europe GmbH in Bietigheim-Bissingen. Since 1998 Mr Sattig has 

worked as a self-employed management consultant in Leonberg. Mr Sattig is a member of the 

Supervisory Board of G. Mohr Präzisionsteile GmbH, Karlsbad. 

The Supervisory Board’s remuneration is set out in the Articles of Association. Accordingly to the latter, 

in addition to the reimbursement of any expenses incurred by a member in conducting his duties, each 

member of the Supervisory Board receives remuneration in the sum of EUR 15,000 for each full year 

for which he has been a member of the Supervisory Board. The Chairman receives twice this sum, and 

the Deputy Chairman receives one-and-a-half times this sum. In addition to the reimbursement of 

expenses and remuneration, value added tax is also reimbursed. Further, the Company may conclude 

personal liability insurance (D&O insurance) for the members of the Supervisory Board and pay the 

associated insurance premiums. 

The former members of the Supervisory Board who held office for the short fiscal period which ran 

from August 25, 2000 to September 30, 2000, and who have since resigned from the Supervisory 

Board, did not receive any remuneration or reimbursement for expenses. For the fiscal year 2000/2001, 

which commenced on October 1, 2000, the members of the Supervisory Board will receive 

remuneration in line with the Articles of Association. 

The Company has not made any loans to the members of the Supervisory Board nor has it assumed any 

guarantees or issued any similar assurance for the benefit of the Supervisory Board members. 

Employee and Management Share Scheme 

To allow employees and management members to participate in its equity, the Company intends, firstly, 

to grant the employees and management members subscription rights for shares and, secondly, to 

enable employees and management members to acquire shares in the context of a preferential 

allotment. 

Stock Option Plan 

In order to allow employees and management of the Company and its associated companies to acquire 

equity in the Company, the Management Board was authorized, by way of a resolution passed by the 

General Meeting on February 21, 2001, to grant subscription rights for up to a total of 3,400,000 bearer 

shares in the Company to the employees and members of the management of the Company and of the 

companies in which the Company either directly or indirectly holds a majority interest (the ‘‘Nordex 

Group’’). The subscription rights may be granted on one or more occasions before March 31, 2005 and 

such grant requires the approval of the Supervisory Board. To the extent that the subscription rights 

benefit the Management Board, the Supervisory Board is authorized to grant them. Of the subscription 

rights, up to 580,000 (approximately 17.1%) may be allocated to members of the Company’s 

Management Board, up to 1,020,000 (30%) may be allocated to the Managing Directors of associated 

companies, up to 440,000 (approximately 13.9%) may be allocated to the Company’s employees and up 

to 1,360,000 (40%) may be allocated to employees of associated companies. Beneficiaries who belong 

to more than one of the groups named above will only receive subscription rights as a member of one 

such group and shall be entitled to shares only from the number of the subscription rights allocated to 

the group in question. 

The Company’s Management Board will determine the individual beneficiaries and the number of 

subscription rights to be granted to each of these. To the extent that these subscription rights are to be 

granted to members of the Management Board, this will be determined by the Supervisory Board. 

Subscription rights may only be granted to beneficiaries during two 15-day periods, one beginning on 

the first bank working day following the annual Ordinary General Meeting of the Company and the 

other beginning on the first bank working day following the publication of the results for the third 

quarter (each a ‘‘Subscription Rights Period’’). In addition, options to subscribe shares granted as part of 

the Company’s Offering may be granted during an additional Subscription Rights Period commencing 

on March 20, 2001 and ending on April 2, 2001 at 9.00 a.m. 

83

Exercise of the subscription rights must be staggered. Up to one third of the rights may be exercised 

two years after they are initially granted, another third may be exercised three years after they are 

initially granted, and the remaining third can be exercised four years after they are initially granted 

(‘‘Waiting Periods’’). The terms and conditions for the issue of options to subscribe shares may also 

foresee longer Waiting Periods before the rights may be exercised for the first time. The subscription 

rights remain valid for a maximum term of eight years from the date on which they are granted. The 

terms and conditions for the issue of options to subscribe shares may specify a shorter term which 

however may not be less than five years. Subscription rights may only be exercised during two 15-day 

periods in each year. The first such period begins on the first bank working day after the annual 

Ordinary General Meeting of the Company and the second begins on the first bank working day after 

the publication of results for the third quarter (each an ‘‘Exercise Period’’). If and to the extent that an 

Exercise Period falls either fully or partially within a period during which Nordex AG publishes an offer 

in the Bundesanzeiger (German Federal Gazette) to its shareholders to subscribe new shares or bonds 

carrying conversion or subscription rights, or if an Exercise Period falls either fully or partially in the 

period between the end of a fiscal year and the day on which the shares of the Company carrying 

subscription rights are quoted ‘‘ex rights’’ for the first time on the Frankfurt Stock Exchange, the 

subscription rights may not be exercised and the relevant Exercise Period will be extended by the 

appropriate number of exercise days on which the subscription rights could not be exercised. 

The subscription rights are issued free of charge. When the subscription rights are exercised, the holder 

must pay an exercise price for each such exercise. The exercise price corresponds to the average closing 

price for the Company’s shares quoted on the Xetra system on the Frankfurt Stock Exchange on the ten 

trading days prior to the end of the Subscription Rights Period in which the relevant subscription rights 

were granted (‘‘Reference Price’’), plus a fixed premium of 25% of the Reference Price as performance 

target. For options offered as part of Nordex AG’s Offering, the exercise price is the issue price plus a 

fixed premium of 25% as performance target. 

The subscription rights are non-transferable. Subscription rights lapse if the beneficiary’s contract of 

employment with Nordex AG or with an associated company ends – for whatever reason – and is not 

replaced with another such contract with another company associated with Nordex AG. This does not 

include subscription rights for which the relevant Waiting Period has expired. These rights may be 

exercised once only, in the Exercise Period following the end of the employment contract. Different 

arrangements can be made in the event of the beneficiary’s retirement, incapacity or death, or if an 

associated company should cease to be a member of the Nordex Group. 

The Management Board has been authorized, subject to the approval of the Supervisory Board, to 

determine the further details of the terms and conditions of the options to subscribe shares together 

with matters relating to the issue and characteristics of the new shares for subscription. 

To facilitate the exercise of the stock options, which the Management Board and Supervisory Board 

were authorized to issue by a resolution passed by the General Meeting on February 21, 2001, the 

General Meeting also resolved to create contingent capital totaling EUR 3,400,000 (see ‘‘General 

Information on the Company’’ and ‘‘Capitalization’’). 

Option Terms and Conditions 2001 

As part of its Offering, the Company intends to grant rights to subscribe for its bearer shares to its 

employees and to senior managers of the Company as well as to companies in the Nordex Group. The 

extent to which the Company will use the authorization granted by the General Meeting on 

February 21, 2001 in this regard to issue further capital will depend on the placement price. 

A resolution concerning the terms and conditions for the issue of options to subscribe shares in this 

first tranche was passed on March 8, 2001 by the Management Board and approved by the Supervisory 

Board on March 19, 2001 (the ‘‘Option Terms and Conditions 2001’’). The Option Terms and Conditions 

2001 stipulate that the number of options to be granted to individual beneficiaries depends on which 

category to which the employee belongs and, in the case of the members of the Management Board, 

also the Offer Price of the shares of Nordex AG. The Company has defined five employee categories for 

this purpose: category one comprises the members of the Company’s Management Board; category 

84

two comprises the managing directors of Nordex Energy GmbH and Südwind Energy GmbH; category 

three comprises the managing directors of the other subsidiaries and divisional leaders within the 

Nordex Group; category four comprises other managers and professionals employed by the Nordex 

Group; and category five comprises the other employees. The Company has set a fixed amount of 

options for employees in categories two to five. For category two there are 67,000 options, for category 

three there are 23,000 options, for category four there are 10,000 options and for category five there 

are 1,667 options reserved. For category one, i.e., the Management Board of the Company, the 

Company has determined certain amounts (the ‘‘Option Amount’’). This amount is divided by the Offer 

Price of the Company’s shares in order to derive the number of shares to be granted to each relevant 

beneficiary. On the basis of an Offer Price below EUR 12.00 per share, the Option Amount totals EUR 

1,500,000; on the basis of an Offer Price of EUR 15.00 per share and above, the Option Amount equals 

EUR 2,500,000. For an Offer Price between EUR 12.00 and EUR 15.00, the Option Amount increases on 

a linear basis from EUR 1,500,000 to EUR 2,500,000. 

Further, the Option Terms and Conditions 2001 supplement the resolution of the General Meeting on 

February 21, 2001, that the subscription rights are to be granted personally to the beneficiary and that 

these subscription rights are non-transferable. Beneficiaries are not permitted to dispose of 

subscription rights, to grant sub-interests in them or establish trusts over them. Further, beneficiaries 

are not permitted to enter into short positions or comparable futures transactions that are the 

economic equivalent of selling the options. In the event that the Company’s employment contract with 

the beneficiary is terminated, for whatever reason, the subscription rights will expire insofar as these 

could not be exercised at the point in time when the contract was terminated and the beneficiary will 

not receive any compensation in respect thereof. The beneficiary can exercise subscription rights on 

one occasion from tranches that could have been but were not exercised at the time the contract was 

terminated, in the Exercise Period that follows the time at which such notice is given. In the event that 

the beneficiary is moving directly between two companies in the Nordex Group, is retiring or is 

incapacitated, the subscription rights will remain in force unchanged. In the event of the beneficiary’s 

death, the beneficiary’s heirs/legatees are authorized, upon proving their entitlement, to exercise these 

subscription rights under the same conditions. This also applies in the event of part of the Company’s 

operations being spun off, or if a company should cease to be a member of the Nordex Group. 

Subscription rights of beneficiaries who have retired or taken early retirement or subscription rights 

that can be exercised by heirs/legatees, remain in force unchanged. The last possible time at which the 

subscription rights can validly be exercised is the Exercise Period starting on the day following the 

Ordinary General Meeting at which the shareholders formally approve Managements’ actions for the 

fiscal year 2004/2005. Any subscription rights that are not exercised in this Exercise Period will expire 

without compensation being payable. 

The first tranche of subscription rights capable of being exercised in accordance with the Option Terms 

and Conditions 2001 will, after a lock-up period of two years, be capable of being exercised on the day 

following the Ordinary General Meeting at which shareholders formally approve the actions of the 

Managing and Supervisory Boards for the fiscal year 2001/2002, which date shall however be no earlier 

than March 1, 2003 (‘‘Tranche 1’’). Up to 33% of the subscription rights granted can be exercised in 

Tranche 1. The second tranche capable of being exercised can be exercised from the day following the 

Ordinary General Meeting at which the shareholders formally approve the actions of the Management 

Board and the Supervisory Board for the fiscal year 2002/2003, which shall not however be earlier than 

March 1, 2004 (‘‘Tranche 2’’), and the third tranche capable of being exercised can be exercised from the 

day following the Ordinary General Meeting at which the shareholders formally approve the actions of 

the Management Board and the Supervisory Board for the fiscal year 2003/2004 which shall not 

however be earlier than March 1, 2005 (‘‘Tranche 3’’). In Tranche 2, the beneficiaries can exercise an 

additional 33% of the subscription rights granted and the remaining 34% of the subscription rights 

granted can be exercised in Tranche 3. 

If Nordex AG increases its share capital by issuing new shares or issues bonds with warrants containing 

subscription or conversion rights for shares or performs other corporate actions listed below and 

grants subscription rights to the shareholders, the exercise price will be adjusted in accordance with 

the following provisions. In the event of a capital increase against contributions or the issuance of 

85

onds carrying subscription or conversion rights, the exercise price will be reduced by the amount 

corresponding to the average price of the subscription rights granted to the shareholders on all trading 

days on the Frankfurt Stock Exchange. The reduced exercise price applies with effect from the first 

trading day on the Frankfurt Stock Exchange following expiration of the subscription period for the 

new shares or bonds carrying conversion or subscription rights. The exercise price will not be reduced if 

the option holders are granted a subscription right. In the event of a capital increase from corporate 

resources, the contingent capital created to secure the options will be increased in the same proportion 

as the share capital (Section 218 of the AktG – German Public Limited Companies Act). In the event 

that the share capital is increased pursuant to Section 207 Paragraph 2 Sentence 2 of the AktG without 

issuing new shares, the capital increase from corporate resources will not affect the legal status of the 

option holders. If, in contrast, new shares are issued, the option holders will be provided with as many 

additional shares when exercising their option as if they had already exercised their option at the time 

of the capital increase from corporate resources. Fractions of shares arising as a result of a capital 

increase from corporate resources will not be provided when the option is exercised, but will be sold at 

best for the account of the option holder. The proceeds will be provided to the option holder when the 

shares are issued. In the event of a capital reduction, the exercise price or the option ratio will not be 

adjusted in those cases where the capital reduction does not change the aggregate number of shares 

or the capital reduction is linked to a capital repayment or the purchase of own shares. In the event of 

a capital reduction by the consolidation of shares without a capital repayment or the purchase of own 

shares without a change in capital (stock split), the number of shares for which one option may be 

acquired at the exercise price will be reduced or increased in proportion to the capital reduction or 

stock split. 

Friends and Family Program 

As part of the public offering, up to a total of 626,000 shares, which equates to approximately 2% of 

the Offered Shares, (excluding the Over-allotment Option) were offered by way of a preferential 

allotment to Nordex Group employees, members of Nordex AG’s Management Board and managers of 

Nordex AG’s subsidiaries as well as business partners as part of a so-called Friends and Family program. 

No such preferential offer was made to members of the Company’s Supervisory Board. 

As part of the Offering, all employees of Nordex in Germany and Denmark acquired the right to 

preferential subscription rights to shares in the Company with a current value of up to EUR 10,000 at 

the issue price. 

In addition, as part of the Offering, selected business partners of the Company were granted the 

opportunity to subscribe for shares of the Company with a current value of up to EUR 15,000 at the 

issue price as part of a preferential allotment within the Offering. To this extent the usual offering 

conditions apply. Subscription orders by business partners in excess of the intended payment volume 

will not be given preferential treatment. 

86

Management’s Discussion and Analysis of Financial 

Condition and Results of Operations 

Historical Financial Information 

The following discussion and analysis of financial condition and results of operations of the Nordex Group 

should be read in conjunction with (i) the IAS Pro Forma Consolidated Financial Statements for the fiscal 

years ended September 30, 1998, 1999 and 2000, prepared in accordance with International Accounting 

Standards and audited by BDO Deutsche Warentreuhand Aktiengesellschaft (‘‘BDO’’), in respect of which 

an audit opinion has been issued, and (ii) the IAS Pro Forma Interim Consolidated Financial Statements for 

the first quarter of fiscal year 2000/2001, prepared in accordance with IAS and reviewed by BDO. The IAS 

Pro Forma Financial Statements and the IAS Pro Forma Consolidated Interim Financial Statements for the 

first quarter of fiscal year 2000/2001 are included in the Offering Memorandum under ‘‘Financial 

Information’’ and comply in all material aspects with the requirements of IAS. 

The comparative figures for the first quarter of fiscal year 1999/2000, contained in the IAS Pro Forma 

Interim Consolidated Financial Statements and also included in the Offering Memorandum under 

‘‘Financial Information’’, are based solely upon the Company’s internal statistical records provided, 

because the Company’s information technology system was converted to SAP R3 during the first 

quarter of fiscal year 1999/2000. Accordingly, no comparative analysis of these two interim periods has 

been provided herein. 

Overview of the Nordex Group Companies 

Nordex AG is the parent Company of the Nordex Group and is a holding company which conducts its 

activities through its five subsidiaries, Nordex Energy GmbH (formerly Nordex GmbH), Südwind Energy 

GmbH (formerly Südwind Borsig Energy GmbH), Nordex Rotor GmbH (formerly Borsig Rotortechnik 

GmbH), Nordex Automation GmbH (formerly the wind energy technology division of Babcock 

Prozeßautomation GmbH) and Nordex Planungs- und Vertriebsgesellschaft mbH (in future: NPV 

Planning & Vertrieb GmbH). The Nordex Group is active in the field of developing and manufacturing 

wind turbines, the technical planning and fitting out of wind farms and servicing wind turbines and 

wind farms. 

The Company, now named Nordex AG, was formed by Borsig Energy GmbH as ‘‘Taifun AG’’ and was 

entered into the commercial register of Oberhausen Local Court on September 19, 2000. 

Pursuant to a contribution and share transfer agreement between Borsig Energy GmbH, Nordvest A/S, 

of Give, Denmark and Nordex AG, Borsig Energy GmbH and Nordvest A/S contributed all of the 

interests they held in Nordex Energy GmbH, Südwind Energy GmbH, Nordex Rotor GmbH, Nordex 

Automation GmbH and Nordex Planungs- und Vertriebsgesellschaft mbH are transferred to Nordex AG 

in return for the issue of new shares of Nordex AG (see ‘‘General Information on the Company — 

Formation, Development and Reorganization of the Group Structure’’). 

Prior to the restructuring of the Group, profit and loss transfer agreements and in some cases control 

agreements existed between Borsig Energy GmbH and NPV Planungs- und Vertriebsgesellschaft mbH, 

Nordex Automation GmbH, Südwind Energy GmbH and Nordex Rotor GmbH. These contracts with 

Borsig Energy GmbH have been terminated, and the termination of the profit and loss transfer 

agreements did not result in any financial burden for the Nordex Group. Nordex AG has not entered 

into any profit and loss transfer agreements with its shareholders. 

Companies Included in the Consolidation 

The following discussion, analysis and financial information for the Nordex Group for the three fiscal 

years ended September 30, 1998, 1999 and 2000 includes three of the Group’s subsidiaries, Nordex 

Energy GmbH, Nordex Planungs- und Vertriebsgesellschaft mbH and Nordex Automation GmbH. In 

addition, Südwind Energy GmbH is included for the two fiscal years ended September 30, 1999 and 

87

2000; Nordex Rotor GmbH and Nordex AG, as holding company, are included for the fiscal year ended 

September 30, 2000, only. 

However, only the wind energy technology division of the former Babcock Prozeßautomation GmbH 

(now Nordex Automation GmbH) was included in the IAS Pro Forma Consolidated Financial Statements 

and the IAS Pro Forma Consolidated Interim Financial Statements; the conventional power plant 

technology division, which was spun off from the former Babcock Prozeßautomation GmbH as of 

October 1, 2000 pursuant to the Purchase and Transfer Agreement dated November 15, 2000, was not 

included. In addition, Nordex Planungs- und Vertriebsgesellschaft mbH was included in the IAS Pro 

Forma Consolidated Financial Statements for the Fiscal Year 1997/1998 only for the stub period 

beginning as of January 1, 1998 through September 30, 1998, since Nordex Planungs-und 

Vestriebsgesellschaft mbH was acquired with economic effect as of January 1, 1998 from its then 

major shareholder, Borsig Energy GmbH. Another of the Company’s subsidiaries, Südwind Energy 

GmbH (formed as Südwind Borsig Energy GmbH on March 22, 1999), is included in the Consolidated 

Group as of fiscal year 1998/1999. Since the results of Nordex Rotor GmbH (formed as Borsig 

Rotortechnik GmbH on September 21, 1999) and Nordex AG as holding company (formed as Taifun AG 

on August 25, 2000) were not material for prior years, their results are included beginning with the 

fiscal year ended September 30, 2000. 

The following table shows a summary of the consolidated Group structure as of December 14, 2000, 

the date the Group’s current legal structure was established. The IAS Pro Forma Consolidated Financial 

Statements have been based on this Group structure to allow for comparability. 

Name Percent 

Interest in subsidiary 

Year of initial inclusion 

in the Pro Forma 

– as of Dec. 31, 2000 – consolidated Group 


— formerly Nordex GmbH — 100.00 Nordex AG, Oberhausen 1997/1998 

Nordex Planungs- und Vertriebsgesellschaft mbH 

— 100.00 Nordex AG, Oberhausen 1997/1998 

NORDEX Automation GmbH 

— formerly Babcock Prozeßautomation 

GmbH — 100.00 Nordex AG, Oberhausen 1997/1998 

Südwind Energy GmbH 

— formerly Südwind Borsig Energy GmbH – 100.00 Nordex AG, Oberhausen 1998/1999 

Nordex Rotor GmbH 

— formerly Borsig Rotortechnik GmbH — 100.00 Nordex AG, Oberhausen 1999/2000 


— formerly Taifun AG — 

19.51 

80.49 

Nordvest A/S, Give (Denmark) 

Borsig Energy GmbH, Oberhausen 1999/2000 

Nordex Energy GmbH’s foreign subsidiaries are Nordex Iberica Borsig Energy S.A., Spain, Ekter Eoliki, 

A.E., Greece, Nordex Omnical Energy Services (Shanghai) Co. Ltd., China, Nordex Hellas E.P.E., Greece, 

and Nordex USA Inc., United States. These companies are primarily involved in sales and distribution 

and are not included in the consolidated Group as the results were not material for prior years. Nordex 

Energy GmbH’s subsidiaries are included in the IAS Pro Forma Consolidated Financial Statements for 

the fiscal years 1998/1999 and 1999/2000 at amortized cost. 

Nordex Energy GmbH’s 40% interest in Xi’an Nordex Wind Turbine Co. Ltd., China, was not included in 

the consolidated Group, as it is neither a subsidiary nor an associated undertaking according to IAS. 

88

Comparison of Fiscal Years 1999/2000, 1998/1999 

and 1997/1998 

Results of Operations 

The following table shows a three-year comparison of selected data and key figures relating to the 

Group’s results of operations: 

Fiscal years 

Results of operations 1999/ 2000 1998/1999 1997/ 1998 

EUR thousand 

Net sales 272,670 223,743 82,477 

Total operating performance 270,191 232,624 85,259 

Depreciation/amortization expense 3,725 2,096 862 

Operating profit 13,214 10,000 2,816 

Net financial result -2,865 122 -335 

Taxes* 3,914 3,592 885 

Net income 6,435 6,530 1,595 

Cost of materials ratio 1 

Personnel expenses ratio 2 

Return on sales 3 

Return on equity 4 

* Income taxes and other taxes 

1 Cost of materials : total operating performance 

2 Personnel expenses : total operating performance 

3 Net income : net sales 

4 Net income : equity (less retained profits) 

75.4% 81.2% 78.1% 

7.1% 5.5% 6.9% 

2.4% 2.9% 1.9% 

101.3% 104% 25.5% 

In addition to the above, selected figures from the Group’s pro forma consolidated income statements 

are analyzed below. 

Net sales and total operating performance 

Net sales, which amounted to EUR 82.5 million in fiscal year 1997/1998, increased by approximately 

171% to EUR 223.7 million in fiscal year 1998/1999, and by approximately 22% to EUR 272.7 million in 

fiscal year 1999/2000. 

Nordex Energy GmbH was the strongest performing unit and chief contributor to net sales. On an 

unconsolidated basis, its sales accounted for EUR 77.1 million, approximately 93% of the Nordex 

Group’s total sales in fiscal year 1997/1998. In fiscal year 1998/1999, on an unconsolidated basis this 

subsidiary contributed EUR 211 million (approximately 94%) of the Nordex Group’s total sales and EUR 

248 million (approximately 91%) in fiscal year 1999/2000. The Group’s main source of sales in fiscal 

year 1998/1999 was the newly developed N-60/62 wind turbine with a total output of 1.3 megawatts. 

In the following fiscal year, foreign sales (in particular from the Iberian peninsula, Greece, Denmark, 

China and the United States) increased in particular due to the successful commencement of the 

Company’s internationalization program, which was also reflected in the strategic establishment and 

expansion of the Company’s foreign subsidiaries. The downturn in domestic sales during the same 

period was due primarily to Nordex Energy GmbH’s focusing heavily on developing the next generation 

N-80 wind turbine which prevented it from being able to meet the demand for smaller turbines from 

the market and its existing customers. 

Südwind Energy GmbH, which was included in the consolidation beginning with fiscal year 1998/1999, 

produces wind turbines, erects turnkey wind farms and services wind turbines. Its net sales increased 

by approximately 127% from EUR 10.9 million in fiscal year 1998/1999 to EUR 24.8 million in fiscal 

year 1999/2000. This increase was primarily due to the expansion of its business with sales of the 

mature S-46 wind turbine, which has a total output of 0.6 megawatt, and the introduction of the 

modern S-70 wind turbine, which has a total output of 1.5 megawatts. 

89

With the exception of the development and provision of technical equipment for wind farms, the 

Group’s other consolidated subsidiaries are primarily involved with providing parts, sales and 

distribution services for Nordex Energy GmbH and Südwind Energy GmbH. 

During the periods under review, the proportion of foreign sales to sales generated in Germany 

developed as follows: 

Net sales Fiscal years 

1999/2000 1998/1999 1997/1998 

EUR thousand % EUR thousand % EUR thousand % 

Germany 152,319.0 55.9 173,792.9 77.7 79,975.4 96.9 

Foreign sales 120,351.0 44.1 49,949.9 22.3 2,501.2 3.1 

Total 272,670.0 100.0 223,742.8 100.0 82,476.6 100.0 

While net sales in the periods under review increased, work in process also increased by approximately 

193% from EUR 2.8 million in fiscal year 1997/1998 to EUR 8.4 million in fiscal year 1998/1999, and 

then decreased EUR -3.2 million in fiscal year 1999/2000. 

In fiscal year 1999/2000, the effect of using the percentage-of-completion method required by IAS 11 

resulted in a decrease in inventories. This method leads to sales being recognized before the transfer of 

risk according to German commercial law, and thus to a technical reduction in the item ‘‘work in 

process’’. This effect will be reversed when these orders are actually invoiced. At present, these effects 

are expected to balance each other out after a maximum of two years, depending on the period for 

which the Nordex Group has advance orders. 

Total operating performance, which compensate for these effects, increased during each of the periods 

under review. Total operating performance increased by approximately 173% from EUR 85.2 million in 

fiscal year 1997/1998 to EUR 232.6 million in fiscal year 1998/1999 and by approximately 16% to EUR 

270.1 million in fiscal year 1999/2000. 

Cost of materials 

Cost of materials, increased by approximately 183% from EUR 66.6 million in fiscal year 1997/1998 to 

EUR 189 million in fiscal year 1998/1999, and by approximately 7% to EUR 204 million in fiscal year 

1999/2000. In addition to an increase in net sales, the relatively high cost of materials in fiscal year 

1998/1999 compared to 1997/1998 was primarily due to the fact that for larger wind farms (e.g., the 

Zafarana project in Egypt), assembly aids such as cranes, were accounted for as purchased services. In 

the following fiscal year 1999/2000, these types of components were leased, leading to a decrease in 

the cost of materials purchased in fiscal year 1999/2000 compared to the previous fiscal year. Lease 

payments are not recorded and disclosed under cost of materials, but as other operating expenses, 

insofar as they do not constitute finance leases under IAS. 

Also contributing to the increase in cost of materials, the cost of raw materials and supplies increased 

by approximately 196% from EUR 52.7 million in fiscal year 1997/1998 to EUR 156 million in fiscal year 

1998/1999, and by approximately 7% to EUR 167 million in fiscal year 1999/2000. In addition, EUR 13.8 

million was spent on services purchased in fiscal year 1997/1998, EUR 32.9 million in fiscal year 1998/ 

1999 and EUR 37.3 million in fiscal year 1999/2000. The services purchased primarily relate to freight, 

sales commissions, outsourced services for order fulfillment, outside labor and the changes in contractrelated 

accruals. 

The increased use of outside labor in fiscal year 1998/99 also contributed to a temporary increase in the 

cost of materials ratio and, at the same time, to proportionately lower personnel expenses. 

Personnel expenses 

Expenses for wages and salaries and for social security taxes increased disproportionately to the 

increase in the number of employees during the period under review, by approximately 113% from EUR 

6 million in fiscal year 1997/1998 to EUR 12.8 million in fiscal year 1998/1999, and by approximately 

50% to EUR 19.2 million in fiscal year 1999/2000. The disproportionate increase in personnel expenses 

90

was due primarily to the Company initially paying very low entry-level wages in the German state of 

Mecklenburg-Vorpommern, but these were adjusted when market conditions changed. The average 

number of employees increased by approximately 134% from 145 in fiscal year 1997/1998 to 340 in 

fiscal year 1998/1999, and by approximately 53% to 523 in the following year. 

Depreciation/amortization expense 

Depreciation/amortization expense constituted an insignificant percentage of the Group’s sales during 

the period under review due to the low level of components manufactured within the Group. The 

establishment of industrial rotor blade manufacturing facilities had not yet had a significant effect on 

depreciation/amortization expense as of September 30, 2000. 

Depreciation/amortization expense increased by approximately 144% from EUR 0.86 million in fiscal 

year 1997/1998 to EUR 2.10 million in fiscal year 1998/1999, and by approximately 78% to EUR 3.73 

million in the following fiscal year. Amortization of intangible assets accounted for EUR 0.21 million of 

total depreciation/amortization expense in fiscal year 1997/1998 and EUR 0.64 million in fiscal year 

1998/1999, representing an increase of approximately 205%, and increased again by approximately 

116% in fiscal year 1999/2000 to EUR 1.38 million. Amortization of intangible assets relates to 

development costs capitalized pursuant to IAS and to purchases of licenses, software and similar rights. 

Increased depreciation during the period under review was primarily caused by the Nordex Group’s 

overall increase in investments during the period (see ‘‘—Comparison of Fiscal Years 1999/2000, 1998/ 

1999 and 1997/1998—Financial Conditions’’). 

Other operating expenses 

Other operating expenses increased by approximately 113% from EUR 9.9 million in fiscal year 1997/ 

1998 to EUR 20.1 million in fiscal year 1998/1999, and by approximately 60% to EUR 32.2 million in 

fiscal year 1999/2000. There are several reasons for the changes: 

Outside and support services decreased by approximately 16% from EUR 0.44 million in fiscal year 

1997/1998 to 0.37 million in fiscal year 1998/1999, and then increased by approximately 1060% to 

EUR 4.29 million in fiscal year 1999/2000. This increase was primarily due to the Nordex Group’s 

substantially increased outsourcing of services both in general administration expenses and in research 

and development. Expenses for maintenance, legal and consultancy and advertising costs and costs for 

equipment leases increased at similarly high rates. 

The Group’s establishment of production facilities in Rostock and the expansion of its vehicle fleet also 

caused an increase in maintenance costs. The increased legal and consulting costs were due to the 

Group’s increased activities overseas, increased use of local advisors and increased purchases of 

planning services. The increase in costs for equipment leases reflected the increase in the vehicle fleet 

for exhibitions and servicing activities. 

Leasing rights expenses amounting to EUR 0.74 million were incurred for the first time in fiscal year 

1999/2000 because the Company leased land in Denmark. These long-term leases are expected to be 

invoiced to the customer when the relevant wind turbine is transferred to the customer. 

Non capitalized commissions expenses increased by approximately 65% from EUR 3.23 million in fiscal 

year 1997/1998 to EUR 5.33 million in fiscal year 1998/1999, and decreased by approximately 45% to 

EUR 2.90 million in 1999/2000. Commissions primarily depend on the Group’s progress in the 

construction of wind turbines. In the case of larger projects in particular, commissions can increase 

rapidly and unevenly as a result. This effect influenced the Group’s domestic business substantially in 

fiscal year 1998/1999. Outside of Germany, commissions have been increasingly paid to third parties 

and are accounted for as consulting services. 

Advertising expenses increased similarly by approximately 335% from EUR 0.55 million in fiscal year 

1997/1998 to EUR 2.39 million in fiscal year 1998/1999, but decreased by approximately 62% to EUR 

0.91 million in fiscal year 1999/2000. These changes were primarily due to the fact that the key trade 

fairs for the Nordex Group, the Hannover Fair (energy sector) and the Husum Fair, are both held every 

two years only or the Group participates in such fairs only every other year. Accordingly, the Group 

91

incurs significant expenses for these fairs every other year. Costs relating to the changing of the 

Nordex Energy GmbH and Südwind Energy GmbH company logos also had a significant effect upon the 

Group’s advertising expense in fiscal year 1998/1999. 

Certain imputed personnel and administrative expenses for Nordex AG have been included in order to 

improve the comparability of the IAS Pro Forma Consolidated Financial Statements. These expenses 

increased by approximately 27% from EUR 1.88 million in fiscal year 1997/1998 to EUR 2.39 million in 

fiscal year 1998/1999, and by approximately 12% to EUR 2.69 million in 1999/2000. 

The increase in receivables written off or written down in fiscal year 1999/2000 primarily related to 

three large individual items amounting to approximately EUR 0.24 million. The remainder was due to 

smaller items in the servicing field. 

Operating profit 

The Group’s operating profit increased by approximately 355% from EUR 2.8 million in fiscal year 1997/ 

1998 to EUR 10.0 million in fiscal year 1998/1999, and by approximately 31% to EUR 13.2 million in 

fiscal year 1999/2000. These increases resulted from the changes in the line items analyzed above and 

from an improvement in the ratio of fixed costs to net sales. 

Net financial result 

The development of the net financial result shown in the following table was influenced significantly by 

increasing interest expenses during the period under review, resulting from the Group’s increased use 

of the Babcock Borsig Group’s clearing account in connection with the expansion of the Group’s 

volume of business. This relates in particular to interest expenses incurred in fiscal year 1999/2000, 

which increased by approximately 242% to EUR 3.38 million compared to EUR 0.99 million in fiscal 

year 1998/1999. However, fiscal year 1998/1999 was marked by unusually high prepayments by 

customers, and thus the Group’s reduced need for borrowing, due to the fact that the 

Stromeinspeisungsgesetz (the German law relating to the supplying of electricity from renewable 

energy sources into the public grid) which was about to be repealed. 

Fiscal years 

1999/2000 1998/1999 1997/1998 

EUR thousand 

Other interest and similar income 516 1,111 70 

Other interest and similar expense -3,381 -989 -406 

Net financial result -2,865 122 -336 

Taxes 

Taxes comprises current, imputed, deferred and other taxes. 

There were no current taxes on income for fiscal year 1997/1998. Current taxes on income increased 

approximately 173% from EUR 0.87 million in fiscal year 1998/1999 to EUR 2.38 million in fiscal year 

1999/2000. This growth was due primarily to the improvement in Nordex Energy GmbH’s results. Due 

to the fact that Borsig Energy GmbH and the other subsidiaries were considered a single entity for tax 

purposes, these companies were not separately taxed in the past. For reasons of comparability, imputed 

taxes have been calculated for the earnings transferred to Borsig Energy GmbH, as well as for the 

adjusted intra-group allocations within the Babcock Borsig Group and for the imputed expenses of 

Nordex AG. These imputed taxes amounted to EUR – 0.26 million for fiscal year 1997/1998, EUR 0.70 

million for fiscal year 1998/1999 and EUR 2.14 million for fiscal year 1999/2000. As a result of the 

Group’s adoption of IAS for financial statements that had previously been prepared in accordance with 

German accounting standards, deferred taxes were required to be calculated for the three fiscal years 

during the period under review, but did not represent any net cash outflow. Deferred taxes were carried 

at EUR 1.14 million for fiscal year 1997/1998, EUR 2.04 million for fiscal year 1998/1999 and EUR -0.63 

million for fiscal year 1999/2000. Other taxes primarily related to transport and vehicle taxes and were 

not significant. 

92

In total, the average pro forma income tax burden during the period under review for the Nordex Group 

was approximately 37%. 

Net income 

Net income after consolidation increased by approximately 408% from EUR 1.6 million in fiscal year 

1997/1998 to EUR 6.53 million in fiscal year 1998/1999, and decreased by approximately 1% to EUR 

6.43 million in fiscal year 1999/2000 due primarily to the negative net financial result. 

Liquidity 

The following table sets forth the development of the Group’s liquidity during the periods indicated: 

Fiscal years 

1999/2000 1998/1999 1997/1998 

EUR thousand 

Cash flow from operating activities -44,886 18,868 -379 

Cash flow from investing activities -12,090 -10,497 -1,947 

Cash flow from financing activities -7,913 -4,104 -1,290 

Change in cash and cash equivalents -64,889 4,266 -3,615 

Cash and cash equivalents at beginning of period 2,407 -1,859 1,756 

Cash and cash equivalents at end of period -62,482 2,407 -1,860 

thereof: 

Cash in hand and at bank 2,634 371 588 

Intercompany clearing account credit/(debit) balances -64,936 2,095 -2,447 

Current liabilities due to banks -180 -59 0 

-62,482 2,407 -1,859 

The fluctuations in cash flow from operating activities resulted from strong increases in sales during 

the period under review. In particular, the investment backlog in fiscal year 1999/2000 that was caused 

by the uncertainty surrounding the Gesetz über den Vorrang erneuerbarer Energien (Renewable Energy 

Directive) coupled with associated planning difficulties, led to incoming orders being delayed until the 

middle of fiscal year 1999/2000. This contributed to a high level of receivables on the balance sheet 

date at September 30, 2000, the unusually high level of receivables at the end of fiscal year 1999/2000 

was primarily due to the date of the balance sheet, and returned to pre-September 30, 2000 levels in 

the first quarter of fiscal year 2000/2001. 

The negative cash flow from investing activities in fiscal year 1999/2000 was due primarily to capital 

expenditures for property, plant and equipment and intangibles. The major contributing factors were 

the capitalization of development costs, prototypes and software required in connection with the 

Group’s conversion to the SAP R3 cost accounting program. In addition, in fiscal years 1998/1999 and 

1999/2000, the Nordex Group increasingly invested in its production facilities in Rostock. 

The main contributing factors to the negative cash flow from financing activities in fiscal year 1999/ 

2000 were profit transfers to shareholders resulting from profit and loss transfer agreements which 

were still in force at that time, and which placed a burden on the Company’s financial position. Prior to 

fiscal year 1999/2000, almost all of the overall requirement for cash and cash equivalents were 

financed by the Babcock Borsig Group by way of the inter-company clearing account. 

In the first year following the Company’s Offering, a portion of earnings will initially be used to set up 

statutory reserves, and the Company’s positive future cash flow will be used to meet operating 

financing requirements. Nordex does not plan to pay any dividends in the fiscal years following the 

Offering. Part of the net proceeds of the Offering will be used, among other things, to repay the 

Group’s liabilities to the Babcock Borsig Group, which will improve the Group’s negative net financial 

result (see ‘‘The Offering — Use of Proceeds’’). 

93

Financial Condition 

The key figures for the results of the Company’s operations on the dates used for comparison were: 

On the balance sheet date 

Sept. 30, 

2000 

Sept. 30, 

1999 

EUR thousand 

Sept. 30, 

1998 

Total assets 153,101 81,994 29,395 

Fixed assets 21,447 12,822 4,479 

Current assets 129,785 68,954 24,873 

Equity 16,014 12,663 7,146 

Accruals 19,696 8,203 3,013 

Liabilities and deferred income 114,751 57,682 18,561 

Investments 1 

Equity ratio 2 

Fixed assets to net worth ratio 3 

1 taken from the pro forma consolidated statements of cash flow 

2 Equity : total assets 

3 Equity : fixed assets 

13,724 9,970 2,134 

10.5% 15.4% 24.3% 

74.7% 98.7% 159.6% 

Fixed assets 

Intangible assets 

Intangible assets increased by approximately 160% from EUR 1.06 million on September 30, 1998 to 

EUR 2.76 million on September 30, 1999 and by approximately 111% to EUR 5.83 million on September 

30, 2000. Concessions, industrial-property and similar rights in particular increased by approximately 

148% from EUR 0.88 million on September 30, 1998 to EUR 2.18 million on September 30, 1999, and 

by approximately 108% to EUR 4.55 million on September 30, 2000. In fiscal year 1999/2000, Südwind 

Energy GmbH acquired licenses to produce, distribute and erect the S-70 wind turbine from pro + pro 

Energiesysteme GmbH & Co. KG. of Rendsburg, Germany. Resulting advance payments to this licensor 

beginning September 30, 1998 are attributed directly to intangible assets until they become due and 

are disclosed as a liability. 

Prepayments for intangible assets in the amount of EUR 0.18 million were capitalized as of September 

30, 1998. As of September 30, 1999 the amount capitalized amounted to EUR 0.58 million and, as of 

September 30, 2000, these capitalized prepayments amounted to EUR 1.27 million. 

Property, plant and equipment 

The value of property, plant and equipment increased during the period under review by approximately 

172% from EUR 3.42 million as of September 30, 1998 to EUR 9.29 million as of September 30, 1999, 

and by approximately 57% to EUR 14.6 million as of September 30, 2000. The following table shows a 

breakdown of the various components on the relevant balance sheet dates: 

Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 1998 

EUR thousand 

Land and buildings 3,059 819 726 

Production plant and machinery 3,519 3,922 1,545 

Other plant, factory and office equipment 3,398 2,432 912 

Prepayments on property, plant and equipment, and construction 

in progress 4,663 2,114 235 

Property, plant and equipment 14,639 9,287 3,418 

The largest increases, from EUR 0.23 million as of September 30, 1998 to EUR 2.11 million as of 

September 30, 1999 and to EUR 4.66 million as of September 30, 2000 were recorded in prepayments 

on property, plant and equipment and construction in progress. Other plant, factory and office 

equipment increased by approximately 167% from EUR 0.91 million on the balance sheet date of 

September 30, 1998 to EUR 2.43 million as of September 30, 1999, and by approximately 39% to 

94

EUR 3.40 million as of September 30, 2000. These increases were primarily due to the establishment of 

production facilities for Nordex Energy GmbH and Nordex Automation GmbH in Rostock, to the costs 

of establishing Nordex Rotor GmbH’s rotor blade production at the same location as well as to the 

establishment of new branches for Südwind Energy GmbH and the expansion of its activities 

accompanied by an increase in its volume of business and internationalization. 

Financial assets 

Financial assets increased by approximately 27% from EUR 0.77 million as of September 30, 1999 to 

EUR 0.98 million as of September 30, 2000. The Company did not hold any equity interests as of 

September 30, 1998. The Company held interests in associated companies of EUR 0.23 million as of 

September 30, 1999 and EUR 0.22 million as of September 30, 2000. These interests related to Nordex 

GmbH’s foreign subsidiaries, Nordex Iberica Borsig Energy S.A., Spain, Ekter Eoliki A.E., Greece, and 

Nordex Omnical Energy Services (Shanghai) Co. Ltd., China. The Company’s 40% interest in Xi’an Nordex 

Wind Turbine Co. Ltd., China, increased by approximately 40% from EUR 0.54 million as of September 

30, 1999 to EUR 0.76 million as of September 30, 2000. 

Current assets 

Inventories 

The Company’s inventories increased by approximately 32% from EUR 16.6 million as of September 30, 

1998 to EUR 21.9 million as of September 30, 1999, and then decreased by approximately 37% to EUR 

13.9 million as of September 30, 2000. This decrease was primarily due to the increase in prepayments 

received, which were deducted from the inventories for reporting purposes. 

Required write-downs for raw materials and supplies were insignificant during the period under review. 

Raw materials and supplies mainly comprise wind turbine components. Work in process relates to wind 

turbines under construction and prepayments made for project development, as well as to rights and 

infrastructure in connection with erecting wind turbines for which no customer-specific orders existed 

at the relevant balance sheet date. Reasonable write-downs were made for slow-moving items and for 

inventories whose fair market prices were below their carrying values. 

Prepayments represent the situation on the particular balance sheet date in each case, and, therefore, 

can provide only a limited amount of information. 

Inventories Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 1998 

EUR thousand 

Raw materials and supplies 27,785 29,742 14,171 

Work in process 8,190 11,403 2,967 

Prepayments made 9,746 4,756 4,435 

45,721 45,901 21,573 

Less prepayments received 31,817 23,985 5,012 

Total 13,904 21,916 16,561 

Future receivables under long-term construction contracts 

This item is used to record orders which have not yet been completed, but which were accounted for 

according to their percentage of completion. This item comprises the accrued contract costs incurred 

as of the balance sheet date, proportionate revenues recognized using the ‘‘cost-to-cost’’ method for 

the relevant contracts and the amount of the accrued contract costs for contracts for which it was not 

possible to reliably calculate the total contract revenue. Prepayments received were deducted. 

Future receivables under long-term construction contracts increased significantly by approximately 

1,171% from EUR 1.07 million as of September 30, 1998 to EUR 16.7 million as of September 30, 1999. 

This significant increase was primarily due to the Group’s expansion of its business and to a high level 

of construction in progress prior to the end of the fiscal year. Orders in progress doubled to EUR 35.1 

million as of September 30, 2000. 

95

The Company believes that profits partially realized to date from projects in process will remain after 

these projects have been finally invoiced. 

Receivables and other current assets 

Receivables and other current assets increased by approximately 350% from EUR 6.7 million as of 

September 30, 1998 to EUR 30.0 million as of September 30, 1999, and by approximately 160% to EUR 

78.2 million as of September 30, 2000. The substantial increase in trade receivables from EUR 4.2 

million as of September 30, 1998 to EUR 20.0 million as of September 30, 1999, and to EUR 63.4 million 

as of September 30, 2000 resulted primarily from the expansion of the Group’s business. 

More than half of the Group’s receivables as of September 30, 2000 were foreign receivables. 

Receivables and other current assets Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 1998 

EUR thousand 

Trade receivables 63,364 20,012 4,182 

Due from Babcock Borsig Group companies 11,808 9,110 631 

Receivables from under investor/investee relations 9 0 256 

Sundry current assets 3,004 841 1,584 

Total 78,185 29,963 6,652 

Receivables due from Babcock Borsig Group companies relates to companies in the Babcock Borsig 

Group, which are not included in the consolidated Nordex Group, and mainly relates to trade 

receivables and receivables from clearing accounts. 

Cash and cash equivalents 

This cash and cash equivalents item decreased by approximately 37% from EUR 0.59 million as of 

September 30, 1998 to EUR 0.37 million as of September 30, 1999, and increased by approximately 

611% to EUR 2.63 million as of September 30, 2000. 

However, because, for clearing purposes in the inter-company clearing account of the Babcock Borsig 

Group, all accounts were generally settled by the parent company each working day, the above figures 

only relate to cash and cash equivalents on the balance sheet dates and are of no particular economic 

significance. 

Equity 

The following table shows that the Group’s equity increased by approximately 77%, from 

EUR 7.15 million on September 30, 1998 to EUR 12.7 million September 30, 1999, and by 

approximately 26% to EUR 16.0 million on September 30, 2000. The additional paid in capital remained 

unchanged at EUR 6.05 million as of September 30, 1999. 

Pro forma net earnings was derived from net income, retained profits/accumulated losses brought 

forward, adjustments for intra-group allocations, imputed expenses for Nordex AG and profit transfers. 

Equity Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 1998 

EUR thousand 

Capital stock 307 232 207 

Additional paid-in capital 6,047 6,047 6,047 

Pro forma net earnings 9,660 6,384 893 

Total 16,014 12,663 7,146 

Accruals 

Accruals increased by approximately 172% from EUR 3.0 million as of September 30, 1998 to EUR 8.2 

million as of September 30, 1999, and by approximately 140% to EUR 19.7 million as of September 30, 

2000. These accruals were primarily comprised of tax accruals and sundry accruals. The sundry accruals 

as of September 30, 2000 of EUR 16.5 million were primarily related to contracts (including warranties, 

follow-up costs and penalties) and personnel related accruals. The Company issues general warranties 

96

with terms of between two and five years for its N-50 and N-60 wind turbines, amounting to 

EUR 25,600 per turbine, amounting to a total of EUR 11.34 million for Nordex Energy GmbH and 

EUR 173,000 for Südwind Energy GmbH. Other sundry accruals relate mainly to unpaid invoices, costs 

for the preparation of the Group’s annual financial statements and risks resulting from legal 

proceedings. 

The substantial increase in tax accruals, from EUR 0.9 million to EUR 3.2 million as of September 30, 

2000, was necessary due to an increased actual income tax burden in line with Nordex Energy GmbH’s 

increased earnings. 

Liabilities and deferred income 

The Company’s liabilities and deferred income increased substantially during the period under review. 

Liabilities and deferred income increased by approximately 210% from EUR 18.6 million as of 

September 30, 1998 to EUR 57.7 million as of September 30, 1999, and increased approximately 100% 

to EUR 114.6 million as of September 30, 2000. The most significant growth was related to liabilities 

due to companies in the Babcock Borsig Group in line with the increase in inter-company clearing 

account debit balances and reflects the Nordex Group’s increased liquidity requirements. 

Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 1998 

EUR thousand 

Prepayments received 0 47 0 

Due to banks 180 59 0 

Trade payables 44,122 34,097 8,424 

Due to Babcock Borsig Group companies 63,152 19,117 9,356 

Sundry liabilities 7,132 4,315 781 

Total 114,586 57,635 18,561 

First Quarter of Fiscal Year 2000/2001 

The following discussion of the IAS Pro Forma Consolidated Interim Financial Statements for the first 

quarter of fiscal year 2000/2001 does not include a comparison to the corresponding quarter in fiscal 

year 1999/2000. Due to the fact that Nordex Energy GmbH which, as of December 31, 1999, accounted 

for approximately 68% of the profits of what is now Nordex Group, changed its accounting software to 

SAP/R3 in November 1999, the only financial information available for the first quarter of fiscal year 

2000/2001 was derived from the Group’s internal statistics. Nonetheless, in order to give investors an 

estimation of the development of, and trends in, certain key items in the IAS Pro Forma Consolidated 

Interim Financial Statements, in some instances references are made to the Group’s internal statistical 

information or to the results of the previous fiscal year. The Company considers that the information 

thus derived gives an accurate representation of the development of its business, but that it is not 

possible to specify percentage changes in items due to the unavoidable possibility of significant 

deviations which is inherent to statistical analysis and comparisons of results. In the Company’s view it 

is possible that the quarterly report for the period from January 1, 2001 to March 31, 2001 will also not 

include a complete set of prior year comparative figures drawn up according to IAS. 

97

Results of Operations 

Selected data and ratios for the first quarter of fiscal year 2000/2001 are set out below: 

EUR thousand 

Net sales 63,004 

Total operating performance 69,129 

Operating profit 1,925 

Net financial result - 920 

Taxes (1) 

Quarterly net income 420 

Cost-of-materials ratio (2) 

Personnel expenses ratio (3) 

Return on equity 0.7% 

1 income and other taxes 

2 costs-of-materials : total operating performance 

3 personnel expenses : total operating performance 

Net sales and total operating performance 

Net sales according to IAS were EUR 63 million in the first quarter of fiscal year 2000/2001. Although 

the Company has no experience on which it can rely to judge, given that it has been producing 

quarterly results under IAS for such a short period of time, the Company’s experience is that net sales 

tend to be weak compared to the rest of the year. German taxation regulations required wind turbines 

under construction to be completed by the end of the calendar year to qualify for certain tax benefits. 

Each wind turbine under construction as of September 30 was accounted for under IAS according to 

the percentage of completion method, with the result that a large proportion of domestic sales had 

been accounted for in the fourth quarter of the previous fiscal year. 

In addition to total operating performance of approximately EUR 69 million, contracts worth EUR 112 

million were concluded in the first quarter of fiscal year 2000/2001. The Company only considers 

contracts as concluded, where the buyer has provided proof of financing and received approval for 

construction and to supply the electricity into the electricity network. 

The proportion of overseas sales decreased from approximately 44.1% in fiscal 1999/2000 to slightly in 

excess of 33% in the first quarter of fiscal year 2000/2001. This was primarily due to the further 

significant expansion of Südwind Energy GmbH, which sells mainly to the domestic market. 

Cost of materials 

The cost of materials and services purchased amounted to EUR 50.8 million in the first quarter of fiscal 

year 2000/2001. The cost-of-materials ratio was 73.4% compared to 75.4% in fiscal year 1999/2000. 

The Company expects that the cost-of-materials ratio will again rise to the level of the previous years. 

Personnel expenses, other operating expenses 

Personnel expenses and the personnel expenses ratio for the first quarter of fiscal year 2000/2001 

amounted to EUR 5.7 million and 8.2%, respectively. The Company expects an increase in total 

operating performance over the remainder of the fiscal year and as a result a slightly lower personnel 

expenses ratio. 

Other operating expenses for the first quarter of fiscal year 2000/2001 amounted to EUR 9.5 million. 

Included in this figure is a provision of EUR 223 thousand for expenses related to the Offering. 

Operating profits, net financial result 

In the first quarter of fiscal year 2000/2001, the Group made an operating profit of EUR 1.9 million. The 

net financial result was due almost entirely to interest on the Babcock Borsig Group inter-company 

clearing of EUR -0.9 million. 

98 

585 

73.4% 

8.2%

Liquidity 

Cash flow from operations in the first quarter of fiscal year 2000/2001 was negative at EUR 5.5 million. 

This was due primarily to the increase in inventories and the reduction of liabilities. A perceptible 

reduction in customer receivables compensated for this to an extent. 

Both cash flow from financing activities (approx. EUR 20 million) and cash flow from investment 

activities (approx. EUR -22 million) were, in the first quarter of fiscal year 2000/2001, influenced 

significantly by extraordinary factors due to the fact that the Nordex Group was consolidated for the 

first time and the capital of Nordex AG was increased. Similar extraordinary factors are not expected in 

the following quarters. 

Financial Condition 

The following table compares the financial position as of December 31, 2000 to the position as of 

September 30, 2000. 

as of 

December 31, 

2000 


September 30, 

2000 

EUR million 

Total assets 169.8 153.1 

Fixed assets 41.8 21.4 

Current assets 125.5 129.8 

incl. receivables from supplies and services 45.2 63.4 

Accruals 20.4 19.7 

Liabilities 109.0 114.6 

incl. financing 72.5 64.9 

Fixed assets 

The main change in fixed assets was to intangible assets in the period from September 30, 2000 to 

December 31, 2000. The increase of EUR 20.4 million in fixed assets from September 30, 2000 to 

December 31, 2000 was due primarily to goodwill resulting from the first time consolidation of the 

capital of the companies comprising the Group. The increase in tangible fixed assets was on a similar 

level to depreciation. Planned investments, especially into rotor blade production, will have an effect 

only in the following quarters. 


Current assets as at December 31, 2000 amounted to EUR 125.5 million and consisted of inventories 

and receivables from customers. There was a slight reduction in current assets from the position at 

September 30, 2000, mainly due to the reduction of receivables. 

As compared with the position at September 30, 2000, receivables from clients as of December 31, 

2000 declined to EUR 45.2 million. Historically, receivables from clients have generally been paid within 

90 days. The default risk for receivables from clients has been low, since orders were only accepted 

where there was proof of financing. 

Accruals 

Accruals as of December 31, 2000 amounted to EUR 20.4 million, representing a slight increase since 

the beginning of fiscal year 2000/2001. Accruals relate primarily to contract related accruals and 

personal accruals. The Company maintained its methodology for accounting and for valuation. 

Liabilities 

Liabilities as of December 31, 2000 amounted to EUR 109.0 million, of which EUR 72.5 million related 

to the Babcock Borsig Group to inter-company clearing facility. The inter-company clearing liabilities as 

of March 31, 2001 (expected to be approximately EUR 92.6 million) are expected to be repaid out of the 

proceeds of the Offering. 

99

Taxation 

The following section provides an overview of selected tax regulations in the Federal Republic of 

Germany. The discussion does not claim to present a comprehensive explanation of all the information 

which could be required before any purchase decision is made regarding the shares on offer. The 

explanations are based on the taxation provisions effective in Germany at the time this Offering 

Memorandum went to print. These may be subject to revision; any changes may also have a retroactive 

effect under certain circumstances. The discussion relates solely to income tax (excluding church tax), 

corporation tax, the solidarity surcharge, trade tax, and inheritance and gift tax and does not address 

all aspects of these types of taxation. It does not address the individual tax situation of each investor. 

Prospective investors are therefore strongly advised to consult a tax adviser regarding the tax 

consequences in their particular case of acquiring, holding or transferring shares. 

In 2000, the German Parliament passed the Steuersenkungsgesetz (Tax Reduction Act) to reduce tax 

rates and reform corporate taxation. The reform lowers the corporation tax rate homogeneously to 

25% plus a solidarity surcharge of 5.5% starting in the 2001 assessment period. The corporation tax 

imputation procedure will be replaced for private individuals by what is known as the 

Halbeinkünfteverfahren. According to this, only 50% of dividend payments and taxable capital gains 

from the disposal of shares held as part of private assets should be subject to income tax. Corporations 

are insofar exempted from taxation. The Tax Reduction Act becomes effective from January, 1 2001 

generally. However, as Nordex has a business year deviating from the calendar year (October, 1 to 

September, 30) and the Company will not switch over to a calendar year as business year via an 

incomplete business year the provisions of the Tax Reduction Act will be applicable later on (see below). 

Taxation of Company Profits 

Aktiengesellschaften (German public companies) domiciled in the Federal Republic of Germany are 

subject to both trade tax and corporation income tax and a solidarity surcharge (Solidaritätszuschlag) 

with their profits. Trade tax may be deducted as an operating expense when calculating the amount of 

income subject to corporation tax. 

The assessment basis for trade tax is the trading profit, which is determined according to the 

Körperschaftssteuergesetz (KStG – German Corporation Income Tax Act) from the taxable income 

adjusted for certain additions and deductions. The trade tax liability is derived by applying a percentage 

rate to the trading result; this percentage rate depends on the effective assessment rate determined by 

municipalities for the areas they cover. If an Aktiengesellschaft maintains operating establishments in 

various municipalities, the total trade tax liability is determined by the rates applicable in each of these 

municipalities. Dependent on the municipality the range for the trade tax burden is generally between 

12% and 21% of the trading profit. 

The income of Nordex that is subject to corporation income tax is calculated on the basis of the 

Company’s trade balance accounts, taking into account special income tax and corporation income tax 

regulations. 

Including September, 30 2001 (assessment period 2001) the corporation income tax rate for Nordex is 

40% for retained and 30% for distributed earnings. A solidarity surcharge in the amount of 5.5% is 

charged on the corporate income tax owed. There are exceptions to this rule for the Company’s tax 

exempt foreign income and contributions by shareholders that increase the Company’s net worth (so 

called EK 04 respectively steuerliches Einlagekonto). Given the fact that the solidarity surcharge is not 

deductible, the corporate income tax and solidarity surcharge result in an effective tax burden (after 

trade tax), assuming full distribution, of 31.94%. 

From October 1, 2001 on (assessment period 2002) the corporate income tax rate for Nordex will be 

homogeneously 25%. A solidarity surcharge of 5.5% will be charged on the corporation income tax 

assessed. Including the non deductibility of the solidarity surcharge, this results in an effective tax 

liability on the Company’s income (after trade tax) of 26.375%. Taking into account that the solidarity 

surcharge is not deductible the effective burden of the income amounts to 26.375% (after trade tax). If 

the Company receives dividend distributions from other companies which are unlimitedly subject to 

100

corporation income tax a special tax rate is applicable under certain preconditions. In the event that 

during the assessment period 2002 dividends are distributed which stem from earnings made in earlier 

years by the distributing company, which were burdened with a corporate income tax of 45% (EK 45), 

40% (EK 40) respectively, these dividend distributions are subject to a special tax rate of 45%, 40% 

respectively on part of the Company. Operating expenses of the Company related in financial terms to 

such equity interests reduce with priority the Company’s income burdened with 25%; such operating 

expenses can generally not be deducted from the Company’s income burdened with 45%, 40% 

respectively. The special tax rate is also applicable for other distributions (for example ‘‘hidden 

distribution’’) to the Company in its assessment period 2002, which are not based on the resolution 

ordering the distribution of profits pursuant to the provisions of corporate law. 

If the Company receives in the assessment period 2002 domestic dividends subject to the special tax 

rate of 45%, 40% respectively the Company’s final balances of the so called EK 45, EK 40 respectively 

which have to be determined as of September 30, 2001 will be increased retroactively. On September 

30, 2001 all final balances of the Company’s equity (EK) will be determined – probably retroactively – 

and converted into EK 02 and EK 40. Within this conversion corporation income tax credit could be lost. 

As of September 30, 2002 the remaining corporation income tax credit in the amount of 1/6 of the 

resolved EK 40 will be determined. If the Company distributes dividends to its shareholders up to the 

year 2017 the Company’s corporation income tax credit and the corporation income tax liability will be 

reduced to an amount of 1/6 of the respective dividend distribution. If during this period the Company 

receives dividend distributions, which led at the distributing company to a reduction of corporation 

income tax credit as set out above, the Company’s corporation income tax credit is increased by this 

amount. Corporation income tax credits which are not reduced until the year 2017 will be lost. 

Dividend distributions received by the Company from domestic corporations in 2002 for the year 2001 

are tax exempt, if the distributing corporation has a business year corresponding to the calendar year. 

If the distributing corporation has a fiscal year not corresponding to the calendar year, the dividend 

distributions executed for the fiscal year ending in 2001 will be tax exempt. Special rules apply in cases 

where the distributing domestic corporation builds an incomplete business year. 

From the assessment period 2002 dividend distributions received by the Company from foreign 

corporations are – subject to certain exceptions – tax exempt. However, 5% of the foreign dividends are 

deemed as non deductible business expense. 

Taxation of Dividends 

Shareholders Subject to Unlimited Tax Liability in Germany 

Dividend payments made by the Company before September 30, 2002 are subject to withholding tax at 

a rate of 25% of the dividend approved by the shareholders’ general meeting (‘‘cash dividend’’, that is 

the dividend less corporate income tax and withholding tax). For such distributions paid after October 

1, 2002 the withholding tax is reduced to 20% of the cash dividend. A solidarity surcharge of 5.5% is 

levied in both cases, increasing the effective tax liability to 26.375% until September 30, 2002 or 21.1% 

after October 1, 2002. Withholding tax and the solidarity surcharge are deducted from the tax liability 

as part of the assessment. Instead, individuals who hold the shares as part of private assets may also 

have part or all of their withholding tax reimbursed or exempted if they have submitted an application 

for exemption or a non-assessment certificate. Otherwise the withholding tax is levied, regardless if or 

to what extent the distribution is tax exempt on the level of the shareholder. 

Dividends distributed by Nordex up to September 30, 2002 to individuals who hold the shares as part of 

private assets (private investors) are fully subject to German income tax plus the solidarity surcharge. In 

the case of such dividend distributions by Nordex, the income from capital assets (gross dividend) of 

private investors consists of (i) the net amount actually received (net dividend) plus (ii) the possibly 

withholding tax withheld amounting to 25% of the cash dividend plus the solidarity surcharge of 5.5% 

on this amount (a total of 26.375% of the cash dividend) and (iii) the corporation income tax withheld 

by the company (corresponding to the corporation income tax credit). Up to September 30, 2002, 

private investors can offset the withholding tax withheld (plus solidarity surcharge) and the 

corporation income tax withheld by the company (excluding the solidarity surcharge paid by the 

101

Company, which is known as the ‘‘shadow burden’’) against their income tax liability (plus solidarity 

surcharge). The purpose behind this corporation income tax imputation procedure is the prevention of 

double taxation of corporations and shareholders as well as the taxation of dividends according to the 

personal tax situation of shareholders with unlimited tax liability. The basis for determining the 

solidarity surcharge to be paid by the shareholder is reduced by the amount of the corporation income 

tax credit. 

After October 1, 2002, only 50% of dividend payments by Nordex to private investors will be subject to 

income tax (plus solidarity surcharge). At the corporation level, the distribution tax rate of 30% is no 

longer applicable; at the shareholder level, the corporation income tax credit is not available anymore. 

Private investors are entitled to a savings allowance of DM 3,000.00 p.a. in 2001, E1,550.00 

respectively (DM 6,000.00 p.a. in 2001, E3,100.00 from 2001 respectively in the case of married couples 

filing jointly). In addition, a blanket deduction for income-related expenses in the amount of DM 100.00 

p.a., E51.00 p.a. from 2002 respectively (DM 200.00 p.a. in 2001, E102 p.a. from 2001 respectively in 

the case of married couples filing jointly) is granted unless the expenses involved are demonstrated to 

have actually exceeded that amount. From October 1, 2002 on only 50% of the expenses related in 

financial terms to the Nordex dividends can be deducted, regardless in which assessment period the 

expenses accrued. 

If the Nordex shares are held as part of the operating assets of a commercial sole proprietor or a 

commercial partnership, the gross dividend is subject to trade tax unless the taxpayer held at least 10% 

of the Company’s share capital at the beginning of the relevant tax period. For the purposes of the 

income tax levied on a sole proprietor, the dividend is up to September 30, 2002 fully, after October 1, 

2002 only to 50% included in the calculation of income from trade. In the case of partnerships, the 

dividend is included in the uniform and itemised declaration and is allocated to the partners from 

there; the taxation of these partners depends on their legal form. 

After October 1, 2002, shareholders not subject to corporation income tax can only deduct 50% of 

operating expenses related in financial terms to the Nordex dividends, regardless in which assessment 

period they accrue. 

In the case of shareholders subject to corporation tax, the gross dividend is subject to trade tax until 

September 30, 2002 unless the taxpayer held at least 10% of the Company’s share capital at the 

beginning of the relevant tax period. After October 1, 2002, the dividends will be exempt from trade tax. 

Up to September 30, 2002, dividends paid to shareholders subject to corporation income tax are taxable 

may be subject to corporation income tax with a special tax rate. The above statements on the 

calculation of income under the imputation procedure and on the special tax rate apply accordingly. 

Nordex Dividends distributed to corporations will no longer be taxed after October 1, 2002. A minimum 

equity interest or holding period is not specified. However, the dividends may be subject to a 

supplementary tax. Operating expenses directly related to tax-free Nordex dividends in financial terms 

may not be deducted as operating expenses. 

Shareholders not Subject to Unlimited Tax Liability 

Dividend payments made by the Company before September 30, 2002 are subject to withholding tax at 

a rate of 25% of the dividend approved by the shareholders’ general meeting (‘‘cash dividend’’, that is 

the dividend less corporate income tax and withholding tax). For such distributions paid after October 

1, 2002 the withholding tax is reduced to 20% of the cash dividend. A solidarity surcharge of 5.5% is 

levied in both cases, increasing the effective tax liability to 26.375% until September 30, 2002 or 21.1% 

after October 1, 2002. Withholding tax and the solidarity surcharge are deducted from the tax liability 

as part of an assessment. If a double taxation agreement applies, the investment income tax (plus 

solidarity surcharge) on dividend distributions paid to shareholders not resident in Germany by 

corporations domiciled in Germany may be reduced. To claim this benefit, the shareholder entitled to 

the benefit or his agent must file an application with the German tax authorities (Bundesamt für 

Finanzen, Friedhofstraße 1, D-53221 Bonn) pursuant to the double taxation agreement for a reduction 

102

or a refund of the amount by which the rate of the regular withholding tax withheld or to be withheld 

exceeds the maximum permissible rate under the relevant double taxation agreement. 

Subject to the application of Council Directive No.90/435/EEC dated July 23, 1990 (known as the 

‘‘Parent-Subsidiary Directive ‘‘) a partial or complete exemption – e.g. by way of a refund -may be made 

on application by corporations which are resident for tax purposes in another state of the EU. For the 

Parent-Subsidiary Directive to apply, the parent company must have under certain circumstances in 

particular its tax domicile in another member state of the European Union, its equity interest in the 

German subsidiary must have existed for an uninterrupted period of at least twelve months and it must 

amount to at least one quarter (or one-tenth in special cases) of the nominal capital. 

Shareholders who are not assessed for taxation in Germany are not entitled to any crediting of the 

corporation income tax paid by the corporation and the withholding tax withheld. 

Dividends distributed by the Company on shares, which are held by an appointed permanent 

representative in Germany or which are part of the assets of an operating establishment or a fixed 

place in Germany, which is run by a foreign legal person are subject to German corporate income tax 

with a regular rate of 25% plus 5.5% solidarity surcharge thereon until September 30, 2002. The 

transfer of profits from the operating establishment or the fixed place to the foreign parent company is 

exempt from withholding tax. Shareholders as individuals are subject to German income tax with the 

earnings received from the permanent establishment or fixed place with their individual income tax 

rate, but at least with 25% plus solidarity surcharge thereon. If the creditable taxes exceed the 

corporate income tax plus solidarity surcharge on the earnings of the operating establishment, the 

respective exceeding amount will be refunded. 

Dividend distributions to foreign corporations holding the shares as business assets in a permanent 

establishment or fixed place of business in Germany or via an appointed permanent representative in 

Germany are -subject to certain exceptions- generally exempt from corporate income tax, trade tax and 

solidarity surcharge from October 1, 2002. Expenses directly related to such dividends in financial terms 

may not be deducted as operating expenses. 

From October 1, 2002 dividends distributed by the Company to holders not subject to corporation 

income tax are subject to the semi-income method. 

Taxation of Capital Gains 

Shareholders Subject to Unlimited Tax Liability in Germany 

Capital gains from the disposal of Nordex shares held as part of private assets by natural persons with 

unlimited tax liability are only subject to income tax if (i) the shares are sold within one year of being 

acquired or if after the expiration of this period (ii) the shares arise from contributions pursuant to 

section 21 Reorganisation Tax Act (Umwandlungsteuergesetz) or (iii) the shareholder directly or 

indirectly held or holds a significant equity interest. Up to September 30, 2002, a significant equity 

interest exists if the shareholder (in case of a gratuitous acquisition also his legal predecessor) held at 

any time within the last five years a direct or indirect interest of at least 10% in the share capital. After 

October 1, 2002, a significant equity interest exists if at any time within the five years prior to the 

disposal a direct or indirect interest of at least 1% existed or exists. 

Up to September 30, 2002, taxable capital gains from the disposal are subject to full income tax (plus 

solidarity surcharge). In line with the Halbeinkünfteverfahren, 50% of these capital gains will be subject 

to income tax (plus solidarity surcharge) after October 1, 2002. Only half of the expenses related to the 

capital gains from disposal of Nordex shares in financial terms may be deducted, regardless in which 

assessment period the expenses accrue. 

Losses from the disposal of shares incurred by a private investor may be of little or no relevance to 

taxation. Losses incurred by shareholders who are individuals from a disposal that occurs within one 

year after the acquisition of the shares can only be offset against the capital gains that the shareholder 

received in the same calendar year from other private taxable sales transactions according to section 

23 Income Tax Act (Einkommensteuergesetz). Losses that are not offset reduce the shareholder’s 

103

income from private sales transactions in the previous calendar year or in the following calendar years. 

If individuals subject to unlimited tax liability realise capital gains from private sales transactions these 

earnings remain tax exempt as long as they are less than DM 1,000 p.a. per person in 2001, E512 from 

2002, respectively. 

For commercial sole proprietors, capital gains from disposal of Nordex shares are subject to full trade 

tax and income tax (plus solidarity surcharge). After October 1, 2002, only half of these profits will be 

exempted from income tax (plus solidarity surcharge). Only 50% of operating expenses related to the 

dividends in financial terms may be deducted, regardless in which assessment period they accrue. 

Claims relating to losses from disposal are also limited. 

For commercial partnerships, capital gains from disposal are subject to full trade tax up to 

September 30, 2002, from October 1, 2001 only to 50%. They are also included in the uniform and 

itemised declaration and are allocated to the partners from there; the taxation of these partners 

depends on their legal form. 

For taxpayers subject to corporation income tax, gains from the disposal of Nordex shares up to 

September 30, 2002 are subject to full trade tax and corporation tax (plus solidarity surcharge). After 

October 1, 2002, gains from the disposal of Nordex shares generated by shareholders with corporation 

income tax liability will be tax-free. Operating expenses directly related in financial terms to tax-free 

capital gains from disposal will not be deductible. Losses from disposal may not be claimed. 

Shareholders Subject to Limited Tax Liability in Germany 

If a shareholder with limited tax liability in Germany receives capital gains from the disposal of Nordex 

shares, these gains are subject to taxation in Germany if (i) the shares are part of the operating assets 

of an operating establishment in Germany or for which a permanent representative is appointed in 

Germany or (ii) the shareholder as an individual (in case of a gratuitous acquisition also his legal 

predecessor) directly or indirectly held at any moment within the last five years prior to the sale of the 

shares at least 10% (or at least 1% after October 1, 2002) of the Company’s share capital or (iii) if the 

shares arose through contributions pursuant to section 21 Tax Reorganisation Act 

(Umwandlungssteuergesetz) or (iv) they are subject to taxation under the requirements of an 

extended limited tax liability pursuant to section 2 of the AStG (Auslandssteuergesetz -German Foreign 

Tax Act). Should a double taxation agreement apply, it is possible that capital gains from disposal may 

not be taxable in Germany. 

Special Rules for Credit Institutions, Financial Services Institutions 

and Financial Enterprises 

If credit institutions and financial services institutions hold or dispose of shares to be deemed part of 

the trading book in accordance with section 1 (12) of the Gesetz über das Kreditwesen (KWG -German 

Banking Act), neither the Halbeinkünfteverfahren nor tax exemption applies to dividends or capital 

gains from disposal. The same applies to shares acquired by financial enterprises within the meaning of 

the KWG with the aim of generating own-account trading profits in the short term. This also applies to 

credit institutions, financial services institutions and financial enterprises domiciled in a different 

European Union member state or in another state which is part o the European Economic Area. 

Inheritance and Gift Tax 

Transfers of shares through inheritance or by way of a gift are subject to inheritance or gift tax if the 

testator, the donor or the acquirer is a ‘‘national ‘‘as defined in section 2 (1) of the 

Erbschaftsteuergesetz (ErbStG -German Inheritance Tax Act). Otherwise they are only subject to 

taxation if (i) the shares are part of the operating assets of a permanent establishment in Germany 

respectively for which a permanent representative is appointed in Germany or (ii) the shareholder alone 

or together with related persons directly or indirectly held at least one-tenth of the share capital of the 

company in the moment of the acquisition or (iii) if the requirements of an extended limited tax liability 

pursuant to section 4 of the AStG are met. 

104

The above-mentioned tax liability can be limited by one of the few double taxation agreements existing 

for inheritance and gift tax. 

Other Taxes in Germany 

The sale, holding or transfer of shares in Germany is not subject to any stock exchange turnover tax, 

company tax, stamp duty, or similar tax. The transfer or merger of at least 95% of the shares can give 

rise to real estate transfer tax if the Aktiengesellschaft, or companies in which the Aktiengesellschaft 

holds a direct or indirect equity interest, holds real property in Germany. 

105

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Financial information 

(Combined) Pro Forma Consolidated Financial Statements of Taifun AG for the twelve 

months ended September 30, 1998, 1999 and 2000 according to IAS F-3 

(Combined) Pro Forma Consolidated Balance Sheets as of September 30, 1998, 1999 and 

2000 according to IAS F-3 

(Combined) Pro Forma Consolidated Income Statements for the twelve months ended 

September 30, 1998, 1999 and 2000 according to IAS F-5 

(Combined) Pro Forma Consolidated Statements of Cash Flow for the twelve months 

ended September 30, 1998, 1999 and 2000 according to IAS F-6 

(Combined) Pro Forma Consolidated Statement of Changes in Equity for the twelve 

months ended September 30, 1998, 1999 and 2000 according to IAS F-7 

Notes to the (Combined) Pro Forma Consolidated Financial Statements for the full fiscal 

years ended September 30, 1998, 1999 and 2000 according to IAS F-8 

(Combined) Fixed-Asset Analysis of the Pro Forma Group as of September 30, 1998, 1999 

and 2000 F-29 

Independent Auditor’s Certificate F-32 

Annual Financial Statements for the Abbreviated Fiscal Year from August 25 to 

September 30, 2000 according to HGB 

Management Report for the Abbreviated Fiscal Year from August 25 to September 30, 

F-35 

2000 F-35 

Balance Sheet for the Abbreviated Fiscal Year from August 25 to September 30, 2000 F-36 

Income Statement for the Abbreviated Fiscal Year from August 25 to September 30, 2000 

Notes to the Financial Statements for the Abbreviated Fiscal Year from August 25 to 

F-37 

September 30, 2000 F-38 

Auditor’s Opinion F-40 

Pro Forma Consolidated Interim Statements of Taifun AG (now Nordex AG) as of 

December 31, 2000, according to IAS F-41 

Pro Forma Consolidated Balance Sheet according to IAS as of December 31, 2000, with 

statistical data as of December 31, 1999 F-41 

Pro Forma Consolidated Income Statement according to IAS for the three months ended 

December 31, 2000, with statistical data for the three months ended December 31, 1999 F-43 

Pro Forma Consolidated Statement of Cash Flows according to IAS for the three months 

ended December 31, 2000 with statistical data for the three months ended December 31, 

1999 F-44 

Pro Forma Consolidated Statement of Changes in Equity according to IAS for the three 

months ended December 31, 2000, with statistical data for the three months ended 

December 31, 1999 F-45 

Notes to the Pro Forma Consolidated Interim Statements according to IAS for the three 

months ended December 31, 2000, with statistical data for the three months ended 

December 31, 1999 F-46 

Fixed-asset Analysis of the Pro Forma Group as of December 31, 2000, and (with 

statistical data) December 31, 1999 F-59 

Page 

F-1

Independent Auditor’s Certificate of Review of the Consolidated Interim Statements as of 

December 31, 2000 F-61 

Annual Financial Statements for the Fiscal Year ended September 30, 2000, according 

to HGB 

Management Report for the Fiscal Year ended September 30, 2000 of Nordex Energy 

GmbH F-64 

Balance Sheet for the Fiscal Year ended September 30, 2000 F-67 

Income Statement for the Fiscal Year ended September 30, 2000 F-68 

Notes to the Financial Statements for the Fiscal Year ended September 30, 2000 F-69 

Fixed Asset Analysis for the Fiscal Year ended September 30, 2000 F-74 

Auditor’s Opinion F-75 

F-2 

Page

Assets 

(Combined) 

pro forma CONSOLIDATED BALANCE SHEETS 

according to IAS 

in a subsumed 3-year presentation 

as of September 30, 2000 



Note 

A. Fixed assets (5.1) 

I. Intangible assets 

Balance at 

Sep. 30, 2000 

pro forma 

Balance at 

Sep. 30, 1999 

pro forma 

Balance at 

Sep. 30, 1998 

pro forma 

E E E 

1. Concessions, franchises, industrial-property 

and similar rights and assets, as well as licenses 

thereto 4,554,282.41 2,182,357.28 883,186.32 

2. Prepayments on intangibles 1,270,960.32 579,284.00 177,976.41 

II. Property, plant and equipment 

5,825,242.73 2,761,641.28 1,061,162.73 

1. Land and buildings 3,058,658.79 818,956.47 725,616.39 

2. Production plant and machinery 3,518,700.77 3,921,845.74 1,545,267.23 

3. Other plant, factory and office equipment 3,398,352.04 2,431,732.42 912,003.98 

4. Prepayments on property, plant and 

equipment, and construction in progress 4,662,885.52 2,114,063.80 234,955.53 

III. Financial assets 

14,638,597.12 9,286,598.43 3,417,843.13 

1. Shares in unconsolidated group companies 222,330.78 233,761.11 0.00 

2. Investments 760,784.92 540,044.38 0.00 

B. Current assets 

I. Inventories (5.2) 

983,115.70 773,805.49 0.00 

21,446,955.55 12,822,045.20 4,479,005.86 

1. Raw materials and supplies 27,785,126.16 29,741,689.59 14,170,865.73 

2. Work in process 8,189,596.97 11,403,473.02 2,966,961.15 

3. Prepayments made 9,745,945.40 4,755,606.68 4,434,790.57 

45,720,668.53 45,900,769.29 21,572,617.45 

less prepayments received (31,816,916.18) (23,984,574.53) (5,011,695.55) 

13,903,752.35 21,916,194.76 16,560,921.90 

II. Future receivables under long-term 

construction contracts (5.3) 35,062,530.25 16,704,467.81 1,072,303.40 

III. Receivables and other current assets (5.4) 

1. Trade receivables 63,364,341.85 20,011,839.42 4,182,167.51 

2. Due from Babcock Borsig Group companies 11,807,700.37 9,110,075.31 630,549.79 

3. Receivables under investor/investee 

relations 8,781.48 0.00 255,645.94 

4. Sundry current assets 3,003,784.41 841,124.62 1,583,559.77 

78,184,608.11 29,963,039.35 6,651,923.01 

IV. Cash and cash equivalents 2,634,180.25 370,633.34 587,620.73 

129,785,070.96 68,954,335.26 24,872,769.04 

C. Prepaid expenses and deferred charges (5.5) 1,316,310.03 79,441.10 43,665.28 

D. Deferred tax assets (6.10) 552,986.71 137,955.24 0.00 

153,101,323.25 81,993,776.80 29,395,440.18 

F-3

Equity & liabilities 

Note 

A. Equity (5.6) 

Balance at 

Sep. 30, 2000 

pro forma 

Balance at 

Sep. 30, 1999 

pro forma 

Balance at 

Sep. 30, 1998 

pro forma 

E E E 

I. Capital stock 306,561.92 231,561.92 206,561.92 

II. Additional paid-in capital 6,047,049.08 6,047,049.08 6,047,049.08 

III. Pro forma net earnings 9,660,374.79 6,384,188.00 892,730.80 

B. Accruals (5.7) 

16,013,985.79 12,662,799.00 7,146,341.80 

1. Tax accruals 3,179,384.71 868,897.12 82,260.22 

2. Sundry accruals 16,516,703.83 7,334,227.39 2,930,479.50 

19,696,088.54 8,203,124.51 3,012,739.72 

C. Future payables under long-term construction 

contracts (5.8) 0.00 590,097.30 0.00 

D. Liabilities (5.9) 

1. Prepayments received 0.00 47,167.44 0.00 

2. Due to banks 180,262.11 58,562.98 0.00 

3. Trade payables 44,121,740.03 34,097,308.88 8,424,436.86 

4. Due to Babcock Borsig Group companies 63,152,135.44 19,117,281.81 9,355,579.51 

5. Sundry liabilities 7,131,778.73 4,314,841.10 781,313.78 

114,585,916.31 57,635,162.21 18,561,330.15 

E. Deferred income (5.10) 165,251.93 46,476.43 0.00 

F. Deferred tax liabilities (6.10) 2,640,080.68 2,856,117.35 675,028.51 

F-4 

153,101,323.25 81,993,776.80 29,395,440.18

(Combined) 

pro forma CONSOLIDATED INCOME STATEMENTS 



for the twelve months ended September 30, 2000 



Note 

1999/00 

pro forma 

1998/99 

pro forma 

1997/98 

pro forma 

E E E 

Net sales (6.1) 272,669,814.84 223,742,801.56 82,476,587.43 

Change in inventories of work in process (6.2) (3,213,876.05) 8,436,511.87 2,782,896.07 

Work and material capitalized (6.3) 735,399.55 444,670.55 0.00 

Total operating performance 270,191,338.34 232,623,983.98 85,259,483.50 

Other operating income (6.4) 1,973,699.62 1,191,065.76 897,484.15 

Cost of materials (6.5) 

cost of raw materials and supplies (166,500,959.01) (156,020,672.38) (52,747,855.91) 

cost of services purchased (37,276,316.89) (32,859,080.43) (13,845,817.20) 

Gross profit 68,387,762.06 44,935,296.93 19,563,294.54 

Personnel expenses (6.6) 

(a) wages and salaries (16,806,910.28) (11,211,819.34) (5,216,417.18) 

(b) social security taxes (2,398,742.33) (1,538,926.27) (783,680.16) 

Amortization of intangible assets and depreciation of 

property, plant and equipment (6.7) (3,725,019.82) (2,096,032.78) (862,057.71) 

Other operating expenses (6.8) (32,242,773.24) (20,088,169.96) (9,885,015.53) 

Operating profit 13,214,316.39 10,000,348.58 2,816,123.96 

Other interest and similar income (6.9) 516,156.93 1,110,856.41 70,445.35 

Other interest and similar expenses (6.9) (3,381,480.21) (988,672.70) (405,895.16) 

Net financial result (2,865,323.28) 122,183.71 (335,449.81) 

Profit from ordinary operations 10,348,993.11 10,122,532.29 2,480,674.15 

Income taxes (6.10) 

current taxes (2,376,192.57) (869,930.44) 0.00 

imputed taxes (2,139,535.64) (703,692.55) 263,560.23 

deferred taxes 631,068.14 (2,043,133.61) (1,141,783.80) 

Other taxes (6.11) (29,736.46) 24,476.49 (7,255.31) 

Net income 6,434,596.58 6,530,252.18 1,595,195.27 

Adjustment for pro forma group fee apportionment and 

imputed taxes 4,829,520.30 3,090,692.55 1,618,439.77 

Profit transfer (7,987,930.09) (4,129,487.53) (1,229,370.33) 

Profit/(loss) carryover 6,384,188.00 892,730.80 (1,091,533.91) 

Pro forma net earnings 9,660,374.79 6,384,188.00 892,730.80 

F-5

(Combined) 

pro forma CONSOLIDATED STATEMENTS OF CASH FLOWS 






I. Operating activities 

1999/00 1998/99 1997/98 

pro forma pro forma pro forma 

E E E 

Net income 6,434,596.58 6,530,252.18 1,595,195.27 

Adjustment for pro forma group fee apportionment and imputed 

taxes 4,829,520.30 3,090,692.55 1,618,439.77 

Amortization/depreciation of fixed assets 3,725,019.82 2,096,032.78 862,057.71 

Gains from/Losses on fixed-asset disposal (259,916.36) 57,907.99 10,898.81 

Change in inventories 8,012,442.41 (5,355,272.86) (10,333,874.87) 

Change in future receivables under long-term construction 

contracts (18,358,062.44) (15,632,164.42) 3,510,249.73 

Change in receivables and sundry current assets (48,221,568.76) (23,311,116.34) (2,608,170.70) 

Change in tax accruals 2,310,487.59 786,636.90 0.00 

Change in sundry accruals 9,182,476.44 4,403,747.89 1,135,828.37 

Change in future payables under long-term construction contracts (590,097.30) 590,097.30 0.00 

Change in liabilities (excl. intercompany clearing account and 

liabilities due to banks) (10,201,310.67) 43,557,074.87 2,633,914.48 

Change in deferred tax assets (415,031.47) (137,955.24) 676,092.50 

Change in deferred tax liabilities (216,036.67) 2,181,088.85 465,691.29 

Change in prepaid expenses and deferred charges (1,236,868.93) (35,775.82) 55,118.74 

Change in deferred income 118,775.50 46,476.42 0.00 

Cash flow from operating activities (44,885,573.96) 18,867,723.05 (378,558.90) 

II. Investing activities 

Cash inflow from the disposal of property, plant and equipment 1,873,672.26 246,645.61 187,314.74 

Cash outflow for capital expenditures for intangibles and property, 

plant and equipment (13,723,698.35) (9,969,820.23) (2,134,017.33) 

Cash outflow for capital expenditures for financial assets (239,987.72) (773,805.49) 0.00 

Cash flow from investing activities (12,090,013.81) (10,496,980.11) (1,946,702,59) 

III. Financing activities 

Cash inflow from increases in capital stock 75,000.00 25,000.00 0.00 

Cash outflow to Babcock Borsig Group companies under profit and 

loss transfer agreements (7,987,930.09) (4,129,487.53) (1,229,370.33) 

Cash dividend distributed by Nordex Planungs- und 

Vertriebsgesellschaft mbH 0.00 0.00 (60,332.44) 

Cash flow from financing activities (7,912,930.09) (4,104,487.53) (1,289,702.77) 

Change in cash and cash equivalents (64,888,517.86) 4,266,255.41 (3,614,964.26) 

Cash and cash equivalents at beginning of period 2,406,833.21 (1,859,422.21) 1,755,542.05 

Cash and cash equivalents at end of period (62,481,684.65) 2,406,833.20 (1,859,422.21) 

F-6 


cash on hand and in bank 2,634,180.25 370,633.34 587,620.73 

intercompany clearing account credit/(debit) balances (64,935,602.79) 2,094,762.84 (2,447,042.94) 

current liabilities due to banks (180,262.11) (58,562.98) 0.00 

(62,481,684.65) 2,406,833.20 (1,859,422.21)

(Combined) 

pro forma STATEMENTS OF CHANGES IN EQUITY 






1999/00 

pro forma 

1998/99 

pro forma 

1997/98 

pro forma 

E E E 

Equity at beginning of fiscal year 12,662,799.00 7,146,341.00 5,162,077.09 

Capital stock 

annual opening balance 231,561.92 206,561.92 206,561.92 

addition from the formation of Südwind Borsig Energy 

GmbH, Oberhausen 0.00 25,000.00 0.00 

additions from initial inclusion of Borsig Rotortechnik 

GmbH, Rostock, in the consolidation group and 

formation of Taifun AG, Oberhausen 75,000.00 0.00 0.00 

annual closing balance 306,561.92 231,561.92 206,561.92 

Additional paid-in capital 

annual opening/closing balance 6,047,049.08 6,047,049.08 6,047,049.08 

Profit/loss carryover 

annual opening balance 0.00 0.00 (1,091,533.91) 

prior-year pro forma net earnings 6,384,188.00 892,730.80 0.00 

book transfer to pro forma net earnings (6,384,188.00) (892,730.80) 1,091,533.91 

annual closing balance 0.00 0.00 0.00 

Pro forma net earnings 

annual opening balance 6,384,188.00 892,730.80 0.00 

profit/(loss) carryover 0.00 0.00 (1,091,533.91) 

net income 6,434,596.58 6,530,252.18 1,595,195.27 

adjustment for pro forma group fee apportionment and 

imputed taxes 4,829,520.30 3,090,692.55 1,618,439.77 

profit transferred to Borsig Energy GmbH under P&L 

transfer agreements (7,987,930.09) (4,129,487.53) (1,229,370.33) 

annual closing balance 9,660,374.79 6,384,188.00 892,730.80 

Equity at end of fiscal year 16,013,985.79 12,662,799.00 7,146,341.80 

F-7

NOTES 

to the (COMBINED) 

pro forma CONSOLIDATED FINANCIAL STATEMENTS 

according to IAS in subsumed presentation 

for the full fiscal years ended 

September 30, 2000, 

September 30, 1999, and September 30, 1998 

(1) Group definition 

The Taifun Group, whose Oberhausen, Germany, based parent is Taifun AG, develops, manufactures and 

markets wind turbines. For details of the operations of the Taifun Group’s sole division, Wind Energy, 

reference is made to the segment report. 

Taifun’s (combined) pro forma consolidated financial statements as of September 30, 2000, September 

30, 1999, and September 30, 1998, have been prepared in accordance with the applicable rules of the 

International Accounting Standards Committee (IASC) in view of the proposed flotation of Taifun AG in 

fiscal 2000/01. The financial statements, prepared in deutsche mark (DM), were transformed into euros 

(E) at the official rate of E1.00 = DM 1.95583. The (combined) pro forma consolidated financial 

statements conform in every material respect with the provisions of the International Accounting 

Standards (IAS). 

The prerequisites for preparing consolidated accounts under the terms of IAS 22 and 27 will not be met 

until early 2001 since this month only will see the inception of Taifun AG’s business operations. Until 

then, its subsidiaries are organizationally fully integrated in Borsig Energy GmbH and included in the 

group of BDAG Balcke-Dürr AG. Taifun AG is under no obligation according to the German Commercial 

Code (‘‘HGB’’) to prepare consolidated accounts for the periods under review since the structure of a 

business combination (‘‘group’’) was de jure not created until after entry in the Commercial Register on 

December 14, 2000. Moreover, Taifun AG is under no obligation to publish exempting consolidated 

financial statements according to internationally accepted accounting principles pursuant to Art. 292a 

HGB, nor has the Company applied for the admission to trading on organized securities markets. 

With a view to providing comparability in the periods under review with the group structure created in 

early 2001, (combined) pro forma consolidated financial statements were prepared for the fiscal years 

1997/98, 1998/99 and 1999/2000 in derogation of the de facto, de jure and economic situation (cf. 

Note 3 hereinbelow) and predicated on the assumptions that (i) Taifun AG had held during said periods 

the shares in the companies included in the underlying quasi-group of consolidated companies and (ii) 

the subsequently created group structure had then already existed (cf. Note 2 hereof). For formulating 

the (combined) pro forma consolidated financial statements, the companies included therein prepared 

opening balance sheets in conformity with IAS, either as of the beginning of the respective periods or 

the date of their first-time inclusion. 

When constructing the (combined) pro forma consolidated financial statements, all IAS in force and 

effect for fiscal 1999/2000 were applied for all three fiscal periods. The (combined) pro forma 

consolidated financial statements were developed from the included companies’ separate annual 

accounts (HGB-based, restated according to IAS) with due regard to the necessary consolidation 

entries. The recognition, disclosure and valuation rules required by IAS were applied, including the 

consistency principle. The accounting and valuation methods used in the (combined) pro forma 

consolidated financial statements were throughout the same as those adopted and applied by Taifun 

AG. New insights acquired by the date the (combined) pro forma consolidated financial statements 

were prepared are duly reflected. 

With a view to optimizing comparability with the future actual situation within the Taifun Group, the 

cost allocations and group fee apportionment charged in the periods under review to the subsidiaries 

F-8

were eliminated from net incomes and replaced by imputed future personnel and administrative 

expenses of Taifun AG, duly accounting for the tax effects. In order to prevent fictitious changes in the 

pro forma group equity, the income statements were adjusted in the lines after net income by inserting 

an item headed, ‘‘adjustment for pro forma group fee apportionment and imputed taxes.’’ Any profit & 

loss transfer agreements in effect during the periods under review (cf. Note 2) and the ensuing cash 

outflows and decreases in equity at the subsidiaries were not reversed lest the true and fair view of 

their financial position be biased. The imputed taxes on such earnings were properly accounted for. To 

render the results of operations comparable, the profits transferred including imputed taxes (net 

balance) were deducted after net income only, i.e. in the profit appropriation account. Therefore, the 

pro forma net earnings do not represent the retained earnings under the terms of Art. 268(1) HGB. 

The restatements made to reconcile the financial-accounting net incomes for fiscal 1997/98, 

1998/99 and 1999/2000 to each period’s pro forma group net income and pro forma net earnings of 

the group according to IAS present the following picture: 

1999/00 1998/99 1997/98 

E E E 

Preconsolidation net income according to HGB 12,667,004.28 7,088,964.26 1,975,731.96 

Development costs capitalized according to IAS 38 646,057.84 1,124,433.11 391,036,03 

Accounting for public grants according to IAS 20 (1,429,245.20) (306,775.13) 0.00 

Application of the PoC method according to IAS 11 (2,054,153.71) 4,151,473.23 2,035,740.83 

Elimination of general allowances for doubtful accounts (6,646.80) 150,123.60 4,039.20 

Accounting for accrued expenses according to IAS 37 0.00 0.00 (51,129.19) 

Recognition/utilization of contract-related accruals due to new 

insights 590,097.30 (590,097.30) 0.00 

Provision for deferred taxes according to IAS 12 631,068.14 (2,043,133.61) (1,141,783.80) 

Accounting in a group dimension for capital leases 

according to IAS 17 247,334.54 56,188.14 0.00 

Intercompany profit elimination according to IAS 27, net (27,384.17) (10,231.57) 0.00 

Adjustment for group fee apportionment for improved 

comparability, net (2,690,000.00) (2,387,000.00) (1,882,000.00) 

Imputed taxes on the net of adjusted group fee apportionment 

and P&L transfer (2,139,535.64) (703,692.55) 263,560.23 

Pro forma group net income according to IAS 6,434,596.58 6,530,252.18 1,595,195.27 

Transfer of HGB-based profit to Borsig Energy GmbH under P&L 

transfer agreements (7,987,930.09) (4,129,487.53) (1,229,370.33) 

Elimination of net balance of adjusted group fee apportionment 

and loss carryover from first-time inclusion of Borsig 

Rotortechnik GmbH 2,689,984.65 2,387,000.00 1,882,000.00 

Elimination of imputed taxes 2,139,535.65 703,692.55 (263,560.23) 

IAS P/L carryover from prior year 6,384,188.00 892,730.80 (1,091,533.91) 

Pro forma group net earnings according to IAS 9,660,374.78 6,384,188.00 892,730.80 

(2) Consolidation group 

For comparison, the (combined) pro forma consolidated financial statements 1999/2000, 1998/99 and 

1997/98 as from the date of formation or organization, include, in addition to Taifun AG all subsidiaries 

over which Taifun AG can exercise a controlling influence as and when the group structure de facto 

materialized. Changes in the consolidation group have been accounted for. 

Taifun AG, Oberhausen, Germany (the ‘‘Company’’), was formed on August 25, 2000 (Doc. Reg. UR 405/ 

2000 of Helmut Hübbers, notary public in and for Oberhausen). Borsig Energy GmbH, Oberhausen, 

subscribed for the capital stock of E50,000 in exchange for the grant of 50,000 shares of common 

stock without par value (‘‘no-par shares’’) at E1.00 each. The incorporation was recorded and certified 

by the Commercial Register of the Oberhausen Local Court (no. HRB 3659) on September 19, 2000. 

F-9

On November 23, 2000, Borsig Energy GmbH and Nordvest A/S executed a contribution & share 

transfer agreement (Doc. Reg. UR 1860/2000 of Dr. Herbert Asschenfeldt, notary public in and for 

Hamburg) and, subject to the condition precedent that Taifun AG’s general meeting adopt an 

affirmative resolution on said contribution & share transfer agreement, agreed to make this 

contribution in kind in exchange for stock of the Company. 

As resolved by the extraordinary general meeting of November 23, 2000, Taifun AG’s capital stock was 

raised by way of contribution in kind by E34,000,000 to E34,050,000 (Doc. Reg. UR 624/2000 of 

Helmut Hübbers, notary public in and for Oberhausen). Out of the 34,000,000 newly issued bearer 

shares of stock (cum dividend), 27,357,500 were subscribed and acquired by Borsig Energy GmbH, and 

6,642,500 by Nordvest A/S, Denmark. 

In exchange for the 27,357,500 shares of stock acquired, Borsig Energy GmbH transferred to the 

Company as contribution in kind: 

– one share of E39,880.77 at par (corresponding to 75% of the share capital) in Nordex GmbH, Rerik, 

registered at the Commercial Register of the Local Court of Rostock under number HRB 5010; 

– four shares of a total E51,129.19 at par (corresponding to 100% of the share capital) of Nordex 

Planungs- und Vertriebsgesellschaft mbH, Bad Essen, registered at the Commercial Register of the 

Local Court of Osnabrück under no. HRB 17795; 

– one share of E25,000.00 at par (corresponding to 100% of the share capital) of Borsig 

Rotortechnik GmbH, Rostock, registered at the Commercial Register of the Local Court of Rostock 

under no. HRB 8218; 

– one share of E25,000.00 at par (corresponding to 100% of the share capital) of Südwind Borsig 

Energy GmbH, Oberhausen, registered at the Commercial Register of the Local Court of 

Oberhausen under no. HRB 3656; 

– one share of E102,258.37 at par (corresponding to 100% of the share capital) of Babcock 

Prozessautomation GmbH, Oberhausen, registered at the Commercial Register of the Local Court of 

Oberhausen under no. HRB 2147. 

In exchange for the 6,642,500 shares of stock acquired, Nordvest A/S transferred to the Company as 

contribution in kind two shares of a total E13,293.59 at par (corresponding to 25% of the share 

capital) of Nordex GmbH, Rerik, registered at the Commercial Register of the Local Court of Rostock 

under number HRB 5010. 

The consent to the contribution & share transfer agreement of November 23, 2000, was endorsed by 

Taifun AG’s extraordinary general meeting of December 8, 2000 (Doc. Reg. UR 667/2000 of Helmut 

Hübbers, notary public in and for Oberhausen), this time under the terms of a postformation agreement 

within the meaning of Art. 52 German Stock Corporation Act (‘‘AktG’’). 

After such contribution, Taifun AG’s capital stock amounts to DM 66,596,012 or E34,050,000, which 

was recorded by the Commercial Register of the Local Court of Oberhausen on December 14, 2000, 

under HRB 3659. 

With respect to the companies contributed, direct-control and/or P&L transfer agreements existed 

between Borsig Energy GmbH, Oberhausen, and the following of its subsidiaries: Borsig Rotortechnik 

GmbH, Rostock; Nordex Planungs- und Vertriebsgesellschaft mbH, Bad Essen; Babcock 

Prozessautomation GmbH, Oberhausen; and Südwind Borsig Energy GmbH, Oberhausen. In its 

representation dated December 7, 2000, Borsig Energy GmbH, Oberhausen, irrevocably stated and 

agreed to terminate such agreements as and when it no longer held the majority in said subsidiaries. 

F-10

In the years under review, the consolidation group covered these German companies: 

Share capital at 

par at 

9-30-2000 


par at 

9-30-1999 


par at 

9-30-1998 

E E E 

Nordex GmbH, Ostseebad Rerik 53,174.36 53,174.36 53,174.36 

Nordex Planungs- und Vertriebs-gesellschaft, Bad Essen 51,129.19 51,129.19 51,129.19 

Babcock Prozessautomation GmbH, Oberhausen 102,258.37 102,258.37 102,258.37 

Südwind Borsig Energy GmbH, Oberhausen 25,000.00 25,000.00 — 

Borsig Rotortechnik GmbH, Rostock 25,000.00 — — 

Taifun AG, Oberhausen 50,000.00 — — 

Babcock Prozessautomation GmbH (‘‘BPA’’), Oberhausen, previously had two divisions, Power Plants and 

Wind Energy. As of October 1, 2000, by share sale & transfer agreement of November 15, 2000, the 

Power Plants division was spun off and the company with its remaining division, Wind Energy, 

contributed to Taifun AG. With a view to improving comparability, separate segment financial 

information (balance sheet and income statement) was prepared for BPA’s Wind Energy division and 

included in the (combined) pro forma consolidated financial statements. 

In fiscal 1997/98, Nordex Planungs- und Vertriebsgesellschaft mbH was included only for the nine 

months ended September 30, 1998, since this company had been acquired by Borsig Energy GmbH with 

economic effect as of January 1, 1998. 

The consolidation group changed in fiscal 1998/99 when Südwind Borsig Energy GmbH (organized on 

March 22, 1999) was newly included. For lack of materiality, consolidation of another subsidiary, viz. 

Borsig Rotortechnik GmbH (formed on September 21, 1999, only) was waived. 

In the fiscal year 1999/2000, Borsig Rotortechnik GmbH (organized on September 21, 1999) and the 

parent company were newly consolidated. The consolidation group as of September 30, 2000, 

corresponds to the group structure now being created de jure. 

The change in the number of consolidated subsidiaries impacts on the comparability of the pro forma 

group’s financial position, performance and results of operations with the prior year’s. The cumulative 

effects of the addition of Südwind Borsig Energy GmbH, Borsig Rotortechnik GmbH and Taifun AG on 

major balance sheet lines and on net income are summarized below: 

1999/00 1998/99 

E E 

Fixed assets 4,245,745.73 1,193,169.14 

Deferred tax assets/(liabilities) 73,093.78 (19,633.10) 

Inventories 1,822,367.88 964,522.40 

Future receivables from l/t construction contracts 1,611,844.10 0.00 

Receivables and sundry current assets 10,937,568.12 2,859,679.00 

Cash & cash equivalents 278,531.22 7,555.67 

Equity (377,691.29) 53,982.40 

Accruals 2,481,799.69 761,303.39 

Liabilities 16,625,607.75 4,148,321.46 

Net income 459,073.85 80,748.42 

F-11

In its separate financial statements, Nordex GmbH discloses the following shares in group companies 

(as intercorporate investments): 

Nordex Ibérica Borsig Energy S.A., Barcelona, Spain 

1999/00 1998/99 1997/98 

Nordex GmbH shareholding [%] 100 100 0 

Investment book value in the separate financial statements of 

Nordex GmbH [E1,000] 15 15 0 

Ekter Eoliki A.E., Athens, Greece 




Nordex Omnical Energy Services (Shanghai) Co. Ltd., Shanghai, 

PR China 




Nordex Hellas E.P.E., Greece 




Nordex USA, Inc., United States 




For lack of materiality, Nordex GmbH’s non-German subsidiaries were not consolidated, which is in 

accordance with IASC Framework paragraph 12 in conjunction with paragraphs 29, 30. Said foreign 

subsidiaries are responsible for handling Nordex GmbH contracts and providing local technological 

support. The shares in the Nordex GmbH subsidiaries listed above were accounted for at amortized cost 

in the (combined) pro forma consolidated financial statements for fiscal 1998/99 and 1999/2000 in 

accordance with IAS 39.4 and IAS 39.66/67. As of September 30, 1998, Nordex GmbH did not own any 

shares in group companies. 

In addition, Nordex GmbH has held since fiscal 1998/99 a 40% equity interest in Xian Nordex Wind 

Turbine Co. Ltd., Xian, PR China, which was incorporated in the fiscal year 1998/99 and renders local 

assistance in the production of wind turbines. In Nordex GmbH’s financial statements as of September 

30, 2000, this investment is carried at a book value of kE760.8 (up from kE539.9 in 1998/99). 

Controlling shareholder is the Chinese government. Since this investee is not controlled by Nordex 

GmbH as defined in IAS 27, the investment has not been included in the consolidation group, nor has it 

been carried at equity under the terms of IAS 28 since Nordex GmbH does not have the power to 

participate in this investee’s financial and operating policy decisions. Therefore, this investee is not an 

associated affiliate under the terms of IAS 28 and has been accounted for 

at amortized cost in the (combined) pro forma consolidated financial statements 1999/2000 and 

1998/99 pursuant to the financial instruments rules of IAS 39.4 and IAS 39.66/67. 

The fiscal year of Taifun AG and all its consolidated subsidiaries is not the calendar year but 

commences on October 1 and closes on September 30 of the succeeding year. 

(3) Consolidation procedures 

According to IAS 27 and 22, initial capital consolidation is governed by the date of acquisition, which, 

pursuant to IAS 22.20, is the date at which control of the net assets and operations of consolidatable 

subsidiaries is effectively transferred to Taifun AG as acquirer and transferee. 

F-12

Since Taifun AG will not commence with its operations before early 2001 and its subsidiaries will until 

then remain fully integrated at the organizational level with Borsig Energy GmbH or the BDAG Balcke- 

Dürr AG Group, no effective group structure in terms of a control of the contributed subsidiaries 

existed in 2000 despite the agreements consummated in November/December 2000. 

This is why capital consolidation has been waived when preparing the (combined) pro forma 

consolidated financial statements for the fiscal years ended September 30, 1998, September 30, 1999, 

and September 30, 2000; instead, the equity of the subsidiaries has been merely footed up. For the 

same reason, no pro forma goodwill amortization has been shown either. 

Another reason for the nonrecognition of pro forma goodwill amortization or pro forma releases of 

badwill from capital consolidation in the (combined) pro forma consolidated financial statements is 

that the relevant amounts required to determine goodwill or badwill could not be reliably measured 

when preparing the financial statements (IASC Framework paragraphs 86 et seq. in conjunction with 

par. 83). This refers to the shares in Taifun AG’s subsidiaries, which the provisions of IAS 22.21 et seq. 

require to be recognized at cost and which, after having been transferred as agreed at book value by 

Borsig Energy GmbH and Nordvest A/S to Taifun AG, would have had to be offset against the IAS equity 

of such subsidiaries. The relevant equity (early 2001) was not determinable when the financial 

information was prepared. 

The expected future goodwill amortization will adversely affect performance in future consolidated 

financial statements. In consolidation, all receivables and payables among consolidated subsidiaries 

were mutually offset, without producing any exchange gains or losses. 

The aggregate total of kE27.4 (net balance) (up from kE10.2 in 1998/99) representing (i) intercompany 

profits which in fiscal 1999/2000 were made from intragroup transfers within inventories, as well as (ii) 

the prorated profits realized according to the percentage-of-completion method, was eliminated in 

consolidation. The accounting for capital leases according to IAS 17 (from the group’s vantage point) 

resulted in fiscal 1999/2000 in income of kE247.3 (up from kE56.2 in 1998/99). Consequently, 

consolidation transactions in fiscal 1999/2000 raised income (including the allocable deferred taxes) by 

kE130.9 (up from kE27.1 in 1998/1999). 

Moreover, all expenses and income originating from intragroup transfers of goods/services and from 

intercompany allocations were mutually netted in consolidation. 

In addition, the group fees apportioned and charged in the periods under review were in consolidation 

eliminated from net income and replaced by imputed future personnel and administrative expenses of 

Taifun AG, duly accounting for the imputed tax effects, cf. Note (1). 

(4) General accounting and valuation details 

(4.1) Classification 

The classification rules of Art. 266 HGB (after adjustment to specific IAS disclosure requirements) were 

applied for preparing the IAS-based balance sheets. The income statements according to IAS are 

presented in the full-cost format in analogy to the classification provisions of Art. 275(2) HGB. Major 

deviations from the HGB-oriented disclosure format are, in particular, attributable to the derivation 

from IAS-based net income of pro forma net earnings, cf. Note (1). 

(4.2) Details of accounting and valuation methods 

Within intangible assets, mainly purchased licenses and software were capitalized. Internally created 

intangible assets (i.e., prototype development costs) were capitalized whenever permitted by IAS 38. 

Intangible assets and property, plant & equipment were stated at cost and, where applicable, amortized 

or depreciated systematically on a straight-line basis over the anticipated useful lives of the underlying 

assets. For additions to personal property (plant & equipment) in the first half of the fiscal year, the full 

annual depreciation rate was applied while for additions in the second 6-month period, half this annual 

rate was used. Low-value assets (under German law, valued at net cost of E409 or less each) were full 

F-13

written off in the year of their addition, however, no significant effects on the group’s net income were 

thus caused. In the fixed-asset analysis, low-value assets are imputed to have been disposed of in the 

year of their addition. 

In accordance with IAS 20, any investment grants and/or allowances received for the purchase of fixed 

assets were treated as a reduction in asset cost. 

The production cost components to be included according to IAS were recognized wherever the costs 

were reliably measurable. The cost of borrowings was recognized as a charge to income. 

Amortization of intangible assets and depreciation of property, plant & equipment were based on the 

following asset ranges (useful lives): 

Useful life Rate charged 

Capitalized development costs 5 years 20% 

Licenses, EDP software and similar rights 2-5 years 20%-50% 

Land and equivalent titles, and buildings 10-25 years 4%-10% 

Production plant and machinery 4-12 years 8.33%-25% 

Factory and office equipment 2-18 years 5.56%-50% 

For the movements of fixed assets, reference is made to the fixed-asset analyses attached to these 

Notes. 

Financial assets were stated at cost. 

Deferred taxes were recognized in accordance with IAS 12 and resulted from the restatement of the 

separate annual accounts as well as from consolidation transactions. 

The following facts and circumstances underlay deferred taxation in the separate financial statements: 

IAS 12 strictly requires that deferred tax assets be capitalized on tax loss carryovers wherever an offset 

against profits available in future periods is reasonably likely. At the amount of the deferred tax assets, 

the current tax expense was out of proportion to the disclosed net income. For preparing the 

(combined) pro forma consolidated financial statements, deferred tax assets were capitalized for tax 

losses carried over by Nordex GmbH from 1997 and earlier periods to the extent that such losses could 

be claimed from the German IRS. The deferred tax assets were released at the amounts needed to 

offset taxes on the profits earned in 1998 and 1999. 

In addition, according to IAS 12, temporary differences between the assets, accruals and liabilities 

recognized in the IAS-based accounts and the corresponding tax bases entail the obligatory disclosure 

of deferred tax assets or liabilities. Deferred tax assets or liabilities were recognized for temporary 

differences at the amount at which the current tax expense shown was out of proportion to the stated 

profit or loss. In the years under review, deferred tax assets or liabilities were solely recognized for 

effects of the restatement according to IAS since the HGB-based financial statements of Nordex GmbH 

presented only insignificant temporary differences versus the corresponding tax bases and all other 

subsidiaries were bound by P&L transfer agreements with Borsig Energy GmbH. The resultant, yet 

unrecognized, deferred taxes are negligible. 

An obligation under IAS 12 to recognize deferred taxes ensued from certain consolidation transactions, 

viz. the elimination of intercompany profits when applying the percentage-of-completion method, as 

well as from physical trade transactions and the accounting for transactions based on capital leases 

from a group vantage point. 

For enhanced comparability, the deferred taxes were calculated on the basis of future tax rates, viz. a 

corporate income tax rate of 25%, a solidarity surtax thereon of 5.5%, and municipal trade tax on 

income at the local factor of the municipality of residence of each subsidiary. 

Deferred tax assets and liabilities were disclosed separately in the balance sheets and not netted unless 

their offset could be claimed against the same tax office. 

F-14

The calculation of imputed taxes, too, was based on future tax rates, cf. Note (1). 

Inventories include raw materials and supplies (operating stores), as well as work in process (goods/ 

services). In conformity with IAS 2, raw materials and supplies were stated at purchase cost. Allowances 

were charged for slow-moving items, varying according to age and product, and for inventories whose 

fair market prices were below their carrying values. Work in process for which no customer contract 

existed and to which IAS 11 did hence not apply were valued at production cost pursuant to IAS 2. The 

production cost components to be included according to IAS 2 were recognized wherever the costs 

were reliably measurable. Borrowing costs were not included in production cost. Provided and to the 

extent that in specific cases production cost (including any overheads yet to be incurred) was 

foreseeable to outweigh expected net revenues, the underlying asset was written down to its lower net 

realizable value. Moreover, prepayments made on inventories were stated, and those received on 

account of inventories were deducted, at their face values. 

Future receivables under long-term construction contracts (i.e., costs and estimated earnings in excess 

of billings) were accounted for according to their percentage of completion (‘‘PoC’’) according to IAS 11 

where based on a specific customer contract and contract costs were reliably allocable. Prorated 

earnings were realized according to the PoC where the latter as well as total contract costs and 

revenues were reliably determinable in conformity with IAS 11. The PoC was determined by using the 

cost-to-cost method, i.e., by relating the costs incurred to the estimated total contract costs. Applying 

this PoC to revenues, the resulting portion of total contract revenues was realized accordingly. Contract 

costs comprise all direct costs allocable to the contract, as well as all indirect costs separately billable to 

the customer (as defined in IAS 11) and if reliably measurable. Costs of debt were expensed. If the 

contract revenues were not determinable with reasonable reliability, valuation was based on contract 

costs according to IAS 11. 

When determining contract costs and revenues, any new insights with respect to the periods under 

review at the time the (combined) pro forma consolidated financial statements were prepared were 

duly taken into account. Losses incurred for specific contracts and ascertained subsequently were also 

accounted for. 

In the balance sheet, this item was disclosed as ‘‘future receivables under long-term construction 

contracts’’ and, in the income statement, under net sales. Where specific contracts produced a loss on 

balance, such loss was shown separately on the liabilities side as ‘‘future payables under long-term 

construction contracts.’’ In the income statement, such losses were disclosed as cost of materials. 

Prepayments received on contracts were offset against ‘‘future receivables under l/t construction 

contracts’’ unless the total turned into a negative balance (i.e., a payable). 

Trade receivables and sundry current assets were recognized at par, duly allowing for any and all 

foreseeable risks. General allowances for doubtful accounts were eliminated when restating the 

separate financial accounts to conform to IAS. 

Cash & cash equivalents are valued at par. 

In accordance with IAS 37, the sundry accruals provide for all uncertain obligations to third parties. 

Provisions were made wherever current legal or economic commitments existed that resulted from past 

events and whose settlement was probable to entail an outflow of resources embodying economic 

benefits. Accruals were measured on the basis of best estimates. Discounting was waived for lack of 

materiality. 

Liabilities were recognized at the amounts repayable. 

Expenses and income of the periods were recognized when realized, regardless of the payment date. 

Revenues were recognized when the agreed product or service was provided or when realized early as 

required by the PoC method under IAS 11. Period-related income and expenses were only accounted 

for to the extent allocable to the period. 

F-15

(4.3) Currency translation 

Non-DM transactions were translated at their historical rates into deutsche mark (DM). Currency 

translation gains and losses were recognized in net income. Translation at the current closing rate 

under the terms if IAS 21 was waived for lack of materiality. 

(5) Comments on balance sheet lines 

(5.1) Fixed assets 

The following intangible assets were capitalized within fixed assets: 

9-30-2000 E21,446,955.55 

9-30-1999 E12,822,045.20 

9-30-1998 E4,479,005.86 

9-30-2000 9-30-1999 9-30-1998 

E E E 

Concessions, franchises, industrial-property and similar rights and 

assets as well as licenses thereto 4,554,282.41 2,182,357.28 883,186.32 

Prepayments on intangibles 1,270,960.32 579,284.00 177,976.41 

5,825,242.73 2,761,641.28 1,061,162.73 

Intangible assets mainly include acquired licenses and software, as well as internally created 

intangibles (development costs) according to IAS 38. 

Capitalized property, plant & equipment breaks down as follows: 

9-30-2000 9-30-1999 9-30-1998 

E E E 

Land and buildings 3,058,658.79 818,956.47 725,616.39 

Production plant and machinery 3,518,700.77 3,921,845.74 1,545,267.23 

Other plant, factory and office equipment 3,398,352.04 2,431,732.42 912,003.98 

Prepayments on PP&E, and construction in progress 4,662,885.52 2,114,063.80 234,955.53 

14,638,597.12 9,286,598.43 3,417,843.13 

In fiscal 1999/2000 land and buildings were written down by E30,297.37 to the recoverable amount 

according to IAS 36. 

In fiscal 1999/2000, government grants of E1,787,947.69 (up from E306,775.13) were received for 

capital expenditures for property, plant & equipment and deducted from cost as required by IAS 20. 

The leases for property, plant & equipment chiefly include noncapitalizable operating leases under the 

terms of IAS 17. In consolidation for the (combined) pro forma consolidated financial statements, one 

mobile crane within production plant and machinery was capitalized at E1,260,334.49 in fiscal 1998/ 

99. From the group’s viewpoint, this addition constitutes a lease subject to capitalization according to 

IAS 17.8. The crane is depreciated over eight years. The lease expenses (rents) were eliminated during 

consolidation in fiscal 1999/2000 at E404,876.51 and in fiscal 1998/99 at E134,958.78. 

The financial assets of E983,115.70 as of 9-30-2000 (9-30-1999: E773,805.49; 9-30-1998: E0.00) 

reflect the subsidiaries not included in the pro forma consolidation group, as well as the investee of 

Nordex GmbH, cf. Note (2). 

F-16

(5.2) Inventories 

9-30-2000 E13,903,752.35 

9-30-1999 E21,916,194.76 

9-30-1998 E16,560,921.90 

9-30-2000 9-30-1999 9-30-1998 

E E E 

Raw materials and supplies 27,785,126.16 29,741,689.59 14,170,865.73 

Work in process 8,189,596.97 11,403,473.02 2,966,961.15 

Prepayments made 9,745,945.40 4,755,606.68 4,434,790.57 

45,720,668.53 45,900,769.29 21,572,617.45 


13,903,752.35 21,916,194.76 16,560,921.90 

The raw materials and supplies substantially include Nordex GmbH’s inventories and, to a minor extent, 

Südwind GmbH’s and Borsig Rotortechnik GmbH’s. In 1999/2000, a major write-down of kE544.5 (up 

from kE521.5 in 1998/99 and kE146.2 in 1997/98) was charged for slow-moving, obsolete or those 

inventories of Nordex GmbH whose cost exceeded market prices. WIP refers to wind turbines under 

construction, as well as to intermediate input for project development, rights and infrastructure in 

connection with wind turbines for which no specific customer contract had been received as of the 

respective closing dates for the pro forma group accounts or whose contract costs were not reliably 

determinable. 

(5.3) Future receivables under I/t construction contracts 

9-30-2000 E35,062,530.25 

9-30-1999 E16,704,467.81 

9-30-1998 E1,072.303.40 

9-30-2000 9-30-1999 9-30-1998 

E E E 

Accumulated contract costs 103,100,967.36 75,566,421.45 13,203,469.79 

Earnings realized pro rata 4,632,278.07 6,704,105.19 2,577,511.54 

107,733,245.43 82,270,526.64 15,780,981.33 


35,062,530.25 16,704,467.81 1,072,303.40 

This caption covers work in process accounted for according to the PoC method of IAS 11 and breaks 

down into the contract costs accumulated by balance sheet date and the prorated contract earnings 

realized and determined according to the cost-to-cost method, as well as into contracts the revenues 

from which were not reliably measurable. Prepayments received (billings paid) were duly deducted from 

the future contract receivables. Contracts producing a net loss were shown as ‘‘future payables under 

l/t construction contracts,’’ cf. Note (5.8). 

F-17

(5.4) Receivables and other current assets 

9-30-2000 E78,184,608.11 

9-30-1999 E29,963,039.35 

9-30-1998 E6,651,923.01 

9-30-2000 9-30-1999 9-30-1998 

E E E 

Trade receivables 63,364,341.85 20,011,839.42 4,182,167.51 

Due from Babcock Borsig Group companies 11,807,700.37 9,110,075.31 630,549.79 

Receivables under investor/investee relations 8,781.48 0.00 255,645.94 

Sundry current assets 3,003,784.41 841,124.62 1,583,559.77 

78,184,608.11 29,963,039.35 6,651,923.01 

Specific bad-debt allowances of E534,554.70 were charged to trade receivables as of September 30, 

2000 (E642,428.09 at 9-30-1999, E406,681.56 at 9-30-1998). 

The accounts due from Babcock Borsig Group companies largely refer to receivables from Babcock 

Borsig AG, Oberhausen; BDAG Balcke-Dürr AG, Oberhausen; Nordex Ibérica Borsig Energy S.A., Spain; 

Nordex USA Inc., United States; and Nordex Hellas E.P.E., Greece. After netting the debit and credit 

balances, the intercompany account for the intragroup cash management funds provided by Babcock 

Borsig AG showed E2,094,762.84 in Taifun’s favor as of 9-30-1999. For details of intercompany 

payables, see Note (5.9). 

The receivables under investor/investee relations comprised as of 9-30-2000 accounts due from Xian 

Nordex Wind Turbine Co. Ltd., Xian, PR China, and as of 9-30-1998, from Nordvest A/S, Give, Denmark. 

The trade receivables, accounts due from Babcock Borsig Group companies and receivables under 

investor/investee relations all had a remaining term of one year or less in the periods under review. 

Breakdown of the sundry current assets: 

9-30-2000 9-30-1999 9-30-1998 

E E E 

Due from tax office 15,788.69 520,889.12 1,219,946.62 

Short-term loans 1,782,874.79 0.00 102,258.38 

Subsidies and investment grants 688,459.37 0.00 0.00 

Due from employees 71,773.94 65,864.48 41,746.85 

Insurance claims receivable 204,516.75 204,516.75 0.00 

All other 240,370.87 49,854.27 219,607.92 

3,003,784.41 841,124.62 1,583,559.77 

The sundry current assets as of 9-30-2000 and 9-30-1999 were due within one year while those as of 

9-30-1998 included E3,067.75 with a remaining term above one year. 

(5.5) Prepaid expenses & deferred charges 

9-30-2000 E1,316,310.03 

9-30-1999 E79,441.10 

9-30-1998 E43,665.28 

This caption principally covers prepayments for insurance premiums, assessed frontage, rents, and 

nonrecurring lease payments. 

F-18

(5.6) Equity 

9-30-2000 E16,013,985.79 

9-30-1999 E12,662,799.00 

9-30-1998 E7,146,341.80 

9-30-2000 9-30-1999 9-30-1998 

E E E 

Capital stock 306,561.92 231,561.92 206,561.92 

Additional paid-in capital earnings 6,047,049.08 6,047,049.08 6.047,049.08 

Pro forma net earnings 9,660,374.79 6,384,188.00 892,730.80 

16,013,985.79 12,662,799.00 7,146,341.80 

In the (combined) pro forma consolidated financial statements 1999/2000, 1998/99 and 1997/98, 

capital consolidation was waived in favor of adding up all equity. For reasons of comparability, no 

minority interests (Nordvest A/S) were shown—cf. Note (3)—since Nordvest A/S meantime directly holds 

a stake in Taifun AG. The pro forma net earnings disclosed within equity does not equal the net 

earnings after profit appropriation (retained earnings), cf. Note (1). 

For the movement of equity items, see the statement of changes in equity. 

(5.7) Accruals 

9-30-2000 E19,696,088.54 

9-30-1999 E8,203,124.51 

9-30-1998 E3,012,739.72 

Pro forma group 

carryover Utilization Release Addition 9-30-1998 

E E E E E 

Tax accruals 82,260.22 0.00 0.00 0.00 82,260.22 

Sundry accruals 

contract-related 1,465,351.74 510,919.67 869,059.11 1,920,162.71 2,005,535.67 

personnel-related 281,110.13 280,518.89 591.24 580,424.48 580,424.48 

remaining 48,189.26 42,725.83 5,463.43 344,519.35 344,519.35 

1,876,911.35 834,164.39 875,113.78 2,845,106.54 3,012,739.72 

10-1-1998 Utilization Release Addition 9-30-1999 

E E E E E 

Tax accruals 82,260.22 42,091.70 40,168.52 868,897.12 868,897.12 


contract-related 2,005,535.67 36,036.87 26,331.53 3,791,180.56 5,734,347.83 

personnel-related 580,424.48 444,496.27 30,090.80 1,100,715.73 1,206,553.14 

remaining 344,519.35 339,524.74 4,994.61 393,326.42 393,326.42 

3,012,739.72 862,149.58 101,585.46 6,154,119.83 8,203,124.51 


E E E E E 

Tax accruals 868,897.12 65,494.47 0.00 2,375,982.06 3,179,384.71 


contract-related 5,734,347.83 4,706,177.96 145,838.16 12,735,774.83 13,618,106.54 

personnel-related 1,206,553.14 1,097,180.65 3,535.07 1,373,268.93 1,479,106.35 

remaining 393,326.42 378,798.68 12,993.86 1,417,957.06 1,419,490.94 

8,203,124.51 6,247,651.76 162,367.09 17,902,982.88 19,696,088.54 

The tax accruals provide for accrued real-estate, municipal-trade and corporate-income tax liabilities. 

F-19

The sundry accruals, recognized in accordance with and required by IAS 37, provide for obligations that 

exist at the legal or economical level, whose settlement will probably result in an outflow of resources 

embodying economic benefits, and whose amount can be determined reliably. Discounting was waived 

for lack of materiality. The contract-related accruals refer to flat-rate and specific warranties, follow-up 

costs, and penalties, while the personnel-related accruals substantially provide for accrued vacation 

and leave, profit shares and Workers Compensation Insurance premiums. The remaining sundry 

accruals refer to liabilities accrued for invoices not yet received, for annual closing and audit costs, and 

for litigation risks. 

(5.8) Future payables under l/t construction contracts 

9-30-2000 E0.00 

9-30-1999 E590,097.30 

9-30-1998 E0.00 

This line reflects the losses from work in process accounted for according to the PoC method (IAS 11). 

(5.9) Liabilities 

9-30-2000 E114,585,916.31 

9-30-1999 E57,635,162.21 

9-30-1998 E18,561,330.15 

9-30-2000 9-30-1999 9-30-1998 

E E E 

Prepayments received 0.00 47,167.44 0.00 

Due to banks 180,262.11 58,562.98 0.00 

Trade payables 44,121,740.03 34,097,308.88 8,424,436.86 

Due to Babcock Borsig Group companies 63,152,135.44 19,117,281.81 9,355,579.51 

Sundry liabilities 7,131,778.73 4,314,841.10 781,313.78 

All substantial liabilities have a remaining term of one year or less. 

114,585,916.31 57,635,162.21 18,561,330.15 

In the years under review, the accounts due to Babcock Borsig Group companies were mostly owed to 

Babcock Borsig AG, Oberhausen; Flender AG, Bocholt; Babcock Giesserei GmbH, Oberhausen; and Loher 

AG, Ruhstorf. After netting the debit and credit balances, the intercompany clearing account for the 

intragroup cash management funds provided by Babcock Borsig AG showed net debts of 

E64,935,602.79 as of 9-30-2000 (E2,447,042.94 as of 9-30-1998). For details of intercompany 

receivables, see Note (5.4). 

Breakdown of sundry liabilities: 

9-30-2000 9-30-1999 9-30-1998 

E E E 

Fiscal taxes 4,291,115.30 1,822,205.97 109,220.87 

Social security taxes 295,527.83 255,920.98 97,633.16 

Due to employees 541,408.78 918,981.65 267,930.98 

Mobile crane capital lease 720,499.35 1,125,375.70 0.00 

License agreement 777,163.66 0.00 0.00 

EU grant 0.00 155,705.62 300,568.05 

Remaining items 506,063.81 36,651.18 5,960.72 

F-20 

7,131,778.73 4,314,841.10 781,313.78

(5.10) Deferred income 

9-30-2000 E165,251.93 

9-30-1999 E46,476.43 

9-30-1998 E0.00 

The deferred income is basically related to prepayments received for maintenance services, machine 

insurance contracts and warranties for a wind turbine, as well as from a purchasing pool. 

(5.11) Contingent liabilities 

No contingent liabilities existed in the periods under review. 

(5.12) Other financial obligations 

Breakdown of other financial obligations: 

Obligations under leases 

9-30-2000 E2,486,863.61 

9-30-1998 E3,167,720.69 

9-30-1997 E946,592.97 

Maturity Total 

C 1 year 1-5 years 

E E E 

as of 9-30-2000 308,225.24 2,178,638.37 2,486,863.61 

as of 9-30-1999 417,626.56 2,750,094.13 3,167,720.69 

as of 9-30-1998 149,501.98 797,090.99 946,592.97 

(6) Comments on the income statement 

(6.1) Net sales 

1999/00 E272,669,814.84 

1998/99 E223,742,801.56 

1997/98 E82,476,587.43 

For the breakdown and analysis of net sales by geographical markets (regions), reference is made to the 

segment report. In 1999/2000, net sales to Babcock Borsig Group companies amounted to 

E9,982,952.22 (E1,967,760.26 in 1998/99, E1,259,496.75 in 1997/98). 

Contrary to the separate HGB-based financial statements, net sales also include revenues from PoC 

accounting under IAS 11, cf. Note (5.3). 

(6.2) Change in inventories of WIP 

1999/00 (E3,213,876.05) 

1998/99 E8,436,511.87 

1997/98 E2,782,896.07 

This income statement line discloses the changes in inventories of work in process (goods/services) 

which are not accounted for according to the PoC method of IAS 11. 

(6.3) Work and material capitalized 

1999/00 E735,399.55 

1998/99 E444,670.55 

1997/98 E0.00 

This caption accounts for the production cost of internally manufactured wind turbine prototypes and 

rotor casting molds. 

F-21

(6.4) Other operating income 

Breakdown of major items of other operating income: 

1999/00 E1,973.699.62 

1998/99 E1,191,065.76 

1997/98 E897,484.15 

1999/00 1998/99 1997/98 

E E E 

Insurance benefits/refunds 567,191.42 248,091.63 151,982.20 

Foreign-exchange gains 425,875.74 31,250.33 58,249.18 

Gains from fixed-asset disposal 301,579.52 148,891.74 20,962.56 

Income from the compounding of receivables 210,868.08 1,538.58 28,692.73 

Expense allowances 96,269.83 186,978.57 240,073.70 

Income from sideline business 0.00 230,444.08 345,364.04 

Remaining items 371,915.03 343,870.83 52,159.74 

(6.5) Cost of materials 

Breakdown of the cost of materials: 

1,973,699.62 1,191,065.76 897,484.15 

1999/00 E203,777,275.90 

1998/99 E188,879,752.81 

1997/98 E66,593,673.11 

1999/00 1998/99 1997/98 

E E E 

Cost of raw materials & supplies 166,500,959.01 156,020,672.38 52,747,855.91 

Cost of services purchased 37,276,316.89 32,859,080.43 13,845,817.20 

203,777,275.90 188,879,752.81 66,593,673.11 

The cost of raw materials and supplies was mainly incurred for components, operating stores, freight 

charges, and energy. The cost of services purchased resulted from outsourced freights, changes in 

contract-related accruals, sales commissions, outsourced services for contract handling, and outside 

labor. 

(6.6) Personal expenses 

1999/00 E19,205,652.61 

1998/99 E12,750,745.61 

1997/98 E6,000,097.34 

1999/00 1998/99 1997/98 

E E E 

Wages and salaries 16,806,910.28 11,211,819,34 5,216,417.18 

Social security taxes, pension expense and related employee 

benefits 2,398,742.33 1,538,926.27 783,680.16 

19,205,652.61 12,750,745.61 6,000,097.34 

The annual average headcount in the pro forma group came to 523 in fiscal 1999/2000 (340 in fiscal 

1998/99, and 145 in fiscal 1997/98). As of 9-30-2000, the workforce comprised 558 employees (387 as 

of 9-30-1999, and 194 as of 9-30-1998). 

F-22

(6.7) Amortization/depreciation 

1999/00 E3,725,019.82 

1998/99 E2,096,032.78 

1997/98 E862,057.71 

1999/00 1998/99 1997/98 

E E E 

Intangible assets 1,377,556.82 644,461.56 206,648.27 

Land and buildings 151,013.11 41,220.03 36,203.32 

Production plant and machinery 912,682.75 532,375.89 315,792.79 

Other plant, factory and office equipment 1,283,767.14 877,975.30 303,413.33 

3,725,019.82 2,096,032.78 862,057.71 

As required by IAS 36, write-down to the recoverable amount was charged at E30,297.37 to land and 

buildings in fiscal 1999/2000. 

(6.8) Other operating expenses 

1999/00 E32,242,773.24 

1998/99 E20,088,169.96 

1997/98 E9,885,015.53 

1999/00 1998/99 1997/98 

E E E 

Outside and support services 4,292,133.11 369,042.37 435,357.63 

Insurance 2,558,146.31 1,307,131.64 309,499.40 

Travel 2,656,453.03 1,609,135.01 654,417.67 

Maintenance 1,983,008.01 135,508.41 167,011.05 

Legal, consultancy and auditing 1,609,578.48 340,828.05 175,530.14 

Commissions 2,904,614.03 5,328,648.72 3,225,518.99 

Equipment leases 1,445,024.30 420,855.25 170,350.15 

Costs allocated 1,463,067.93 875,306.76 303,194.35 

Postage, phone, telex 1,014,245.42 429,314.35 279,439.85 

Rents 1,161,752.12 484,072.12 355,038.92 

Allocations by Babcock Borsig Group companies 755,527.32 848,325.58 281,210.53 

Leasing rights 741,440.32 0.00 0.00 

Foreign exchange losses on receivables and payables 512,567.10 107,222.74 18,781.38 

Advertising 907,078.42 2,393,913.55 547,565.13 

Pro forma expenses of Taifun AG 2,690,000.00 2,387,000.00 1,882,000.00 

Receivables written off/down 422,102.06 207,039.08 135,767.25 

Losses on fixed-asset disposal 41,663.15 206,799.74 31,861.37 

Remaining items 5,084,372.13 2,638,026.59 912,471.72 

32,242,773.24 20,088,169.96 9,885,015.53 

F-23

(6.9) Net financial result 

1999/00 E(2,865,323.28) 

1998/99 E122,183.71 

1997/98 E(335,449.81) 

1999/00 1998/99 1997/98 

E E E 

Other interest and similar income 516,156.93 1,110,856.41 70,445.35 

Interest and similar expenses (3,381,480.21) (988,672.70) (405,895.16) 

(2,865,323.28) 122,183.71 (335,449.81) 

Most of the interest income and expenses originated from intercompany clearing account (credit/debit) 

balances with Babcock Borsig Group companies. In addition, the net financial result covers interest 

income from customers (trade receivables), bank interest, expenses for guaranty commissions, and 

interest expenses for suppliers and prepayments received. 

(6.10) Income taxes 

1999/00 E3,884,660.07 

1998/99 E3,616,756.60 

1997/98 E878,223.57 

The income taxes line substantially accounts for the current taxes of Nordex GmbH, as well as for 

imputed taxes—cf. Note (1)—and the recognition of deferred tax assets and liabilities, cf. Note (4.2.). 

Imputed and deferred taxes were calculated by using future tax rates. When computing the deferred 

taxes, a rate of 25% as stated in the statutory German Corporate Tax Reform 2001, plus 5.5% thereon 

as solidarity tax was used. Determination of deferred municipal trade taxes was predicated on the 

applicable municipal factors. 

F-24

A detailed breakdown of income taxes is shown in the table below. Deferred taxes are shown nonnetted. 

1999/00 1998/99 1997/98 

E E E 

Profit from ordinary operations 10,348,993.11 10,122,532.29 2,480,674.15 

Non-income tax (expenses)/refund (29,736.46) 24,476.49 (7,255.31) 

Earnings before taxes (EBT) 10,319,256.65 10,147,008.78 2,473,418.84 

Current tax expenses of the period (2,376,192.57) (869,930.44) 0.00 

Imputed tax (burden)/relief on net adjustment for group fee 

apportionment and P&L transfer (2,139,535.64) (703,692.55) 263,560.23 

Increase in deferred taxes for the period: 

application of the PoC method (75,724.37) (1,520,261.47) (790,216.94) 

accounting for public grants (15,941.57) 0.00 0.00 

accounting for assets under capital leases (99,881.38) (22,691.65) 0.00 

capitalization of development costs (232,438.40) (404,547.94) (140,686.56) 

elimination of change in general allowance for doubtful accounts (25,330.93) (55,062.05) (1,452.58) 

utilization of deferred tax assets from loss carryovers 0.00 (407,567.12) (268,525.39) 

change in future payables from l/t construction contracts (212,304.75) 0.00 0.00 

Decrease in deferred taxes for the period: 

(661,621.40) (2,410,130.23) (1,200,881.47) 

application of the PoC method 811,633.42 26,669.50 59,097.67 

accounting for public grants 445,038.68 123,889.09 0.00 

change in future receivables from l/t construction contracts 0.00 212,305.77 0.00 

elimination of change in general allowance for doubtful accounts 24,958.71 0.00 0.00 

elimination of intercompany profits 11,058.73 4,132.26 0.00 

1,292,689.54 366,996.62 59,097.67 

Income tax expense as per income statement (3,884,660.07) (3,616,756.60) (878,223.57) 

Total actual burden from current, imputed and deferred taxes 

in the fiscal year approx. 37% approx. 36% approx. 36% 

(6.11) Other taxes 

The other (i.e., non-income) taxes basically cover vehicle and real-estate taxes. 

1999/00 E29,736.46 

1998/99 (E24,476.49) 

1997/99 E7,255.31 

(7) Comments on the cash flow statement 

The cash flow statement shows the changes in the flow of funds during the years under review. In 

accordance with IAS 7, a distinction is made between the cash flows from (i.e. the net cash used in or 

provided by) operating, investing and financing activities. 

The cash & cash equivalents as shown in the cash flow statement comprises cash on hand and in bank. 

Current liabilities due to banks were deducted. Included in cash & cash equivalents were, moreover, 

debit and credit balances of the intercompany clearing account provided by Babcock Borsig AG for 

intragroup cash management purposes since such funds represent cash equivalents under the terms of 

IAS 7. Also included were interest receivables and payables. 

The indirect approach was adopted to determine the cash flow from operating activities. The changes 

in balance sheet lines ensue from the difference of each fiscal year’s closing balances versus the 

previous year. The cash flow from investing activities breaks down into cash outflows for expenditures 

for intangible assets, property, plant & equipment and financial assets, as well as into cash inflows 

from fixed-asset disposal. The cash flow from financing activities was provided by cash inflows from 

F-25

capital stock increases in the wake of the incorporation of Taifun AG, Borsig Rotortechnik GmbH, and 

Südwind Borsig Energy GmbH. Further cash used in financing activities involved cash outflows under 

the P&L transfer agreements and one cash dividend distributed by Nordex Planungs- und 

Vertriebsgesellschaft mbH prior to executing the P&L transfer agreement with Borsig Energy GmbH. 

On balance, the change in cash & cash equivalents in fiscal 1999/2000 was a decrease by 

E64,888,517.86 (in fiscal 1998/99 an increase by E4,266,255.41, and in fiscal 1997/98 a decrease of 

E3,614,964.26), mainly attributable to the utilization or redemption of funds from the aforesaid 

intercompany clearing account. 

(8) Details of related-party transactions 

At the legal and organizational levels, the Taifun Group was in the years under review part of Borsig 

Energy GmbH, Oberhausen, and the group of BDAG Balcke-Dürr AG, Oberhausen. First-tier parent is 

Babcock Borsig AG, Oberhausen. In the years under review, a controlling stake in all subsidiaries 

included in the (combined) pro forma consolidated financial statements was held by Borsig Energy 

GmbH, which, except for Nordex GmbH, owned 100% of the shares in said subsidiaries. In fiscal 1997/ 

98, Nordvest A/S, Give, Denmark, owned a 49% stake in Nordex GmbH and, in fiscal 1998/99 through 

1999/2000, one of 25%. This ownership structure is the reason why the Babcock Borsig Group 

companies were able to exercise a significant influence over the business and financial policy of Taifun 

AG’s pro forma subsidiaries. 

In addition, the integration of Taifun AG’s pro forma subsidiaries into the Babcock Group resulted in the 

intercompany accounts due from and to Babcock Borsig Group companies at the three balance sheet 

dates, cf. Notes (5.4), (5.9). Major transactions involved, in particular, the aforementioned intercompany 

clearing. Furthermore, the Taifun Group generated sales to Babcock Borsig Group companies in fiscal 

1999/2000 of E9,982,952.22 (E1,967,760.26 in fiscal 1998/99, and E1,259,496.75 in fiscal 1997/98). 

(9) Details of the boards of Taifun AG, Oberhausen 

Supervisory Board members appointed for Taifun AG’s short fiscal year ended September 30, 2000: 

– Dr.-Ing. Hans Fechner, Düsseldorf 

– Dipl.-Ökonom Ludger Kramer, Kempen 

– Dr. Siegfried Michelfelder, Gummersbach 

Taifun AG’s initial Executive Board members appointed by the Supervisory Board on August 25, 2000, 

and December 21, 2000: 

– Dipl.-Wirtsch.-Ing. Rudolf Schulz, Hamburg (as from December 21, 2000) 

– Dipl.-Oec. Michael von Cappeln, Krefeld (up to December 21, 2000) 

– Dr.-Ing. Dietmar Kestner, Essen 

– Carsten Risvig Pedersen, Brande, Denmark (as from December 21, 2000) 

(10) Segment report 

The Taifun Group’s business activities encompass the development, production and marketing of wind 

turbines. Apart from development and production, upstream project development services are 

rendered, the appropriate rights acquired, and the infrastructures created in order to install wind 

turbines on suitable sites and locations. Such activities require to be depicted in the primary segment 

report since the major risks and rewards originate therefrom, in contrast to the various geographical 

sales markets of Taifun AG, which form the secondary segment. 

F-26

Primary segment report 

The Wind Energy operations cannot be further subdivided into reasonable segments with discrete risks 

and returns, as required by IAS 14. Therefore, the primary segment report according to IAS 14 deals 

with the Taifun Group’s sole business segment, allocating to this segment long-term income and 

expenses in order to portray the Group’s performance. The report that follows includes, besides net 

sales, the change in inventories of work in process (goods/services), work and material capitalized and 

other income earned from operating activities. In addition, the interest income and interest expense 

were fully included in segment income/expense since within the Taifun Group these items are not 

attributable to financing activities, which is in accordance with IAS 14 and, by analogy, IAS 7—cf. Note 

(7). Major expenses allocated to the segment include the cost of materials, personnel expenses, 

amortization/depreciation, and other operations-related expenses, whereas any nonrecurring or 

nonperiodic items, below-the-line factors, tax expenses and tax income were not allocated to the 

segment. 

Major assets and liabilities not allocated to the segment include tax accruals, tax claims and tax debts, 

as well as deferred taxes. Any such other assets or liabilities as serve long-term financing purposes 

under the terms of IAS 14 and (by analogy) IAS 7—cf. Note (7)—and are not allocable to the segment do 

not exist. 

Wind Energy Unallocated Taifun Group 

1999/00 1998/99 1997/98 1999/00 1998/99 1997/98 1999/00 1998/99 1997/98 

E1,000 E1,000 E1,000 E1,000 E1,000 E1,000 E1,000 E1,000 E1,000 

SEGMENT REVENUE 271,079.41 234,199.85 85,721.99 271,079.41 234,199.85 85,721.99 

SEGMENT RESULT 9,723.54 9,917.53 2,161.66 9,723.54 9,917.53 2,161.66 

thereof amortization/depreciation of 

fixed assets 3,725.02 2,096.03 862.06 3,725.02 2,096.03 862.06 

EXTRAORDINARY FACTORS 625.45 205.00 319.01 625.45 205.00 319.01 

Income taxes 3,884.66 3,616.76 878.22 3,884.66 3,616.76 878.22 

Other taxes 29.74 (24.48) 7.26 29.74 (24.48) 7.26 

GROUP NET INCOME 6,434.60 6,530.25 1,595.20 

SEGMENT ASSETS 152,532.55 81,334.93 28,175.49 152,532.55 81,334.93 28,175.49 

thereof capital expenditures for 

fixed assets 15,471.76 10,743.63 2,134.02 

Deferred tax assets 552.99 137.96 0.00 552.99 137.96 0.00 

Other tax claims 15.79 520.89 1,219.95 15.79 520.89 1,219.95 

OPERATING ASSETS 153,101.33 81,993.78 29,395.44 

SEGMENT LIABILITIES 126,976.76 63,783.76 21,382.59 126,976.76 63,783.76 21,382.59 

Equity 16,013.99 12,662.80 7,146.34 16,013.99 12,662.80 7,146.34 

Tax accruals 3,179.38 868.90 82.26 3,179.38 868.90 82.26 

Deferred tax liabilities 2,640.08 2,856.12 675.03 2,640.08 2,856.12 675.03 

Current tax liabilities 4,291.12 1,822.20 109.22 4,291.12 1,822.20 109.22 

OPERATING CAPITAL 153,101.33 81,993.78 29,395.44 

Secondary segment report 

The Taifun Group sells its products on the following regional markets: 

1999/00 

Net sales 

1998/99 1997/98 

E1,000 E1,000 E1,000 

Germany 152,319.0 173,792.9 79,975.4 

Abroad 120,351.0 49,949.9 2,501.2 

No significant non-German branches exist as defined in IAS 14. 

272,670.0 223,742.8 82,476.6 

F-27

(11) Earnings per share 

For determining the earnings per share while ensuring comparability, the number of bearer shares of 

stock held in Taifun AG as parent as of December 14, 2000, by Borsig Energy GmbH, Oberhausen, and 

Nordvest A/S, Denmark, was retroactively used as basis for the fiscal years 1999/2000, 1998/99, and 

1997/98. 

1999/2000 1998/1999 1997/1998 

E E E 

Capital stock = number of shares of Taifun AG at Dec. 14, 2000 34,050,000.00 34,050,000.00 34,050,000.00 

Group net income 6,434,596.58 6,530,252.18 1,595,195.27 

EpS: earnings per E1 of Taifun AG’s capital stock 0.19 0.19 0.05 

Oberhausen, February 9, 2001 

sgd. Dipl.-Wirtsch.-Ing. 

Rudolf Schulz 

(Executive Board member) 

F-28 

sgd. Dr.-Ing. 

Dietmar Kestner 

(Executive Board member) 

sgd. 

Carsten Risvig Pedersen 

(Executive Board member)

F-29 

(Combined) fixed-asset analysis of the pro forma group 


Pro forma 

group 

carryover 

Additions 

pro forma 

Gross values Amortization/depreciation Net values 

Book 

transfers 

pro forma 

Disposals 

pro forma 

Balance at 

9-30-1998 

pro forma 

Pro forma 

group 

carryover 

Additions 

pro forma 

Book 

transfers 

pro forma 

Disposals 

pro forma 

Balance at 

9-30-1998 

pro forma 

Balance at 

9-30-1998 

pro forma 

Balance at 

9-30-1997 

pro forma 

E E E E E E E E E E E E 


Concessions, franchises, industrial-property and 

similar rights and assets, as well as licenses 

thereto 477,334.67 714,859.41 106,516.79 4,269.29 1,294,441.58 208,874.74 206,648.27 0.00 4,267.75 411,255.26 883,186.32 268,459.93 

Prepayments on intangibles 205,051.94 177,815.86 (106,516.79) 98,374.60 177,976.41 0.00 0.00 0.00 0.00 0.00 177,976.41 205,051.94 


682,386.61 892,675.27 0.00 102,643.89 1,472,417.99 208,874.74 206,648.27 0.00 4,267.75 411,255.26 1,061,162.73 473,511.87 

Land and buildings 903,313.07 16,121.32 0.00 0.00 919,434.39 157,614.68 36,203.32 0.00 0.00 193,818.00 725,616.39 745,698.39 

Production plant and machinery 2,593,902.44 238,640.89 0.00 0.00 2,832,543.33 971,483.31 315,792.79 0.00 0.00 1,287,276.10 1,545,267.23 1,622,419.13 

Other plant, factory & office equipment 

Prepayments on property, plant & equipment, and 

901,819.19 757,366.6 0.00 171,099.80 1,488,085.99 401,238.2 303,413.33 0.00 128,569.52 576,082.01 912,003.98 500,580.99 

construction in progress 63,049.41 229,213.25 0.00 57,307.13 234,955.53 0.00 0.00 0.00 0.00 0.00 234,955.53 63,049.41 


4,462,084.11 1,241,342.06 0.00 228,406.93 5,475,019.24 1,530,336.19 655,409.44 0.00 128,569.52 2,057,176.11 3,417,843.13 2,931,747.92 

Shares in unconsolidated group companies 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

5,144,470.72 2,134,017.33 0.00 331,050.82 6,947,437.23 1,739,210.93 862,057.71 0.00 132,837.27 2,468,431.37 4,479,005.86 3,405,259.79 

Low-value assets added, and immediately written off, within the 

fiscal year are deemed to have been disposed of in the same year.

F-30 

(Combined) fixed – asset analysis of the proforma group 


Balance at 

10-1-1998 

pro forma 

Additions 

pro forma 

Gross values Amortization/depreciation Net values 

Book 

transfers 

pro forma 

Disposals 

pro forma 

Balance at 

9-30-1999 

pro forma 

Balance at 

10-1-1998 

pro forma 

Additions 

pro forma 

Book 

transfers 

pro forma 

Disposals 

pro forma 

Balance at 

9-30-1999 

pro forma 

Balance at 

9-30-1999 

pro forma 

Balance at 

9-30-1998 

pro forma 



Concessions, franchises, industrial-property and 

similar rights and assets, as well as licenses 

thereto 1,294,441.58 1,983,647.01 0.00 41,543.57 3,236,545.01 411,255.26 644,461.56 0.00 1,529.09 1,054,187.73 2,182,357.28 883,186.32 

Prepayments on intangibles 177,976.41 401,307.59 0.00 0.00 579,284.00 0.00 0.00 0.00 0.00 0.00 579,284.00 177,976.41 

1,472,417.99 2,384,954.60 0.00 41,543.57 3,815,829.01 411,255.26 644,461.56 0.00 1,529.09 1,054,187.73 2,761,641.28 1,061,162.73 


Land and buildings 919,434.39 134,560.12 0.00 0.00 1,053,994.51 193,818.00 41,220.04 0.00 0.00 235,038.04 818,956.47 725,616.39 

Production plant and machinery 2,832,543.33 2,912,759.98 322.58 5,524.51 5,740,101.38 1,287,276.10 532,375.89 0.00 1,396.35 1,818,255.64 3,921,845.74 1,545,267.23 


Prepayments on property, plant & equipment, and 

1,488,085.99 2,658,114.72 0.00 947,340.91 3,198,859.80 576,082.01 877,975.3 0.00 686,929.93 767,127.38 2,431,732.42 912,003.98 

construction in progress 234,955.53 1,879,430.85 (322.58) 0.00 2,114,063.80 0.00 0.00 0.00 0.00 0.00 2,114,063.80 234,955.53 

5,475,019.24 7,584,865.67 0.00 952,865.42 12,107,019.49 2,057,176.11 1,451,571.23 0.00 688,326.28 2,820,421.06 9,286,598.43 3,417,843.13 


Shares in unconsolidated group companies 0.00 233,761.11 0.00 0.00 233,761.11 0.00 0.00 0.00 0.00 0.00 233,761.11 0.00 

Investments 0.00 540,044.38 0.00 0.00 540,044.38 0.00 0.00 0.00 0.00 0.00 540,044.38 0.00 

0.00 773,805.49 0.00 0.00 773,805.49 0.00 0.00 0.00 0.00 0.00 773,805.49 0.00 

6,947,437.23 10,743,625.76 0.00 994,408.99 16,696,653.99 2,468,431.37 2,096,032.79 0.00 689,855.37 3,874,608.79 12,822,045.20 4,479,005.86 



F-31 

(Combined) fixed-asset analysis of the pro forma group 


Balance at 

10-1-1999 

pro forma 

Additions 

pro forma 

Investment 

grant received 

in fiscal 

1999/2000 

Gross values Amortization/depreciation/write-down Net values 

Book 

transfers 

pro forma 

Disposals 

pro forma 

Balance at 

9-30-2000 

pro forma 

Balance at 

10-1-1999 

pro forma 

Additions 

pro forma 

Reduction in 

investment 

grant/book 

transfers 

Disposals 

pro forma 

Balance at 

9-30-2000 

pro forma 

Balance at 

9-30-2000 

pro forma 

Balance at 

9-30-1999 

pro forma 

E E E E E E E E E E E E E 


Concessions, franchises, industrialproperty 

and similar rights & assets, 

as well as licenses thereto 3,236,545.01 3,437,358.66 0.00 312,147.46 43,236.92 6,942,814.21 1,054,187.73 1,377,556.82 0.00 43,212.75 2,388,531.8 4,554,282.41 2,182,357.28 

Prepayments on intangibles 579,284.00 1,019,162.54 0.00 (327,486.22) 0.00 1,270,960.32 0.00 0.00 0.00 0.00 0.00 1,270,960.32 579,284.00 


3,815,829.01 4,456,521.20 0.00 (15,338.76) 43,236.92 8,213,774.53 1,054,187.73 1,377,556.82 0.00 43,212.75 2,388,531.80 5,825,242.73 2,761,641.28 

Land and buildings 1,053,994.50 309,202.02 (365,011.27) 2,500,204.29 60,277.99 3,438,111.55 235,038.03 151,013.11 0.00 6,598.38 379,452.76 3,058,658.79 818,956.47 

Production plant and machinery 5,740,101.38 2,358,865.48 (583,638.88) 108,960.05 3,035,306.51 4,588,981.52 1,818,255.64 946,768.50 (9,427.98) 1,685,315.41 1,070,280.75 3,518,700.77 3,921,845.74 


Prepayment on property, plant & 

equipment, and construction in 

3,198,859.81 2,813,030.98 (336,722.32) (71,196.19) 561,960.74 5,042,011.54 767,127.39 1,289,682.34 (30,572.97) 382,577.26 1,643,659.50 3,398,352.04 2,431,732.42 

progress 2,114,063.80 5,886,658.97 (815,207.86) (2,522,629.39) 0.00 4,662,885.52 0.00 0.00 0.00 0.00 0.00 4,662,885.52 2,114,063.80 

12,107,019.49 11,367,757.45 (2,100,580.33) 15,338.76 3,657,545.24 17,731,990.13 2,820,421.06 2,387,463.95 (40,000.95) 2,074,491.05 3,093,393.01 14,638,597.12 9,286,598.43 


Shares in unconsolidated group 

companies 233,761.11 19,247.18 0.00 0.00 30,677.51 222,330.78 0.00 0.00 0.00 0.00 0.00 222,330.78 233,761.11 

Investments 540,044.38 220,740.54 0.00 0.00 0 760,784.92 0.00 0.00 0.00 0.00 0.00 760,784.92 540,044.38 

773,805.49 239,987.72 0.00 0.00 30,677.51 983,115.70 0.00 0.00 0.00 0.00 0.00 983,115.70 773,805.49 

16,696,653.99 16,064,266.37 (2,100,580.33) 0.00 3,731,459.67 26,928,880.36 3,874,608.79 3,765,020.77 (40,000.95) 2,117,703.8 5,481,924.81 21,446,955.55 12,822,045.20 



INDEPENDENT AUDITOR’S CERTIFICATE 

As of December 14, 2000 (date of Commercial Register entry), the Wind Energy business segment was 

spun off by and from Borsig Energy GmbH, Oberhausen, a subsidiary of Ratingen-based BDAG Balcke- 

Dürr AG (Group of Babcock Borsig AG, Oberhausen) and contributed to Taifun AG, a subsidiary of 

Borsig Energy GmbH, Oberhausen (holding a stake of 80.49%). 

Partly, the operations of the Taifun Group were in the past conducted within legally independent 

entities, partly as unincorporated divisions of certain group companies of Borsig Energy GmbH, 

Oberhausen, and included in the group accounts of BDAG Balcke-Dürr AG, Ratingen. Taifun AG 

prepared (combined) pro forma consolidated financial statements for the three 12-month periods 

(fiscal years) ended September 30, 2000, 1999 and 1998, and presented such statements in a 

3-year summarized format that retroactively combines the entities now owned by Taifun AG. The 

accounting and other transactions are explained in greater detail in the notes to the (combined) pro 

forma consolidated financial statements of Taifun AG. 

For the periods under review, the (combined) pro forma consolidated financial statements of Taifun AG 

include apart from the Wind Energy business segment of Babcock Prozessautomation GmbH, 

Oberhausen, also Nordex Planungs- und Vertriebsgesellschaft mbH, Bad Essen; Südwind Energietechnik 

GmbH, Oberhausen; Borsig Rotortechnik GmbH, Rostock; and Nordex GmbH, Rerik. 

Previously, the operations of Babcock Prozessautomation GmbH, Oberhausen (‘‘BPA’’), comprised the 

two divisions (business segments) of Power Plants and Wind Energy. As of October 1, 2000, Power 

Plants was spun off and BPA with the remaining Wind Energy division contributed to Taifun AG, a 

company organized on August 25, 2000. 

Subsidiaries of Nordex GmbH, Rerik, were not included in the consolidation group since their impact on 

the Taifun Group’s financial position and results of operations was insignificant. According to IAS, 

another investee of Nordex GmbH, Rerik, was stated at amortized cost according to IAS as any 

influence on the investee’s business and financial policies could be safely ruled out under IAS terms. 

Except for Babcock Prozessautomation GmbH’s Wind Energy division, the operations of the Taifun 

Group were conducted in the past by legally independent companies, and these were included in the 

group accounts of BDAG Balcke-Dürr AG. The same procedure was adopted analogously and indirectly 

for the Wind Energy segment, viz. by including Babcock Prozessautomation GmbH, a BDAG Balcke Dürr 

AG Group company, as the latter’s unincorporated segment. 

The annual financial statements of the companies included in the 3-year presentation of the 

(combined) pro forma consolidated financial statements were prepared and audited in accordance with 

German Commercial Code provisions, whereupon, based on our audits, we issued our unqualified 

opinion on each. Such separate financial statements were restated to conform to IAS in order to 

formulate the (combined) pro forma consolidated financial statements on the basis of groupwide 

uniform accounting and valuation principles. Separate IAS-based segment financial statements were 

prepared for the Wind Energy segment of Babcock Prozessautomation GmbH. All companies were 

consolidated in the (combined) pro forma consolidated financial statements as of September 30, 2000/ 

1999/1998 in accordance with IASC rules mainly as follows and as described in greater detail in the 

notes thereto: 

The IAS require that initial capital consolidation be made as of the date of acquisition, which is defined 

as the date at which control over net assets and business operations of the companies included in the 

consolidation group actually passes to Taifun AG as transferee. According to current information, these 

prerequisites will be met in early 2001 only, which is substantially why capital consolidation was 

waived for the (combined) pro forma consolidated financial statements, also in conformity with the 

opinion of IDW, the German institute of sworn public auditors. Consequently, no goodwill amortization 

or release of badwill was disclosed in the (combined) pro forma consolidated financial statements, not 

even for comparative purposes. In the future IAS-based consolidated financial statements of Taifun AG, 

such expected goodwill amortization will burden the results of operations. In contrast, intercompany 

F-32

alances (receivables, payables, income, expenses, gains, losses) and intercompany profits were 

eliminated according to IAS. 

With a view to ensuring best practicable comparability of the (combined) pro forma consolidated 

financial statements with the future actual accounts of the Taifun Group, the group fees apportioned 

in each of the years under review were eliminated from net income and replaced by imputed future pro 

forma personnel and administrative expenses of Taifun AG. In the profit appropriation account below 

net income, such adjustments were reversed to develop pro forma net earnings. The P&L transfer 

agreements in force and effect in the fiscal years under review and the related cash outflows and 

equity decreases were not reversed when developing the (combined) pro forma consolidated financial 

statements lest the view of the financial position and results of operations be biased or turn untrue. 

Instead, in an effort to enhance interperiod comparability of the results of operations in the years 

under review, the profits or losses already transferred were carried over below net income to arrive at 

the pro forma group’s net earnings, duly accounting for the imputed taxes thereon. 

Taifun AG’s (combined) pro forma consolidated financial statements in the 3-year summarized 

presentation for the three fiscal years ended September 30, 2000/1999/1998, consist of pro forma 

balance sheets, pro forma income statements, pro forma statements of changes in equity, pro forma 

cash flow statements and the notes to such pro forma financial statements and are meant in an 

economically reasonable format to show the significant effects on the Taifun AG Group’s financial 

position, results of operations and cash flows, premised on the assumption that the spin-off had been 

effected as of October 1, 1997. However, the (combined) pro forma consolidated financial statements 

as herein presented do not necessarily provide information about the effects on the Taifun AG Group’s 

financial position, results of operations and cash flows that would or might actually have occurred in 

the periods under review if the events and transactions had actually happened or been made as of 

October 1, 1997. 

We audited the IAS-based (combined) pro forma consolidated financial statements as presented by 

Taifun AG in a 3-year format subsuming the fiscal years ended September 30, 2000/1999/1998. The 

preparation and contents of the (combined) pro forma consolidated financial statements are the 

responsibility of the Company’s Executive Board. 

Our responsibility is, based on our audit, to express an opinion on whether the subsumed 3-year 

presentation of the (combined) pro forma consolidated financial statements conforms with the 

approaches, procedures, assumptions and premises described in the notes thereto as well as, generally, 

with International Accounting Standards (IAS). 

We conducted our audit in accordance with German auditing regulations and with due regard to 

generally accepted standards on the audit of financial statements as established by IDW as well as, 

where applicable and appropriate, additionally to the International Standards on Auditing (ISA) of the 

International Federation of Accountants (IFAC). Said standards require that we plan and perform the 

audit to obtain reasonable assurance about whether, subject to the aforesaid procedures detailed in the 

notes, the (combined) pro forma consolidated financial statements in their subsumed 3-year 

presentation are free of any material misstatements. An audit includes examining, on a test basis, the 

evidence supporting the amounts and disclosures in the (combined) pro forma consolidated financial 

statements. An audit also includes assessing the accounting principles used, and significant estimates 

made, by the auditee’s legal representatives, as well as evaluating the overall presentation of the 

(combined) pro forma consolidated financial statements. We believe that our audit provides a 

reasonable basis for our opinion. 

F-33

It is our opinion that the (combined) pro forma consolidated financial statements as prepared by Taifun 

AG and presented in a subsumed 3-year format, which are in conformity with IAS, present in all 

material respects a fair view (as derived from the consolidated financial statements of BDAG Balcke- 

Dürr AG) of the financial position, the results of operations and the cash flows in the fiscal years of the 

business units and subsidiaries extracted from such BDAG consolidated financial statements, all subject 

and with regard to the approaches, procedures, assumptions and premises disclosed. 

Cologne, February 9, 2001 

F-34 

(Dr. Scheur) 

Wirtschaftsprüfer 

BDO Deutsche Warentreuhand 

Aktiengesellschaft 

Wirtschaftsprüfungsgesellschaft 

(Siebert) 

Wirtschaftsprüfer

MANAGEMENT REPORT 

FOR THE ABBREVIATED FISCAL YEAR 

FROM AUGUST 25 TO SEPTEMBER 30, 2000 

TAIFUN AG was formed on August 25, 2000, for the purpose of repackaging as a holding company the 

Balcke-Dürr Group’s Wind Energy operations. The Company’s incorporation results from its entry on 

September 19, 2000, in the Commercial Register of the Local Court of Oberhausen. 

In the short fiscal year under review, the Company did not yet engage in any operations. 

Consequently, no potentially ruinous risks are identifiable. 

Outlook: 

The first quarter of fiscal 2000/01 saw the inception of the Company’s activities as holding company of 

the Balcke-Dürr Group’s Wind Energy operations. In this context, the Company’s general meeting 

resolved on November 23, 2000, to raise the capital stock from E0.05 million by E34 million to E34.05 

million in exchange for contributions in kind. Under this noncash capital increase in exchange for 

altogether 34 million no-par shares of stock, Borsig Energy GmbH (a Balcke-Dürr AG subsidiary) 

contributed its shareholdings in the five Wind Energy operations, viz. Nordex GmbH, Südwind Borsig 

Energy GmbH, Nordex Automation GmbH, NPV Nordex Planungs- und Vertriebs GmbH and Borsig 

Rotortechnik GmbH, while Nordvest A/S, Denmark, contributed its minority interest in Nordex GmbH. 

The capital increase entry in the Commercial Register has been applied for and is still pending; the 

shareholdings will be contributed in due accordance with the postformation regulations of the German 

Stock Corporation Act (‘‘AktG’’). 

The Company has planned to go public in the spring of 2001 to fund its future growth; the Offering will 

probably be placed at the New Market of the Frankfurt/Main stock exchange. To this end, the 

Company’s capital stock will in spring 2001 be increased by an aggregate total E18 million against cash 

contributions while excluding the subscription right of previous stockholders. 

According to corporate plans, the new stock from this capital increase, plus part of the bearer shares of 

no-par stock existing at December 31, 2000, which represent a E1 share each in the capital stock, will 

be offered by a banking syndicate to institutional investors at a price established by book-building, in 

the Federal Republic of Germany in an initial public offering and, in several countries outside of 

Germany, by way of international private placement. In addition, the Company will apply for its entire 

capital stock to be admitted for public trading at the Regulated Market of the Frankfurt/Main stock 

exchange once trading at the New Market has commenced. 

Inter alia, the cash inflow expected by the Company from the Offering will be used to fund the further 

internal and external growth of the Nordex Group, certain developments of new, and enhancements of 

existing, products as well as the proposed reinforcement of the Nordex Group’s market position. 

Moreover, the proceeds would be applied to finance potential M&A transactions and strategic alliances, 

as well as to repay part of the Nordex Group’s liabilities to the Balcke-Dürr Group. 

In the new fiscal year, the Company will continue as a pure holding company. The necessary human 

resources, mainly for Finance, Personnel and Legal Affairs, will gradually be acquired. 

Oberhausen, December 6, 2000 

sgd. Dr. Kestner 

Executive Board member 

sgd. von Cappeln 


F-35

ANNUAL FINANCIAL STATEMENTS FOR THE ABBREVIATED 

FISCAL YEAR 


BALANCE SHEET 

Assets 


9-30-2000 8-25-2000 

DM ’000 DM ’000 

Due from banks 98 98 

Equity and liabilities 

Equity 

98 98 

9-30-2000 8-25-2000 

DM ’000 DM ’000 

Capital stock 98 98 

Net loss (3) 0 

Accruals 

Sundry accrued liabilities 3 0 

F-36 

95 

98 98

ANNUAL FINANCIAL STATEMENTS FOR THE ABBREVIATED 

FISCAL YEAR 


INCOME STATEMENT 

8-25 to 9-30-2000 

DM ‘000 

Sundry operating expenses –3 

Loss from ordinary operations –3 

Net loss for the period –3 

F-37

ANNUAL ACCOUNTS FOR THE ABBREVIATED FISCAL YEAR 


NOTES TO THE FINANCIAL STATEMENTS 

(I) General 

At the balance sheet date, the Company presented the size criteria of a small stock corporation under 

the terms of Art. 267(1) German Commercial Code (‘‘HGB’’) but has applied voluntarily the principles 

governing large corporations in accordance with Art. 267(3) HGB. 

The annual financial statements of TAIFUN AG for the short fiscal year from August 25 to September 

30, 2000, have been prepared according to the applicable HGB provisions. 

The figures stated in the balance sheet at 8-25-2000 correspond to the opening balance sheet. 

(II) Accounting and valuation methods 

The provision for the sundry accrued liabilities has been measured to adequately account for all 

identifiable risks and uncertain obligations. 

(III) Comments on the balance sheet 


The Company’s capital stock amounts to approx. DM 98,000 (E50,000) and is divided into 50,000 bearer 

shares of no-par stock at E1.00 each. 

Sundry accrued liabilities 

These cover accrued annual closing fees and expenses. 

(IV) Comments on the income statement 

Sundry operating expenses 

This line basically includes the annual closing fees and expenses. 

(V) Additional disclosures 

Workforce 

In the short period under review, the Company had no employees of its own. 

Boards 

Appointed as Supervisory Board members: 

Dr.-Ing. Hans Fechner, Düsseldorf, 

Dipl.-Ökonom Ludger Kramer, Kempen, 

Dr. Siegfried Michelfelder, Gummersbach. 

Appointed as Executive Board members: 

Dipl.-Oec. Michael von Cappeln, Krefeld 

Dr.-Ing. Dietmar Kestner, Essen 

Ownership 

All of the Company’s stock (100%) is held by Borsig Energy GmbH, Oberhausen. 

F-38

Group affiliation 

TAIFUN AG as well as Borsig Energy GmbH are group companies of Babcock Borsig AG, Oberhausen. 

Oberhausen, December 6, 2000 

sgd. Dr. Kestner 


sgd. von Cappeln 


F-39

AUDITOR’S OPINION 

We audited the annual accounts (including the accounting system) and management report prepared 

by TAIFUN AG, Oberhausen, for the abbreviated fiscal year from August 25 to September 30, 2000. The 

accounting and preparation of the annual accounts and management report in accordance with 

German Commercial Code regulations are the responsibility of the Company’s Executive Board. Our 

responsibility is, based on our audit, to express an opinion on the annual accounts (with due regard to 

the accounting system) and management report. 

We conducted our annual audit in accordance with the provisions of Art. 317 HGB and with due regard 

to generally accepted standards on the audit of financial statements as established by IDW, the 

Institute of Sworn Public Auditors in Germany. Those standards require that we plan and perform the 

audit to obtain reasonable assurance that any misstatement or fraud which has a material impact on 

the view of the net assets, financial position and results of operations as presented by the annual 

accounts in accordance with generally accepted accounting principles and by the management report 

is identified. When planning the audit procedures, knowledge and understanding of the Company’s 

business, its economic and legal environment as well as sources of potential errors are given due 

consideration. In view of the Company’s size and purpose, an audit includes examining, solely through 

various individual audit procedures, the evidence supporting the amounts and disclosures in the 

accounting and annual accounts. An audit also includes assessing the accounting principles used, and 

significant estimates made, by the Company’s Executive Board, as well as evaluating the overall 

presentation of the annual accounts and management report. We believe that our audit provides a 


Our audit did not result in any objections or exceptions. 

It is our opinion that the annual accounts, with due regard to accounting principles generally accepted 

in Germany, present fairly, in all material respects, the Company’s net assets, financial position and 

results of operations. The management report gives a true and fair view of the Company’s overall 

position and the risks inherent in its future development. 

Cologne, December 15, 2000 

F-40 

(Dr. Scheur) 





(Siebert) 

Wirtschaftsprüfer

Assets 

Pro forma CONSOLIDATED BALANCE SHEET 

according to IAS as of December 31, 2000, 

with statistical data as of December 31, 1999 

Note 

A. Fixed assets (5.1) 

Balance at Balance at 

12-31-2000 12-31-1999 

pro forma pro forma 

E E 

I. Intangible assets 

1. Concessions, franchises, industrial-property and similar rights 

and assets, as well as licenses thereto 4,575,407.64 2,289,905.16 

2. Pro forma goodwill 20,047,901.67 0.00 

3. Prepayments on intangibles 1,501,598.70 563,945.24 

II. Property, plant & equipment 

26,124,908.01 2,853,850.40 

1. Land and buildings 2,350,160.49 856,922.51 

2. Production plant and machinery 3,501,661.60 3,721,970.88 

3. Other plant, factory and office equipment 3,989,640.70 2,608,414.39 

4. Prepayments on property, plant & equipment, and construction 

in progress 4,853,098.21 2,542,898.02 

III. Financial assets 

14,694,561.00 9,730,205.80 

1. Shares in unconsolidated group companies 222,330.78 203,083.60 

2. Investments 760,784.92 540,044.38 

B. Current assets 

I. Inventories (5.2) 

983,115.70 743,127.98 

41,802,584.71 13,327,184.18 

1. Raw materials and supplies 31,515,937.27 18,476,025.78 

2. Work in process 14,314,883.74 26,596,677.61 

3. Prepayments made 10,151,460.83 7,628,474.87 

55,982,281.84 52,701,178.26 

less prepayments received (17,910,672.27) (5,559,368.70) 

38,071,609.57 47,141,809.56 

II. Future receivables under long-term construction contracts (5.3) 25,884,414.85 20,486,496.06 

III. Receivables and sundry current assets (5.4) 

1. Trade receivables 45,176,536.69 20,183,361.34 

2. Due from Babcock Borsig Group companies 10,449,516.35 1,960,313.72 

3. Sundry current assets 2,834,947.61 1,326,132.53 

58,461,000.65 23,469,807.59 

IV. Cash & cash equivalents 3,118,909.49 354,325.55 

125,535,934.56 91,452,438.76 

C. Prepaid expenses & deferred charges 1,635,373.58 15,157.00 

D. Deferred tax assets (6.7) 873,554.96 130,238.31 

169,847,447.81 104,925,018.25 

F-41

Equity and liabilities 

Note 

A. Equity (5.5) 

Balance at Balance at 

12-31-2000 12-31-1999 


E E 

I. Capital stock 34,050,000.00 256,561.92 

II. Additional paid-in capital 3,577,668.00 6,047,049.08 

III. Pro forma net earnings/(pro forma accumulated deficit) (493,258.53) 5,844,337.66 

B. Accruals (5.6) 

37,134,409.47 12,147,948.66 

1. Pension accruals 148,759.86 0.00 

2. Tax accruals 3,866,811.55 1,323,514.34 

3. Sundry accruals 16,433,430.51 8,929,836.24 

20,449,001.92 10,253,350.58 

C. Future payables under long-term construction contracts (5.7) 0.00 475,695.74 

D. Liabilities 

1. Due to banks 121,588.74 0.00 

2. Trade payables 29,044,981.71 44,633,897.29 

3. Due to Babcock Borsig Group companies (5.8) 74,451,697.00 33,117,424.40 

4. Sundry liabilities 5,354,659.80 2,181,128.31 

108,972,927.25 79,932,450.00 

E. Deferred income 511.29 57,895.62 

F. Deferred tax liabilities (6.7) 3,290,597.88 2,057,677.65 

F-42 

169,847,447.81 104,925,018.25

Pro forma CONSOLIDATED INCOME STATEMENT 


for the three months ended December 31, 2000 

with statistical data 


Note 

First Quarter First Quarter 

for Fiscal for Fiscal 

Year 2000/2001 Year 1999/2000 


E E 

Net sales (6.1) 63,003,701.96 28,045,088.78 

Change in inventories of work in process 6,125,286.76 15,193,204.59 

Total operating performance 69,128,988.72 43,238,293.37 

Other operating income (6.2) 526,210.68 309,607.35 

Cost of materials (6.3) 

cost of raw materials and supplies (40,328,659.31) (28,979,812.15) 

cost of services purchased (10,437,730.95) (6,028,352.76) 

Gross profit 18,888,809.14 8,539,735.81 

Personnel expenses (6.4) 

(a) wages and salaries (4,943,532.65) (3,276,731.22) 

(b) social security taxes (751,713.73) (729,943.00) 

Amortization of intangible assets and depreciation of property, 

plant & equipment (1,751,921.00) (530,925.87) 

Other operating expenses (6.5) (9,516,745.69) (4,995,913.87) 

Operating profit/(loss) 1,924,896.07 (993,778.15) 

Other interest and similar income 34,118.79 34,790.26 

Interest and similar expenses (954,118.90) (215,261.32) 

Net financial result (6.6) (920,000.11) (180,471.06) 

Profit/(loss) from ordinary operations 1,004,895.96 (1,174,249.21) 

Income taxes (6.7) 

current (687,763.33) (454,617.22) 

imputed 442,006.88 122,150.09 

deferred (329,948.95) 790,722.78 

Other taxes (8,918.17) (4,176.16) 

Quarterly net income/(loss) 420,272.39 (720,169.72) 

Adjustment for pro forma group fee apportionment and imputed 

taxes 652,493.13 550,349.91 

Profit transfer (243.52) (370,030.53) 

Pro forma profit carryover 9,660,374.79 6,384,188.00 

Elimination of pro forma profit carryover plus the subsidiaries’ 

quarterly net income/(loss) as of Dec. 31, 2000, due to pro 

forma capital consolidation (11,226,155.32) 0.00 

Pro forma net earnings/(pro forma accumulated deficit) (493,258.53) 5,844,337.66 

F-43

Pro forma CONSOLIDATED STATEMENT OF CASH FLOWS 


for the three months ended December 31, 2000, 



I. Operating activities 

First Quarter for 

Fiscal Year 

2000/2001 

pro forma 


Fiscal Year 

1999/2000 

pro forma 

E E 

Quarterly net income/(loss) 420,272.39 (720,169.72) 

Adjustment for pro forma group fee apportionment and imputed taxes 652,493.13 550,349.91 

Amortization/depreciation of fixed assets 1,751,921.00 530,925.87 

(Gains from)/Losses on fixed-asset disposal (24,487.56) 0.00 

Change in inventories of goods (24,167,857.22) (25,225,614.80) 

Change in future receivables from long-term construction contracts 9,178,115.40 (3,782,028.24) 

Change in receivables and sundry current assets 19,723,607.46 6,493,231.77 

Change in pension accruals 148,759.86 0.00 

Change in tax accruals 687,426.84 454,617.22 

Change in sundry accruals (83,273.32) 1,595,608.85 

Change in future payables from long-term construction contracts 0.00 (114,401.56) 

Change in liabilities (excl. intercompany clearing account and liabilities due to banks) (13,147,511.42) (2,773,633.91) 

Change in deferred tax assets (320,568.25) 7,716.93 

Change in deferred tax liabilities 650,517.20 (798,439.71) 

Change in prepaid expenses & deferred charges (319,063.54) 64,284.10 

Change in deferred income (164,740.64) 11,419.19 

Cash flow from operating activities (5,014,388.67) (23,706,134.10) 

II. Investing activities 

Cash inflow from the disposal of property, plant & equipment 896,182.84 86,407.68 

Cash outflow for capital expenditures for intangibles and property, plant and 

equipment (22,979,245.45) (1,122,472.53) 

Cash flow from investing activities (22,083,062.61) (1,036,064.85) 

III. Financing activities 

Cash inflow from increase in capital stock 33,743,438.08 25,000.00 

Cash inflow from transfer to additional paid-in capital (2,469,381.08) 0.00 

Change in pro forma net earnings due to pro forma capital consolidation (11,226,155.32) 0.00 

Cash dividend distributed by Nordex Planungs- und Vertriebsgesellschaft mbH (243.52) 0.00 

Profit transfer to Borsig Energy GmbH under P&L transfer agreements 0.00 (370,030.53) 

Cash flow from financing activities 20,047,658.16 (345,030.53) 

Change in cash & cash equivalents (7,049,793.12) (25,087,229.48) 

Cash & cash equivalents at beginning of period (62,481,684.65) 2,406,833.20 

Cash & cash equivalents at end of period (69,531,477.77) (22,680,396.28) 


F-44 

cash on hand and in bank 3,118,909.49 354,325.55 

intercompany clearing account credit/(debit) balances (72,528,798.52) (23,034,721.83) 

current liabilities due to banks (121,588.74) 0.00 

(69,531,477.77) (22,680,396.28)

Pro forma STATEMENT OF CHANGES IN EQUITY 


for the three months ended December 31, 2000, 



First Quarter for First Quarter for 

Fiscal Year Fiscal Year 

2000/2001 1999/2000 


E E 

Equity at beginning of fiscal year 16,013,985.79 12,662,799.00 


quarterly opening balance 306,561.92 231,561.92 

capital increase due to changeover to the euro (E) 2,438.08 0.00 

addition of the subsidiaries to Taifun AG by contribution in kind 34,000,000.00 0.00 

elimination due to pro forma capital consolidation of the subsidiaries to be included (259,000.00) 0.00 

addition from initial inclusion of Borsig Rotortechnik GmbH, Rostock, in the 

consolidation group 0.00 25,000.00 

quarterly closing balance 34,050,000.00 256,561.92 

Additional paid-in capital 

quarterly opening balance 6,047,049.08 6,047,049.08 

transfer to Taifun AG’s additional paid-in capital of share premiums from the 

contributions 3,577,668.00 0.00 

elimination due to pro forma capital consolidation of the subsidiaries to be included (6,047,049.08) 0.00 

quarterly closing balance 3,577,668.00 6,047,049.08 

Profit/loss carryover 

Pro forma net earnings as of September 30 9,660,374.79 6,384,188.00 

book transfer to pro forma net earnings (9,660,374.79) (6,384.188.00) 

quarterly closing balance 0.00 0.00 

Pro forma net earnings 

quarterly opening balance 9,660,374.79 6,384,188.00 

elimination of the subsidiaries’ pro forma profit carryover as of 12-31-2000 due to 

pro forma capital consolidation (9,503,162.99) 0.00 

elimination of the subsidiaries’ pro forma net income/loss as of 12-31-2000 due to 

pro forma capital consolidation (1,722,992.33) 0.00 

quarterly net income/(net loss) 420,272.39 (720,169.72) 

adjustment for pro forma group fee apportionment and imputed taxes 652,493.13 550,349.91 

profit transfer to Borsig Energy GmbH under P&L transfer agreements 0.00 (370,030.53) 

cash dividend distributed by Nordex Planungs- und Vertriebsgesellschaft mbH (243.52) 0.00 

quarterly closing balance (493,258.53) 5,844,337.66 

Equity at quarter-end as of December 31 37,134,409.47 12,147,948.66 

F-45

NOTES to the pro forma CONSOLIDATED INTERIM 

STATEMENTS 

with selected explanatory disclosures according to IAS 34 

for the 3-month period ended December 31, 2000 

(1) Group definition 

The Taifun Group, whose Oberhausen, Germany, based parent is Taifun AG, develops, manufactures and 

markets wind turbines. For details of the operations of the Taifun Group’s sole division, Wind Energy, 

reference is made to the segment report. 

In view of Taifun AG’s proposed IPO in fiscal 2000/01, we prepared (combined) pro forma consolidated 

financial statements for the fiscal years 1997/98, 1998/99, and 1999/2000 in accordance with the 

provisions of the International Accounting Standards (IAS). In connection with the applicable 

accounting obligations and in derogation of the de facto economic situation, we presented pro forma 

consolidated interim statements for the 3 months ended December 31, 2000, in accordance with IAS 

34. For comparative purposes, we used for the like-for-like (LFL) prior-year quarter (10-1 to 12-31- 

1999) figures based on statistical data. The pro forma consolidated interim statements for the 3-month 

period ended December 31, 2000 (‘‘First Quarter for Fiscal Year 2000/2001’’), conform in every material 

respect with the provisions of the International Accounting Standards. 

The prerequisites for preparing consolidated accounts under the terms of IAS 22 and 27 will not be met 

until early 2001 since this period only will see the inception of Taifun AG’s business operations. Until 

then, its subsidiaries are organizationally fully integrated in Borsig Energy GmbH and included in the 

group of BDAG Balcke-Dürr AG. 

The pro forma consolidated interim statements for the 3-month period ended December 31, 2000, were 

developed from the included companies’ separate annual accounts (restated according to IAS) with due 

regard to the necessary consolidation entries and to balance sheet continuity versus the (combined) 

IAS-based pro forma consolidated financial statements as of September 30, 2000. The financial 

statements, prepared in DM, were transformed into euros (E) at the final official rate of E1.00 = DM 

1.95583. The same approach was adopted to develop the accounting figures for the LFL quarter, viz. 

First Quarter for Fiscal Year 1999/2000. The recognition, disclosure and valuation rules required by IAS 

were applied, including the consistency principle. The accounting and valuation methods used in the 

pro forma consolidated interim statements were throughout the same as those adopted and applied by 

Taifun AG. The accounting and currency translation methods adopted for the (combined) pro forma 

consolidated financial statements for the fiscal year ended September 30, 2000, were consistently 

applied to these interim accounts. New insights acquired by the date the pro forma consolidated 

interim statements were prepared are duly reflected. 

With a view to optimizing comparability with the future actual situation within the Taifun Group 

(meantime the Nordex Group), the cost allocations and apportioned group fees charged in the 3-month 

period under review to the subsidiaries were eliminated from quarterly net income and replaced by 

imputed future personnel and administrative expenses of today’s Nordex AG (formerly Taifun AG), duly 

accounting for the tax effects. In order to prevent fictitious changes in the pro forma group equity, the 

income statements were adjusted in the lines after quarterly net income by inserting an item headed, 

‘‘adjustment for pro forma group fee apportionment and imputed taxes.’’ 

The subsidiaries’ prorated P/L carryovers from the (combined) IAS-based pro forma consolidated 

financial statements and their pro rata temporis (p.r.t.) results for the quarter ended December 31, 

2000, were eliminated under the pro forma capital consolidation within the profit appropriation 

account of the income statement where the quarterly net income was developed into the pro forma 

quarterly net earnings. The pro forma net earnings do not represent the retained earnings under the 

terms of Art. 268(19 German Commercial Code (‘‘HGB’’). Goodwill amortization has not been disclosed, 

cf. Note (3) hereinbelow. 

F-46

The restatements made to reconcile the financial-accounting net income in the interim accounts as of 

December 31, 2000, and the figures as of December 31, 1999, to each period’s pro forma group net 

income and pro forma net earnings of the group according to IAS present the following picture: 


Fiscal Year 

2000/2001 


Fiscal Year 

1999/2000 

E E 

Preconsolidation quarterly net income/(loss) acc. to HGB (408,274.32) 1,244,048.68 

Development costs capitalized according to IAS 38 853,763.66 115,418.68 

Recognition of public grants according to IAS 20 18,030.13 0.00 

Application of the PoC method according to IAS 11 839,745.61 (2,499,950.98) 

Elimination of general allowances for doubtful accounts 0.00 (6,525.74) 

Release of future payables under l/t construction contracts 0.00 114,401.56 

Provision for deferred taxes according to IAS 12 (329,948.95) 790,722.78 

Accounting in a group dimension for capital leases according to IAS 17 61,833.64 61,833.64 

Elimination of intercompany profits according to IAS 27 37,615.74 10,231.57 

Adjustment for group fee apportionment for improved comparability, net (1,094,500.00) (672,500.00) 

Imputed taxes on the net of adjusted group fee apportionment and P&L transfer 0.00 122,150.09 

Imputed taxes on adjustment for group fee apportionment 442,006.88 0.00 

Pro forma quarterly group net income/(loss) acc. to IAS 420,272.39 (720,169.72) 

Transfer of HGB-based profit to Borsig Energy GmbH under P&L transfer 

agreements (243.52) (370,030.53) 

Elimination of imputed taxes and group fee apportionment 652,493.13 550,349.91 

IAS profit carryover from prior year 9,660,374.79 6,384,188.00 

Elimination of the subsidiaries’ IAS profit carryover and of their quarterly net 

income/loss as of 12-31-2000 due to pro forma capital consolidation (11,226,155.32) 0.00 

Pro forma group net earnings/(accumulated deficit) according to IAS (493,258.53) 5,844,337.66 

(2) Consolidation group 

For comparison, the pro forma consolidated interim statements for the 3-month period ended 

December 31, 2000, include besides Taifun AG (today: Nordex AG) as the future parent all subsidiaries 

over which Taifun AG can exercise a controlling influence as and when the group structure has de 

facto materialized in early 2001. 

In the quarters ended December 31, 2000 and 1999, the group of consolidated companies comprised 

the following German subsidiaries: 

Share capital Share capital 

12-31-2000 12-31-1999 

E E 

Taifun AG (today Nordex AG), Oberhausen 34,050,000.00 — 

Nordex Energy GmbH, Ostseebad Rerik (formerly Nordex GmbH) 54,000.00 53,174.36 

NPV Planung und Vertrieb GmbH, Bad Essen (formerly Nordex Planungs- und 

Vertriebsgesellschaft mbH) 52,000.00 51,129.19 

Nordex Automation GmbH, Oberhausen (formerly Babcock Prozessautomation GmbH) 103,000.00 102,258.37 

Südwind Energy GmbH, Oberhausen (formerly Südwind Borsig Energy GmbH) 25,000.00 25,000.00 

Nordex Rotor GmbH, Rostock (formerly Borsig Rotortechnik GmbH) 25,000.00 25,000.00 

The consolidation group changed versus the LFL quarter 1999 through the addition of Taifun AG, which 

was organized on August 25, 2000. The interperiod comparability is mainly affected by the acquisition 

by Taifun AG of the stakes in its future subsidiaries from the legal predecessors Borsig Energy GmbH 

and Nordvest A/S. In its interim accounts as of December 31, 2000, Taifun AG shows financial assets of 

E37,580,106.07. In all other respects, Taifun AG’s addition to the consolidation group did not materially 

bias comparability. 

F-47

Taifun AG’s capital stock of E34,050,000.00, divided into 34,050,000 no-par shares at E1.00 each, was 

held at December 31, 2000, by the following owners: 

12-31-2000 

E % 

Borsig Energy GmbH, Oberhausen 27,407,500.00 80.49 

Nordvest A/S, Give, Denmark 6,642,500.00 19.51 

34,050,000.00 100.00 

Nordex Energy GmbH (formerly Nordex GmbH) showed the following shares in subsidiaries (group 

companies) as of December 31, 2000 and 1999: 

Name 

Registered 

office 

Book value 


12-31-2000 Interest in 

Book value 


12-31-1999 Interest in 

E1,000 (= kE) % kE % 

Nordex Ibérica Borsig Energy S.A. Barcelona 15 100 15 100 

Nordex Omnical Energy Services 

(Shanghai) Co. Ltd. Shanghai 188 100 188 100 

Nordex Hellas E.P.E. Greece 18 100 — — 

Nordex USA Inc. United States 1 100 — — 

In the 3-month period ended December 31, 1999, the stake in Ekter Eoliki A.E., Athens, was divested. 

For lack of materiality, Nordex Energy GmbH’s aforesaid non-German subsidiaries were not 

consolidated, which is in accordance with IASC Framework paragraph 12 in conjunction with 

paragraphs 29, 30. Said foreign subsidiaries are responsible for handling Nordex Energy GmbH 

contracts and providing local technological support. The shares in these subsidiaries were accounted 

for at amortized cost in accordance with IAS 39.4 and IAS 39.66/67. 

In addition, Nordex Energy GmbH has held since fiscal 1998/99 a 40% equity interest in XIAN Nordex 

Wind Turbine Co. Ltd., Xian, PR China. Since the controlling shareholder is the Chinese government and 

this investee is hence not controlled by Nordex Energy GmbH as defined in IAS 27.12, the investment 

has neither been included in the consolidation group, nor has it been stated at equity under the terms 

of IAS 28 since Nordex Energy GmbH does not have the power to participate in this investee’s financial 

and operating policy decisions. Therefore, the investee is carried at amortized cost pursuant to the 

financial instruments rules of IAS 39.4 and IAS 39.66/67. As of December 31, 2000 and 1999, the 

investment book value amounted to kE760.8 and kE539.9, respectively. 

The direct-control and profit and loss transfer agreements existing in the fiscal years 1997/98, 1998/99 

and 1999/2000 between the then shareholder Borsig Energy GmbH and the subsidiaries NPV Planung 

und Vertrieb GmbH (formerly Nordex Planungs- und Vertriebsgesellschaft mbH), Nordex Automation 

GmbH (formerly Babcock Prozessautomation GmbH, Wind Energy division), Südwind Energy GmbH 

(formerly Südwind Borsig Energy GmbH) and Nordex Rotor GmbH (formerly Borsig Rotortechnik GmbH) 

will be terminated in fiscal 2000/01 with civil-law effect as from October 1, 2000. Corresponding 

agreements will be made by and between today’s Nordex AG and the consolidated subsidiaries and 

under these, Nordex AG will economically be entitled to the annual P/L of its subsidiaries as from 

October 1, 2000. 

The intercompany receivables, payables, income, gains, losses and expenses from P&L transfer 

generated at the level of the subsidiaries and included in the pro forma consolidated interim 

statements were eliminated in consolidation. 

The fiscal year of Taifun AG and all its consolidated subsidiaries is a non-calendar year that commences 

October 1 and closes September 30, 2000. 

F-48

(3) Consolidation procedures 

According to IAS 27 and 22, initial capital consolidation is governed by the date of acquisition, which, 

pursuant to IAS 22.20, is the date at which control of the net assets and operations of consolidatable 

subsidiaries is effectively transferred to Taifun AG as acquirer and transferee. 

Since today’s Nordex AG (formerly Taifun AG) will not start up its operations before early 2001 and its 

subsidiaries will until then remain fully integrated at the organizational level with Borsig Energy GmbH 

and the BDAG Balcke-Dürr AG Group, no effective group structure, and hence no control of the 

contributed subsidiaries, existed in 2000 despite the agreements consummated in November/December 

2000. 

In the pro forma consolidated interim statements, capital consolidation was effected pro forma 

(i) to ensure that the equity as of December 31, 2000, is best comparable to that at September 30, 2000, 

and (ii) lest the group’s net assets should be overstated as of December 31, 2000. For such pro forma 

capital consolidation, the equity interests (financial assets) of, acquired with legal effect as of 12-14- 

2000 by, Taifun AG in the subsidiaries included in the pro forma consolidation group were offset 

against such subsidiaries’ IAS-based equity as of January 1, 2001, the resulting difference being shown 

as pro forma goodwill, which was thus determinable on a best-estimate basis. Since, when the 

individual subsidiaries were transferred and contributed to Taifun AG, this nonmonetary transaction 

constituted merely a restructuring process within the Babcock Borsig Group, the investment book 

values carried in Taifun AG’s balance sheet underlay not only pro forma capital consolidation but also 

the determination of pro forma goodwill. No goodwill amortization was charged since the group 

structure was not created until early 2001. On this basis and assuming a 15-year period of benefit, the 

anticipated annual goodwill amortization will amount to kE1,336.5. 

In consolidation, all receivables and payables among consolidated subsidiaries were mutually offset, 

without producing any foreign exchange gains or losses. 

In First Quarter for Fiscal Year 2000/2001, no intercompany profits were made, whether within 

inventories or in the form of prorated profits realized according to the percentage-of-completion 

method. The accounting for capital leases according to IAS 17 (from the group’s vantage point) resulted 

in First Quarter for Fiscal Year 2000/2001 and First Quarter for Fiscal Year 1999/2000 each in income of 

kE61.9. 

Moreover, all expenses and income originating from intragroup transfers of goods/services and from 

intercompany allocations and intragroup P&L transfers were all mutually netted in consolidation, cf. 

Note (2). 

In addition, the external group fees apportioned and charged in the quarters under review were in 

consolidation eliminated from quarterly net income and replaced by imputed future personnel and 

administrative expenses of today’s Nordex AG, duly accounting for the imputed tax effects, cf. Note (1). 

(4) General accounting and valuation details 

(4.1) Classification 

The classification rules of Art. 266 HGB (after adjustment to specific IAS disclosure requirements) were 

applied for preparing the IAS-based balance sheet. The income statement according to IAS is presented 

in the full-cost format in analogy to the classification provisions of Art. 275(2) HGB. Major deviations 

from the HGB-oriented disclosure format are, in particular, attributable to the derivation from IASbased 

quarterly net income of pro forma net earnings, cf. Note (1). 

(4.2) Accounting and valuation methods 

The accounting, valuation and currency translation methods underlying the (combined) pro forma 

consolidated statements 1997/98, 1998/99 and 1999/2000 were consistently applied when preparing 

the pro forma consolidated interim statements for the quarter ended December 31, 2000. 

F-49

(5) Comments on selected balance sheet lines 

(5.1) Fixed assets 

Breakdown of intangibles within fixed assets: 

12-31-2000 E41,802,584.71 

12-31-1999 E13,327,184.18 

12-31-2000 12-31-1999 

E E 

Concessions, franchises, industrial-property and similar rights 4,575,407.64 2,289,905.16 

Pro forma goodwill 20,047,901.67 0.00 

Prepayments on intangibles 1,501,598.70 563,945.24 

26,124,908.01 2,853,850.40 

Intangible assets include development costs (less amortization) of E3,015,290.64 as of December 31, 

2000, under the terms of IAS 38. The intangible assets total at December 31, 2000, soared from the 

level of the (combined) pro forma consolidated statements 1997/98, 1998/99 and 1999/2000 due to 

the disclosure of a pro forma goodwill, which was developed as shown below: 


Energy 

GmbH 

IAS 

12-31-2000 

NPV Planung 

und Vertrieb 

GmbH 

IAS 

12-31-2000 


Automation 

GmbH 

IAS 

12-31-2000 

Südwind 

Energy 

GmbH 

IAS 

12-31-2000 


Rotor 

GmbH 

IAS 

12-31-2000 

Total 

IAS 

12-31-2000 

E E E E E E 

Financial assets at book 

value 16,693,065.74 5,948,177.07 14,850,830.04 63,033.60 24,999.62 37,580,106.07 

Share capital 54,000.00 52,000.00 103,000.00 25,000.00 25,000.00 259,000.00 

Additional paid-in capital 6,047,049.08 0.00 0.00 0.00 0.00 6,047,049.08 

Net earnings/(acc. deficit) 12,046,494.43 62,936.47 (625,521.13) 102,743.02 (360,497.47) 11,226,155.32 

Equity 18,147,543.51 114,936.47 (522,521.13) 127,743.02 (335,497.47) 17,532,204.40 

Goodwill/(badwill) (1,454,477.77) 5,833,240.60 15,373,351.17 (64,709.42) 360,497.09 20,047,901.67 

Based on a period of benefit of 15 years, annual goodwill amortization amounts to kE1,336.5. 

Breakdown of capitalized property, plant and equipment: 

12-31-2000 12-31-1999 

E E 

Land and buildings 2,350,160.49 856,922.51 

Production plant and machinery 3,501,661.60 3,721,970.88 

Other plant, factory and office equipment 3,989,640.70 2,608,414.39 

Prepayments on PP&E, construction in progress 4,853,098.21 2,542,898.02 

14,694,561.00 9,730,205.80 

For capital expenditures for property, plant and equipment in First Quarter for Fiscal Year 2000/2001, 

public grants of E18,030.13 were received and, in accordance with IAS 20, deducted from cost. 

As of December 31, 2000, a leased mobile crane was shown as capitalized since from the group’s 

vantage point, the transaction is a capital lease. The rents, which were expensed in the separate 

statements at E101,219.09 (unchanged versus First Quarter for Fiscal Year 1999/2000), were 

consequently eliminated in the pro forma consolidated interim statements for the quarter ended 


F-50

(5.2) Inventories 

12-31-2000 E 38,071,609.57 

12-31-1999 E47,141,809.56 

12-31-2000 12-31-1999 

E E 

Raw materials and supplies 31,515,937.27 18,476,025.78 

Work in process (WIP) 14,314,883.74 26,596,677.61 

Prepayments made 10,151,460.83 7,628,474.87 

55,982,281.84 52,701,178.26 


38,071,609.57 47,141,809.56 

The raw materials and supplies as of December 31, 2000, substantially include Nordex Energy GmbH’s 

inventories and, to a minor extent, Südwind Energy GmbH’s and Nordex Rotor GmbH’s. WIP refers to 

wind turbines under construction, as well as to intermediate input for project development, rights and 

infrastructure in connection with wind turbines for which no specific customer contract had been 

received as of the respective closing dates for the quarterly pro forma consolidated balance sheets or 

whose contract costs were not reliably determinable. 

(5.3) Future receivables under I/t construction contracts 

12-31-2000 E25,884,414.85 

12-31-1999 E20,486,496.06 

12-31-2000 12-31-1999 

E E 

Accumulated contract costs 99,816,686.52 64,332,264.50 

Earnings realized pro rata 5,438,926.82 4,239,175.08 

105,255,613.34 68,571,439.58 


25,884,414.85 20,486,496.06 

This caption covers work in process accounted for according to the PoC method of IAS 11 and breaks 

down into the contract costs accumulated by the interim balance sheet date and the prorated contract 

earnings realized and determined according to the cost-to-cost method, as well as into contracts the 

revenues from which were not reliably measurable. Prepayments received (billings paid) were duly 

deducted from the future contract receivables. Contracts producing a net loss were shown as ‘‘future 

payables under l/t construction contracts,’’ cf. Note (5.7). 

(5.4) Receivables and sundry current assets 

12-31-2000 E58,461,000.65 

12-31-1999 E23,469,807.59 

12-31-2000 12-31-1999 

E E 

Trade receivables 45,176,536.69 20,183,361.34 

Due from Babcock Borsig Group companies 10,449,516.35 1,960,313.72 

Sundry current assets 2,834,947.61 1,326,132.53 

58,461,000.65 23,469,807.59 

The accounts due from Babcock Borsig Group companies refer to those companies which are not 

included in the Taifun consolidation group and mainly reflect intercompany trade transactions. 

F-51

(5.5) Equity 

12-31-2000 E37,134,409.47 

12-31-1999 E12,147,948.66 

12-31-2000 12-31-1999 

E E 

Capital stock 34,050,000.00 256,561.92 

Additional paid-in capital 3,577,668.00 6,047,049.08 

Pro forma net earnings/(accumulated deficit) (493,258.53) 5,844,337.66 

37,134,409.47 12,147,948.66 

In the pro forma consolidated statements as of December 31, 2000, capital consolidation was effected 

pro forma for comparability reasons, cf. Note (3). For the movement of equity items, see the statement 

of changes in equity. 

(5.6) Accruals 

12-31-2000 E20,449,001.92 

12-31-1999 E10,253,350.58 


E E E E E 

Tax accruals 868,897.12 0.00 0.00 454,617.22 1,323,514.34 


contract-related 5,734,347.83 267,405.65 0.00 2,269,102.59 7,736,044.77 

personnel-related 1,206,553.14 525,124.48 31,131.54 160,238.34 810,535.46 

remaining 393,326.42 21,830.12 0.00 11,759.71 383,256.01 

8,203,124.51 814,360.25 31,131.54 2,895,717.86 10,253,350.58 


E E E E E 

Pension accruals 0.00 0.00 0.00 148,759.86 148,759.86 

Tax accruals 3,179,384.71 0.00 442,807.90 1,130,234.74 3,866,811.55 


contract-related 13,618,106.54 3,510,381.82 127,000.00 2,726,788.05 12,707,512.77 

personnel-related 1,479,106.35 537,199.90 25,053.30 897,056.84 1,813,909.99 

remaining 1,419,490.94 69,642.03 0.00 562,158.84 1,912,007.75 

19,696,088.54 4,117,223.75 594,861.20 5,464,998.33 20,449,001.92 

The tax accruals provide for accrued real-estate, municipal-trade and corporate-income tax liabilities. 

The sundry accruals, recognized in accordance with and required by IAS 37, provide for obligations that 

exist at the legal or economical level, whose settlement will probably result in an outflow of resources 

embodying economic benefits, and whose amount can be determined reliably. Discounting was waived 

for lack of materiality. The contract-related accruals refer to flat-rate and specific warranties, follow-up 

costs, and penalties, while the personnel-related accruals substantially provide for accrued vacation 

and leave, profit shares and Workers Compensation Insurance premiums. The remaining sundry 

accruals refer to liabilities accrued for invoices not yet received, for annual closing and audit costs, 

Taifun AG’s IPO costs of kE223, and litigation risks. A letter of release was obtained for certain 

litigation risks. 

F-52

(5.7) Future payables under l/t construction contracts 

12-31-2000 E0.00 

12-31-1999 E475,695.74 

The line reflects the losses from work in process at December 31, 1999, accounted for according to the 

PoC method (IAS 11). 

(5.8) Due to Babcock Borsig Group companies 

12-31-2000 E74,451,697.00 

12-31-1999 E33,117,424.40 

12-31-2000 12-31-1999 

kE kE 

Borsig Energy GmbH 82.8 90.5 

Babcock Borsig AG 72,528.8 23,033.2 

BDAG Balcke-Dürr Aktiengesellschaft 43.0 281.2 

Flender AG 0 3,271.8 

Babcock Giesserei GmbH 593.1 1,899.4 

Loher AG 0 1,972.6 

Omnical GmbH 771.5 1,748.1 

Babcock Versicherungs Vermittlungs GmbH 7.7 725.5 

Other 424.8 95.1 

74,451.7 33,117.4 

The accounts due to Babcock Borsig Group companies substantially reflect the debit balance of funds 

made available by Babcock Borsig AG through the intercompany clearing account. As of December 31, 

2000, the clearing account debit balance came to kE72,528.8 (up from kE23,033.2 at December 31, 

1999). 

(5.9) Contingent liabilities 

No contingent liabilities existed in the periods under review. 

(5.10) Other Financial Obligations 

Breakdown of the other financial obligations: 

12-31-2000 2,535,661.06 

12-31-1999 2,665,293.13 

Maturity 

1 year 1-5 years Total 

kE kE kE 

Obligations under leases 



F-53

(6) Comments on the income statement 

(6.1) Net sales 

First Quarter for Fiscal Year 2000/2001 E63,003,701.96 


For the breakdown and analysis of net sales by geographical markets (regions), reference is made to the 

segment report. 

Contrary to the separate HGB-based financial statements, net sales also include revenues from PoC 

accounting under IAS 11, cf. Note (5.3). 

(6.2) Other operating income 

First Quarter for Fiscal Year 2000/2001 E526,210.68 


The other operating income was substantially derived from costs billed, exchange rate differences, 

gains from fixed-asset disposal, release of accruals, and insurance benefits/indemnities. 

(6.3) Cost of materials 

Breakdown: 



First Quarter 

for Fiscal 

Year 2000/2001 

First Quarter 

for Fiscal 

Year 1999/2000 

E E 

Cost of raw materials and supplies 40,328,659.31 28,979,812.15 

Cost of services purchased 10,437,730.95 6,028,352.76 

50,766,390.26 35,008,164.91 

The cost of raw materials and supplies was mainly incurred for components, operating stores, and 

energy. The cost of services purchased resulted from outsourced freights, changes in contract-related 

accruals, commissions, outsourced services for contract handling, and outside labor. 

(6.4) Personnel expenses 



First Quarter 

for Fiscal 

Year 2000/2001 

First Quarter 

for Fiscal 

Year 1999/2000 

E E 

Wages and salaries 4,943,532.65 3,276,731.22 

Social security taxes, pension expense and related employee benefits 751,713.73 729,943.00 

5,695,246.38 4,006,674.22 

The quarterly headcount in the pro forma group averaged 610 in First Quarter for Fiscal Year 2000/ 

2001 (up from 389 in First Quarter for Fiscal Year 1999/2000). As of 12-31-2000, the workforce 

comprised 634 employees (up from 440 at 12-31-1999). 

F-54

(6.5) Other operating expenses 



The other operating expenses mainly resulted from IPO expenses, costs allocated, foreign-exchange 

losses, pro forma expenses of Taifun AG—cf. Note (1)—, legal, consultancy and audit fees, insurance, 

dues and subscriptions, as well as other operating, administrative and selling expenses. 

(6.6) Net financial result 

First Quarter for Fiscal Year 2000/2001 (E920,000.11) 


First Quarter 

for Fiscal 

Year 2000/2001 

First Quarter 

for Fiscal 

Year 1999/2000 

E E 

Other interest and similar income 34,118.79 34,790.26 

Interest and similar expenses (954,118.90) (215,261.32) 

Interest expense basically covers that charged for intercompany clearing liabilities. 

(6.7) Income taxes 

(920,000.11) (180,471.06) 



The income taxes line substantially accounts for the current taxes of Nordex Energy GmbH, NPV 

Planung und Vertrieb GmbH and Südwind Energy GmbH as well as for the (net) tax effects produced in 

connection with the adjustment of group fee apportionment and cost allocations, cf. Note (1). Deferred 

tax assets and liabilities were recognized for the restatement to IAS of the separate HGB-based 

quarterly accounts and for tax loss carryovers. For enhanced comparability, imputed and deferred taxes 

were calculated by using future tax rates that apply as from the fiscal year 2000/01. When computing 

the deferred taxes, a rate of 25% as stated in the statutory German Corporate Tax Reform 2001, plus 

5.5% thereon as solidarity tax was used. Determination of deferred municipal trade taxes was 

predicated on the applicable municipal factors. 

The tax expense corresponds to the amount anticipated to be incurred since the lower tax rates 

specified in the Corporate Tax Reform Act 2001 may for non-calendar years not be applied before fiscal 

2001/02. 

Breakdown of income taxes: 

First Quarter First Quarter 

for Fiscal for Fiscal 

Year 2000/2001 Year 1999/2000 

E E 

Profit/(loss) from ordinary operations 1,004,895.96 (1,174,249.21) 

Non-income tax (expenses)/refund (8,918.17) (4,176.16) 

Earnings before taxes (EBT) 995,977.79 (1,178,425.37) 

Current tax expenses of the period (687,763.33) (454,617.22) 

Imputed tax (burden)/relief on net adjustment for group fee apportionment and P&L 

transfer 442,006.88 122,150.09 

Deferred tax (burden)/relief due to restatement to IAS (657,531.10) 790,722.78 

Deferred tax assets for tax loss carryovers 327,582.15 0.00 

Income tax credit/(expenses) as per income statement (575,705.40) 458,255.65 

Total actual burden from current, imputed and deferred taxes in the quarter approx. 58% approx. 38% 

F-55

(7) Comments on the cash flow statement 

The cash flow statement for First Quarter for Fiscal Year 2000/2001 shows the changes in the flow of 

funds during the period under review. In accordance with IAS 7, a distinction is made between the cash 

flows from (i.e. the net cash used in or provided by) operating, investing and financing activities. 

The cash and cash equivalents as shown in the cash flow statement comprises cash on hand and in 

bank. Current liabilities due to banks were deducted. Included in cash and cash equivalents were, 

moreover, debit and credit balances of the intercompany clearing account provided by Babcock Borsig 

AG for intragroup cash management purposes since such funds represent cash equivalents under the 

terms of IAS 7. 

The indirect approach was adopted to determine the cash flow from operating activities. The changes 

in balance sheet lines ensue from the difference of the closing balances as of December 31, 2000, 

versus September 30, 2000. The cash flow from investing activities breaks down into cash outflows for 

expenditures for intangible assets, property, plant and equipment and financial assets, as well as into 

cash inflows from fixed-asset disposal. The cash flow from financing activities was provided by cash 

inflows from capital stock increases of Taifun AG, as well as by the effects of the pro forma capital 

consolidation in Q4/2000 on the pro forma net earnings as of December 31, 2000, cf. Notes (1) and (3). 

On balance, the change in cash and cash equivalents in First Quarter for Fiscal Year 2000/2001 was a 

decrease by kE7,049.7 (versus a decrease of E25,087.2 in First Quarter for Fiscal Year 1999/2000), 

mainly attributable to the (on balance) utilization of funds from the aforesaid intercompany clearing 

account. 

(8) Details of related-party transactions 

At the legal and organizational levels, the Taifun Group was in the quarter under review part of Borsig 

Energy GmbH, Oberhausen, and included in the group of BDAG Balcke-Dürr AG, Oberhausen. First-tier 

parent is Babcock Borsig AG, Oberhausen. In the quarter under review, a controlling stake in all 

subsidiaries included in the pro forma consolidated interim statements as of December 31, 2000, was 

held by Taifun AG, which, in turn, was held as of December 31, 2000, by Borsig Energy GmbH (80.49 %) 

and Nordvest A/S, Give, Denmark (19.51%). Transactions of the Taifun Group with the remaining 

Babcock Borsig Group companies substantially involved the aforementioned intercompany clearing [on 

balance, funds were utilized, cf. note (7)] as well as trade business. 

(9) Details of the boards of Taifun AG, Oberhausen 

Supervisory Board members appointed: 

– Dr.-Ing. Hans Fechner, Düsseldorf 

– Dipl.-Ökonom Ludger Kramer, Kempen 

– Dr. Siegfried Michelfelder, Gummersbach 

Taifun AG’s Executive Board members as of December 31, 2000: 

– Dr.-Ing. Dietmar Kestner, Essen 

– Dipl.-Wirtsch.-Ing. Rudolf Schulz, Hamburg (as from December 21, 2000) 

– Carsten Risvig Pedersen, Brande, Denmark (as from December 21, 2000) 

(10) Segment report 

The Taifun Group’s business activities encompass the development, production and marketing of wind 

turbines. Apart from development and production, upstream project development services are 

rendered, the appropriate rights acquired, and the infrastructures created in order to install wind 

turbines on suitable sites and locations. Such activities require to be depicted in the primary segment 

report since the major risks and rewards originate therefrom, in contrast to the various geographical 

sales markets of Taifun AG, which form the secondary segment. 

F-56

Primary segment report 

The Wind Energy operations cannot be further subdivided into reasonable segments with discrete risks 

and returns, as required by IAS 14. Therefore, the primary segment report according to IAS 14 deals 

with the Taifun Group’s sole business segment, allocating to this segment long-term income and 

expenses in order to portray the Group’s performance. The report that follows includes, besides net 

sales, the change in inventories of work in process (goods/services), work and material capitalized and 

other income earned from operating activities. In addition, the interest income and interest expense 

were fully included in segment income/expense since within the Taifun Group these items are not 

attributable to financing activities, which is in accordance with IAS 14 and, by analogy, IAS 7—cf. Note 

(7). Major expenses allocated to the segment include the cost of materials, personnel expenses, 

amortization/depreciation, and other operations-related expenses, whereas any nonrecurring or 

nonperiodic items, below-the-line factors, tax expenses and tax income were not allocated to the 

segment. 

Major assets and liabilities not allocated to the segment include tax accruals and tax debts, as well as 

deferred taxes. 

Wind Energy Unallocated Taifun Group 

First Quarter First Quarter First Quarter First Quarter First Quarter First Quarter 

for Fiscal for Fiscal for Fiscal for Fiscal for Fiscal for Fiscal 

Year 2000/ Year 1999/ Year 2000/ Year 1999/ Year 2000/ Year 1999/ 

2001 2000 2001 2000 2001 2000 

kE kE kE kE kE kE 

SEGMENT REVENUE 69,450.44 43,477.94 69,450.44 43,477.94 

SEGMENT RESULT 1,246.06 (1,279.01) 1,246.06 (1,279.01) 

thereof amortization/depreciation 

of fixed assets’’ 1,751.92 530.93 

EXTRAORDINARY FACTORS (241.17) 104.76 (241.17) 104.76 

Income taxes 575.71 (458.26) 575.71 (458.26) 

Other taxes 8.90 4.18 8.90 4.18 

QUARTERLY NET INCOME/(LOSS) 420.28 (720.17) 

SEGMENT ASSETS 168,973.89 104,794.78 168,973.89 104,794.78 

thereof capital expenditures for 

fixed assets’’ 22,978.89 1,122.47 

Deferred taxes 873.56 130.24 873.56 130.24 

OPERATING ASSETS 169,847.45 104,925.02 

SEGMENT LIABILITIES 125,406.87 89,395.87 125,406.87 89,395.87 

Equity 37,134.41 12,147.95 37,134.41 12,147.95 

Tax accruals 3,866.81 1,323.51 3,866.81 1,323.51 

Pension accruals 148.76 0.00 148.76 0.00 

Deferred tax liabilities 3,290.60 2,057.68 3,290.60 2,057.68 

OPERATING CAPITAL 169,847.45 104,925.02 

Secondary segment report 

In the 3-month period ended December 31, 2000, sales revenues of kE40,903 were generated in 

Germany and kE22,101 abroad. 

F-57

(11) Earnings per share 

First Quarter 

for Fiscal 

Year 2000/2001 

First Quarter 

for Fiscal 

Year 1999/2000 

E E 

Capital stock = no. of shares of Taifun AG at 12-31-00 34,050,000.00 34,050,000.00 

Group net income/(loss) for the 3-month period 420,272.39 (720,169.72) 

EpS: earnings per E1 of Taifun AG’s capital stock 0.01 (0.02) 

For determining the earnings per share while ensuring comparability, the number of bearer shares of 

stock held in Taifun AG as group parent as of December 31, 2000, by Borsig Energy GmbH, Oberhausen, 

and Nordvest A/S, Denmark, was used as basis for First Quarter for Fiscal Year 2000/2001 and First 

Quarter for Fiscal Year 1999/2000. 

Oberhausen, February 26, 2001 

F-58 

sgd. Dr.-Ing. sgd. Dipl.-Wirtsch.-Ing. sgd. 

Dietmar Kestner Rudolf Schulz Carsten Risvig Pedersen 

(Executive Board member) (Executive Board member) (Executive Board member)

F-59 

Combined fixed asset analysis of the pro forma group 

as of December 31, 1999 

(statistical figures) 

Balance at 

1.10.1999 

pro forma 

Additions 

pro forma 

Book transfers 

pro forma 

Disposals 

pro forma 

Gross values Amortization/depreciation/write-down 

Balance at 

31.12.1999 

pro forma 

Balance at 

1.10.1999 

pro forma 

Addition 

pro forma 

Book transfers 

pro forma 



Concessions, franchises, industrial property and similar 

rights to assets as well as licences thereto 3,236,545.01 277,143.47 0.00 0.00 3,513,688.48 1,054,187.73 169,595.59 0.00 0.00 1,223,783.32 2,289,905.16 2,182,357.28 

Prepayments on intangibles 579,284.00 0.00 –15,338.76 0.00 563,945.24 0.00 0.00 0.00 0.00 0.00 563,945.24 579,284.00 


3,815,829.01 277,143.47 –15,338.76 0.00 4,077,633.72 1,054,187.73 169,595.59 0.00 0.00 1,223,783.32 2,853,850.40 2,761,641.28 

Land and buildings 1,053,994.51 35,790.43 15,338.76 1,918.75 1,103,204.95 235,038.04 11,483.23 0.00 238.83 246,282.44 856,922.51 818,956.47 

Production, plant and machinery 5,740.101.38 2,682.63 0.00 70,217.83 5,672,566.18 1,818,255.64 148,556.09 0.00 16,216.43 1,950,595.30 3,721,970.88 3,921,845.74 

Other plant, factory and office equipment 

Prepayment on property, plant and equipment and 

3,198,859.80 378,021.78 0.00 1,638.96 3,575,242.62 767,127.38 201,290.96 0.00 1,590.11 966,828.23 2,608,414.39 2,431,732.42 

construction in progress 2,114,063.80 428,834.22 0.00 0.00 2,542,898.02 0.00 0.00 0.00 0.00 0.00 2,542,898.02 2,114,063.80 


12,107,019.49 845,329.06 15,338.76 73,775.54 12,893,911.77 2,820,421.06 361,330.28 0.0 18,045.37 3,163,705.97 9,730,205.80 9,286,598.43 

Shares in unconsolidated Group Companies 233,761.11 0.00 0.00 30,677,51 203,083.60 0.00 0.00 0.00 0.00 0.00 203,083.60 233,761.11 

Investments 540,044.38 0.00 0.00 0.00 540,044.38 0.00 0.00 0.00 0.00 0.00 540,044.38 540,044.38 

773,805.49 0.00 0.00 30,677.51 743,127.98 0.00 0.00 0.00 0.00 0.00 743,127.98 773,805.49 

16,696,653.99 1,122,472.53 0.00 104,453.05 17,714,673.47 3,874,608.79 530,925.87 0.00 18,045.37 4,387,489.29 13,327,184.18 12,822,045.20 

Land value assets added and immediately written off within 

the fiscal year are deemed to have been disposed of in the 

same year. 

Disposals 

pro forma 

Balance at 

31.12.1999 

pro forma 

Balance at 

31.12.1999 

pro forma 

Net values 

Balance at 

30.09.1999 

pro forma

F-60 

Balance at 

1.10.2000 

pro forma 

Combined fixed asset analysis of the pro forma group 

as at December 31, 2000 

Additions 

pro forma 

Investment 

grant received 

in fiscal 

1999/2000 

pro forma 

Book 

transfers 

pro forma 

Disposals 

pro forma 

Gross value Amortization/depreciation/write-down Net values 

Balance at 

31.12.2000 

pro forma 

E E E E E E E E E E E E E 


Concessions, franchises, industrial 

property and similar rights as 

well as licences thereto 6,942,814.21 1,190,690.41 0.00 0.00 0.00 8,133,504.62 2,388,531.80 1,169,565.18 0.00 0.00 3,558,096.98 4,575,407.64 4,554,282.41 

Pro forma goodwill 0.00 20,047,901.67 0.00 0.00 0.00 20,047,901.67 0.00 0.00 0.00 0.00 0.00 20,047,901.67 0.00 

Prepayments or intangibles 1,270,960.32 230,638.38 0.00 0.00 0.00 1,501,598.70 0.00 0.00 0.00 0.00 0.00 1,501,598.70 1,270,960.32 


8,213,774.53 21,469,230.46 0.00 0.00 0.00 29,683,004.99 2,388,531.80 1,169,565.18 0.00 0.00 3,558,096.98 26,124,908.01 5,825,242.73 

Land and buildings 3,438,111.55 141,303.24 0.00 0.00 826,878.10 2,752,536.69 379,452.76 47,056.53 0.00 24,133.09 402,376.20 2,350,160.49 3,058,658.79 

Production, plant and machinery 

Other plant, factory and office 

4,588,981.52 160,038.47 0.00 0.00 21,378.91 4,727,641.08 1,070,280.75 160,518.24 0.00 4,819.51 1,225,979.48 3,501,661.60 3,518,700.77 

equipment 

Prepayment on property, plant 

and equipment and 

5,042,011.54 1,017,017.12 0.00 19,585.93 77,336.55 6,001,278.04 1,643,659.50 374,781.05 18,142.46 24,945.67 2,011,637.34 3,989,640.70 3,398,352.04 

construction in progress 4,662,885.52 191,301.74 0.00 -1,089.05 0.00 4,853,098.21 0.00 0.00 0.00 0.00 0.00 4,853,098.21 4,662,885.52 


Shares in unconsolidated Group 

17,731,990.13 1,509,660.57 0.00 18,496.88 925,593.56 18,334,554.02 3,093,393.01 582,355.82 18,142.46 53,898.27 3,639,993.02 14,694,561.00 14,638,597.12 

companies 222,330.78 0.00 0.00 0.00 0.00 222,330.78 0.00 0.00 0.00 0.00 0.00 222,330.78 222,330.78 

Investments 760,784.92 0.00 0.00 0.00 0.00 760,784.92 0.00 0.00 0.00 0.00 0.00 760,784.92 760,784.92 

983,115.70 0.00 0.00 0.00 0.00 983,115.70 0.00 0.00 0.00 0.00 0.00 983,115.70 983,115.70 

26,928,880.36 22,978,891.03 0.00 18,496.88 925,593.56 49,000,674.71 5,481,924.81 1,751,921.00 18,142.46 53,898.27 7,198,090.00 41,802,584.71 21,446,955.55 

Low value assets added and immediately written-off within the fiscal 

year are deemed to have been disposed of in the same year. 

Balance at 

1.10.2000 

pro forma 

Disposals 

pro forma 

Reduction in 

investment 

grant/book 

transfers 

Disposals 

pro forma 

Balance at 

31.12.2000 

pro forma 

Balance at 

31.12.2000 

pro forma 

Balance at 

30.09.2000 

pro foram

INDEPENDENT AUDITOR’S CERTIFICATE OF REVIEW 

The operations of the Taifun (now Nordex) Group were in the past conducted partly within legally 

independent entities, partly in unincorporated divisions of certain group companies of Borsig Energy 

GmbH, Oberhausen, and included in the group accounts of BDAG Balcke-Dürr AG, Ratingen. Taifun AG 

(today’s Nordex AG) prepared pro forma consolidated interim statements for the 3-month period ended 

December 31, 2000 (‘‘First Quarter for Fiscal Year 2000/2001’’), which include the entities now owned by 

Nordex AG (formerly Taifun AG). The accounting and other transactions are explained in greater detail 

in the notes to the pro forma consolidated interim statements of Taifun AG. 

In the quarter under review, the pro forma consolidated interim statements of Taifun AG as of 

December 31, 2000, included apart from Nordex Automation GmbH, Oberhausen (formerly Babcock 

Prozessautomation GmbH, Wind Energy division), also NPV Planung und Vertrieb GmbH, Bad Essen 

(formerly Nordex Planungs- und Vertriebsgesellschaft mbH), Südwind Energy GmbH, Oberhausen 

(formerly Südwind Borsig Energy GmbH), Nordex Rotor GmbH, Rostock (formerly Borsig Rotortechnik 

GmbH), and Nordex Energy GmbH, Rerik (formerly Nordex GmbH). 

Previously, the operations of Babcock Prozessautomation GmbH, Oberhausen (‘‘BPA’’), comprised the 

two divisions (business segments) of Power Plants and Wind Energy. As of October 1, 2000, Power 

Plants was spun off and BPA with the remaining Wind Energy division contributed as of December 14, 

2000 (date of Commercial Register entry) to Taifun AG, a company organized on August 25, 2000. 

Babcock Prozessautomation GmbH with its remaining, Wind Energy, division was renamed Nordex 

Automation GmbH, Oberhausen, as of November 20, 2000. 

Subsidiaries of Nordex Energy GmbH, Rerik, were not included in the consolidation group since their 

impact on the Taifun Group’s net assets, financial position and results of operations was insignificant. 

Another investee of Nordex Energy GmbH, Rerik, was stated at amortized cost according to IAS as any 

influence on the investee’s business and financial policies could be safely ruled out. 

The interim (quarterly) accounts of companies included in the pro forma consolidated interim 

statements as of December 31, 2000, were prepared in accordance with the accounting regulations of 

the German Commercial Code. In line with our engagement, we reviewed the interim accounts of such 

consolidated subsidiaries for the 3-month period ended December 31, 2000. Our review included 

assessing such quarterly accounts by obtaining information and audit evidence through inquiries and 

analytical audit procedures. Our review did not cover the contents of the consolidated subsidiaries’ 

accounting systems. For preparing the pro forma consolidated interim statements, the separate 

quarterly accounts for the 3-month period ended December 31, 2000, were substantially restated to 

conform with IAS in accordance with groupwide uniform accounting principles. The companies were 

consolidated in the pro forma consolidated interim statements as of December 31, 2000, in accordance 

with IASC rules mainly as follows and as described in greater detail in the notes thereto: 

The IAS require that initial capital consolidation be made as of the date of acquisition, which is defined 

as the date at which control over net assets and business operations of the companies included in the 

consolidation group actually passes to Taifun AG (now Nordex AG) as transferee. These prerequisites 

were met in early 2001 only. Since Taifun AG was required to account for the shares in said subsidiaries 

already as of December 31, 2000, capital consolidation was effected pro forma and pro forma goodwill 

disclosed in order to present an as true as possible view of the net assets at December 31, 2000. For the 

time being, potential hidden reserves and burdens did not enter into consideration. Since, when the 

individual subsidiaries were transferred and contributed to Taifun AG, this nonmonetary transaction 

constituted merely a restructuring process within the Babcock Borsig Group, the investment book 

values carried in Taifun AG’s balance sheet underlay pro forma capital consolidation. No amortization, 

primarily of a potential goodwill, due to the pro forma capital consolidation was charged to income for 

reasons of comparability with the (combined) pro forma consolidated financial statements. The 

Company is presently testing the components of the resultant difference (net equity under cost) for 

future accounting treatment. Provided that no different allocation or offset in comparison with the 

F-61

procedure described for the preparation of the pro forma consolidated interim statements would enter 

into consideration, the results of operations in the future IAS-based consolidated accounts to be 

prepared by Nordex AG might according to the values at January 1, 2001, be on this basis burdened 

with a maximum annual goodwill amortization of (netted) kE1,337. Such goodwill would amount to 

kE20,048 and, assuming a 15-year period of benefit, be amortized over this range. Alternatively, 

discounting the allocation of hidden reserves and after offset against reserves, the initially resulting 

goodwill would amount to approx. kE5,113 and the corresponding goodwill amortization to around 

kE358. 

Intercompany balances (receivables, payables, income, expenses, gains, losses) and intercompany 

profits were eliminated according to IAS in the pro forma consolidated interim statements. 

With a view to ensuring optimum comparability of the pro forma consolidated interim statements as of 

December 31, 2000, with the future actual situation in the Nordex Group, the group fees apportioned 

and posted in the quarter under review by Babcock Borsig Group companies were eliminated from net 

income and replaced by imputed future pro forma personnel and administrative expenses of Nordex 

AG, with due regard to the ensuing imputed tax effects. In the profit appropriation account below 

quarterly net income, such adjustments were reversed to develop pro forma net earnings in order to 

avoid any fictitious changes in pro forma group equity. Moreover, the proposed direct-control and/or 

profit and loss transfer agreements to be signed by and between the consolidated subsidiaries and 

Nordex AG underlay the pro forma consolidated interim statements as of December 31, 2000, as did 

their anticipated tax implications and effects. 

In accordance with our engagement, we reviewed the IAS-based pro forma consolidated interim 

statements for the 3-month period ended December 31, 2000, comprising Taifun AG’s pro forma 

consolidated balance sheet, pro forma consolidated income statement, pro forma consolidated 

statement of cash flows, pro forma statement of changes in shareholders’ equity, and the pro forma 

notes thereto. The preparation of the quarterly accounts in accordance with IAS is the responsibility of 

the Company’s legal representatives. Our responsibility is, based on our review, to issue a certificate 

thereon. 

We reviewed the pro forma consolidated interim statements as of December 31, 2000, in accordance 

with the standards generally accepted in Germany for the review of financial statements as established 

by Institut der Wirtschaftsprüfer in Deutschland e.V. (IDW). 

Said standards require that we plan and perform the review to obtain moderate assurance about 

whether anything has come to our attention that causes us to believe that the pro forma consolidated 

interim statements have not been prepared, in all material respects, in accordance with the applied 

accounting principles. A review consists principally of inquiries of company personnel and analytical 

procedures and, therefore, is substantially less in scope than a statutory audit, the objective of which is 

the expression of an opinion regarding the financial statements taken as a whole. Accordingly, and in 

line with our engagement, we cannot and do not express such an opinion. 

Based on our review, we certify that, except for entry timing differences in the clearing accounts of 

Babcock Borsig AG, nothing has come to our attention that causes us to believe that the pro forma 

consolidated interim statements for the 3-month period ended December 31, 2000, do not present a 

true and fair view of the net assets, financial position and results of operations or have not been 

prepared, in all material respects, in accordance with the applied accounting principles. 

F-62

Owing to the accounting system having been converted to SAP R/3 in the like-for-like quarter 1999, 

the financial data prepared by the Company for First Quarter for Fiscal Year 1999/2000 is based on 

statistical surveys by the Company. We did not review such financial data and disclosures as of 


Cologne, February 27, 2001 

(Dr. Scheur) 





(Siebert) 


F-63

F-64 

MANAGEMENT REPORT 

FOR THE FISCAL YEAR 

ENDED SEPTEMBER 30, 2000 

Business trend and situation of the Company 

NORDEX continues its astounding uptrend. The soaring growth rates of order inflow and sales in 

absolute terms are well comparable with previous years. Sales jumped by 52% from fiscal 1998/99 to 

DM 438 million, and incoming orders surged 33% to DM 552 million. As in the years before, the 

Company came a good deal closer to the achievement of its prime strategic goal of acquiring orders 

and generating sales not only in the strong German market but also and increasingly in the major 

markets of the world. The share of non-German sales (DM 134 million) was pushed up from 20% to 

31% in the fiscal year 1999/2000. For the first time, the volume of orders received from abroad 

accounted for more than 50%. 

Earnings before taxes leaped 84% to DM 13.8 million. 

In comparison to the calendar year 1999, the German wind energy market experienced a clear 

downtrend early in the year, mainly due to political uncertainties. Nonetheless, the newly installed 

output capacity estimated at 1,200 MW will still be a world record. Contrary to 1997 and 1998, 

NORDEX unfortunately lost market shares in Germany in 1999 and 2000, primarily since the newly 

developed 2.5-MW turbine had reached industrialization level at fiscal year-end only and since 

presently wind turbines with a minimum rotor diameter of 70 m are in demand. For strategic reasons, 

however, NORDEX currently does not offer wind turbines with 70-m rotors because this segment is 

covered by its same-tier affiliate, Südwind Borsig Energy GmbH. 

As stated, the somewhat depressed German business was outcompensated by successful 

internationalization. In the calendar year 1999, NORDEX had a 7.8% share in the world market. 

It will be possible to raise this world market share to just under 10%. In the megawatt-turbine 

segment, NORDEX has so far retained its world leadership with a market share of 20%+. 

In the period, 148 N43/600kW turbines were installed and 152 sold. This relatively small wind turbine 

(600 kW rated output and 43 m rotor diameter) thus experiences an encouraging renaissance. The N50/ 

800kW turbine, of which 22 were installed and 35 sold, showed a remarkable success, especially in 

Denmark, and was well received by the market. In the megawatt, 160 N60/N62/1.300kW turbines were 

installed and sold. NORDEX benefits from the fact that it is one of the few manufacturers that install 

megawatt turbines not only in Germany but worldwide, such as in Finland, United States, Spain, 

Portugal, Denmark, Latvia, and shortly even in China. 

The new production facility in Rostock, Germany, started in January 2000 to produce wind turbines. 

Several major supplier plants, particularly the sister companies BPA and Borsig Rotortechnik GmbH, are 

meantime located in the direct neighborhood of the production shop, which has resulted in initial 

savings. Apart from the Give, Denmark, production facility, the joint venture in Xian, China, also started 

up production, assembling and successfully delivering the first wind turbines in the year under review. 

The preparations for setting up a further production site have commenced in Spain. 

The Company’s headcount grew from 338 at 9-30-1999 to 438 as of September 30, 2000. 

Information on significant risks inherent in future development 

Worth mentioning for risk reporting purposes are quality problems experienced with one blade supplier 

in several N60 turbines. Currently, a repair and replacement program is in progress to be completed by 

end-January. Another supplier has meanwhile been contracted. Most of the additional blade repair 

expenses are borne by insurers and, therefore, no long-term impact on the Company’s profitability is 

expected from this situation.

Research and development 

Certification of the N50/800kW turbines has substantially been completed, series production started in 

early 2000. In order to tap the market for variable-speed, adjustable-pitch wind turbines, work on an 

N50p (variable-speed/pitch) turbine began on the basis of the N50/stall and a prototype installed mid- 

August. Prototype testing will start in the high-wind seasons of fall and winter, and first results should 

be available in the spring of 2001. 

The N43 turbine can presently be regarded as the most sturdy and flexible NORDEX product; even at 

locations of extreme climatic conditions with temperatures varying between +40ºC and -30ºC such as 

the Egyptian Desert or Inner Mongolia, the N43 presents good uptimes and satisfies the warranty 

requirements of the international market (uptime and characteristic performance curve). 

In January 2000, the N80/2500kW prototype was installed as scheduled. Extensive trials and tests have 

since been conducted with this variable-speed, adjustable-pitch, 2,500-kW rated output turbine with 

whose development NORDEX broke new ground. A lack of wind delayed testing and thus also selective 

marketing of this product. Therefore, a second, identical prototype will by year-end be installed on the 

test wind farm of Wilhelmshaven where wind conditions are more favorable. 

The NORDEX Control, developed by the Company as from the summer of 1999, has so far been installed 

in more than 160 wind turbines. 

Significant subsequent events 

No significant reportable events occurred subsequent to the balance sheet date. 

Head office relocation 

NORDEX will close down its Rerik location and move with all its and NPV’s corporate functions 

(Finance, Sales, Purchasing, R&D, Project Management, Management) to a new, central location in 

Norderstedt near Hamburg (State of Schleswig-Holstein). Customer Service along with the Remote 

Plant Control Center will move to the Rostock Wind Turbine Competence Center. 

The Company expects Hamburg to provide a far better human resources potential for administrative 

and executive staff, improved traffic links and a wide variety of operational synergies from the 

concentration of all decision-making functions at one site. 

Besides the existing branches in Denmark, Spain, China (sales office in Beijing, a limited company for 

customer service in Shanghai, a joint venture in Xian), and Turkey, the following new operations were 

set up: 

– on 12-27-1999 an independent US company, NORDEX USA Inc., near Dallas, Texas 

– on 10-26-1999 a branch in Cairo, NORDEX GmbH Egypt Branch, to handle two Egyptian 

megaorders 

– on 8-7-2000 an independent company in Athens, NORDEX Hellas L.L.C., to handle a major Greek 

contract 

NORDEX is still seeking joint venturers for establishing a company in Turkey. 

F-65

Future development of the Company 

For the new fiscal year, NORDEX GmbH expects business volume to grow significantly. By restructuring 

and decentralizing the German sales organization, the Company plans to increase market shares and 

improve profit contributions, as well as to further develop the non-German sales network enabling us 

to reach a share of 40% to 50% of total sales. 

Rerik, November 23, 2000 

F-66 

sgd. Dr. Thomas Tschiesche sgd. Theo Becker sgd. Carsten Pedersen

ANNUAL FINANCIAL STATEMENTS FOR THE FISCAL YEAR 


Assets 

Fixed assets 

BALANCE SHEET 

9-30-2000 9-30-1999 

DM ‘000 DM ‘000 

Intangible assets 3,678 1,922 

Tangible assets 11,435 10,235 

Financial assets 1,923 1,513 


17,036 

Inventories 265,641 225,376 

less 

prepayments received (198,263) (170,765) 

67,378 

Receivables and sundry current assets 129,608 52,472 

Cash and cash equivalents 2,003 681 

198,989 

Prepaid expenses and deferred charges 2,511 105 

Equity & liabilities 

Equity 

218,536 121,539 

9-30-2000 9-30-1999 

DM ‘000 DM ‘000 

Share capital 104 104 

Additional paid-in capital 11,827 11,827 

Profit/(loss) carryover 2,973 (2,816) 

Net income 9,155 5,789 

24,059 

Accruals 32,544 12,730 

Liabilities 161,932 93,904 

Deferred income 1 1 

218,536 121,539 

F-67

ANNUAL FINANCIAL STATEMENTS FOR THE FISCAL YEAR 


INCOME STATEMENT 

1999/2000 1998/1999 

DM ‘000 DM ‘000 

Net sales 436,816 287,626 

Increase in inventories of work in process 39,971 131,915 

Total operating performance 476,787 419,541 

Other operating income 3,236 2,571 

Cost of materials (383,324) (362,075) 

Personnel expenses (29,888) (19,241) 

Amortization of intangible and depreciation of tangible assets (3,793) (2,817) 

Other operating expenses (45,827) (30,901) 

Net interest result (3,340) 354 

Result from ordinary operations 13,851 7,432 

Income taxes (4,647) (1,699) 

Other taxes (49) 56 

Net income 9,155 5,789 

F-68

ANNUAL ACCOUNTS FOR THE FISCAL YEAR 


NOTES TO THE FINANCIAL STATEMENTS 

(I) GENERAL 

The annual financial statements of NORDEX AG for the fiscal year ended September 30, 2000, have 

been prepared according to HGB and GmbHG provisions. 

In the balance sheet and income statement, certain captions have been summarized for enhanced 

transparency of presentation but are detailed further down in these Notes. 

The income statement has been presented in the total-cost format. 

In derogation of the prior-year practice, the other (non-income) taxes are shown after the result from 

ordinary operations. 

(II) ACCOUNTING AND VALUATION PRINCIPLES 

Intangible assets are valued at cost less straight-line amortization. 

Tangible assets are valued at (purchase or production) cost, less straight-line depreciation. The 

production cost of internally manufactured assets includes besides direct costs also prorated 

overheads. 

For plant and equipment purchased in the first half-year, the full annual rate of depreciation is applied 

while for additions in the second 6-month period, half the annual rate is used. 

Grants received are offset against the cost of the office building and wind turbine in Rerik. 

So-called low-value assets (i.e., at net cost of DM 800 each or less) are fully written off pursuant to Art. 

6(2) German Income Tax Act (‘‘EStG’’). 

Financial assets are stated at cost. 

Current assets are shown at the lower of cost or market. 

Inventories are stated at the lower of (purchase or production) cost or market. Production cost includes 

direct materials, direct labor, as well as any production overheads subject to capitalization under tax 

regulations. Work in process is stated at net realizable value to allow for any anticipated losses. 

The deduction of prepayments received from inventories is openly disclosed. 

The receivables and sundry current assets are stated at face or par value. Specific bad-debt allowances 

account for identifiable individual risks, while a general allowance for doubtful accounts provides for 

the standard collection risk. 

The other accruals provide for all foreseeable risks and uncertain obligations and are determined 

according to principles in line with sound business judgment. 

Liabilities are stated at the repayment or settlement amount. 

Currency translation 

Foreign-currency credit balances are translated at the closing rate. For the translation of foreigncurrency 

receivables, the historical rate or any lower current rate as of balance sheet date has been 

used. 

F-69

(III) COMMENTS ON THE BALANCE SHEET 

(1) Fixed assets 

The movement and development of the various fixed assets are shown in the fixed-asset analysis. 

(2) Inventories 

Breakdown of inventories: 

9-30-2000 9-30-1999 

DM ‘000 DM ‘000 

Raw materials and supplies 49,647 56,307 

Work in process 199,956 159,984 

Prepayments made 16,038 9,085 

265,641 225,376 

Less prepayment received (198,263) (170,765) 

(3) Receivables and sundry current assets 

Remaining 

term of 

1 year or less 

Remaining 

term above 

1 year 

67,378 54,611 

Balance at 

9-30-2000 

Balance at 

9-30-1999 

DM ‘000 DM ‘000 DM ‘000 DM ‘000 

Trade receivables 101,036 0 101,036 32,897 

Intercompany receivables 24,318 0 24,318 17,945 

thereof due from shareholders (0) (0) (0) (0) 

Receivables under investor/investee relations 17 0 17 0 

Sundry current assets 4,237 0 4,237 1,630 

129,608 0 129,608 52,472 

Trade receivables also include accounts due from non-German customers and receivables denominated 

in foreign currencies. 

The sundry current assets chiefly comprise loans and insurance claims receivable. 

(4) Cash & cash equivalents 

This caption covers cash on hand and in bank. 

(5) Accruals 

9-30-2000 9-30-1999 

DM ‘000 DM ‘000 

Tax accruals 6,218 1,699 

Other accruals 26,326 11,031 

32,544 12,730 

The other accruals mainly provide for accrued contract-related warranties as well as accrued payroll 

costs. 

F-70

(6) Liabilities 

Remaining 

term 

1 year or less 

Balance at 

9-30-2000 

Balance at 

9-30-1999 

DM ‘000 DM ‘000 DM ‘000 

Trade payables 66,932 66,932 49,279 

Intercompany payables 84,558 84,558 38,690 

thereof due to shareholders (0) (0) (0) 

Sundry liabilities 10,442 10,442 5,935 

thereof for taxes (8,295) (8,295) (3,512) 

thereof for social security (461) (461) (408) 

161,932 161,932 93,904 

The intercompany payables mainly refer to liabilities from intragroup finance transactions. 

The sundry liabilities substantially comprise a VAT debt payable to the tax office, as well as the residual 

September 2000 payroll, and social security taxes. 

(7) Contingent liabilities and other financial obligations 

Reportable contingent liabilities under the terms of Art. 268(7) HGB in conjunction with Art. 251 HGB 

did not exist at balance sheet date. 

The other financial obligations as of balance sheet date total DM 3.969 million under leases. 

(IV) COMMENTS ON THE INCOME STATEMENT 

(1) Net sales 

Germany: 

1999/2000 1998/99 

DM ‘000 DM ‘000 

Revenues from the sale of wind turbines 287,689 231,304 

Service, maintenance 1,980 2,042 

Power supply 1,218 838 

Other sales revenues 2,822 0 

Abroad: 

293,709 234,184 

Revenues from the sale of wind turbines 110,853 51,445 

Service, maintenance 2,286 95 

Other sales revenues 573 917 

Power supply 18 0 

Cash discounts granted (36) (1) 

113,694 52,456 

Intercompany transfers: 29,413 986 

(2) Cost of materials 

436,816 287,626 

1999/2000 1998/99 

DM ‘000 DM ‘000 

Cost of raw materials and supplies 322,954 305,801 

Cost of services purchased 60,370 56,274 

383,324 362,075 

F-71

(3) Personnel expenses 

1999/2000 1998/99 

DM ‘000 DM ‘000 

Wages and salaries 26,353 17,224 

Social security taxes 3,535 2,017 

(4) Net interest result 

29,888 19,241 

1999/2000 1998/99 

DM ‘000 DM ‘000 

Other interest and similar income 1,032 1,941 

– thereof from group companies DM 0.762 million (down from DM 1.752 million) 

Interest and similar expenses (4,372) (1,587) 

– thereof to group companies DM 2.689 million (up from DM 0.112 million) 

(3,340) 354 

(5) Other operating expenses 

The other operating expenses include general business and administrative expenses not disclosable 

separately, as well as selling expenses. 

(6) Write-down in prior periods 

Due to the write-down charged in previous years at a total DM 0.851 million and the ensuing favorable 

impact on taxable income in future periods, we expect the annual tax burden to rise in the years ahead. 

(V) ADDITIONAL DISCLOSURES 

Headcount 

Breakdown of the Company’s average workforce: 

1999/2000 1998/99 

White-collar employees 155 108 

Blue-collar employees 214 155 

As of September 30, 2000, the Company had 405 employees (up from 319). 

Corporate boards 

Management Board members in fiscal 1999/2000: 

369 263 

Dipl.-Ing. Dr. Thomas Tschiesche, Oberhausen, 

Carsten Pedersen, Give, Denmark, and 

Dipl.-Ing. Theo Becker (as from March 1, 2000), Essen. 

The Management Board’s total compensation in fiscal 1999/2000 totaled DM 0.385 million. 

F-72

Shareholdings 

Interest held Equity 

Latest net 

income/ 

(net loss) 

in % in LCU ‘000 in LCU ‘000 

Shares in group companies 

NORDEX Ibérica Borsig Energy S.A., Barcelona, Spain 100 Pts 10,000 Pts 912 

NORDEX Hellas E.P.E., Athens, Greece 100 Dr 6,000 — 1 

NORDEX Omnical Energy Services (Shanghai) Co. Ltd., 

Shanghai, PR China 100 US$ 200 Yuan (399) 

NORDEX USA Inc., United States 100 US$ 1 — 1 

Investee 

Xian NORDEX Wind Turbine Co. Ltd., Xian, PR China 40 US$ 2,100 Yuan 0 

1 Latest figures were not yet available. 

Group affiliation 

NORDEX GmbH is a group company of Babcock Borsig AG, Oberhausen, Germany. The Company’s 

annual accounts are included in the consolidated accounts of Babcock Borsig AG, Oberhausen, and of 

BDAG Balcke-Dürr AG, Ratingen. The consolidated accounts of Babcock Borsig AG will be filed with the 

Local Court of Oberhausen. 

Rerik, November 23, 2000 

sgd. Dr. Thomas Tschiesche sgd. Theo Becker 

sgd. Carsten Pedersen 

F-73


Cost 

(carryover) Additions 

Fixed-asset analysis 

Investment 

grant 

received in 

1999/2000 

Book 

transfers Disposals 

Accumul. 

amortiz./ 

depreciation/ 

write-down 

Book 

value at 

9-30-2000 

Amortization 

and 

depreciation 

in fiscal year 

DM ’000 DM ’000 DM ’000 DM ’000 DM ’000 DM ’000 DM ’000 DM ’000 

Concessions, franchises, 

industrial-property 

and similar rights and 

assets 1,804 294 87 611 85 1,344 1,193 444 

Prepayments on 

intangibles 1,103 1,993 0 (611) 0 0 2,485 0 

Tangible assets 

2,907 2,287 87 0 85 1,344 3,678 444 

Land, equivalents titles, 

and buildings 

(including on leased 

land) 

Developed land and 

equivalent titles 108 0 0 0 0 0 108 0 

Commercial buildings 1,885 22 0 0 20 538 1,349 90 

Other buildings 0 398 709 4,860 1,620 68 2,861 73 

1,993 420 709 4,860 1,640 606 4,318 163 

Production plant and 

equipment 7,337 774 0 0 5,936 1,148 1,027 1,059 

Other plant, factory and 

office equipment 5,315 4,405 537 74 1,016 2,616 5,625 2,127 

Prepayments on 

tangibles, construction 

in progress 594 4,805 0 (4,934) 0 0 465 0 


15,239 10,404 1,246 0 8,592 4,370 11,435 3,349 

Shares in group 

companies 457 38 0 0 60 0 435 0 

Investments 1,056 432 0 0 0 0 1,488 0 

F-74 

1,513 470 0 0 60 0 1,923 0 

19,659 13,161 1,333 0 8,737 5,714 17,036 3,793

AUDITOR’S OPINION 

We audited the annual accounts (including the accounting system) and management report prepared 

by NORDEX GmbH, Rerik, for the full fiscal year ended September 30, 2000. The accounting and 

preparation of the annual accounts and management report in accordance with German Commercial 

Code regulations are the responsibility of the Company’s Management Board. Our responsibility is, 

based on our audit, to express an opinion on the annual accounts (including the accounting system) 

and management report. 

We conducted our annual audit in accordance with the provisions of Art. 317 HGB and with due regard 

to generally accepted standards on the audit of financial statements as established by IDW, the 

Institute of Sworn Public Auditors in Germany. Those standards require that we plan and perform the 

audit to obtain reasonable assurance that any misstatement or fraud which has a material impact on 

the view of the net assets, financial position and results of operations as presented by the annual 

accounts in accordance with generally accepted accounting principles and by the management report 

is identified. When planning the audit procedures, knowledge and understanding of the Company’s 

business, its economic and legal environment as well as sources of potential errors are given due 

consideration. An audit includes examining, largely on a test basis, the internal control system’s 

effectiveness and the evidence supporting the amounts and disclosures in the accounting, annual 

accounts, and management report. An audit also includes assessing the accounting principles used, 

and significant estimates made, by the Company’s Management Board, as well as evaluating the overall 

presentation of the annual accounts and management report. We believe that our audit provides a 


Our audit did not result in any objections or exceptions. 

It is our opinion that the annual accounts, with due regard to accounting principles generally accepted 

in Germany, present fairly, in all material respects, the Company’s net assets, financial position and 

results of operations. The management report gives a true and fair view of the Company’s overall 

position and the risks inherent in its future development. 

Cologne, November 24, 2000 

(Dr. Scheur) 





(Schmoller) 


F-75


Recent Developments and Outlook 

During the first quarter of the fiscal year 2000/2001, which started on October 1, 2000, Nordex AG took 

up its activity as a holding company, having consolidated its five subsidiaries through its principal 

shareholders, Borsig Energy GmbH and Nordwerk A/S. 

In the first quarter of the current fiscal year Nordex AG, in addition to the cost of establishing the 

business operations, incurred expenses primarily for the restatement of the Group quarterly accounts 

according to IAS (EUR 68 thousand), communications consultancy in preparation for the Offering (EUR 

30 thousand) as well as recruitment expenses (EUR 26 thousand). Further, in relation to the planned 

Offering and the related expenses, reserves of EUR 223 thousand were established in the IAS Pro Forma 

Consolidated Interim Financial Statement as of December 31, 2000. 

The Nordex Group was able to conclude contracts for the supply of 113 wind turbines in the first 

quarter of the current fiscal year. During the same period, 46 wind turbines and through the end of 

February 2001 another 52 wind turbines were installed. The total operating performance of the Nordex 

Group during the first quarter of fiscal year 2000/2001 was EUR 69 million. In the first quarter of the 

fiscal year 2000/2001 costs of EUR 50.8 million for materials, EUR 5.7 million for personnel and EUR 9.5 

million for other operating expenses were incurred. The number of employees rose to 634 at December 

31, 2000, of which 458 (72%) were employed by Nordex Energy GmbH. 

For the rest of the fiscal year 2000/2001 the Nordex Group expects that the sales of the 1.5 megawatt- 

Plant S-70 in Germany will continue to be strong and that first ventures elsewhere in Europe with this 

type could be realized. The Company has noted a strong market interest for the new N-80 with 2.5 

megawatts both in Germany and abroad. The main focus for the foreign market remain the wellestablished 

N-43, N-50, N-60 and N-62. In addition to a core market which is continuing to be busy, 

especially in Germany and Denmark, the Nordex Group is expecting to realize a number of large scale 

projects abroad, and, in February 2001, signed a contract for the supply of a 20 megawatt windfarm in 

Canada and in March 2001 a contract for the supply of a 40 megawatt windfarm in the United States. 

The positive business expectations are based on the development of the in-house rotor production, 

which has so far preceded in accordance with plan, with the industrial wing production scheduled to be 

operational by the end of the fiscal year, and the continuing development and increased use of 

NORDEX Control with its advantages as compared to the steering concepts used by competitors in the 

past. At the same time the administrative areas of the Nordex Group are being, where so required, 

continuously expanded. 

The Nordex Group further plans to develop its sales activities in what it considers to be major growth 

markets – United States, Spain as well as in China – but also in France and the U.K. The Company 

expects that the focusing of its management will lead to a further strengthening of the market position 

there. The same also applies to the consolidation of the procurement and storage at the production 

location in Rostock resulting from the new group structure. 

Oberhausen, March 2001 Nordex AG 

A-1


Glossary 

Alternative energy sources Those sources of energy which renew themselves constantly and 

are practically inexhaustible: solar energy, biomass, d wind 

energy, ambient heat, etc. Contrast with d conventional energy 

sources. 

Asynchronous generator The rotation speed of the rotor of an asynchronous generator is 

different to the d grid frequency (50 Hz in Europe Hertz). Due to 

its construction it is very robust and does not require much 

maintenance. The double-fed asynchronous generator has several 

technical advantages. Due to the additional costs the decision to 

use a double-fed asynchronous generator is a balancing of 

economic and technical considerations. Double-fed asynchrouous 

generators have been used for several years in conventional power 

plants which means that it is possible to rely on operational knowhow. 

Average annual wind speed The average wind speed over a year, measured in d m/s. 

Blade pitch adjustment Turning the rotor blades of a d pitch-regulated turbine around 

their longitudinal axis. In the case of a pitch-regulated wind 

turbine, the turbine’s electronic controls constantly measures the 

power output. When the power output is too high, the controller 

sends a command to the blade pitch mechanism which 

immediately pitches (turns) the rotor blades slightly out of the 

wind. Conversely, the blades are turned back into the wind 

whenever the wind drops again. The rotor blades thus have to be 

able to turn around their longitudinal axis (to pitch). During normal 

operation, the blades pitch a fraction of a degree at a time while 

the rotor is continuing to turn. 

Designing a pitch-regulated wind turbine requires sophisticated 

engineering to make sure that the rotor blades pitch exactly the 

amount required. On a pitch-regulated wind turbine, the 

electronics control will pitch the blades every time the wind 

speed changes, which ensures that the rotor blades are always at 

the optimum angle in order to maximise output across all wind 

conditions. 

Certification Wind turbines are certified pursuant to certain regulations. This 

ensures the correct planning and safety of operation of the wind 

turbines. Germanische Lloyd (GL), based in Hamburg, is the 

authoritative body for wind turbine certification in Germany. 

Constant-speed wind turbine Turbine which can operate at only one or ^ in worst cases two fixed 

rotation speeds. While technically far simpler, these turbines do not 

permit optimal use of d wind energy (see d variable-speed wind 

turbine). 

Conventional energy sources All d fossil fuels as well as nuclear power and hydroelectric power. 

Cut-out speed The wind speed at which the d wind turbine is shut down for 

safety reasons (as a rule around 25 meters per second d m/s). 

G-1

Drive train The mechanical component of the turbine which transmits the 

motion of the rotor to the generator. The drive train consists of the 

rotor shaft, gear, coupling and the generator armature. 

EEG Abbreviation for ‘‘Erneuerbare Energien Gesetz’’ (Renewable 

Energies Act). For the Federal Republic of Germany the EEG 

superseded the ‘‘Stromeinspeisungsgesez’’ (Act on Supplying 

Electricity from Renewable Energies into the Public Grid). The 

EEG has been in force since April 1, 2000. 

Engineering Technical calculations and construction works 

Fossil fuels Energy reserves formed millions of years ago by the decomposition 

of plants and animals in a vacuum, under high temperatures and 

pressure. These fuels include oil, gas, lignite and hard coal. 

Gear The gear lies between the slow-moving d rotor shaft and the fastmoving 

generator shaft. The gear causes the generator shaft to 

turn approximately 70 times faster than the rotor shaft. This is 

essential as the generator must turn at a much greater speed than 

the rotor. All of the rotor’s output is transferred to the generator 

via the gear. 

Generator The generator transforms the kinetic energy of the rotor into 

electrical energy. Generators for wind turbines differ from 

generators for conventional power plants. One reason is that the 

generator is connected to a power source (the rotor) with a variable 

output of kinetic energy. Normally an asynchronous generator is 

used as electrical generator. (d asynchronous generator). 

Generator slip The slip is the difference between the rotation speed of the 

generator armature and the grid frequency in the stator of the 

generator, it occurs only in asynchronous generators and allows 

the simple operation of the turbine at various rotor rotation speeds 

(see d rotation range, d asynchronous generator and d 

inverter). 

Grid frequency The rate of oscillation of an electricity grid: 50 Hz in Europe, 60 Hz 

in the US. 

Inverter An electronic device which regulates the energy produced by the 

d asynchronous generator and feeds it into the grid. An inverter is 

required in variable-speed turbines or those not directly connected 

to the grid. The speed of the rotor’s rotation changes depending on 

the wind conditions, so the inverter adjusts the energy from the 

generator to the grid frequency, allowing the turbine to operate at 

variable speeds. 

Kilowatt (kW) 1,000 watts; a watt is a unit of measure for electrical power. 

Kilowatt hours Unit for energy which is fed into a grid. 

Life expectancy The period of time during which a turbine is operational. Life 

expectancy depends on the quality of the turbine itself and on local 

climatic conditions such as the level of turbulence at the site. 

m/s Meters per second. A unit for measuring wind speed. 

G-2

Medium voltage A type of voltage. The grid distinguishes between high voltage 

(greater than 30kV) for long-range transmission, medium voltage 

(up to 30kV) for local grids and low voltage (up to 1 kV) for normal 

end-users. Wind turbines are normally connected to the mediumvoltage 

grid via a transformer. 

Megawatt (MW) Unit for measuring the performance of a wind turbine. 1MW=1,000 

kilowatts or 1,000,000 watts. 

Megawatt turbine A turbine with a nominal output of one megawatt or more. 

Multipole generator A generator with several poles which raises the generated 

frequency at low rotor speeds. This can mean that a complicated 

d gear between rotor and generator may not be needed. 

Nacelle The nacelle contains the most important components of the wind 

turbine the d drive train as well as the electronic and electrical 

components. The maintenance staff can access the nacelle from 

the mast. The rotor is located at the front of the nacelle and 

consists of the rotor blades and the rotor hub. 

Nominal output The ultimate permanent output level of a wind turbine or rather its 

generator. If a wind turbine has a nominal output of 1,300kW, it 

means that it produces 1,300kW per hour if it is operating at 

nominal level. The nominal output of a wind turbine, however, does 

not give an indication as to the level of energy it actually produces, 

since a wind turbine operates only for a few hours per year at its 

nominal level. In order to assess how much energy a wind turbine 

actually produces it is necessary to know the wind conditions on 

the individual site. An expertise on wind conditions is the best way 

to assess this. 

Nominal rotation speed Rotation speed of the rotor/generator required for nominal output. 

Offshore wind turbine A turbine constructed at sea. 

Onshore wind turbine A turbine constructed at land. 

Operations control system A system automatically controlling a turbine’s operation. 

OptiSlip OptiSlip (optional slip) is a special control system for d 

asynchronous generators to match the rotation speed of the 

rotor to the grid frequency which works on the basis of an 

increased generator slip. The system is much simpler in technical 

terms than normal asynchronous technology. 

Output Output is energy per unit of time measured in Watts. Output is 

measured at any specific time, while energy is measured over a 

period of time (d nominal output.) 

Pitch bearing The component which attaches the turbine d nacelle to the tower, 

allowing it rotate about the tower. A turbine’s tower is anchored in 

the ground, and as it must be possible for the rotor, generator, etc. 

to be turned into the wind, these are mounted on the pitch bearing 

which allows rotary movement. 

Pitch-regulated wind turbine A specific type of wind turbines which ensures a steady rotor 

rotation speed by using a d blade pitch adjustment. The turbine’s 

electronics sensor constantly monitors the power output of the 

G-3

turbine. When the power output is too high, the controller sends a 

command to the blade pitch mechanism which immediately pitches 

(turns) the d rotor blades slightly d out of the wind. Conversely, 

the blades are turned back into the wind whenever the wind drops 

again. It must therefore be possible to turn the rotor blades around 

their longitudinal axis. On a pitch-regulated wind turbine, the 

controller will pitch the blades every time the wind changes; this 

ensures that the rotor blades are always at the optimum angle in 

order to maximise output. Due to the complex technology involved, 

pitch-regulated turbines require greater investment than stall 

technology. 

‘‘Plug and play’’ assembly IT term meaning the assembly of a device or machine from 

components without the need for engineering. 

Power curve A turbine’s power curve shows the relationship between electric 

power output and wind speed. 

Power regulation Principles which govern the operation of a wind turbine, e.g. 

defining the cut-in speed, the speed at which electricity is 

produced or the speed at which it is turned out of the wind. 

Renewable energy sources see d alternative energy sources 

Retail fund A standardized form of asset management by an investment 

company. In contrast to individual portfolio management, the 

investor has no influence on management and investment 

strategy. The corporation is only bound to observe legal 

regulations and its self-imposed investment guidelines. 

Rotation range The difference, given as a percentage, between the cut-out speed 

and the cut-in speed. 

Rotor area The area swept out by the rotor during operation. The larger the 

rotor diameter, the greater the swept area and therefore the 

output. 

Rotor blades The rotating wings of a turbine which are driven directly by the 

wind. 

Rotor hub The part of the wind turbine to which the rotating rotor blades are 

attached. The hub is situated in the middle of the rotor and 

connects this to the generator armature via the shaft and in some 

cases a gear. 

Rotor shaft A machine component which transmits the rotor’s motion to a gear 

or to the generator armature. 

Shaft A machine component which transmits the rotor’s motion to a 

fixed gear, which is in turn connected to the generator armature. 

Also called rotor shaft. 

Stalling A physical situation which stops the rotor’s motion. Stalling occurs 

when the angle of the rotor blade to the directions of the wind is 

too acute. The lift force on the rotor increases with the angle of the 

blade to the direction of the wind up to a certain point, at which 

turbulence occurs on the surface facing away from the wind. This 

turbulence causes the rotor to slow or stop. 

G-4

Stall-regulated wind turbine Stall-regulated wind turbines have d rotor blades bolted onto the 

d hub at a fixed angle. The geometry of the rotor blade profile has 

been aerodynamically designed to ensure that when the wind 

speed becomes too high, it creates turbulence on the side of the 

rotor blade which is not facing the wind. This d stalling prevents 

the lifting of the rotor blade from acting on the rotor. 

The basic advantage of stall regulation is that there is no need for 

moving parts in the rotor itself, or a complex control system. On 

the other hand, stall regulation represents a very complex 

aerodynamic system which also presents many challenges with 

regard to the structural dynamics of the whole turbine, e.g. 

avoiding stall-induced vibrations. Stall regulation is more simple 

than pitch regulation and is therefore cheaper. Approximately two 

thirds of the wind turbines currently being installed worldwide are 

stall-regulated. 

Supply management The Company’s organization and administration of supply and 

inventory management for turbine components. 

Turn out of the wind Turning the turbine so that the rotor blades are no longer 

perpendicular to the wind direction. This is mainly used for 

maintenance work. 

Variable-speed wind turbine Variable speed turbines can be operated with variable rotor speeds. 

This allows a better adjustment to the wind speed and increased 

exploitation of the kinetic energy of the wind (d asynchronous 

generator and d inverter). 

Volt (V) Unit of electric potential. 1,000 V = 1 kV 

Voltage peaks Voltage peaks occur when the rotation speed of a turbine is too 

high. At nominal rotation speed and nominal output, the generator 

produces the nominal voltage. If the rotation speed is too high, 

voltage peaks occur which can lead to faults. 

Wind energy The energy converted from the kinetic energy of the air. 

Wind farm Several wind turbines in the same place. This, in particular 

simplifies service. 

Wind regime A classification of locations according to strength of wind. 

A location where a certain wind strength is predominant will 

belong to the corresponding wind regime. 

G-5


On the basis of the above 

Company Report 


- with a stated value of E1.00 per share - 

Nos. 00000001- 52,050,000 

each carrying full dividend rights from the beginning of fiscal year 2000/2001 i.e. from October 1, 

2000 

composed of 




resolved by the Company’s Ordinary General Meeting on February 21, 2001 

and 




- German Securities Identification Number (WKN) 587 357 - 

and 

20,750,000 bearer shares subject to lock-up 



of which up to 



from the holdings of Selling Shareholders is made available to Dresdner Bank Aktiengesellschaft as 

a loan 

in respect of the Over-allotment Option granted to Dresdner Bank Aktiengesellschaft, 

which will for this purpose be released under a freely tradeable securities identification number 

and 

400,000 bearer shares 


from the holdings of a Selling Shareholder made available to Dresdner Bank Aktiengesellschaft and 

Westdeutsche Landesbank Girozentrale as a loan 

in their capacity as designated sponsors, 

which will for this purpose be released under a freely tradeable securities identification number 

- German Securities Identification Number (WKN) 621058 - 

and up to 



in respect of subscription rights for bearer shares 

from the contingent capital increase of up to E3,400,000.00 resolved by the Company’s Ordinary 

General Meeting on February 21, 2001 each carrying full dividend entitlement as from the fiscal 

year in which the rights are exercised 

of 

Nordex Aktiengesellschaft, Oberhausen 

were admitted to the Geregelter Markt and to trading on the 

Neuer Markt 

of the Frankfurt Stock Exchange 

Frankfurt am Main, Dusseldorf, Munich, March 30, 2001 

Dresdner Bank 

Aktiengesellschaft Westdeutsche Landesbank Girozentrale 

BHF-BANK 


COMMERZBANK 


Bayerische Hypo- und Vereinsbank 

Aktiengesellschaft


SUMMARY OF CERTAIN DIFFERENCES 

AMONG GERMAN (HGB), UNITED STATES (US GAAP) 

AND INTERNATIONAL (IAS) ACCOUNTING PRINCIPLES 

Certain selected financial data of the Nordex Group contained in this Offering Memorandum were 

prepared in accordance with German Commercial Code provisions reflecting German principles of 

adequate and orderly accounting. German Commercial Code provisions differ in some respects from 

the Generally Accepted Accounting Principles in the United States (‘‘US GAAP’’) and from those in the 

proposals made by the International Accounting Standards Committee (the ‘‘IASC’’) to harmonise 

international presentation of accounts in the form of International Accounting Standards (‘‘IAS’’). 

Below is a summary of some essential differences among the German provisions, US GAAP and IAS. 

This summary does not explain all of the differences that are of importance for preparing annual 

financial statements. The following explanation also does not describe all of the differences that can 

affect the presentation of the assets, financial position and earnings situation of the Nordex Group. 

Fundamental Differences 

HGB accounting, US GAAP accounting and IAS accounting pursue fundamentally different accounting 

goals. 

While accounting according to the German Commercial Code gives special emphasis to the principle of 

prudence and protection of creditors, US GAAP and IAS accounting give priority to providing 

shareholders with information relevant to decisions. Therefore, the comparability of annual financial 

statements — both over different years as well as of different companies — and income determination 

by period are given more emphasis under US GAAP and IAS than under HGB. 

In addition, under German law, financial statements prepared in accordance with the Commercial Code 

also form the basis for the tax balance sheet and, therefore, tax considerations influence considerably 

the preparation of the annual financial statement. Companies therefore use somewhat conservative 

valuation methods, to some extent, in their financial statements. 

Giving priority to the principles of conveying information relevant for decisions and comparability of 

annual financial statements instead of to the principle of prudence under US GAAP and IAS results, in 

certain situations, to cases in which unrealised results are shown. This applies to transactions in foreign 

currencies, to long-term custom orders and to showing marketable securities in the balance sheet. 

Long-term custom orders are shown in the balance sheet under certain conditions according to the 

percentage-of-completion method. This method recognizes sales and also profits from a long-term 

order corresponding to the progress of the order, whereas HGB allows a realisation of results for orders 

carried out over several years only after the full completion of the order. 

With marketable securities being held only for the short to medium-term — in contrast to the 

accounting treatment under HGB — a market valuation is prescribed by both IAS and US GAAP in which 

the unrealised profit from securities held for a short period is considered as fully affecting net income 

in the profit and loss statement. For securities held medium-term, market changes under US GAAP 

have a neutral effect on shareholders’ equity, whereas IAS allows the choice of either treating these 

changes in value as having an effect on results or to treat them neutrally. 

Goodwill 

According to the provisions of the German Commercial Code, for an affiliated group’s financial 

statement, the differential amount between the purchase price of a company and the current market 

value of the acquired net assets (goodwill) can be set off with reserves (with a neutral effect on results) 

or carried as an asset on the balance sheet and depreciated during its expected useful life, as a rule 5 to 

15 years, with an effect on the financial statements According to German Accounting Standard No. 4 

(DRS 4), ‘‘Acquisition of Companies in Consolidated Statements’’, issued by the German Accounting 

B-1

Standards Board (‘‘DRS’’), the charging of the company’s value to the group’s own equity in a manner 

that does not affect income is, however, not permissible. DRS has, inter alia, responsibility for 

developing recommendations regarding the application of the basic principles of consolidated 

accounting. 

According to currently applicable US GAAP, goodwill must be carried as an asset on the balance sheet 

and depreciated over the expected useful life, with 40 years being the maximum. 

According to IAS, goodwill also must be shown as an asset on the balance sheet with subsequent 

depreciation over the expected useful life. As a rule, the depreciable life is a maximum of 20 years; 

longer depreciable lives are possible in justified exceptional cases. 

Tangible Assets 

German companies frequently orient themselves in assessing depreciation for tangible assets 

(buildings, technical equipment, tools, furniture and fixtures) on the useful life customary for their 

company as laid down by the tax administration. 

According to US GAAP and IAS, tangible assets are depreciated on a straight-line basis over their 

expected useful life. This difference in depreciation policy can result in companies that prepare their 

balance sheet in accordance with the German Commercial Code basically showing a lower book value 

for tangible assets than companies that prepare their balance sheets in accordance with US GAAP or 

IAS. Tax-motivated special depreciation as well as tax-motivated reserves in ‘‘reserves for special 

depreciation’’ are prohibited under international principles for rendering accounts. 

According to IAS, a tangible asset can also be assessed with its ‘‘new valuation amount’’, which 

corresponds to its adjusted value (fair value) at the time of the new valuation, less subsequent 

cumulative normal depreciation. Increases in value are basically credited to a special valuation reserve 

with no effect on the balance sheet. A rise in value will be displayed as earnings to the extent that an 

earlier new valuation gave rise to an expense-related depreciation. 

Reserves 

The German Commercial Code provisions require the creation of reserves for uncertain obligations as 

well as for threatened losses from pending and unsettled business transactions. The level of reserves is 

measured according to the expenditure expected by a prudent and reasonable businessman. Reserves 

for threatened losses from pending business transactions include all internal expenditures, including 

indirect marketing and administrative expenses. Reserves for uncertain obligations towards third 

parties are recorded as soon as a legal obligation towards a third party has arisen or at least has been 

caused in an economic sense. 

Reserves may also be formed in German financial statements under HGB for expenditures that are 

exactly outlined and assigned to a financial year or to an earlier financial year and that, on the key date 

for the financial statement, are probable or certain, but their amount or the time they will occur is 

indefinite. 

According to US GAAP and IAS, reserves for uncertain obligations are expressed not only when it is 

probable that the assets will diminish or an obligation has arisen, but also when the least loss can be 

estimated reliably. Future losses that cannot be estimated and costs and risks do not fit the 

requirements for the formation of reserves according to US GAAP and IAS. Application of German 

Commercial Code provisions can — especially because of the strong influence of tax-related 

considerations — lead to higher reserves than are possible under US GAAP and IAS. In the case of a 

reduction of reserves in later periods, however, this effect would be reversed. 

Long-term reserves for removal of waste rock or rubble or for the disposal of environmental waste, 

which under HGB accumulate over the period of the accompanying installations, are, under IAS, 

already accounted for at the time of the acquisition of the installation in the amount of the present 

value of the estimated completion. These future expenditures count as acquisition costs of the 

installation in the same amount as the reserves amount. The period expenditure from this results from 

B-2

the accrued interest of the present value and from the higher depreciation as compared to treatment 

under HGB. US GAAP has rules for such circumstances only in cases of environmental damage for 

which future elimination has been proscribed. 

Pension Reserves 

Under HGB, pension reserves are basically carried as liabilities on the balance sheet in the amount of 

the tax partial value which is determined on the basis of actuarial principles (expectancy-covering 

procedure). In evaluating the reserve, the current salary and pension level as well as an interest rate of 

6% is to be considered. 

According to US GAAP and IAS, determining the pension reserves is done according to the expectancypresent 

value procedure, taking into account long-term trend assumptions concerning future salary 

and pension developments as well as the current (US GAAP) or long-term (IAS) capital-market interest 

rate on the valuation key date. 

Under IAS the expectancy-covering procedure is also permissible. 

B-3

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS 

The following is a summary of the material U.S. federal income tax consequences of the acquisition, 

ownership and disposition of Offered Shares by a U.S. Holder (as defined below). This summary deals 

only with initial purchasers of Offered Shares that are U.S. Holders and that will hold the Offered 

Shares as capital assets. The discussion does not cover all aspects of U.S. federal income taxation that 

may be relevant to, or the actual tax effect that any of the matters described herein will have on, the 

acquisition, ownership or disposition of Offered Shares by particular investors, and does not address 

state, local, foreign or other tax laws. In particular, this summary does not address tax considerations 

applicable to investors that own (directly or indirectly) 10% or more of the voting shares of the 

Company, nor does this summary discuss all of the tax considerations that may be relevant to certain 

types of investors subject to special treatment under the U.S. federal income tax laws (such as banks, 

insurance companies, investors liable for the alternative minimum tax, individual retirement accounts 

and other tax-deferred accounts, tax-exempt organisations, dealers in securities or currencies, investors 

that will hold the Offered Shares as part of straddles, hedging transactions or conversion transactions 

for U.S. federal income tax purposes or investors whose functional currency is not the U.S. dollar). 

As used herein, the term ‘‘U.S. Holder’’ means a beneficial owner of Offered Shares that is (i) a citizen or 

resident of the United States for U.S. federal income tax purposes, (ii) a corporation, or other entity 

treated as a corporation, created or organised under the laws of the United States or any State thereof, 

(iii) an estate the income of which is subject to U.S. federal income tax without regard to its source or 

(iv) a trust if a court within the United States is able to exercise primary supervision over the 

administration of the trust and one or more U.S. persons have the authority to control all substantial 

decisions of the trust. 

The Company believes and the summary assumes that the Company is not a passive foreign investment 

company (a ‘‘PFIC’’) for U.S. federal income tax purposes. The Company’s possible status as a PFIC must 

be determined annually and therefore may be subject to change. If the Company were to be a PFIC in 

any year materially adverse tax consequences could result for U.S. Holders. 

The summary is based on the tax laws of the United States, including the Internal Revenue Code of 

1986, as amended, its legislative history, existing and proposed regulations thereunder, published 

rulings and court decisions, as well as on the income tax treaty between the United States and 

Germany (the ‘‘Treaty’’), all as currently in effect and all subject to change at any time, possibly with 

retroactive effect. 

THE SUMMARY OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FOR 

GENERAL INFORMATION ONLY. ALL PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN 

TAX ADVISERS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING THE 

OFFERED SHARES, INCLUDING THEIR ELIGIBILITY FOR THE BENEFITS OF THE TREATY, THE 

APPLICABILITY AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND POSSIBLE 

CHANGES IN TAX LAW. 

Dividends 

General. Distributions paid by the Company out of current or accumulated earnings and profits (as 

determined for U.S. federal income tax purposes), before reduction for any German withholding tax 

paid by the Company with respect thereto, will generally be taxable to a U.S. Holder as foreign source 

ordinary dividend income, and will not be eligible for the dividends received deduction allowed to 

corporations. Distributions in excess of current and accumulated earnings and profits will be treated as 

a non-taxable return of capital to the extent of the U.S. Holder’s basis in the Offered Shares and 

thereafter as capital gain. 

Foreign Currency Dividends. Dividends paid in euro will be included in income in a U.S. dollar amount 

calculated by reference to the exchange rate in effect on the day the dividends are received by the U.S. 

Holder, regardless of whether the euro are converted into U.S. dollars. If dividends received in euro are 

converted into U.S. dollars on the day they are received, the U.S. Holder generally will not be required to 

B-4

ecognise foreign currency gain or loss in respect of the dividend income. If the euro are converted 

after the date on which they are received, any gain or loss that a U.S. Holder recognises on the 

conversion will be U.S. source ordinary income or loss. 

Effect of German Withholding Taxes. As discussed in ‘‘Taxation’’, under current law payments of 

dividends by the Company to foreign investors are subject to German withholding taxes including a 

solidarity surcharge that is levied on the amount of tax withheld. The rate of withholding tax applicable 

to U.S. Holders that are eligible for benefits under the Treaty is reduced to a maximum of 15%. As 

discussed under ‘‘Taxation,’’ U.S. Holders eligible for benefits under the Treaty can apply for a refund of 

any taxes withheld in excess of this amount. For U.S. federal income tax purposes, U.S. Holders will be 

treated as having received the amount of German taxes withheld by the Company, and as then having 

paid over the withheld taxes to the German taxing authorities. As a result of this rule, the amount of 

dividend income included in gross income for U.S. federal income tax purposes by a U.S. Holder with 

respect to a payment of dividends may be greater than the amount of cash actually received (or 

receivable) by the U.S. Holder from the Company with respect to the payment. 

Under the current German tax regime (see ‘‘Taxation—Taxation of Dividends—Shareholders not Subject 

to Unlimited Tax Liability’’), a U.S. Holder may claim an additional refund equal to 5% of the dividend 

paid. For United States federal income tax purposes, the additional refund is treated as an additional 

dividend equal to 5.88% of the amount of the dividend actually paid. The withholding tax deemed to 

have been paid is equal to 15% of the sum of the dividend paid to the U.S. Holder and the 5.88% 

additional dividend. After September 30, 2002, Germany will not pay a tax credit to shareholders. 

Therefore, U.S. Holders will not be able to claim the additional tax refund equal to 5% of the dividend 

paid and will not be required to include the additional dividend equal to 5.88% of the amount of the 

dividend actually paid in their income. 

Subject to certain limitations, a U.S. Holder will generally be entitled to a credit against its U.S. federal 

income tax liability, or a deduction in computing its U.S. federal taxable income, for German income 

taxes withheld by the Company. U.S. Holders that are eligible for benefits under the Treaty will not be 

entitled to a foreign tax credit for the amount of any German taxes withheld in excess of the 15% 

maximum rate, and with respect to which the holder can obtain a refund from the German taxing 

authorities. For purposes of the foreign tax credit limitation, foreign source income is classified into 

one of several ‘‘baskets’’, and the credit for foreign taxes on income in any basket is limited to U.S. 

federal income tax allocable to that income. Dividends paid by the Company generally will constitute 

foreign source income in the ‘‘passive income’’ basket or, in the case of certain holders, the ‘‘financial 

services income’’ basket. In certain circumstances, a U.S. Holder may be unable to claim foreign tax 

credits (and may instead be allowed deductions) for foreign taxes imposed on a dividend if the U.S. 

Holder (i) has not held the Offered Shares for at least 16 days in the 30-day period beginning 15 days 

before the ex dividend date, or (ii) holds the Offered Shares in arrangements in which the U.S. Holder’s 

expected profit, after non-U.S. taxes, is insubstantial. U.S. Holders that are accrual basis taxpayers must 

translate German taxes into U.S. dollars at a rate equal to the average exchange rate for the taxable 

year in which the taxes accrue, while all U.S. Holders must translate taxable dividend income into U.S. 

dollars at the spot rate on the date received. This difference in exchange rates may reduce the U.S. 

dollar value of the credits for German taxes relative to the U.S. Holder’s U.S. federal income tax liability 

attributable to a dividend. Prospective purchasers should consult their tax advisers concerning the 

foreign tax credit implications of the payment of German taxes. 

Sale or other Disposition 

Upon a sale or other disposition of Offered Shares, a U.S. Holder generally will recognise capital gain or 

loss for U.S. federal income tax purposes equal to the difference, if any, between the amount realised 

on the sale or other disposition and the U.S. Holder’s adjusted tax basis in the Offered Shares. This 

capital gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period in the 

Offered Shares exceeds one year. Any gain or loss will generally be U.S. source, except that losses will 

be treated as foreign source to the extent the U.S. Holder received dividends that were includible in the 

financial services income basket during the 24-month period prior to the sale. 

B-5

A U.S. Holder that receives euro upon sale or other disposition of the ordinary shares will realise an 

amount equal to the U.S. dollar value of the euro upon the date of sale (or, in the case of cash basis 

and electing accrual basis taxpayers, the settlement date). A U.S. Holder will have a tax basis in the euro 

received equal to the U.S. dollar amount of the euro received. Any gain or loss realised by a U.S. Holder 

on a subsequent conversion of euro will be U.S. source ordinary income or loss. 

Passive Foreign Investment Company Considerations 

A foreign corporation will be a PFIC in any taxable year in which, after taking into account the income 

and assets of the corporation and certain subsidiaries pursuant to the applicable ‘‘look-through rules,’’ 

either (i) at least 75% of its gross income is ‘‘passive income’’ or (ii) at least 50% of the average value of 

its assets is attributable to assets which produce passive income or are held for the production of 

passive income. The Company does not believe that it should be treated as a PFIC for U.S. federal 

income tax purposes but the Company’s possible status as a PFIC must be determined annually and 

therefore may be subject to change. This determination will depend in part on whether the Company 

continues to earn substantial amounts of operating income, as well as on the market valuation of the 

Company’s assets and the Company’s spending schedule for its cash balances and the proceeds of the 

Offer. If the Company were a PFIC, U.S. Holders of Shares would be required (i) to pay a special U.S. 

addition to tax on certain distributions and gains on sale and (ii) to pay tax on any gain from the sale of 

Shares at ordinary income (rather than capital gains) rates in addition to paying the special addition to 

tax on this gain. Prospective purchasers should consult their tax advisers regarding the potential 

application of the PFIC regime. 

Backup Withholding and Information Reporting 

Dividends and other proceeds with respect to Offered Shares paid by a U.S. paying agent or other U.S. 

intermediary will be reported to the IRS and to the U.S. Holder as may be required under applicable 

regulations. Backup withholding at a rate of 31% may apply to these payments if the U.S. Holder fails 

to provide an accurate taxpayer identification number or certification of exempt status or fails to report 

all interest and dividends required to be shown on its U.S. federal income tax returns. Certain U.S. 

Holders (including, among others, corporations) are not subject to backup withholding. 

B-6

UNDERWRITING AND SALE 

Dresdner Kleinwort Wasserstein and WestLB Panmure are the Joint Lead Managers for the Offering; 

Dresdner Kleinwort Wasserstein is the Sole Bookrunner and BHF–BANK, COMMERZBANK SECURITIES 

and HypoVereinsbank are the Co-Managers (together the ‘‘Managers’’). 

Pursuant to the Underwriting Agreement, the Managers will agree, severally but not jointly, to 

underwrite, at the Offer Price of E9 per Offered Share, up to the number of Offered Shares set forth 

opposite their names in the table below. Subject to certain conditions, Nordex has agreed to issue 

18,000,000 Offered Shares (the ‘‘New Shares’’) and the Selling Shareholders have agreed to sell 

13,300,000 Offered Shares (together with the Option Shares, the ‘‘Sale Shares’’) in the Offering. The New 

Shares will be subscribed for, and the Sale Shares will be purchased, by Dresdner Kleinwort Wasserstein 

for the account of all Managers. Furthermore, the Selling Shareholders have agreed, subject to certain 

conditions, to sell up to an additional 4,700,000 Offered Shares (the ‘‘Option Shares’’) pursuant to the 

Over-Allotment Option (see ‘‘The Offering — Over-allotment Option’’). Pursuant to the terms of the 

Underwriting Agreement, the Managers will subscribe for and purchase up to the total number of 

Offered Shares listed below. 

Manager Number of Offered Shares 

Dresdner Bank Aktiengesellschaft q 

Westdeutsche Landesbank Girozentrale q 

BHF-BANK Aktiengesellschaft q 

COMMERZBANK Aktiengesellschaft q 

Bayerische Hypo-und Vereinsbank Aktiengesellschaft q 

Total 36,000,000 

The Offer Price per Offered Share will be determined jointly by the Joint Lead Managers, the Selling 

Shareholders and Nordex on the basis of the results of the book-building process (see ‘‘The Offering’’). 

The Company and the Selling Shareholders will pay to the Managers a commission of 4% of the Offer 

Price for each Offered Share, other than the Option Shares, in respect of which the Selling Shareholders 

will pay to the Managers a commission of 2.4375% of the Offer Price for each Option Share and any 

Offered Shares placed on a preferential basis with employees of the Nordex Group, members of the 

Management Board of the Company, managing directors of the Company’s subsidiaries and business 

partners, in respect of which the Company and the Selling Shareholders will pay to the Managers a 

commission of 1.3125% of the Offer Price per Offered Share. The Company and the Selling 

Shareholders will also pay to the Managers, in their sole discretion, a success fee of up to 0.25% of the 

Offer Price for each Offered Share. In addition, the Company and the Selling Shareholders have agreed 

to reimburse the Managers in respect of certain of their expenses in connection with the Offering. The 

Underwriting Agreement entitles the Managers to be released and discharged from their respective 

obligations thereunder in certain circumstances prior to payment to the Selling Shareholders. Nordex 

and the Selling Shareholders have agreed to indemnify the Managers against certain liabilities in 

connection with the Offering, including liabilities under United States federal securities laws. The 

Company and the existing shareholders of Nordex have agreed to certain restrictions on the sale, 

announcement of sale or transfer of bearer shares of Nordex (see ‘‘The Offering — Lock-Up 

Agreement’’). 

The Managers propose to offer the Offered Shares to non-U.S. persons outside the United States in 

offshore transactions in reliance on Regulation S and in accordance with applicable law, and the 

Managers, through their respective U.S. affiliates, propose to offer the Offered Shares to qualified 

institutional buyers in the United States pursuant to, and in reliance upon, Rule 144A. Each Manager 

has agreed that, except as permitted under the Underwriting Agreement, it will not offer, sell or deliver 

the Offered Shares within the United States. Terms used in this paragraph have the meanings given to 

them by Regulation S. Transfer of the Offered Shares will be restricted as described under ‘‘Notice to 

Investors’’. 

B-7

No action has been or will be taken in any jurisdiction by the Managers that would permit a public 

offering of the Offered Shares or possession or distribution of this Offering Memorandum or any other 

offering of publicity material relating to the Offered Shares in any country or jurisdiction where action 

for that purpose is required. Each Manager has agreed to comply with all applicable laws and 

regulations in each jurisdiction in which it acquires, offers, sells or delivers Offered Shares or has in its 

possession or distributes this Offering Memorandum or any such other material. Nordex and the Selling 

Shareholders will have no responsibility for, and each Manager has agreed to obtain any consent, 

approval or permission required by it for, the acquisition, offer, sale or delivery by it of Offered Shares 

under the laws and regulations in force in any jurisdiction, to which it is subject or in or from which it 

makes any acquisition, offer, sale or delivery. No Manager is authorized to make any representation or 

use any information in connection with the issue and sale of the Offered Shares other than as 

contained in this Offering Memorandum or any amendment or supplement to it. 

United States 

Each Manager agrees and acknowledges that the Offered Shares have not been, and will not be 

registered under the Securities Act or under the securities laws of any State of the United States and 

may not be offered or sold within the United States, except pursuant to an exemption from, or in a 

transaction not subject to, the registration requirements of the Securities Act. Each Manager agrees 

and represents that: (i) it has not offered or sold, and will not offer or sell, any Offered Shares within 

the United States except to those who it reasonably believes to be QIBs (as defined in Rule 144A); (ii) 

neither it nor any person acting on its behalf has made or will make offers or sales of the Offered 

Shares in the United States by means of any form of general solicitation or general advertising (within 

the meaning of Regulation D) in the United States; and (iii) it has not entered and will not enter into 

any contractual arrangement with any distributor (as that term is defined by Regulation S) with respect 

to the distribution of the Offered Shares, except with its affiliates or with the prior written consent of 

Nordex. 

United Kingdom 

Each of the Managers agrees and represents that: (i) it has not offered or sold and will not offer or sell 

any Offered Shares to persons in the United Kingdom except to persons whose ordinary activities 

involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the 

purpose of their business or otherwise in circumstances that do not constitute an offer to the public in 

the United Kingdom for the purposes of the Public Offers of Securities Regulations 1995; (ii) it has 

complied and will comply with all applicable provisions of the Financial Services Act of 1986 with 

respect to anything done by it in relation to the Offered Shares in, from or otherwise involving the 

United Kingdom; and (iii) it has only issued or passed on, and will only issue or pass on, in the United 

Kingdom any document received by it in connection with the issuance of the Offered Shares to a 

person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment 

Advertisements) (Exemptions) Order 1996 or is a person to whom such document may otherwise 

lawfully be issued or passed on. 

Japan 

Each Manager has agreed not to offer or sell, or procure any offers or sales of Offered Shares in Japan 

without the prior written consent of the Joint Lead Managers. 

B-8

OFFERING MEMORANDUM Global Offering of up to ... - Nordex

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