Group - L. Possehl & Co. mbH

Annual Report 2007
Successful over the Long Term
with Clear-cut Principles

At a Glance
L. Possehl & Co. mbH is a management holding company based in Lübeck, Germany. Under our leadership, there were
approximately 7,000 people employed worldwide during the reporting period, working in about 81 various companies toward the
joint success of the Group. Our subsidiaries are divided into three core business segments: Production, Trading and Services. They
are each extremely independent in their market operations. In 2007, the Group achieved annual sales of € 1.5 billion, with profit
from ordinary operations totaling € 75 million.
Key figures
in e million 2003 2004 2005 2006 2007
Earnings
Sales 1,016 695 809 1,452 1,522
Germany 580 221 244 570 633
International 436 474 565 882 889
Result from ordinary operations 9 22 36 74 75
Consolidated net profit 7 17 26 99 114
Dividend 3 5 5 8 8
EBIT ratio in % 2.6 3.9 5.3 6.1 5.6
Return on equity before taxes in % 10.8 13.3 20.6 35.3 27.6
Balance sheet
Balance sheet total 493 442 533 718 796
Fixed assets 157 147 150 195 144
Investment in fixed assets 24 18 21 31 22
Depreciation 31 18 19 26 24
Cash and cash equivalents 10 45 57 42 180
Other current assets 321 249 324 478 467
Shareholders’ equity 174 182 202 209 273
Equity ratio in % 35.3 41.1 37.9 29.1 34.2
Financial data
Net debt 103 40 35 117 –
Gearing (net debt/equity) in % 59.2 22.2 17.3 56.0 0
Employees
Employees-yearly average 4,373 3,659 4,267 6,958 7,012
Germany 1,815 789 1,190 2,733 2,872
International 2,558 2,870 3,077 4,225 4,140

Possehl – the Entrepreneurs’ Gr
Capital for business development Paths with specific boundaries
PRODUCTION
Our business division Production is comprised
of experienced industrial companies
whose efforts are focused on the production
of promising products for the future.
The special characteristics of these companies
include a high level of specialization
as well as particular niche know-how. Our
customers stem from the areas of trade,
craft and the processing industry.
Precious Metals Processing
Heimerle + Meule GmbH, Pforzheim
Electronics
Possehl Electronics N.v.,
’s-Hertogenbosch (Netherlands)
Elastomer Processing
Harburg-Freudenberger Maschinenbau GmbH,
Hamburg
Cleaning Machines
Hako Holding GmbH & Co. KG,
Bad Oldesloe
Textile Finishing Systems
A. Monforts Textilmaschinen GmbH & Co. KG,
Mönchengladbach
Special-purpose Construction
Possehl Spezialbau GmbH, Wiesbaden
in e million 2007 2006
Sales 1,219.0 1,175.7
EBT 64.3 71.6
Capital
expenditure 21.3 29.9
Employees 6,788 6,687
TRADING
Taking center stage in the Trading business
division is International Trading, which is
comprised of goods for both industry and
the trades across the entire globe. This
business segment is based on many years
of experience coupled with a network that
has grown and developed from within.
Trading is the origin of Possehl’s business
activities.
International Trading
Possehl Erzkontor GmbH, Lübeck
L. Poss
in e million 2007 2006
Sales 291.4 265.2
EBT 6.5 7.7
Capital
expenditure 0.5 1.1
Employees 127 170

oup
Commitment to the success of
the organization
ehl & Co. mbH
SERvICES
Within the Services business segment, we
gear our focus on service areas that augment
our portfolio in a meaningful way.
Locally we offer services in the area of
environmental protection and outside of
Germany we offer services in the areas of
insurance and freighting services for commercial
undertakings, shipping companies,
shipyards and freight forwarders, to name
a few.
Environmental Protection
Possehl Umweltschutz GmbH, Lübeck
Broker Activities
Lubeca versicherungskontor GmbH,
Lübeck
Teutonia Fracht- und Assekuranzkontor GmbH,
Lübeck
in e million 2007 2006
Sales 11.3 11.3
EBT 1.6 1.4
Capital
expenditure 0.2 0.1
Employees 71 72
We manage our Group
according to clear-cut principles
geared toward the long term.
SALES By BUSINESS SEGMENTS
in € million
E 1,521.7 million
2007 2006
Production 1,219.0 1,175.7
Trading 291.4 265.2
Services 11.3 11.3

Table of Contents
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term with Clear-cut Principles 6
Group Management Report
Overview of the Economic Condition of the Group
Group Structure and Operations
Strategic Direction and Management Philosophy
2007 Economic Environment
Group Earnings Position
Earnings Position in the Operational Segments
Net Assets
Capital Expenditure and Financing
Employees
Research and Development
Risk Management System and Risks of Future Development
Report on Subsequent Events, Opportunities, and Forecasts
Consolidated Financial Statements
Auditors’ Report
Overview of Participation
Contact and Imprint
2
4
5
14
15
15
17
17
18
19
23
24
25
25
26
29
30
49
50
1

Letter from the Executive Board
2
Dear Busines Partners, Dear Readers,
The Possehl Group remained on a successful path in 2007. The result from ordinary operations reached
€ 75.3 million. We were thus able to expand on the previous year’s results for the fourth time in a row. It is also the best
result achieved thus far in the history of our company.
Each of the divisions provided positive contributions to results. Almost all of the divisions were able to increase their earnings
compared to the previous year. While the earnings of the Electronics division – which continues to be our largest
performance pillar – declined, it was still able to maintain an overall high level. Five of the seven divisions were able to
achieve historic best marks in performance.
Net sales of the group of companies increased during the fiscal year from e 1.452 billion to e 1.522 billion. The
Cleaning Machines, International Trading and Special-purpose Construction divisions experienced the greatest organic
growth. Sales in the Elastomer Technology division increased in part due to the initial consolidation of an acquisition. The
Electronics division reported a decline in sales as a result of the weak US dollar.
We used the past year to completely abolish our net financial liabilities by e 122.9 million, and now report a positive value
of e 6.1 million in the balance sheet. This leaves the Possehl Group completely debt-free.
With respect to new acquisitions, we decided to take a little break in 2007. Following two extremely
acquisition-rich years, we limited our activities to two compact transactions last year. In the Elastomer Technology
division, we implemented a supplementary acquisition by purchasing the “Rubber & Plastics” unit of the Italian company
Techint in April 2007, which strengthens our successful Mixing Technology division of subsidiary Harburg-Freudenberger
Maschinenbau GmbH. The newly integrated unit already provided gratifying contributions to sales and results in 2007
and thus affirmed itself as a successful acquisition at an early stage.
As of October 1, 2007, we increased our interest in the Hako Group, located in Bad Oldesloe, to 100 %, after previously
holding a 56 % interest acquired in two stages in 2004 and 2006. We were thus able to successfully complete the acquisition
process scheduled jointly with the former owners.

Uwe Lüders,
Born 1952, Dipl.-Volkswirt (degree in
economics), Chairman of the Executive
Board since April 2004. Previous
management experience in successful
diversified groups with a focus on
mechanical and systems engineering.
Most recently Chairman of the Management
Board of Buderus AG in Wetzlar
Our focus in 2007 was on the consolidation of the companies acquired during the two previous
years. By implementing efficiency and structural improvement measures, we were able to strengthen the divisions
from within. The required restructuring expense of approximately e 10 million has already been accounted for in the
fiscal year 2007 result. By introducing and implementing these measures, we have created the preconditions necessary
for the respective divisions to continue to achieve positive results even in the event of a possible weakening of
economic activity and a deterioration of general conditions.
We are confident that we can continue on our successful course into the year 2008 as well. We
want to profitably grow and – whenever suitable opportunities arise – make additional acquisitions. The M&A market for
medium-sized companies was highly competitive last year. In a number of cases, company purchase prices were paid that
to us were not economically justifiable. However, we continue to adhere to our strategic orientation as a long-term and
reliable new owner for medium-sized companies. Our newly improved and overall extremely solid equity base and
financial position form a secure foundation for our goal of consistently continuing to pursue and implement our growth
strategy.
Of course we also see certain risks, such as in the lingering uncertainty as to the outcome of the US loan crisis and further
development of the US dollar exchange rate. There are also uncertainties with respect to an implied economic weakening
in the various marketing areas in which Possehl subsidiaries are operating. However, based on our diversified position
as a medium-sized conglomerate, we have the necessary balance, stability and capital power to successfully realize our
objectives.
Yours sincerely,
Uwe Lüders Norbert Scheuch
Norbert Scheuch,
Born 1960, Dipl.-Kaufmann (degree in
business studies), member of the
Executive Board since April 2007.
Previously Managing Director of Schmidt
Holding GmbH in St. Blasien, a leading
global manufacturer of specialized
vehicles
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
3

Company Boards
ExECUtivE Board
Uwe Lüders, Lübeck
Chairman
Norbert Scheuch, Kasseedorf
(since April 1, 2007)
dr. Egon rudolph, Bad Schwartau
(until June 30, 2007)
adviSory CoUNCiL
(until February 5, 2008)
dr. Lutz Peters, Hamburg
Chairman
Managing Director of
AOH Nahrungsmittel GmbH & Co. KG
dr. Helmuth Pfeifer, Lübeck
Vice Chairman
Attorney and retired Notary
dr. Stephan Bartelt, Lübeck
Personally liable shareholder of
Martens & Prahl Versicherungskontor KG
dr. Manfred Biermann, Lübeck
Certified Public Accountant
theo dräger, Lübeck
Vice Chairman of the Supervisory Board
of Drägerwerk AG & Co. KGaA
Martin Salzmann, Lübeck
Managing Partner of Pressegroßvertrieb
Franz Maurer Nachf. GmbH & Co. KG
dr. Werner Marnette, Hollenstedt
(until July 23, 2007)
Former Chairman of the Executive Board
of Norddeutsche Affinerie AG
4
SUPErviSory Board
(since February 5, 2008)
Shareholder representatives
dr. Lutz Peters, Hamburg
Chairman
Managing Director of
AOH Nahrungsmittel GmbH & Co. KG
dr. Helmuth Pfeifer, Lübeck
Additional Vice Chairman
Attorney and retired Notary
dr. Stephan Bartelt, Lübeck
Personally liable shareholder of
Martens & Prahl Versicherungskontor KG
theo dräger, Lübeck
Vice Chairman of the Supervisory Board
of Drägerwerk AG & Co. KGaA
Martin Salzmann, Lübeck
Managing Partner of Pressegroßvertrieb
Franz Maurer Nachf. GmbH & Co. KG
rolf Schmidt-Holtz, Pogeez
Chief Executive Officer of
Sony BMG Music Entertainment
Employee representatives
dirk Kohrs, Bad Oldesloe
Vice Chairman
Chairman of the Works Council of
Hako-Werke GmbH, Bad Oldesloe plant
Peter Hlawaty, Hamburg
Labor Union Secretary of IG Metall
Coastal region
Hartmut Menn, Seevetal
Chairman of the Works Council of
Harburg-Freudenberger Maschinenbau
GmbH, Hamburg-Harburg plant;
Chairman of the Group Works Council
of L. Possehl & Co. mbH
Mario Schreiber, Bad Schwartau
Authorized representative of
L. Possehl & Co. mbH
Peter Seeger, Neumünster
Authorized representative of
IG Metall Administrative Office
Neumünster
Horst Wardius, Steinhorst
Vice Chairman of the Works Council
of Hako-Werke GmbH, Bad Oldesloe plant;
Vice Chairman of the Group Works
Council of L. Possehl & Co. mbH

dr. Lutz Peters
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
report of the Controlling Boards
Ladies and Gentlemen,
During the 2007 reporting year, the Advisory Council, as the supervisory
body for the Company, fulfilled the duties incumbent upon it according
to the law and the articles of association fully and completely.
This includes the regular exchange of information with the Executive
Board and assisting with the work of the Executive Board on an advisory
basis. The detailed reports of the Executive Board, prepared in
both written and verbal form, served as the basis for this. The Chairman
of the Advisory Council maintained regular contact with the Chairman
of the Executive Board and stayed abreast of the current company
development and business position. The Advisory Council as controlling
board was constantly kept informed of the intended business policies,
the corporate planning including financial, investment, and personnel
planning, the profitability of the Company, and the course of
business as well as the situation of the Group overall.
In the 2007 fiscal year, there were five Advisory Council meetings.
Decisions and resolutions of the Advisory Council, which required its
approval according to the articles of association or internal rules of
procedure, were intensively reviewed and passed based on draft
resolutions. Where required, resolutions were also drawn up in written
procedures.
In addition to discussing the economic situation of the group of companies,
the Advisory Council directed its attention during the reporting
year mainly to improving the corporate portfolio, developing individual
subsidiaries and implementing the Company’s acquisition strategy.
Within this context, the Advisory Council approved the acquisition of
the “Rubber & Plastics” unit of the Italian firm Techint in order to
strengthen the Mixing Technology division of the subsidiary Harburg-
Freudenberger Maschinenbau GmbH. The Advisory Council also gave
its approval for the complete takeover of the Hako Group, located in
Bad Oldesloe, following Possehl’s previously held 56 % interest in Hako
in two stages in 2004 and 2006. In addition, the Advisory Council also
agreed fully with the Executive Board that based on the high company
prices on the M&A market for medium-sized companies, no further acquisitions
would be undertaken. The controlling board continues to
support a continuation of the previously profitable growth path in 2008.
Due to the corporate acquisitions made in 2006 and 2007, the number of
domestic employees of the Possehl Group has continuously increased
to significantly more than 2,000. In this case, the legal provisions
stipulate that a Supervisory Board is to be appointed in accordance
with the co-determination act. The elections of the members for a codetermined
Supervisory Board took place in the 2007 fiscal year. On
February 5, 2008 a new co-determined Supervisory Board was formed.
The term of office of the Advisory Council ended on the same day.
The individual financial statements and the consolidated financial statements
of L. Possehl & Co. mbH for the 2007 fiscal year prepared by the
Executive Board according to the rules of the HGB (Handelsgesetzbuch:
German Commercial Code) as well as the Management Report
and the Group Management Report were audited by auditors BDO
Deutsche Warentreuhand Aktiengesellschaft, Wirtschaftsprüfungsgesellschaft,
Hamburg. In the meeting of the new co-determined Supervisory
Board of April 23, 2008, the auditors presented and explained
their audit report in detail. The annual financial statements and consolidated
financial statements received an unqualified auditors’ certificate.
The annual financial statements and Management Report, consolidated
financial statements, and Group Management Report and the audit
reports have all been presented to the members of the Supervisory
Board of L. Possehl & Co. mbH in a timely manner. The financial statement
information was discussed in detail and reviewed by the Supervisory
Board. There were no objections. Therefore, the Supervisory
Board approved the results of the annual audit.
The Supervisory Board has approved the annual financial statements
and consolidated financial statements and recommends that the shareholder
adopts the annual financial statements. The Supervisory Board
is in agreement with the proposed appropriation of earnings of the
Executive Board.
Effective April 1, 2007, Mr. Norbert Scheuch has been appointed as a
new member of the Executive Board. On June 30, 2007, Dr. Egon
Rudolph resigned from the Executive Board. The Supervisory Board
would like to thank him for his many years of dedicated and successful
work within the Possehl Group.
Dr. Werner Marnette has stepped down from his position as member of
the Advisory Council of L. Possehl & Co. mbH as of July 23, 2007. The
controlling boards would like to express their thanks to Dr. Marnette for
the work he accomplished as an Advisory Council member.
The controlling boards would like to thank the Executive Board, the
managing directors of the group companies, and all employees of the
Possehl Group for their successful work in the 2007 fiscal year.
Lübeck, Germany, April 23, 2008
The Supervisory Board/The Advisory Council
Dr. Lutz Peters, Chairman
5

Successful over the Long Term
with Clear-cut Principles
?
What is the decisive factor for
long-term business success
Excellent products and competitive conditions?
The right feel for the market and its trends?
A good strategic setup and alignment with challenging
objectives?

All of this is essential for the success of Possehl and its companies.
However, what is even more important: we manage our Group
according to clear-cut principles geared toward the long term.
They serve as binding orientation guides to provide our companies
with security in everyday operations and stabilize the Group as
a whole.
The holding company is a fixed reference point for our companies,
which is well-suited to them and to which they can align themselves.
We accompany them attentively in developing their capabilities and
support them actively in expanding their know-how. When we intervene,
we support them from their respective positions.
Possehl manages its companies while preserving their identity – in
terms of successful corporate development and in terms of the people
within the organization. The result is a level of success that stimulates
and grows on a stable foundation.

What Truly Counts …
... is that the earned Capital is used for
corporate development of the divisions, without limiting
the financial requirements of the shareholder.

The organizational structure of Possehl with its focus on the long term
enables us to adjust business interests to the individual situation
of our companies. We make it a point to ensure that a company of the
Possehl Group always has the economic freedom it needs to develop
successfully within the market.

What Truly Counts …
… is that the chosen Path is clear,
with specific boundaries – and does not branch off wildly.

Possehl initially becomes deeply involved in the experiences of
its companies and then rounds out this experience as it looks on from
the outside. We meet with our companies at the place they currently
find themselves and guide them on a future path that is visible and safe
for all.
11

What Truly Counts …
… is that the People within the company are
fully dedicated to its success – under reliable management.

Possehl views each of its companies as a complete and individually
functioning unit. When monitoring and assisting the companies, we make
sure that the people join in as well as the management, because it is
the people who turn our objectives into reality through their dedication
and commitment.

Group Management report
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Overview of the Economic Condition of the Group
Group Structure and Operations
Strategic Direction and Management Philosophy
2007 Economic Environment
Group Earnings Position
Earnings Position in the Operational Segments
Net Assets
Capital Expenditure and Financing
Employees
Research and Development
Risk Management System and Risks of Future Development
Report on Subsequent Events, Opportunities, and Forecasts

ovErviEW of tHE ECoNoMiC CoNditioN
of tHE GroUP
The 2007 fiscal year was a year of successful consolidation for
the Possehl Group. Group net sales increased from the previous year
by 4.8 % to e 1,521.7 million, results from ordinary operations rose by
1.9 % to e 75.3 million, and consolidated net profit increased by 15.1 %
to e 114.1 million. At the same time, net debt declined by e 123.0
million to a positive e 6.1 million. Thus, the Possehl Group was on
balance debt-free as of the end of the fiscal year.
All of the Group divisions recorded positive earnings in the reporting
year. With the exception of the Electronics division, which could not
duplicate the exceptional result of the previous year, all of the remaining
divisions exceeded the good results they achieved in 2006. Along with
encouraging growth in operating earnings, the sale of our 10 % equity
stake in Norddeutsche Affinerie AG positively influenced the consolidated
net profit and thus consolidated shareholders’ equity.
After two years of stormy growth, no major acquisitions could
be made during the reporting period. The M&A market for small and
medium-sized enterprises (SMEs) was highly competitive in 2007 and
purchase prices were often paid that were not economically justified.
We are maintaining our strategic focus on demonstrating that we are
a long-term and reliable new owner for SMEs.
L. Possehl & Co. mbH
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
The Possehl Group is excellently positioned and has at its dis posal
substantial financial resources to continue pursuing profit-oriented
growth.
GroUP StrUCtUrE aNd oPEratioNS
The Possehl Group is a diversified company with approximately
7,000 employees and annual sales of e 1.5 billion. We hold a globally
leading position in our niche markets.
The Possehl Group is decentrally managed so that operational decisions
can be made as close to the market as possible. The individual
divisions have a high degree of autonomy in all market and customerrelated
matters. The most important tasks for L. Possehl & Co. mbH as
the management holding company are corporate strategy and portfolio
management, risk and opportunity management, personnel development,
and central financing.
The Group is divided into the three operative segments: Production,
Trading, and Services. These in turn currently encompass eight
divisions, whereby Services has its own segment:
Production trading Services
Precious Metals Processing
Electronics
Elastomer Processing
Cleaning Machines
textile finishing Systems
Special-purpose Construction
international trading
Environmental Protection
Broker activities
15

The number of companies in the Possehl Group in the reporting
period was 88, of which 30 are based in Germany and 58 internationally.
Following substantial changes to the Group portfolio in the previous
year through the acquisition of the Cleaning Machines and Textile
Finishing Systems divisions, the segments and divisions remained
essentially unchanged during the reporting year.
Production
The Production segment includes the six divisions: Precious Metals
Processing, Electronics, Elastomer Processing, Cleaning Machines,
Textile Finishing Systems, and Special-purpose Construction.
Precious Metals Processing: Pforzheim-based Heimerle + Meule
GmbH is a full-service provider for the recycling of precious metals,
especially gold, silver, and platinum. The metals recovered by the
recycling process are processed into semi-finished products, salts,
and alloys and sold to the jewelry industry, automotive suppliers, the
electrical and electronics industry as well as dental companies.
Electronics: Possehl Electronics is one of the leading global
producers of leadframes for the semiconductor industry. Primarily
involved are copper-based, multipin conducting elements that are
attached to silicon chips. With its US-based activities, the division
is among the most important providers of copper-based plug-in
con nectors. The focus of our activities is in Asia – Malaysia, China,
and Singapore. Subsidiaries are also maintained in Europe and
the USA.
Elastomer Processing: Harburg-Freudenberger is the global
market leader for tire production systems. The company consists
of branches for tire, rubber mixing, and edible oil technologies.
Harburg-Freudenberger offers a comprehensive machine program and
know-how to the rubber and tire production industry for all essential
production stages from raw material preparation to tire manufacturing
and vulcanization. The Group currently has two production sites
in Germany (Hamburg and Freudenberg) as well as subsidiaries in
Croatia, the USA, France, and Russia. The Rubber Mixing Technology
unit was also strengthened during the reporting year by the acquisition
of Milan-based Pomini Rubber & Plastics S.r.l. Furthermore, with
Harburg-Freudenberger Machinery (China) Co. Ltd., a company was
established in the important Chinese market.
16
Cleaning Machines: Hako is one of the leading global producers
of professional cleaning machines. Its product range covers equipment
for cleaning factories and office buildings, external cleaning, and
site maintenance as well as multi-purpose special vehicles for use by
municipalities. The strengths of the Bad Oldesloe-based company are
customized innovative quality products and a closely meshed sales
and service network. Hako Group is active on four continents with an
emphasis on Europe.
Textile Finishing Systems: A. Monforts Textilmaschinen GmbH
& Co. KG is a global technology leader for high-end textile finishing
systems. The family business, which was founded in 1884, produces
textile machines and equipment for the finishing and coating of knitted
and woven fabrics. The Monforts Group includes an operating subsidiary
in Austria and a joint venture in China in addition to the
management company in Mönchengladbach.
Special-purpose Construction: The Possehl Spezialbau Group
is specialized in the maintenance and improvement of industrial,
business, road, and airport surfaces. Through the acquisition in the
previous year of DFT Deutsche Flächen-Technik Industrieboden GmbH
the Group’s business has expanded to include the manufacturing
of large-scale seamless industrial surface systems. Special-purpose
Construction is managed by Possehl Spezialbau GmbH from Wiesbaden
and has oper ations in the Netherlands, Austria, Slovenia, Croatia, and
Belarus.
trading
This segment includes the international trading operations with
raw materials for the fireproof and metallurgical industries and for the
chemical, welding electrodes, cement, plastics, and paper industries.
Trading activities include the representation of reputable mines and
producers as well as open trading. Furthermore, the segment includes
upstream and downstream processing, milling, and recycling.
Services
The segment includes Environmental Protection and Broker
Activities. Possehl Environmental Protection is primarily involved with
the construction, alteration, extension, and inspection of tanks and
the remediation of pollution accidents on streets and waterways. The
company also maintains a gravel business. Our two Broker Activities
companies conduct brokerage operations.
Holding
In addition to the parent company L. Possehl & Co. mbH, this
segment combines the minority holdings and equity investments as
well as intermediate holding companies.

StratEGiC dirECtioN aNd
MaNaGEMENt PHiLoSoPHy
Possehl aims to grow profitably in all segments on a sustainable
basis and to increase the enterprise value. Growth results from both
the expansion of existing business and the strategic acquisition of
new business units. Along with profitability and a long-term orientation,
the diversification of the Group’s portfolio plays an essential role.
This reflects the interest of the Possehl-Stiftung as shareholder in the
long-term profitable growth of the Group. With its independent and
productive business segments, the Group has a solid foundation for
continued success.
Our management philosophy is aimed at providing the managers
of the individual companies with as much operational freedom as possible
to develop and implement new ideas. In order to executive this
management philosophy successfully and to achieve the Group’s ambitious
goals, we require highly motivated and productive employees,
who are aware of their contribution to the Group’s success and conduct
themselves in a success-oriented, customer-focused manner. Managing
directors and managers have a financial stake in the success of
the Group or segment through performance-based incentives.
2007 ECoNoMiC ENviroNMENt
GROSS DOMESTIC PRODUCT 2007
Real change compared to previous year in %
Germany 2.6
Eurozone 2.6
United States of America 2.2
East Asia (without China, India, and Japan) 5.2
China 11.4
Global economy overall 5.1
Source: Kiel Institute for the World Economy – World Economy in Winter 2007
Global Economic development
The global economy continued to develop positively during the fiscal
year. In 2007, high global economic growth continued at a 5.1 %
pace, only slightly lower than in 2006. Despite higher prices in the international
energy and raw materials markets, global growth remained
robust. However, toward the end of the year the US real estate crisis
began to hinder global economic growth. While the economies of
developing countries grew at an above-average 6.2 % rate, growth in
industrial countries was only 2.4 %.
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
Once again the Chinese economy was the driver of growth during
the fiscal year. However, other Asian countries as well as Latin America
and Central and Eastern Europe produced strong economic growth in
2007.
At the same time, growth slowed in the USA. The weak real estate
market caused by the subprime mortgage crisis has perceptibly impaired
economic growth.
The Eurozone continued to develop positively with GDP growth of
2.6 %. Economic growth was also encouraging in Germany, driven mostly
by exports. The increase in the external value of the Euro has not
materially impaired the growth of the export economy.
US dollar Substantially Weaker
The US dollar (USD) continued to come under pressure in international
currency markets and trust in the US currency steadily declined
during the year. The Euro in particular appreciated against the USD
during the past 12 months. At the beginning of the year, the Euro was
worth approximately USD 1.32. At the end, the rate was USD 1.47.
The average over the year was USD 1.37/€, about 10 % below the last
year’s rate.
US DOLLAR/EURO ExCHANGE RATE IN 2007
(ECB REFERENCE RATE)
1.5
1,5
1.4
1,4
1.3
1,3
1.2
1,2
Jan.
Feb.
March
April
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
17

overall Positive Growth of the relevant Markets
Mechanical and systems engineering in Germany achieved doubledigit
growth for the first time in many years. Growth was driven by an
increase in ordering activity in Germany and internationally. Investments
in Asia were primarily responsible for high foreign demand.
Domestic demand benefited from pent-up demand and increased
investments in expanding capacity.
The electrical and electronics industry developed differently
depending on region. Western Europe achieved a steady increase,
accompanied by double-digit growth in Eastern Europe. Growth in
Japan and the USA was below average, whereas the branch grew
substantially in Asia.
The performance of textile machine engineering was mixed during
the fiscal year. While spinning machines saw a reduction in orders,
weaving and knitting machines had a slight upward trend. Meanwhile,
finishing systems displayed a significant decline.
The global automotive industry developed positively in 2007 albeit
at a slower pace and with regional differences. However, the nearly
4 % growth in the passenger car sector was attributable exclusively to
demand in the developing countries of Asia and Latin America as well
as Eastern Europe.
The international steel markets also developed positively in 2007 –
driven by the booming global economy. Once again, China turned out to
be the largest growth driver. The European Union registered a moderate
increase, while the steel market in North America declined.
The German construction industry grew during the reporting period,
if not with the high growth rates of the previous year. However, growth
was mixed in the individual sectors of the main construction trade. High
sales in commercial and public-sector construction were offset by a
decline in residential construction. There was also a shift from new
construction to renovation.
Generally Positive Economic Climate for Possehl Group
Most of the segments of the Possehl Group were able to benefit
from the overall favorable economic climate in 2007. In particular, our
mechanical engineering businesses grew sharply. International Trade
benefited primarily in the fireproof business from the expansion of
the steel industry, while results in Precious Metals Processing were
positively influenced by higher precious metals prices. On the other
18
hand, Electronics was burdened by lower demand and the declining
US dollar and thus could not duplicate the exceptional result of the
previous year. However, despite the lower profits, this division remains
one of the most profitable in the Possehl Group.
OPERATIONS AND FINANCIAL POSITION OF THE POSSEHL GROUP
in e million 2007 2006
Net sales 1,521.7 1,452.2
Ordinary result before taxes 75.3 73.9
Extraordinary result 49.5 32.8
Earnings before taxes (EBT) 124.7 106.6
Consolidated net profit 114.1 99.1
GroUP EarNiNGS PoSitioN
Moderate revenue Growth
Group net sales of € 1,521.7 million rose by 4.8 % from the previous
year. The increase in sales was primarily attributable to organic growth.
However, the individual segments of the Group displayed mixed sales
growth. While the mechanical engineering businesses grew in part at
double-digit rates, sales in the Electronics sector declined both on a
currency and unit basis. The remaining sectors approximately maintained
the sales level of the previous year.
NET SALES BY REGION IN 2007
Germany
Other Europe
Asia and other regions
USA
19.3%
9.7 %
E 1,521.7 million
29.4 %
41.6 %

The increase in net sales came primarily from Germany and other
European countries, while net sales in North America sank as a result
of declines in the US dollar and trading activity. Germany accounted
for approximately 42 % of total sales versus 39 % in the previous year.
ordinary Earnings Before taxes increased again
After ordinary earnings before taxes reached a record of
e 73.9 million in the previous year, this record was broken again
during the reporting year by approximately 2 %. This development is
particularly encouraging as we succeeded in compensating for lower
earnings in the Electronics segment through growth in the other
segments. As a percentage of sales, ordinary earnings before taxes
amounted to 4.9 % after 5.1 % in the previous year. While we could
largely pass along higher prices for raw materials in the form of
higher selling prices, the weak US dollar negatively influenced the
Group’s success in the reporting year.
the Gain on Sale Leads to a Large Extraordinary result
The extraordinary result contains a e 59.7 million gain on the sale
of our 10 % equity stake in Norddeutsche Affinerie AG (NA). We used
a portion of the gain in the amount of e 10.2 million to pay for the
transition from German to international accounting rules, specifically
by accounting for pension liabilities immediately according to International
Financial Reporting Standards (IFRS).
Substantial increase in Consolidated Net Profit
The consolidated net profit rose by e 15.0 million or 15.1 % to
e 114.1 million. Along with the slight increase in operating earnings,
the higher extraordinary result was primarily responsible for the improvement.
The Group’s tax expenses remained low particularly as a
result of the utilization of loss carry-forwards in Germany as well as
tax rebates. Income taxes as a proportion of ordinary earnings before
taxes amounted to 10.7 % after 7.1 % in the previous year.
The pre-tax return on equity amounted to 27.6 % in the reporting
year. Despite the increase in earnings, it declined by 7.7 percentage
points from the prior year as a result of a significant increase in shareholders’
equity. The EBIT return on sales was 5.6 %, slightly lower than
in the previous year.
EarNiNGS PoSitioN iN tHE
oPEratioNaL SEGMENtS
EARNINGS POSITION IN THE PRODUCTION DIVISION
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
in e million 2007 2006 Change
Sales 1,219.0 1,175.7 43.3
EBT 64.3 71.6 -7.3
Capital expenditures 21.3 29.9 -8.6
Net sales rose by 3.7 % from the previous year. This increase is primarily
attributable to the Cleaning Machines and Elastomer Processing
divisions.
The Electronics division is entirely responsible for the decline of
e 7.3 million in earnings before taxes, while the other segments improved
their results from the previous year. The segment’s earnings
reflect one-time restructuring expenses.
The decline of capital expenditures for intangible assets and
property, plant, and equipment results from the construction of a new
electronics production site in Dongguan included in the previous year’s
figure.
Precious Metals Processing: High Precious Metals Prices
Have a Positive impact on Sales and Earnings
The upward trend that began in the previous year continued during
the reporting period. The three operating divisions Semi-finished/
Recycling, Surface Technics, and Dental all achieved positive results in
2007 and were able to expand and confirm their market shares.
Semi-finished/Recycling: Nominal income from semi-finished
jewelry could be increased despite declining unit sales for jewelry
alloys. The critical factor here was the special production expertise,
which enables us to manufacture products with higher value added
and higher nominal prices. The increase in nominal sales came both
from Germany and abroad, whereby the international increase was
significantly higher.
The sales of industrial semi-finished products also developed
positively. Due to the increase in precious metals prices the recycling
business revived, even though the prices for precious metal waste
remained under pressure.
19

Surface Technics: The division was able to expand both sales
and earnings. Along with strong economic demand, process improvements
increased the competitiveness of industrial galvanizing. Sales of
chemicals and baths for jewelry galvanizing also benefited galvanizing
technology.
After routinely producing losses in recent years, the division was
able to achieve the first positive result in some time during the reporting
year.
Dental: The market for precious metal dental alloys still has not
fully recovered from its collapse in 2005 caused by the introduction
of a fixed subsidy system by legal health insurers. The ongoing trend
toward the use of alloys without precious metals and of ceramics,
which has been reinforced by high prices for precious metals, had a
negative impact on the business with precious metal dental alloys.
Through additional cost reductions and price adjustments, however,
results improved slightly.
No significant changes are expected in the business development
of Heimerle + Meule in 2008. Due to the establishment of a subsidiary
in Vienna at the beginning of 2008, we anticipate sales growth over
the medium term in Austria and neighboring countries particularly in
the area of semi-finished jewelry.
Electronics: Normalization of Sales and Earnings
The Electronics division could not duplicate the extremely good
result of the previous year. Along with a normalization of sales as a
result of a cyclical semiconductor market, the weak US dollar and high
metal prices impaired earnings. In addition, moving the Chinese factory
from Shenzen to Dongguan had a greater impact on earnings than
expected. Nevertheless, the division – the most profitable – achieved a
positive result with double-digit return on sales.
Net sales declined by e 34.9 million to e 186.8 million. This
decline is equally attributable to lower sales volumes and the decline
of the US dollar. Lower sales volumes affected the business with leadframes
and connectors, while sales of smart cards were virtually
unchanged.
20
Due to the expected sustained weakness of the US dollar, cost
reductions were carried out during the reporting year. These included
a reduction in staff and the closure of a production site for connectors
in the USA.
The ongoing weakness of the US dollar and signs of weaker growth
in the semiconductor branch are expected to weigh on results in 2008
as well.
Elastomer Processing: Successful acquisition in rubber
Mixing technology and restructuring in Extrusion
The performance of the Elastomer Processing division was mixed
in the reporting year. While in particular the product areas of rubber
mixing, heated presses, and tire building machines could expand both
sales and earnings significantly, a restructuring program was introduced
and already substantially implemented for the extrusion product
area as a result of sustained losses. Total net sales of e 235.7
million rose by e 37.2 million or 18.7 % over the previous year. Of this
amount, about half was attributable to the 100 % acquisition of Milanbased
Pomini Rubber & Plastics S.r.l. on April 1, 2007. Along with the
sales increase, Pomini also had a positive impact on the earnings of
the division.
Capital investments of the tire industry, the most important
customer group for Harburg-Freudenberger, remained high last year.
The product areas of heated presses, rubber mixing, and tire building
machines derived the greatest benefit from these developments.
The relocation of tire production toward the growth markets
China, India, and Brazil continued in the reporting year. Along with
its good customer relationships with the large tire manufacturers,
Harburg-Freudenberger is following this trend by establishing a subsidiary
in Qingdao, China. Substantial potential for our tire production
machines continues to exist in Eastern Europe and Russia, where local
tire manufacturers are boosting their investments in modernization.
The demand for machines and plants for edible oil technology
did not match the level of the previous year due to an unclear political
climate.
Assuming the same conditions, we expect moderate sales growth
next year. The restructuring steps that have been taken and the high
level of order backlog as of the end of fiscal year 2007, which cover
almost all of 2008, should lead to an improvement in earnings.

Cleaning Machines: Significant Growth in Sales and Earnings
The market environment remained positive for Hako Group last
year. This applied to both indoor and outdoor cleaning. The growth
rates by region and type of machine were between about 2 % and 11 %.
Hako’s main competitors took advantage of the market situation
through a consolidation, in which they purchased smaller competitors.
Hako benefited from the generally favorable developments and increased
sales by 6.9 % to e 423.0 million. The increase in sales came
primarily from Germany and the rest of Europe. Thus, Hako was able to
increase its market share in Europe for many products. Similarly, the
Multicar brand had a positive result. In comparison with the previous
year, 112 or 7.4 % more cars were sold.
However, the situation in the USA deteriorated. While adjustments
to the Hako and Power Boss products were substantially completed
during the reporting year, steps introduced to reposition the
Minuteman products had not yet been completed. The reworking of the
Minuteman product program, the reorganization of sales, and the restructuring
of production in the USA will continue during the current
year. A production site will be closed in this context.
The earnings situation of the Hako Group has continued to improve,
but not to the same extent as sales growth. Overall earnings in 2007
were depressed by losses in the USA and Poland.
For the next fiscal year, we are expecting moderate growth and
an improvement in earnings for this area as well. In particular, the
market introduction of new products and the repositioning of Minuteman
should contribute to this result.
textile finishing Systems: Positive development in China
offsets Negative development
The overall economic climate was difficult for European manufacturers
of textile machines. In the Textile Finishing Systems division,
there were some double-digit declines in incoming orders. The decisive
factor here was the concentrated production of textile machines and
textiles in China. This market is extremely difficult for Western manufacturers
to access. The other countries of focus for textile production
such as India, Turkey, and Pakistan could not slow down the continued
shift to China. The European market improved slightly, primarily driven
by the manufacture of technical textiles.
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
Excluding the pro rata consolidation of the Monforts Group in the
previous year, net sales declined by 3.5 %. However, this marginal sales
decline was accompanied by tighter gross margins. In order to secure
sustainable competitiveness, the European companies implemented
improvements and efficiency-enhancing measures in all areas. The
related expenses clearly depressed annual net profit.
Through our 50 % stake in the Chinese Monfongs joint venture,
which is reflected using the equity method in the consolidated financial
statements, we were able to participate in the textile boom in China.
Both sales and earnings from the joint venture rose sharply from the
previous year.
The global market for textile finishing is not expected to change
substantially in 2008, so we are anticipating sales at the same level as
last year. In view of the streamlining measures that have been taken,
however, we are assuming an improvement in earnings at the European
companies. On the other hand, the earnings contribution of the
Chinese joint venture could decline.
Special-purpose Construction: increase in Sales and Earnings
The construction industry in Germany was characterized by
weakening, but still positive growth in the reporting year. Sales in the
main construction trade rose by nearly 2 %. The street and com mercial
construction sectors saw growth of about 1.2 % and 4.3 %, respectively.
Net sales rose at a double-digit rate from the previous year to
e 79.4 million. This increase was primarily driven by extremely strong
growth at DFT Deutsche Flächen-Technik Industrieboden GmbH, which
was acquired in the previous year and offers ultra-precise, seamless
rolled concrete flooring solutions (e.g. for warehouses) to the logistics,
transport, and wholesale industries. Along with solid economic growth,
we were able to benefit from several large orders from Europe outside
Germany. On the other hand, sales declined from the maintenance,
refurbishment, and protection of transport surfaces. The closure of a
subsidiary in France also contributed to the sales decline.
The foreign subsidiaries in the Netherlands, Austria, Croatia,
Slovenia, and Belarus have performed according to plan and collectively
were able to maintain the sales level of the previous year. The
subsidiary in Spain was liquidated in the reporting year.
Assuming stable growth in the construction sector, we expect a
moderate increase in sales and earnings next year.
21

EARNINGS POSITION IN THE TRADING DIVISION
in e million 2007 2006 Change
Sales 291.4 265.2 26.2
EBT 6.5 7.7 -1.2
Capital expenditures 0.5 1.1 -0.6
The complete reorganization of our trading business on the
American continent was implemented in 2007. At the beginning of
2008, the legal separation from our former partners was also arranged.
Furthermore, we have decided to discontinue the business activities
of GeoCrete B.V. in the Netherlands and the subsidiary in Greece. The
financial figures presented here for 2007 fully reflect the negative impact
arising from these steps. From now on, Possehl Erzkontor GmbH
will be solely responsible for the global trading business with fireproof
and non-fireproof materials. We continue to be represented on the
American continent with one subsidiary.
one-time Expenses depress Earnings
Net sales from the International Trading business rose by e 26.2
million or 9.9 %. Higher prices for raw materials were decisive for this
increase. Earnings before taxes for the division declined due to onetime
expenses to e 6.5 million after e 7.7 million in the previous year.
The Lübeck-based Erzkontor Group, however, was able to improve its
earnings from the previous year.
Fireproof Business: The economic conditions for our fireproof
activities were favorable last year. The European steel industry achieved
1.5 % production growth over the previous year. The rate of increase in
the German market was 2.8 %. The level of steel production led to good
capacity utilization for the fireproof industry.
22
Prices for almost all raw materials rose sharply during the reporting
period. The price increases for almost all essential products ranged
between 40 % and 80 %. Decisive here were rather high purchase
and freight prices as well as the restrictive export policies of the
Chinese government. Our trading business was able to benefit from
this development, particularly through higher profit margins.
Metallurgy: The metallurgical division grew at a double-digit rate
in the reporting year, but with a lower gross earnings margin. While
the trading business with raw iron clearly expanded both on a unit and
price basis, net sales and gross earnings declined with iron sand, raw
bauxite, and petroleum coke.
Plastics: The development of the trading business with plastics
was charac terized again last year by substantial price increases as a
result of a continued rise in the price of oil and a concomitant shortage
of tradable material. Despite constant volumes, sales increased by 8 %
from the previous year.
EARNINGS POSITION IN THE SERVICES DIVISION
in e million 2007 2006 Change
Sales 11.3 11.3 0.0
EBT 1.6 1.4 0.2
Earnings improvement with Constant Sales
The Services business with insurance, environmental protection
(tank protection, renovation, gravel, and disposal), and freight services
achieved sales of e 11.3 million, the same as in the previous year.
Earnings before taxes rose by e 0.2 million to e 1.6 million. This
growth came primarily from environmental protection and broker
activities. The latter benefited from higher freight fees and broker
activities. The return on sales in the Services division improved by
1.2 % percentage points to an encouraging 13.9 %.

BALANCE SHEET STRUCTURE
Fixed assets
Current assets
NEt aSSEtS
18.1 %
81.9 %
assets
in e million 12/31/2007 12/31/2006
Fixed assets 143.8 194.7
Current assets 652.1 523.0
assets 795.9 717.7
Shareholders’ equity 272.5 209.0
Provisions 167.9 159.1
Liabilities 355.5 349.6
Liabilities 795.9 717.7
Possehl Group’s total assets increased by e 78.2 million in the
previous year to e 795.9 million.
The increase in assets related almost exclusively to cash and cash
equivalents. This item rose by a total of e 137.9 million to e 179.9 million
primarily as a result of the sale of the equity stake in NA, but also
because of positive cash flows from operating activities. On the liabilities
side of the balance sheet, the increase was primarily attributable
to e 63.6 million more shareholders’ equity.
27.1 % 29.1 %
34.2 %
72.9 %
Equity & Liabilities
21.1 %
44.7 %
2007 2006 2007
2006
22.2 %
48.7 %
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
Shareholders’ equity
Provisions
Liabilities
The reduction in fixed assets applies primarily to financial assets.
Along with the removal of the NA equity stake from the balance sheet,
the value of equity investments in associated companies declined as
a result of our final separation from our former partners in the trading
business in the American market. The share of fixed and thus longterm
assets to total assets has declined from 27.1 % in the previous
year to 18.1 % as of the balance sheet date.
Current assets – with the exception of the increase in cash and
cash equivalents – have not substantially changed from the previous
year. In particular, higher procurement costs did not lead to an increase
in working capital.
Consolidated shareholders’ equity rose by e 63.6 million to
e 272.5 million. The positive effect of the consolidated net profit of
e 114.1 million on shareholders’ equity was partially mitigated by the
offsetting of goodwill from the acquisition of Pomini, the acquisition of
the remaining shares in Hako, the dividend payment to the Possehl-
Stiftung, and the decline in the US dollar exchange rate. However, the
equity ratio rose from 29.1 % to 34.2 %. More than 200 % of long-term
assets were financed by long-term liabilities.
The increase in provisions of e 10.2 million includes one-time
allocations to adjust to the valuation of pension provisions according
to internationally customary valuation methods.
23

CaPitaL ExPENditUrE aNd fiNaNCiNG
financing Strategy
L. Possehl as the management holding company is primarily
responsible for the financial management of the Possehl Group. The
primary objective of centralized financial management is to ensure the
liquidity and creditworthiness of the Group. The reduction in the cost
of capital, the optimization of the capital structure, and effective risk
management are contributing factors. We decide on a case-by-case
basis whether liquidity is distributed internally within the Group from
a central source or held decentrally in the individual companies. The
same applies to the assumption of financial assistance in the form of
parent guarantees or other backing by L. Possehl. Financial transfers
for the companies in Germany are carried out via a cash management
system.
Our policy on assuming debt is conservative and designed for flexibility.
Along with long-term loans we particularly take advantage of
short-term bank credits. An asset-backed securities program in the
International Trading division is also at our disposal.
We use financial derivatives to hedge risks from operations and
financial transactions. However, we do not enter into any contracts
without an underlying core transaction.
CHANGES IN CASH FLOW AND CAPITAL ExPENDITURE
in € million 2007 2006
Cash flow from operating activities 84.6 97.9
Cash flow from investing activities 52.8 -102.2
Cash flow from financing activities 2.6 -11.8
Changes in cash or cash equivalents
over the period
Cash and cash equivalents
140.0 -16.1
on December 31 179.9 42.0
Cash flow from operating activities exceeded consolidated net
income excluding extraordinary items as in the previous year. The
decline of € 13.3 million from the previous year stemmed primarily
from lower provisions adjusted for changes in the group of consolidated
companies. In addition, higher tax payments reduced cash
flow from operating activities.
24
Cash flow from investing activities was € 52.8 million in the
reporting period after € -102.2 million in the previous year. This significant
change resulted primarily from proceeds from the sale of the
NA equity stake. Expenditures for acquisitions were € 29.8 million in
the reporting year and primarily involved the acquisition of the remaining
shares in Hako and the purchase of Pomini.
In 2007, expenditures on property, plant, and equipment plus intangible
assets were € 22.4 million. They were approximately 28 %
less than in the previous year, which included expenditures for building
a new factory in Dongguan. Excluding this extraordinary item, capital
expenditures remained at the same level as in the previous year.
Capital expenditures on property, plant, and equipment plus intangible
assets were slightly below depreciation and amortization.
Capital expenditures net of acquisitions were mainly related to
the Production segment and there specifically to the areas of Cleaning
Machines (€ 9.5 million), Electronics (€ 4.4 million), and Elastomer
Processing (€ 2.7 million). Expenditures were devoted primarily to the
planned modernization of manufacturing sites, environmental protection,
and information technology. Otherwise, capital expenditure was
mainly to replace assets.
The financing of capital expenditures on intangible assets plus
property, plant, and equipment came almost exclusively from cash flow
from operating activities. We obtained favorable borrowing terms for
the medium-term and long-term external financing of the remaining
shares in Hako.
Cash and Cash Equivalents and Net debt
As of December 31, 2007, the Group had cash and cash equivalents
of € 179.9 million, which were completely available for financing
future growth.
The Group’s net debt declined by € 123.0 million. At the end of
the fiscal year, the Possehl Group had positive net liquidity of € 6.1 million
and thus was on balance debt free.
The other liquidity and leverage key figures are on a highly solid
basis.

Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
in % 2007 2006
Liquidity
Dynamic leverage
Leverage
Gearing
EMPLoyEES
Short-term assets
Short-term external capital
Cash flow from operating activities
Bank liabilities
Bank debts
Bank debts + shareholders’ equity
Net debt
Shareholders’ equity
Possehl had 7,012 employees on average worldwide during the
year. Of that amount, 2,872 were employed in Germany. The number
of apprentices was 161. The number of employees rose by 54 from
the previous year. While the Electronics division in particular reduced
personnel in Asia and the USA through efficiency enhancing measures,
we increased the number of employees in Germany especially in
construction and at Hako due to good business conditions.
In 2007, expenses for personnel and benefits totaled € 269.2 million
compared with € 258.2 million in the previous year. This represents
an increase of 4.3 %. Personnel costs per employee rose on average
from € 37,000 to € 38,000.
EMPLOYEES BY REGION ON ANNUAL AVERAGE
2007 2006
Germany 2,872 2,733
Other Europe 1,575 1,543
USA 596 599
Asia and other regions 1,969 2,083
total 7,012 6,958
The economic success of our Group depends critically on the
commitment of all of our employees. Therefore, the paramount goal of
our personnel policy is to promote the performance and qualifications
of our employees through continuing education and global personnel
development programs.
The “Formel P” management development program initiated in
the previous year in collaboration with the Malik Management Center
in St. Gallen, Switzerland was successfully continued in the reporting
year. By the end of the year, a large number of managers and management
trainees had completed the program successfully.
EMPLOYEES BY REGION – 2007
Germany
Other Europe
Asia and other regions
USA
28.0 %
rESEarCH aNd dEvELoPMENt
183.5 135.1
50.9 61.6
37.9 43.2
8.5 %
0.0 56.0
7,012
Employees
22.5 %
41.0 %
Innovation is indispensable for the profitable growth of the Possehl
Group. Therefore, Possehl continued to pursue its research and development
activities in the reporting year. Our innovation efforts focus primarily
on the divisions of the Production segment.
Precious Metals Processing
In the reporting year, the development of seamless, concentric
multi-color tubes was successfully completed and introduced in
the market. These tubes enable our customers to use innovative fabrication
techniques in the manufacturing of multi-color jewelry. In addition,
the development of an innovative platinum alloy was completed
successfully.
25

Electronics
The main focus of Possehl Electronics’ research and development
activities is on the development of new products and processes
and their implementation in serial or mass production. The most important
projects in 2007 were:
Increasing the service life and thus the productivity of tools with
the help of new coating procedures in the nano domain;
The continued development and improvement of cyanide-free
galvanization processes to reduce environmental damage; and
The development of smart cards coated on both sides.
Elastomer Processing
Research and development activities in the area of Elastomer
Processing remained at a high level last year. The prototype of a newly
developed tire building machine with four manufacturing drums was
delivered to the first customer. In the area of rubber mixing technology,
priority was given to the further development of mixing facility
management and basic research into mixing technology. The emphasis
of innovation activities in the edible oil product area was on the further
development of technologies to improve the oil extraction of screw
extrusion presses.
Cleaning Machines
The Hako Group has increased its development spending from the
previous year. The focal point of innovation activities was the development
and introduction of new products and improved coordination of
development projects at the Hako facilities and the American Minuteman
company. The goal is a clear increase in innovation combined with
reduced development times.
textile finishing Systems
The research and development activities in the Textile Finishing
Systems division are carried out in close coordination with cus tomers
from headquarters in Mönchengladbach. At the International Textile
Machinery Association (ITMA) trade show in fall 2007, A. Monforts
Textilmaschinen GmbH & Co. KG was able to demonstrate its global
innovation leadership with a new shrinkage unit and a completely
new ly developed tentering frame for technical textiles.
26
riSK MaNaGEMENt SyStEM aNd
riSKS of fUtUrE dEvELoPMENt
risk Policy and risk Management
Entrepreneurial activity is inseparably linked to opportunities and
risks. To a large extent, such activity consists of uncovering and taking
advantage of opportunities, which serve to secure and expand the
Group’s competitiveness. We have introduced effective management
and control systems for the early identification, evaluation, and systematic
handling of risks. These systems are constantly undergoing
further development.
The risk policy of the Possehl Group is aimed at increasing enterprise
value continuously and sustainably, minimizing dependencies on
developments in individual industries and divisions, and attaining the
medium to long-term financial targets. The long-term perspective of our
shareholder, the charitable Possehl-Stiftung, does not allow the company
to be aligned solely toward short-term goals. Nor may it assume
inappropriate risks or conduct speculative trading or other speculative
business transactions.
For the Possehl Group, the management of opportunities and risks
is an integral component of Group-wide governance along with the
planning and execution of our corporate strategy. The risk policy for
the entire Group and the individual divisions is therefore set by the
Executive Board of L. Possehl. The strategic orientation and development
of all subsidiaries are monitored extremely closely by the
Executive Board of the holding company. In regular conversations and
conferences with the management teams of the subsidiaries, business
results, opportunities, and risks are discussed and goals and management
steps are established.
The Possehl Group has a range of coordinated risk management
and control systems that make it possible to identify significant risks
early and to take suitable countermeasures. Particular importance
is attached to corporate planning processes and intra-year controls.
Corporate planning helps us assess potential risks before major business
decisions are made, while intra-year controls are designed to
monitor countermeasures that have been introduced.

The regular reporting is supplemented by credit scoring procedures
and an active receivables management. Purchase and sales transactions
over certain individual divisional limits must also be approved
by the Executive Board of the holding company.
Investment controlling covers the annual budget as well as follow-
up inspections of the actual investment amounts. All capital expenditures
are valued using return calculations based on a uniform
methodology and minimum risk-adjusted rates of return, which are reviewed
regularly. In divisions with longer production times, the central
risk management group also focuses on new orders and order backing
and on advance calculation checks above certain thresholds.
The transfer of risks to insurers is managed – to the extent feasible
and economically responsible – by our insurance broker, Lubeca
Versicherungskontor GmbH, in coordination with the Executive Board
of the holding company and involves insurance contracts for the
whole Group.
As an international corporation with a diverse portfolio, the Possehl
Group is subject as a rule to multiple risks, the most important of which
are described below. Fundamental changes in the structure and assessment
of risks have not occurred in comparison to the previous year.
financial risks
One of L. Possehl’s main responsibilities as holding company is to
ensure the Group’s financial independence. As well as optimizing Group
financing, this means limiting the financial risks.
To ensure liquidity at all times, sufficient cash and cash reserves
are maintained to meet all of the Group’s payment obligations when
they are due. A reserve is always maintained for unplanned cash stream
irregularities. In addition, there are adequate bank credit lines.
Liquidity is mainly sourced in Euro and US dollars with varying
terms. Interest rate risks are analyzed regularly and any existing risks
limited by appropriate hedging transactions.
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
Liquid funds are invested exclusively in low-risk and short-term
deposits and similar secure investment products.
Currency risks
Due to the global nature of the Group’s business activities, both
business operations and financial transactions are subject to risks
from currency exchange rate fluctuations, particularly of the US dollar
against the Euro. A currency risk exists when sales are generated in
a different currency than associated costs. This applies particularly to
the Electronics division.
To limit the risks of multiple cash flows in different currencies,
foreign currency positions are normally hedged when they arise. This
involves the use of conditional and unconditional derivative financial
instruments. Transaction risks from the conversion of the net assets
of Group subsidiaries outside the Eurozone are fundamentally not
hedged.
risks from Purchase and Sale of Companies
The acquisition of companies and – in exceptional cases – also the
sale of subsidiaries or equity investments are important parts of our
corporate strategy. With company acquisitions, the fundamental risk
exists that the future earnings power of the company was improperly
assessed and therefore the purchase price was too high.
In any case, the Executive Board of the holding company decides
on company purchases and sales. In order to limit the risk associated
with company purchases, prior to the investment decision as a rule
comprehensive legal, tax, and financial analyses are prepared with the
assistance of external advisors. We have extremely strict internal rules
for valuing individual potential acquisition targets.
27

Segment and Company-specific risks
As a conglomerate, the Possehl Group is active in various sectors
with disparate risk profiles and degrees of risk. The main potential risks
encountered by the individual divisions are as follows:
Production: For all segments, intense competition creates permanent
pressure to reduce production costs. This applies particularly to
the Electronics division and our engineering businesses. In addition, a
further fall in the US dollar could impair the earnings of the Electronics
division. In some divisions, there is also a certain dependency on
individual large customers. Our aim is to reduce existing dependencies
further by acquiring new customers and so broadening the customer
base.
Trading: The trading companies are exposed to price risks on
one hand, but also to procurement risks on the other. Especially trade
barriers in the form of tariffs and quotas can harm the trading business.
We manage this risk via our global presence, long-term supplier
relationships, a broad customer base, and a high degree of diversification.
The dependence on the steel industry is mitigated by developing
new businesses in the plastics, dyes, and paint industries. The resulting
diversification of risks also applies to the default risk of receivables,
which are further limited by hedging instruments, particularly commercial
credit insurance. Price fluctuations are reduced by extensive use of
back-to-back transactions.
28
Employee risks
The success of the Possehl Group is critically dependent on the
expertise and commitment of all employees. Retaining new employees
and know-how are fundamental components of our personnel policy.
Targeted employee development and continuing education are an
additional emphasis. Our managers and management trainees also
benefit from the Possehl Academy.
Macroeconomic risks
We expect moderate global economic growth for 2008, although
probably below the level of the previous year. As a result of the cooling
of the US economy, the risks of less favorable growth for the global
economy have noticeably increased. In addition, the danger exists of
continued increases in energy prices, which would put pressure on purchasing
power. The unfavorable development of the global economy
can have a negative impact on the financial and earnings position of
the Possehl Group.
overall assessment: No Existential risks
for the Possehl Group
The risk position of the Possehl Group has not substantially
changed during the reporting period. The Group’s continued broad
diversification leads to a balance of risks between individual divisions
within the company. From today’s perspective, no risks can be identified
which could endanger the Possehl Group’s continued existence.

EPort oN SUBSEqUENt EvENtS,
oPPortUNitiES, aNd forECaStS
Particular Events after the Balance Sheet date
There have been no events requiring disclosure since the start of
the year.
orientation of Possehl Group and Probable development
GROSS DOMESTIC PRODUCT, FORECAST FOR 2008
Change over previous year in real terms in %
Germany 1.9
Eurozone 2.2
USA 1.8
East Asia (excluding China, India, and Japan) 4.4
China 10.7
Total global economy 4.5
Source: Kiel Institute for the World Economy – World Economy in Winter 2007
Predictions for the development of the global economy in 2008
are quite varied. While some anticipate continued robust growth,
others are increasingly pointing to signs of global recession. It can be
assumed that growth in the industrial countries will slow perceptibly.
In particular, signs are gathering for a serious and sustained recession
for the US economy. Economic expansion in the Eurozone could also
slow. The EU Commission has lowered its growth forecast for the
Eurozone in 2008 to 1.8 %. A similar trend is likely for Germany. China
and India, however, are turning out to be the new drivers of the global
economy. The catch-up requirements of these countries presumably
will provide significant economic stimulus in the future as well.
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
Thanks also to the internationally oriented strategic positioning of
Possehl, we see a good chance for continued growth for the Group
over the long term. Assuming an unchanged portfolio of businesses,
we expect that consolidated sales and the consolidated result from ordinary
operations will remain at a similar high level in 2008 as in the
previous year. Through the restructuring measures taken last year in
the Textile Finishing Systems, Elastomer Processing, and Electronics
divisions, which were linked to a reduction in employees, we have
created the foundation to achieve our targeted rates of return and
insured against the effects of a possible economic downturn.
In the years ahead, the Possehl Group will continue to maintain
its fundamental orientation toward profitable and sustainable growth.
In the future, we will exploit opportunities presented by acquisitions
in existing divisions and also in new business areas. We assume that
company purchase prices will decline to an appropriate level and scarce
and expensive credit will improve our chances to make acquisitions.
Moreover, strategies will be developed and implemented in collaboration
with the management of our subsidiaries to expand our sound
positions in individual markets.
The once again improved and generally extremely solid capitalization
and financial position of the Possehl Group and its parent company
form a solid foundation for pursuing this growth strategy with resolve
in the future.
29

Consolidated
financial Statements
30
31
32
33
34
36
36
38
49
Consolidated Balance Sheet
Consolidated Income Statement
Consolidated Cash Flow Statement
Changes in Noncurrent Group Assets
Changes in Shareholders’ Equity
Segmental Reporting
Notes to the Consolidated Financial Statements
Auditors’ Report

Consolidated Balance Sheet
as of December 31, 2007
in E ’000 Notes 12/31/2007 12/31/2006
ASSETS
a. fixed assets
I. Intangible assets (1) 2,791 3,297
II. Property, plant, and equipment (2) 120,286 128,258
III. Financial assets (3) 20,772 63,194
143,849 194,749
B. Current assets
I. Inventories (4) 224,994 249,567
II. Receivables and other assets (5)
1. Trade receivables 212,161 199,260
2. Other receivables and other assets 29,667 29,000
241,828 228,260
III. Cash and cash equivalents (6) 179,929 41,993
646,751 519,820
C. Pre-paid expenses 3,561 3,160
d. deferred taxes representing assets (7) 1,701 0
total assets 795,862 717,729
EQUITY & LIABILITIES
a. Equity (8)
I. Subscribed capital 30,678 30,678
II. Retained earnings 44,939 17,420
III. Consolidated net profit for the period 190,637 130,810
IV. Minority interests 6,281 30,051
272,535 208,959
B. Provisions
1. Pension provisions (9) 68,582 57,906
2. Other provisions (10) 99,317 101,222
167,899 159,128
C. Liabilities (11)
1. Bank loans 166,016 158,847
2. Accounts payable 94,894 97,980
3. Other liabilities 93,183 91,647
354,093 348,474
d. deferred income 1,335 1,168
total equity and liabilities 795,862 717,729
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
31

Consolidated income Statement
from January 1, 2007 to December 31, 2007
in e ’000 Notes 2007 2006
Net sales (12) 1,521,695 1,452,163
Changes in finished goods, work in progress, and capitalized own work (13) -25,648 337
Other operating income (14) 34,892 24,768
Cost of materials (15) 988,914 946,891
Gross profit 542,025 530,377
Personnel expenses (16) 269,223 258,166
Depreciation and amortization (17) 24,086 26,431
Other operating expenses (18) 175,478 166,746
Net investment income/expense (19) 12,471 8,841
Net interest earnings/expense (20) -10,323 -14,013
Other financial result (21) -119 -1
result of ordinary operations 75,267 73,861
Extraordinary income (22) 59,693 32,773
Extraordinary expense (23) 10,230 0
Extraordinary result 49,463 32,773
Earnings before taxes 124,730 106,634
Income taxes (24) 8,067 5,253
Other taxes (25) 2,585 2,244
Consolidated net profit 114,078 99,137
Minority interests -489 4,696
32

Consolidated Cash flow Statement
from January 1, 2007 to December 31, 2007
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
in E ’000 2007 2006
Consolidated net profit 114,078 99,137
Extraordinary result 49,463 32,773
Consolidated net profit before extraordinary items 64,615 66,364
Additions/depreciation of noncurrent assets 24,219 26,300
Changes in accruals and provisions -6,990 3,382
Other non-cash expenses and income 2,450 219
Gains and losses on the disposal of noncurrent assets -1,894 -894
Change in working capital 2,151 2,572
(1) Cash flow from operating activities 84,551 97,943
Proceeds from disposal of intangible assets and property, plant, and equipment
Proceeds from disposal of noncurrent financial assets and from the disposal
3,363 4,738
of consolidated companies and business units 101,730 37,387
Payments for investments in intangible assets and property, plant, and equipment -22,433 -31,170
Payments for investments in noncurrent financial assets and for the acquisition
of consolidated companies and business units -29,841 -113,184
(2) Cash flow from investing activities 52,819 -102,229
Payments to shareholders (including minority interests) -8,000 -6,927
Payments from shareholders (including minority interests) 0 1,828
Change in bank debt 11,330 -16,846
Change in other financial receivables/liabilities -693 10,134
(3) Cash flow from financing activities 2,637 -11,811
Cash-relevant changes from (1) to (3) 140,007 -16,097
Net change in cash and cash equivalents due to exchange rate differences,
changes in group of consolidated companies, and valuation changes -2,071 1,414
Cash and cash equivalents at beginning of period 41,993 56,676
Cash and cash equivalents at end of period 179,929 41,993
33

Changes in Noncurrent Group assets
from January 1, 2007 to December 31, 2007
in E ’000 01/01/2007
34
Exchange rate
changes
acquisition or manufacturing costs
Changes
in group of
consolidated
companies Additions Reclassified Disposals 12/31/2007
i. intangible assets
1. Concessions, trademarks, copyrights,
and other rights and licenses
to use such rights 15,002 -91 1,004 975 96 -297 16,689
2. Goodwill 2,725 -30 0 0 0 0 2,695
3. Advance payments made 6 0 0 0 0 0 6
total intangible assets 17,733 -121 1,004 975 96 -297 19,390
ii. Property, plant, and equipment
1. Land, land rights, and buildings 111,723 -2,109 -4,090 1,862 7,002 -3,737 110,651
2. Technical plant and machinery 210,044 -8,064 -921 6,019 -23,777 -18,299 165,002
3. Other plant, production,
and office equipment 57,943 -818 -1,728 6,926 27,311 -5,926 83,708
4. Advance payments made
and plant under construction 8,456 -329 -95 6,705 -10,632 -9 4,096
total property, plant, and equipment 388,166 -11,320 -6,834 21,512 -96 -27,971 363,457
iii. financial assets
1. Shares in affiliated companies 771 0 0 15 0 -597 189
2. Loans to affiliates 110 0 0 0 0 0 110
3. Equity investments in
associated companies 16,200 -97 -1,644 8,084 0 -8,779 13,764
4. Other equity investments 1,077 0 -122 25 0 -529 451
5. Loans to companies in which equity
is held 4,397 0 0 1,214 0 -96 5,515
6. Securities held as noncurrent assets 39,533 0 0 32 0 -39,193 372
7. Other lending 2,102 0 0 1,132 0 -1,750 1,484
total financial assets 64,190 -97 -1,766 10,502 0 -50,944 21,885
470,089 -11,538 -7,596 32,989 0 -79,212 404,732

Cumulative
01/01/2007
Exchange rate
changes
depreciation and amortization
Changes
in group of
consolidated
companies Additions Reclassified Disposals
Cumulative
12/31/2007
Carrying amount
12/31/2007
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
Carrying amount
12/31/2006
12,282 -76 972 1,398 69 -255 14,390 2,299 2,719
2,153 -18 0 74 0 0 2,209 486 572
0 0 0 0 0 0 0 6 6
14,435 -94 972 1,472 69 -255 16,599 2,791 3,297
50,199 -788 -1,499 3,472 -31 -3,189 48,164 62,487 61,524
163,160 -6,765 -953 11,908 -20,710 -18,289 128,351 36,651 46,885
46,549 -822 -1,523 6,829 20,672 -5,052 66,653 17,055 11,393
0 0 0 3 0 0 3 4,093 8,456
259,908 -8,375 -3,975 22,212 -69 -26,530 243,171 120,286 128,258
128 0 0 0 0 0 128 61 643
0 0 0 0 0 0 0 110 110
534 0 0 0 0 0 534 13,230 15,666
162 0 0 0 0 0 162 289 916
0 0 0 0 0 0 0 5,515 4,397
16 0 0 8 0 0 24 348 39,518
158 0 0 125 0 -18 265 1,219 1,944
998 0 0 133 0 -18 1,113 20,772 63,194
275,341 -8,469 -3,003 23,817 0 -26,803 260,883 143,849 194,749
35

Changes in Shareholders’ Equity
from January 1, 2007 to December 31, 2007
in E ’000
36
Subscribed
capital Retained earnings
Accumulated other
Group earnings
12/31/2005 30,678 176,904 -26,617
Consolidated net profit 94,441
Dividend payment -5,000
Currency translation -8,164
Other changes in shareholders’ equity 3,023 -86,357
12/31/2006 30,678 269,368 -121,138
Consolidated net profit 114,567
Dividend payment -8,000
Currency translation -771 -13,699
Other changes in shareholders’ equity 2,556 -7,307
12/31/2007 30,678 377,720 -142,144
Segmental reporting
by business segment
Production trading
in E ’000 2007 2006 2007 2006
External sales 1,218,967 1,175,714 291,444 265,201
Segment earnings EBT 64,273 71,640 6,457 7,730
Depreciation and amortization of property, plant,
and equipment and intangible assets -22,707 -24,526 -473 -760
Other non-cash items -35,235 -5,677 10 -1,474
Net income from equity investments in associates 7,369 3,989 816 960
Other net income from equity investments 14 190 0 0
Other financial result -8 -1 -125 0
Interest income 2,313 1,512 989 1,337
Interest expense -10,060 -9,141 -3,063 -4,168
Segment assets 528,729 521,916 112,007 130,401
Capital expenditure on property, plant, and equipment and intangible assets 21,281 29,919 532 1,081
Segment liabilities 324,095 297,506 66,763 81,015
Employees 6,788 6,687 127 170
by region
Germany other Europe
in E ’000 2007 2006 2007 2006
External sales 632,981 570,063 447,927 403,564
Segment assets 426,812 349,348 138,888 128,455
Capital expenditure on property, plant, and equipment and intangible assets 12,356 12,295 4,890 7,373

Group shareholders’
equity without
minority interests
Share of equity of
minority interests
Accumulated share of
minority interests in
other Group earnings
Share of minority
interests in
Group capital
Shareholders’
equity
180,965 22,414 -1,012 21,402 202,367
94,441 4,696 4,696 99,137
-5,000 -1,927 -1,927 -6,927
-8,164 116 116 -8,048
-83,334 5,764 5,764 -77,570
178,908 30,947 -896 30,051 208,959
114,567 -489 -489 114,078
-8,000 0 -8,000
-14,470 -884 602 -282 -14,752
-4,751 -22,999 -22,999 -27,750
266,254 6,575 -294 6,281 272,535
Services Holding reconciliation Group
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
2007 2006 2007 2006 2007 2006 2007 2006
11,315 11,282 0 0 -31 -34 1,521,695 1,452,163
1,568 1,432 -6,529 -6,941 9,498 0 75,267 73,861
-314 -531 -592 -614 0 0 -24,086 -26,431
-263 116 -5,975 -5,666 0 -1 -41,463 -12,702
0 0 371 318 0 0 8,556 5,267
0 0 3,901 3,384 0 0 3,915 3,574
-4 0 -2,881 0 2,899 0 -119 -1
73 48 5,828 2,358 -2,250 -1,403 6,953 3,852
-27 -82 -6,338 -5,837 2,212 1,363 -17,276 -17,865
6,867 6,977 388,324 308,928 -256,532 -265,486 779,395 702,736
215 102 459 68 0 0 22,487 31,170
3,527 4,106 168,125 151,436 -56,230 -45,277 506,280 488,786
71 72 26 28 0 0 7,012 6,958
asia america other regions Group
2007 2006 2007 2006 2007 2006 2007 2006
253,030 241,452 147,073 194,713 40,684 42,371 1,521,695 1,452,163
114,376 127,961 94,527 91,841 4,792 5,131 779,395 702,736
3,714 9,972 1,338 1,495 189 35 22,487 31,170
37

Notes to the Consolidated Statements
GENEraL iNforMatioN
The consolidated financial statements of L. Possehl & Co. mbH,
Lübeck, (subsequently referred to as L. Possehl) for the 2007 fiscal
year have been prepared in accordance with the provisions of the
German Commercial Code (Handelsgesetzbuch, HGB). The financial
statements of the subsidiaries included in the consolidated financial
statements have been prepared as of the same reporting date as that
of L. Possehl.
In the interest of clarity, individual items in the consolidated financial
statements have been summarized in the balance sheet and
income statement. However, they are disclosed separately and explained
in the notes, along with the corresponding figures for the previous
year. Due to their significance, individual receivables, provisions,
and liabilities are disclosed separately in the balance sheet.
The income statement is structured according to the nature of
expense method.
The consolidated financial statements have been prepared in Euro.
All amounts are shown in thousand currency units except for the
proposal on appropriation of net profit for the parent company.
GroUP aNd CHaNGES to tHE GroUP
of CoNSoLidatEd CoMPaNiES
aNd aSSoCiatEd CoMPaNiES
Group of Consolidated Companies
In addition to the parent company L. Possehl, the consolidated
financial statements include 27 domestic and 54 foreign production,
trading, and service companies in which L. Possehl directly or indirectly
holds a majority of voting rights. The option of not including certain
subsidiaries provided by § 296 HGB was chosen for six companies
due to their minor importance for the financial and earnings position
of the Group. Shares in these subsidiaries are recognized at cost less
any impairment losses. Further details are available in the attached
overview of equity investments.
38
Changes to the Group of Consolidated Companies
Changes to the group of consolidated companies from acquisitions
or additional share purchases relate to:
On April 1, 2007 Harburg-Freudenberger Maschinenbau GmbH
acquired all of the shares of Pomini Rubber & Plastics S.r.l.
On October 2, 2007 Hako-Werke International GmbH acquired an
additional 38.7 % stake of Wega nova AG and now holds a total of
69.6 % of the share capital, including indirect interests.
In addition, as of October 1, 2007, L. Possehl increased its stake
in Hako Holding GmbH & Co. KG and Hako-Werke Beteiligungsverwaltungsgesellschaft
mbH from 56.22 % to 100 %.
The US-based Alumina Trading Company and the Netherlandsbased
Van Mannekus & Co. B.V. are no longer fully consolidated, but
included in the consolidated financial statements using the equity
method.
associated Companies
Important equity investments are accounted for using the equity
method if significant influence is exercised (associates). There are
15 associated companies. Four companies are not accounted for
using the equity method as they are of minor importance for the
financial and earnings position of the Group within the meaning of
§ 311 Para. 2 HGB.
CoNSoLidatioN PriNCiPLES
The financial statements of the companies included in the
Group’s consolidated financial statements have been prepared
according to uniform accounting principles. If the financial statements
of associates differ significantly from the accounting principles applied
within the Group, adjustments are made as necessary.

Equity is consolidated under the equity method by offsetting the
carrying amount of the investment with the share of equity held at the
time of acquisition. A positive difference between the carrying amount
of the investment and the shares of equity held (goodwill) is offset
against retained earnings in accordance with § 309 Para. 1 Sentence 3
HGB. A negative difference is recognized in retained earnings if it is
attributable to equity and as a separate item in provisions if it is
predominantly an expense.
Equity investments accounted for as associates are recognized in
the consolidated financial statements with the share of equity under
the equity method at the time of acquisition or at the time of initial
consolidation. A positive difference is offset against retained earnings.
If the share of equity is higher at the time of initial consolidation, only
cost is recognized. In following years, the carrying amount is adjusted
for the share of profit or loss from these companies and the difference
is recognized in the income statement. Dividend payments for prior
years are deducted, but not recognized in the income statement. Uniform
equity accounting is not conducted for foreign companies.
Receivables and liabilities as well as sales, expenses and income
between consolidated companies are eliminated. Interim profits from
trading are eliminated. Income from internal sales of the company’s
own products are reclassified to capitalized own work or changes in
inventories.
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
As they are of minor importance for the financial and earnings position
of the Group, no interim profits from trading with associates need
to be eliminated.
Any impairment losses on intra-Group receivables recognized in
the individual financial statements and impairment losses on shares in
consolidated companies are reversed.
Deferred tax assets and/or liabilities are recognized as necessary
for consolidation procedures with effect on the income statement. In
the consolidated financial statements, deferred tax assets and liabilities
are offset against each other.
CUrrENCy traNSLatioN
The reporting currency of L. Possehl is the Euro. Currency translation
of carrying amounts for subsidiaries in non-Euro countries takes
place on a uniform basis at the middle rate on the balance sheet date.
Any differences from a change in the exchange rate compared to the
previous balance sheet date are recognized directly in equity.
Translation of expenses and income, including the results for the
year, takes place at average rates for the month. Currency differences
from the use of different rates for translating the balance sheet and income
statement are recognized in equity without effect on profit and
loss in accordance with German Accounting Standard (GAS) 14.
The following exchange rates were applied for the translation of the
main foreign currencies in use in the Group:
Rates in e as per
balance sheet date Average rates in e
Country Currency 2007 2006 2007 2006
USA USD 0.67930 0.75930 0.73074 0.79722
China RMB 0.09300 0.09728 0.09604 0.09997
Hong Kong HKD 0.08711 0.09765 0.09374 0.10258
Malaysia MYR 0.20541 0.21510 0.21259 0.21735
Singapore SGD 0.47252 0.49500 0.48478 0.50164
Translation differences for the opening amounts in the fixed asset
schedule and provisions schedule and the schedule of changes in impairment
losses between the exchange rate as of December 31, 2007
and the previous balance sheet rate are recognized in retained earnings
without effect on the income statement.
39

aCCoUNtiNG PriNCiPLES
intangible assets acquired for valuable consideration are carried
at cost less scheduled amortization on a straight-line basis and any
unscheduled amortization as necessary. Scheduled amortization
normally takes place over the contractual or expected useful life of the
individual assets. Licenses and similar rights are normally amortized
over a useful life of one to five years.
Goodwill resulting from initial consolidation is recognized directly
in equity in the Group’s retained earnings. All other goodwill is
amortized over the expected amortization period of up to 15 years.
Property, plant, and equipment are carried at cost, less
scheduled depreciation for use and any unscheduled depreciation as
necessary. If the basis for unscheduled depreciation no longer exists,
the assets are written back. Costs of property, plant, and equipment
produced internally include an appropriate portion of overhead costs,
including depreciation of production equipment, as well as the direct
costs. Costs of debt financing are not included in production costs.
Assets of minor value are fully depreciated in the year purchased and
shown in the asset schedule under disposals.
Public subsidies for the purchase or manufacture of assets are
deducted from the cost of those assets.
Property, plant, and equipment are normally depreciated over their
expected useful life on a straight-line basis. In the Electronics division,
tools are depreciated based on a combination of useful life and actual
use over a maximum period of four years.
Scheduled depreciation is based on the following assumptions of
useful life:
40
years
Buildings 20 – 50
Technical plant and machinery 5 – 10
Tools 1 – 4
Operating and office equipment 3 – 10
Carrying amounts for associated companies reported under financial
assets are adjusted for the pro rata share of profit and loss, taking
account of dividend payments. These adjustments are disclosed in the
asset schedule as additions or disposals. Equity investments in subsidiaries
that are not fully consolidated and other equity investments
are recognized at cost less any impairment losses. Loans bearing no or
a low rate of interest are recognized at present value. Interest bearing
loans are always recognized at nominal value. Securities held as fixed
assets are recognized at cost.
inventories are carried at the lower of cost or quoted/market
price or fair value on the balance sheet date. Production-related overhead
costs and depreciation of production-related property, plant, and
machinery are included in addition to direct costs of production.
Financing costs are not included. Inventories are measured using the
average cost method, except for precious metals, which are measured
using the Last-in-First-out method, in line with common practice in
the industry. Inventories are written down if their realizable value is
diminished due to longer storage periods. The principle of “lower of
cost or market” is respected.
advanced payments received for inventories are deducted
directly from the carrying amounts.
receivables and other assets are normally recognized at the
lower of nominal value or fair value as per the balance sheet date. Any
risks are accounted for by individual write downs of 1 % of the carrying
amount of receivables not written down individually.
tax receivables and tax liabilities are normally recognized at the
amount expected to be received or paid to the tax authorities.
For the first time, pension provisions are measured according
to the projected benefit credit method in line with IAS 19 taking into
account future compensation and pension adjustments. The calculation
is based on the following parameters:
Actuarial interest rate 5.3 %
Salary growth 3.0 %
Pension growth 1.5 %

The biometric data underlying the measurement of pension
pro visions were based on the actuarial tables G for 2005 by Dr. Klaus
Heubeck. The difference of e 10.2 million between the previous valuation
in line with § 6a German Income Tax Law (Einkommensteuergesetz,
EstG) and the valuation in line with IAS 19 is reflected in earnings via
the extraordinary result from pension provisions.
other provisions were recognized for all available risks and uncertain
obligations as necessary using reasonable commercial judgment.
Longer-term provisions are only recognized at present value if the
underlying obligation includes an interest portion.
Liabilities are recognized at their repayment amount. Liabilities in
foreign currencies are translated at the rate applicable as per the date
they arose or the rate as per the balance sheet date.
NotES to tHE CoNSoLidatEd BaLaNCE SHEEt
fixed assets
Detailed information is available in the schedule of changes in consolidated
fixed assets. Historical cost as per January 1, 2007 includes
adjustments for currency translation without effect on profit or loss of
e 121,000 in intangible assets and e 11,320,000 in property, plant, and
equipment.
1. intangible assets
in E ’000 12/31/2007 12/31/2006
1. Concessions, commercial rights
and similar rights and assets and
licenses to such rights and assets 2,299 2,719
2. Goodwill 486 572
3. Advance payments received 6 6
2,791 3,297
This item mainly contains software. Only the amounts reported in
the individual Group companies are shown as goodwill here. Goodwill
arising on consolidation of equity is recognized directly in Group equity.
In the reporting year, a total of e 8,533,000 was recognized without
effect on the income statement.
2. Property, Plant, and Equipment
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
in E ’000 12/31/2007 12/31/2006
1. Land, equivalent titles, and
buildings including buildings
on leased land 62,487 61,524
2. Technical plant and machinery 36,651 46,885
3. Other plant, operating, and office
equipment 17,055 11,393
4. Advance payments made and
plant under construction 4,093 8,456
120,286 128,258
The Production segment accounted for the majority of total capital
expenditure of e 21,512,000 for property, plant, and equipment; in
particular the divisions Cleaning Machines (e 9,460,000), Electronics
(e 4,340,000), and Elastomer Processing (e 2,683,000).
3. financial assets
in E ’000 12/31/2007 12/31/2006
1. Shares in affiliated companies 61 643
2. Loans to affiliated companies 110 110
3. Equity investments in associates 13,230 15,666
4. Other equity investments 289 916
5. Loans to investee and investor
companies 5,515 4,397
6. Securities held as fixed assets 348 39,518
7. Other loans 1,219 1,944
20,772 63,194
The reduction in securities held as fixed assets reflects the sale of
the equity stake in Norddeutsche Affinerie AG.
The complete list of the parent company’s equity investments is
published along with the financial statements in the electronic version
of the German Federal Gazette.
41

The following domestic subsidiaries are making use of the exemption
provided by § 264 Para. 3 HGB regarding mandatory disclosure for
the year 2007:
Heimerle + Meule GmbH, Pforzheim
Harburg-Freudenberger Maschinenbau GmbH, Hamburg
Possehl Erzkontor GmbH, Lübeck
Possehl Beteiligungsverwaltung GmbH, Lübeck
Deutscher Eisenhandel AG, Lübeck
ABT Vermögensverwaltungs-Gesellschaft mbH, Mönchengladbach
The following domestic subsidiaries are making use of the
exemption provided by § 264b HGB regarding mandatory disclosure
for the year 2007:
A. Monforts Textilmaschinen GmbH & Co. KG, Mönchengladbach
Hako-Holding GmbH & Co. KG, Bad Oldesloe
CUrrENt aSSEtS
4. inventories
in E ’000 12/31/2007 12/31/2006
1. Raw materials, consumables,
and supplies 61,626 62,001
2. Work in progress 20,438 30,456
3. Finished goods and merchandise 139,854 143,606
4. Advance payments received 3,076 13,504
42
224,994 249,567
Advanced payments received on orders of e 68,356,000 (previous
year: e 73,458,000) were offset against inventories.
5. receivables and other assets
in E ’000 12/31/2007 12/31/2006
1. trade receivables 212,161 199,260
of which with a remaining term
of more than 1 year 1,537 1,330
2. other receivables and
other assets
Receivables from affiliated
companies 1 1
Receivables from investee and
investor companies 4,402 4,252
Other assets 25,264 24,747
of which with a remaining term
of more than 1 year 4,741 5,132
29,667 29,000
Receivables and other assets are recognized at nominal value, less
individual write downs of e 6,197,000 (previous year: e 6,871,000) and
a general write down of e 3,546,000 (previous year: e 3,380,000).
Other assets include recoverable tax amounts of e 14,765,000
(previous year: e 14,993,000).
The corporation tax credit of e 4,687,000 in accordance with
§ 37 German corporation tax law (Körperschaftsteuergesetz) was discounted
at 4.3 % p.a., the same interest rate as in the previous year.
6. Cash and Cash Equivalents
in E ’000 12/31/2007 12/31/2006
Bank balances 179,342 41,567
Cash in hand and checks 587 426
179,929 41,993
Bank balances consist primarily of short-term Euro deposits.
7. deferred tax assets
Deferred tax assets and liabilities result from the different carrying
amounts between the financial statements of domestic and foreign
Group companies prepared according to commercial law and those
prepared for tax purposes. Deferred taxes are also offset against consolidation
entries with effect on profit and loss. No deferred tax assets
are recognized for tax loss carryforwards. Deferred tax assets and
liabilities are netted out and the balance is reported.

As per the balance sheet date, the capitalized amount is composed
as follows:
in E ’000 12/31/2007 12/31/2006
Deferred tax assets 9,985 2,613
Deferred tax liabilities -8,284 -8,679
deferred tax assets (a provision
in the prior year)
1,701 -6,066
8. Equity
The schedule of changes in shareholders’ equity has been drawn up
in accordance with GAS 7.
Subscribed capital consists of the common equity of the parent
company, L. Possehl, held by the sole shareholder, Possehl-Stiftung.
Retained earnings consist of the parent company’s share of total
consolidated and retained net income. It includes all earnings components
with effect on the income statement including consolidation
effects through the income statement.
in E ’000 01/01/2007
Exchange rate
differences
Change in
group of
consolidated
companies
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
Accumulated other Group earnings consist of all transactions not
recognized through the income statement. The change in the reporting
year mainly relates to goodwill from company acquisitions offset
directly without effect on the income statement.
Minority interests relate mainly to the two Chinese companies
Shenzen Possehl SEG Electronics Co. Ltd. and Dongguan Possehl SEG
Electronics Co. Ltd. (20 % respectively).
9. Pension Provisions
Provisions for pensions exist almost exclusively at the parent company
and the domestic subsidiaries. Pension provisions consist of
1,784 (previous year: 1,837) future pensions and 1,078 (previous year:
1,054) current pensions for eligible active and former employees and
their surviving dependents. The amount of the pensions paid depends
on the length of service and the salaries or contributions of the
beneficiaries.
10. other Provisions
in E ’000 12/31/2007 12/31/2006
1. Provisions for deferred taxes 0 6,066
2. Other provisions for taxes 10,284 7,450
3. Other provisions 89,033 87,706
99,317 101,222
Changes in other provisions for taxes and other provisions in the
reporting year were as follows:
Reclassification
Used Reversals Additions 12/31/2007
other provisions for taxes 7,450 -132 0 3,106 -5,472 -133 5,465 10,284
Personnel 32,372 -269 508 -590 -22,070 -2,185 27,401 35,167
Warranties 11,238 -41 377 -585 -2,628 -1,540 5,727 12,548
Accounting 1,838 -16 -36 -95 -1,470 -88 1,664 1,797
Outstanding invoices 9,142 -168 -83 182 -7,120 -1,286 7,532 8,199
Other 33,116 -144 90 -1,646 -18,217 -2,838 20,961 31,322
other provisions 87,706 -638 856 -2,734 -51,505 -7,937 63,285 89,033
43

Personnel provisions primarily relate to obligations toward staff for
anniversary gifts, outstanding vacation entitlement, overtime, annual
bonuses, and partial early retirement as well as severance packages
and social compensation plans.
The item Accounting covers accounting work in the current year
relating to the reporting year and the internal and external costs of
preparing, auditing, and publishing the financial statements.
The other provisions mostly include obligations for disposing of
pollution, for guarantees and litigation, as well as for annuities. This
item also includes a negative difference from the consolidation of
equity and attributable to expense. Changes in this item in the reporting
year were as follows:
44
e ’000
01/01/2007 8,107
Reversals -5,989
Additions 4,682
12/31/2007 6,800
Additions result from the acquisition of the remaining shares in
Hako Holding GmbH & Co. KG and Hako-Werke Beteiligungsverwaltungsgesellschaft
mbH.
11. Liabilities
in E ’000 Up to 1 year 1 – 5 years Over 5 years total
1. Liabilities toward banks
(previous year)
2. accounts payable
(previous year)
3. other liabilities
Liabilities from bills drawn
(previous year)
Liabilities toward affiliated companies
(previous year)
Liabilities toward investee and investor companies
(previous year)
Other liabilities
(previous year)
total other liabilities
(previous year)
Liabilities of e 12,371,000 (previous year: e 17,196,000) are
secured by liens and retention of title.
Other liabilities include:
in E ’000 12/31/2007 12/31/2006
Taxes 6,909 6,785
Social security 2,358 2,851
Shareholders (of which Possehl-
Stiftung € 53,655,000;
previous year: € 50,416,000) 53,923 55,512
Other 21,519 20,492
67,520
(96,228)
94,894
(97,926)
7,818
(5,771)
30
(30)
626
(206)
83,786
(84,637)
92,260
(90,644)
93,824
(56,299)
0
(54)
0
(–)
0
(–)
0
(–)
896
(1,003)
896
(1,003)
84,709 85,640
4,672
(6,320)
0
(–)
0
(–)
0
(–)
0
(–)
27
(–)
27
(–)
166,016
(158,847)
94,894
(97,980)
7,818
(5,771)
30
(30)
626
(206)
84,709
(85,640)
93,183
(91,647)

NotES to tHE CoNSoLidatEd
iNCoME StatEMENt
12. Net Sales
The breakdown of consolidated net sales of e 1,521,695,000 (previous
year: e 1,452,163,000) according to division and region is shown
in the segment reporting.
13. Changes in finished Goods, Work in Progress,
and Capitalized own Work
in E ’000 2007 2006
Changes in finished goods
and work in progress -26,905 -854
Other capitalized own work 1,257 1,191
14. other operating income
-25,648 337
in E ’000 2007 2006
Income from reversal of provisions 8,621 6,341
Income from write backs and receipt
of written off receivables 447 2,578
Income from rents and leases 3,457 3,325
Currency gains 2,945 1,492
Insurance rebates 2,105 711
Gains on disposals of assets and write
backs 2,112 1,686
Gains on disposals of fully consolidated
subsidiaries 143 133
Other 15,062 8,502
34,892 24,768
Gains on disposal of fully consolidated subsidiaries show the total
gain from the disposal of individual assets and liabilities of subsidiaries
no longer included in the group of consolidated companies. Deconsolidation
takes place with full effect on profit and loss, including the
differences recognized in the consolidated financial statements.
15. Cost of Materials
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
in E ’000 2007 2006
Expenses of raw materials,
c onsumables, and accessories
as well as of purchased goods 930,561 898,309
Expenses of purchased services 58,353 48,582
16. Employee Expenses
988,914 946,891
in E ’000 2007 2006
Wages and salaries 219,616 210,136
Social security contributions 40,340 39,496
Pension payments 9,267 8,534
269,223 258,166
The average number of employees by group was as follows:
2007 2006
Manual workers 3,703 3,508
Salaried employees 3,142 3,298
Apprentices 167 152
7,012 6,958
The number of employees in the individual divisions is shown in the
segment reporting.
17. depreciation and amortization
Depreciation and amortization in the previous year included
unscheduled depreciation and amortization of e 181,000 on intangible
assets and property, plant, and equipment.
45

18. other operating Expenses
in E ’000 2007 2006
Freight charges 21,051 18,970
Other selling costs 38,791 38,255
Maintenance costs 15,327 18,167
Rental and leasing expenses 15,015 14,351
Other operating expenses 19,647 13,666
Legal, IT, and consultancy expenses 12,344 13,639
Insurance expenses 6,664 4,773
Currency losses 4,596 2,765
Other administrative expenses 16,013 18,278
Personnel leasing expenses 4,144 4,551
Other employee expenses 5,685 5,732
Expenses for individual and general
write downs 2,830 2,473
Other impairment losses on current
assets 2,279 1,233
Losses on disposal of fixed assets 230 705
Losses on disposal of fully
consolidated subsidiaries 164 87
Other 10,698 9,101
19. result of Equity investments
46
175,478 166,746
in E ’000 2007 2006
Earnings from equity investments
in associates 8,556 5,267
Earnings from securities
(dividend income) 3,915 3,397
Earnings from affiliated companies 0 177
20. interest result
12,471 8,841
in E ’000 2007 2006
Interest income on loans and
securities held as fixed financial assets 206 276
Other interest and similar income 6,747 3,576
Interest paid and similar expense -17,276 -17,865
-10,323 -14,013
Affiliated companies account for interest expense of e 1,000 (previous
year: e 19,000).
21. other financial result
in E ’000 2007 2006
Write downs on financial assets -119 -1
In contrast to the previous year, dividend income is included in
equity investments. The previous year’s amount of e 3,397,000 was
reclassified accordingly.
22. Extraordinary income/Extraordinary result
The indicated amount relates to the gain on the sale of the equity
stake in Norddeutsche Affinerie AG.
The previous year’s amount related solely to the gain on the sale of
shares in Süd-Chemie AG.
23. Extraordinary Expense
The indicated amount relates solely to the allocation of the
difference resulting from the conversion to valuing pension provisions
in line with IAS 19.
24. income taxes
Income taxes cover taxes, paid or due, on income in the individual
countries as well as deferred taxes. Taxes on income consist of trade
tax, corporation tax, solidarity surcharge, and the equivalent foreign
income taxes. Deferred taxes recognized in the individual financial
statements are adopted insofar as they conform to uniform Group
accounting principles. Otherwise, deferred taxes are eliminated, e.g.
deferred tax assets on tax loss carryforwards.
To the extent that consolidation procedures result in deferred
taxes, tax rates of 7.5 % and 40 % are applied depending on the business
and the country. In the reporting year, income taxes include a net
deferred tax gain of e 4,035,000. In determining deferred taxes, a
reduction in the corporate tax in Germany to approximately 30 %
beginning in 2008 was taken into account.
Of total tax expense, a net gain of e 1,877,000 is due to prior
years.
25. other taxes
This item primarily consists of land tax, real estate transfer tax, and
vehicle taxes as well as sales tax not deductible abroad.

NotES to tHE CoNSoLidatEd
CaSH fLoW StatEMENt
In accordance with GAS 2, the cash flow statement shows changes
in the net cash position of the Possehl Group over the course of the
year from positive and negative cash flows. Cash flows from operating
activities are derived indirectly via consolidated net profit.
Cash and cash equivalents disclosed as per the balance sheet
date is the total of cash in hand, bank balances, and checks and is
consistent with the carrying amount in the balance sheet.
Other non-cash expenses mainly include additions to individual
write downs and expenses due to impairment or disposal of fixed or
current assets. Non-cash income primarily consists of changes in
equity valuations, reversals of individual write downs, and write backs
in inventories.
NotES to SEGMENt rEPortiNG
Group activities are primarily divided into segments according to
the internal reporting lines and divisional Group management. The
division according to geographical regions is secondary. Businesses
and regions not allocated elsewhere are combined in a category of
their own.
divisions
The Production segment covers the divisions Electronics, Precious
Metals Processing, Special-purpose Construction, Elastomer Pro cessing,
Cleaning Machines, and Textile Finishing Systems.
The trading segment consists of Group companies dealing in
international trading of minerals, ores, metals, plastics, and chemicals.
The range of services is supplemented by upstream and downstream
processing, milling, and recycling.
The segment Services includes Group companies involved in
Environmental Protection and Broker Activities.
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
Central head office services provided by Holding and interim
Holding Companies are combined in this segment, along with the
equity investments managed by them.
Geographical regions
The secondary division is into the regions of Germany, other
Europe, Asia, America, and other regions.
Segment data
The data in the segment reporting is based on the accounting
principles used for the consolidated financial statements and explained
in the notes. They have been prepared as for financially and legally
independent companies, i.e. without eliminating transactions between
segments. Reconciliation of balances and movements within the items
of the consolidated balance sheet and consolidated income statement
therefore represents the extent of consolidation between segments.
External net sales include sales income from the sale of products
and services to third parties. Inter-segment sales result from sales of
products and services between individual segments. Offsetting takes
place at market prices.
The segment result is shown as earnings before taxes (EBT). It does
not include extraordinary earnings and therefore corresponds to earnings
from ordinary operations.
To isolate the segment assets, tax claims are deducted from gross
assets. Segment liabilities include provisions and long-term and shortterm
liabilities as well as financial liabilities. Liabilities from income
taxes are not segmented.
Investments include expenditures for fixed intangible assets as well
as property, plant, and equipment.
The balance of other non-cash items primarily consists of write
backs, depreciation, and amortization of current assets, changes in
inventories, and capitalized own work as well as changes in write
downs and provisions.
For the geographical segmentation, sales are divided according to
the location of the customer. Segment assets and investments are
calculated based on the location of the Group company.
47

otHEr diSCLoSUrES
Contingent Liabilities
in E ’000 12/31/2007 12/31/2006
Acceptance liability for drafts 7,581 3,020
Financial guarantees 541 728
Guarantees/warranties 7,844 8,498
other financial obligations
48
15,966 12,246
in E ’000 12/31/2007 12/31/2006
rental/Leasing and other
contractual obligations (face value) 112,559 104,097
with term structure
up to 1 year 22,475 17,264
1 – 5 years 46,592 37,164
over 5 years 43,492 49,669
Purchase commitments for
investments 2,916 3,048
115,475 107,145
derivative financial instruments
Derivative financial instruments are used in the Group only to hedge
currency and interest rate risks. The instruments used consist of
unconditional forward contracts for currencies and currency or interest
rate swaps.
The forward currency contracts are mainly over-the-counter
forward contracts on US dollar and Euro bases. As well as hedging
items of the balance sheet, imminent payment obligations from
procurement transactions are also hedged against anticipated unfavorable
exchange rate movements.
The currency swaps are short-term. Interest rate swaps have
settlement dates up to 2012.
The following table lists the nominal amounts and market values of
the financial instruments:
in E ’000
Nominal
amount
12/31/2007
Market value
12/31/2007
Forward currency contracts 13,956 1,513
Currency options 3,450 146
Interest rate and currency swaps 62,548 136
Financial instruments are measured using the mark to market
method. The market value of financial instruments is calculated as the
total value of all instruments as per the balance sheet date, without
accounting for the underlying transactions.
total remuneration of the Executive Board, advisory Council,
and Supervisory Board
The members of the Executive Board received total remuneration
of e 2,355,000 (previous year: e 2,341,000) for the performance of
their duties in the parent company and subsidiaries, the members
of the Advisory Council received e 80,000 (previous year: e 80,000),
and the members of the Supervisory Board e 28,000 (previous year:
e 31,000).
Former members of the Executive Board and their surviving dependents
received e 809,000 (previous year: e 718,000). Obligations from
current pensions and pension entitlements are covered by provisions of
e 8,312,000 (previous year: e 8,082,000).
Proposal on appropriation of Profits of the Parent Company
in E ’000
Net profit for 2007 76,744,023.39
Profit carried forward from the previous year 251.70
Balance sheet profit 76,744,275.09
The Executive Board proposes appropriating the balance sheet
profit of e 76,744,275.09 as follows: an amount of e 8,000,000.00 to
the sole shareholder, Possehl-Stiftung, an amount of e 68,700,000.00
to be transferred to other earnings reserves, and the remainder of
e 44,275.09 is to be carried forward.
Lübeck, Germany, March 19, 2008
L. Possehl & Co.
mit beschränkter Haftung (limited)
The Executive Board
Uwe Lüders Norbert Scheuch

auditors’ report *
We have audited the consolidated financial statements prepared by L. Possehl & Co. mit beschränkter Haftung,
Lübeck, – comprised of the balance sheet, income statement, notes, cash flow statement, and statement of changes
in equity as well as the segment reporting and the Group management report for the fiscal year from January 1, 2007
to December 31, 2007. The preparation of the consolidated financial statements and the Group management report in
accordance with German commercial law regulations is the responsibility of the legal representatives of the Company.
Our responsibility is to express an opinion on the consolidated financial statements and the Group management report
based on our audit.
We conducted our audit of the consolidated annual financial statements in accordance with section 317 HGB and
the generally accepted standards for the audit of financial statements promulgated by the German Institute of Auditors
(Institut der Wirtschaftsprüfer, IDW). Those standards require that we plan and perform the audit so as to obtain
reasonable assurance that any inaccuracies or violations that have a material effect on the presentation of the net
assets, financial position, and results of operations conveyed by the consolidated financial statements and the
principles of reliable accounting methods and by the Group management report are identified. Knowledge of the
business activities as well as the economic and legal environment of the Group and evaluations of possible misstatements
are taken into account in the determination of audit procedures. The effectiveness of the accounting- related
internal control system as well as verification of the information in the consolidated financial statements and the
Group management report is examined primarily on a test basis within the framework of the audit. The audit includes
assessing the annual financial statements of the companies included in the consolidated financial statements, the
definition of the group of consolidated companies, the accounting principles used and significant estimates made by
the legal represen tatives, as well as evaluating the overall presentation of the consolidated financial statements and
the Group management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
According to our assessment based on the knowledge gained during the audit, the consolidated financial statements
comply with the legal provisions and convey an accurate picture of the net assets, financial position, and results of operations
of the Group, while observing the principles of reliable accounting methods. The Group management report is in
agreement with the consolidated financial statements, conveys an accurate image of the position of the Group and accurately
represents the opportunities and risks of future development.
Hamburg, Germany, March 19, 2008
BDO Deutsche Warentreuhand
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Dyckerhoff Herbers
Auditor Auditor
*Translation of German Auditors’ Report
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
49

overview of Participation
Shareholdings
on December 31, 2007
Name registered in
Consolidated Group companies
50
Share of capital
in %
Precious Metals Processing
Heimerle + Meule GmbH Pforzheim, Germany 100.00
Electronics
Possehl Electronics N.V. ’s-Hertogenbosch, The Netherlands 100.00
Possehl Electronics Deutschland GmbH Wedel, Germany 100.00
Possehl Electronics France S.A.S. Roche la Molière, France 100.00
Possehl Electronics Nederland B.V. ’s-Hertogenbosch, The Netherlands 100.00
Possehl Electronics Maroc S.A.R.L. Casablanca, Morocco 100.00
Possehl Electronics Hong Kong Ltd. Hong Kong, China 100.00
Possehl Laminates Ltd. Hong Kong, China 100.00
Shenzhen Possehl SEG Electronics Co. Ltd. Shenzhen, China 80.00
Dongguan Possehl SEG Electronics Co. Ltd. Machong, China 80.00
Possehl Electronics (Malaysia) Sdn. Bhd. Malakka, Malaysia 100.00
Possehl Electronics Singapore Pte. Ltd. Jurong Town, Singapore 100.00
Possehl Connector Services Illinois, LLC Elk Grove Village, USA 100.00
Possehl Connector Services SC, Inc. Rock Hill, USA 100.00
Possehl (Malaysia) Sdn. Bhd. Malakka/Malaysia 100.00
Special-purpose Construction
Possehl Spezialbau GmbH Wiesbaden, Germany 100.00
Possehl Aannemingsmaatschappij B.V. Oosterhout, The Netherlands 100.00
Possehl Spezialbau Ges.m.b.H. Griffen, Austria 100.00
Possehl Iberica S.A. Madrid, Spain 100.00
Possehl Posebne Gradnje d.o.o. Maribor, Slovenia 100.00
Possehl Posebne Gradnje d.o.o. Jastrebarsko, Croatia 100.00
IOOO Possehl Spezstroj Minsk, Belarus 100.00
DFT Deutsche Flächen-Technik Industrieboden GmbH Bremen, Germany 100.00
Elastomer Processing
Harburg-Freudenberger Maschinenbau GmbH Hamburg, Germany 100.00
Harburg-Freudenberger (France) S.A.R.L. La Courvignon, France 100.00
Harburg-Freudenberger Belisˇ ć e d.o.o. Belisˇ ć e, Croatia 95.00
HF Rubber Machinery, Inc. Topeka, USA 100.00
Pomini Rubber & Plastics S.r.l. Milan, Italy 100.00
textile finishing Systems
A. Monforts Textilmaschinen GmbH & Co. KG Mönchengladbach, Germany 100.00
A. Monforts Textilmaschinen-Verwaltungs-GmbH Mönchengladbach, Germany 100.00
Monforts Service-Gesellschaft mbH Mönchengladbach, Germany 100.00
Montex Maschinenfabrik Ges.m.b.H. St. Stefan Lavanttal, Austria 100.00
ABT Vermögensverwaltungsgesellschaft mbH Mönchengladbach, Germany 100.00
Favour State Limited British Virgin Islands, Great Britain 100.00
Cleaning Machines
Hako Holding GmbH & Co. KG Bad Oldesloe, Germany 100.00
Hako-Werke Beteiligungsverwaltungs-GmbH Bad Oldesloe, Germany 100.00
Hako-Werke GmbH Bad Oldesloe, Germany 100.00
Hako-Werke International GmbH Bad Oldesloe, Germany 100.00
Hako Service GmbH Bad Oldesloe, Germany 100.00

Name Registered in
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
Share of capital
in %
Hako-Werke Verwaltungsgesellschaft mbH Bad Oldesloe, Germany 100.00
RZ-Service GmbH Bad Oldesloe, Germany 100.00
ZGM GmbH Remscheid, Germany 100.00
Hako Benelux Holding B.V. Andelst, The Netherlands 100.00
Hako B.V. Andelst, The Netherlands 100.00
Hilco Chemie B.V. Andelst, The Netherlands 100.00
N.V. Hako Belgium S.A. Erpe-Mere, Belgium 100.00
Labor Hako S.A.S. Plaisir, France 99.90
Sadimato S.A.S. Plaisir, France 99.98
SCI L’Hermitage Plaisir, France 99.67
Solvert S.A.S. Plaisir, France 98.00
Hako España S.A. Barcelona, Spain 100.00
Hako Polska Sp. z o.o. Krakow, Poland 100.00
Hako Technology Sp. z o.o. Swieszyno, Poland 100.00
Hako Machines Ltd. Crick, Great Britain 100.00
Hako Ground & Garden AB Halmstad, Sweden 100.00
Hako Ground & Garden A/S Oslo, Norway 100.00
OY Hako Ground & Garden AB Helsinki, Finland 100.00
Minuteman International, Inc. Addison, USA 100.00
Multiclean, Inc. Shoreview, USA 100.00
Minuteman Canada, Inc. Quebec, Canada 100.00
Minuteman PowerBoss Corporation Aberdeen, USA 100.00
Minuteman European B.V. Nieuw-Vennep, The Netherlands 100.00
I & B Cleaning Equipment Ltd. Hong Kong, China 60.56
Hako Australia Pty. Ltd. Rydalmere, Australia 98.60
Kommobil Vertriebsgesellschaft mbH i.L. Waltershausen, Germany 100.00
WEGA nova AG Sursee, Switzerland 69.60
International Trading
Possehl Erzkontor GmbH Lübeck, Germany 100.00
IRS Stahlhandel GmbH Krefeld, Germany 100.00
Mineralmahlwerk C. Welsch GmbH Wesel, Germany 100.00
GeoCrete B.V. Schiedam, The Netherlands 100.00
Possehl Erzkontor Hong Kong Limited Hong Kong, China 100.00
Possehl, Inc. Park Ridge, USA 100.00
Possehl AE Athens, Greece 99.00
Possehl (H.K.) Limited Hong Kong, China 100.00
Services
Possehl Umweltschutz GmbH Lübeck, Germany 100.00
Gesellschaft für das Recycling kontaminierter Industriebrachen mbH Lübeck, Germany 100.00
Teutonia Fracht- und Assekuranzkontor GmbH Lübeck, Germany 100.00
Lubeca Versicherungskontor GmbH Lübeck, Germany 100.00
Investments
Possehl Beteiligungsverwaltung GmbH Lübeck, Germany 100.00
Possehl (H.K.) Holdings Ltd. Hong Kong, China 100.00
Deutscher Eisenhandel AG Lübeck, Germany 100.00
51

Shareholdings
on December 31, 2007
Name Registered in
Non-consolidated Group companies
52
Share of capital
in %
Possehl Sicherheitstechnik GmbH Lübeck, Germany 100.00
Lübeck Linie GmbH Lübeck, Germany 100.00
Harburg-Freudenberger RUS Moscow, Russia 100.00
Possehl Connector Services, Inc. Rock Hill, USA 100.00
Possehl S. Africa (Proprietary) Ltd. Johannesburg, South Africa 100.00
Harburg-Freudenberger Machinery (China) Co. Ltd. Quingdao, China 100.00
Associated companies
o.m.t. Oberflächen- und Materialtechnologie GmbH Lübeck, Germany 25.00
Beck & Co. Industriebedarf GmbH & Co. KG Neuss, Germany 48.75
Holsteiner Humus und Erden GmbH Lübeck, Germany 33.33
Possehl Kehrmann GmbH Duisburg, Germany 50.00
Roots Multiclean Ltd. Coimbatore, India 26.00
Monforts Fong’s Textile Machinery Co. Ltd. Hong Kong, China 50.00
Monforts Fong’s Textile Machinery (Shenzhen) Co. Ltd. Shenzhen, China 50.00
Monforts Fong’s Textile Machinery (Macao Commercial Offshore) Co. Ltd. Macao, China 50.00
Van Mannekus & Co. B.V. Schiedam, The Netherlands 50.00
Alumina Trading Co. Park Ridge, USA 50.00
Tianjin Huade Mineral Product Co. Ltd. Tanggu, China 30.00
Other non-associated companies over 20%
Aravio Grundstücksverwaltungsgesellschaft mbH & Co. Objekt Braunschweig KG Wiesbaden, Germany 90.00
Aristo Grundstücksverwaltungsgesellschaft mbH & Co. Objekt Halle KG Wiesbaden, Germany 95.65
Pafravo Grundstücksverwaltungsgesellschaft mbH & Co. Vermietungs-KG Pöcking, Germany 94.00
Patrimo Grundstücksverwaltungsgesellschaft mbH & Co. KG Pöcking, Germany 94.00
Parosso Grundstücksverwaltungsgesellschaft mbH & Co. KG Pöcking, Germany 94.00
Bahners GmbH Neuss, Germany 50.00
Nordsalz GmbH Leer, Germany 50.00
DIP Gesellschaft für Dienstleistungen mbH Bad Oldesloe, Germany 35.00
Di.Hako-Tec GmbH Trappenkamp, Germany 49.00
Di.Hako-Log GmbH Trappenkamp, Germany 49.00

CONTACT AND IMPRINT
L. Possehl & Co. mbH
Beckergrube 38-52
23552 Lübeck, Germany
Phone: 49 (0) 451 148 – 0
Fax: 49 (0) 451 148 – 255
E-mail: info@possehl.de
Please contact:
Mario Schreiber
Head of Corporate Communications
Phone: 49 (0) 451 148 – 304
Fax: 49 (0) 451 148 – 1153
E-mail: mschreiber@possehl.de
Notes
The annual report is available in both
German and English.
More information on the company is available
on our website at
www.possehl.de.
Imprint
Editor: The Executive Board of L. Possehl & Co. mbH
Coordinator: Mario Schreiber
Concept and Design: Berichtsmanufaktur GmbH, Hamburg
Photos: Possehl Group, Corbis, Fotolia, Plainpicture
Status: May 2008
© L. Possehl & Co. mbH, Lübeck

www.possehl.de