IFRS-Financial ratios 2008

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IFRS-Financial ratios 2008
Balance sheet key ratios                             31 Dec. 2008    31 Dec. 2007     31 Dec. 2006
                                                      € thousands     € thousands       € thousands
Total assets                                              38,038          35,064            19,492
Shareholders' equity                                      13,043          12,380             3,664
Liabilities                                               24,995          22,684            15,828
Equity ratio                                              34.29%          35.31%            18.80%
Cash and cash equivalents                                   7,679          5,556             1,923




Cash flow key ratios                                 31 Dec. 2008    31 Dec. 2007     31 Dec. 2006
                                                      € thousands     € thousands       € thousands
Cash flow from current operating activities                2,058           -4,101            -2,414
Cash flow from investment activities                       -1,499              123            -489
Cash flow from financing activities                        1,564           7,611             2,223
Cash and cash equivalents at the end of the period          7,679          5,556             1,923




Consolidated income statement key ratios             31 Dec. 2008    31 Dec. 2007     31 Dec. 2006
                                                      € thousands     € thousands       € thousands
Sales                                                     36,697          41,344            33,942
Gross profit                                               4,154           1,852             3,534
Operating profit (EBIT)                                    1,574              -266           1,365
Earnings before income tax                                  1,044             -577           1,259
Group annual result                                          617              -858             365
Earnings per share (EUR per share)                           0.15             -0.26            1.06




Sales                                                         Operating profit (EBIT)


     € thousands                                                  € thousands
45.000                                                       1.600




      0
              2006     2007    2008                           -300     2006       2007      2008
           AGO. One step ahead.
Because ground-breaking technology and fast implementation
          of projects are what leads to the future.
Index

  1. To our shareholders                                                  03

        Letter to shareholders                                            04
        Interview with the Management Board of AGO AG Energie + Anlagen   10
        Supervisory Board Report                                          14

  2. The AGO share                                                        19

  3. Milestones since Formation                                           27

  4. Management and Supervisory Board                                     33

  5. Business divisions                                                   37

  6. Company strategy                                                     41

  7. Product categories                                                   49

  8. Climate protection                                                   57

  9. Environment                                                          61

        Emissions trading                                                 62
        Our Environment                                                   67

  10. Sustainability                                                      71

  11. General economic conditions                                         75

  12. Consolidated financial statement                                    85

        Consolidated Income Statement                                     86
        Consolidated Balance Sheet                                        87
        Consolidated Cash Flow Statement                                  88
        Consolidated Statement of Changes in Shareholder´s Equity         89
        Statement of Recognised Earnings and Expenses                     90

  13. Note to the consolidated financial statement                        91

        Statement by the Board of Directors                               151

  14. Consolidated annual report                                          153

  15. Auditor´s Opinion                                                   167

  16. Glossary                                                            169

  17. Legal Note                                                          181
To our shareholders
Letter to shareholders

Ladies and gentlemen,

The international financial market crisis increasingly affected the real economy in 2008.
Government aid packages, which are no longer limited to bailouts of the finance sector,
were put forward around the world. The downturn in the global economy led to
a decrease in investments, which has hit the export nation of Germany especially hard.
After a relatively good first half of 2008, economic growth in Germany slowed perceptibly
in the last six months of the year.

The global financial crisis also presented significant challenges for the renewable energy
sector. As a result of more restrictive lending policies, obtaining financing for energy
projects not only became more expensive but also increasingly difficult. Climate change
combined with rising energy costs in the face of limited raw material resources represents
another global challenge. Among other things, companies in the renewable energy sector
stand to benefit from politically supported subsidies for industrial energy projects to switch
from fossil fuels to biogenic energy sources. Meeting the need for increased energy
efficiency combined with cost reduction also creates interesting opportunities in our
industry.

Identifying and taking advantage of these opportunities was the main focus of
AGO AG Energie + Anlagen in the financial year 2008. Expanding our domestic business
operations and intensifying our international expansion efforts were of strategic
importance to sustainable growth and established our direction. Highlights of the
financial year 2008 include the commencement of planning for the biomass heating plant
in Upper Franconia, being selected as the technical general contractor for the
construction of a power station for the Heineken brewery in South Africa and of course
concluding the contract for our first biomass cogeneration plant in Italy accompanied by
information-gathering visits by Italian politicians on the municipal level from the
Apulia region.

The implementation and launch of our ECo-Plus* climate protection programme, which
received final approval from the federal government on 27 February 2009 after several
excellent meetings with the former Federal Minister of the Economy Michael Glos and the
new Federal Minister of the Economy Dr. Karl-Theodor Freiherr zu Guttenberg,
constitutes another high point. This expands our product range and promotes the switch
from fossil fuels to renewable energy sources. Combined with the improved cost-
effectiveness and increased energy efficiency of power stations, ECo-Plus* is another
good argument for customer recruitment.




                                  * ECo-Plus is a registered trademark of AGO AG Energie + Anlagen
                                                                                                     |5



As previously announced in 2007, AGO AG was able to counteract the prevailing
economic trend and consistently increase its order volume over the course of 2008 to
€57.8 million. In spite of an 11 percent reduction in sales to €36.7 million resulting from
the postponement of projects, AGO AG Energie + Anlagen was able to increase EBIT
from €-0.3 million in the previous year to €1.6 million in the financial year 2008. The focus
on in-house planning in the project business and only selective, less profitable third-party
planning led to this significant increase in profitability. Consolidated net profit for 2008
amounted to €0.6 million compared to €-0.9 million in the previous year. At the same
time, we were able to report a new record with an order backlog of €28.3 million as of
31 December 2008.

Ongoing projects started in 2008 and the continuous expansion of our international
business activities will increase employee workloads in the financial year 2009 and have
a continued positive impact on the EBIT margin. In spite of the banking and financial
crisis, the economic downturn has not had a significant impact on our business model.
The issues of climate protection, renewable energy, contracting and energy efficiency are
independent of the current economic situation. Since our customer base is very
diversified, we are not highly dependent on specific industries. The long-term goals of the
EU to promote the use of renewable energy and large-scale economic aid in many
countries should also stimulate demand for AGO technologies over the medium term. In
addition, we have a lot of leeway for short-term project financing regardless of the current
economic downturn thanks to liquid assets in the amount of €7.7 million.

As a specialist in the field of innovative and efficient power generation plants for industrial
customers and more than 29 years of expertise collected in over 2,000 energy projects
based on a variety of technologies, we focus on the three business areas of Project
Development & Implementation, Plant Operation and Service & Consulting. Our vertically
integrated value creation chain from the planning process to the installation and operation
of various types of power stations combined with raw materials and fuel management as
well as emission management offers an efficient and secure supply solution that is
economically and ecologically viable. Based on our financial leeway, accelerated
international expansion and ECo-Plus* climate protection programme, we believe we are
favourably positioned for further sustainable growth in the financial year 2009 and
beyond.



Yours sincerely,




Hans Ulrich Gruber            Helmut Peetz




                                  * ECo-Plus is a registered trademark of AGO AG Energie + Anlagen
|7
|9
                          Interview with the Management Board of
                          AGO AG Energie + Anlagen
Helmut Peetz (Member of
the Board) and
Hans Ulrich Gruber
(Speaker of the Board)
(left to right)




                          AGO AG was able to improve EBIT from €-0.3 million in 2007 to €1.6 million in the
                          2008 financial year. How were you able to achieve such a pronounced increase in
                          EBIT in spite of the slight decrease in sales?

                          Hans Ulrich Gruber: While the results of the financial year 2007 were affected by one-
                          time effects related to the IPO, the development of the 2008 results was positive since
                          there were no such past effects. In spite of the drop in sales from €41.3 million to
                          €36.6 million resulting from the postponement of projects to 2009, EBIT in the financial
                          year 2008 increased by €1.9 million. Even if one-time effects from 2007 are taken into
                          account, we were able to improve EBIT by nearly €0.9 million. The favourable
                          development of our margin is largely due to the focus on in-house planning in the project
                          business. Here we have control of our projects across all processes, which means we are
                          able to manage costs accordingly. We also consciously opted out of the implementation
                          of low-margin projects during the past financial year.

                          With an equity ratio of 34 percent and liquid assets in the amount of €7.7 million,
                          AGO AG is in a good financial position. Will you be able to realise your planned
                          investments for 2009 with the existing financial resources?

                          Hans Ulrich Gruber: With the 40 percent increase in liquidity to €7.7 million, we have a
                          lot of leeway for short-term project financing. We were also able to increase our financial
                          freedom in the financial year 2008 by reducing non-current financial liabilities by
                          16 percent to €8.6 million. Our shareholders’ equity position is correspondingly
                          favourable. This allows us to remain relatively independent of the financial market,
                          especially in view of the current economic and financial situation. Nevertheless, there are
                          several banks that are interested in financing renewable energy projects in spite of the
                                                                                                    | 11


banking crisis. For example, we were speaking with the three larger institutions in Italy
regarding refinancing for our upcoming projects. As a result, we are optimistic about
financing for our planned investments for 2009 and currently see no reason to revise our
plans.

AGO AG Energie + Anlagen was the first professional contractor in Germany to
develop a climate protection programme solely focused on the use of biomass.
You have already been able to convince former Federal Minister of the Economy
Michael Glos and his successor Dr. Karl-Theodor Freiherr zu Guttenberg with your
ECo-Plus* climate protection programme. What is the significance of ECo-Plus*
and how will AGO benefit?

Helmut Peetz: With a sole focus on biomass, the ECo-Plus* climate protection
programme is our answer to the solutions demanded by the Kyoto Protocol for the cross-
national implementation (joint implementation) of emission reductions. We are exploring
uncharted but highly interesting waters. ECo-Plus* applies to power stations in Germany
with a rated thermal output from 400 kW up to a maximum of 19.9 MW. Our intention is to
motivate industrial SMEs and public institutions in Germany to convert their energy
supplies from fossil fuels to renewable alternatives by means of joint implementation. The
resulting emission certificates for reduced CO2 emissions can then be sold at a profit. The
proceeds depend on the amount of emission reductions and the respective market price
for the certificates. For example, an SME can reduce its emissions by 6,000 tons of CO2
annually by converting to climate-friendly energy generation. Based on a price
of €15 per ton of CO2, the customer can report €90,000 as an asset under these
conditions. The Federal Republic of Germany approved this climate protection
programme on 27 February 2009 under Article 6 of the Kyoto Protocol.

This means emissions trading may become a customer acquisition multiplier in
Germany. Following 2008, can we expect another record order backlog at the end
of 2009?

Helmut Peetz: We were able to report a record order backlog as of 31 December 2008
when the preliminary figures for the financial year 2008 were released. At €28.3 million,
it has more than doubled compared to the previous year. The volume of new orders in the
current financial year 2009 is within the scope of internal planning. On the one hand, this
is based on our good overall position in the industrial energy supply market. We offer
integrated concepts and our services are competitive – not just in view of market trends.
On the other hand, the topic of a low-cost energy supply is and remains a key issue for
industry. More so than the ecological aspect, the economic component is the key
decision-making factor. This is why the proceeds from trading emission certificates –
which result from CO2 emission reductions after converting from fossil fuels to
renewables – constitute a useful argument when recruiting new industrial customers. Our
services harmonise the ecological and economic aspects. In many cases, we can even
achieve savings compared to energy generating plants that burn fossil fuels. As a result,
we expect sustained growth in our order volumes for this year and the next.



As a plant operator in Germany, AGO AG largely concentrates on supplying heat.
The strategic focus in Italy is on the electricity supply. What operational goals are
you pursuing as you compete for market share in Italy? What are the operational
objectives for the current year?
                                 * ECo-Plus is a registered trademark of AGO AG Energie + Anlagen
Hans Ulrich Gruber: While the European Union has targeted an overall reduction in
greenhouse gas emissions of 20 percent by 2020 compared to 1990, Italy has legally
established objectives to expand the proportion of renewable energy from seven percent
currently to 22 percent by the year 2012. At 22-30 cents / kWh, the current Italian supply
remuneration for electricity generated from biomass is particularly attractive to us and
exceeds comparable national as well as international values. Accordingly we expect a
massive increase in the gross consumption of electricity from renewable sources in Italy.
We want to be one of the first foreign energy suppliers to participate in these expected
developments. AGO has assumed a leading position for the supply of heat in Germany,
for example with the engine works of Daimler AG which has been supplied exclusively
with wood chips since 2002. Now we also want to assume a leading position with energy
generation plants in Italy. The specific operational objectives of AGO AG include the
construction and subsequent operation of biomass cogeneration plants as well as
trigeneration, which has not been implemented to a great extent in Italy to date. We
intend to construct ten biomass cogeneration plants averaging 6 MWth and 1 MWel by
the year 2014. The proposed annual investment volume is between €6.0 and
€10.0 million.
With our entry into the Italian market in July 2008, we have also assumed a good position
in regards to the supply of raw materials. For example, AGO AG has invested in the
Italian olive tree trimming supplier Reindeer srl. In addition to expanding the raw material
input for our plants, the strategic reason behind this move is the future supply of raw
materials in the form of olive tree trimmings for biomass cogeneration plants that have not
been constructed yet.

The proportion of Group sales to other countries may exceed 50 percent over the
medium term. Much of this could be generated in Italy. Where do you see
additional opportunities for expansion with the innovative technology expertise of
AGO AG Energie + Anlagen?

Hans Ulrich Gruber: In principle, we can envision the expertise of AGO wherever we
find politically motivated change processes for environmentally friendly energy supply
technologies in addition to overall favourable conditions. We generally observe markets
and their development closely in order to expand into the appropriate markets at the right
time. Norway is a good example. The Norwegian government is promoting a switch from
electric direct heat commonly used for building and process heat to alternative,
environmentally friendly technologies. In contrast to supply remuneration, the national
funding organisation ENOVA subsidises each individual project with up to 20 percent of
the financial cost subject to certain energy-related requirements. Here the densely
populated coastal areas are of particular interest to us. Using seawater as an
inexhaustible source of heat for heat pumps makes a lot of sense. Norway also has a
huge supply of biomass in the form of timber which has remained largely untapped as a
source of energy. The market for biomass heating plants for municipal local heat
networks in particular is growing rapidly, especially since Norway has severe restrictions
and even local bans on the new installation of oil-fired boilers in public buildings and large
-scale industrial facilities. In summary, we are seeking and utilising opportunities for
expansion in markets which, in addition to the politically motivated reorientation of the
energy supply, offer suitable energy or biomass sources. In Italy, these may be the olive
trees; in Norway, the coastal waters or forests which are largely untapped as an energy
source.
                                                                                            | 13


AGO AG Energie + Anlagen has also been active in the USA, Russia, Dubai and
Malaysia in the past. What about the expansion strategy beyond Europe?

Helmut Peetz: Yes, we have been active in a number of countries outside Europe. But
this needs to be differentiated. In most cases, we are talking about project
implementation while AGO AG did not operate a local branch or subsidiary. This only
happens when, after a detailed market analysis, we find that conditions indicate a
sustained demand for our products and services so that corresponding market
development is economically feasible for AGO AG. We found such a situation in South
Africa. This is a market with tremendous potential which we intend to develop through the
founding of AGO energy (Pty) Ltd. with its registered office in South Africa in September
2008. In particular, we are focusing on what we believe is a fast-growing market for
trigeneration and industrial energy supply plants for local industrial SMEs. We are
planning the implementation of energy projects with a total annual volume of up to
€5.0 million. Under the leadership of General Manager Uwe Kern in cooperation with
Managing Director Ralph M. Ertner, AGO energy will identify potential projects and
develop the market with a local partner. We have already secured the first turnkey
contract for a power station for the Heineken brewery in 2008. The order volume of
€3.75 million includes the planning, delivery, installation and commissioning of a power
station in a suburb of Johannesburg.
In spite of the positive market outlook in South Africa, our main focus remains on the
European market. For example, we were able to gain a foothold in Greece with the
construction of four cogeneration plants for the city of Serres in 2007. We are
correspondingly optimistic in regards to international business developments.
                    Supervisory Board Report

                    The financial year 2008 was dominated by the start up of the Italian subsidiary
                    AGO energia srl. Turin and an intensification of sales activities for German biomass
                    projects.

                    Activities by the Supervisory Board in the financial year 2008
                                                 In the financial year 2008, the Supervisory Board
Steffen Pfund,
                                                 monitored and supported the activities of the
chairman of the
Supervisory Board                                AGO AG Energie + Anlagen Management Board in
                                                 compliance with its legal advisory and supervisory function.
                                                 Benchmarks for this supervision were notably the legitimacy,
                                                 regularity, usefulness and efficiency of the Management
                                                 Board and the Group’s Management. The Management
                                                 Board supplied the Supervisory Board with continuous,
                                                 comprehensive, and timely written and verbal information.
                                                 Reporting on the part of the Management Board covered all
                                                 essential information regarding the current position of the
                    Group, especially company planning, strategic development, risk and risk management.
                    The Management Board also informed the Supervisory Board regarding significant
                    business transactions and the development of net assets, financial position and results of
                    operation. The company’s current situation was regularly examined by the Supervisory
                    Board in its meetings based on written and verbal coverage by the Management Board.
                    Reports made by the Management Board and other information were checked for
                    plausibility and critically questioned and appreciated. The Supervisory Board was
                    included in all important decisions. Business transactions requiring approval by the
                    Supervisory Board were examined carefully, discussed with the Management Board in
                    detail and approved.

                    In between meetings, the chairman of the Supervisory Board continuously discussed the
                    strategy with the Management Board and informed himself of business activities and
                    other important events.

                    The meetings and decisions made by the Supervisory Board mainly related to:

                    •      founding AGO energy (PTY) Ltd., Cape Town (South Africa) and the resolution on
                           establishing a company in Sweden in 2009,
                    •      BMHKW Alperstedt. Particularly operating optimisations, the completed legal
                           dispute with a supplier of BMHKW Alperstedt and the ongoing debate with heating
                           customers,
                    •      scheduling and organising of the Annual General Meeting 2008,
                    •      launching a joint implementation (JI) program for generating CO2 certificates as
                           a service provider of AGO AG,
                    •      revising the IT landscape of AGO AG,
                    •      staffing of the Board of HolSoTherm GmbH and negotiations with minority
                           shareholders.

                    Meetings and participation
                    The Supervisory Board held four meetings in the financial year 2008. Mr. Eismann was
                    unable to attend one of the Supervisory Board meetings. Two meetings took place in the
                                                                                                  | 15


first six months and two meetings in the last six months of 2008.

Conflicts of interest
The Supervisory Board did not receive any reports regarding conflicts of interest from any
member of the Management Board or the Supervisory Board.

Organisation of the Supervisory Board’s activities
The Supervisory Board works together on an open and effective basis. There was no
requirement to form separate committees.

Audit of the annual financial statements and consolidated financial
statements 2008
Ebner Stolz Mönning Bachem GmbH & Co. KG (formerly: Dr. Ebner, Dr. Stolz und
Partner GmbH), Stuttgart examined the annual financial statements and consolidated
financial statements prepared by the Management Board for 31 December 2008 as well
as the annual report and the consolidated annual report for the financial year 2008 and
supplied an unqualified opinion. The consolidated financial statements and the
consolidated annual report were prepared according to Sec. 315a HGB (German
Commercial Code) on the basis of the international financial reporting standards, as are
to be applied in the EU.

The financial statements (annual financial statements and annual report of the Company
as well as the consolidated financial statements and consolidated annual report as well
as the auditor's reports were provided to the Supervisory Board in a timely way.

The Supervisory Board on its part examined the documents delivered by the Board and
the audit reports by the certified public accountant, particularly with respect to their
lawfulness, correctness and fitness for purpose.

In the Supervisory Board’s meeting held on 26 March 2009, the certified public
accountant explained the audit result in detail and supplied additional information. The
members of the Supervisory Board took note of, critically appreciated and discussed the
audit reports and the auditor’s opinion as well as the audit itself together with the certified
public accountant and questioned the kind and scope of the audits as well as the audit
results. The members of the Supervisory Board were sufficiently convinced of the
regularity of the audits and the audit results. The Supervisory Board has viewed the audit
result and approved its content.

The Supervisory Board finally examined the annual financial statement, the consolidated
financial statements, the annual report and the consolidated annual report taking into
account the audit reports made by the certified public accountant and does not raise any
objections. The Supervisory Board approved the annual financial statements and
consolidated financial statements prepared by the Management Board. The annual
financial statements are therefore determined. The Supervisory Board agrees with the
Management Board’s evaluation of the Company’s and Group’s situation.
Examination of the Management Board’s report on relations to
associated companies
The report prepared by the Management Board according to Sec. 312 AktG on relations
to associated companies (dependency report) for the financial year 2008 was presented
to the Supervisory Board together with the audit report prepared by the certified public
accountant on that subject.

The certified public accountant examined the dependency report and applied the
following unqualified opinion according to Sec. 313 AktG:

“After our mandatory examination and assessment we confirm that

1.     the actual contents of the report are correct,
2.     the company’s efforts in the legal transactions mentioned in the report were
       not inappropriately high.”

The Supervisory Board on its part examined the dependency report made by the
Management Board and the audit report made by the certified public accountant. The
Supervisory Board came to the conclusion that the audit report as well as the audit itself
comply with the legal requirements. The Supervisory Board especially checked the
dependency report for completeness and correctness and made sure that the circle of
associated companies was identified with appropriate care and that necessary provision
for the identification of reportable legal transactions and measures were made. Evidence
for objections to the dependency report did not become obvious during this examination.
The Supervisory Board agrees with the final result of the dependency report’s
examination by the certified public accountant. After the final result of the Supervisory
Board’s examination there are no objections to the Management Board’s statement at the
end of the dependency report.

The Supervisory Board would like to thank the Management Board, the employee
representatives and all employees for their dedication and commitment over the course of
the past financial year as well as the shareholders for their faith in the company.

On behalf of the Supervisory Board



Kulmbach, 30 April 2009




Steffen Pfund
Chairman of the Supervisory Board
| 17
EVC Energy Supply Center II, Dresden
The AGO share
The AGO share

General market environment in 2008 defined by financial crisis
Stock prices in all key markets plummeted in 2008. The end of the economic boom which
had lasted since the end of 2003 and was associated with positive stock market trends
around the world was triggered by the US mortgage crisis in mid-2007. However, the
massive impact of the so-called sub-prime crisis only became apparent in the course of
2008. During the past calendar year, the ill-defined need for extensive write-offs of risk
papers by banks in the triple-digit billions led to lack of trust between the banks
themselves. The culmination of these events - at least for now - was the collapse of the
US investment bank Lehman Brothers in the fall of 2008. Because of this loss of trust,
combined with increasing uncertainty regarding the solvency of banks in general, inter-
bank trading which is so important to the liquidity of financial institutions ground to a halt.
Dozens of banks experienced financial difficulties as a result. This led to mergers, the
nationalisation of banks and government aid in the billions around the world. The liquidity
shortage caused by the financial crisis caused banks to implement more restrictive
commercial lending policies. As a result, refinancing options which can be described as
extremely unfavourable for commercial enterprises led to a massive reluctance to invest.
This in turn quickly affected world trade and domestic demand, ultimately leading to the
current global economic crisis – the extent of which cannot be accurately predicted yet.

The development of international stock indexes in this environment was extremely
negative. For example, the Dow Jones EURO STOXX 50 as the leading European index
lost approximately 42 percent of its value. The DAX leading German index lost 40 percent
in its second-weakest year since it was introduced on 1 July 1988. From its all-time high
of 8,106 points in July 2007, the DAX fell to 8,067 points at the beginning of 2008 and
then 4,127 points in November to close at 4,810 points by the end of the year. In 2009,
the DAX also followed the increasingly unfavourable forecasts of the leading economic
institutes regarding global economic developments. Driven by profit warnings issued by
companies, the lack of clarity regarding the economic situation and increasing uncertainty
regarding the stability and liquidity of banks, stock market volatility remained high at the
beginning of 2009 and market prices continued to fall. In March 2009, the DAX briefly fell
below 3,700 points and was therefore back at the 1997 level.

Negative developments in 2008 also affected the DAXsector Industrial performance index
and the Entry Standard index. The DAXsector Industrial lost approximately 52 percent.
The Entry Standard followed this trend, losing 51 percent over the course of the year and
trading at 410 points by year-end. Depicting the 30 leading listed companies in the future-
oriented renewable energy sector around the world, the RENIXX World industry index
lost a full 64 percent in 2008.
                                                                                                                                    | 21


Performance of important indices in 2008
       Percent
       Prozent
    120%


    100%


      80%


      60%


      40%


      20%
                                                                                                  Dec/08
            Jan/ 08 Feb/ 08 Mrz/ 08 Apr/ 08 May/08 Jun/ 08 Jul/ 08 Aug/ 08 Sep/ 08 Oct/08 Nov/ 08 Dez/ 08
                            Mar/08          Mai/ 08                                Okt/ 08
                  DAX            RENIXX             DAXsector Industrial Performance-Index                   Entry Standard Index
Source: Deutsche Börse AG; ARIVA.de; Internationales Wirtschaftsforum Regenerative Energien (IWR); AGO AG Energie + Anlagen

AGO share affected by the general market environment
The share of the energy supplier AGO AG Energie + Anlagen was also affected by the
negative capital market environment in 2008. Since its high point for the year at €7.02 on
2 January 2008, the share lost approximately 33 percent in value in the first two months
of 2008. In the months from March to September, the price of the AGO share stabilised
somewhat and hovered around €4.00. Starting in September, the percentage decrease
was less drastic compared to several reference indexes. After reaching its low for the
year at €2.77 on 22 December 2008, the AGO share closed at €3.05 for 2008 in floor
trading on the Frankfurt Stock Exchange. This corresponds to a drop of approximately
-55 percent compared to the price of €6.75 at the end of the previous year.



AGO AG Energie + Anlagen Share price development 2008 (Xetra)
            EUR
        8


        6


        4


        2


        0
        Jan/ 08 Feb/ 08 Mar/08 Apr/ 08 Mai/ 08 Jun/ 08
                        Mrz/ 08        May/08                              Jul/ 08                                  Dec/08
                                                                                     Aug/ 08 Sep/ 08 Oct/08 Nov/ 08 Dez/ 08
                                                                                                     Okt/ 08
Source: Deutsche Börse AG; ARIVA.de; AGO AG Energie + Anlagen


The average trading volume for the AGO share in 2008 was 2,649 shares per trading
day. 1,816 shares were traded on Xetra, 674 in floor trading on the Frankfurt Stock
Exchange and the remainder on regional stock exchanges in Stuttgart, Düsseldorf and
Berlin.
AGO AG Energie + Anlagen trading volumes (Xetra)
              Stück
             Share
  24,000

  20,000

  16,000

  12,000

   8,000

   4,000

        -0
                             Mar/08                                                 Oct/08          Dec/08
             Jan/ 08 Feb/ 08 Mrz/ 08 Apr/ 08 May/08 Jun/ 08 Jul/ 08 Aug/ 08 Sep/ 08 Okt/ 08 Nov/ 08 Dez/ 08
                                             Mai/ 08
Source: Deutsche Börse AG; ARIVA.de; AGO AG Energie + Anlagen



                                 Capital market communication approaches Prime Standard level
                                 Transparency, continuity and reliability are the pillars of capital market communication for
                                 AGO AG Energie + Anlagen. AGO AG builds trust with its interest groups based on this
                                 foundation. Reporting in German and English follows the Prime Standard, which is the
                                 highest transparency level in Germany. AGO publishes annual and quarterly reports
                                 according to IFRS standards. With regular reporting activities in the form of corporate
                                 news and press releases, AGO AG Energie + Anlagen informs its shareholders and
                                 prospects about ongoing Company activities in a timely and comprehensive manner. In
                                 addition to the nine corporate news announcements, a total of 8 press conferences were
                                 held this year.


Corporate news 2008 in overview                                                                                        Date

Construction and operating of biomass heating station in Upper Franconia                                          27 Feb 08
Incoming orders in 2008 at record high of €20.70 million                                                           16 Apr 08
Publication of Annual Report ++ Turnover increase by + 21.8 percent                                               15 May 08
Release of Q1 Report 2008 ++ Gross profit margin at 12.7 percent                                                  30 May 08
AGO AG Energie + Anlagen is awarded a contract for a project in South Africa                                      10 Jun 08
Market entry in Italy ++ Annual turnover of EUR 2.6 million as of 2010                                             24 Jul 08
2008´s first term’s revenue of EUR 14.81 million according to plan                                                14 Aug 08
AGO AG Energie + Anlagen expanding to Africa                                                                      25 Sep 08
2008 nine-month-figures: Continuation of the positive trend expected for the fourth quarter                       20 Nov 08


                                 In order to address institutional investors more directly and increase awareness, the
                                 Management Board of AGO AG Energie + Anlagen answered questions from the public
                                 at five capital market events in 2008. This means the Company expanded its capital
                                 market presence by two events in the second year since its IPO. Several foreign and
                                 domestic road show presentations supplemented the Company's investor relations
                                 activities. The Management Board was also in continuous contact with various journalists
                                 from the key print and online media for listed companies in Germany. .
                                                                                                | 23


Conference calendar 2008 in overview                                                             Date

Vienna Investment Forum                                                                      18 Apr 08
Entry and General Standard Conference 2008                                                   29 Apr 08
Munich Capitalmarket Conference 2008                                                         02 May 08
Close Brothers Seydler Small- and MidCap Conference 2008                                     05 May 08
Vienna Investment Forum Autumn 2008                                                          27 Nov 08

Annual General Meeting 2008
On 30 June 2008, AGO AG Energie + Anlagen held its first regular shareholder's meeting
as a listed company. All six of the proposed agenda items were passed unanimously. The
long-term strategy of the Company also proved convincing. The Annual General Meeting
for the past financial year 2008 is planned for 30 June 2009 in Kulmbach.

Analyst targets for 2008 range from €5.10 to €6.70.
Three research institutions – Close Brothers Seydler Research AG, Independent
Research AG and Kayenburg AG – researched AGO AG Energie + Anlagen in 2008.
In a total of 12 studies that were prepared, the assessed fair value of the share ranged
from €5.10 to €6.70.

Among other things, the analysts emphasised the growth potential of German SMEs
based on increasing demand for contracting solutions by industrial enterprises because
of Basel II regulations. The pronounced increase in the cost of fossil fuels by mid-2008
also drove up demand. AGO AG Energie + Anlagen can generate cost reductions
through the conversion to biomass cogeneration plants with an energy mix of electricity
and heat. The CO2 climate debate is stimulating demand. In addition, amendments to the
German Renewable Energy Sources Act (EEG) and Renewable Heat Energy Act
(EEWärmeG) are consistently improving legal conditions. The internationalisation of
business activities and CO2 certificate trading also harbour potential. In these difficult
economic times, the fact that AGO is not highly dependent on industries such as the
automotive sector could prove advantageous. This is confirmed by the order backlog of
€28.3 million at the end of 2008, which represents an increase of approximately
105 percent compared to the previous year. The entry into the Italian market in
December 2007 – the European country with the highest demand for technology to
generate heat and electricity from biomass – and the expansion to South Africa in
September 2008 offer attractive potential. In addition to these direct undertakings, the
Company’s know-how has been in demand for energy projects around the world for many
years.

Stable shareholder structure, management buys AGO shares
Since the initial public offering (IPO) of AGO AG Energie + Anlagen in June 2007, the
shareholder structure has been anchored by caverion GmbH which holds the majority of
voting rights at 59.25 percent. While the Supervisory Board holds approximately
3.40 percent of the Company, management shareholdings increased to 5.48 percent. In
August 2008 – after the publication of the semi-annual report – the management of
AGO AG Energie + Anlagen acquired additional shares and thereby increased its
proportion of total share capital by 0.38 percent. Free float decreased accordingly from
32.25 percent to 31.87 percent.
Shareholder structure as of December 31, 2008




                          59.25 %

                                                       caverion GmbH
       31.87 %                                         Management

                                                       Supervisory Board
        3.40 %
          5.48 %                                       Free Float




Contact information
If you would like more information on Investor Relations then visit our website at
www.ago.ag or call us:

             GFEI Gesellschaft für Effekteninformation mbH
             Marcus Kapust
             Phone:       +49 (0)69 - 74 30 37 00
             Fax:         +49 (0)69 - 74 30 37 22
             E-Mail:      ir-ago@gfei.de
             Internet:    www.ago.ag

If you would like more information on Public Relations or background details on the
Company contact us at:

             AGO AG Energie + Anlagen
             Christian Reinlein
             Phone:        +49 (0)9221 - 60 21 15
             Fax:          +49 (0)9221 - 60 21 49
             E-Mail:       info@ago.ag
             Internet:     www.ago.ag

We are delighted that you are interested in AGO AG Energie + Anlagen and we aim to
make your research as simple and efficient as possible.
                                                                                           | 25


Key capital market data of the AGO-stock
Aktienkennzahlen zum 31. Dezember 2008 as of 31 December 2008


ISIN                                                                     DE000A0LR415
WKN                                                                             A0LR41
Stock exchange symbol                                                              AGY
Bloomberg symbol                                                                AGY GY
Reuters symbol                                                                AGYG.DE
Market segment                                                              Open Market
Transparency level                                                        Entry Standard
Designated Sponsor                                        Close Brothers Seydler Bank AG
Deutsche Börse Listing Partner                                            quirin bank AG
Investor Relations                                                            GFEI mbH


Share capital in €                                   EUR                      4,000,000
Number of outstanding shares                                                  4,000,000
Free Float                                                %                       31.87


Share price of 1 January 2008 (Xetra)                EUR                           6.70
Share price of 12 December 2008 (Xetra)              EUR                            3.05
52-week-high (1 January 2008)                        EUR                           7.02
52-week-low (22 December 2008)                       EUR                            2.77
Market capitalisation as of 30 December 2008         EUR                     12,200,000
Average daily trading volume in 2008 (Xetra)         Stück                        1,816
Average daily trading volume in 2008 (Frankfurt)     Stück                          674


Total performance in 2008
                 DAX                                                               -40%
                 DAXsector Industrial Performance-Index                            -52%
                 Entry Standard Index                                              -51%
                 RENIXX World Index                                                -64%
                 AGO AG Energie + Anlagen                                          -55%
Biomass cogeneration plant Alperstedt
Milestones since Formation
Milestones since Formation

1980        ASK GmbH spin-off (technical plant equipment for industrial enterprises)

            The company was formed in 1980 as a ASK-Zander Luft- und
            Wärmetechnik GmbH spin-off. At the time, the business focused on
            ventilation systems and thermotechnical engineering. At approximately
            33%, the heat pump formed the mainstay of sales.

1984        Company name changed to Zander Wärmetechnik Kulmbach GmbH

1995        ISO 9001 certification for plant construction

            A trendsetter even then, the company received its ISO 9001 certification in
            1995. It was the first plant construction company in Upper Franconia to
            obtain this certification. This step emphasised the company's progressive,
            forward-looking approach of supplying energy to major industrial
            customers. ISO 9001 focuses on verifiable quality criteria and customer
            orientation. Meanwhile, the business included the development and
            production of heating, cooling and ventilation equipment.

1998        Integration into the M+W Zander Holding / Jenoptik Group

            In 1998, the company was integrated into M+W Zander Holding which is
            part of the Jenoptik Group. M+W Zander Holding is a technology company
            offering integrated services from consulting, planning and construction to
            operation and modernisation of high-tech buildings and production facilities
            from a single source.

1999        Company name changed to M+W Zander Energie + Anlagen GmbH

2003        Entry into the emission and energy efficiency consulting field / Major order
            for EVC Energieversorgungscenter II in Dresden

            With the introduction of emissions trading, the company expanded its busi-
            ness activities to include emissions trading services.

2004        AMD cogeneration plant (plant construction reference project)

            A revolutionary natural gas cogeneration plant for semiconductor
            production at the international microchip manufacturer Advanced Micro
            Devices (AMD) led AGO to technical and economic success. The
            generating plant produces 35 MW of electricity, 38 MW of heat and 53 MW
            of refrigeration. It was completed and commissioned over a period of just
            12 months (EVC Energieversorgungscenter II, Dresden).

Jan. 2006   Founding of Biomasseheizkraftwerk Alperstedt GmbH
            (plant operation reference project)

            In 2006, the company embarked on its successful path as a plant operator
            with its first major contract to develop, construct and finance the biomass
                                                                                           | 29


            cogeneration plant in Alperstedt. The biomass cogeneration plant with an
            output of 19 MW of thermal and 1.7 MW of electrical energy is operated by
            HolSoTherm GmbH. Measured according to its annual energy output, it is
            among the largest ORC biomass cogeneration plants in Europe. The
            ventilation systems division was shut down at the end of 2006. With this
            strategic step, the company increasingly focused on plant operation with
            more stable, scalable earnings and higher sales potential.

Dec. 2006   Change of corporate form into AGO AG Energie + Anlagen

            In 2006, the company was reorganised as AGO AG Energie + Anlagen.
            The reorganisation objective was to take the company public.

Dec. 2006   49% investment in HolSoTherm GmbH

            In December 2006, the company became the operator of the biomass
            cogeneration plant in Alperstedt with its 49% investment in
            HolSoTherm GmbH. 50% of the generating plant is owned by
            AGO AG Energie + Anlagen and 50% by HolSoTherm GmbH in Kölleda.
            HolSoTherm GmbH has been supplying the Daimler AG engine works with
            heat from the combustion of wood chips since 2002.

Jan. 2007   Founding of Bio- und Wärmeenergie GmbH in Ohrdruf

            The establishment of Bio- und Wärmeenergie GmbH, 50% of which is held
            by AGO AG Energie + Anlagen as the founding shareholder, marked the
            planning stage for another bio-energy generating plant. It will also be
            managed by HolSoTherm GmbH in Kölleda.

Apr. 2007   Share in HolSoTherm GmbH increased to 74.5%

            In April 2007, the share in HolSoTherm GmbH was increased to 74.48%.
            This means the Company holds the majority of a heat generation plant
            which has been supplying the Daimler AG engine works with energy on an
            ecological basis since 2002.

Jun. 2007   Initial public offering with subsequent listing in the entry standard of the
            Frankfurt Stock Exchange

            Up to 1,430,000 no-par bearer shares with a price spread of €6 to €7 were
            offered for sale under the IPO. During the subscription period from 18 to
            22 June 2007, the transaction was oversubscribed several times. Gross
            proceeds from the issue amounted to €9.1 million. On 28 June, all 4 million
            shares of AGO AG Energie + Anlagen were included in the entry standard
            as part of the open market on the Frankfurt Stock Exchange. Trading
            commenced at €7.50.

Okt. 2007   Construction and operation of a biomass cogeneration plant in Gierstädt

            On 7 August 2007, AGO AG Energie + Anlagen announced the
            construction of a biomass cogeneration plant in Gierstädt.
Nov. 2007   Decision of founding of AGO energia srl, Turin

            With    the     establishment       of  AGO       energia    in     Turin,
            AGO AG Energie + Anlagen is pursuing its operational goal of promoting
            the construction and operation of biomass cogeneration plants in Italy. Italy
            is among the leading countries in Europe that intend to massively expand
            the proportion of renewable energy sources used to cover gross electricity
            requirements by 2010. Biomass will be used as solid fuel.
            AGO AG Energie + Anlagen plans to implement energy projects with an
            investment volume of €6 to €10 million annually. Annual sales between
            €3.0 and €4.0 million per cogeneration plant are expected from plant
            operation.

Dec. 2007   Plant expansion in Kölleda

            In December 2007, AGO AG Energie + Anlagen announced the expansion
            of heat generation for Daimler at the biomass heating plant in Kölleda.
            HolSoTherm GmbH expects additional annual sales in the vicinity of
            €0.5 million once the expansion is complete. Since the heat generation
            contract has a term of 15 years, proceeds will total up to €7.5 million.



Events of the Year 2008

Feb. 2008   Construction and operation of a biomass heating plant in Upper Franconia

            In February 2008, AGO AG Energie + Anlagen secured the contract for the
            construction and operation of a biomass heating plant in Upper Franconia.
            Wood chips from the Franconia region will be used to fuel the plant.

Apr. 2008   Record order volume in the first quarter of 2008

            AGO AG Energie + Anlagen is pleased to report record orders in the
            amount of €20.7 million for the first quarter of the financial year 2008.
            Compared to approximately €12.1 million during the comparable period last
            year, orders increased by €8.6 million or 71 percent. The record order
            volume is mainly due to the delivery of a variety of power plants to existing
            customers.

Apr. 2008   Recipient of the “Industriepreis 2008” (2008 industry award)

            In April 2008, AGO AG Energie + Anlagen received the “Industriepreis
            2008” from the “Initiative Mittelstand” (SME initiative). The award was for
            the ammonia / water absorption cooling plant in the machine construction
            category. This innovative product, which had already aroused interest at
            the Kulmbach cooling technology congress, offers low-temperature cooling
            down to -30° Celsius in the trigeneration field. After the “Innovationspreis
            2007” (2007 innovation award) for the Alperstedt biomass cogeneration
            plant operated by AGO AG Energie + Anlagen, the “Industriepreis 2008” is
            already the second from the “Initiative Mittelstand”.
                                                                                                  | 31


Jun. 2008   Climate protection partner of the Kulmbach municipal utility

            AGO AG Energie + Anlagen has been selected as a climate protection
            partner of the Kulmbach municipal utility. The two organisations jointly
            developed a process to determine the reduction in CO2 emissions in the
            course of plant modernisation. A project design document (PDD) with the
            objective of reducing greenhouse gas emissions in the region was
            prepared as part of the consulting services. The annual reduction in CO2 is
            projected at up to 672 tons of CO2. This means CO2 can be reduced by a
            total of up to 2,690 tons through the implementation of more efficient
            heating plants over the four-year project term.

Jun. 2008   Heineken contract in South Africa

            AGO AG Energie + Anlagen is             looking after the planning, delivery,
            installation and commissioning of       a power station in South Africa as
            general contractor for the global       Heineken brewery group. The order
            volume of the power station for the     new Heineken South Africa brewery is
            €3.75 million.

Jul. 2008   AGO develops climate protection programme for industrial SMEs

            AGO AG Energie + Anlagen has developed its own ECo-Plus* climate
            protection programme, thereby making a contribution towards reducing
            CO2 emissions. The new ECo-Plus* climate protection programme was
            presented to Michael Glos, the former Federal Minister of the Economy and
            Technology, and his successor Dr. Karl-Theodor Freiherr zu Guttenberg.
            Member of the Management Board Hans Ulrich Gruber discussed the joint
            implementation project for industrial SMEs developed by AGO AG during
            the 6th Upper Franconia economic congress. The objective of the climate
            protection programme is the conversion from fossil fuels such as oil and
            gas to wood chips.

Jul. 2008   Founding of a subsidiary in Italy

            AGO AG Energie + Anlagen is pleased to announce the acquisition of
            90 percent of the shares in Reindeer srl. Reindeer srl. is a shelf company
            and plans to operate a biomass cogeneration plant with 6 MW heat output
            and 1 MW electricity output in Southern Italy. The biomass cogeneration
            plant, which will be constructed by AGO Group, will be the first power
            station in Italy operated by AGO. After the completion of the biomass
            cogeneration plant, AGO Group will accrue sales of approximately
            €2.6 million per year from the delivery of electricity and heat. The specialist
            for renewable energy solutions expects total sales in excess of €39.0
            million over the 15-year contract term. Approximately 12,600 tons of wood
            chips per year from the immediate vicinity will be used to fuel the plant.

Sep. 2008   AGO AG Energie + Anlagen expanding to Africa

            AGO AG is accelerating the pace of international expansion with the
            founding of AGO energy (Pty) Ltd., a South African subsidiary. The
                               * ECo-Plus is a registered trademark of AGO AG Energie + Anlagen
            Company plans to implement energy projects with an annual volume of
            €5.0 million.



Events after the Reporting Period

Feb. 2009   AGO AG among the top 100 SME employers

            A comparison of companies in the current cross-industry federal study
            "Top Job" has determined that AGO AG is among the top 100 SME
            employers in Germany. In the seventh round of the renowned economic
            initiative, AGO convinced the judges with its tailor-made and
            correspondingly successful personnel management. Former Federal
            Minister of the Economy Wolfgang Clement presented the coveted
            “Top Job” seal of approval to the Kulmbach company at a ceremony in the
            Duisburg North landscape garden in February.

Mar. 2009   AGO AG Energie + Anlagen launches climate protection programme

            After the approval of the ECo-Plus* climate protection programme by the
            Federal Republic of Germany on 27 February 2009, AGO AG has
            commenced marketing as a contractual partner of the Kyoto Protocol. By
            granting is approval, the Federal Republic of Germany has authorised
            AGO AG Energie + Anlagen to participate in a project under Article 6 of the
            Kyoto Protocol.

            AGO AG is the first contractor in Germany to develop a joint
            implementation project (cooperative implementation of climate protection
            measures) with a sole focus on the use of biomass. The approval fell under
            the jurisdiction of the German emissions trading office of the Office for the
            Environment as the authorised agency for joint project implementation in
            the federal territory of the Federal Republic of Germany as the host nation.




                              * ECo-Plus is a registered trademark of AGO AG Energie + Anlagen
Management and Supervisory Board
Management and Supervisory Board




Dr. Klaus Hermsdorf                    Hans Ulrich Gruber                     Johannes Eismann                       Harald Petersen
(Deputy Chairperson of the             (Speaker of the Management             (member of the Supervisory             (member of the Supervisory
Supervisory Board)                     board)                                 Board)                                 Board)

Dr. Klaus Hermsdorf (born in 1950)     Hans Ulrich Gruber (Born in 1968)      Mr. Johannes Eismann (born in          Mr. Harald Petersen (born in 1966)
has been a member of the               has been a member of the               1967) has been a member of the         has been a member of the
Supervisory Board of AGO AG            Company’s Management Board             Supervisory Board of AGO AG            Supervisory Board of AGO AG
Energie + Anlagen since December       since the reorganisation of AGO as     Energie + Anlagen since November       Energie + Anlagen since May 2007.
2006. After studying industrial        a German stock corporation             2007. As a member of the               He studied law at Bayreuth
engineering with a focus on building   (Aktiengesellschaft) in December       Management Board of quirin bank        University and passed his second
technology     and     subsequently    2006. He is responsible for            AG, he has been responsible for        state law examination in Bayreuth
graduating from Dresden Technical      commercial activities and has been     Investment Banking, Settlement         in 1995. Mr. Harald Petersen is a
University,                            involved in plant construction since   and Accounting since the year          lawyer and Managing Director of
Dr. Klaus Hermsdorf was initially      1991. The business administration      2000. He administered numerous         H2M Capital Management GmbH.
employed as a member of the            graduate began his career in 1991      IPOs and equity-linked transactions    He is also the CEO of the
research staff at the Dresden          as Controller at Zander                during his career. Before joining      “Schutzgemeinschaft der
Institute for Air Conditioning and     Klimatechnik GmbH. From 1995 to        quirin bank, Mr. Eismann was           Kapitalanleger” (SdK) (Association
Refrigeration. Between 1978 and        1998, he was employed as the           responsible for Corporate Finance,     for the Protection of Investors) and
1990, he was Research Division         assistant to the Management Board      Trading and Sales at a private         a member of the Exchange Council
Manager and Deputy Director of the     of Zander Klimatechnik AG and          German bank. Between 1995 and          of the Bavarian Stock Exchange as
Institute for Air Conditioning and     managed various projects, including    1998, Mr. Eismann was responsible      well as the Securities Acquisition
Refrigeration. From 1990 to 2002,      the merger with Meissner & Wurst       for the setup and management of        and Takeover Act (WpÜG)
he worked in plant construction at     GmbH + Co. as well as the              the Structured Products                Objection Committee of the Federal
Krantz-TKT GmbH and was in             implementation of standardised         Engineering department at an           Financial Supervisory Authority
charge of the setup of a branch in     software and a sales information       international investment bank. From    (BaFin). In addition to his position
Dresden responsible for the federal    system. Between 1999 and 2003,         1992 to 1995, he managed the           as a member of the Supervisory
states of Saxony, Thuringia and        Hans Ulrich Gruber was employed        Derivatives Trading department at      Board of AGO AG, Mr. Harald
Saxony-Anhalt.       Dr.      Klaus    as Commercial Manager of M+W           an investment bank in Frankfurt am     Petersen is the Managing Director
Hermsdorf has been Managing            Zander Energie + Anlagen GmbH.         Main and developed the institutional   of SPH Verwaltungs GmbH and
Director    of    caverion   GmbH      From 1 March 2003 to the               sales business division. In addition   SPH Management GmbH. He is
(formerly        M+W         Zander    reorganisation as AGO AG Energie       to his position as a member of the     also the Chairperson of the
Gebäudetechnik              GmbH)      + Anlagen, he was the Managing         Supervisory Board of AGO AG,           Supervisory Board of ARAGON AG
since 2005 .                           Director of M+W Zander Energie +       Mr. Johannes Eismann is a              and a member of the Supervisory
                                       Anlagen GmbH. Gruber has also          member of the Management Board         Board of Primacom AG, ISPEX AG,
                                       been the Managing Director of          of quirin business support AG in       AAA Aktionärsakademie AG,
                                       Biomasseheizkraftwerk Alperstedt       Leipzig and a member of the            SophistiCapital AG and J2P Real
                                       GmbH since March 2006 and a            Supervisory Board of Skonto AG,        Estate GmbH & Co KGaA. In the
                                       member of the management team          Iserlohn, and Extra-Sportwetten        last five years, Mr. Petersen was
                                       of AGO Betriebs GmbH since             AG, Vienna .                           also Chairperson of the Supervisory
                                       July 2008. Since 2008,                                                        Board of Interstrom AG and a
                                       Hans Ulrich Gruber is also the                                                member of the Supervisory Board
                                       Regional Director of BayME                                                    of Heliad Equity Partner und Co KG
                                       (previously Junior Director),                                                 AA, Themis Equity Partner und Co
                                       member of the senate of the                                                   KG AA, BEW Bayreuther Energie-
                                       “Bundesverband                  für                                           und Wasserversorgungs GmbH,
                                       Wirtschaftsförderung und                                                      BVB Bayreuther Verkehrs- und
                                       Außenwirtschaft” (Federal                                                     Bäder GmbH and Klinikum
                                       Association for Economic                                                      Bayreuth GmbH.
                                       Development and Foreign Trade),
                                       chairman of the state economic
                                       committee of IHKS in Bavaria,
                                       Saxon and Thuringia and member
                                       of the central economic committee
                                       of BHKS for Bavaria, Saxony and
                                       Thuringia.
                                                                                                                                                | 35




Helmut Peetz                          Steffen Pfund                          Franz Brosch                           Prof. Dr. Eckhard Dinjus
(Member of the Management             (Chairman of the Supervisory           (member of the Supervisory             (member of the Supervisory
board)                                Board)                                 Board)                                 Board)

Helmut Peetz (born in 1953) has       Mr. Steffen Pfund (born in 1962)       Mr. Franz Brosch (born in 1949)        Prof. Dr. Eckhard Dinjus (born in
been a member of the Company’s        has been a member of the               has been a member of the               1944) has been a member of the
Management Board since the            Supervisory Board of AGO AG            Supervisory Board of AGO AG            Supervisory Board of AGO AG
reorganisation of AGO as a            Energie + Anlagen since December       Energie + Anlagen since May 2007.      Energie + Anlagen since May 2007.
German stock corporation              2006. He studied supply                Mr. Franz Brosch completed his         After his training as a
(Aktiengesellschaft) in December      engineering at the Esslingen           education as a banker and studied      chemical laboratory assistant,
2006. He is responsible for           University of Applied Sciences and     business administration as well as     Prof. Dr. Dinjus studied chemistry at
technical activities. In his          was subsequently employed as           law. He first worked as a banker for   Friedrich Schiller University in Jena.
mechanical engineering studies at     Project and Sales Manager by           various credit institutions and then   He graduated from the Institute of
Berlin Technical University, Helmut   Meissner+Wurst GmbH + Co.              as a business administrator and        Inorganic Chemistry of the Friedrich
Peetz specialised in energy and       Between 1992 and 1994, he first        lawyer. Mr. Brosch was a member        -Schiller University in Jena in 1973.
process technology. He began his      advanced to Technical Manager          of the Bavarian Parliament from        He was a member of the research
career in 1979 as Planning            and then General Manager of            1982 to 2003. Since 2003,              staff from 1977 to 1986 before
Engineer and Management               Hau.S GmbH in Jena, a subsidiary       Mr. Brosch has been Managing           joining the Institute of Chemical
Assistant at ASK August Schneider     of Meissner+Wurst GmbH + Co.           Director of the Oberfranken office     Engineering in 1986. From 1987 to
GmbH & Co KG in Kulmbach.             Steffen Pfund returned to the parent   for the industry associations          1988, he was head of the chemical
Between 1979 and 1983, Peetz          company in 1995, taking over the       “Vereinigung der Bayerischen           technical centre group. In 1989, he
was employed as Deputy                Building Technology division as        Wirtschaft e.V.”, “Bayerischer         habilitated on the interaction of
Department Manager in the heating     Sales and General Manager.             Unternehmensverband Metall und         electron-rich nickel (O) complexes
technology business division of       Between 1998 and 2004, Steffen         Elektro e.V.” and “Verband der         with hetero-P-systems and carbon
ASK-Zander-Luft               und     Pfund first was the General            Bayerischen Metall- und                dioxide. From December 1989 to
Wärmetechnik GmbH, where he           Manager and then Managing              Elektroindustrie e.V.”. He is also     March 1990, Prof. Dr. Dinjus
was responsible for setting up a      Director of M+W Zander Facility        Chairperson of the Board of            worked as Product Manager in the
sales and project department for      Engineering GmbH. He was               Administration of the Federal          field of penicillin at Jenapharm
heating and cooling technology.       responsible for the building           Employment Office and the              (VEB PharmaNeubrandenburg).
From 1983 to 1999, he was first       technology business division as        representative committee of DRV        Between April 1990 and July 1991,
Department Manager with               CEO of M+W Zander Holding AG           Bayreuth. Since 2004,                  he was a visiting professor at the
commercial power of attorney and      for a few months in 2004. Mr. Pfund    Mr. Brosch has been a member of        Max-Planck Institute for Coal
then General Manager at Zander        has been Managing Director of          the Management Board of                Research, Mühlheim Ruhr. From
Wärmetechnik Kulmbach GmbH in         caverion GmbH (formerly M+W            Oberfranken Offensiv and also a        September 1991 to 1996,
the Heat Technology Plant             Zander Gebäudetechnik GmbH)            member of the Board of Trustees of     Prof. Dr. Dinjus was the full-time
Construction, Project Planning and    since 2004.                            the Coburg University of Applied       and then until 1999 the part-time
Sales department. Helmut Peetz                                               Sciences and Hof University of         head of the newly founded carbon
was General Manager of M+W                                                   Applied Sciences since 2006.           dioxide chemistry research group of
Zander Energie + Anlagen GmbH                                                                                       the Max-Plank Association at the
from 1999 to 2002 until he was                                                                                      Friedrich-Schiller University of Jena
appointed as COO in March 2003.                                                                                     and, in 1993, was appointed as
He has also been a member of the                                                                                    professor at the Friedrich-Schiller
management team of AGO Betriebs                                                                                     University of Jena. Since June
GmbH since July 2008. In addition,                                                                                  1996, he as been a professor of the
Helmut Peetz is a member of the                                                                                     Faculty of Chemical Engineering at
Advisory Board of “Energieagentur                                                                                   Ruprecht-Karls University in
Oberfranken”.                                                                                                       Heidelberg and Director of the
                                                                                                                    Institute of Chemical Engineering at
                                                                                                                    the Karlsruhe Research Centre. In
                                                                                                                    addition to his position as a
                                                                                                                    member of the Supervisory Board
                                                                                                                    of AGO AG, Prof. Dr. Eckhard
                                                                                                                    Dinjus is the Deputy Chairperson of
                                                                                                                    the Supervisory Board of
                                                                                                                    Campa AG.
Biomass cogeneration plant Alperstedt
Business divisions
Business divisions

The Latin word “ago” means “to bring forward”, “to move”, “to operate”. It is a name
that obligates our Company and employees to rise to the challenge.
AGO AG Energie + Anlagen (AGO) plans, develops, installs and operates power
generation facilities based on complex biomass cogeneration plants as well as heating
and refrigeration plants.

Founded in 1980 as a full-service provider of heat, refrigeration, steam, compressed air
and electricity in the field of power generation plants for industrial customers,
AGO AG Energie + Anlagen also offers a range of consulting services as well as other
services for aspects such as energy efficiency and the emissions trading obligations of
industrial power plant operators.

With the three business areas of Project Development & Implementation, Plant Operation
and Service & Consulting, AGO AG Energie + Anlagen is a reliable and competent
partner for many companies today. The success of the company is based on its
dedication as an industrial supplier at all levels of the value creation chain and on
meeting all requirements related to the electricity, heat and cooling needs of industrial
customers.

Thanks to vertical integration in the fields of biomass cogeneration plants, cogeneration
plants, heat and cooling plant construction, trigeneration, contracting, site studies and
development, energy efficiency consulting, raw materials and fuel management as well
as emissions trading management, we offer an efficient and secure energy supply to our
customers. We are also developing horizontal integration with the combination of energy
sources for heat, steam, cooling and compressed air.

The three business divisions :
Project development and implementation throughout Europe
In the project development and implementation field, AGO is pursuing the implementation
of decentralised plants to supply energy to industrial enterprises and municipal
organisations throughout Europe. The Company is fully responsible for the development,
planning, financing and construction of power generation plants for its customers. AGO
takes individual needs into account from design to implementation. Since it has access to
components from various manufacturers, AGO is able to meet customer requirements
with suitable power generation plants without being reliant on specific suppliers.

“Contracting” is becoming an increasingly popular service. Under the contracting model,
responsibility for all key energy supply components and the related services are
transferred from the company to AGO. With energy and plant contracting,
AGO AG Energie + Anlagen – and not the customer – generates the energy required by
the customer. By supplying a company with heat, steam, refrigeration, electricity or
compressed air, AGO can provide its customers with complex, innovative and economical
energy solutions and sell the required energy to the company.

With contracting, AGO AG Energie + Anlagen assumes responsibility for the construction,
renovation, servicing, maintenance and operation of the power generation plant instead
of leaving these areas to the company being supplied with energy. After all, these specific
issues are normally not part of the customer's core competencies. Initial contracts are
normally concluded for a period of 5 to 15 years, precluding the need for any customer
                                                                                            | 39


investments in the power generation plant as well as eliminating service and
maintenance. Customers are also released from any obligation to participate in emissions
trading in accordance with the German Greenhouse Gas Emissions Trading Act (TEHG).

In summary, contracting offers customers a secure energy supply, which may be
combined with energy savings and a reduction in emissions. Sales generated from the
ongoing operation of a power generation plant as a result of contracting are reported
under the plant operation business division.

Supply security through plant operation
The plant operation business division offers a full range of services including
maintenance, servicing and especially raw materials management. AGO operates power
generation plants for industrial customers based on conventional and renewable energy
sources.

Since 2002, larger projects such as the biomass heating plant with a heat output of up to
5 MW for Daimler AG Kölleda have been realized – mainly due to the 74.48% equity
interest of AGO in the HolSoTherm GmbH operating company. Through this equity
interest, the Company has access to a long-standing supplier network.

Raw materials and fuel management includes a comprehensive availability and heat
requirements analysis before the start of a project, since raw materials procurement
ranges from issues related to capacity utilization and ongoing logistics to warehousing
and quality assurance for biogenic fuel. AGO AG Energie + Anlagen is able to guarantee
stable heat prices by entering into long-term agreements with its fuel suppliers.

The smooth operation of power generation plants using biogenic fuel is dependent on
quality assurance and operational reliability – which may also involve mixed energy
generation.

Service & consulting
In the service and consulting field, AGO offers servicing, repairs and maintenance
including emergency services for its own or third-party power generation plants. Energy
efficiency consulting, the completion of location studies and location development
studies, as well as consulting and other services related to emissions trading are also
bundled in this business division.

AGO customer service currently includes 30 employees throughout Germany trained in
refrigeration technology, cogeneration plant technology, furnace technology,
measurement and control technology, and ventilation and air conditioning technology. In
addition to maintaining plants constructed and operated by AGO AG Energie + Anlagen,
employees also service third-party plants to a significant extent.
AGO AG Energie + Anlagen redevelops and expands plants with its in-house assembly
team. Customer service employees are deployed so as to ensure their availability
365 days a year, 24 hours a day.

AGO AG Energie + Anlagen offers its customers comprehensive consulting services on
energy-related issues (such as energy efficiency) and prepares energy studies in the
areas of thermal technology, refrigeration technology and cogeneration, among other
things. The technologies used to generate energy for customers are analyzed and, based
on the preparation of feasibility studies, alternatives to the current energy generation
concepts are developed. In addition, AGO AG Energie + Anlagen provides consulting on
financing prior to the construction of a plant and examines the need for approvals and
permits in advance. For plants that are subject to the German Greenhouse Gas
Emissions Trading Act (TEHG) due to their emissions output, AGO organizes the
purchase or sale of emission certificates as required.
Company strategy
Company strategy

Within the three business divisions of project development and implementation, plant
operation and service & consulting, AGO AG Energie + Anlagen pursues the following
strategic objectives :

    •       Corporate growth from plant operation with a focus on biomass
    •       Expansion of our customer base and long-term customer retention
    •       Extension of international business activities
    •       Recruiting new customers under the ECo-Plus* climate protection programme

Organic growth from plant operation with a focus on biomass
In conjunction with an increase in sales and income, AGO AG Energie + Anlagen is on
the track of growth in the plant operation segment with a focus on biomass. The
foundation of this growth strategy includes government aid to energy production based on
regenerative sources of energy and the sustained increase in the prices of fossil fuels.
Accordingly, the law has the objective of increasing the proportion of renewable energies
in power production in Germany to between 25 to 30 percent by 2020. This is why
AGO AG has promoted the implementation of its ECo-Plus* climate protection
programme for new customer recruitment, among other things. Efforts are also being
made around the world to secure and develop a sustainable energy supply based on
alternative energy sources. In addition, rising prices for fossil fuels over the long term are
making investments in new generating technologies more cost-effective.

The ongoing public discussion on reducing carbon dioxide emissions will result in an
increased commitment of the industry to convert existing conventional energy production
plants to energy centres utilising regenerative energy sources. This step means not only
a reduction in emissions but also a reduction in the cost of energy to industrial
companies. With this in mind, we are proceeding on the presumption of an increased
demand for our power generation plants with a focus on biomass and acceleration of
contracting solutions proposed by AGO. Thanks to our 29+ years of experience, we have
the necessary expertise in the construction and subsequent operation of energy centres
using biomass.

Expansion of our customer base and long-term customer retention
Long-term customer loyalty in projects in the plant operation sector ensure the
AGO AG Energie + Anlagen business model a high degree of planability and solid
scalability. We are achieving this strategic objective through energy supply contracts with
a 15-year term for the supply of power, heat and cooling. Our customer target groups
include industrial enterprises and municipal organisations in particular. Thanks to
a systematic marketing approach, aligned with the energy requirements of the customer
and biogenic fuel availability on site, AGO AG Energie + Anlagen is in ongoing
negotiations with other potential customers. In their own commissioned study on the
identification of target customers, more than 400 potential customers - in Bavaria,
Baden-Württemberg and Thuringia - for biomass cogeneration plants have been
identified in this priority AGO operational area.

The team necessary for accomplishing this and to fulfil marketing and sales of the
AGO AG Energie + Anlagen product and service offerings in Germany numbered
5 associates in the financial year 2008.

                                  * ECo-Plus is a registered trademark of AGO AG Energie + Anlagen
                                                                                                 | 43


Extension of international business activities
AGO AG Energie + Anlagen's third strategic objective aims at extending its international
business activities. Here, efforts are aimed primarily at the expansion in those European
regions in which AGO can benefit economically from the current legislative objective for
utilisation of regenerative energies, based on the energy mix.

Italy – Europe’s market of the future
Italy's legislative objective of increasing the proportion of renewable energies from the
current 7 percent to 22 percent by 2012 can represent enormous potential for continued
growth for AGO AG Energie + Anlagen Group. With the current amendment of the Italian
net-metering for electrical power derived from biomass, the effective compensation level
of up to 30 cents per kWh fed into the public supply grid is considerably above that of the
German situation. In a study done for AGO, more than 50,000 industrial companies were
identified as target customers in northern Italy. The single concentration on companies in
the foods sector provides some 70,000 potential customers.

AGO AG founded AGO energia S.r.l. in Turin after a detailed analysis of the Italian
market. The operative objective of the new Italian Company - in which
AGO AG Energie + Anlagen holds a 55 percent share - is the construction and operation
of biomass cogeneration plants. Here - gauged by the Italian energy mix - considerable
potential resides primarily in opening up the market for trigeneration. To date, Italy has
not taken advantage of the process of refrigeration using heat emerging during the
generation of electricity.

From the planned implementation of energy projects with an annual investment volume of
€6.0 to €10.0 million, AGO anticipates annual sales from plant operation of €3.0 to
€4.0 million for each plant. Here, medium-size energy plants with an output of one MWe
and three to four MWth are the Company focal point. Consequently, the Company moves
between the large and the small competing businesses. AGO AG Energie + Anlagen's
responsibility is to provide its expertise in construction of absorption chillers and turn-key
construction of biomass cogeneration plants. Leading the way to opening the new Italian
market is taken care of by the Company's 5 associates in Italy by way of the collaboration
with Pro Ambiete srl. Plaus (Bozen), a biomass cogeneration plant planner with a well
established and extensive marketing structure and currently comprising more than
20 freelance collaborators.

Sustainable potential in South Africa
AGO AG founded AGO energy (Pty) Ltd. in South Africa in September 2008. The
operational objectives of the company with its registered office in Cape Town are the
planning and construction of industrial energy supply facilities in Africa. The focus of the
wholly-owned AGO subsidiary lies in opening up the market for trigeneration and energy
efficiency projects for the industry in South Africa. AGO energy (Pty) Ltd. is planning the
implementation of energy projects with a total volume of up to €5 million annually.

The operational objectives of the South African company include the planning and
construction of industrial energy supply facilities in Africa. The focus of the wholly-owned
AGO subsidiary lies in opening up the market for trigeneration and energy efficiency
projects for the industry in South Africa. As Managing Director in conjunction with
Ralph M. Ertner in South Africa, Uwe Kern is managing the Company’s market
development activities. Uwe Kern is also the General Manager of
AGO AG Energie + Anlagen in Kulmbach AGO AG Energie + Anlagen in Kulmbach.
Further international expansion
In addition to international activities in Italy, Greece and South Africa, AGO AG is
currently also active in the USA and Romania. The current projects in the USA
(consulting and planning) and Romania (consulting, planning and plant construction)
were secured through connections of the majority shareholder caverion GmbH. Planning
services have already been provided to caverion GmbH in Russia, Dubai and Malaysia,
for example. AGO AG will also be able to benefit from the branches and structures of the
caverion-International Division in the future.

The graphic below shows the AGO AG Energie + Anlagen expansion countries worldwide
to date :




Growth through the ECo-Plus* climate protection programme
With the ECo-Plus climate protection programme initiated by AGO through “joint
implementation”, the Company was able to establish essential prerequisites for
participation in CO2 emission certificate trading over the course of 2008. Following the
approval of the AGO climate protection programme by the Federal Republic of Germany
on 27 February 2009, AGO AG Energie + Anlagen as a contractual partner of the
Kyoto Protocol is authorised to participate in a project under Article 6 of the
Kyoto Protocol and was able to commence marketing activities.

The climate protection programme is aimed at industrial customers and public institutions
in Germany, and applies to power stations with a rated thermal output from 400 kilowatt
to a maximum of 19.9 megawatt.

AGO AG is the first contractor in Germany to develop a joint implementation project
(cooperative implementation of climate protection measures) with a sole focus on the use
of biomass. The Company is entering a very interesting market. The objective is to
convince SMEs to switch their energy supplies from fossil fuels to renewables based on
ecological factors and attractive economic terms and conditions. Through this conversion,
companies reduce their CO2 emissions and receive emission certificates which can be
                                * ECo-Plus is a registered trademark of AGO AG Energie + Anlagen
                                                                                              | 45


sold at a profit. Based on the ecological responsibilities of companies and the attractive
economic framework, we believe this proactive strategy will result in higher demand for
the technologies we employ while simultaneously promoting sustainable climate
protection. .

Competitive strengths
Professional experience shows a broad technological spectrum
Thanks to 29+ years of experience in the industry, AGO AG Energie + Anlagen is in the
position to ensure optimum energy supply to industrial companies. The innovative
adaptations to any technical situation over the past decades further document the
Company's extensive expertise. The myriad changes in market and contextual conditions
that have taken place in the power sector have resulted in broader technical offerings
with combinations and adaptations to different technological energy centres in the areas
of boiler plants, block thermal generation plants, heating and cooling plant construction,
and biomass cogeneration plants with trigeneration.

The focus of our activity lies in the engineering–technical coupling of different
technologies. Ultimately, we are not limited to single technologies but - thanks to our
supplier network built over many years - we can draw on a diverse range of component
manufacturers for the respective project.

The range of services offered by AGO AG covers the entire plant construction and plant
operation life cycle. Starting with the conversion from fossil fuels to renewables, we
provide planning services, coordinate plant construction and operate the power station on
behalf of the customer. We also have the expertise required for efficient raw materials
management by our customers and for emission certificate trading.

Here, AGO AG Energie + Anlagen's R&D activity primarily covers the economic
implementation of new concepts in services and energy production. Accordingly, AGO
markets the ammonia/water absorption chiller developed by the Dresden Institut für Luft
und Kältetechnik (“Institute for Air and Refrigeration Engineering”) which is characterised
by its particular energy efficiency, its compact construction, low maintenance and service
overhead, a comparatively low refrigerant requirement, completely automatic operation
and the possibility of trigeneration. In times of high energy costs, the absorption cooling
plant powered by waste heat is an economical alternative. Suitable sources of heat
include industrial waste heat in the form of water, steam or thermo-oil, waste heat from
cogeneration and thermal reburning, solar heat and biomass as well as biogas plants.
       The following graphic presents the contribution of different technologies to current total
       sales and therefore shows the technological versatility of AGO AG Energie + Anlagen
       with respect to changing contextual conditions in its Company history:

100%

                                              Other construction
                                              engineering and
                                             service/consultancy




                                                                             Biomass Boilers
                                           Boilers




                                                                     Large refrigeration
            Heat pumps       Cogeneration plants                           plants

 0%
   1980         1985         1990         1995       2000     2005        2006       2007       2008
       Source: AGO AG Energie + Anlagen

       Time savings in plant construction results from parallel project phases
       Another competitive strength of AGO AG Energie + Anlagen is the significant amount of
       time saved and the resulting reduction in costs during the installation of an energy centre.
       Because of the parallel execution of different project phases during planning and
       execution of an energy production plant, the time between proposal, acceptance and
       commissioning of the plant is kept relatively short. This competitive strength saves up to
       six to twelve months in time compared to conventional project development.
       Consequently, the strategy of this efficient parallel processing results in cost savings for
       the plant operator. The illustration below uses the example of the schedule and
       respective process steps in the realisation of the Alperstedt biomass cogeneration plant
       which inter alia was awarded the 2007 Innovationspreis des Mittelstandes ("Mid-size
       Company Innovation Award"):
       Parallel implementation of project phases speeds up the realization of the
       entire project




       Source: AGO AG Energie + Anlagen
                                                                                              | 47


Long-term contracts with biomass suppliers under economically attractive
conditions
Our customer base comprises essentially of industrial and municipal Companies that
require energy in different forms - as electrical power, heating or refrigeration, for
example. In principle, AGO AG Energie + Anlagen can construct energy production plants
throughout the entire national territory. The focus of AGO's operational activity is in the
construction and subsequent operation of biomass cogeneration plants, primarily in
Bavaria, Baden-Württemberg and Thuringia. The reason for this is the adequate access
to biomass in these states. Because of AGO's concentration on these federal states, the
suppliers are predominantly in Thuringia. In this case, the respective weekly required
quantity and quality is collected by the subsidiary.
Scraper floor, fuel store at biomass cogeneration plant Alperstedt
Product categories
Product categories

AGO AG Energie + Anlagen has implemented over 2,000 energy projects based on
a variety of technologies since 1980. To date, most of its business activities were based
in Germany.

Power generation plants
AGO AG Energie + Anlagen develops and implements different sizes of decentralised
industrial power generation plants. These plants are based on a variety of different
technologies and energy sources. Some of the technical principles of various AGO plants
are described below:

Biomass cogeneration plants
Conventional cogeneration plants are industrial facilities that generate electricity and heat
in a process called cogeneration. Since heat has to be fed into a remote heat network,
cogeneration plants are situated in the vicinity of metropolitan areas or industrial sites that
require large amounts of heat. Thermal plants only supply heat. Just as with conventional
thermal generating plants, primary energy is usually converted into electricity by a closed
water-steam circuit. Combustion of fossil or biogenous fuels heats the water until it is
vaporised in the boiler and superheated to the maximum possible temperature in the
superheater. The pressure of the fresh vapour (maximum operating conditions:
420 - 460°C, approximately 40 to 50 bar) is reduced in a steam turbine and the vapour
then powers the generator.

Project development at AGO AG Energie + Anlagen has focused on the construction and
subsequent operation of biomass cogeneration plants by project companies founded for
this purpose. Unlike conventional cogeneration plants, these facilities use renewable raw
materials as a source of energy. Based on current market conditions, most of the
biomass that is used consists of wood chips that can be produced from any type of
natural wood. Using biomass as fuel makes a significant contribution to the reduction
of CO2 emissions from the combustion of fossil fuels. Renewable raw materials are
largely CO2 neutral, since combustion of biomass only releases the same amount of CO2
that was previously removed from the atmosphere by plant growth. Key technologies
include biomass cogeneration plants using a steam process and biomass cogeneration
plants based on the Organic Rankine Cycle (ORC) principle. Combining various
components facilitates the construction of a plant adapted to customer requirements,
which can be erected directly at the site where energy will be consumed. Heat that results
from the generation of electricity is used to supply hot water, steam, dry heat, etc. Using
this waste heat minimises energy loss, thereby reducing the consumption of primary
energy. Since AGO AG designs its plants to meet individual customer demands based on
heat and media requirements, the production of electricity and the related dependence on
the German Renewable Energy Sources Act (EEG) is secondary. Cogeneration is only
used when it results in an economic advantage for the heat user.

A major advantage of biomass cogeneration plants is that they can be situated in areas
where raw materials such as wood processing waste abound, and the resulting thermal
energy can be used to dry wood and for remote heat simultaneously. This also allows
transport routes to be kept as short as possible, which in turn reduces transport losses
and CO2 emissions. As a result, the local ecological situation is improved. Favoured by
supply remuneration regulations from the German Renewable Energy Sources Act
(EEG), numerous biomass cogeneration plants have been constructed over the course of
                                                                                                            | 51


the last few years.

In the heating plant engineering field, AGO offers power generation plants suitable for
steam preparation or the generation of warm and hot water in all performance categories.
AGO products allow plants to be designed for use with various energy sources. However,
the main focus of the Company is on plants that use biomass (e.g. wood chips). The
AGO AG Energie + Anlagen product range also includes heating plants operated using
conventional energy sources (oil or gas). The choice of energy sources is based on
availability, customer requirements and annual heating capacity utilisation.




                                                                                           Biomass cogeneration plant
                                                                                           Alperstedt and Kölleda,
                                                                                           beneath: burning wood chips
AGO concaldo                                          At the lower end of the output spectrum, AGO
                                                      offers the modular “AGO concaldo”. This type of
                                                      biomass heating plant fuelled with wood chips or
                                                      pellets has a maximum nominal output of three
                                                      tons saturated steam per hour. Strong points of
                                                      the “AGO concaldo” include rapid assembly and
                                                      installation, because most of the required
                                                      technology is preinstalled, as well as the ability
                                                      to move it to other deployment locations quickly.
               While the construction of a conventional biomass thermal plant takes up to six months,
               this modular plant can be installed in just a few weeks. Potential customers for this
               modular energy plant also include industrial and commercial enterprises. It can be used
               to supply heat to buildings and heat networks, to expand capacity and as a temporary
               solution.

               Advantages of the modular plant
               •      On-site combination with preinstalled modules to form an integrated system
               •      Less time from delivery to commencement of the heat supply
               •      Simple, fast disassembly and reassembly at another location
               •      Contract terms of just 5 years for contracting solutions

               Boilers
               Boilers are the standard heat generation solution in power generation plants. They are
               heat generators with combustion chambers for solid, liquid or gaseous fuels which
               provide heat energy used for heating rooms, producing hot water or for use in production
               engineering. The combustion heat generated when fuel burns is released to heat carriers
               (water, water vapour, thermal oil) and carried to heat consumers (radiators, heat
               exchangers). Different boiler designs are available for various output ratings and areas of
               application.



  AGO Boiler
                                                                                                             | 53


Cogeneration plants
Cogeneration plants are modular facilities used to generate electricity and heat through
the principle of cogeneration. They are preferably located at the site where heat is
consumed. Alternatively, heat is fed into a local heat network. Higher overall efficiency
compared to the conventional combination of local heat and a large central power plant
results from the use of waste heat produced when electricity is generated, immediately at
the location where this waste heat arises. The efficiency of power generation is between
25 and 50 percent, depending on the size of the plant. Since waste heat is used locally,
primary energy utilisation ranges from 80 to over 90 percent. This means cogeneration
plants reduce primary energy consumption by up to 40 percent, which leads to
a reduction in CO2 emissions.

According to the results of a cogeneration survey in February 2009,
AGO AG Energie + Anlagen ranked 3rd in the German market for natural gas
cogeneration with an output of 13 MW upon first-time participation in the survey. The
overall results of the study revealed a relatively stable market for natural gas
cogeneration. Although a differentiated image of the individual market segments resulted
at that time, the demand for cogeneration plants among municipal utilities in particular
has once again been increasing significantly for two years.

A conventional cogeneration plant module has an electrical output between five kW and
five MW. Combustion engines - preferably natural gas engines but also sewer gas and
biogas engines, biodiesel engines and gas turbines - can be used to drive the power
generator. The natural gas cogeneration plant for semiconductor production at Advanced
Micro Devices, Inc. (AMD) constructed in 2004 in Dresden, with a total output of 35 MW
of electricity, 38 MW of heat and 53 MW of refrigeration, constitutes a prime example.




                                                                                            Gas engine of a combined
                                                                                            heat and power plant
                         Energy output of a combined heat and power plant by comparison




                         Source: „BHKW Grundlagen“ published by ASUE

                         AGO AG Energie + Anlagen has implemented cogeneration or combined heat-power-
                         refrigeration-technology in more than 160 installed cogeneration plant modules.
                         Compared to conventional thermal power plants that only generate electricity, these
                         power generation plants generate both electricity and heat with a relatively low
                         consumption of energy sources. In contrast, power generation plants that do not employ
                         cogeneration release excess heat to the environment as waste .
AGO absorption chiller
                                                                                                             | 55


Cooling plants
AGO AG also provides its customers with cooling plants in a variety of sizes. The product
range includes split systems, piston and screw-type water coolers, turbo water coolers
and absorption cooling plants. Products are individually selected depending on the area
of application and the user’s consumption behaviour .

Compression cooling plants
Compression cooling plants use the Carnot process; they are fitted with a mechanical
compressor and a refrigerant metering device (thermostatic expansion device).
A compression and expansion element as well as two heat exchangers (evaporator and
condenser) are required. The heat exchangers are interconnected in a circuit in such
a way that they are placed on both sides between the compression and expansion
element. Currently, only CFC-free coolants and ammonia are permitted as working fluids.
Developments using propane, butane, air and water are underway. This technology is
widely used in domestic refrigerators, freezers, top-loading freezers, dispensing
equipment, cold storage, air conditioners, industrial cooling units and heat pumps. The
technologies that are used include split systems discussed above, piston and screw-type
water coolers and turbo water coolers. Based on these extremely widespread
technologies, AGO AG Energie + Anlagen has installed a large number of such systems
in recent decades.


                                                                                            AGO compression-type chiller
              Absorption cooling plants (combined heat-power-refrigeration)
              Absorption cooling plants use a pair of substances. The process is based on the
              absorption capacity of substance pairs at different pressures and temperatures.
              Absorption cooling units have the advantage that mechanical compression is replaced by
              thermal energy. This means that refrigeration consumes far less electricity since heat is
              used as the "drive energy". This process is particularly advantageous when excess heat
              is available during the summer – for example waste heat from processes in
              a cogeneration plant – while there is simultaneous demand for refrigeration. Another
              advantage of absorption cooling plants is the use of significantly more environmentally
              friendly coolants such as water/lithium bromide or ammonia/water. AGO has decades of
              experience in combined heat-power-refrigeration based on absorption cooling
              technology.

              Under a cooperation agreement with Dresden Institute for Air Conditioning and
              Refrigeration (ILK Dresden), AGO offers an ammonia/water absorption cooling plant for
              temperatures below 0°C. The benefits of this solution compared to conventional plants
              include a high degree of efficiency, compact construction, low servicing and maintenance
              costs, and the optional use of combined heat-power-refrigeration. Especially high plant
              efficiency is based on the fact that the operator can benefit from the so-called “efficiency
              bonus” offered by the German Renewable Energy Sources Act (EEG). This bonus is paid
              in addition to the minimum compensation amount for plants that generate both heat and
              electricity.




AGO congelo
Climate protection
Climate protection

To generate CO2 certificates for resale, AGO AG Energie + Anlagen has initiated
a climate protection programme aimed at industrial customers and public institutions in
Germany which applies to power stations with a rated thermal output from 400 kilowatt to
a maximum of 19.9 megawatt. The objective pursued by AGO AG is to convince SMEs in
Germany to switch their energy supplies from fossil fuels to renewables based on
ecological factors and attractive economic terms and conditions. Through this conversion,
companies reduce their CO2 emissions and receive emission certificates which can be
sold at a profit.

Joint implementation
The Kyoto Protocol establishes various options to reach emission reduction objectives.
“Joint implementation" (JI), known as “Gemeinschaftsreduktion” (GR) in German, refers
to a flexible market mechanism for the reduction of pollutant emissions. Unlike the
alternative “clean development mechanism" (CDM), JI is aimed at industrialised and
transforming nations.

The JI mechanism allows an annex 1 state (the term “annex 1 state” originates from the
convention on climate change and lists all industrialised and transforming nations that
have committed to promoting national emission reduction policies and measures under
the Framework Convention on Climate Change, among other things) to implement
emission reduction projects in another annex 1 state without implementing measures in
their own county and to apply the emission credits from these projects in order to meet
the Kyoto obligations of their own country.

The resulting emission reductions are fully credited to the investor country. This means
the country in which emissions are actually reduced is secondary. JI does not result in
new emission reduction certificates but in a transfer of emission reduction units (ERU).

Joint implementation often creates a win-win situation. Because of the rising incremental
cost of emission reductions, investments in emission reduction measures in the host
nation are often less costly than a reduction of emissions in the investor country. On the
other hand, the host nation benefits from the sale of emission rights as well as the
transfer of technology from the investor country.

ECo-Plus* - the climate protection programme of AGO AG Energie + Anlagen
Based on many years of experience as a consulting firm and plant operator under the
European emissions trading system, AGO AG Energie + Anlagen has the expertise
required to implement international climate protection projects efficiently, quickly and in a
manner that ensures legal compliance. AGO AG utilises the existing and future potential
in the areas of climate protection measures and emission rights trading for the benefit of
its customers.

AGO bundles this expertise in an offering developed especially for SMEs - the ECo-Plus*
climate protection programme. This joint implementation programme created by AGO AG
Energie + Anlagen is mainly aimed at SME industrial enterprises and, in particular, at all
operators of power stations with a rated thermal output from 400 kW to 19.9 MW.




                                 * ECo-Plus is a registered trademark of AGO AG Energie + Anlagen
                                                                                               | 59


The programme achieves the following objectives for plant operators:

•      Switching from fossil fuels to biogenic energy sources
•      Improving energy efficiency
•      Reduction of CO2 emissions in facilities that are not subject to EU emissions
       trading
•      Improved profitability by generating certificates available for sale

When switching to biogenic fuels, each resulting ton of CO2 emission reductions is
determined and corresponding certificates are generated.

The climate protection programme uses a programmatic approach. New projects can be
added under the JI programme at any time during the project term between 2008 and
2012.

If you have any other questions on the                climate   protection    programme   of
AGO AG Energie + Anlagen, please contact:

              AGO AG Energie + Anlagen
              Jürgen Frisch
              Am Goldenen Feld 23
              95326 Kulmbach
              Phone: +49 9221 602-196
              Fax: +49 9221 602-149

              AGO AG Energie + Anlagen
              Swen Sanders
              Am Goldenen Feld 23
              95326 Kulmbach
              Phone: +49 9221 602-202
              Fax: +49 9221 602-149
3D model biomass cogeneration plant, Apulien
Environment
Emissions trading

Emissions trading as a climate protection process
Emissions trading is based on the so-called Kyoto Protocol from 1997. 39 industrial
nations pledged to reduce the emission of gases hazardous to the climate by a total of
five percent by the year 2012 compared to 1990 levels. The objective of emission
certificate trading is to reach this goal at the lowest possible cost. According to the
agreement, the European Union is to reduce its average emissions by eight percent by
the year 2012 compared to 1990 levels. However, the ambitious goal of the EU is to
reduce emissions by at least 20 percent compared to 1990 by the year 2020.

Emissions trading in Europe
The European emissions trading system for carbon dioxide at the company level
represents the most important joint climate protection measure of the EU. Uniform
certificates and the possibility of cross-border trade in emissions rights were created with
the implementation of this system on 1 January 2005. The emissions trading system
includes an economic incentive to reduce carbon dioxide emissions. All participating
facilities receive an emission budget according to set rules for a certain trading period,
which takes the established emission reduction objectives into account.

In order to introduce this system without economic inequity, emissions rights were initially
assigned at no cost. If the carbon dioxide emissions of a company are lower than the
assigned emissions rights as the result of emission reduction measures, the company
may sell the extra rights on the market. Alternatively, a company can purchase additional
emissions rights on the market if its own emission reduction measures would be too
expensive. This puts a value on a ton of carbon dioxide, which is determined by the
market based on supply and demand. As a result, the most cost-effective emission
reduction measures are implemented. If a company fails to meet its emission reduction
targets or does not acquire sufficient emissions rights on the market, the difference in
emissions rights has to be accounted for in the following year.

Emissions trading in Germany
A total of 1,853 facilities in Germany participated in emissions trading over the course of
the 2005 to 2007 trading period. Facilities required to participate in emissions trading
include those for the generation of electricity, heat and mechanical energy as well as
refineries and a selection of CO2-intensive industrial processes – the production of iron
and steel, cement, sinter, coke, lime, glass, bricks, ceramics, pulp, paper and cardboard.
622 facilities are in high-emission industries while 1,231 are in the energy sector. 23 of
these facilities did not submit an application in spite of their established obligation to
participate in emissions trading, and therefore did not receive an allocation at no charge.
                                                                                                          | 63


Distribution of the number of plants in the energy and
industrial sectors




                                                   34%




            66%
                                                                             Plants in high-emission
                                                                             industries

                                                                             Plants in the energy
                                                                             industry

Source: Deutsche Emissionshandelsstelle; AGO AG Energie + Anlagen

 With 435 facilities, North Rhine-Westphalia was the federal state with the largest number
 of plants required to participate in emissions trading. Saarland and Bremen had the
 fewest with 32 and 30 facilities respectively.



Number of plants by federal state


              North Rhine-Westphalia                                                          435
                                 Bavaria                                        288
                         Lower Saxony                                  197
                  Baden-Würtemberg                                    177
                                  Hesse                         129
                                 Saxony                    101
                 Rhineland-Palatinate                      92
                        Saxony-Anhalt                    81
                          Brandenburg                  76
                               Thuringia              58
                   Schleswig-Holstein               52
                                   Berlin         37
                               Hamburg            35
  Mecklenburg-Western Pomerania                   33
                               Saarland           32
                                Bremen           30

                                            0          100          200       300      400          500
Source: Deutsche Emissionshandelsstelle; AGO AG Energie + Anlagen

 Nearly 80 percent of emissions rights for the first trading period went to energy
 conversion facilities.
Development of emissions in the first trading period
Emissions trading was uncharted territory for all participants at the beginning of 2005.
There were no precedents for the operation of a national emissions rights registry under
German environmental policies. The problem-free operation of the sometimes complex
registry technology and more than 99 percent availability of the German emissions
trading registry are all the more noteworthy.

The absolute amount of CO2 emissions from facilities required to participate in emissions
trading increased continuously during the first trading period from 2005 to 2007. While the
increase in 2006 compared to the previous year roughly corresponds to the additional
emissions from new facilities and the expansion of capacity that year, the increase in
2007 compared to the previous year was mainly due to higher emissions from existing
facilities. In particular, additional production by generating plants offset reduced
production by nuclear plants and a high trade surplus in electricity production.

According to the German emissions trading office (DEHSt), more than half the facilities in
Germany received less than 25,000 emissions rights (EUA) in the first trading phase of
EU emissions trading from 2005 to 2007. At the same time, only around 1.8 percent of
the allocation volume applied to these 967 facilities. On the other hand, the 16 largest
facilities combined accounted for 39 percent of the allocation volume and received an
average of 12.3 million EUA per year.

Nevertheless, the perception of market activity during the first trading period is frequently
dominated by the price decline for EUAs from the end of April 2006. This is when the
initial figures on verified emissions for 2005 (VET) of the member countries were
published. For market participants, this represented the first opportunity to verify their
expectations based on confirmed data at the facility level. Because there were too many
EUAs on the market and excess emissions rights of the first trading period could not be
transferred to the second trading period, the price for EUAs of the first trading period
continually declined and fell to almost zero in the last few months of the trading period.
The average price for EUAs in 2006 was relatively high at approximately €17.




Price development of EU emissions certificates from December 2004 to June 2008




    Dec                      Oct   Dec     May                Mar           Oct   Dec




Source: European Energy Exchange; AGO AG Energie + Anlagen
                                                                                                | 65


The forward price for EUAs of the second trading period provided a particularly clear
price indication for investment decisions during the entire first trading period. While the
price of EUAs of the second trading period was also affected by the price drop at the end
of April 2006, it declined much less drastically compared to EUAs of the first trading
period. The price also recovered and remained around €20 for 2007 on average.

A mature, integrated pan-European market for EUAs developed during the first trading
period. It is sufficiently liquid and active in various trading centres with a recent monthly
transaction volume in excess of 100 million EUA or a value of more than €2 billion. This
makes the European market for emissions trading certificates by far the largest carbon
market in the world.

German facility operators “short” for the first time in 2008
New types of certificates – so-called Kyoto certificates – were added with the start of the
Kyoto obligation period in 2008. According to the German emissions trading office
(DEHSt), the CO2-emissions of facilities in Germany required to participate in emissions
trading totalled 473 million tons in 2008. 389 million EUA were assigned to the
1,659 facility operators in Germany required to participate in emissions trading. This
means the number of certificates issued to German operators was lower than actual
emissions from the facilities for the first time with a deficit of 84 million EUA. German
facility operators had until 30 April 2009 to provide proof of emissions rights equivalent to
the emissions of their facilities.
Our Environment

Climate change is one of the biggest challenges facing our society today. Industry,
science, politics and society as a whole have to rise to this challenge by eliminating the
increase in greenhouse gas emissions and using available resources more efficiently.

Responsibility for future generations
Preserving our environment for future generations is a key responsibility of the current
generation. Sustainable protection of the earth, water and atmosphere plays a central
role. AGO AG Energie + Anlagen is taking specific steps and making decisions to
harmonise ecology with economics. Our master strategy guarantees sustainable,
economical and environmentally friendly energy production. This is why promoting and
developing new energy sources is very important to AGO AG Energie + Anlagen.

AGO AG Energie + Anlagen supports the objectives established by the Kyoto Accord and
considers climate protection a global task that requires additional action. Human
influence on the greenhouse effect is considered one of the main reasons for global
climate change. This is why a reduction of carbon dioxide emissions has long been an
important objective of AGO AG Energie + Anlagen. We intend to continue meeting this
challenge in the future by strengthening our commitment to environmental and climate
protection even further.

Improving energy efficiency
Due to increasing air and environmental pollution, energy efficiency and climate
protection are gaining more and more importance. Even today, the conservation and
efficient use of natural resources presents a significant challenge. Major reductions in the
consumption of resources can be achieved when it comes to energy production from
energy sources. AGO AG Energie + Anlagen is constantly striving to improve plant
efficiency and fuel utilisation.

Company objective: Environmental protection
AGO AG Energie + Anlagen intends to meet its responsibilities to the environment and
future generations with transparency and innovative solutions. Through efficient and
reliable environmental management, we are able to examine the sustained environmental
impact of any economic decision at an early stage. The sustainable use of resources is
just as important to us as the efficient operation of our plants in the value creation chain.
Our comprehensive environmental performance and the regular verification and
evaluation of measures allow us to set the standards in the markets in which we operate
while driving innovation. In conjunction with politicians, we help implement national laws
and guidelines while providing a secure supply of energy. We cooperate with officials, the
general public and other companies in a relationship based on openness and trust.

Environmental guidelines
AGO AG Energie + Anlagen deals with a variety of environmental issues. The
management of greenhouse gas emissions, air quality, land use, soil protection, waste
management and energy efficiency are considered key issues. Energy – especially in the
form of electricity – is the basis of modern society and our quality of life. All AGO plants
are highly efficient and operated responsibly. This is why all entrepreneurial decisions are
based on the following principles:
                                                                                                | 67


•      Openness, effectiveness, and reliability
•      Qualitative management
•      Deployment of modern, efficient, environmentally friendly technologies
•      Structured, systematic balance between ecology and economics
•      Investments in research and development to improve energy efficiency
•      Reduction of carbon dioxide emissions from energy generating plants
•      Evaluation of the environmental performance of our suppliers, subcontractors and
       business partners

The environmental efforts of AGO AG Energie + Anlagen help to promote healthy
Company development. They also improve our competitive position in accordance with
applicable laws, regulations and approvals. We intend to continue taking a leadership role
through continuity and innovation. We strive for sustainable economic, social and
ecological development without losing sight of our mission to protect the environment and
prevent pollution within our field of activity.

AGO AG Energie + Anlagen also consistently promotes sustainability, the efficient use of
resources and environmental awareness within the Company.

2008 energy consumption and CO2 emissions
Our employees also help reduce the Company's CO2 footprint. After all, climate
protection is not limited to power stations but also takes place in the minds of individuals.
Examples of how we do this:

•      Improving the energy efficiency of buildings
•      Decentralised energy production
•      Modern technologies such as video conferencing (to reduce business travel)
•      Raising environmental awareness.

With the initiative to become CO2 neutral, AGO AG Energie + Anlagen set a goal to
compensate for Company carbon dioxide emissions in 2007.

In the course of this project, the total annual carbon dioxide emissions caused by
electricity and natural gas consumption as well as fuel for company vehicles was
determined. Emissions due to train and airline travel were also included. A total of
595.29 tons of CO2 was calculated for 2008. The increase in total consumption compared
to 2007 is the result of the intensified international activities of
AGO AG Energie + Anlagen.
                              Total consumption          Total consumption            CO2 emissions               CO2 emissions
                              2008                       2007                         in t CO2                    in t CO2
Electricity      kWh                        140,179                      119,722                        42.61                          36.4
Natural gas      kWh                        235,748                      214,629                        47.53                          50.2
Fuel             Liter                      171,778                      159,923                       455.21                         423.8
Train journeys   km                           5,000                        3,000                         0.28                           1.7
Flights          km                         135,860                        4,700                        49.65                           3.6

Total                                    688,565.26                   501,974.00                        595.29                         515.7
                 Ratio for converting kWh of electricity into tons of CO 2 : 0.000304 according to information from the energy provider
                 Ratio for converting kWh of natural gas into tons of CO 2 : 0.000233
                 Ratio for estimating CO 2 emissions from fuels: 1 litre diesel = 2.65 kg CO 2
                 Estimates according to calculations from the German Federal Environment Agency
                 According to calculations by “Atmosfair”; http://www.atmosfair.de/index.php?id=5


                          Neutrality is achieved by our thermal plant in Kölleda. The amount of carbon dioxide
                          emitted by the Company in 2008 is offset by the use of 909.28 t of wood chips as
                          a natural gas equivalent.

                          AGO AG Energie + Anlagen intends to continue acting as a model in terms of energy
                          efficiency and is striving to reduce its emissions further. This is why we are currently
                          working on measures to reduce energy consumption in our buildings. We also want to
                          have an exemplary vehicle fleet, gradually replacing it with low-emission, fuel-efficient
                          models. Additionally, the use of a bonus programme evaluated by voluntary monitoring
                          will create an incentive to reduce driving. Ultimately, this will result in an active
                          contribution towards helping the environment.

                          For us, protecting the environment also includes the conservation of water, nature and
                          landscapes in addition to climate protection. The conservation of flora and fauna is
                          correspondingly important. In terms of in-house environmental protection, we focus on
                          the efficient use of resources such as water and raw materials as well as effective
                          disposal concepts..

                          The biomass environmental concept
                          Biomass refers to all organic substances – plant and animal matter – that can be used to
                          produce energy. Two categories have been defined: Renewable resources and organic
                          waste. In Germany, biomass that can be used to produce energy is generated by the
                          forest industry, wood processing, agriculture and factory farming. Examples of renewable
                          biomass energy sources include firewood, wood chips and bioethanol. Energy generation
                          only releases the same amount of CO2 previously absorbed by the biomass.

                          Advantages from the use of biomass as fuel:

                          •       Virtually self-contained CO2 cycle
                          •       Reduced sulphur dioxide and hydrocarbon emissions
                          •       Safe storage and transportation (no oil spills and gas leaks)
                          •       Short transportation routes
                          •       Energy consumption awareness
                                                                                                                | 69


Energy generation plants that blend into the landscape
Our landscape is usually defined by the generation and distribution of electricity, heat and
refrigeration. AGO AG Energie + Anlagen strives to design the required processes
harmoniously. The location and size of energy generation plants is one of the key design
aspects. The Alperstedt biomass cogeneration plant in the Erfurt lake district is a prime
example. The biomass cogeneration plant supplies one of the largest greenhouse
installations in Germany (20 hectares) with heat and electricity. In order to focus on its
core business, the greenhouse operator decided to cease independent heat production.
Since the end of 2006, this has been the responsibility of a project company founded for
this purpose which counts AGO AG Energie + Anlagen among its shareholders.
AGO AG Energie + Anlagen considered the landscape of the Erfurt lake district during its
circumspect planning and architecture design process.




                                                                                               Biomass cogeneration
AGO AG Energie + Anlagen was awarded the 2007 innovation prize for small to medium-
                                                                                               plant Alperstedt and
sized enterprises in mid-2007. The Company was honoured for the groundbreaking
                                                                                               greenhouse
implementation of the Alperstedt generation plant in a record time of twelve months from
the first draft to commissioning with an output of 19 MWth and 1.7 MWe. Measured
according to its annual energy output, the Alperstedt biomass cogeneration plant is
among the largest ORC biomass cogeneration plants in Europe.

Raw material for the Alperstedt biomass cogeneration plant is supplied under an agency
agreement with AGO Betriebs GmbH. Annual demand for wood chips is around
40,000 tons. Wood chips consist of 100 percent pure wood that burns CO2 neutral in
terms of the German Greenhouse Gas Emissions Trading Act (TEHG). The fuel value is
approximately 4.0 kWh per kg (depending on the type of wood, at approximately
20 percent water content). The density is 2.5 kN/m³.                                           Wood chips
                     High level of transparency through precise evaluation
                     Our goal is to continuously improve the safety of AGO plants. Safety and environmental
                     experts inspect all our facilities on a regular basis. We verify the implementation of our
                     high standards with the help of an inspection catalogue. Based on these activities, we
                     prepare a comprehensive operating profile to derive the need for additional measures.

                     Safety
                     Company responsibilities include safe transportation and the reliability of our facilities.
                     This is why safety is extremely important to AGO AG Energie + Anlagen. We intend to
                     prevent breakdowns and accidents, since they could endanger the health of our
                     employees and neighbours in addition to causing environmental damage and disrupting
                     production. All safety, health and environmental protection aspects have to be considered
                     from the design to commissioning of power generation plants. In order to pursue
                     consistent safety standards, we place great emphasis on the training and continuing
                     education of our safety experts. We continuously examine and evaluate our internal
                     performance based on an approved process. Cooperation with external logistics service
                     providers is also geared towards safety. This is why we used recognised evaluation
                     systems to evaluate the performance of our shippers.


Installation of an
energy center
Sustainability
Sustainability

Acting responsibly
The proportion of electricity generated from renewable resources is increasing steadily
around the world. It has become clear that the rising demand for energy, concerns about
our climate and the search for better, more efficient energy supply solutions are gaining in
importance. In addition to climate change, the limited availability of resources and the
resulting long-term increase in energy prices is a key motivating factor.

Modern life is inextricably linked to the consumption of energy. As an industrial energy
supplier, AGO AG Energie + Anlagen intends to fulfil all supply contracts with the lowest
consumption of resources and the least possible impact on the environment. Customers
of AGO AG can be confident that the energy they require will not only be available at all
times, but also that it is generated in the most environmentally friendly manner possible.
The solutions offered by AGO AG can also save energy and reduce costs. Key aspects of
acting responsibly include the conservation of natural resources, a significant reduction in
pollutant emissions, the prevention of environmentally hazardous waste generation and
landscape conservation. Of course AGO AG does not limit objectives such as climate
protection and resource conservation to the generation of energy but also applies them to
energy consumption.

Sustainable company strategy
Thanks to its expertise, AGO AG Energie + Anlagen is a reliable energy supply partner
for many companies today. This is based on its sustainable, innovative activities at all
levels of the value creation chain.

Vertical integration in the fields of biomass cogeneration plants, cogeneration plants, heat
and cooling plant construction, trigeneration, contracting, site studies and development,
energy efficiency consulting, raw materials and fuel management as well as emissions
trading management offers an efficient and secure energy supply to AGO customers.

Horizontal integration of energy sources for heat, steam, cooling and compressed air
results in synergy effects and growth potential.

All of this means that AGO AG is favourably positioned to meet all challenges of the
continuously changing market environment.

Lasting responsibility to the market and its expectations
The market expects:

•      competitive prices,
•      reduced environmental impact, and
•      a reduction in pollutant emissions

…and AGO meets these expectations.

By focusing on renewable energy, we are able to assure the security of our customer’s
energy supply now and in the future. Not only do we want to provide them with a secure
energy supply, we also want to offer comprehensive energy-related information. This is
why we offer energy efficiency consulting services in regards to new products and
                                                                                                 | 73


alternative energy sources as well as information on energy prices.

Responsible energy consulting
Ongoing global demand for energy remains high and may lead to an additional increase
in energy prices over the medium term. Improving energy efficiency can help soften the
impact of price increases. This is why we consider energy consulting for our customers to
be an important part of our business strategy. Every kilowatt hour that is not consumed
improves supply security and protects the climate.

Sustainable investment
Sustainability is becoming more and more important in the financial markets.
Sustainability criteria such as ecology and the conservation of natural resources, the
atmosphere and the climate are being taken into account during company analyses along
with yield and risk considerations by many institutional investors, investment funds,
pension funds, banks and insurance companies in addition to many private investors.
This means sustainability aspects are increasingly being used as the basis for investment
decisions by companies. The rising number of sustainability funds also illustrates this
trend: Ten such funds were approved in the past year alone.

Under consideration of all sustainability aspects under our control, we supply the actors in
this target group with the information they require for the continuous development of their
investments. After all, they want to invest in issuers that are financially strong in addition
to being environmentally and socially compatible. This is why we have anchored a
number of sustainability aspects in the guiding philosophy of AGO AG Energie + Anlagen.
We are also committed to the continuous and consistent development and expansion of
sustainability reporting. In the future, we intend to proactively integrate important
sustainability aspects - especially environmental protection issues and economic as well
as social development aspects - in strategic company management.

This is why we examine micro and macro factors including political-legal, technical and
ecological principles as well as customers, competitors, employees, suppliers and other
stakeholders based on sustainability aspects in order to integrate the results of these
analyses within the company strategy.

Ethical behaviour
Our business activities are based on ethical and responsible behaviour in all areas.
Among other things, we are fighting child and forced labour as well as corruption and
dedicating ourselves to the promotion and proliferation of environmentally friendly
technologies.

We observe ethical standards in the competitive market and in our cooperation with
suppliers. In addition to fighting human rights violations and corruption, fair and safe work
conditions are very important to us - also for our own employees.
3D model biomass cogeneration plant, Apulien
General economic conditions
General economic conditions

The world economy was severely affected by the global financial crisis and its effects on
the real economy in 2008. An ill-defined need for extensive write-offs of risk papers by
banks in the triple-digit billions led to lack of trust among the banks themselves, which
was exacerbated by the insolvency of the US investment bank Lehman Brothers in
mid-September. This caused banks to implement more restrictive lending policies.
Limited inter-bank trading and increasing uncertainty regarding the solvency of all banks
resulted in significant investment reluctance across all industries. This in turn affected
world trade and domestic demand, leading the economies of nearly all developed
countries into a recession.

In spite of economic packages in the billions, research institutes are predicting
a continued decline in the economic performance of the major industrialised nations for
2009. According to Commerzbank economists, the possibility of minus 7 percent
economic growth and therefore the expectation of the worst recession in the history of the
federal republic cannot be ruled out. Although many experts do not rule out this scenario,
most estimates of economic research institutes such as the “Deutsches Institut für
Wirtschaftsforschung” (DIW) (German Institute for Economic Research) and the
“ifo Institut für Wirtschaftsforschung” (ifo Institute for Economic Research) are currently at
minus 4 to 5 percent. According to the International Monetary Fund (IMF), an economic
recovery could commence in the first half of 2010 if the global banking system is able to
overcome its legacy and conditions are therefore favourable.

Italy and South Africa – countries where AGO AG Energie + Anlagen is represented by
subsidiaries – were also unable to escape the effects of the financial crisis. While
Germany experienced real economic growth of 1.3 percent in 2008 according to the
International Monetary Fund (IMF), growth in Italy and South Africa was -0.6 percent and
3.8 percent respectively. This means all countries fell short of the growth rate for the two
previous years. The downturn is expected to continue in 2009.

While the inflation rate in Germany at 2.9 percent and Italy at 3.4 percent remained in the
lower single digits for 2008, the increase in price levels in South Africa according to the
IMF hit double digits for the first time in more than ten years at 11.8 percent for 2008.
A pronounced increase in the price of oil as well as soft commodities (wheat, soy, corn
etc.) until mid-2008 constituted major inflation drivers in the European countries.

According to calculations by the German Central Bank, the average yield of German
10-year federal bonds was 3.0 percent at the end of December 2008. Banca D’Italia
reported that Italy’s yield on secure government bonds with a 10-year term was
4.49 percent at the end of December 2008. Because of higher expected inflation and
default risk, the yield of South Africa’s government bonds at the end of October 2008 was
9.24 percent.
                                                                                                                            | 77


Change in real gross domestic product                            Change in the price level

     Percent                                                          Percent
15                                                               15



10                                                               10




5                                                                 5




0                                                                 0
 1998       2000        2002       2004        2006     2008       1998        2000        2002        2004         2006     2008

        Germany                Italy           South-Africa                Germany                 Italy            South-Africa

Source: IWF; AGO AG Energie + Anlagen                            Source: IWF; AGO AG Energie + Anlagen



The development of the German employment market in 2008 was favourable. According
to the Federal Employment Office, the unemployment rate continued falling to
7.4 percent. On the other hand, the unemployment rate in Italy was slightly lower at
6.7 percent in the third quarter of 2008. The employment market in South Africa is
defined by high unemployment above 20 percent and a falling trend. Unemployment
figures in Germany and Italy are expected to increase in 2009 .


Rate of return on 10-year government bonds                       Unemployment rate


     Percent                                                          Percent
20                                                               35

                                                                 30
15
                                                                 25

                                                                 20
10
                                                                 15

                                                                 10
 5
                                                                  5

 0                                                                0
 1998        2000       2002        2004       2006     2008       1998        2000        2002        2004         2006     2008
          Germany*             Italy**         South-Africa***               Germany*              Italy**          South-Africa***

 * Deutsche Bundesbank                                           * Federal Employment Office
 ** Banca D’Italia                                               ** Eurostat; Q3 values for 2008
 *** South African Reserve Bank; October 2008 value
                                                                 Source: IWF; Eurostat; Bundesagentur für Arbeit;
 Source: National Central banks; AGO AG Energie + Anlagen        AGO AG Energie + Anlagen
Oil price correction in 2008
At USD 146.70 per barrel (159 litres), the oil price reached an all-time high in the first half
of 2008. Fears of a recession caused a significant reduction in the oil price beginning in
the third quarter of 2008, so that it closed at USD 39.40 by the end of the year. This
equates to a decrease of approximately 58 percent compared to the price of USD 94.30
at the start of the year. Compared to May 2004 when oil was traded at around
USD 35 a barrel, the price of this fossil fuel has gone up by approximately 13 percent.



Development in the oil price

       USD
160


120


  80


  40


   0
   May
   Mai. 04           Apr. 05          Mar. 04
                                      Mrz. 06            Feb. 07     Jan. 08       Dec. 04
                                                                                    Dez. 08
Source: International Petroleum Exchange; AGO AG Energie + Anlagen


The price stabilised above USD 40 at the beginning of 2009.

CO2 emissions rights in step with the price of oil
The price decline of emission futures at the Leipzig Energy Exchange was not as
dynamic compared to the leading energy source "oil". At the end of December 2008, the
settlement price of emission futures for delivery in December 2012 was €18.11. This
equates to a decrease of approximately 29 percent compared to the price of €25.43 at
the start of the year.

Settlement prices of EEX Futures in 2008 with delivery period in December 2012

       EUR
  40
  35
  30
  25
  20
  15
  10
   5
   0
   Jan. 08                 Apr. 08                  Jul. 08          Oct. 04
                                                                      Okt. 08       Dec.08
Source: Strombörse - European Energy Exchange – EEX, Leipzig; AGO AG Energie + Anlagen
                                                                                                        | 79


 Electricity prices rising more rapidly for industrial customers than private
 households
 According to the “Bundesverband der Energie- und Wasserwirtschaft e. V.” (BDEW)
 (Federal Association for Energy and Water), the price of electricity has increased by
 approximately 20 percent over the last ten years. While the deregulation of the German
 electricity market in 1998 triggered the rationalisation of the electricity industry and led to
 price decreases, this trend reversed in the year 2000. The intended positive effects of
 competition are increasingly overcompensated by the rising global demand for energy. In
 addition, climate protection costs are beginning to affect electricity prices in the European
 Union since the introduction of CO2 emission certificate trading in 2005. Demand for elec-
 tricity in Europe is also continuously increasing and there is a shortage of generating
 plant capacity. This is reflected in electricity prices. According to the BDEW, electricity
 prices increased noticeable in all European wholesale markets over the last few years.
 The increase in the price of electricity for industrial enterprises is noticeably higher
 compared to private households. This inconsistent development may be caused by the
 impact of the government on the generation of electricity (cogeneration law, renewable
 energy law, electricity tax, VAT and concession levies). While around 40 percent of the
 price of electricity for private households consists of such charges, the figure for industrial
 customers is approximately 11 percent plus electricity tax. This means that changes in
 the price of an energy source have a correspondingly greater effect on the final price
 of electricity for industrial use.

 Electricity price development for private households and the industrial sector
 (1998 = 100)
         Percent                                                            Private households
      140                                                                   Industrial sector

      120

      100

       80

       60

       40

       20

        -0
                 2000      2001      2002     2003      2004      2005      2006     2007       2008e

* Average monthly electricity bill of a three-person household with 3 500 kWh/year (in Euros)
Source: BDEW Bundesverband der Energie- und Wasserwirtschaft e. V.; AGO AG Energie + Anlagen


 Falling wood prices
 In contrast to severe fluctuations in the price of the fossil fuel “oil”, the price of energy
 products made of the renewable resource wood was much more stable. According to the
 Federal Statistical Office, the average price of wood chips and pellets over the course of
 2008 fell by around 9.5 percent. The annual average price of sawdust and sawmill waste
 dropped by approximately 3.7 percent. After the multi-year high in 2007, the cost of
 downstream wood products is relaxing visibly.
Annual average prices for wood chips and sawmill by-products (2000 = 100)
       Percent
     170

     150

     130

     110

      90

      70

      50
       2000       2001      2002       2003        2004        2005      2006   2007      2008

                      Wood chips                      Saw dust and sawmill by-products

Source: Federal Statistial Office ; AGO AG Energie + Anlagen

 Wood chips – the lowest-cost energy alternative
 Wood as a raw material is an important biomass energy source and key heat generation
 component. According to C.A.R.M.E.N “Centrales Agrar-Rohstoff-Marketing- und
 Entwicklungs-Netzwerk” calculations, wood in the form of chips is the lowest-cost
 alternative for producing energy and heat. In addition, the sustainability of this raw
 material facilitates supply planning which can prevent long-term bottlenecks and related
 price increases. This renewable resource also features a much better CO2 pollutant
 balance .

 Advantages of wood chips – overview:
 •         Competitive prices per kWh
 •         Reduced price fluctuations
 •         Better CO2 balance
 •         Sustainable resource


Price development of wood chips, wood pellets, fuel oil and natural gas

           *




                                                                                       * € Cent
                                                                                       per 10 kWh



Source: C.A.R.M.E.N. e.V. - www.carmen-ev.de; AGO AG Energie + Anlagen
                                                                                               | 81


Double-digit growth in renewable energy subsidies
Based on the Kyoto Protocol – which came into force on 16 February 2005 and was the
first agreement to establish binding targets under international law for CO2 greenhouse
gas emissions by industrialised nations – the leading industrialised nations are
increasingly dedicating themselves to the issue of climate protection. Among other things,
the European Union has established a goal to increase the proportion of total electricity
consumption that comes from renewable energy sources to 20 percent by the year 2020
and to reduce greenhouse gas emissions by 20 percent. Germany plans to exceed this
target with the German Renewable Energy Sources Act (EEG). With the EEG, the
proportion of the electricity supply from renewable energy sources is to be increased to at
least 30 percent by the year 2020 and continuously thereafter.

According to the “Bundesverband der Energie- und Wasserwirtschaft e. V.” (Federal
Association for Energy and Water), remuneration under the EEG increased from
€1.2 billion in the year 2000 to approximately €7.7 billion in 2007. This means
remuneration has increased more than six-fold. While most of the subsidies at the
beginning of the decade went to wind energy, remuneration is increasingly being claimed
for other renewable energy sources. Climate policies are having more of an effect on
activities, and not just in Germany.

With the change in the presidency, even the United States of America which has been
very restrictive in terms of climate protection in the past is now quite open to more
environmentally friendly economic policies. The USA plans to provide USD 150 billion for
renewable energy in the next ten years in order to reduce the country’s dependency on
oil.

Remuneration for renewable energies in Germany

    € billion
    Mrd. EUR
    12



    10



     8



     6



     4



     2



     0
          2000      2001     2002     2003     2004      2005     2006     2007     2008e

Source: BDEW Bundesverband der Energie- und Wasserwirtschaft e. V.; AGO AG Energie + Anlagen
 Wind and biomass will dominate renewable energy production
 While most of the electricity from renewable sources was generated by water in the year
 2000, massive investments in wind energy and biomass plants doubled this amount by
 2007. According to forecasts by the Federal Ministry of the Environment, Conservation
 and Nuclear Power Safety, biomass and wind energy will remain key factors for
 increasing the proportion of electricity from renewable sources over the next forty years.
 The German Advisory Council on Global Change (WBGU) reached a similar conclusion
 in a report from December 2008. It indicated that biomass could cover approximately
 10 percent of global energy requirements without this form of energy production having
 a negative impact on food production or nature conservation and climate protection.

Electricity generation from renewable energy
     Billion kWh                 Geothermal energy                Photovoltaics
    400                          Hydroelectricity                 Biomass
    350                          Wind energy
    300
    250
    200
    150
    100
     50
       0
            2000     2007     2010     2015      2020     2025     2030     2040      2050
Source: Federal Ministry of the Environment, Conservation and Nuclear Power Safety from
“Leitstudie 2008 - Weiterentwicklung der „Ausbaustrategie Erneuerbare Energien“ vor dem Hinter-
grund der aktuellen Klimaschutzziele Deutschlands und Europas" (Leading Study 2008 – Develop-
ment of the “Renewable Energy Expansion Strategy” Based on Current Climate Protection Goals in
Germany and Europe); AGO AG Energie + Anlagen

 In contrast to electricity generation, the options for generating heat from renewable
 sources are limited. According to the leading scenario of the Federal Ministry of the
 Environment, Conservation and Nuclear Power Safety, heat production using biomass
 will continue to dominate. Heat generation options using solar collectors and geothermal
 energy, which are not firmly established at this time, could contribute to the additional
 production of heat from renewable sources over the long term.

 Heat generation from renewable energy

     Billion kWh                        Geothermal energy          Solar collectors
    400                                 Biomass
    350
    300
    250
    200
    150
    100
      50
       0
            2000     2007      2010     2015     2020     2025     2030     2040      2050

Source: BDEW Bundesverband der Energie- und Wasserwirtschaft e. V.; AGO AG Energie + Anlagen
                                                                                               | 83


Calls for more ambitious climate protection targets
On 4 February 2009, the European Parliament in Strasbourg requested a reduction in
greenhouse gas emissions of 25 to 40 percent by 2020 compared to 1990. It also
indicated that the European Union has to raise its climate protection targets. The
multiethnic parliament is calling for 80 percent less greenhouse gas emissions,
35 percent more energy efficiency and 60 percent of renewable energy in the electricity
supply by the year 2050. This is to be accomplished through innovation, motivation and
by increasing awareness in society.

The delegates were concerned about numerous scientific reports indicating that climate
change is progressing more quickly than originally assumed, and asked the EU to enter
into solar energy partnerships with third-party states in the Mediterranean region. In
addition, the construction industry would have to offer new zero-energy residential
buildings by 2015 and also implement this energy standard for new commercial and
public buildings by 2020.

Financial crisis delaying climate protection
According to a recent study by the A.T. Kearney consulting firm, the international financial
crisis has reduced the willingness to invest in renewable generating plant projects more
so than in conventional ones. While energy suppliers hardly paid risk premiums just two
years ago, even companies with good credit ratings now have to pay high risk premiums
for project financing loans. Not only has financing for generating plants become much
more expensive, it is also a lot more difficult to obtain. Out of the investment volume of
approximately €30 to €35 billion required annually for plant replacement and new
generating plant construction in the entire EU until 2010, the study expects that only
around two-thirds will be available.

Due to a lack of cash flow, many investors are more dependent on external financing
than the large energy conglomerates. As a result of the financial crisis, the cost of energy
generation from coal and natural gas has increased by 4.3 percent and 2.1 percent
respectively. The generating costs for electricity from running-water generating plants
increased even more at 19 percent while the cost for offshore wind parks rose by
10.7 percent. According to the analysts, major structural changes in the energy industry
may result with large energy conglomerates increasingly buying into renewable
generating plant projects.
Consolidated financial state-
Consolidated Income Statement for AGO AG Energie + Anlagen, Kulmbach,
for the Financial Year 2008

                                                                 2008             2007
                                                   Appendix   € thousands      € thousands
Sales                                                (6)            36,697           41,344
Cost of sales                                                       32,543           39,492
Gross profit                                                         4,154            1,852
Research and development costs                                          174               68
Selling costs                                                        2,118            2,090
General administrative costs                                            692              995
Other operating earnings                             (7)                551           1,233
Other operating expenses                             (8)                147              198
Operating profit (EBIT)                                              1,574               -266
Profit or loss from at equity reported companies     (9)                  -1                 6
Interest and similar earnings                        (10)               372              423
Interest and similar expenses                        (10)               901              740
Earnings before income tax                                           1,044               -577
Income tax                                           (11)               458              102
Earnings from continued business divisions                              586              -679
Earnings from discontinued business divisions        (12)                31              -179
Group annual result                                                     617              -858


Thereof:
shareholders from the parent company                                    638              -870
minority shareholders                                                    -21              12


Earnings per share (€ per share)
From continued business divisions                    (15)               0.15          -0.26
From discontinued business divisions                 (15)               0.01          -0.07
Consolidated Balance Sheet for AGO AG Energie + Anlagen, Kulmbach,
as of 31 December 2008                                                                 | 87
                                                                  31/12/2008    31/12/2007
                                                       Appendix   € thousands   € thousands

Assets
Non-current assets
Intangible assets                                        (16)            275           154
Property, plant and equipment                            (17)         14,442        13,957
Investments in companies balanced at equity              (18)              5             0
Other non-current financial assets                       (22)          2,038           292
Deferred tax assets                                      (11)            168           112
                                                                      16,928        14,515

Current assets
Inventories and paid down payments                       (19)            482           751
Receivables from contract manufacturing                  (20)          4,805         2,260
Trade receivables                                        (21)          7,052        10,203
Income tax receivables                                                   377           232
Other receivables and other current financial assets     (22)            715         1,547
cash and cash equivalents                                (23)          7,679         5,556
                                                                      21,110        20,549

Total assets                                                          38,038        35,064

Shareholders' equity
Issued capital                                                         4,000         4,000
Capital reserve                                                        8,146         8,146
Revenue reserves                                                         656            24
Minority interests                                                       241           210

Total shareholders' equity                               (24)         13,043        12,380

Liabilities
Non-current liabilities
Provisions for pension obligations                       (25)            215           209
Other non-current provisions                             (25)            471           480
Non-current financial liabilities                        (28)         10,068        10,246
Other non-current liabilities                            (28)             14            20
Deferred tax liabilities                                 (11)            705           239
                                                                      11,473        11,194

Current liabilities
Other current provisions                                 (25)            123           170
Current financial liabilities                            (28)          2,069         1,002
Trade payables and advances received                     (26)          6,603         7,185
Liabilities from contracted work                         (27)          1,395            24
Income tax liabilities                                                    29            35
Other current liabilities                                (28)          3,303         3,074
                                                                      13,522        11,490

Total liabilities                                                     24,995        22,684

Total shareholders' equity and liabilities                            38,038        35,064
Consolidated Cash Flow Statement for AGO AG Energie + Anlagen, Kulmbach,
for the Financial Year 2008

                                                                                          2008          2007
                                                                                    € thousands   € thousands
Profit for the period before interest and taxes                                          1,617          -530
Paid income tax                                                                           -212         -1,079
Paid interest                                                                             -901          -744
Received interest                                                                          372           423
Depreciations from the disposal of fixed assets                                            820           730
Profit or loss from at equity reported companies                                             1             -6
Increase (+) / decrease (-) in provisions                                                   -50         -611
Other non-payment related expenses (+) / earnings (-)                                        0           875
Profit (+) / loss (-) from asset disposal                                                   -18            0
Increase (-) / decrease (+) of inventories, trade receivables and other assets              45         -2,309
Increase (+) / decrease (-) of trade payables and other liabilities                        384           -850
Cash flow from current operating activities                                              2,058         -4,101
- thereof discontinued activities                                                       (1.481)      (-1.085)


Cash inflow from the disposal of fixed assets                                               44            36
Cash outflow for investments in fixed assets                                             -1,301         -266
Cash outflow for investments in intangible assets                                         -152            -14


Cash flow for investments in non-current assets                                             -90         -157

Cash flow from the acquisition of consolidated companies and other business units             0          524
Cash flow from investment activities                                                     -1,499          123
- thereof discontinued activities                                                           (0)          (-1)


Cash inflow from capital increase                                                            0         9,300
Cash outflow in connection with capital increase                                             0         -1,075
Cash inflow from minority interests in shareholders' equity of consolidated
subsidiaries                                                                                46             0
Cash inflow from proceeds from financial liabilities                                     3,764           113
Cash outflow from repayments of financial liabilities                                    -2,246         -727
Cash flow from financing activities                                                       1,564        7,611
- thereof from discontinued activities                                                      (0)           (0)


Changes of cash and cash equivalents affecting payment                                   2,123         3,633
Cash and cash equivalents at the start of the period
Konsolidierungskreisbedingte Änderung des Finanzmittelfonds                              5,556         1,923
Cash and cash equivalents at the end of the period                                       7,679         5,556


Cash and cash equivalents are comprised of the following:
Cash and cash equivalents                                                                7,679         5,556
Consolidated Statement of Changes in Shareholders' Equity for AGO AG Energie + Anlagen, Kulmbach,
for the Financial Year 2008                                                                                                  | 89
                                            Subscribed         Capital        Revenue            Total          Minority         Consolidated
                                              capital          reserve        reserves                          interests        shareholders'
                                                                                                                                    equity
                                            € thousands      € thousands     € thousands      € thousands      € thousands       € thousands
As of 1 January 2007                                770              500           2,394            3,664                   0           3,664
Capital increase against cash deposits            1,300            7,800                 0          9,100                   0           9,100
Capital increase from corporate resources         1,730             -400          -1,330                  0                 0                 0
Share-based compensation                            200              920                 0          1,120                   0           1,120
Changes in basis of consolidation                        0               0          -170             -170              198                    28
IPO costs                                                0          -674                 0           -674                   0            -674
Annual result                                            0               0          -870             -870                   12           -858
As of 31 December 2007                            4,000            8,146                 24        12,170              210             12,380


As of 1 January 2008                              4,000            8,146                 24        12,170              210             12,380
Changes in basis of consolidation                        0               0               -6               -6                52                46
Annual result                                            0               0           638                 638            -21                  617
As of 31 December 2008                            4,000            8,146             656           12,802              241             13,043
Statement of Recognised Earnings and Expenses
for AGO AG Energie + Anlagen, Kulmbach,
for the Financial Year 2008

                                                                      2008          2007
                                                                € thousands   € thousands
Consolidated net loss / profit                                         617          -858
IPO costs                                                                0         -1,075
Tax on income and expense for the year recognised directly in
shareholders' equity                                                     0           401
Earnings and expenses recognised directly in equity                      0           -674
Total recognised expenses and earnings                                 617         -1,532
Notes to the consolidated
      financial statement
AGO AG Energie + Anlagen, Kulmbach
Notes to Consolidated Financial Statements for the Financial Year 2008

1.     General information

AGO AG Energie + Anlagen (AGO AG or the Company) is a stock corporation with head-
quarters in Kulmbach/Germany (Am Goldenen Feld 23, 95326 Kulmbach). AGO AG and
its subsidiaries (AGO Group or the Group) are full service providers for heat, coolant,
steam, compressed air and power delivery in the area of industrial energy supply systems
as well as being the operator of these energy supply systems. In addition, it offers various
consultancy services and other services for operators of industrial energy supply sys-
tems.

AGO AG’s parent company is caverion GmbH, Stuttgart. At the same time, it is the
Group’s supreme parent company.

AGO AG’s annual financial statement and consolidated financial statement will be pub-
lished in the Federal Gazette.

Following a resolution by the Management Board, the AGO AG consolidated financial
statement for the financial year 2008 was released for publication on 24 April 2009.



2.     Application of new and modified standards

During the current year the Group applied all the new and modified standards as well as
the interpretations that were published by the IASB International Accounting Standards
Board (IASB) and the International Financial Interpretations Committee (IFRIC) in so far
as they entered into effect for the financial years commencing 1 January 2008 and were
adopted by the European Union during the committee process.

During the financial year the Group applied the new interpretations that are listed below.
The application of these new interpretations did not have any effect on the consolidated
financial statement.



IFRIC 11 “IFRS 2 – Group and Treasury Share Transactions”

The interpretation stipulates how IFRS 2 is to be applied to share-based payment ar-
rangements which include an entity’s equity instruments or the equity instruments of an-
other entity in the same group (e.g. the parent company’s equity instruments). The inter-
pretation sets out that a share-based payment arrangement, which an entity receives for
goods or services as consideration for its equity instruments, is recognised as a share-
based payment settled with equity instruments, irrespective of whether the necessary
equity instruments are received. Furthermore, IFRIC 11 clarifies whether share-based
payment arrangements, involving an entity's own equity instruments in which the entity
chooses or is required to buy its own equity instruments (treasury shares) to settle the
share-based payment obligation are to be recognised as a share-based payment. IFRIC
11 does not have any effect on the net assets, financial position and results of operation
or, alternatively, the cash flow of AGO Group, since the Group does not grant any share-
based payments within the scope of this interpretation.
                                                                                                 | 93


IFRIC 12 “Service Concession Agreements”

Service concession agreements are agreements in which as a concession provider, a
government or other public sector institution awards contracts for the provision of public
services such as roads, airports, prisons and energy and water supplies to private com-
panies as concessionaires. IFRIC 12 governs how concessionaires, in the context of ser-
vice concession agreements, have to apply existing IFRS in order to include the obliga-
tions and rights received within the framework of the service concession agreements.
Depending on the type of return service which the concessionaire receives from the con-
cession provider, the concessionaire comprises a financial or an intangible asset. A finan-
cial asset is applied, if there is an unconditional contractual right on behalf of the conces-
sionaire, to cash or other financial assets from the concession provider. If on the other
hand, the return service of the concession provider relates to the granting of a right to
receive payments from users, an intangible asset is to be applied. Depending on the con-
tractual agreements, the application of both a financial and an intangible asset is possi-
ble. The rules of IFRIC 12 are to be applied for the financial years beginning on or after 1
January 2008. The companies included in the consolidated financial statement are not
concessionaires as defined by IFRIC 12. Therefore, this interpretation does not have an
impact on the Group.



The IASB and IFRIC subsequently published listed standards and interpretations which
had already been incorporated into EU law as part of the comitology procedure but had
still not been applied in a binding manner during the financial year 2008. The Group does
not apply these standards and interpretations prematurely.



Amendment IFRS 2 “Share-based Payment”

The main changes and clarifications are:



•      Vesting conditions are exclusively service or performance conditions customary
       on the market.
•      Cancellations (premature), whether by the entity or by other parties, should
       receive the same accounting treatment.


Amendments to IFRS 2 will be applied to annual reporting periods beginning on or after
1 January 2009. Earlier application is permitted. IFRS 2 will probably not have any effect
on the net assets, financial position and results of operation or, alternatively, the cash
flow of AGO Group, since the Group does not grant any share-based payments within the
scope of IFRS 2.



IFRS 8 “Operating Segments”

IFRS 8 was published in November 2006 and shall be initially applied to financial years
beginning on or after 1 January 2009. IFRS 8 requires information to be disclosed about
the operating segments of an entity and replaces the obligation to define primary
(operating segments) and secondary (geographical segments) segment report formats for
a company. IFRS 8 follows the so-called management approach according to which seg-
ment reporting is exclusively guided by financial information that is used by an entity’s
decision-makers for purposes of internal management of the entity. Of decisive impor-
tance are the internal reporting and organisational structure and key figures applied for
purposes of reaching a decision about the allocation of resources and assessment of
earning power. The amended standard will have an influence on the way in which the
Group’s financial information is published but not on the approach and measurement of
assets and liabilities in the consolidated financial statement.



Amendment IAS 1 “Presentation of Financial Statements”

IAS 1 (revised) employs the terms “statement of financial position” (formerly “balance
sheet”) and “statement of cash flows” (formerly “cash flow statement”) and introduces an
arithmetic unit with the designation “statement of comprehensive income”. However, it is
not obligatory to employ the new descriptions. The amendment to IAS 1 obliges entities
to present comparative information for the previous reporting period. Furthermore, the
revised standard requires the presentation of another “statement of financial position” at
the start of the comparative period being presented, provided the entity applies an ac-
counting policy retrospectively or makes a retrospective restatement. In addition, the
amendment to IAS 1 sets out the following:



•      All modifications in shareholders’ equity that are based on transactions with
       shareholders must be presented separately to modifications that are not based
       on transactions with shareholders.
•      Income and expenses must be presented separately to transactions with
       proprietors either in a financial statement component (“statement of comprehen-
       sive income”) or in two financial statement components (a separate “income
       statement” and a “statement of comprehensive income”).
•      The components of “other comprehensive income” must be presented in
       a “statement of comprehensive income”.
•      The sum “total comprehensive income” must be presented.
•      The amendment to IAS 1 also requires disclosure of the respective amount of
       income tax for each item in “other comprehensive income” and the presentation
       of reclassification amounts in “other comprehensive income”. Reclassification
       amounts arise during regrouping of former amounts recorded in “other compre-
       hensive income” which are then recorded in “profit or loss”. Furthermore, amounts
       recognised as distributed dividends and corresponding per-share amounts must
       be shown either in the statement of changes to shareholders’ equity or in the
       appendix.

The amendment to IAS 1 must be applied for the financial years which begin on or after 1
January 2009. The amended standard will have an influence on the way in which the
Group’s financial information is published but not on the approach and measurement of
assets and liabilities in the consolidated financial statement.
                                                                                                 | 95


Amendment IAS 23 “Borrowing Costs”

The revised standard IAS 23 was published in March 2007. The main amendment to the
standard relates to the abolishment of the option to recognise borrowing costs that can be
directly allocated to the acquisition, construction or manufacture of a qualifying asset.
AGO Group currently recognises these expenses as expenditure. A qualifying asset is
defined as an asset for which a significant period of time is required in order to make it
ready for its intended use or sale. According to this, entities must capitalise such borrow-
ing costs as part of the purchase costs of qualifying assets. The amended standard does
not require borrowing costs for assets that are measured at fair value and for inventories
that are manufactured or produced in large quantities to be capitalised even if the period
until the sale is quite considerable. The standard is mandatory for borrowing costs for
qualifying assets to be capitalised on or after 1 January 2009. In conformity with the tran-
sitional provisions of the standard, the Group will most likely apply this standard. Accord-
ing to this, borrowing costs will be capitalised for qualifying assets from 1 January 2009.
This does not result in any effects for borrowing costs previously incurred and which were
immediately recognised as expense-related. Depending on the scope of the construction
measures of energy supply systems and their financing, this will result in lower interest
expenses in the future. The exact effects are currently not known.



Amendments to IFRS 1 and IAS 27 – Amortised cost of an interest in a subsidiary, jointly
managed company or associated company.

The amendments to IAS 1 and IAS 27 were published in May 2008 and will be first ap-
plied to financial years beginning on or after 1 January 2009. The amendments to IFRS 1
enable an entity to substitute the amortised cost of an interest in a subsidiary, jointly man-
aged company and associated company in its IFRS opening balance sheet for deemed
cost, even when using figures which were recognised in accordance with previous ac-
counting regulations or when recognising these items at fair value. The amendments to
IAS 27 purely affect separate financial statements of a parent company and particularly
stipulate that all dividends of subsidiaries, jointly managed companies and associated
companies must be recognised directly in the separate income statement. The provi-
sional regulations require that these changes will be applied in future. This new regulation
does not affect the consolidated financial statement, as the regulation for the first-time
adoption of IFRS and regulations for separate financial statements is not relevant to the
Group.



Amendment IAS 32: “Financial Instruments: Presentation” and IAS 1 “Presentation of
Financial Statements”

The amendments to IAS 32 and IAS 1 were published in February 2008 and will be first
applied to financial years beginning on or after 1 January 2009. The amendments con-
cern the classification of redeemable shareholder deposits as a liability or as sharehold-
ers’ equity. According to previous regulations, entities were partially obliged to show the
capital under commercial law as financial liabilities due to shareholder cancellation rights
being anchored in law. As a rule, these shareholder deposits should be classified as
shareholders’ equity to the extent that settlement is agreed to be at fair value and the
deposits rendered represent the most subordinate claim on the company’s net assets. As
a result of the parent company’s legal structure and the relevant statutory provisions un-
der commercial law, the new regulation will have no effect on the classification, evalua-
tion and statement of shareholder deposits in the consolidated financial statement.



Amendments to IFRS 2008
The amendments from the improvement project 2008 were published in May 2008 and
will be first applied to financial years beginning on or after 1 January 2009, with the ex-
ception of IFRS 5 (here from 1 July 2009). As part of the 2008 improvement project, vari-
ous material changes, which affect accounting and evaluation, and also purely editorial
changes were passed. The latter affect, revisions of separate definitions and formulations
in order to ensure consistency with other IFRS. The following amendments have not yet
been applied by the Group:



•      IFRS 5 Non-current Assets Held for Sale and Discontinued Operations: All assets
       and liabilities of a subsidiary, which is scheduled to be sold with the result of the
       entity losing the majority interest in this subsidiary, must be classified as held for
       sale, if the entity retains a minority interest in the former subsidiary after its sale.

•      IAS 1 Presentation of the Financial Statement: It is not compulsory to recognise
       financial instruments held for trading as current assets or liabilities in the balance
       sheet. Items must be classified as 'current' purely in accordance with the accrual
       criteria stated in IAS 1.

•      IAS 10 Events occurring after the reporting date: Dividends, which occurred after
       the reporting date and before the authorisation of the financial statements for pub-
       lication, do not constitute a liability and are therefore not recognised as liabilities in
       the balance sheet.

•      IAS 16 Property, Plant and Equipment: Sales from property, plant and equipment
       held for lease, which is usually sold after the lease has terminated and within the
       scope of ordinary operations, must be recognised in sales.

•      IAS 19 Employee Benefits: As well as revising several definitions, it should be
       stated that plan amendments, which result in a reduction of benefits for services
       performed in future periods, must be recognised in the balance sheet as plan cur-
       tailments. On the other hand, plan curtailments relating to already performed ser-
       vices must be recognised as past service expenditure.

•      IAS 20 Accounting for Government Grants and Disclosure of Government Assis-
       tance: In future, interest rate advantages of non- or low-interest-bearing loans
       must be calculated. The difference between the received amount and the dis-
       counted amount must be recognised in the balance sheet as a government grant.

•      IAS 23 Borrowing Costs: The definition of borrowing costs was revised and the
       IAS 39 guidelines on real interest rates were adopted.

•      IAS 27 Consolidated and Separate Financial Statements: In accordance with IAS
       39, a subsidiary must continue to be recognised at fair value in the separate bal-
       ance sheet of the parent company even when it is classified as held for sale.

•      IAS 28 Investments in Associates: Goodwill included in the carrying amount of an
       investment in an associate is not recognised separately and therefore not tested
       for potential impairments. Instead, the entire carrying amount of the investment is
                                                                                              | 97


    recognised as a single asset, tested for impairment and, if required, written down.
    Write-ups on an investment in an associate, which was written down in previous
    reporting periods, must be recognised as write-ups on this investment and not be
    allocated to goodwill contained therein. Another amendment pertains to the disclo-
    sure requirements regarding investments in associates that are recognised at fair
    value in accordance with IAS 39. In future, only the requirements of IAS 28 will
    have to be applied to these investments, according to which it must be reported to
    what extent the associate has serious limitations in transferring financial resources
    in the form of cash or loan repayments to the entity.

•   IAS 29 Financial Reporting in Hyperinflationary Economies: Within financial state-
    ments that are prepared on a cost basis, assets and liabilities that are or could be
    recognised at fair value do not have to include property, plant and equipment and
    financial investments only.

•   IAS 31 Interests in Joint Ventures: The amendment pertains to the disclosure re-
    quirements regarding interests in joint ventures that are recognised at fair value in
    accordance with IAS 39. In future, only IAS 31 will be applicable to these interests,
    in accordance to which the obligations of the venturer and joint venture as well as
    a summary of financial information on assets, liabilities, earnings and expenses
    must be reported.

•   IAS 34 Interim Financial Reporting: It is necessary to only recognise undiluted and
    diluted earnings per share in the interim financial statement, if the entity is subject
    to the regulations of IAS 33 Earnings per share.

•   IAS 36 Impairment of Assets: The disclosure requirements for measuring the
    value at use and fair value less costs for sale, which is calculated using the dis-
    counted cash flow model, were standardised.

•   IAS 38 Intangible Assets: In future, expenses for goods and services used for mar-
    keting campaigns and promotion (including mail-order catalogues) must be recog-
    nised as expenditure if the entity has obtained the access rights to such goods
    and services. Furthermore, the application of the depreciation method for intangi-
    ble assets has been permitted without limitations.

•   IAS 39 Financial Instruments: Recognition and Measurement: In future, derivatives
    can be recognised at fair value, designated or removed from this class after their
    first-time recognition, as this does not constitute a reclassification within the mean-
    ing of IAS 39. In addition, the reference to a “segment” in connection with deter-
    mining if an instrument meets the criteria of a hedging instrument was removed.
    Furthermore, when recognising a debt instrument as a fair value hedge after the
    balance sheet date, the newly calculated real interest rate must be used.

•   IAS 40 Investment Property: In future, property under construction that is built or
    developed as an investment is no longer attributable to property, plant and equip-
    ment but investment property and recognised at cost or fair value. If the entity
    uses the fair value model and the fair value cannot be reliably determined, the
    property under construction is recognised at cost until the fair value can be deter-
    mined or construction has been completed.

•   IAS 41 Agriculture: The restriction for the use of an input tax discount rate when
    calculating fair values has been removed. Furthermore, the ban on taking into
    account cash flows, which are the result of additional biological transformations
       and other future activities of the entity, when estimating fair values has been lifted.



The Group assumes that new regulations resulting from the improvement project will not
have any significant effects on the presentation of net assets, financial position and re-
sults of operation - excluding those regulations whose effects are stated separately in the
following section:



•      IAS 16 Property, Plant and Equipment In future, the use of this regulation will re-
       sult in higher sales, if such items actually exist. There are no effects on the Group
       result as a whole, as it is merely a reclassification within the income statement.



IFRIC 13 “Customer Bonus Programme”

The interpretation deals with the accounting and evaluation of customer loyalty pro-
grammes where the customer receives points (premiums) allowing him or her to obtain
goods or services free or at a reduced cost from a seller or third party. So far, the ques-
tion has been left open as to whether, in this context, premiums represent a liability in
connection with a sale transaction which has taken place, or a reward, in the sense of an
advance payment for a future sale transaction. According to this current interpretation,
the proceeds from the sale are to be split into two components. A portion is accounted for
through the current business, which has resulted in the premiums. The other part is ac-
counted for by future business, which results from premiums which are to be redeemed.
The portion of the proceeds assigned to a delivery or service already provided are to be
recorded in profit or loss. The portion of the proceeds which is allocated to the premium is
to be drawn up in the balance sheet as an advance payment until the premium is re-
deemed by the customer and an obligation from granting the premium is met. The inter-
pretation of financial years applies to those which begin on or after 1 July 2008. As the
Group has no current customer bonus programmes, no impact will be expected on the
consolidated financial statement from this interpretation.



IFRIC 14 “IAS 19 – The Limit of a Performance-oriented Asset, Minimum Funding Re-
quirements and their Reciprocal Effect”

The interpretation governs the assessment of an asset, which results when the planned
assets exceed the pension plan obligation. The interpretation specifies the way to deter-
mine whether there are economic benefits for the Company from the over-endowment of
a pension plan. Furthermore, on the one hand, regulation exists concerning the way in
which the cash value of the asset is determined in the event of a future contribution
refund or reduction, given the existence of a minimum requirement regarding the endow-
ment of the pension plan. On the other hand, regulation exists concerning the way to
proceed in evaluating a "defined benefit asset" or a "defined benefit liability" if the
Company is required to pay minimum contributions into a pension plan. The interpretation
of financial years applies to those which begin on or after 1 January 2009. Since all
Group performance-oriented pension plans are currently in deficit, no impact on the
net assets, financial position and results of operation of the Group is expected from this
interpretation.
| 99
The IASB and IFRIC subsequently published listed standards and interpretations which
had still not been applied in a binding manner during the financial year 2008. So far, the
EU has not recognised these standards and they will not be applied by the Group.

IFRS 1 “First-time Adoption of IFRS”

The revised standard IFRS 1 was published in November 2008 and must be applied for
the first time to reporting periods starting on or after 1 January 2009. The revision of the
standard includes all editorial changes and restructurings of the standard. This revision
does not result in changes to accounting and valuation regulations for first-time users of
IFRS. This new regulation does not affect the consolidated financial statement, as the
regulation for the first-time adoption of IFRS is not relevant to the Group.

Amendment IFRS 3: “Mergers” and IAS 27: “Consolidated and Separate Financial State-
ments in Conformity with the IFRS”

The standards resulted from the second phase of the project for reforming accounting of
mergers conducted in conjunction with the FASB. The main amendments vis-à-vis the
previous version of the IFRS 3 can be summarised as follows:



•      For the accounting treatment of minority interests the new version of IFRS 3
       introduces an option to measure minority interests at fair value or proportionate
       identifiable net assets. This option can be exercised for each business
       combination on an individual basis.
•      Recognition through the income statement of any changes in the value of
       investments when control is first gained (mergers achieved in stages). The
       goodwill is then calculated as the difference between the re-measured associate
       book value plus purchase price payments for the acquisition of new shares less
       the acquired net assets.

•      In the future secondary acquisition costs will be recognised as expenditure.

•      If adjustments are made at fair value which are contingent upon future events
       (contingent consideration), which are recognised as liabilities on the acquisition
       date, then subsequent measurement will not permit any adjustment to the
       goodwill.

•      Effects as a result of the transaction of business relations that existed prior to the
       business combination must not be included in the calculation of consideration
       for the business combination according to the new version of IFRS 3.

•      In comparison with the previous version, IFRS 3 stipulates, in its revised version,
       the inclusion and measurement of rights which were granted to another entity prior
       to the business combination and now, as part of the business combination,
       are re-acquired (re-acquired rights).
                                                                                                  | 101


The main changes vis-a-vis the previous IAS 27 version can be summarised as follows:



•      Changes in the stake without loss of control must be recognised exclusively as
       an equity transaction.

•      In the case of loss of control of a subsidiary, the consolidated assets and liabilities
       must be deconsolidated. The new version stipulates that any instrument remaining
       in the former subsidiary must be recorded at fair value in first-time recognition and
       any resulting adjustments to previously recognised assets and liabilities
       recognised in profit or loss.

•      If losses accounted for by minority interests exceed the minority interest share
       in the shareholders’ equity of the subsidiary, then these must be attributed to
       the minority interests despite the resulting negative balance.


The new version of IFRS 3 shall most likely be applied to mergers whose acquisition date
falls within the annual reporting period which begins on or after 1 July 2009. Earlier
application is permitted but is restricted to annual reporting periods that begin on or after
30 June 2007. Amendments to IAS 27 will be applied to annual reporting periods begin-
ning on or after 1 July 2009. Earlier application is permitted. However, early application of
either standard requires early application of the other standard at the same time. Since it
is expected that its first application within the Group during the financial year shall neither
incur the said transactions nor a negative amount in minority interests, the application of
this standard will likely have no effect on the consolidated financial statement.



Amendments to IAS 39 – Qualifying Items

Amendments to IAS 39 were published in July 2008 and must be retrospectively adopted
for the first time for reporting periods starting on or after 1 July 2009. The amendment
specifies how to apply reporting principles for hedging relationships to unilateral risks that
are designated as qualifying items as well as inflation risks that are designated as
qualifying items. It is permissible to designate only part of a financial instrument's
changes in fair value or cash flow movements as a qualifying item. The recognition of
hedging instruments in the Group balance sheet is not affected by this change.



IFRIC 15 Agreements for the Construction of Real Estate IFRIC

The IFRIC 15 interpretation was published in July 2008 and must be adopted for the first
time for reporting periods starting on or after 1 January 2009. This interpretation provides
guidelines on the time and scope of earnings recognition from real estate construction
projects.



IFRIC 16 Hedges of a Net Investment in a Foreign Operation

The IFRIC 16 interpretation was published in July 2008 and must be adopted for the first
time for reporting periods starting on or after 1 October 2008. IFRIC 16 provides guide-
lines for identifying currency risks that can be hedged by hedging a net investment, deter-
mining which Group entity is able to hold the net investment hedging instrument, and
calculating currency gains and losses that must be taken out of shareholders’ equity and
recognised in the income statement instead once the hedged foreign operation is sold.
The interpretation must be applied retrospectively. IFRIC 16 does not have any effect on
the consolidated financial statement as the Group does not hold any such investments.



IFRIC 17 Distributions of Non-cash Assets to Owners

The IFRIC 17 interpretation was published in November 2008 and must be adopted for
the first time for reporting periods starting on or after 1 July 2009. This interpretation pro-
vides guidelines for recognising obligations, which are intended to be distributed as non-
cash assets to owners, in the financial statements. It particularly refers to time, measure-
ment and recognition of these obligations. Accordingly, such an obligation must be recog-
nised at fair value once the entity cannot avoid this obligation any longer. The recognition
of the obligation and potential changes to the fair value of the affected asset must be rec-
ognised in shareholders’ equity. The difference between the fair value and carrying
amount of the asset only starts affecting income once the asset has been transferred to
the equity holders. The interpretation must be applied retrospectively. IFRIC 17 does not
have any effect on the consolidated financial statement as the Group does not expect any
intragroup distribution of non-cash dividends.



IFRIC 18 Transfers of Assets from Customers IFRIC

The IFRIC 18 interpretation was published in January 2009 and must be adopted for the
first time for reporting periods starting on or after 1 July 2009. This interpretation provides
guidelines for recognising agreements in which an entity receives an item of property,
plant and equipment from a customer that the entity must then use either to connect the
customer to a network or to provide the customer with ongoing access to a supply of
goods or services. This interpretation particularly refers to recognition criteria of customer
contributions and the time and scope of earnings recognition from such transactions. The
interpretation must be applied retrospectively. IFRIC 18 does not have any effect on the
consolidated financial statement as the Group does not conduct such transactions.



3.     Key accounting and valuation methods

3.1    General information

The consolidated financial statement of AGO AG for the financial year to
31 December 2008 was prepared in accordance with International Financial Reporting
Standards (IFRS) of the International Accounting Standards Board (IASB), as applied in
the European Union on the balance sheet date.

Individual items in the income statement and balance sheet are summarised in order to
improve the clarity of presentation. These items are elucidated in the notes section. The
income statement is prepared using the cost of sales method.

The cost method is generally applied when preparing the consolidated financial
statement.
                                                                                                | 103


3.2    Consolidation

Consolidation principles
The consolidated financial statement comprises the financial statements of AGO AG and
its subsidiaries and associated companies dated 31 December of each financial year.
The financial statements of included companies use uniform accounting and valuation
methods which are prepared on the same reporting date set as the consolidated financial
statement of the parent company.

For the purchase method, the capital consolidation of the fully consolidated companies
takes place on the acquisition date. The acquisition date represents the date on which the
possibility to control the net assets and the financial and operational activities of the
acquired company is transferred to the Group. With the purchase method, the acquisition
values of the acquired shares are offset against the pro-rata current value of the acquired
assets and liabilities of the subsidiary on the acquisition date. The difference which arises
from the offset is calculated as derivative goodwill. Negative difference which arises from
the capital consolidation at the acquisition date are immediately liquidated as affecting net
income.

All intercompany balances, transactions, income, expenses and profits and losses from
intercompany transactions which are contained in the book value of the assets are fully
eliminated.

Associated companies are included in the consolidated financial statement using the
equity method.



Basis of consolidation
The following table provides a summary concerning the composition of the basis of
consolidation for AGO Group:




                                                                         2008          2007
Number of domestic fully consolidated companies                              6             3
Number of foreign fully consolidated companies                               3             0
Number of domestic companies balanced at equity                              1             0
Described in detail, the following companies have been taken into account in the consoli-
dated financial statement dated 31 December 2008:

                                                                                  Capital
                                                                             shareholding
                                                                                     in %
According to the principles of full consolidation
Domestic
AGO AG Energie + Anlagen, Kulmbach
HolSoTherm GmbH, Kölleda                                                            74.48
Biomasseheizkraftwerk Alperstedt GmbH, Kölleda                                     100.00
AGO Betriebsgesellschaft mbH, Kulmbach (new)                                       100.00
AGO Bioenergie I GmbH, Kulmbach (new)                                              100.00
AGO Bioenergie II GmbH, Kulmbach (new)                                             100.00


Foreign
AGO ENERGIA S.r.l, Turin, Italien (new)                                             55.00
Reindeer S.r.l., Cassano Magnano, Italien (new)                                     90.00
AGO Energy (PTY) Ltd., Kapstadt, Südafrika (new)                                   100.00


At equity method
BEW Bioenergie + Wärme GmbH, Floh-Seligenthal
(not included in the previous year)                                                 50.00


Conversion of foreign currency accounts
The consolidated financial statement is drawn up in euros. Unless otherwise indicated, all
values indicate thousands of euros (€ thousands).

Converting the annual financial statements of the foreign companies included in the
Group is carried out according to the functional currency concept outlined in IAS 21
(effects of changes in foreign exchange rates). The functional currency of the included
companies is the national currency as this is the currency used by the company in a
financial, economic and organisational sense in its daily business.

The assets and liabilities of the Group companies are converted from the national
currency into euros using the average exchange rate on the reporting date. The
expenses and earnings of the foreign companies are converted using the average
exchange rate for the reporting period, in a similar way to the corresponding annual
results. Translation differences are recorded as not effecting net income.

The capital of the foreign companies is converted using the historical exchange rate.
Accumulated translation differences are recorded separately in shareholders’ equity. As
of 31 December 2008, these amounted to €0 thousand (previous year: €0 thousand).

An average exchange rate of ZAR 12.0590/€ was used for the reporting period and
ZAR 13.0687/€ for the reporting date.
                                                                                              | 105


3.3    Explanation of the accounting and valuation methods

In accordance with IAS 1 (Presentation of Financial Statements) a distinction is made
in the balance sheet between non-current and current assets and non-current and current
liabilities. Assets are assessed as current if realisation is expected within a year.
Liabilities are assessed as current if they are due within a year.



Intangible assets
Intangible assets gained in return for payment are assessed at cost, less the accumu-
lated depreciation. The balanced intangible assets have an identifiable useful life over
which they are depreciated. Depreciation is carried out on a linear basis over a period of
3 to 10.5 years. Depreciations are accounted for as non-planned depreciation. Where the
reasons for the non-planned depreciations are discontinued, write-ups are undertaken,
which are not allowed to exceed the continued net book values.

The agreement to supply goods acquired in 2007 within the framework of combining busi-
ness with HolSoTherm GmbH, Kölleda, is linearly depreciated over the remaining term of
the contract (10.5 years).



Property, plant and equipment
Assets of property, plant and equipment are devalued at the acquisition or manufacturing
cost using scheduled physical depreciation. In indicating depreciation, unscheduled de-
preciation is carried out. The determination of the unscheduled depreciation value takes
place in accordance with IAS 36, based on a comparison of the achievable amount with
the net book value of the asset. Depreciation is recognised as affecting net income,
where the achievable amount of assets lies below the net book value. The achievable
amount is the higher amount from the net selling price and useful value of the asset. The
net selling price is the amount which is achievable from a sale of an asset at market rates
minus the recoverable selling costs. The useful value is the present net value of the esti-
mated future cash flows which can be expected from the continued use of an asset and
its sale at the end of its useful life.

If none of our own financial future cash flows can be assigned to these assets, the
depreciations are audited on the basis of the useful value (financial cash flows) of the
cash-generating unit to which the asset is assigned. In order to identify the cash flows
from the cash-generating units, basic assumptions have to be made. These include
assumptions regarding the Company's plans, discounting and other parameters
(including growth rate).

If the reasons for an unscheduled depreciation cease to apply, corresponding write-ups
are undertaken.

The manufacturing costs of the self-provided facilities include the production related full
costs. In addition to the material costs and manufacturing wages these include all the
incurred costs, which are directly connected with the product or the production process.
Often, these are pro-rata material costs and manufacturing overheads plus the cost of
special equipment.

Financing costs are recorded as expenditure.
Servicing and maintenance work is recorded as periodical expenditure in the income
statement. General overhaul costs and investments for replacement or expansion which
is necessary for the continued operation of the facility are regularly capitalised as
substitute components.

The scheduled depreciation takes place linearly over the respective useful life.



The following Group-wide useful lives are applied to key components of the property,
plant and equipment :


Property, plant and equipment                                                      Useful life
                                                                                     in years
Buildings                                                                                  40
Technical systems                                                                     10 - 25
Operational and business equipment                                                     5 - 15


Upon the sale of property, plant and equipment, the profit or loss from the difference be-
tween sales proceeds and the net book value is shown under other operating income
and/or expenses.

Leasing
The determination as to whether an arrangement contains a leasing relationship or not is
based on the economic contents of the agreement at the time the agreement is con-
cluded as well as an assessment as to whether the fulfilment of the contractual agree-
ment is dependent on the use of a particular asset or certain assets and whether the
agreement grants a right to use the asset. A re-assessment as to whether an arrange-
ment contains a leasing relationship or not is only undertaken after the start of the leasing
relationship if one of the following conditions are met:

a)     A change takes place in the contract terms, in as far as the change does not only
       relate to a renewal or extension of the agreement.
b)     A renewal option is exercised or an extension is granted, unless the renewal or
       extension provisions were originally taken into account in the lease term.
c)     A change takes place in determining whether the fulfilment depends on a specific
       asset, or
d)     a significant change takes place to the asset value.

If a new estimation is carried out, the accounting/balancing of the leasing term has to
start and/or the accounting/balancing of the leasing term has to finish:

•      in the case of a), c) or d) where a new assessment has been caused from the date
       on which the change of circumstances occurs,

•      in the case of b) from the start of the renewal or extension period.
                                                                                                   | 107


Companies of the Group as a lessee
Finance leasing relationships (in which substantially, in relation to the transferred asset,
all the opportunities and risks connected with ownership are transferred to a company)
lead to the capitalisation of the leasing object at the point in time that the leasing relation-
ship is concluded at the attributed current value of the leasing goods or with the cash
value of the minimum lease payments, where this value is lower. Lease payments are
split up into financial expenses and the amortisation share of residual debt so that over
the period, a constant interest rate develops on leasing the remaining debt. Financial
expenses are immediately recorded as affecting net income.

If at the end of the leasing term, the transfer of ownership to a group is not sufficiently
secure, the capitalised leasing objects are fully depreciated over the shorter of the two
periods based on expected useful life and duration of the leasing term.

Leasing payments for operating lease relationships are recorded on a linear basis over
the duration of the leasing relationship as an expense in the income statement.

AGO Group companies are lessees of property, plant and equipment, mainly motor
vehicles and operational and business equipment/fixtures.


Financial instruments
A financial instrument is a contract which simultaneously leads to the emergence of a
financial asset for one company and to the emergence of a financial liability or an equity
instrument for another company. Financial assets include in particular:

•      Cash and cash equivalents

•      Trade receivables

•      Other loans and receivables

•      Financial investments held up to the final maturity

•      Original and derivative financial assets held for trading

•      Financial assets for sale

•      Other net income affecting valued financial assets at fair value.


The categorisation depends on the nature and purpose of the financial assets and takes
place through accretions.

Financial liabilities regularly constitute a restitution claim in terms of cash funds or other
financial assets. These include in particular :

•      Bonds and other liabilities evidenced by certificates

•      Trade payables

•      Liabilities to banks

•      Liabilities from financial leasing contracts

•      Derivative financial liabilities
Financial instruments are generally used when AGO Group is a party to the regulations of
the financial instrument. In the case of usual market purchases or sales (purchases or
sales under a contract, whose conditions provide for the supply of the asset over a period
of time, which is usually fixed by rules or conventions of the respective market) the fulfil-
ment date is relevant (i.e. the date when the asset is delivered to or by AGO Group) for
the first balance sheet entry and debit entry. Financial assets and liabilities are usually
accounted for as unbalanced, they are only then balanced if relating to current amounts,
there is a right to offset and the intention exists to bring about the compensation on a net
basis. As far as contracts to buy or sell non-financial items such as goods or electricity
falling within the scope of IAS 39 are concerned, they are balanced in accordance with
the provisions of these accounting standards. The initial inclusion of financial assets is
carried out by using the acquisition costs, which correspond to the attributed cash value
(at that point in time). Depending on the category, these are measured in subsequent
periods at their fair value or cost. In the financial assets the acquisition costs include
those costs which are valued in the sequence of attributed values as not affecting net
income, including directly attributable transaction costs.



Financial assets
Cash and cash equivalents, which include current cash accounts and short term deposits
with banks, have in terms of accretions, a remaining maturity of up to three months and
are valued at amortised cost.

Trade receivables and other short-term receivables are, where necessary, valued using
the effective interest method, using the book value at the time of the accretion, less de-
preciation. Depreciations, which take the form of individual value adjustments, sufficiently
take into account the expected default risks; concrete failures lead to the write-off of the
affected receivable.

Other long-term loans and receivables are valued applying the effective interest method
using the amortised cost less depreciations.

Financial assets with fixed or determinable payments and fixed maturities, which the
Company intends to hold on to until maturity and can keep (except outstanding Company
loans and receivables in accordance with IAS 39) are classified as investments held up to
maturity. This applies to certain securities of fixed assets. Investments held up to maturity
are valued in the series along with the amortised cost, where necessary, using the effec-
tive interest method less depreciations. The interest earnings are recorded using the ef-
fective interest method.

Financial assets are valued as affecting net income at the attributed cash value when the
financial asset is either held for trading or designated as affecting net income at the attrib-
uted cash value.

The financial assets held for trading primarily include derivative financial instruments
which are not part of an effective hedging relationship in accordance with IAS 39 and as
such, on a mandatory basis, have to be classified as “held for trading”. A gain or loss
resulting from the subsequent valuation is to be recorded as affecting net income in the
income statement. The recorded net profit or loss includes any dividends and interest of
the financial asset.
                                                                                                   | 109


A financial asset is held for trading, when

•      it was mainly purchased with the intention of being sold in the future, short-term, or

•      it is part of an identified portfolio jointly controlled with the Group’s financial
       instruments, for which in the recent past, there are references to short-term profit
       taking; or

•      it is a derivative which was not designated as a hedging instrument.


Relating to financial assets to be evaluated, the Group has so far made no use of the
option of designating financial net assets at their initial inclusion as affecting net income
at fair value.

Other financial assets are considered as being available for sale.

Financial assets which are available for sale are subsequently valued at fair value.
Fluctuations in the fair value result in gains and losses which are directly recorded as
shareholders’ equity. These exclude depreciation losses, interest which is worked out
according to the effective interest method, gains and losses from foreign currency conver-
sion of monetary items. Here, accounts affecting net income are recorded in the income
statement. If a financial asset is sold or a depreciation is determined, the profits and
losses that have been directly accumulated as shareholders’ equity previously are
recorded in the periodical earnings. Dividends from equity instruments associated with
this category are reflected as affecting net income, as soon as the Group has made
a claim for the payment.

The shareholdings are considered “available for sale”, and in accordance with IAS 39
assessed at fair value. As no reliable current value can be determined for these
shareholdings, they are recognised at amortised cost .

On each balance sheet date, the book values of the financial assets that are not
recognised at fair value should be evaluated, examined whether there is a substantial
objective indication of impairment in respect of financial assets. These indications include
for example, significant financial difficulties of the debtor, a high probability that
insolvency proceedings will be initiated against the debtor, the absence of a capital
market for financial assets, significant changes in the technological, economic and legal
environment, changes in the market environment of the issuer and an ongoing decline in
the fair value of the financial asset under amortised costs. Any depreciation loss, which is
founded by a comparison to the book value of the financial asset with the current value of
the expected future cash flows as calculated on the basis of the original effective interest
rate, is immediately recorded as affecting net income. If depreciations of the fair values of
financial assets available for sale were previously reported as not affecting net income in
shareholders’ equity, these are to be eliminated from shareholders’ equity up to the
amount of the established depreciation and transferred over to the income statement as
affecting net income. If, at later points in time after the date of registering the depreciation
there is an evaluation and it is apparent that as a result of events, the fair value has risen
objectively, the depreciations are withdrawn at a corresponding level, affecting net in-
come. Depreciations which are classified as available for sale and with the recognised
acquisition costs, relate to unlisted equity instruments, may not be reversed.
A depreciation leads to a direct reduction in the book value of all relevant financial assets
with the exception of trade receivables, whose book value is lessened by a depreciation
account. If a trade receivable is uncollectable, depreciation takes place against the depre-
ciation account. Changes in the book value of the depreciation account are recorded as
affecting net income via the income statement.

A financial asset (and/or a part of a financial asset or part of a group of similar financial
assets) is written off when one of the following three conditions are met:

•      The contractual rights to receive the cash flows from a financial asset are ceased.

•      The Group retains the rights to receive the cash flow of financial assets, however
       undertakes a contractual obligation for immediate payment of the cash flow to
       a third party under an association agreement which fulfils the conditions of
       IAS 39.19 (“Pass through Arrangement”).
•      The Group has transferred its contractual rights to receive the cash flows from a
       financial asset and either (i) substantially transferred all the opportunities and risks
       associated with ownership of the financial asset, or (ii) substantially neither trans-
       ferred nor retained all the opportunities and risks associated with ownership of the
       financial asset, but has transferred the authority to dispose of the assets.


If the Group substantially neither transfers nor retains all the opportunities and risks in
relationship to the ownership of a transferable asset and at the same time, retains the
authority to dispose of the transferred asset, the Group further gathers the transferred
asset within the scope of its continuing involvement. If continuing involvement guarantees
the form the transferred asset takes, the extent of the continuing involvement
corresponds to the lower amount from the original book value of the asset and the
highest amount, the received return service which the Group may have to repay.

If the continuing involvement is in the form of a written and / or a vested option (including
an option, by cash settlement or in a similar manner) on the transferred asset, the extent
of the continuing involvement of the Group corresponds to the amount of the transferred
assets which the Group can buy back. In the case of a written sales option (including an
option, by cash settlement or in a similar manner) on an asset, which is measured at fair
value, the extent of the continuing involvement of the Group is however restricted to
the lower amount from the fair value of the transferred assets and the exercise price of
the option.
                                                                                                          | 111


Financial liabilities
In their initial inclusion, financial liabilities are measured at fair value. The transaction
costs which are directly attributable to the acquisition are similarly applied for all financial
liabilities, which are not valued in the series as affecting net income at fair value.

Trade payables as well as other primary financial liabilities are basically valued using the
effective interest method with the amortised cost.

Financial liabilities are measured at fair value, if the financial liability is either held for trad-
ing or is designated as affecting net income at fair value.

Relating to financial liabilities being evaluated, the Group has so far made no use of the
option to designate financial liabilities at their initial inclusion as affecting net income at
fair value.

A financial liability is held for trading, if

•       it was mainly purchased with the intention of being sold in the future, short-term, or

•       it is part of an identified portfolio jointly controlled with the Group’s financial
        instruments, for which in the recent past, there are references to short-term profit
        taking; or

•       it is a derivative which is not designated as a hedging instrument.


A financial liability is written off, if the liability underlying the liability is fulfilled, cancelled
or expires.

If an existing financial liability is exchanged with any other financial liability of the same
lender with substantially different contract terms or if the conditions of an existing liability
change substantially, such an exchange or such a change is treated as a write-off of the
original liability and requires the assessment of a new liability. The difference between the
book value is recorded as affecting net income.



Derivative financial instruments
The Group uses derivative financial instruments for the management of operational activi-
ties, financial transactions and investment resulting interest rate risks. For speculative
purposes, derivative financial instruments are neither held nor issued.

With derivative financial instruments, the fair value corresponds to the amount that the
Group would have either received or would have to pay at the end of the financial
instrument at the reporting date. In the absence of market values, the values are calcu-
lated by recognised financial mathematical models, taking into account the relevant inter-
est rates and credit ratings of the contractors on the balance sheet date. The resulting
profit or loss from the valuation is immediately recorded as affecting net income. Security
business accounting (Hedge Accounting) has no relevance to the Group for the purposes
of IAS 39.
Emissions rights
Emissions rights acquired free of charge were measured at fair value.



Inventories
Inventories are applied to the acquisition and manufacturing costs or the lower net resid-
ual value at the reporting date. The net residual value is the estimated attainable sales
proceeds in normal transactions less the reductions in earnings and direct cost of sales
and other incidental and directly allocable production costs. Value adjustments are made
for ageing inventories and surpluses.

The manufacturing costs of unfinished and finished products include the full costs related
to production. They are determined essentially from the individual calculations which de-
pend on current cost accounting. Besides the directly allocable individual material costs,
direct labour costs and special direct costs of manufacturing, all directly allocable over-
head production and material costs are accounted for. Costs associated with the general
administrative and finance costs are not capitalised.



Cash and cash equivalents
Cash and demand deposits are included under cash. Cash equivalents are current liquid
financial instruments which can be converted at any time into specific cash amounts (i.e.
checks). The cash equivalents enable short-term payment obligations to be met while
liquid assets include only financial investments with a maturity of no more than three
months. Financial investments with a maturity of more than three months are reported
under current or non-current respectively, other financial assets.

The capital funds in the consolidated cash flow statement are limited to the above defini-
tions.



Provisions for pensions and similar obligations
Provisions for pensions and similar obligations are calculated in accordance with IAS 19
according to the projected unit credit method with regards to future compensation and
retirement revaluations. The valuation of the pension benefits is based on pension
evaluation reports. The so-called corridor method is applied whereby actuarial gains and
losses which exceed the corridor by 10 percent of the higher amount from the cash value
of the pension benefit and the plan assets are amortised over the average remaining term
of service of the participating employee. The interest share included in the pension ex-
penses is reported as a component of interest expenses.



Other provisions
Other provisions are reported in accordance with IAS 37. As such, an inclusion occurs
when a present obligation results from past events and is therefore probable, that for ful-
filment of the obligation an outflow of resources with economic uses is required as well as
a reliable estimate of the amount of the obligation is possible.

Warranty provisions are measured with the best possible estimated value. Only the costs
of the individual warranty claims are regularly dealt with. This presupposes an individual
concrete warranty claim. In addition, provisions are established based on empirical val-
                                                                                                  | 113


ues from previous years.

Provisions for anticipated losses from pending transactions are made to the extent that
due to prior events the unavoidable costs for fulfilment of a contract exceed the economic
use from the contract.



Income tax
Effective taxes
The effective tax refunds and tax liabilities for the current and prior periods are measured
using the amount with which a claim from the tax authority or a payment, respectively, to
the tax authority is expected. The calculation of the amount is based on the tax rates and
tax laws in effect at the reporting date.

Deferred taxes
For temporary differences with regards to the valuation of assets and liabilities between
the tax balance sheet and the commercial balance sheet, deferred tax assets and liabili-
ties are recognised in accordance with IAS 12. They are not recognised according to
IFRS if the temporary difference from goodwill or that from a first-time valuation of other
assets and liabilities in a transaction which is not a merger results and affects neither the
taxable nor the booked result. Likewise, deferred tax assets are applied for tax credits
and losses carried forward.

Deferred taxes are recognised on the basis of the balance sheet liability method in accor-
dance with IAS 12 (income taxes).

Deferred taxes are measured at the tax rate in effect, or which will be in effect, to the ex-
tent it is enacted, at the reporting date.

Deferred tax assets are applied to the extent to which it is probable that future taxable
income can be calculated against tax credits and losses carried forward.

Deferred tax assets and liabilities are balanced when an enforceable right results from
offsetting effective tax refunds against effective tax liabilities, and the deferred taxes re-
late to the same tax subject and the same tax authority. Deferred taxes are recognised as
tax income or expense in the income statement unless they do not directly affect net in-
come in the shareholders’ equity recognised entries.



Contingent liabilities
Contingent liabilities are reported in the attachment. These are regularly provided when a
current obligation exists which does not fulfil the valuation criteria for provisions (i.e. the
probability of a future outflow of resources with economic use is not provided) and when
the occurrence of the obligation is determined by non-secure future events. If the outflow
of resources with economic use is not probable, then no contingent liability is reported.



Earnings and expense realisations
Sales in the framework of business operations during the financial year are found under
sales. Sales returns or reduction in earnings and guaranteed remunerations are
subtracted from the sales.
Sales represent the gross accrual of economic utility resulting from the usual business
activities during the reporting period.

The realisation of sales from the sale of goods occurs in accordance with IAS 18. Sales
from the sale of products and goods are therefore realised when the service due or
delivery is rendered and the risk and available right of transfer has taken place.

If a contract on the sale of goods contains a finance agreement, then the interest share is
recognised as interest earnings.

Interest is accrued as expense or earnings.

Interest earnings are recognised when there is sufficient probability that the economic
utility from the financing transaction will accrue and the amount is reliably allocable. The
realisation occurs pro rata temporis based on the effective interest method.

Operating expenses affect net income when there are service claims or when caused.



Production orders
Long-term customer-specific production orders are recorded on the balance sheet in line
with the percentage-of-completion method (PoC method) according to the project’s pro-
gress. If the profit or loss of a work order is reliably estimated, then the contract earnings
or costs are recognised in conjunction with this work order corresponding to the service
progress on the reporting date respectively as part of the incurred work order costs for
the work rendered in relation to the expected contract costs, unless this was to not reflect
the service progress. Changes in the contractual work, the claims and service rates are
covered to the degree in which they were agreed upon with the customer.

If the profit or loss of a work order cannot reliably be determined, then the contract earn-
ings are recognised only in the amount of the incurred contract costs which can poten-
tially be rendered. Contract costs are recognised in the period in which they occur as an
expense.

If it is probable that the entire contract costs will exceed the entire contract earnings, then
the expected loss is immediately expensed.

The disclosure of the production orders is made under receivables or liabilities. As far as
the accumulated services (accrued order costs and declared profits) exceed the initial
payments received in particular cases, the disclosure of the work orders is made under
receivables from commissioned production. In case there is a remaining negative balance
after deducting the client’s initial payments, the disclosure will be made on the liabilities
side under liabilities from commissioned production.



Research and development costs
Research costs are costs for independent searches according to plan for new findings for
which the intended use is the development of new products and processes, or for the
improvement of existing ones. Upon development, they are immediately accounted for as
allowed expenses in accordance with IAS 38.
                                                                                               | 115


Development costs are costs for the transfer of research results or other findings on a
plan or proposal for the generation of new products or processes or for the essential im-
provements of existing ones.

In the reporting year, research and development costs amounting to €174 thousand
(previous year: €68 thousand) were recognised as expense-related..



Foreign currency transactions
Foreign currency transactions are calculated in the cash price at the time of transaction in
the local currency of the subsidiary. At the reporting date, all monetary foreign currency
positions are calculated at the period-end exchange rate in the functional currency.

Non-monetary entries are made with the exchange rate at the time of transaction. Differ-
ences resulting from the conversion affecting net income are recognised in the reporting
period. Valuation differences which are to be reported in shareholders’ equity not affect-
ing net income are fundamentally exempt. The latter has no relevance in the reporting
year for AGO Group.

Exchange rate profits or losses which develop from changes in the exchange rate with
foreign currency transactions are reported under other operational earnings or expenses.



Application of estimates and assumptions
The consolidated financial statement contains assumptions and estimates which affect
the amount and reporting of the balanced assets and liabilities, the earnings and ex-
penses, as well as contingent liabilities. The actual resulting amounts may be different
from the amounts resulting from the estimates and assumptions.

In particular, assumptions and estimates with regards to the corporate uniform expected
useful life of assets for fixed assets, the accumulated depreciation on receivables and
inventories, the parameter for the valuation of pension provisions and other accruals as
well as the liquidability of deferred tax assets are affected. In accordance with IAS 8,
changes are accounted for affecting net income at the time when better information is
provided.

An agreement could not be reached on the contractual heating price adjustment of Bio-
masseheizkraftwerk Alperstedt GmbH, Alperstedt. Receivables now no longer require a
court decision. The legal opinion of our lawyer confirms however that we have good
chances for a positive outcome. Receivables from heat customers were evaluated based
on a potential agreement or court decision.



4.     Mergers

Changes to the basis of consolidation in 2008 were exclusively the result of start-ups. No
mergers took place in 2008.
Mergers in 2007
Acquisition of HolSoTherm GmbH and Biomasseheizkraftwerk Alperstedt GmbH

Until 31 March, 2007, AGO AG held a 48.96 percent share in HolSoTherm GmbH. On 1
April, 2007, AGO AG acquired another 25.52 percent of the capital of HolSoTherm GmbH
and henceforth holds 74.48 percent of the shares. HolSoTherm GmbH develops tech-
nologies, processes and products, project control, undertakes consulting services, plan-
ning and realisation including the operation of selected plants in the field of regenerative
energy utilisation, recycling as well as renewable raw materials. In particular, HolSo-
Therm GmbH operates the Kölleda biomass cogeneration plant.

Until 31 March, 2007, AGO AG had a further 50 percent share of BMHKW Alperstedt
GmbH. Upon acquiring HolSoTherm GmbH, AGO AG gained another 37.24 percent of
the shares in BMHKW Alperstedt GmbH on 1 April, 2007. The merger took place exclu-
sively due to an increase in the amount of the share in HolSoTherm GmbH. As with the
50 percent share of BMHKW Alperstedt GmbH, an indirect share of 87.24 percent re-
sulted after the acquisition of HolSoTherm GmbH. BMHKW Alperstedt GmbH operates a
biomass cogeneration plant in Alperstedt which produces power and heat commercialisa-
tion.

The fair values of the identifiable assets and liabilities of HolSoTherm GmbH to be rec-
onciled at the time of acquisition and the corresponding book values directly before the
time of acquisition are presented as follows:
                                                                                                  | 117


                                                         Fair value to be          Book value
                                                               reconciled
                                                                at time of
                                                               acquisition
                                                             € thousands          € thousands
Property, plant and equipment and intangible
assets                                                              2,095                1,947
Other non-current assets                                              148                  148
Inventories                                                            68                   68
Receivables and other current assets                                  182                  182
Cash and cash equivalents                                             146                  146
                                                                    2,639                2,491


Deferred tax liabilities                                              -95                  -41
Interest-bearing financial liabilities                             -1,528               -1,528
Remaining liabilities                                                -241                 -241
                                                                   -1,864               -1,810
Net assets                                                            775                  681

The fair values of the acquired assets and liabilities of BMHKW Alperstedt GmbH to be
reconciled at the time of acquisition and the corresponding book values directly before
the time of acquisition are presented as follows:

                                                         Fair value to be          Book value
                                                               reconciled
                                                                at time of
                                                               acquisition
                                                             € thousands          € thousands
Property, plant and equipment                                       9,527                9,527
Deferred tax assets                                                    81                   81
Inventories                                                           123                  123
Receivables and other current assets                                  683                  683
Cash and cash equivalents                                             425                  425
                                                                   10,839              10,839


Interest-bearing financial liabilities                             -7,458               -7,458
Provisions and other liabilities                                   -3,634               -3,634
                                                                  -11,092              -11,092
Net assets                                                           -253                 -253

The at equity value recognised before the merger of both associated companies was
€379 thousand. Together with the purchase price settled in cash (€48 thousand), the total
acquisition costs amount to €427 thousand.

From the initial consolidation, surplus funds from the sum of the fair values of the applied
identifiable assets, liabilities and contingent liabilities to be reconciled were realised over
the acquisition costs of the merger in the amount of €55 thousand, which after reassess-
ment is reported in the income statement under the entry “other operating earnings”. In
the management’s view, these surplus funds result as representative of a favourable
purchase.

Since the time of acquisition, HolSoTherm GmbH accounted for a profit of €48 thousand
in 2007, in the operating profit of the Company. Had the merger taken place at the begin-
ning of the year, the Company net loss for 2007 would have been €843 thousand and the
sales would have amounted to €42,205 thousand.

Since the time of acquisition, BMHKW Alperstedt GmbH accounted for a loss of
€173 thousand in the operating profit of the Company in 2007. Had the merger taken
place at the beginning of the year, the Company net loss for 2007 would have been
€952 thousand and the sales would have amounted to €42,056 thousand.



5.     Segment reporting

The goal of segment reporting is to provide information about the essential business divi-
sions of the Company. At the same time, it allows for an ongoing insight into the risk-
opportunity structure of a diversified Company. The segmenting of the Company divisions
and regions in AGO Group occurs corresponding to internal reporting. The structure and
content of the internal reporting show the risk-opportunity structure of the respective busi-
ness divisions. The segment data was ascertained in compliance with the inclusion and
valuation methods in the consolidated financial statement.

The segment reporting encompasses the business field divisions of service, consulting
and small projects, project development and realisation as well as plant operation.

In the business division of “service, consulting and small projects”, AGO AG offers
repair and maintenance of energy generation plants. Customer service currently includes
approximately 30 employees active nationwide who not only handle the maintenance of
the plants constructed and operated by the corporation but also in a considerable scope
the maintenance of plants constructed by third parties. Specially trained employees are
active in the customer service of the Company in the areas of cooling technology, com-
bustion engineering, measurement, control and regulation technologies (MSR technol-
ogy) as well as ventilation and climate technology. AGO AG also handles the reorganisa-
tion and expansion of plants with its own assembly personnel. Customer service employ-
ees are trained in the area of compartment air engineering according to hygienic
regulation VDI 6022 and scheduled to ensure availability 24 hours a day, 365 days
a year.

Besides the repair and maintenance of power generation plants, AGO AG offers other
services. The Company comprehensively advises customers on energy issues (i.e., en-
ergy efficiency consulting) and generates energy studies among other things for the ar-
eas of heat and cooling technology, and trigeneration. The technologies used by the cus-
tomer for power production are analysed and after feasibility studies are conducted, alter-
native concepts for the current power production are determined. In addition, before any
construction begins on a plant, the Company advises on financial issues and investigates
the possible requirement of an approval process. By the same token, smaller projects
were also executed by this business division.
                                                                                             | 119


The corporation also organises the purchase or sale of emission certificates as needed
for customers who due to their emission output are subject to the regulations of the Ger-
man Greenhouse Gas Emissions Trading Act (TEHG). Therefore, an employee of AGO is
an authorised dealer for Energy Exchange Austria (EXAA). Furthermore, handling emis-
sion certificate trading is also possible off-market on Bavarian Hypo- und Vereinsbank AG
and Dresdner Bank AG. Beyond this, consulting services are offered in conjunction with
emissions trading.

In the business division of “project development and implementation”, AGO offers
primarily industrial enterprises and communal companies throughout Europe, the realisa-
tion of decentral plants for the generation of power. As a solution and implementation-
oriented project developer, the Company guides its customers from the conception to the
implementation of power generation. The development of power generation plants takes
place implementation oriented according to the individual needs of the customer. AGO
obtains its components from various manufacturers and sees itself in the position to de-
velop and construct suitable power generation plants for its customers corresponding to
the respective demands independent of manufacturer. .

AGO also increasingly offers its services through contracting. This means that AGO fully
takes over supplying a company with heat, vapour, cooling, power or compressed air.
The central element of contracting involves all essential parts of the energy supply and
the associated services from the field of activities of the Company are transferred to
AGO. In the area of energy and plant contracting offered by the Company, customers do
not independently produce the energy they require, but rather obtain it from AGO. AGO is
therefore able to offer its customers complex, innovative, and economical solutions for
power generation. In the framework of contracting, AGO develops, plans, builds, finances
and operates a power generation plant of its own enterprising accountability and sells
energy to the Company that requires energy. The sales realised through contracting from
the continuous operation of a power generation plant are reported in the business division
of “plant operation”.

AGO operates power generation plants in the business division of plant operation for
industry customers based on conventional and regenerative energies.

Besides undertaking the required repair and maintenance work, the operation of a plant
primarily includes the management of raw materials and fuels whereby issues extend
from raw material production to logistics to warehousing and the quality assurance of
biogenic fuels. The Company can rely on the supply network developed over many years,
in particular from the share of HolSoTherm GmbH.

In the area of holding/consolidation, consolidation effects are presented as well as
other activities not assignable to the separately presented segments.
                              2008 in € thousands
                                Service,     Project        Plant   Holding/   Activities   Activities    Total
                              consulting    develop-    operation   consoli-       to be        to be
                                      &    ment and                   dation   continued         dis-
                                  small       imple-                                        continued
                                projects   mentation
External sales                    8,399      23,939        4,359          0      36,697          224     36,921
Intercompany sales                  384             0          0       -384            0            0        0
Total sales                       8,783      23,939        4,359       -384      36,697          224     36,921
Segment profit or loss              722         588          334        -71       1,573            44     1,617
Profit or loss of at equity
stated companies                      0             0          -1         0           -1            0        -1
Segment assets                    2,510      12,238       12,090      2,770      29,608            41    29,649
Segment liabilities               2,990       5,438          634      3,012      12,074            50    12,124
Investments in
intangible and property,
plant and equipment                  61       1,206          159         27       1,453             0     1,453
Write-offs                           53          77          594         96         820             0      820
Substantial non-cash
item expenses                         0             0          0          0            0            0        0
Book value of at equity
stated companies                      0             0          5          0            5            0        5
                                                                                                             | 121


2007 in € thousands
                                Service,     Project       Plant     Holding/     Activities   Activities    Total
                              consulting    develop-   operation     consoli-         to be        to be
                                      &    ment and                    dation     continued         dis-
                                  small       imple-                                           continued
                                projects   mentation
External sales                    5,878      33,031       2,435              0      41,344        2,018     43,362
Intercompany sales                  137           0           0            -137            0           0        0
Total sales                       6,015      33,031       2,435            -137     41,344        2,018     43,362
Segment profit or loss              428        -246         438            -880       -260         -270       -530
Profit or loss of at equity
stated companies                      0           0           6              0             6           0        6
Segment assets                      944      10,847      11,947        3,370        27,108        1,764     28,872
Segment liabilities                 440       6,477         360        3,561        10,838          304     11,142
Investments in
intangible and property,
plant and equipment                  55          61          82             81         279             1      280
Write-offs                           42          36         514            131         723             7      730
Substantial non-cash
item expenses                         0           0           0            920         920             0      920
Book value of at equity
stated companies                      0           0           0              0             0           0        0




Intercompany sales provide the amount of sales between the segments. Sales between
the segments were executed at market price.

From segment assets, €389 thousand (previous year: €0 thousand) is located outside of
Germany within Europe. From the sales generated in 2008, €348 thousand (previous
year: €9,236 thousand) was generated abroad within Europe, €2,279 thousand (previous
year: €0 thousand) in third party countries and €34,070 thousand (previous year: €32,108
thousand) domestically.



Transition from the overall result of the segment to annual result


                                                                   2008              2007
                                                           € thousands        € thousands
Overall result of the segment                                      1,617             -530
Interest result                                                    -529              -332
Income tax                                                         -471                 4
                                                                    617              -858
Transition of the segment assets and segment liabilities

                                                                 2008          2007
                                                           € thousands   € thousands
Total assets of the segment                                    29,649        28,872
Cash and cash equivalents                                       7,679         5,556
Income tax receivables                                            377           232
Other non-current assets                                          165           292
Deferred tax assets                                               168           112
Assets according to consolidated balance sheet
(assets)                                                       38,038        35,064



                                                                 2008          2007
                                                                TEUR          TEUR
Total liabilities of the segment                               12,124        11,142
Current financial liabilities                                   2,069         1,002
Non-current financial liabilities                              10,068        10,246
Income tax liabilities                                             29            35
Deferred tax liabilities                                          705           239

Liabilities according to consolidated balance sheet            24,995        22,684




Explanations on consolidated income statement

6.      Sales

The reported sales are subdivided as follows:

                                                                 2008          2007
                                                           € thousands   € thousands
Sales from plant operations                                      4,359         2,435
Sales from production orders, service & consulting              32,338        38,909
                                                                36,697        41,344

Sales from contract manufacturing registered in the reporting year according to the
PoC method amount to €11,353 thousand (previous year: €6,491 thousand).

From the sales generated in 2008, €348 thousand (previous year: €9,236 thousand) was
achieved abroad within Europe, €2,279 thousand (previous year: €0 thousand) in third
party countries and €34,070 thousand (previous year: €32,108 thousand) domestically.
                                                                                              | 123


7.     Other operating earnings

Other operating earnings break down as follows:

                                                                     2008             2007
                                                             € thousands       € thousands
Earnings from the dissolution of debit differences from
capital consolidation                                                   0                55
Earnings from the outflow of fixed assets                              19                 5
Dissolution of provisions                                              17                53
Dissolution of accumulated depreciation                                99              117
Indemnifications and accident compensation                             75              550
Earnings from conversion of currency                                   21                0
Other earnings                                                        320              453
                                                                      551            1,233




8.     Other operating expenses

Other operating expenses break down as follows:

                                                                     2008             2007
                                                             € thousands       € thousands
IPO costs                                                               0                72
Insurance                                                               0                73
Other taxes                                                            79                 9
Losses from outflow of fixed assets                                     1                 5
Other expenses                                                         67                39
                                                                      147              198


9.     Profit or loss from at equity reported companies

Profit or loss from at equity reported companies effects the proportional profit or loss of
HolSoTherm GmbH with €0 thousand (previous year: €6 thousand) and BEW Bioenergie
+ Wärme GmbH with €-1 thousand (previous year: €0 thousand).
10.    Interest and similar earnings and expenses

Interest earnings and interest expenses break down as follows:
                                                                    2008             2007
                                                            € thousands       € thousands
Interest earnings
Interest earnings third parties                                      372              385
Interest earnings from related companies                               0               38
                                                                     372              423


Interest expenses
Interest expenses to banks and from bonds                            797              717
Interest expenses to related companies                                29                 5
Addition of accrued interest from provisions                          20                18
Interest expense from leasing                                         55                 0
                                                                     901              740

11.    Income tax

Income tax encompasses taxes from income and earnings payable in the individual coun-
tries as well as deferred tax accruals.

The calculation of domestic deferred taxes was based on a Group-wide tax rate of 30.53
percent (previous year individual tax rates averaging 29.25 percent). Apart from the trade
earnings tax, this relates to corporate income tax at 15.0 percent and the solidarity sur-
charge of 5.5 percent.

At foreign companies income taxes are calculated according to the local tax rates.

The cost from income tax is as follows:
                                                                    2008             2007
                                                            € thousands       € thousands
Actual income tax
Income tax costs for the reporting year                               26                32
Income tax costs in the previous year (compared to
income tax rebates)                                                   35              -109
                                                                      61               -77

Deferred taxes
Creation and reversal of temporary differences                       677               183
Tax losses carried forward                                          -267              -110
                                                                     410                73

Tax earnings (costs)                                                 471                -4
Designated tax costs in the consolidated income
statement                                                            458              102
Attributable actual income tax for discontinued
activities                                                            13              -106
                                                                                              | 125


The deferred taxes are regularly valued. The ability to realise tax earnings from deferred
taxes depends on the possibility to achieve income tax in the future as well as using tax-
related losses which are carried forward. On the balance sheet date AGO Group dis-
poses of unused tax loss carried forward in the amount of €2,028 thousand (previous
year: €953 thousand) to offset against future profits. Within the planning horizon, the use
of tax losses carried forward amounting to €1,789 thousand (previous year: €953 thou-
sand) are planned. Concerning these usable losses, a deferred tax asset in the amount of
€546 thousand (previous year: €279 thousand) was capitalised. The loss carried forward
by 31 December 2008 can be carried forward without limitation. Deferred tax assets are
only formed when it can be assumed that any future earnings to be taxed will remain
available and thus the use of deferred tax is given.

Income tax can be attributed to the fictitious expenses for income tax, which would have
resulted when applying the tax rate of the Group parent Company AGO AG amounting to
30.53 percent (previous year: 37.34 percent) based on IFRS consolidated income before
taxes, as shown in the following:


                                                                     2008             2007
                                                             € thousands       € thousands
Result before income tax                                            1,088              -862
Theoretical income tax cost                                           332              -322
Impact of tax rate changes                                              -1              -37
Non-deductible expenses                                                43                54
Permanent differences                                                  57              334
Other                                                                  40              -33
Actual income tax                                                     471                -4


Effective tax rate in %                                              43.3               0.5


Deferred tax assets and liabilities developed from temporary differences and tax losses
carried forward as follows:
                                                                         2008               2007
                                                                 € thousands        € thousands
Deferred tax assets
Other provisions and liabilities                                           47                 70
Tax losses carried forward                                                546                279
                                                                           593               349
Balancing                                                                 -425              -237
Information shown                                                         168                112


Deferred tax liabilities
Intangible assets                                                           65                42
Property, plant and equipment                                             335                323
Receivables and other assets                                              451                 82
Other provisions and liabilities                                          279                 29
                                                                        1,130                476
Balancing                                                                -425               -237
Information shown                                                         705                239


A settlement of deferred tax claims and liabilities takes place, if offsetting actual tax
claims against actual tax liabilities is enforceable. In addition, tax claims and tax liabilities
must relate to income taxes, which are levied by the same tax authority.

The deferred tax assets and liabilities have developed as follows:


                                                                         2008               2007
                                                                 € thousands        € thousands
Deferred tax assets                                                        168               112
Deferred tax liabilities                                                  -705              -239
Balance                                                                   -537              -127


Change                                                                    -410               314
There of:
  affects net earnings                                                    -410                -73
  settles equity                                                             0               401
  acquisitions                                                               0                -14


12.     Earnings from discontinued business divisions

In 2007, earnings from discontinued business divisions related to the discontinued busi-
ness divisions of ventilation and air conditioning. In 2008, only two ventilation projects
that were already underway were completed.

Earnings from discontinued business divisions which are reported separately in the in-
come statement break down as follows:
                                                                                             | 127


                                                                     2008             2007
                                                              € thousands      € thousands
Sales                                                                224            2,018
Production costs                                                    -180            -2,247
Other earnings                                                          0              34
Other expenses                                                          0              -75
Financial expenses                                                      0              -15
Earnings before income tax                                             44            -285
Income taxes                                                          -13             106
Earnings from discontinued business divisions                         31             -179


13.     Cost of materials

The reported cost of materials in the operating costs break down as follows:
                                                                    2008             2007
                                                              € thousands      € thousands
Expenses for raw materials and supplies and for
goods purchased                                                   31,058           30,288
Expenses for services purchased                                    2,241            4,288
                                                                  33,299           34,576


14.     Staff costs

Staff costs included in the operating costs are as follows:
                                                                    2008             2007
                                                              € thousands      € thousands
Wages and salaries                                                 5,808            5,896
Social security costs and pension and support costs                  998            1,156
                                                                   6,806            7,052



15.     Earnings per share

Earnings per share is determined by the earnings attributable to the shareholders of AGO
AG divided by the average number of shares in circulation. A dilution of the reference
number occurs on account of so-called potential shares resulting from stock options and
convertible bonds. AGO AG does not own so-called potential shares meaning that basic
earnings per share is identical to diluted earnings per share.
                                                                       2008            2007
Earnings from continuing operations            € thousands              586             -679
There of, the earnings share from
shareholders of the parent company             € thousands               607            -691
Weighted average number of issued shares       Thousands               4,000           2,624
Earnings per share from continuing
business divisions                             €                        0.15           -0.26


                                                                       2008            2007
Earnings from discontinued operations          € thousands                  31          -179
There of, the earnings share from
shareholders of the parent company             € thousands                31            -179
Weighted average number of issued shares       Thousands               4,000           2,624
Earnings per share from discontinued
business divisions                             €                        0.01           -0.07


Adjusted for the costs of share-based payments, in the financial year 2007, positive earn-
ings per share of €0.09 would have resulted from continuing operations.




Explanations concerning the Group balance sheet

16.    Intangible assets

The development of the intangible assets is represented as follows:

2008                                          Licenses         Contracts               Total
                                            and similar
                                                   rights
                                           € thousands       € thousands         € thousands
Acquisition and production costs
As of 1 Jan. 2008                                   143               148               291
Accretion                                           152                0                152
As of 31 Dec. 2008                                  295               148               443


Accumulated depreciation
As of 1 Jan. 2008                                   126               11                137
Accretion                                             17              14                 31
As of 31 Dec. 2008                                  143                25               168
Book value as of 31 Dec. 2008                       152               123               275
                                                                                                                       | 129


2007                                            Licenses             Contracts             Total
                                              and similar
                                                      rights
                                             € thousands           € thousands       € thousands
Acquisition and production costs

As of 31 Jan. 2007                                     111                    0             111
Change in the basis of consolidation                     18                  148            166

Accretion                                                14                   0                  14
As of 31 Dec. 2007                                     143                   148            291


Accumulated depreciation
As of 31 Jan. 2007                                     107                    0             107
Change in the basis of consolidation                     12                    0                 12

Accretion                                                 7                  11                  18
As of 31 Dec. 2007                                     126                    11            137
Book value as of 31 Dec. 2007                            17                  137            154


17.    Property, plant and equipment

The development of property, plant and equipment is represented as follows:

2008                                      Property               Technical         Operational           Paid down           Total
                                               and                systems                 and         payments and
                                          buildings                   and             business        systems under
                                                                 machines           equipment           construction
                                       € thousands             € thousands         € thousands          € thousands    € thousands
Acquisition and
production costs
As of 1 Jan. 2008                            6,144                  9,957               1,588                    12        17,701
Accretion                                      199                    306                 180                   616         1,301
Reduction                                        0                      0                  -65                  -12            -77
As of 31 Dec. 2008                           6,343                 10,263               1,703                   616        18,925

Accumulated depreciation
As of 1 Jan. 2008                            1,246                  1,343               1,156                     0         3,745
Accretion                                       98                    567                 124                     0           789
Reduction                                        0                      0                  -51                    0            -51
As of 31 Dec. 2008                           1,344                  1,910               1,229                     0         4,483
Book value as of
31 Dec. 2008                                 4,999                  8,353                 474                   616        14,442
2007                                   Property           Technical        Operational          Paid down             Total
                                            and            systems                   and     payments and
                                       buildings                and           business      systems under
                                                          machines          equipment         construction
                                    € thousands         € thousands        € thousands        € thousands      € thousands
Acquisition and
production costs
As of 1 Jan. 2007                          3,588                  0              1,404                  0             4,992
Change in the basis of
consolidation                              2,494              9,957                   93                0            12,544
Accretion                                     62                  0                  192               12              266
Reduction                                      0                  0                  -101               0              -101
Stand 31.12.2007                           6,144              9,957              1,588                 12            17,701

Accumulated depreciation
As of 1 Jan. 2007                          1,011                  0              1,010                  0             2,021
Change in the basis of
consolidation                               104                 920                   52                0             1,076
Accretion                                   131                 422                  159                0              712
Reduction                                      0                  0                   -65               0               -65
As of 31 Dec. 2007                         1,246              1,343              1,156                  0             3,744
Book value as of
31 Dec. 2007                               4,898              8,615                  432               12            13,957

                         Depreciation was attributed to production costs in sales.

                         In terms of property, plant and equipment, there are collaterals for liabilities of up to
                         €7,033 thousand max. (previous year maximum: €7,430 thousand). In addition to the
                         fixed assets, parts of the trade receivables as well as parts of inventory assets are or-
                         dered for these liabilities as security.



                         18.    Investments in companies balanced at equity

                         The Company has a 50 percent share (previous year: 50 percent) in BEW Bioenergie +
                         Wärme GmbH, Floh-Seligenthal.

                                                                                              2008           2007
                                                                                        € thousands    € thousands
                         As of 1 January                                                         0            373
                         Accretions from acquisitions                                            6               0
                         Accretions/reductions on the basis of results                           -1              6
                         Reductions on the basis of full consolidation                            0           -379
                         As of 31 December                                                       5               0



                         The following table contains summarised financial information on financial assets bal-
                         anced at equity:
                                                                                               | 131


                                                                     2008              2007
                                                              € thousands       € thousands
Total assets                                                            12                 0
Total liabilities                                                       -2                 0
Net assets                                                              10                 0


Group share in net assets                                                5                 0


Total sales (previous year: pro rata temporis)                           0            1,573
Total consolidated net profit for the period (previous
year: pro rata temporis)                                                -2                79
Group share in consolidated net profit for the period
(previous year: pro rata temporis)                                      -1                 6


19.     Inventories and paid down payments
                                                                     2008              2007
                                                              € thousands       € thousands
Raw materials, auxiliary and operations materials                      413              266
Unfinished products and services                                         0                0
Paid down payments                                                      69              485
                                                                       482              751


From the inventories, €254 thousand is pledged (previous year: €130 thousand) as collat-
eral for liabilities. In addition to inventory assets, parts of trade receivables as well as
parts of fixed assets are ordered for these liabilities as security.




20.     Receivables from contract manufacturing

Receivables from contract manufacturing are made up as follows:

                                                                     2008              2007
                                                              € thousands       € thousands

Sum of the incurred costs and profits from third parties           10,474             4,298
Down payments received from third parties                           -5,678            -2,038
Sum of incurred costs and profits from related
companies                                                              112                 0
Down payments received from related companies                         -103                 0
                                                                     4,805            2,260

On 31 December 2008, the securities held back by customers for production orders
amounted to €0 thousand (previous year: €0 thousand).
                       21.           Trade receivables

                       Trade receivables contain receivables from related companies and individuals amounting
                       to €10 thousand (previous year: €201 thousand). These relate to the parent company, its
                       subsidiaries and at equity balanced companies. This also contains receivables from fi-
                       nance leasing amounting to €383 thousand (previous year: €0 thousand).

                       Trade receivables are due within a year and are not interest bearing.

                       Split up according to time bands, the non-depreciating trade receivables were repre-
                       sented on 31 December, in each case as follows (in € thousands):



       Book      There of, is          There of, is                There of, is not depreciated / overdue over the following time

       value      neither de-          neither de-

                 preciated nor        preciated nor
                 overdue be-            overdue

                   cause of                 on the        Less             Between           Between           Between              Between
                  contractual        balance sheet        than              31 and            91 and           181 and                than

                 adjustments         date                30 days           90 days           180 days          365 days             365 days

2008     7,052                   0               2,520           317                  76                17                43                   27

2007    10,203            1,146                  5,491           543                 497           1,139                978                  409




                       In terms of the stock of trade receivables which are neither depreciated nor in default of
                       payment on the reporting date, there are no signs indicating that debtors will not honour
                       their payment obligations.

                       The value adjustments on trade receivables developed as follows:


                                                                                                                2008                    2007
                                                                                                        € thousands            € thousands
                       As of 1 January                                                                         2,099                   1,954
                       Allocations                                                                               772                     425
                       Consumption                                                                              -339                    -129
                       Break ups                                                                                 -99                    -151
                       As of 31 December                                                                       2,433                   2,099

                       Due to the deconsolidated business division, allocations amounted to €34 thousand
                       (previous year: €65 thousand) and consumption totalled €0 thousand (previous year: €34
                       thousand).

                       Receivables amounting to €639 thousand (previous year: €410 thousand) serve as collat-
                       eral for liabilities. In addition to the receivables, parts of the inventory assets as well as
                       parts of the fixed assets for these liabilities are ordered as security.
                                                                                            | 133


22.     Other receivables and assets
                                                           31 Dec. 2008     31 Dec. 2007
                                                            € thousands      € thousands
Non-current assets
 Financial assets
  Securities – held to maturity                                     165                75
  Bank deposits with a remaining maturity of over
  a year                                                            168                76
  Outstanding loans and receivables                                 137              135
  Investments                                                         0                 6
 Receivables from finance leasing                                 1,568                 0
                                                                  2,038              292


Current assets
 Financial assets
  Debit-side creditors                                              431             1,298
 Non-financial assets
  Amounts receivable from tax authority (without
  income tax)                                                          4               12
  Accruals                                                          155              158
  Other non-financial assets                                        125               79
                                                                    715             1,547
Total                                                             2,753             1,839


The granted loans and receivables were neither depreciated nor overdue on the balance
sheet date.

On the balance sheet date, there was no indication that debtors would not honour their
payment obligations.

Bank deposits with a maturity greater than 12 months are pledged as collateral in a simi-
lar fashion to the securities.

The receivables from finance leasing are made up as follows:

                                                           31 Dec. 2008     31 Dec. 2007
                                                            € thousands      € thousands
Receivables from finance leasing -current-                          383                 0
Receivables from finance leasing -non-current-                    1,568                 0
                                                                  1,951                 0



Current receivables from finance leasing are included in trade receivables. Receivables
from finance leasing result from a leasing deal relating to a rebuilding project.

The connection between future minimum leasing payments with gross and net invest-
ments in the leasing relationship as well as the cash value of the outstanding minimum
leasing payments breaks down as follows:
                                                             31 Dec. 2008     31 Dec. 2007
                                                              € thousands      € thousands
Future minimum leasing payments                                      2,277                 0
+ non-guaranteed remaining value                                         0                 0
Gross investment in the leasing relationship                         2,277                 0
- unrealised finance income                                           -326                 0
Gross investment in the leasing relationship                         1,951                 0
- Cash value of the non-guaranteed remaining value                       0                 0
Cash value of the outstanding minimum leasing
payments                                                             1,951                 0

The gross investments in the leasing relationship as well as the cash value of the out-
standing minimum leasing payments are due as follows:
                                                             31 Dec. 2008     31 Dec. 2007
                                                              € thousands      € thousands
Gross investment in the leasing relationship
 < 1 year                                                              506                 0
 1 to 5 years                                                        1,771                 0
  > 5 years                                                              0                 0
Cash value of the outstanding minimum leasing
payments
 < 1 year                                                              383                 0
 1 to 5 years                                                        1,568                 0
 > 5 years                                                               0                 0
23.    Cash and cash equivalents

Cash relates to bank balances amounting to €7,666 thousand (previous year: €5,541
thousand) and cash in hand amounting to €13 thousand (previous year: €15 thousand).
The bank balances attract variable interest rates for balances which are subject to call on
a daily basis.

24.    Shareholders’ equity

The development of shareholders’ equity and the overall results are represented sepa-
rately in the statement of shareholders’ equity.

Subscribed capital
The share capital of AGO AG amounts to €4,000 thousand (previous year: €4,000 thou-
sand) and this is split between 4,000,000 (previous year: 4,000,000) bearer shares, which
are fully paid. The unit shares are calculated at €1.00 / unit (previous year: €1.00 / unit)
as part of the subscribed capital. All shares allow one vote per share at the Annual Gen-
eral Meeting. Voting restrictions do not exist.

Through the resolution made at the Extraordinary General Meeting dated 4 May 2007,
the share capital from company funds was increased by €1,730 thousand to €2,500 thou-
sand. The capital increase was entered into the commercial register on 18 May 2007. In
                                                                                              | 135


addition, the Extraordinary General Meeting of 4 May 2007 decided on a capital increase
through a cash deposit amounting to a further €200 thousand as well as the changeover
to bearer shares with no par value (shares). The capital increase was entered into the
commercial register on 31 May 2007.

Through a resolution made at the Extraordinary General Meeting of 4 May 2007, the
Company's share capital was increased by €1,300 thousand through a cash deposit and
by issuing 1,300,000 new shares, by €4,000 thousand. The subscription rights of share-
holders were excluded. The shares were distributed within the scope of the Company’s
IPO on 28 June 2007. The capital increase was entered into the commercial register on
26 June 2007.

On the balance sheet date, caverion GmbH, Stuttgart holds 59.25 percent (previous year:
59.25 percent) of share capital.



Authorised capital
Through a resolution made at the Extraordinary General Meeting of 4 May 2007, the
Management Board of the Company were authorised, to increase the Company's share
capital on one or on successive occasions with the approval of the Supervisory Board
until 4 May 2012 (in nominal terms up to €1,250 thousand) by issuing new bearer shares
in the form of common shares against cash or in kind.

The shareholders shall be granted subscription rights, the Management Board is however
authorised to exclude high amounts from the assignation to the shareholders and for the
recovery of assets in kind, particularly in the form of stakes in companies and assets and
to exclude the right to subscribe. In addition, with the approval of the Supervisory Board,
the Management Board is also authorised to exclude subscription rights in the respective
utilisation of the authorisation through a capital increase against cash contributions (but
no more than once within 12 months) if the capital increase does not exceed 10 percent
of the existing share capital of the Company at the time of the authorisation, where the
newly issued shares shall take the same form as company shares which are already
listed and where the issue price of new shares is not substantially lower than the stock
price of the shares at the time the issue price is adopted by the Management Board.

With the consent of the Supervisory Board, the Management Board is authorised to settle
the remaining content of the share rights and terms of the share issue. The Supervisory
Board is authorised in each case, to adapt the statutes in accordance with the size of the
capital increase from the authorised capital.

The authorised capital was entered into the commercial register on 18 May 2007.



Capital reserve
The capital reserve contain the amounts which have been made by issuing AGO AG
shares, beyond the notional value of the shares.

Furthermore, the cost of the IPO amounting to €1,075 thousand less the attributed de-
ferred taxes amounting to €401 thousand were charged to the capital reserve in the previ-
ous year. The expenses for share-based payments have been credited to the capital re-
serve in the previous year amounting to €920 thousand.
Share-based payment
Through resolutions made by the Management Board on 25 April 2007, the Supervisory
Board on 27 April 2007 and at the Extraordinary General Meeting of 4 May 2007, the
management of the Company received 200,000 shares in the Company on 4 May 2007
against a cash deposit amounting to €200 thousand. The shares of the Company were
issued on 28 June 2007 at a price of €7.00 thousand.

The fair value of the granted shares was worked out taking into account a fungibility dis-
count, based on the issue price. Dividends were not included.

The Group’s net result was diminished through a share-based payment in the previous
year by €920 thousand. The cost was spread over the staff costs and is included in oper-
ating costs.

Profit reserves
Profit reserves contain the pro-rata profit reserves of the parent company and other in-
volved companies following the date of the initial consolidation.

Minority interests
Minority interests show the ownership of shares of third parties in the consolidated com-
panies. Other shareholders’ shares concern HolSoTherm GmbH, AGO ENERGIA S.r.l.
and Reindeer S.r.l.

Capital control
The primary objective of capital control for AGO AG and its shareholdings is to ensure
that they support the business activity and maintain a high credit rating and a good equity
ratio. The capital includes shareholders’ equity, share capital, capital reserve and net
profit. To adjust, maintain or adapt the capital structure, AGO AG is able to make adjust-
ments to the dividends paid to shareholders, can issue new shares or take out loans. As
of 31 December 2008 and 31 December 2007 there were no changes made to the objec-
tives and guidelines.

The Group monitors its shareholders’ equity using the equity ratio set against the total
capital. This amounted to 34.3 percent (previous year: 35.3 percent) on 31 December
2008.

25.    Provisions

These provisions break down as follows:

                                                            31 Dec. 2008      31 Dec. 2007
                                                             € thousands       € thousands
Pension provisions
 Non-current share                                                    215              209


Other provisions
 Current share                                                        123              170
 Non-current share                                                    471              480
                                                                      594              650
Total provisions                                                      809              859
                                                                                              | 137


Pension provisions
AGO maintains a defined-benefit pension plan.

In addition to the defined-benefit plan, defined-contribution plans are also maintained.
The legally mandated contributions by employers to the statutory pension insurance
scheme in Germany should be considered examples of such defined-contribution plans.
The expense for these contributions in this reporting period, recorded as working costs,
was €510 thousand (previous year: €432 thousand).

These pension obligations are based on individual agreements and pension schemes.
These pension schemes and individual contracts provide for the granting of pensions in
cases of long-term disability or when employees reach retirement age. The qualifying
period is respectively 5 and 10 years of employment with AGO. Individual contracts con-
tain no provision for a qualifying period. In general, the calculation of pension levels is
based on the wage or salary level of the employee and his or her length of service.

The determination of pension obligations is based on actuarial expert opinions, which are
commissioned each year. Benefit levels are calculated based on employees’ length of
service and predicted future salary and pension trends.

The cash value of benefit claims for pension obligations are carried over into the bal-
anced value of benefit claims as follows: :


                                          31 Dec. 2008       31 Dec. 2007    31 Dec. 2006
                                           € thousands        € thousands     € thousands
Present value of entitlement                           207           215               241
Actuarial profits (compared to
losses) not yet offset                                   8             -6              -40
Pension obligation                                     215           209               201



The changes in cash value of service related obligations are as follows :


                                                                     2008             2007
                                                              € thousands      € thousands
Present value of entitlement at the beginning of the
financial year                                                        215              241
Working time costs                                                      4                 5
Interest costs                                                         11                11
Services paid for                                                      -9                -9
Actuarial profits                                                     -14               -33
Cash value of the service related obligation by the
end of the fi-nancial year                                            207              215
Pension obligations developed as follows:

                                                                                € thousands
Service related obligations as of 1 January 2007                                       201
Ongoing service cost                                                                     5
Interest expense                                                                        11
Actuarial losses                                                                          1
Benefits paid                                                                            -9
Service related obligations as of 31 December 2007                                     209
Ongoing service cost                                                                     4
Interest expense                                                                        11
Actuarial losses                                                                          0
Benefits paid                                                                            -9
Service related obligations as of 31 December 2008                                     215


Recorded expenditures for pension benefits :

                                                                   2008                2007
                                                            € thousands         € thousands
Ongoing service cost                                                   4                  5
Interest expense                                                      11                 11
Expenditures for pension benefits                                     15                 16



Ongoing service cost is recorded under staff costs, interest expense under finance costs.

For the financial year 2009, AGO expects to make contributions of €4 thousand to service
related plans.



Valuation factors
Pension benefit obligations are based on the following actuarial assumptions:



                                                                    2008              2007
                                                                       %                 %
Discount rate                                                         6.2               5.5
Rate of compensation increase                                       2.25               2.25
Rate of pension progression                                         2.25               1.75
Labour turnover rate                                                  4.5               4.5
                                                                                                       | 139


Other provisions
Other provisions have accrued as follows:


                                   Staff           Sales and             Other               Total
                                                 distribution
                            € thousands         € thousands        € thousands        € thousands
As of 1 Jan. 2007                   260                  408               532              1,200
Company mergers                          0                   0                 45                 45
Consumption                          -21                     0            -478               -499
Dissolution                          -11                -193                   -8            -212
Allocation                              21                   0                 88             109
Accrued interest                         5                   0                  2                  7
As of 31 Dec. 2007 /
1 Jan. 2008                         254                  215               181                650
Consumption                              0                   0             -98                -98
Dissolution                             -8               -14                   -9             -31
Allocation                               7                   0                 57                 64
Accrued interest                         6                   0                  3                  9
As of 31 Dec. 2008                  259                  201               134                594



Staff department provisions reported on the balance sheet date consist largely of provi-
sions for anniversary benefits (€104 thousand, previous year: €102 thousand) and provi-
sions for partial retirement (€147 thousand previous year: €151 thousand). In the sales &
distribution department, provisions have accrued for guaranteed benefits (€201 thousand,
previous year: €215 thousand). The remaining miscellaneous provisions primarily relate
to legal and restructuring costs €70 thousand, (previous year: €60 thousand) and restora-
tion obligations.

The following table reflects the maturities of remaining accrued provisions as of
31 December, 2008 :



                                Staff           Sales and             Other               Total
                                              distribution
                         € thousands         € thousands         € thousands        € thousands
Current                            3                   50                70                123
Non-current                      256                  151                64                471
                                 259                  201               134                594
26.    Trade payables and advances received



This entry consists of the following:

                                                          31 Dec. 2008   31 Dec. 2007
                                                           € thousands    € thousands
Trade payables                                                  6,589          7,141
Advances received                                                  14             44
                                                                6,603          7,185


27.    Liabilities from contracted work

Liabilities from contracted work break down as follows:

                                                          31 Dec. 2008   31 Dec. 2007
                                                           € thousands    € thousands
Sum of incurred costs and profits from third parties            3,959          2,193
Payments received from third parties                            -4,733         -2,217
Sum of incurred costs and profits from related
companies                                                        3,299             0
Payments received from related companies                        -3,920             0
                                                                1,395             24
                                                                                             | 141


28.      Financial and miscellaneous liabilities



These liabilities break down as follows:

                                                           31 Dec. 2008     31 Dec. 2007
                                                            € thousands      € thousands
Non-current liabilities
 Financial liabilities
  Financial liabilities
      Bank loans                                                   6,071            7,796
   Bonds outstanding                                               2,462            2,450
  Liability from finance leasing                                   1,535                0
                                                                  10,068           10,246


 Non-financial liabilities
  Other non-financial liabilities                                     14               20
                                                                      14               20
                                                                  10,082           10,266


Current liabilities
 Financial liabilities
  Financial liabilities
   Bank liabilities                                                1,702            1,002
  Liabilities from finance leasing                                   367                0
                                                                   2,069            1,002
  Other financial liabilities
      Liabilities to employees                                       192              333
      Other financial liabilities                                    128              134
      Liabilities to minority shareholders                           674                0
                                                                     994              467
                                                                   3,063            1,469


 Non-financial liabilities
  Other liabilities
      Liabilities from other taxes                                 2,270            2,557
      Accrued social insurance liabilities                            39               50
                                                                   2,309            2,607
                                                                   5,372            4,076
Total                                                             15,454           14,342


Liabilities vis-a-vis banks are denominated in euros. In addition to repayment liabilities
due within a year, the short-term component of the bank loans item also includes over-
drafts.
The majority of bank loans and the entirety of the bond issue are on fixed-interest terms.

The interest rate for fixed rate loans was between 5.49 percent and 5.75 percent
(previous year: between 3.95 percent and 6.35 percent), representing an average interest
rate of 5.49 percent (previous year: 5.46 percent). The effective interest rate of bonds
outstanding is 8.68 percent. liche Zins bei 5,49 % (Vorjahr 5,46 %). Der effektive Zinssatz
der Anleihe beträgt 8,68 %.

29.    Financial instruments

The primary financial instruments used by the Group – with the exception of financial
derivatives – are bank loans and overdrafts, bonds, trade payables and advances. The
main purpose of these financial instruments is the financing of the Group’s business ac-
tivities. The firm possesses assorted financial assets such as trade receivables, cash,
and short-term deposits resulting directly from its business activities. The Group’s risk
management provisions are discussed in detail in the financial report.

AGO employs derivative financial instruments (interest rate caps) to minimise its expo-
sure to risk from interest rate changes. These instruments are used solely to hedge exist-
ing or expected interest rate risks.

Exchange rate risk
Due to its geographical area of operations, the Group is only exposed to low exchange
rate risks. As the South African company had not yet begun operations in the reporting
year, fluctuations in the exchange rate between the South African rand and the euro are
immaterial. In consequence of its financing activities, however, it is exposed to risk from
interest rate variations.

Default risk
A solvency or default risk exists when a counterparty is unable to meet its obligations
stemming from a transaction with original or derivative financial instruments, thereby
causing a loss.

Credit assessments are carried out on new clients. In the case of existing client relation-
ships, regular analyses of payment behaviour are carried out.

For the receivables outstanding on the most recent balance sheet date, the default risk is
considered to be low. A large proportion of these receivables have been insured against
default.

The amounts recorded in assets represent the maximum extent of possible default risk.

Risks from interest rate changes
AGO Group is exposed to risks from interest rate changes. Such changes primarily affect
the Group’s liabilities to banks. These liabilities include loans and overdrafts with variable
interest rates and are thus directly affected by interest rates changes. These changes
affect future cash flows.

Financial risks stemming from variations in interest rates are managed by the Group’s
executives. Interest rate related hedging transactions (interest rate caps) are used to
hedge loans with variable interest rates. The residual maturity of these interest rate caps
                                                                                                                            | 143


is 5 years.

A change in Eurozone interest rates of 50 base points relative to the normal volume as of
the reporting date of 31 December 2008 would have no appreciable effect on Group an-
nual result or consolidated shareholders’ equity, as financial instruments with variable
interest rates are only of secondary importance to the firm.

Liquidity risk
The Group’s business activities require that provision be made for adequate liquidity.
AGO counters liquidity risk through multiple credit facilities and by ensuring adequate
supplies of cash on hand.

The following tables list the future undiscounted cash flows resulting from financial liabili-
ties that affect the future liquidity status of AGO.


                                                              Undiscounted cash flows as of 31 Dec. 2008 in € thousands
                                                      Total          2009        2010         2011         2012           > 2012

Non-current financial liabilities                      12,949               0       1,536        1,509       1,443           8,461
Trade payables and advances received                    6,603          6,603            0            0            0                0
Liabilities from contracted work                        1,395          1,395            0            0            0                0
Current financial liabilities and other liabilities     3,063          3,063            0            0            0                0
Total                                                  24,010         11,061        1,536        1,509       1,443           8,461




                                                              Undiscounted cash flows as of 31 Dec. 2008 in € thousands
                                                      Total          2008        2009         2010         2011           > 2011

Non-current financial liabilities                      13,550               0       1,252        1,204       1,169           9,925
Trade payables and advances received                    7,185          7,185            0            0            0                0
Liabilities from contracted work                              24            24          0            0            0                0
Current financial liabilities and other liabilities     1,469          1,469            0            0            0                0
Total                                                  22,228          8,678        1,252        1,204       1,169           9,925




Credit risk

There are no significant concentrations of credit risk in the firm.

Current value
In general, financial instruments are carried at market or current value. Those financial
instruments not carried at market value primarily include cash equivalents, trade receiv-
ables, trade payables and other financial liabilities, bank overdrafts and long-term loans.

Financial instruments classified as “available for sale” are valued at cost for lack of an
active market.

Financial investments in the category “retained until maturity” are securities in which an
active market exists. These securities are valued at their market price on the balance
sheet date.
The book value of cash, cash equivalents and overdrafts is close to their fair value, due to
the short-term nature of these financial instruments.

In the case of trade receivables and payables, which are generally based on normal trade
credit conditions and which mostly have short-term maturities, book value is also very
close to the relevant fair value. The remaining receivables and obligations are also gener-
ally short-term in nature, thus their recorded value also represents a close approximation
of present market value.

The fair values assigned to the miscellaneous non-current receivables represent the cash
value of the payment streams associated with those assets. These are calculated at stan-
dard market interest rates with the usual maturity and credit conditions.

The fair values of non-current liabilities to banks as well as other non-current financial
liabilities are calculated as the cash values of the payments associated with the obliga-
tions based on the applicable term structure curve.

The fair values of derivative financial instruments were determined according to standard
market assumptions. The fair value of interest rate hedging transactions is based on the
future expected discounted payment stream as determined by the applicable term struc-
ture curves.

Derivative financial instruments are recorded as other financial receivables (positive mar-
ket value) or financial liabilities (negative market value) depending on their market values.
As of 31 December 2008, the interest rate cap had a nominal value of €1,120 thousand
(previous year: €1,250 thousand) and a market value of €0 thousand (previous year: €0
thousand).
                                                                                                                                | 145


The following table represents the fair value and book value of the financial assets and
financial liabilities recorded in the individual balance sheet items:


Assets as of 31 Dec. 2008                                                      Book value by valuation category
in € thousands
                                          Fair value     Available for    Retained          Credits and   Not covered          Total
                                                             sale        until maturity     receivables    by IFRS 7


Non-current financial assets                   2,038                 0                165         1,873                0          2,038
Receivables from contracted work               4,805                 0                 0          4,805                0          4,805
Trade receivables                              7,052                 0                  0         7,052                0          7,052
Other current receivables and assets           1,092                 0                  0           807           285             1,092
Cash and cash equivalents                      7,679                 0                 0          7,679                0          7,679
Total assets                                  22,666                 0                165        22,216           285            22,666




Liabilities as of 31 Dec. 2008                                              Book value by valuation category
in € thousands
                                              Fair value            Financial           Not covered by         Total
                                                                liabilities at cost         IFRS 7


Non-current financial liabilities                      10,068              10,068                     0            10,068
Trade payables and advances received                    6,603               6,603                     0                6,603
Liabilities from contracted work                        1,395               1,395                     0                1,395
Current financial liabilities and other
liabilities                                             5,372               3,063                 2,309                5,372
Total liabilities                                      23,438              21,129                 2,309            23,438
Assets as of 31 Dec. 2007                                                          Book value by valuation category
in € thousands
                                               Fair value    Available for     Retained         Credits and     Not covered         Total
                                                                 sale         until maturity    receivables      by IFRS 7


Non-current financial assets                          292                6               75              211                0               292
Receivables from contracted work                     2,260               0                0             2,260              0              2,260
Trade receivables                                  10,203                0                0            10,203               0         10,203
Other current receivables and assets                 1,547               0                0             1,298             249             1,547
Cash and cash equivalents                            5,556               0                0             5,556              0              5,556
Total assets                                       19,858                6               75            19,528             249         19,858




           Liabilities as of 31 Dec. 2007                                                  Book value by valuation category
           in € thousands
                                                              Fair value             Financial         Not covered by             Total
                                                                                   liabilities at          IFRS 7
                                                                                       cost
           Non-current financial liabilities                           9,747               10,246                     0              10,246
           Trade payables and advances received                        7,185                   7,185                  0               7,185
           Liabilities from contracted work                                  24                  24                   0                     24
           Current financial liabilities and other
           liabilities                                                 4,076                   1,469             2,607                4,076
           Total liabilities                                         21,032                18,924                2,607               21,531




                                Following the valuation classes of the aggregated fair value according to IAS 39 repre-
                                sent as follows:




                                                                                                         31 Dec. 2008           31 Dec. 2007
                                                                                                          € thousands           € thousands
                                Financial instruments available for sale                                              0                      6
                                Financial instruments held until maturity                                          165                      75
                                Credits and receivables                                                         22,216               19,528
                                Financial liabilities valued at cost                                            21,129               18,924


                                The sum total of all financial liabilities in the course of the next 5 years and later is com-
                                prised of the following components:
                                                                                                                                         | 147

                                                                   31 Dec. 2008                                           31 Dec. 2007

                                                Total     2009     2010-2013             After         Total      2008     2009-2012       After

                                              € thou-   € thou-       € thou-       € thou-          € thou-    € thou-       € thou-    € thou-
                                               sands     sands         sands         sands            sands      sands         sands      sands
Liabilities to financial institutions          7,773     1,702          2,086        3,985            8,798      1,002         2,846      4,950

Bonds outstanding                              2,462           0        2,462               0         2,450          0             0      2,450

Liabilities to employees                         192       192              0               0            333       333             0          0

Other financial liabilities                      128       128              0               0            134       134             0          0

Liabilities from finance leasing               1,902       367          1,535               0              0         0             0          0

Liabilities to minority shareholders of AGO
Energia                                          674       674              0               0              0         0             0          0

Trade payables and advances received           6,603     6,603              0               0         7,185      7,185             0          0
Liabilities from contracted work               1,395     1,395              0               0             24        24             0          0

                                              21,129    11,061          6,083        3,985           18,924      8,678         2,846      7,400


Book value by valuation category


                                               From interest                    Net earnings
                                                                        2008                      2007
                                                                      € thousands                € thousands
Loans and receivables                                    383                       383                    423
Financial liabilities valued at cost                    -901                      -901                   -689
                                                        -518                      -518                   -266


30.       Explanations on the Group’s cash flow statement

The cash flow statement of AGO Group shows in what way the cash and cash equiva-
lents have changed through cash inflow and outflow in the course of the reporting year. In
accordance with IAS 7 „Cash flow statements“ cash flow from operational, investment
and financing activities are distinguished.

The capital funds disclosed in the cash flow statement comprise cash assets, checks as
well as credits with banks, as far as they are originally due in less than three months.

Within the indirect evaluation, changes of balance sheet items taken into account are
adjusted by effects from changes of all companies to be consolidated. Therefore, there
are differences compared to the changes of the concerning balance items in the consoli-
dated balance sheet. Cash flow from investment and financing activities is calculated in a
payment-oriented way.

For information on payment instrument flow from the acquisition of companies please
refer to item 4. “Mergers in 2007“.
Other disclosures

31.    Leasing contracts

The Group has entered into leasing contracts as a lessee. The objects of these contracts
are primarily vehicles and office equipment.

As of the reporting date, the following minimum payment obligations from operating leas-
ing relationships existed:
                                                             31 Dec. 2008       31 Dec. 2007
                                                              € thousands       € thousands
Less than a year                                                        248                244
Between one and five years                                              227                294
More than five years                                                        0                 0
                                                                        475                538

Rental and lease payments affecting net income totalled €265 thousand in 2008
(previous year: €244 thousand). There are no contingent rental payments or payments
from subleasing relationships.

Leasing liabilities result from assets to be capitalised in line with IAS 17. This relates to a
finance leasing contract for a wheel loader with a book value of €62 thousand (previous
year: €0 thousand). The leasing relationship runs until 1 December 2011. There is no
option to extend it. However, the Company has the option of purchasing the leasing ob-
ject at the end of the contractual period. The interest rate is 6.3 percent.

In 2008, a rental contract was signed which runs until 30 June 2013. The interest rate is
6.9 percent. In contrast, the financing is connected to a leasing object which qualified as
a finance leasing (see the detailed explanation of this under other non-current assets).

On 31 December 2008, liabilities from finance leasing and rental purchase contracts
amounted to a total of €1,902 thousand (previous year: €0 thousand).

The details of the minimum leasing payments are as follows:
                                                                                                | 149


                                                            31 Dec. 2008      31 Dec. 2007
                                                            € thousands       € thousands
Future minimum leasing payments
 < 1 year                                                            484                    0
 1 to 5 years                                                      1,725                    0
  > 5 years                                                               0                 0
Share of interest contained in the future minimum
leasing payments
 < 1 year                                                            117                    0
 1 to 5 years                                                        190                    0
 > 5 years                                                                0                 0
Cash value of the future minimum leasing payments
 < 1 year                                                            367                    0
 1 to 5 years                                                      1,535                    0
 > 5 years                                                                0                 0


The following expenses are incurred from finance leasing:

                                                            31 Dec. 2008      31 Dec. 2007
                                                            € thousands       € thousands
Interest expense                                                      55                    0
Depreciation                                                              4                 0
Recorded expense                                                      59                    0



32.    Contingent liabilities, contingent claims and financial obligations

Contingent liabilities and contingent claims
Bank credits amounting to €1,785 thousand (previous year: €2,312) serve to secure guar-
anteed credit of over €14,015 thousand (previous year: €10,724 that has been drawn on.



Other financial obligations
Other financial obligations consist of the following:

                                                            31 Dec. 2008      31 Dec. 2007
                                                            € thousands       € thousands
Obligations from leasing contracts                                   475               538
Service agreements                                                   346               383
                                                                     821               921


33.    Disclosures of relationships to related companies and people

caverion GmbH, Stuttgart, (hereinafter “caverion”) holds 59.25 percent of the shares in
AGO AG, Kulmbach.
In a series of subcontractor agreements with caverion and other caverion subsidiaries,
i.e. contracts in which AGO AG as subcontractor agreed to complete portions of projects
executed by caverion, the Company assumed responsibility for building various subas-
semblies. Normal contract procedures were followed. For some of these projects,
caverion or its subsidiaries provided guarantees on behalf of the Company. On the bal-
ance sheet date there are securities as well as guarantees by caverion in favour of
AGO Group in the amount of € 1,253 thousand (previous year: € 1,253 thousand) and
€ 6,557 thousand (previous year: € 7,071 thousand) respectively.

The insurance of the Group was converted from the group insurance of caverion Group to
individual agreements over the course of the year. Costs allocated to Group insurance
amounted to €2 in 2008 (previous year: €73).

The exchange of services with the subsidiaries of caverion took place according to the
usual market conditions and had the following balance sheet and income statement of
AGO AG:


                                                             2008              2007
                                                          € thousands       € thousands
Sales                                                               687            6,704
Sales                                                                85            1,184
Other operating expenses                                                4              76
Financial expenses                                                   28                   5



                                                         31 Dec. 2008       31 Dec. 2007
                                                          € thousands       € thousands
Payments received from production orders                          4,023                   0
Trade receivables                                                    10               201
Trade payables                                                          4             150



In the usual course of business operations, relationships also exist with other companies
valued at equity. Services were not exchanged with this company.

Compensation of the Management Board
Total compensation due to the Management Board for the financial year 2008 amounted
to €295 thousand (previous year, including share-based compensation: €748 thousand).

Former members of the Management Board received €9 thousand (previous year:
€9 thousand). Pension obligations under IFRS (Defined Benefit Obligations) to former
members of the Board total €102 thousand (previous year: €104 thousand).

Compensation of the Supervisory Board
For the financial year 2008, the members of the Supervisory Board received compensa-
tion totalling €80 thousand (previous year: €45 thousand), including attendance fees.

The holdings of AGO AG shares held by the members of the Management Board and the
                                                                                           | 151


Supervisory Board total 8.9 percent of all outstanding shares.

34.    Executive bodies of the Company

The members of the Supervisory Board of the Company are:

       Steffen Pfund (Chairman of the Executive Board of caverion GmbH),
       Waiblingen-Neustadt (Chairman);
       Dr. Klaus Hermsdorf (Managing Director of caverion GmbH responsible for
       technology and sales), Dresden (Deputy Chairman);
       Johannes Eismann (Bank management), Eggolsheim ;
       Prof. Dr. Eckhard Dinjus (Director at Karlsruhe Research Center), Leimersheim ;
       Franz Brosch (Lawyer, Director), Iphofen;
       Harald Petersen (Lawyer, Director), Bayreuth.

The members of the Management Board of AGO AG Energie + Anlagen are:

       Dipl. Betriebswirt Hans Ulrich Gruber (Head of Business and Trading), Mainleus;
       Dipl. Ing. Helmut Peetz (Head of Sales and Technology), Kulmbach

35.    Employees
In 2008, AGO employed an average of 131 employees (previous year: 116).
In 2008, an average of 124 (previous year: 111) white-collar and 7 blue-collar employees
(previous year: 5) were employed.

36.    Events occurring after the reporting date

No material events occurred after the reporting date.



Kulmbach, 24 April 2009



AGO AG Energie + Anlagen
Management Board




Hans Ulrich Gruber          Helmut Peetz
Biomass cogeneration plant Alperstedt,
upper burning chamber of the 6 MW boiler
Consolidated annual report
Consolidated annual report of AGO Group for the
financial year 2008

1.      Business and environment
In 2008 the Company continued to systematically pursue the strategy of focusing on
industrial supply concepts. Sales of industrial energy supplies for industrial customers in
the field of renewable energies and conventional planet construction were stepped up.
AGO Group was the first provider to launch a joint implementation project dedicated to
making the fuel switch to biomass. The use of biomass generates emissions trading
certificates that can be marketed worldwide. Foreign markets were approached in
a structured manner and several projects were acquired outside of Europe. The focus of
the Company’s business operations is offering an industrial energy supply with biomass
as a contracting solution. In this area AGO Group continues to concentrate on growth.

1.1 Group structure and business activities
AGO Group is a group of companies with the shared future objective of focusing on
energy supply for industrial locations. Industrial locations are provided with energy from
regenerative and conventional sources using a wide range of electricity, heating,
refrigeration and media technologies. AGO AG Energie + Anlagen takes on the role of an
implementation-driven project developer as the parent company. A differentiation is made
between sales companies and project companies when it comes to
AGO AG Energie + Anlagen’s subsidiaries. The Company’s project companies are
responsible for the contracting projects that are developed and erected by
AGO AG Energie + Anlagen. Sales companies are solely responsible for project acquisi-
tions in line with target markets.

Business divisions and organisational structure
AGO AG Energie + Anlagen has held both its interests since the financial year 2006.
Biomasseheizkraftwerk Alperstedt GmbH, Alperstedt, was formed in early 2006 for the
purpose of providing bio energy to a large greenhouse complex near Erfurt. In the finan-
cial year 2008, Hans Ulrich Gruber (CFO of AGO AG Energie + Anlagen) was appointed
the sole director of this company. In 2008 Helmut Peetz (COO of
AGO AG Energie + Anlagen) became a director, together with Roy Michael, of
HolSoTherm GmbH, Kölleda. Furthermore, the decision was taken in 2007 to set up a
company in Italy. AGO AG Energie + Anlagen’s share in the newly founded AGO ENER-
GIA S.r.l., Turin, is 55%. Mr. Roberto Sacco is heading the Italian company. In 2008,
AGO ENERGIA S.r.l. acquired a 90% share in the first project company – Reindeer S.r.l.,
Cassano Magnago (VA)/Italy. AGO Energy (Pty) Ltd., Cape Town, South Africa, was
founded as an additional sales company. Responsibility for the African company was
handed over to Ralph M. Ertner and Uwe Kern (Executive Manager at
AGO AG Energie + Anlagen). Ralph M. Ertner has already been working in South Africa
for over ten years.
The internationalisation rolled out in 2007 was continued in 2008. Norway has been
identified as another market that AGO Group can tap thanks to its expertise when it
comes to biomass and heat pumps in particular. Several projects are currently being
negotiated. An independent company will be established when the first project is
implemented. A Swedish company has been planned for carrying out joint implementa-
tion mechanisms.
                                                                                              | 155


Products, services and business processes
Energy supply as a core competency. AGO AG focuses on its core strengths: supplying
industrial locations with energy using a wide range of technologies. In this case, energy
means heating, cooling and compressed air as well as electricity. We distinguish
ourselves from our competitors thanks to our technical expertise across a wide range of
energy supply methods, combined with our highly streamlined project implementation
processes. AGO AG therefore has a clear “unique selling proposition” (USP for short).
AGO Group is also well positioned with high levels of expertise when it comes to increas-
ing its customers’ energy efficiency in the field of trigeneration.

Key locations
From the heart of Germany to the whole of Europe. The parent company is headquar-
tered in Kulmbach, Germany. All of the major population centres in southern and central
Germany and a total of six airports are within two-and-a-half hours of our head office. To
date, we have also established a sales site in Thuringia. We will also operate on the
international market as a result of the establishment of AGO ENERGIE S.r.l. in Turin/Italy
and AGO Energy (PTY) Ltd. in Cape Town/South Africa in 2008.

Key sales markets and competitive positions
Always one step ahead as an industrial energy supplier.
Energy provision for industrial locations is a varied and individual field. With its
experienced project team and over twenty five years of experience with industrial custom-
ers, AGO AG’s strength lies in its employees and their expertise. Due to its well-versed
project teams which are organised into separate organisational units and a large propor-
tion of employees with technical expertise, projects can be implemented quickly and
efficiently. AGO AG therefore is always one step ahead. The Company’s sales markets
are clearly experiencing growth. Each international industrial location which is character-
ised by a high degree of energy consumption or a certain need for media (heating, refrig-
eration, compressed air, steam, etc.), makes up the Group’s target clientele.

Management and control
The Management Board of AGO AG Energie + Anlagen is made up of two members. As
Head of Technology (COO), Helmut Peetz is responsible for the business divisions con-
sulting, project development and implementation, operation and service as well as sales,
environmental and quality management, data protection and internal audit. CFO Hans
Ulrich Gruber is responsible for strategic corporate planning and equity investments,
taxes, finance, controlling and real estate, human resources, IT, investor and public rela-
tions, risk management, centralised marketing, and corporate governance.
The Supervisory Board, which acts as the supervisory body for AGO AG, consists of six
members. The Chairman of the Supervisory Board is Steffen Pfund.

Corporate governance
The German Corporate Governance Code (“Code”) contains suggestions and recommen-
dations for managing and overseeing a listed company in Germany. The Code was
passed by the German Corporate Governance Code Governmental Commission on
26 February 2002 and has been revised several times since then, most recently on
2 June 2005 effective 12 June 2005. AGO AG Energie + Anlagen has applied to include
all its shares in trading on the Open Market as well as in the Entry Standard subsection.
As a result it will not be classed as a listed company according to Section 3 (2) AktG. As
a result the Management Board and Supervisory Board of AGO Group are not obligated
in line with Section 161 AktG to confirm that the recommendations of the Code were
fulfilled every year and which recommendations were not used.

The Company is not yet following the regulations of the Code as it is not currently
obligated to issue a compliance statement, however it is clarifying whether it is to issue
such a statement in the future.

1.2 Company management, objectives and strategy
Focus on core competencies
In the future, AGO Group intends to focus on project development and implementation.
Its uppermost objective is to further develop the existing market and to take advantage of
the potential in the area of industrial energy provision with regenerative energy sources.
A wide range of AGO Group products are supplied to different customers in a number of
markets in various countries worldwide. Therefore, specific strategies are formulated de-
pending on the product area. A differentiation strategy has been adopted in the biomass
cogeneration plant division. The product area of ammonia/water absorption chillers, the
“ago congelo”, is to be focused on even more.

Our objectives
The future market of AGO AG is the growth market of energy supply for industrial produc-
tion, and in particular the sub-segment of biomass cogeneration plants. The Company’s
strength lies in integrated project management from the planning stage right through to
construction and operation which is then carried out by operating companies. This is to
form the foundation for achieving growth in AGO Group through plant operation.

Strategic financing measures
AGO Group has been in discussion with investment companies and foreign direct inves-
tors since 2008 in an effort to substantially increase the project financing volumes allowed
by the IPO in 2007.

The subordinate bonds which were issued in 2006 to finance the formation of the Bio-
masseheizkraftwerk Alperstedt GmbH, Alperstedt, and the acquisition of the equity inter-
est in HolSoTherm GmbH, Kölleda, still endure. The subordinate bonds are considered
as proportionate components of shareholders’ equity for rating purposes and are reported
in the annual financial statements as a separate liability item. In addition, a few credit
lines (bonds) were created by insurance companies and banks to the amount of approxi-
mately €20.3 million. €14.0 million were availed of on 31 December 2008.

Management system and key performance indicators
AGO AG performs internal financial reporting in accordance with the German Commercial
Code and IFRS. Four earnings forecasts are prepared each year. Projects are generally
evaluated on the basis of direct costs and appropriate additions for overheads. Credit
checks are performed for all customers via Euler Hermes. An intensive liquidity manage-
ment and performance indicator system serves to ensure that the Management Board
always has a current basis of information for decision-making purposes.

1.3 Macroeconomic and sector development

Macroeconomic development
The German economy continued to grow in 2008. However, it wasn’t impacted by the
“financial crisis” quite to the anticipated extent. The gross domestic product (GDP)
increased by 1.3 percent in real terms in the past year according to the Federal Statistical
                                                                                                | 157


Office in Frankfurt. In 2007, the economy grew by 2.5 percent, while the increase in 2006
was 3.0 percent. The world economic situation was strongly impacted by the price of oil in
2008. Since the beginning of the year, the price of crude oil was constantly on the rise,
reaching a record high of USD 146 a barrel. As a result of the banking crisis, the trend
changed in the middle of the year. From July to December, the price of crude oil fell by
73 percent and closed the year at USD 40 a barrel. This means that an average world
market price of USD 91 per barrel of crude was calculated for 2008. In 2007, the price
average was just USD 74 per barrel.
Production in the manufacturing industries, the principal contributors to growth in 2007
and 2008, suffered a massive slump in the second half of 2008.
All financial sectors made a positive contribution to growth on the investment side of the
GDP. The manufacturing industries (excluding construction) and the areas of financing,
rental and company service providers however recorded significantly lower growth rates
than in 2007. The price-adjusted gross value added of manufacturing industries rose by
0.7 percent (after + 5.2 percent in 2007), while that of financing, rental and company
service providers increased by 1.7 percent (2007: +3.6 percent). The construction indus-
try also once again recorded positive development, increasing its economic performance
by 3.3 percent. (Source: German Federal Statistical Office, press release no. 016 from
14 January 2009)

A breakdown of AGO Group’s individual markets
The oil price development in 2008 and the gas supply stop at the start of 2009 once again
showed how fatally dependent industrial companies are on gas and oil. Many are increas-
ingly looking for environmentally friendly alternative solutions for supplying their company.
However, the automotive and financial crisis has considerably lengthened the negotiation
periods for contracting projects. Many companies are dependent on industrial suppliers,
as the strong increase in the oil price in the first half of 2008 demonstrated. AGO Group
has enjoyed a clear competitive edge in the field of industrial supply with biomass since
2008 with the joint implementation project, unique of its kind in the world, and the emis-
sions trading certificates that were produced from it. This shows the alternatives to con-
ventional energy sources as well as options which increase energy efficiency. This in-
cludes both site analyses and trigeneration. Italy in particular offers great potential for
supplying industrial companies with the required heating and cooling via contracting solu-
tions. Italian legislation makes the use of regenerative fuels particularly favourable. With
the establishment of AGO ENERGIA S.r.l., Turin/Italy, the Italian market will also be ser-
viced on a domestic basis. Things are changing in South Africa. AGO Energy (PTY) Ltd.
in Cape Town serves as a sales office for AGO AG Energie + Anlagen. Projects are being
acquired here and existing customer contacts bolstered. The primary technology used will
be industrial trigeneration solutions.
In addition, several potential projects have been under discussion with a Norwegian part-
ner since summer 2008. The focus of the discussions are biomass projects as well as
large heat pump concepts due to the country’s proximity to the sea.

Summary of market development
AGO Group was able to further expand its consulting business in 2008. Demand in the
project development and implementation business division also increased significantly in
2008. The offer volume grew many times over compared to the previous year. Due to the
initial focus on the automotive industry, order conversion was checked very early on in
2008. The current offer structure is very broad. With over two dozen on-going offers and
the emissions certificates as a unique selling point, AGO Group is able to sets itself apart
from the competition.
2. Net assets, financial position and results of operations

2.1 Results of operations and key financial indicators of the Group and the
    business divisions

Sales
AGO AG recorded sales of €36.7 million (€41.3 million in the previous year), significantly
down on the previous year due to project postponements. AGO Group does not intend to
record large rates of growth in plant creation, but rather in plant operation by operating
companies with individual biomass cogeneration plants. What is striking is the dramatic
increase in sales in the consulting business division (€0.7 million compared to €0.3 million
the previous year). This resulted from the sale of CO2 emissions certificates amounting to
€0.3 million.

Sales:


                                                     2008               2007         Change
                                            € thousands         € thousands                  %
Sales                                             36,697               41,344         -11.2%
Domestic                                          34,070               32,108             6.1%
Foreign                                              2,627              9,236         -71.6%



AGO Group’s foreign activities have substantially increased compared to previous years.
However, this trend is not yet noticeable in sales figures due to lesser degrees of comple-
tion and invoicing a large project in the previous year.

Sales by business division:


                                    Service,                 Project              Plant
                                  consulting &         development &            operation
                                 small projects        implementation
External sales                              8,399                 23,939                  4,359
Intercompany sales                             384                       0                   0
Total sales                                 8,783                 23,939                  4,359
Segment profit or loss                         722                     588                  334



Earnings situation
At €1.6 million (€-0.3 million in the previous year), earnings before interest and income
tax (EBIT) were positive. EBIT increased by €1.9 million in the financial year 2008 mainly
due to the focus on in-house planning in the project business. Less profitable, externally
planned projects which caused margins to fall in 2007 were only selectively carried out in
the reporting year. The financial result amounted to €-0.5 million (€-0.3 million in the
previous year) with income before taxes of €1.0 million (€-0.6 million in the previous
year).
                                                                                                   | 159


Incoming orders
Incoming orders for 2008 amounted to €57.8 million, significantly above the forecast
€47.0 million. This underlines the statement that AGO Group is on the right track.

Research and development costs
Research and development costs increased to €174 thousand (previous year: €68 thou-
sand). In research and development, AGO Group is continuing to focus on implementing
new economic energy supply concepts and market niches, especially in the field of
cooling technology. Therefore in 2008 the first ammonia / water absorption chiller was
delivered.

Staff intensity
With 147 employees (as of 31 December 2008, previous year: 132), the number of
employees in 2008 increased over the previous year. Twelve apprentices (previous year:
nine) were employed in the Company. The increase in the workforce is attributable to
personnel expansion in the divisions service, foreign market activities and controlling.
In an effort to further improve internal processes, the KAIZEN approach was continued in
2008 and the corresponding training measures among employees were carried out.
At €81 thousand (previous year: €70 thousand), training costs were above the level of the
previous year, clearly underlining the strategy of constantly improving employees’
know-how.

Staff costs
At €6.8 million, staff costs were down slightly on the previous year (€7.1 million). The item
of staff costs was composed of expenses for wages and salaries at €5.8 million and ex-
penses for social contributions and expenses for pension provision at €1.0 million.

Quality management system
The Company revised its quality management manual in 2008. AGO AG Energie + Anla-
gen is certified in accordance with ISO 9001:2000 and again successfully passed its
surveillance audit in September 2008.

Costs of materials and purchased services
At €33.3 million (previous year: €34.6 million), the cost of materials sunk substantially in
the reporting year. This includes purchased services amounting to €2.2 million, almost
halving compared to the previous year (previous year: €4.3 million). This can mainly be
attributed to the focus on in-house planning in the project business. Externally planned
projects which caused high costs in 2007 in purchased services were only selectively
carried out in the reporting year.

Selling costs
Selling costs remained unchanged at €2.1 million compared to the previous year
(€2.1 million). Last year’s selling costs were impacted by a one-time item which was
offset with several items. Biomass projects still to be implemented and expenses for the
bid proposal preparation are included in current selling costs as a significant proportion of
these costs. Brand registration fees as well as legal and consulting costs for brands
totalling €0.1 million are also included in this item. Travel activities were also expanded in
an effort to acquire further projects, particularly in foreign markets. The resultant activities
on the ground led to increased selling costs in comparison with the previous year.
Project development and implementation business division
A large-scale project in Stuttgart has been delayed over several months with the upshot
that several million Euros in sales are missing in 2008 compared to the initial order. The
conclusion of contracts in biomass projects has been significantly delayed due to the
market development. Existing contracts from automotive suppliers were cancelled and
resultant costs compensated. Thanks to the high incoming order in 2008 and the
multiplied number of open offers compared to the previous year, a significant increase in
sales is anticipated for 2009.
Consequently, operating activities primarily concentrated on projects that were set up for
our customers. What is particularly striking in the project development and implementa-
tion business division is the significant decrease, due to the Serres project, in the foreign
share from €9.2 million in 2007 to €2.6 million in 2008. Domestic sales of €21.3 million
(previous year €23.8 million) were strongly impacted by positively executed biomass
cogeneration plant and cooling projects.

Service & consulting business division
Service business recorded growth with sales of €8.8 million (previous year: €6.0 million),
in a similar vein to the previous year. The trend, which has developed over a number of
years, continued in 2008. Due to the constant contact with existing customers and
capacity expansions in service, more orders were able to be processed and therefore
more sales were generated. The consulting division developed very positively in 2008
with an increase in sales of over 130 percent (previous year: over 50 percent). Rising
energy costs led to a substantial improvement in the market for energy efficiency
consulting in both 2008 and 2007. Additional sales were also generated here from the
sale of CO2 emissions certificates.

2.2 Financial position

Financing analysis
Liabilities to banks, i.e. long-term financing of the building extension work in Kulmbach,
was repaid as planned in 2008. Bearer bonds with a term of seven years and a volume of
€2.5 million were issued in 2006 for the long-term financing of the Company’s
investments in biomass cogeneration plants. As the bonds are subordinated, they are
considered as proportionate components of shareholders’ equity for rating purposes.

Gearing
Gearing, i.e. the ratio of debt to equity, increased slightly against the previous year. In
counting the bearer bond towards shareholders’ equity at half its value for rating
purposes, gearing also increased slightly from 1.58 in the previous year to 1.66.

Total cash and cash equivalents
As of the reporting date on 31 December 2008, AGO Group had liquid assets amounting
to €7.7 million (previous year: €5.6 million) available for short-term and independent pro-
ject financing. No short-term refinancing is planned for the financial year 2009.

Investments, divestments and depreciations
AGO Group invested a total of €1.5 million in intangible assets and property, plant and
equipment in the financial year 2008 (previous year: €0.3 million). This relates to replace-
ment investments, investments in a biomass heating plant in Italy amounting to
€0.8 million, a test facility and the first AGO cooling machine “ago-congelo” (totalling
€0.2 million). A total of €0.1 million (previous year: €0.1 million) was invested in
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non-current securities in the year under review. This was attributable to a savings obliga-
tion in connection with the financial liabilities.

Liquidity analysis

      € thousands
 10,000

                                                                                           7,679
  8,000

  6,000          5,556


  4,000
                                 2,058
  2,000                                         Cash flow from         1,564
                                                 investment
                                                   activities
       0
            Cash and cash    Cash flow from                        Cash flow from       Cash and cash
              equivalents   current operating                    financing activities     equivalents
             31 Dec. 2007       activities                                               31 Dec. 2008
 -2,000                                           -1,499

The inflow of liquidity was generated from ongoing business operations. The investments
were counter-financed with net cash used by investing activities.

2.3 Net assets

Asset structure analysis
At €38.0 million, total assets grew compared to the previous year (€35.1 million) by
around €3.0 million.
In the case of asset positions, this is primarily as a result of property, plant and
equipment, non-current assets and liquid assets. While property, plant and equipment
rose as a result of the investment activities, the increase in liquid assets underline the
positive cash flow of the operating business.
On the liabilities side, financial liabilities increased (€0.9 million), as the new financing of
a large individual project overcompensated the planned repayments of existing loans.
Due to the high number of not yet invoiced orders, liabilities from commissioned
production recorded a sharp increase year-on-year (€1.4 million).

Disclosures on founding companies
AGO ENERGIA S.r.l. Turin/Italy was founded on 15 January 2008. AGO AG Energie +
Anlagen holds a 55 percent share in the company.
AGO Energy (Pty) Ltd., Cape Town, South Africa, was founded as fully owned subsidiary
in September 2008.

Overall assessment of the economic situation
The notes to AGO AG’s results show that we are entering 2009 with a positive result,
high liquidity and a well filled order pipeline.
3. Report on the risks and opportunities of the Company’s future development

3.1 Risk report

Risk management system
The Company’s project development business is subject to specific risks that require
risk-oriented corporate management. The aim of AGO’s risk policy is to ensure proactive
risk management. An early risk identification and monitoring system serves to ensure the
timely, qualified and quantified identification of all potential risks. Risk control as a
management task is performed as part of business division development on the basis of
the level of capital resources available in the dynamic field of risk and expected return.
The functions of risk control and financial control are clearly separated. Risk reports are
prepared on a monthly basis, while projects within the Company are continuously
evaluated for risk management purposes on a weekly basis.
In order to prevent default, Hermes credit insurance is generally concluded for all
customers. All relevant customers are checked for commercial creditworthiness before
the contract is completed.
When processing orders, a check is carried out on a weekly basis to ensure that partial
invoices are sent so that the agreed insurance sum is not exceeded.
Any possible execution risks are recorded in the monthly project status report taking into
account possible corrective measures. The financial success of every notable order is
monitored with controlling at monthly project meetings.

Individual risks
In 2006, AGO AG granted a customer in Munich an extension to its payment terms as it
had not yet completed the follow-up financing of the respective project. Euler Hermes
credit insurance was concluded for the receivable from this customer. The customer
mentioned above has been paying these liabilities back in instalments since October
2007. The repayments were still ongoing in 2008.
No agreement could be reached about the contractual heating price adjustment at
Biomasseheizkraftwerkes Alperstedt GmbH, Alperstedt. The action will now be settled in
court. Our lawyer’s legal opinion confirms that there are good chances of a positive
outcome. However, if a price adjustment cannot be made, this would result in further
losses at the subsidiary.

Macroeconomic risks
AGO AG’s sales are primarily generated from capital goods for industrial energy
generation. Due to the general economic situation and the forecasts for 2009, a fall in the
willingness to investment, especially in automotive manufacturers, is anticipated. As
these companies now only make up a small proportion of AGO Group's target clientele,
this only represents a small default risk. The Company’s main focus is international small
and medium sized businesses. Due to the investment bottleneck in the area of industrial
energy supply and fluctuating energy costs, which are stimulating the employment of
energy efficiency measures and the changeover to regenerative energy sources, we do
not currently consider there to be any significant risk to the Company’s earnings power
even if the European economy falls into a recession as forecast.

Sector risks
We are broadly positioned in the core business of industrial energy generation. We are
not dependent on a specific sector. As a result, AGO AG’s business is exposed to a large
number of sector risks, but the individual effect of each of these risks is minimal. The
                                                                                               | 163


broad technology base of the energy supply sector allows AGO AG to react flexibly to
market developments. The internationalisation of the Company for tapping into national
special economic situations also helps broadly disperse the risks.

Strategic risks
AGO AG’s growth strategy is focussed on project development in the area of industrial
energy supply. One key feature of the Company’s risk hedging strategy is the long-term
analysis of the creditworthiness of its industrial customers. As in the project development
business, customers are assessed and corresponding credit insurance is concluded.
Access to refinancing for project development is the Company’s key strategic focus.

Risks from long-term orders
One of the particular strengths of AGO AG is that it implements projects in a significantly
shorter timeframe than is typical for the market as a whole.

Financial risks
Project refinancing is generally secured for the respective project term. This ensures that
financial risk is limited.

Legal risks
As is typical in the project development sector, a small number of legal disputes are
currently pending. These disputes relate to claims for remuneration and guarantee
issues. The resulting risks are secured by way of valuation allowances and provisions

Staff risks
AGO AG is reliant on its highly qualified workforce. It competes with a large number of
small and medium-sized companies to attract the best staff. There has been very little
fluctuation in terms of the key players in the Company’s workforce over the years.
However, AGO AG’s planned growth over the coming years means that it will be forced to
expand its workforce in an increasingly competitive environment, with substantial demand
for the best candidates due to the decline in the training of highly qualified technical
employees. AGO AG intends to counter this risk by implementing various measures
aimed at improving its attractiveness as a potential employer. As well as training its own
employees and promoting employee potential, the human resources market is continually
being monitored. Being named as one of the best 100 small and medium sized
employers in January 2009 has also helped generate more interest in AGO Group.

Risks relating to real estate assets
The real estate assets of AGO AG and its subsidiaries are limited to owner-occupied
power plants and business premises used by the Company. This means that the
Company is not dependent on the real estate market.

Environmental risks
Environmental risks consist to a lesser extent in the fluids and oils used in plants oper-
ated by AGO AG. These risks are countered by analysing hazardous substances and
work instructions. Risk limitation is carried out by means of regular briefings and environ-
mental liability policies.

Assessment of the risk situation by the Company’s management
The most significant risk to which AGO AG is exposed is the default of the project in Mu-
nich with a monthly repayment which was not completed as planned in 2008. No agree-
ment could be reached about the contractual heating price adjustment at Biomasse-
heizkraftwerkes Alperstedt GmbH, Alperstedt. The action will now be settled in court. Our
lawyer’s legal opinion confirms that there are good chances of a positive outcome.
However, if a price adjustment cannot be made, this would result in further losses at the
subsidiary. Above and beyond this risk, AGO AG’s risk profile is primarily composed of
the risks that are inextricably linked to its business activities.

Rating
The Company sustained its Standard & Poor’s rating of BBB- and Moody’s rating of Baa3
in 2008.

3.2 Report on expected developments

Orientation of the Company in the next two financial years
Due to the crisis that arrived in 2008, AGO Group has used its scope of technology as an
ideal instrument for successfully fighting against the difficult years ahead. We are able to
tap the anticipated public investments with over 160 projects already implemented as
a successful biomass cogeneration project partner well known in the industry. The joint
implementation emissions trading project represents a competition-free economical
biomass alternative heating supply for municipal and industrial applications. Our
successful launch in Italy means that we are well represented in the country that offers
the highest supply remuneration for “bio” energy. Our decades of experience with large
cooling machines and heating pumps makes us the ideal partner in the Norwegian growth
market.
The African market for trigeneration is addressed by AGO Energy (PTY) Ltd. in Cape
Town (South Africa) as part of a sales cooperation with Dematech. We have already
received a planning order for a second project in South Africa.

Opportunities from establishing AGO ENERGIA S.r.l., Turin/Italy in 2008
Italy has a developed market for regenerative heat production and regenerative electricity
generation with a share of 7.2 percent in the entire energy production total. Politically, the
objective is to achieve a share of 22 percent by 2012.
However, intensity of production is still far behind that of Germany and Austria, even
though a similarly large degree of biomass potential exists. AGO ENERGIA S.r.l., Turin/
Italy has been active in the market since 2008. After several trade fair appearances and
effective publicity work, the first project was submitted for approval as planned in 2008.
Numerous further projects await approval in 2009. AGO ENERGIA S.r.l., Turin/Italy has
exceeded our expectations from a present-day perspective.

Future macroeconomic conditions and developments in AGO AG’s key sectors
The world economic environment is set to suffer a significant slump in the coming years.
The energy supply sector is expected to show differing tendencies depending on sector
development. The wide scope of the technological possibilities and special regional fac-
tors still provide general operating conditions for AGO Group.

Expected course of business and forecast development of key performance
indicators
The degree of utilisation at the turn of year was satisfactory. The number of projects for
which contracts were due to be signed at the turn of year was significantly higher than in
previous years. The Management Board of AGO AG expects sales to significantly
increase year-on-year in 2009, accompanied by a substantial improvement in earnings.
                                                                                             | 165


Expected financial position
In terms of financing, AGO had cash in hand and bank balances totalling €7.7 million at
the reporting date on 31 December 2008 as well as unutilised credit facilities of over
€3.4 million. AGO AG intends to use the appropriate financial instruments to finance its
acquisitions and project development activities. Small project developments and
acquisitions are financed from current cash flow. Long-term projects will be refinanced on
a long-term basis.

Overall assessment of the Company’s projected development
AGO Group will make selective project acquisitions from the variety of technological
options and geographical markets. We are convinced that AGO Group is very well
positioned to operate successfully in the crisis years anticipated.
We believe that we will not suffer from major capacity utilisation problems due to our
moderate size and flexibility. We are consistently and successfully continuing on the
course we have set.

3.3 Post balance sheet date events of special importance
After the conclusion of the financial year ending 31 December 2008, there were no
events of special importance that have to be reported.

3.4 Closing statement in accordance with Section 312 (3) of the German
    Stock Corporation Act
Caverion GmbH, Stuttgart, is the parent of AGO Group, Kulmbach.

We hereby declare that AGO AG received appropriate remuneration for the business
transactions entered into on the basis of the circumstances known to the Management
Board at the time at which the transactions were implemented. We neither performed nor
failed to perform any measures within the meaning of section 312 (1) sentence 2 of the
German Stock Corporation Act.



Kulmbach, 24 April 2009




AGO AG Energie + Anlagen
Management Board




Hans Ulrich Gruber           Helmut Peetz
Auditor’s opinion
Auditor’s opinion
For the attention of AGO AG Energie + Anlagen, Kulmbach:
We have audited the consolidated financial statement prepared by
AGO AG Energie + Anlagen, Kulmbach, consisting of balance sheet, income statement,
statement of registered earnings and expenditures, statement of changes in shareholder’s
equity, cash flow statement and notes – together with the consolidated annual report for
the financial year from 1 January to 31 December 2008. The preparation of the
consolidated financial statement and the consolidated annual report according to IFRS, as
is to be applied in the EU, and according to the regulations based on commercial law to be
applied additionally to Sec. 315 a (1) HGB (German Commercial Code) as well as
according to the additional regulations of the articles of association is subject to the
Company’s legal representatives’ responsibility. It is our responsibility to express an
opinion on the consolidated financial statement and the consolidated annual report on the
basis of our audit.
We have carried out our audit of the consolidated financial statement according to
Sec. 317 HGB taking into account the German principles of orderly annual audits estab-
lished by the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer, IDW).
Based on this, the audit is to be planned and carried out in a way that misstatements ma-
terially affecting the presentation of the net assets, financial position and results of opera-
tion communicated by the consolidated financial statement and consolidated annual report
are definitely identified, taking into consideration the applicable accounting regulations.
When stipulating the audit activities, knowledge about the Group’s business activities and
its economic and legal environment as well as expectations about potential mistakes is
taken into account. Within the audit, the effectiveness of the accounting-related internal
control system and evidence supporting the disclosures in the consolidated financial
statement and the consolidated annual report are predominantly examined on a test basis
within the framework of the audit. The audit comprises the assessment of the annual
accounts of the entities included in the consolidated financial statement, the assessment
of the accrual of all companies within the scope of consolidation, of the balancing and
consolidation principles applied and of the basic evaluations of the legal representatives
as well as evaluating the overall design of the consolidated financial statement and the
consolidated annual report. We believe that our audit provides a sufficiently reliable basis
for our opinion.
Our audit did not lead to any reservations.
According to our assessment based on the knowledge gained during the audit, the con-
solidated financial statement corresponds to the IFRS as must be applied in the EU, and
to the regulations based on commercial law to be applied additionally according to
Sec. 315 a (1) HGB (German Commercial Code) as well as to the additional regulations of
the articles of association. Considering these regulations, the consolidated financial state-
ment also communicates an image corresponding to the Group’s actual net assets,
financial position and results of operation. The consolidated annual report is in line with
the consolidated financial statement, communicates an overall appropriate image of the
Group’s situation and appropriately represents the opportunities and risks of the future
development.
Stuttgart, 27 April 2009

                                              Ebner Stolz Mönning Bachem GmbH & Co. KG
                                              Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft

                                              Dr. Wolfgang Russ                 Christoph Lehmann
                                              German Public Auditor              German Public Auditor
Glossary
Glossary
I. Sectoral glossary

Absorption cooling unit
An absorption cooling unit is a special type of cooling unit that compresses the refrigerant
thermally, rather than mechanically, using a temperature-affected refrigerant solution.

Annex 1 states
This term refers to all industrialised and transforming countries (former state-directed
economies) that have pledged to promote national emission reduction policies and meas-
ures in the Framework Convention on Climate Change, among other things.

Biomass cogeneration plant
A biomass cogeneration plant generates electricity and heat by burning biomass.

Biomass heating plant
A biomass heating plant exclusively generates heat by burning biomass.

Certified emission reductions (CER)
CERs are emission reduction credits earned by annex 1 states under Article 12 of the
Kyoto Protocol with CDM emission reduction projects in non-annex 1 states, e.g. devel-
oping countries. They can also be earned with unilateral CDM projects, e.g. without the
involvement of an annex 1 state.

Clean development mechanism
The “clean development mechanism” (CDM) climate protection tool allows countries with
emission reduction obligations to achieve these emission reductions through the imple-
mentation of concrete climate protection projects in countries with no such reduction obli-
gations. In this regard, the Kyoto Protocol expressly permits the involvement of private
and public institutions, e.g. also companies, in the CDM. Emission credits generated by
CDM projects are called certified emission reductions (CER). They can be included in the
calculation of emissions rights of industrialised nations (assigned amounts). This in-
creases the total available emissions rights of these countries. The CDM links two objec-
tives of the Framework Convention on Climate Change and the Kyoto Protocol: It is in-
tended to help industrialised nations achieve their emission targets and simultaneously
promote the sustainable development of developing countries.

Cogeneration
The use of cogeneration technology in a power plant means that both the electrical en-
ergy and the waste heat are used, e.g. for heat supply.

Cogeneration plant
A cogeneration plant is a plant with a modular structure that generates both electricity
and heat and that is frequently operated at the location where the heat is consumed.

Cogeneration plant module
Module used to construct a cogeneration plant.

Compression refrigeration unit
A compression refrigeration unit generates cooling energy through the mechanical com-
                                                                                                 | 171


pression of a refrigerant and using heat from vaporisation.

Condensing boiler
A condensing boiler is a boiler that uses almost all of the energy content of the respective
fuel. The difference between conventional boilers and condensing boilers is that the latter
also use most of the condensation heat of the exhaust gases. This means that condens-
ing boilers offer an extremely high level of efficiency in terms of heating value.

Contracting
Contracting is the financing, development, implementation and operation of a power gen-
eration plant by an energy supply company for one or more customers on the basis of
long-term energy supply contracts.

ECo-Plus climate protection programme
ECo-Plus is a registered trademark of AGO AG.

EEG
Gesetz für den Vorrang erneuerbarer Energien (Erneuerbare Energien Gesetz, EEG)
German Act on the Promotion of Renewable Energies (Renewable Energies Act, EEG)

Efficiency
Efficiency is the ratio of work produced to work expended, and is used to describe the
effectiveness of energy conversion.

Emissions trading
Emissions trading refers to the trading of certificates that entitle the holder to emit green-
house gases in accordance with the German Greenhouse Gas Emissions Trading Act
(TEHG).

Emission reduction units (ERU)
Emission reduction units are emission credits generated by joint implementation under
Article 6 of the Kyoto Protocol. The main difference between ERUs and CERs is that
ERUs are generated by the conversion of emissions rights of the host country (AAU) so
that no additional certificates are created.

Energy source
Energy sources are raw materials or other materials in fossil, regenerative or nuclear
form that are suitable for use in energy generation.

Gas burner
A gas burner is used to ignite a gas/air mixture. The gas flame is used in a boiler to heat
water or generate steam.

Heat exchanger
A heat exchanger is a component that transfers heat between two other components,
such as a boiler and a superheater.

Joint implementation
Joint implementation (JI) is the second flexible mechanism available to annex 1 states in
order to reduce their greenhouse gas emissions without implementing measures in their
own country. The JI mechanism allows annex 1 states to implement emission reduction
projects in another annex 1 state and take credit for this reduction for their own country.
Unlike the clean development mechanism, this does not involve developing countries.

Kyoto Protocol
The Kyoto Protocol is an international agreement of the UN organisation: United Nations
Framework Convention on Climate Change (UNFCCC). It was negotiated and approved
at the third International Conference on Climate Change in the Japanese city of Kyoto in
1997. The Kyoto Protocol is a binding agreement under international law which obligates
participating countries to make concrete reductions in greenhouse gas emissions by
2012. The minimum target reduction between 2008 and 2012 is 5 percent compared to
1990 levels.

Megawatt (MW)
Unit of power. 1 megawatt = 1,000 kilowatts = 1,000,000 watts

Megawatt hour (MWh)
Unit of energy. The consumption of electrical energy is also expressed in terms of mega-
watt hours. A megawatt hour corresponds to the use of 1,000,000 watts for a period of
one hour.

Combined cycle power plant
Combined cycle power plants are power plants that use a mixture of materials as a heat
source, such as water and ammonia in the case of the Kalina process, thus reducing the
required process temperature due to the lower boiling point.

Measurement and control technology
Measurement and control is a term used in the area of automation technology (building
automation), in which all of the sensors, actuators, control elements, consumers and
other technical units within a building are connected.

MW
Abbreviation of megawatt

MWh
Abbreviation of megawatt hour

OECD
The OECD (Organisation for Economic Co-operation and Development) is an interna-
tional organisation with 30 member countries dedicated to democracy and the market
economy. Most OECD members are states with high per capita incomes and are consid-
ered developed countries. The seat of the organisation is Paris. Objectives of the OECD
include promoting economic development, raising the standard of living, expanding world
trade in the member states and also, for example, in developing countries.

Oil burner
An oil burner is a compact unit in which fuel oil is mixed with air and atomised and ignited
on the combustion head. Oil burners are fully automated, adjustable combustion devices
with various safety features. Oil burners are mounted on water boilers in such a way that
the combustion head protrudes into the water reservoir of the boiler. The flame then
heats up the water in the boiler for heating or steam generation purposes.
                                                                                             | 173


ORC
Abbreviation of Organic Rankine Cycle

Organic Rankine Cycle
The Organic Rankine Cycle is a method under which a steam turbine is driven by organic
fluids rather than water vapour.

Power generation plant
This term refers to the premises in which the equipment used for power generation is
situated.

Primary energy
Primary energy is defined as the energy that can be derived from natural forms of energy
or energy sources. By contrast, secondary energy is generated from the conversion of
primary energy sources (with a resulting energy loss).

Project design document (PDD)
The PDD is prepared by the CDM/JI (second track) project participants for project valida-
tion purposes. It should include the following information: Description of the project and
project context, the selected baseline method, the estimated project term and selected
financing period, additionality, environmental impact, origin of public funds for project
financing, stakeholder statements, monitoring plan, descriptions and explanations of cal-
culations.

Regenerative energies
See renewable energies

Renewable energies
Renewable energies are forms of energy from sustainable sources that can either be
regrown or that are considered to be inexhaustible.

Screw-type water cooler
A screw-type water cooler is a cooling unit that generates cold water using a screw com-
pressor. A screw compressor is used to increase the pressure on a refrigerant. The refrig-
erant in the evaporator takes the heat energy from a closed water cycle, hence removing
energy from the water that is to be cooled. The pressure on the refrigerant is then re-
duced by releasing the energy taken from the water cycle. Following this process, the
refrigerant is a gaseous aggregate and is reliquefied in a condenser using cold water.

Split system
A split system is an air conditioning system consisting of an outer unit (condenser/
compressor) that is linked to an inner unit (evaporator).

Steam boiler
This term refers to all of the components required to generate steam. Steam consumers,
such as ducts and pipes, heat exchangers and condensers, do not form part of a steam
boiler.

Stirling engine
The Stirling engine is a heat engine in which a closed working fluid (mostly a gas such as
air or helium) is heated and cooled using external changes in temperature in order to
generate mechanical energy.

TEHG
(Gesetz über den Handel mit Berechtigungen zur Emission von Treibhausgasen) German
Greenhouse Gas Emissions Trading Act

Turbo water cooler
A turbo water cooler is a cooling unit that generates cold water using a turbo compressor.
A turbo compressor is used to increase the pressure on a refrigerant. The refrigerant in
the evaporator takes the heat energy from a closed water cycle, hence removing energy
from the water that is to be cooled. The pressure on the refrigerant is then reduced by
releasing the energy taken from the water cycle. Following this process, the refrigerant is
a gaseous aggregate and is reliquefied in a condenser using cold water.

Wood chips
Wood chips are small pieces of wood that have been chopped up, for example, and that
are used as an energy source for biomass heating and cogeneration plants. Wood chips
can be produced from various types of wood, such as waste wood, natural wood, or wood
obtained from rural conservation activities.
                                                                                              | 175


Glossary
II. Fiscal glossary

Annual financial statements
Annual balance sheet and profit and loss account to be prepared by the managing board
and controlled by the supervisory board and certified public accountants. Requirement
under commercial law.

Annual report
Report drawn up annually containing the annual financial statements, the reports from the
management board and supervisory board and a proposal on the allocation of the profit.

Balance Sheet
A balance sheet is a summarized, systematic comparison between a company's assets
and its capital resources as of a certain reporting date. The assets side of the balance
sheet shows how the company has used the capital resources at its disposal. The liabili-
ties side shows where the capital has come from by reporting, on the one hand, details of
the company's debts and, on the other hand, the capital attributable to the company's
owners.

Bear
The American term bear is a symbol for falling prices. The opposite is the term bull which
stands for rising prices.

Bookbuilding
A method of collating all incoming applications to buy shares to reduce the risk of issuing
shares on the stock exchange at a price that does not conform with market develop-
ments. The actual issue price is decided during a bookbuilding phase on the basis of a
price margin, which is calculated after talks with major investors.

Bull
In stock exchange parlance a symbol for rising prices. Its opposite, the bear, stands for
falling prices.

Cash Flow
A measure of a company's financial and earnings potential. It is calculated from inflow
and outflow of cash and cash equivalents during the financial year.

Cash Flow Return on Investment (CFROI)
A measure of asset creation. It is derived from cash flow and determines the shareholder
value created - or net earnings after deduction of capital costs of a business unit.

Cash Value Added (CVA)
A measure of asset creation. It is derived from cash flow and determines the shareholder
value created - or net earnings after deduction of capital costs of a business unit.

Consortium banks
Bank that prepares and accompanies an IPO (initial public offer).
DAX
The DAX Index is made up of 30 major German stocks (blue chips). It represents roughly
75 percent of the combined share capital of domestic joint-stock corporations listed in
Germany and accounts for some 85 percent of overall trading in German equities. DAX
stock are admitted to trading on the Official Markt and Regulated Market and are quoted
in the Prime Standard segment. The criteria for stock weighting in the DAX Index are
exchange turnover and market capitalization on the basis of free float share capital and
sectoral representativeness. Changes to the DAX are resolved by the Executive Board of
Deutsche Börse AG on the basis of proposal made by the Working Committee for Equity
Indices.

Designated sponsor
Banks or specialized traders who bridge temporary imbalances between supply and de-
mand in Xetra electronic stock trading, thereby improving a stock's liquidity. They do so
by quoting bid and ask limits (market making), either on their own initiative, on request of
a market participant (quote reuest) or in auctions. The fact that these quotes are shown in
the order books gives investors greater security for limiting their orders. Depending on the
market segment involved, a stock may have one or more designated sponsors, or none
at all. On arrangement with issuers, designated sponsors with the necessary capabilities
may also provide research or investor relations services.

Dividend
The share of a company's profit paid to a shareholder. Dividends are usually expressed
as a percentage of the nominal value of the shares. The amount is decided by the Annual
General Meeting on the basis of proposals put forward by the company's executive and
supervisory boards. Dividends are paid - normally through a depositary bank - on the day
after the AGM on shares a shareholder possesses on the day of the AGM.

EBIT
Earnings before interest and taxes. Key figure for the assessment of companies. This is
the profit result before tax and interest expenditure.

EBITDA
Financial indicator denoting earnings before interest, tax, depreciation and amortization
on tangible and financial assets and on securities held as current assets as well as amor-
tization on goodwill from equity method investments.

Entry Standard
Capital market access provided by Deutschene Börse within the Open Market (formerly:
Regulated Unofficial Market) for small and medium-sized companies as an alternative to
EU-regulated segments. The Entry Standard is primarily aimed at qualified investors who
are able to assess and accept the potential risks related to the investment in shares of
the respective company. Investors must be aware that shares of the company are not
admitted to trading at an EU-regulated market and that this part of the Open Market is not
subject to the uniform transparency standards and the strict provisions for investor pro-
tection on organized markets in the EU.

EPS
Earnings per Share.
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Equity method
Accounting method recording investments in associated companies or joint ventures ac-
cording to the investor's share of net assets.

Equity ratio
A financial measure showing the share of equity or own capital and reserves as a propor-
tion of total assets.

Federal Financial Supervisory Authority (BaFin)
The Federal Financial Supervisory Authority (BaFin) with official domiciles in Bonn and
Frankfurt am Main was founded on May 1, 2002 and took over the duties of the former
supervisory offices for banking, insurance and securities trading. In Germany, therefore,
there is an official bancassurance regulator under one roof covering about 2,600 banks,
800 financial services providers and roughly 700 insurance companies. The Authority is
funded exclusively from fees and charges paid by the supervised institutions and compa-
nies and is independent of the Federal budget. The overriding goal of the BaFin is to
safeguard the functional operability of the entire financial sector in Germany. Sub-targets
can be derived from this. Firstly, protecting the solvency of banks and financial services
providers, and secondly ensuring customer and investor protection. The BaFin itself is
subject to legal and material supervision by the Federal Ministry of Finance.

General Standard
Deutsche Börse stock listing segment for companies fulfilling the transparency require-
ments prescribed by German law. Admission to General Standard does not require any
action on the issuers' part; it occurs automatically in connection with listing on either the
Official or Regulated Market. General Standard is basically the initial listing segment for
smaller companies. For admission to Prime Standard, the market segment for joint-stock
companies with international operations, and inclusion in one of the selection indices of
Deutsche Börse, such as the DAX , companies must fulfil more stringent transparency
criteria.

Goodwill amortization
Method of depreciation the amount paid for goodwill on the acquisition of a new business.
Goodwill is an intangible asset reflecting the market position, brand, know-how and image
of a company. It is assessed by determining the difference between the present value of
the assets/debts of a company and the price paid to acquire it. It is amortized applying
the straight-line method over its estimated useful life

Group of consolidated companies
Those subsidiaries in the Group, which are included in the Group's consolidated financial
statements.

IFRS/IAS
Financial reporting standards published by the IASC or IASB. These regulations, formerly
known as International Accounting Standards (IAS), are now referred to as International
Financial Reporting Standards (IFRS) to reflect their broader remit. IAS standards retain
their current designations. As with IAS, new IFRS rules are consecutively numbered
("IFRS 1", "IFRS 2" etc.). Therefore, both an IAS 1 and an IFRS 1 exist side by side. Re-
porting under IFRS/IAS values securities by the 'mark to market' method and therefore
restricts the formation of undisclosed reserves. The main objective of reporting is to pro-
vide information, primarily for investors, to meet the basic criteria of comprehensibility,
relevance to decision-making, comparability and reliability. In contrast to the emphasis on
creditor protection and the principle of caution typical of traditional German accounting
methods, IFRS is guided by the concept of "fair presentation". To be admitted to the
Prime Standard listing segment of the Frankfurt Stock Exchange, companies are required
to report according to IFRS or U.S.-GAAP.

Issuer
Issuers of securities on the stock-exchange are generally private-sector public liability
companies or public corporations issuing their shares.

Joint stock corporation
Joint stock corporation (Aktiengesellschaft/AG) is one of the legal forms that companies
can take. In a joint stock corporation, the owners hold their stakes in the company in the
form of shares. Shareholders are only liable up to the amount of their shareholding, but
not with their other assets. The management bodies of the joint stock corporation are the
management board (Vorstand), the supervisory board (Aufsichtsrat) and the annual gen-
eral meeting (Hauptversammlung). A joint stock corporation is managed by the manage-
ment board, which is appointed by the supervisory board, while the suervisory board is
elected by the annual general meeting, i.e. the shareholders in general meeting. Further-
more, the shareholders also resolve at annual general meetings on important questions
of key relevance to the company, such as the appropriation of profits, the ratification of
the acts of management of the supervisory board and management board as well as on
capital increases and mergers.

Margin
The amount of the deposit required to set up a future position.

Market capitalization
The monetary amount obtained from the price of a share multiplied by the number of is-
sued shares.

Market price
Price of a share determined by supply and demand.

Nominal capital
In the association articles defined capital. This paper also determines in how many
shares it is divided. The company issues shares amounting to the nominal capital.

Non-par shares
Shares which do not specify any value in the relevant national currency, but rather a cer-
tain fraction of the stock capital of the publicly held company.

Open Market
The "open market" is a legally regulated market segment in Germany. However, it is not
subject to public but private law and was officially called the "regulated unofficial market"
until October 2005. Trading in the open market segment on the Frankfurt Stock Exchange
(FWB) includes not only German shares, but primarily foreign shares, bonds of German
and foreign issuers, certificates and warrants. It was first created on May 1, 1987, through
the merger of the "regulated unofficial market" and the "unregulated unofficial market".
The open market is not an organized market as defined by the German Securities Trad-
ing Act (WpHG). The basis for the inclusion of securities in the open market is provided
                                                                                               | 179


by the conditions for the regulated unofficial market of Deutsche Börse AG. There are
only a few formal application requirements and no follow-up obligations. Anti-insider trad-
ing rules apply, but the regulation on ad hoc disclosures does not.

Operating result
Profit term. It shows the profit from operating activities less book profits (and losses),
write-back (or allocation of provisions), currency losses on valuation at the balance sheet
date of long-term financial liabilities, and other periodic expenses and income.

Oversubscription
The total purchase offers exceeds the value of the securities issued. Issuing then takes
place on a percentage basis (in proportion to purchase offers received) or by drawing of
lots.

Profit and loss statement
Comparison of earnings (i.e. sales revenue, changes in stock) and expenditure (i.e.
wages, salaries, depreciation) for the financial year.

Quotation
Statement of the price of a security at a particular point of time.

Registered shares
Holders of registered shares have their name, address, profession and number of shares
entered in the share register kept by the company: The details are transferred to the reg-
ister by the depositary bank. Unlike holders of bearer shares, it is not the depositary bank
but the company that invites registered shareholders to the annual general meeting and
mails them admission cards. General proxy voting rights are not applicable with regis-
tered shares: That means - the shareholder must appoint a bank or representative to act
as proxy and vote in his stead in accordance with the shareholder's instructions.

Retention
Induction of withheld gains to equity. Method to strengthen the financial power of a com-
pamy.

Return on equity
A financial term indicating the net profit on equity capital employed.

Return on investment (ROI)
Interest of the financial investment.

Share
A share is a type of security. The owner of a share owns parts of a publicly held company
and is therefore a stockholder in that company. Share ownership is associated with cer-
tain stockholder's rights and obligations.

Share capital
Subscribed capital of a joint-stock company, divided up into equity shares. The statutory
nominal capital is at least 50,000 euros, but is usually much higher. The par value indi-
cates the fraction of a company's nominal capital represented by a single share. No-par
shares, on the other hand, securitize ownership in proportion of the number of shares
owned to the company's total number of shares. Share capital can only be raised or de-
creased with the approval of the General Meeting.

Shareholder Value
Benefit for the shareholder. A shareholder value oriented company policy aims at a fair
rate of return for its shares.

Share Identification Number/ Security Identification Number
Identification number for securities (shares, investment funds etc). The six-digit number is
intended to facilitate share trading.

Share index
An index number based on the prices of a parcel of representative shares. Among the
better known share indices are the German DAX (Deutscher Aktien Index), the FAZ Index
(Index of the Frankfurter Allgemeine Zeitung), the MSCI, the Dow Jones (USA), the Nik-
kei Index (Japan) and the Financial Times Ordinary Share Index (FTSE).

Stock price
The market price of a share, governed by the supply and demand on the Stock Ex-
change.

Subscription
Undertaking to buy a particular number of securities in the context of a new issue. In most
cases full allotment is not possible, owing to oversubscription.

Supervisory board
The supervisory board is typically one of the management bodies of a joint stock corpora-
tion. The two other management bodies are the management board and the annual gen-
eral meeting. A supervisiory board can also be established at a German limited liability
company (GmbH), the regulations of the German Stock Corporation Act then apply ac-
cordingly. The task of the supervisory board is to monitor the company's management, in
other words the management board which it has elected, and to advise it on strategic
issues. Furthermore, it has audit duties (in particular with respect to the company's an-
nual and consolidated financial statements) and reporting duties. The legal basis for the
work of the supervisory board is formed by the German Stock Corporation Act and the
articles of association of the respective joint stock corporation. In addition, practically all
supervisory boards have their own terms of reference. Many supervisory boards have
committees for specific subjects, the most frequent ones here being the audit committee
and the personnel committee. At most companies, the supervisory board consists of rep-
resentatives of the shareholders and also - a feature peculiar to Germany - of representa-
tives of the employees. The German Corporate Governance Code makes various de-
mands on a supervisory board member's personal profile, especially of his/her specialist
abilities and his/her loyalty to the company.

XETRA
Computerized trading system of the German stock exchange introduced in 1997. The
transactions are not conducted in person, but as buy and sell orders communicated via
computer systems.
Legal note
Legal note
This report contains statements about future developments which reflect current opinions
of AGO AG Energie + Anlagen’s management regarding future events. Any statement
within this report that reflects or is based on intentions, assumptions, expectations or
predictions is such a statement about future events. Those statements are based upon
plans, estimations and forecasts that are currently at hand to
AGO AG Energie + Anlagen’s management. Therefore, they only refer to the day on
which they were made. Statements about future developments naturally are subject to
risks and uncertainty factors which might lead to actual developments deviating
significantly from the mentioned statements about future developments or events
implicitly expressed therein. AGO AG Energie + Anlagen does not assume any obligation
and does not intend to refresh such statements due to new information or future events.

The English version of the annual report 2008 of AGO AG Energie + Anlagen is a
one-to-one translation of the audited German annual report 2008 of
AGO AG Energie + Anlagen. The English version is not audited.
| 183
Company headquarter of AGO AG Energie + Anlagen
                                                                                            |5
Contact

Financial calendar
4 May 2009                          Annual Report 2008

4 May 2009                          Entry and General Standard Conference

May 2009                            Three-Month Report 2009

30 June 2009                        Annual General Meeting

August 2009                         Semi-Annual Report 2009

November 2009                       Nine-Month Report 2009


Imprint
Publisher

AGO AG Energie + Anlagen
Am Goldenen Feld 23
95326 Kulmbach
Deutschland

Phone:+49 (0) 9221 - 6020
Fax: +49 (0) 9221 - 602149
ir-ago@ago.ag

Register Court Bayreuth
HRB 4419

Board of Directors

Hans Ulrich Gruber
Helmut Peetz

Information

The Annual Report is also published in German.
If you wish to receive copies of any of these reports, please contact:

GFEI Gesellschaft für Effekteninformation mbH
Carl Bosch Haus
Hamburger Allee 26-28
60486 Frankfurt am Main
Deutschland
www.gfei.de

Phone:+49 (0) 69 - 74303700
Fax: +49 (0) 69 - 74303722
ir-ago@ago.ag

The entire Annual Report an the interim reports are available on the Internet at:
www.ago.ag


Concept and content / Investor Relations




AGO AG Energie + Anlagen                    GFEI Gesellschaft für Effekteninformation mbH
AGO AG Energie + Anlagen
Am Goldenen Feld 23
95326 Kulmbach
Phone:   +49 9221 602-0
Fax:     +49 9221 602-149
www.ago.ag