A N N U A L R E P O R T

Transcription

1 ANNUAL REPORT 2005

2 TRIPLAN Key Figures (IAS): 01/01/ to 01/01/ to Change 12/31/05/ '000 12/31/04/ '000 in % Total revenues* ,6 EBITDA ,0 EBIT ,4 EBT ,0 Period result ,1 Earnings per share ( )** 0,04 0,27 85,2 Number of employees (on 12/31/) ,1 * incl. changes in inventories and other income and capitalized internal services undiluted ** undiluted TRIPLAN customers benefit the most from innovative engineering services Quarterly Review Financial Year 2005 Q1 / 2005 Q2 / 2005 Q3 / 2005 Q4 / 2005 TRIPLAN AG recorded improved figures for EBIT and the result for the period, in comparison with the previous year. A significant contribution to this improvement was made by the company's strict cost management rules. During the second quarter of 2005, TRIPLAN AG issued convertible bonds. Placement of the bonds was concluded by mid June. Furthermore a capital increase from approved capital amounting to a nominal 649,999 was placed with institutional investors. The funds resulting from this were invested in expanding the Engineering division. Chairman of the Managing Board Ralf Heimberg stood down with the agreement of the Supervisory Board. Reinhard Meier became the sole director of TRIPLAN AG. TRIPLAN AG switched from the General Standard to the Prime Standard on 5 August, for the purpose of increasing transparency. The company was awarded several major orders, amounting to a total volume of around 10 million. At the Annual Shareholders Meeting, the company s shareholders approved each of the items on the agenda proposed by the Board with large majorities. A further capital increase amounting to 714,998 was placed with institutional investors. TRIPLAN AG acquired several competitors and strengthened the future growth of the company. A further capital increase involving the issue of 699,959 shares was successfully placed. TRIPLAN AG broke even and completed a handover on the Management Board to a new generation of directors. Walter Nehrbaß has been Managing Director since 01/04/2006, while Heinz Braun took over responsibility for Finance and IT on 01/01/2006.

3 1 TRIPLAN AG specializes in its Engineering division on planning of complex plants for the Process industry. This core competence is complemented by the development and sale of software for factory planning (Digital Factory) and in buildings systems engineering by the Technology Services division, which has resided in the ITandFactory Group since the beginning of The combination of innovative engineering services and the development and marketing of professional software tools that build on market standards representes a unique selling point. In the plant-planning, buildings systems engineering and automotive sectors, the success of the TRIPLAN group since 1983 has been built on innovative solutions that first must prove their worth in house before being sold to professional users. Contents Part 1 2 Foreword of the Management Board 4 Engineering Services 8 Technology Services 14 Group Management Report Part 2 20 Consolidated balance sheet 22 Consolidated income statement 23 Consolidated statement of changes in shareholders equity 24 Consolidated cash flow statement 25 Consolidated notes 50 Consolidated statement of changes in fixed assets 52 Report of the Supervisory Board 53 Transcript of the Auditor s Certificate and Remarks 54 Corporate Governance

4 2 Foreword of the Management Board Dear Shareholders For our company, 2005 was a successful year. We succeeded in increasing our EBITDA by 454,000 to 814,000. Our annual result of -0.3 million is 1.5 million better than in TRIPLAN AG has returned to the threshold of profitability! At this point, we would like to express our thanks to all of the Group s employees, who have actively contributed to this result and who will continue to support our future strategies of: Expanding our core business areas Enhancing the value added for our customers Expanding our sales structures Growth in sales during the year, including revenue from the acquisitions we completed, was particularly welcome. Invoiced sales alone rose by some 1 million. In the Engineering division, our Swiss subsidiary, Triplan Ingenieur AG in Basel, won a number of high-value orders that will mean the company will be working at full capacity until At the turn of the year, our Karlsruhe branch, which specializes in the petrochemicals/refineries sector, concluded a service-level agreement worth over 2.5 million with the OMV Raffinerie Burghausen. Overall, our branches are all on a positive track. With continued development of CADISON, the integrated solution for fast and efficient plant planning, and TRICAD MS, the solution for HVAC, as well as further innovation in the automotive sector (in particular, the Digital Factory initiative), the Technology Services division has once again made its mark. New customers include Ziemann, based in Ludwigsburg, Wilhelm Karmann in Osnabrück, SIK in Berlin and LTH in Dresden,

5 Foreword of the Management Board 3 to name but a few. Customers were also acquired from other countries in Europe, such as Austria, Belgium, Ireland, Slovenia and Spain. The major share of our customers, however, is composed of the many SMEs that rely on our solutions. As at year-end 2004, our share price closed trading on the Xetra stock exchange at On 12/31/2005 it closed at We also successfully placed three cash capital increase programs, strengthening our liquidity base. On 06/30/2005, Mr. Heimberg resigned his post as Chairman of the Management Board and Managing Director. Consequently, as the only remaining Director, Reinhard Meier took over sole responsibility for the Group until 12/12/2005. On 07/01/2005, management of ITandFactory Deutschland was handed over to two experienced employees in Bernd Henrici and Georg Kremer. We should also not forget at this point to thank Mr. Heimberg for this commitment and help. On 01/01/2006, Heinz Braun was appointed to the Management Board, where he has responsibility for the Finance and IT mandates. Mr. Meier will leave the Board as planned on 03/31/2006 and will hand over his position to Walter Nehrbaß, the long-standing and much experienced manager of the Karlsruhe branch, with effect from 04/01/2006. As the two new Directors, we would both like to take this opportunity to thank Mr. Meier expressly for the good work he has done. Our aim for 2006 is to be profitable in all areas, and to continue to drive growth in the company. The Management Board and employees of TRIPLAN AG would be very happy for you as shareholders to continue to accompany us on our journey. Bad Soden, April 2006 Walter Nehrbaß Director TRIPLAN AG Heinz Braun Director TRIPLAN AG

6 4 Engineering Services Engineering Services TRIPLAN AG offers Engineering Services to the pharmaceuticals, biotech and chemicals industries. The services on offer are taken up by both large corporations and SMEs; typical project volumes are between 30 million and 40 million. The type of project ranges from operational planning, through technical consulting to general planning of production plants. Over the past 40 years, Triplan s experts have concentrated especially on planning for fine-chemicals and multiple-product facilities. Our employees look after project management and controlling activities, while also taking responsibility for qualification and validation of all core stages of the project and the final plant. In comparison with last year, the market has changed little. Large-scale plant construction is continuing outside Germany, while in Germany most investment is in replacement plant, replacing old facilities with more modern installations. Another frequent request is for optimization of existing plants. With its flexible organizational structure, a medium-sized engineering company such as Triplan can react well to these requirements. We are profiting from this trend. Interest is growing among clients for service models such as Main-contractor Representation, Owner Engineering and Investment Representation. Many of our clients simply need a partner whom they can trust completely. They need a partner who will help them get the plant they need, even when their requirements cannot be entirely precisely defined when starting the planning phase. Companies like this derive particular advantage from working with a General Planning Consultant such as Triplan. Our primary role is to assume responsibility for providing good planning, advising the client on its selection of apparatus and components. In plant planning, we focus on keeping down long-term lifecycle costs. Hand-in-hand planning, with the client In addition to an efficient system of project management, the factors that have contributed to our success particularly include our hand-in-hand planning style of working with the client, as can be seen from the number of references that we have acquired from almost 40 years on the market. Our special strength is in representing the interests of our client as an equal partner. That we can do this quite as well as we do is largely due to our lack of corporate affiliation as an engineering consultancy there are ever fewer independent companies around. On the basis of this level of trust, we have developed robust, long-lasting relationships with our clients, impressive confirmation of which can be seen in our contracts and alliance agreements with well-known players in the pharmaceuticals, fine chemicals, chemicals and petrochemicals segments.

7 Engineering Services 5 The wide range of projects we have conducted is typical for our business. For example, we received a general planning order from Rhenus Lub for a new lubricants plant, and also collaborated on the largest ever mothballing in the history of the MiRO refinery in Karlsruhe. We can also open our own offices on site, at the client s request. This type of service contract was agreed with DSM Fine Chemicals Austria. In conjunction with this order, Triplan provides a defined set of engineering services, operating from offices in the Chemiepark Linz chemicals park. Another important factor is our decentralized organizational system, encompassing both local and national structures, that ensures sufficient resources are always available to react quickly and competently to client requirements. 2005: The upwards trend continues The asset deal with IMA Ingenieurgesellschaft mbh and the share deal with ItDL Ingenieurtechnische Dienstleistung GmbH have enabled TRIPLAN to optimize its market penetration and to expand its regional presence during the 2005 financial year. IMA Ingenieurgesellschaft mbh is a planning company that has been present on the market for decades and complements our market coverage perfectly. Die ItDL Ingenieurdienstleistungen GmbH, Karlsruhe, is a regional provider with operations focused primarily on refinery business, with the result that it fits exceptionally well into our petrochemicals competence center. In 2005 the company invested once more in its sales force and marketing activities, to raise its profile and gain access to new markets (such as the food sector, etc.). A pilot scheme at our Swiss subsidiary Triplan Ingenieur AG in Basel has promised success in integrating engineering capacity from Triplan offices in Prague at lower hourly rates in order to offer a range of services at lower prices. Thanks to this successful model, additional orders were won within a short space of time. Our client is the Basel-based pharmaceuticals and biotech industry, with which we have been working continuously for some 30 years. A glimpse of the most modern grease factory in Europe, belonging to Rhenus Lub at Mönchengladbach, Rheindahlen.

8 6 Engineering Services Sample engineering projects undertaken in 2005 A particularly good example of our abilities as a general planning consultancy is the Rhenus Lub project, which involved construction of a new plant for production of high-performance lubricants. The first planning talks took place 5 years before the plant was commissioned in We were contracted to provide engineering services, initially in the form of feasibility studies, location studies and economic feasibility analyses. The order for general planning services, including detail engineering, construction management and commissioning support, followed later. The particular challenge in this project was due largely to the fact that we worked continually with the client to optimize the production process right up to shortly before the realization phase. The freeze point, after which nothing more could be changed in the planning, was postponed again and again. In terms of delivering the project on time and on budget, this represented a certain amount of risk on the part of Triplan. But the results speak for themselves Rhenus Lub now has the most modern grease production facility in Europe. Other interesting projects included the several major orders for planning of multiple-production facilities. This type of plant is becoming increasingly important in view of changes in requirements in the life-sciences sector. The major advantage of multiple-production facilities is that standardized modules that provide different functionalities can easily be swapped in and out. Modular multiple production facilities Modular multiple production facilities are particularly important with regard to changes in the pharmaceuticals, life-sciences and bio-tech are particularly important with regard to sectors. They are characterized by the ability to manufacture various changes in the pharmaceuticals, life-sciences different products (in contrast to the traditional mono-plants that usually and bio-tech sectors. produce only one product in high volumes), and to allow companies to respond to continual changes in terms of the desired active ingredients by changing control program at short notice and low cost, during the life cycle of the plant. In contrast with the traditional structure of a mono-production plant, this is made possible by modular plant planning that uses a building-blocks approach. The major advantage of multiple-production facilities is that standardized modules that provide different functionalities can easily be swapped in and out; in real terms, different plant components can be switched in and out of the process. The actual orders were diverse. One order was received for engineering services for a multiple-production facility used to manufacture bio-tech products (client: Lonza AG, Switzerland). In addition, our Alliance Partnership with Novartis brought us two planning orders including construction management for the expansion of two production facilities for a blockbuster medicine, as well as an order to optimize the business of a multiple-production facility. Furthermore, Novartis also awarded Triplan a major contract to plan a new multiple-production facility.

9 Engineering Services 7 Our intelligent designs for modular multiple-production facilities offer our clients convincing advantages. In addition to the economic advantages over mono-production plants, seen in the proven time savings of 25% and cost savings of 15%, systematic and standardized structuring of planning processes enable us to make modifications to the Our intelligent designs for modular production strategy even during the plant construction phase. multiple-production facilities offer our This allows Triplan engineers to avoid significant extra costs involved in planning and execution. clients convincing advantages. These orders reflect our excellent position in the market for planning and execution, as well as in the construction and reconstruction of multiple-production facilities. Our technical solutions for the challenges faced by our clients mean that we can not only react quickly in realization, but can also create sustainable improvements to the operation and maintenance of the plants. Outlook for 2006: Strategic partnerships on the horizon As a result of the acquired orders in the petrochemicals and semiconductor sectors, it can be assumed that our basic capacities will be well deployed in 2006 and The newly acquired branches have also extended the potential. In 2006 we will strive to seal further cooperation agreements and make further acquisitions to widen our platform and increase our levels of service. The following business areas will be further expanded: General planning orders Shut-down and conversion plans Qualification and validation in the life-sciences industry Service level agreements to cover the base load Outsourcing of planning departments to Triplan Creation of new branches to improve market penetration. At the start of 2006 we agreed an SLA with OMV Burghausen for project support and management services at several site investment projects, amounting to a total order volume of some 2.5 million. On behalf of OMV we will act as project managers, representing our client to their suppliers. We have also been awarded an order to plan the refinery shutdown, in STRENGTHS OF TRIPLAN ENGINEERING Close cooperation with the operator s development, production and engineering teams throughout all project phases from concept design through to commissioning of the plant. Efficient integration of state-of-the-art planning tools, such as our own TRICAD and CADISON software tools. Construction of central life cycle databases for operators, on the basis of the engineering databases developed during the project phase Professional project management and project controlling by experienced project leaders Qualification and validation of all project milestones and the entire plant Own integrated management system for guaranteeing quality standards (certified according to DIN EN ISO 9001 and 14001)

10 8 Technology Services Technology Services Software solutions by engineers, for engineers the added value in TRIPLAN AG s Technology Services division. Operations regarding all IT products and services are managed by Triplan subsidiaries ITandFactory GmbH and ITandFactory AG (ITF). ITF s products are primarily targeted at professional-level users in process and automotive industries, and in the buildings engineering sector. The company provides these clients with innovative solutions running on the latest AutoCAD and MicroStation platforms, as well as bespoke developments. Functionality ranges from plant, factory and building-systems planning using the TRICAD and CADISON tools, through to IT consulting. Experience shows that the use of intelligent planning software and data-management systems can enable companies to make considerable cost savings. The key to success is in integrating all processes relating to planning and developing products, production plants and factories. The available efficient methods and IT tools for process design and product development must be used and integrated consistently. This opportunity is recognized by large corporations and SMEs alike, and the employees of ITandFactory (ITF) are contributing to realizing the benefits. With a strong basis in the engineering business of our parent company,triplan, the ITF experts are used to pragmatic, solution-based thinking. ITF is a solid, practice-based IT factory. We regard IT as a means to an end and not as an end in itself. 2005: Change in company management The beginning of July 2005 saw a change in leadership at ITandFactory. Since the departure of Ralf Heimberg, Bernd Henrici and Georg Kremer have shared responsibility for the company. Henrici and Kremer are both long-standing employees of the Triplan Group, and have long held responsibility for managing Sales and Technology respectively. This guarantees continuity in terms of ability and experience. In 2005, the strategy of concentrating the product range on Cadison, an integrated tool for fast and efficient plant planning, and on Tricad MS, the strong position of which in the HVAC and automotive segments was further expanded, paid off.

11 Technology Services 9 Further well-known major clients were gained for both Cadison and Tricad MS in Germany, in Ziemann (Ludwigsburg), Wilhelm Karmann (Osnabrück), Steinmüller Instandsetzung (Berlin), LTH (Dresden) and Kühn Bauer Partner (Munich). Further afield in Europe, additional clients were acquired in Brionx (Slovenia), PM Group (Ireland), VAMED-KMB (Austria), SEAT and DaimlerChrysler (Spain) and BASF (Belgium). Our network of partners in Spain, Austria and India was also further developed. Plant planning In 2005, ITandFactory became a UAR (Unique Application Reseller) and also an AAR Partner (AutoCAD Authorized Reseller) of Autodesk. With its plant-construction and engineering solution, Cadison, ITF has become established as the major application partner in the vertical process industry. In 2005, the strategy of concentrating the product range on CADISON, an integrated tool for fast and efficient plant planning, paid off. For a practical example of where Cadison is used, consider the plant-construction specialists, Ozonia AG. Ozone is the basis for their business after all, combined ozone/uv technologies are increasingly important around the world, in the treatment of water for example. With the growing complexity of such combined plants, with all the switching they require, a powerful CAD system like Cadison that is also compatible with other planning tools is extremely helpful. The engineering team headed by Walter Uttinger are especially adamant that the system should not just be used as a CAD tool, but should also offer CAE features to support the engineering process and, in particular, simplify routine work. For example, such functionality includes automatic generation of lists, including material date extracts. Another feature is the simplified process for revising original planning data. After all, experience shows that where clients first lay down specifications regarding building dimensions, these may change again and again. With a professional-grade plant planning tool such as Cadison, any changes required by our clients have much less impact in terms of added work than with other systems, and can be implemented quickly, which is especially important, reports Uttinger. Photorealistic view of a 3D plant model

12 10 Technology Services Ozonia s planning team also benefits from the way in which Cadison has been designed with the needs of plant construction in mind. This includes options such as photorealistic visualization of 3D models. Mr. Uttinger has been impressed with this feature, stating, It is an extra advantage, especially during the sales phase, a really nice feature. It is also extremely important for us that Cadison does not provide us with any problems regarding other formats, he explains. To the greatest possible extent, Cadison is compatible with the other CAD systems used in our company. The second example of Cadison in practice comes from the electrical installations at AKH Wien (Vienna General Hospital). First some background using CAE/CAD planning tools to project electrical systems and installations demands both a high degree of automation and very specific electrical engineering functionality. The Cadison Electric Designer tool has both of these attributes. VAMED-KMB Krankenhausmanagement und Betriebsführungsges.m.b.H is responsible for the technical management of the General Hospital of the City of Vienna University Clinics, and migrated to release 6.1 of the Cadison software in Its software installation includes a database of 11GB, containing around 20 It is extremely important for us that million objects it has been one of the largest Cadison databases for many years. CADISON does not provide us with any The update to release 6.1 coincided with an overhaul of the IT infrastructure as problems regarding other formats. To the well as a switch to the AutoCAD 2005 platform. Now the expansion has been greatest possible extent, Cadison is completed, other departments now have permanent online access to the central compatible with the other CAD systems documentation data. Heimo Stiasny (Head of Central Engineering Service Center at VAMED-KMB) reports, the release switchover and enhancements used in our company. were prepared and executed professionally by ITandFactory. Their efforts ensured that the system downtime was extremely short. Even more importantly for us, their work has resulted in an improved application. Stiasny goes on to explain that this project has laid the groundwork for future integration of other specialist departments. In this way, the Cadison system would continue to offer significant potential for the installation at VAMED- KMB. Optimized integration of the new Rhenus Lub lubricating grease plant in the existing site infrastructure.

13 Technology Services 11 Optimized planning of material flows at an automotive corporation using TRICAD MS products. Buildings Engineering / Automotive During 2005, ITF introduced release 7.0 of its CAE/CAD planning tool, Tricad MS, to the market. The new release realizes a range of requests and suggestions that were made at the annual User Meeting. These new features will further simplify the day-to-day work of Tricad MS users. In the automotive segment, the existing 3D product pallet has been extended to include additional layout tools. New members in the Tricad MS product range also include a crane module, and the infrastructure module which can be used to design underground lines and channel shafts, as well as lifting gear and degreasing systems. This improved 3D CAD/CAE tool, Tricad MS, now supports companies in the automotive industry and their suppliers in realizing the digital factory. The underlying requirement is to prepare a 3D electronic planning model of the entire factory (buildings and production). The advantage is plain to see: Using computer-generated simulations, the engineer can run through and optimize all possible variants even before construction begins. This enables production to start more quickly, which is an obvious competitive advantage. At one of Germany s largest car builders this concept has been realized almost entirely; not one of its production halls has been built since 2005 without an electronic back-up. The major advantage of this from the automotive group s point of view is that the freeze point, after which planning can no longer be modified, can be set much earlier. This provides more time for precise definition of tender requirements and components can be ordered much more quickly. It also has a positive influence on quality and costs. In particular, costs related to changes in the project can be reduced significantly using traditional processes experience shows these costs can amount to between 5 and 10% of the total project outlay. With today s collision-free models, companies can save up to 75% of change-related costs that would previously have been incurred, simply because everything now fits together perfectly on site. While 5 years ago the planning management team would have had to factor in a period of 9 months for development of a collision-free model, nowadays this can be accomplished in seven to eight weeks, with the help of a professional 3D CAD planning tool such as Tricad MS and consistent data management. This really is a major step forward.

14 12 Technology Services For suppliers to the automotive industry, the Tricad MS planning software has practically become the standard tool. Software enhancements in cooperation ITandFactory has agreed to form a sales partnership with Leicad Software GmbH, based in St Valentin in Austria. This cooperation will strengthen ITF s range of services in the plant-construction segment. In real terms, the 3D plant construction software Cadison has been enhanced by the addition of Leicad s 3D steel construction module ( AutoSTRUCTURE ). The Leicad steel construction module plugs gaps in terms of requirements of Cadison users that were previously not met. Future plans include cooperation at deeper technological levels. For Marianne Leibetseder, Managing Director of Leicad, For both companies this represents an opportunity to improve our market positions by offering our clients For suppliers to the a consistent solution. automotive industry, the TRICAD MS planning A letter of intent has been agreed with Aucotec AG of Hanover. Aucotec is Germany s largest software has practically independent systems consultant focusing exclusively on the development of engineering systems and additional services for the planning and operation of electrical-engineering and I&E become the standard engineering plants. The core of the agreement concentrates on technological leadership in tool. engineering tools for the plant construction segment (Cadison). In addition, the two companies will support each other in international projects, strengthening their relative market presences. In particular, Aucotec will contribute its Aucoplan tool, which is a high-end engineering system for planning, construction, operation and maintenance of I&E design and engineering plants. The tool integrates data and documents from electrical and electro-mechanical engineering, automation technology, and process engineering planning. Cooperation with I&E specialist Aucotec is based on a clearly-defined wish expressed by users of Cadison. Aucoplan is a perfect complement to Cadison in plant construction. Andreas Glogowsky, Director of Sales & Marketing at Aucotec AG reports, We are looking forward to good and fruitful cooperation with ITandFactory. The new users of our software will see just how professionally and efficiently they can work with our Aucoplan tool. OUTLOOK FOR 2006: NEW MARKETS IN VIEW The following measures are in the pipeline with a view to raising income levels and expanding sales in 2006: Expand distribution network in Europe and further strategically important areas (India, Russia, Asia). In some cases, we are following our Tricad MS clients in the automotive sector Optimize our product portfolio to focus on the two core product areas of Cadison and Tricad MS Instigate strategic sales processes as part of cooperation projects Build on existing client relationships and identify new markets

15 Technology Services 13 Example view of conveying systems and installations in the Digital Factory. As far as the last point above is concerned, during 2005 we observed the concept of the digital factory and electronic plant gaining a reputation outside the automotive sector. This approach is relatively new for companies in the chemicals and pharmaceuticals industries, where the digital factory offers operators and planners advantages especially in expansion and modernization of existing plant. All building and plant systems are recorded in an electronic model, along with all pipelines. This model can be updated to reflect expansion projects. The centralized digital model also supports maintenance teams in planning their work. The concept of the digital factory and electronic plant is also gaining a reputation outside the automotive sector.

16 14 Group Management Report The 2005 financial year was a successful year for TRIPLAN. Total revenues (sales income including changes in inventories and other capitalized internal services) were up 1.7 million, with EBITDA rising to 814,000, an improvement of 457,000. Loan writeoff by NORD/LB NORD/LB has written off a loan owed by TRIPLAN AG with effect from 12/30/2003 as a contribution to the financial reorganization of the company. Since late 2005 we have had access to a credit line from our house bank based on the normal provision of collateral. Stock market There was a sustained improvement in the share price again in As at the 2005 year-end, the TRIPLAN share stood at 1.80 (Xetra closing price), well up on last year s level ( 0.71). During the 2005 financial year TRIPLAN has completed the move from General Standard to Prime Standard in terms of share transparency. Very high levels of trading were recorded during the year. Business development TRIPLAN positions itself through its two divisions. Its Engineering Services division offers its many years of expertise and wide know-how in plant planning and project management to customers in the pharmaceuticals, chemicals, fine chemicals, petrochemicals, biotechnology and food sectors. The services of the Technology Services division, meanwhile, are just as highly sought-after. In the form of ITandFactory, a solution provider, the division not only provides its customers with software products, but can also offer solution and process-oriented IT concepts. The annual accounts for 2005 have been prepared in accordance with the International Financial Reporting Standards (IFRS). The Engineering Services division held its own on the market in The rise in total operating revenues of 1.7 million can be primarily attributed to the major projects acquired in Switzerland as well as to the purchase of the operational business of IMA Ingenieurges. mbh and the acquisition of ItDL Ingenieurtechnische Dienstleistungen GmbH. We have decided not to publish a figure for total revenues per employee as this key figure is or can be skewed to a significant extent by the use of freelance staff. Switzerland remains TRIPLAN s key foreign market, with total revenues up 26.1%, and the EBITDA rising from CHF 612,000 to CHF 816,000. The Technology Services division recorded a net profit for Product ranges have been streamlined and products with weak revenue levels removed from the portfolio. As of 2005 we have been taking targeted measures to expand exports, with the first successes already being recorded. Mr. Ralf Heimberg, Managing Director of ITandFactory GmbH, stood down with effect from 06/30/2005. We would like to take this opportunity to thank him for his extraordinary dedication and achievements.

17 Group Management Report 15 Sales development Total revenues were up by 7% on the previous year, from 23.7 million to 25.4 million. The Engineering Services division was the main contributor to this result, accounting for 77.1%. There was a drop in sales in Technology Services. Despite the good fourth quarter it was not possible to achieve the budgeted level. Overall, the division recorded sales of 5.8 million, which represents a drop of 8%. The division accounted for 22.9% of the Group s total revenues. Development of result Material expenses rose by 16.4% compared with the previous year, totaling 7.9 million for 2005, compared with 6.7 million the year before. This primarily related to the purchase of external services. Personnel expenses rose to 14.6 million, compared with 13.7 million in 2004, which represents a rise of 0.9 million (6.6%). This rise is primarily linked to the asset deal with IMA Ingenieurges. mbh, as a result of which three branches with field sales offices Were incorporated into TRIPLAN AG with effect from 10/01/2005. Personnel costs fell by 5.0% in Technology Services. In terms of external costs, a drop of 21.7% was recorded. Other operating expenses were cut further, down 0.5 million on the previous year at 3.1 million for Earnings before interest, tax and depreciation of assets (EBITDA) doubled to +0.8 million in 2005, compared with 0.4 million in Earnings from operating activities (EBIT) also improved, the figure of +41,000 for the year under review was clearly up on the previous year s level of -1.7 million. This shows that the company has successfully turned the corner. Capitalized internal services amounted to 0.5 million (previous year: 0.4 million). Amortization of goodwill amounted to 0.1 million during the reporting year. The financial result was -23,000 (previous year: -11,000). The annual result for 2005 was million, compared with what was still a figure of -1.8 million in Earnings per share, undiluted, amounted to -0.04, compared with in Asset and financial situation Total assets amounted to 9.3 million in 2004, but reached 13.7 million in The equity capital ratio was 46.5% (previous year: 50.3%). As at 12/31/2005, liquid assets amounted to 1.5 million (previous year: 0.9 million). Compared with the previous year, short-term liabilities rose from 3.5 million to 4.2 million. Short-term receivables were up from 3.6 million to 5.7 million. Net cash flow from operating activities amounted to 121,000 for the 2005 financial year (previous year: 549,000). A real capital increase was carried out and registered during January This has resulted in a further strengthening of shareholders equity including the premium totaling 540,000. Investments and developments Some of the internal software development activities were capitalized during the reporting year as services for own account. In total, these services were worth 0.5 million, with our Cadison product version R 7 accounting for the largest share. Venturis GmbH, our development subsidiary in Switzerland, developed further modules for the German Automobile industry Association (VDA). As part of our effort to expanding the Engineering division, the operating business of IMA Ingenieurgesellschaft mbh was acquired during the fourth quarter in the form of an asset deal. This enabled TRIPLAN to further expand its market position in the key market of North Rhine-Westphalia. With a view to expanding its refinery business, TRIPLAN acquired ItDL GmbH based in Karlsruhe, one of its direct competitors, by means of a share deal. Corporate bodies

18 16 Group Management Report Mr. Ralf Heimberg stood down as Chairman of the Management Board with effect from 06/30/2005. Mr. Reinhard Meier was appointed as sole director of TRIPLAN. We would like to thank Mr. Heimberg for his work with our company. On 12/28/2005 the appointment of Mr. Heinz Braun as Director of Finance and IT with effect from 01/01/2006 was confirmed by the Supervisory Board, whilst Mr. Walter Nehrbaß was appointed as Director of Engineering as of 04/01/2006. Employees As at 12/31/2005 the TRIPLAN Group employed a total of 263 people, 51 (24%) higher than at the end of 2004 (212 employees). Our employees are our most valuable asset. Our services are personnel-intensive and the quality of service provided is directly related to the skills, experience and know-how of the employees concerned. The high level of qualifications of our employees can be seen from the fact that more than half have academic training behind them, the majority being trained engineers in a variety of engineering disciplines. We would like to thank all of our employees for their active contribution to the development of our company. Measures introduced The asset deal with IMA Ingenieurgesellschaft mbh and the share deal with ItDL Ingenieurtechnische Dienstleistung GmbH have enabled TRIPLAN to optimize its market penetration and to expand its regional presence. IMA Ingenieurgesellschaft mbh is a planning company that has been present on the market for decades and complements our market coverage perfectly. Die ItDL Ingenieurdienstleistungen GmbH, Karlsruhe, is a regional provider with operations focused primarily on refinery business, with the result that it fits exceptionally well into our petrochemicals competence center. The turnaround in our company was almost completed in The Group was streamlined, its cost structures optimized, administrative and management costs were cut and cost transparency within the Group was further increased. Overall, operational and strategic measures were introduced to improve profitability. The provisions of the Corporate Governance Code were adhered to in 2005, whilst the manageability of the Group as a whole was further improved. The talks held by TRIPLAN AG with various interested parties on the implementation of a capital measure resulted in three cash capital increases. The subscribed capital rose by 1,701,691 to 8,201,691. As part of the convertible bond issue in June 2005 from the conditional capital II, the company is now obliged upon conversion of the bonds to raise the basic capital by a further 300,125 from the conditional capital II. Key risks and opportunities, and risk management The IT-based risk management system in 2003 has been used consistently, with the result that risks can be depicted well and accurately in terms of time. The liquidity risk remains of significance. The money acquired through the capital measures and the acquisitions have raised the operating resources requirement whilst, however, improving the basis. As a result of the acquired orders in the petrochemicals and semiconductor sectors, it can be assumed that our basic capacities will be well deployed in 2006 and The newly acquired branches have also extended the potential. Our Swiss subsidiary is also contributing in this regard with large-scale orders. The 2006 Group budget assumes total revenues in the region of 36 million and an EBIT of some 1.4 million. In the event of liquidity shortages, Triplan can make use of the free reserves within the Group subject to the liquidity situation of the subsidiary companies. The aim is to engage in further cooperation projects and make further acquisitions in 2006 to raise the performance level. TRIPLAN has consistently striven to optimize the company. We have further strengthened the organizational

19 Group Management Report 17 structure and adapted the size of our workforce to the basic economic conditions. The following business areas have been further expanded: General planning orders Shut-down and conversion plans Life science qualification and validation Service level agreements to cover base load Outsourcing of planning departments to TRIPLAN Creation of new branches to improve market penetration. In the Technology Services division, represented by the ITandFactory Group, the starting situation is good. The following measures are in the pipeline with a view to raising income levels and expanding sales in 2006: Extension of distributor network in Europe and other strategic countries Expansion of our markets and, as a result, stabilization of sales expectations Optimization of product portfolio to focus on two product ranges (CADISON and TRICAD MS) Instigation of strategic sales processes as part of cooperation projects Implementation of new sales channels using existing or new solutions. We would like to take this opportunity to thank all of our employees for their understanding and support throughout Bad Soden, 03/22/2006 Reinhard Meier Heinz Braun

20

21 Consolidated financial statements Consolidated balance sheet 22 Consolidated income statement 23 Consolidated statement of changes in shareholders equity 24 Consolidated cash flow statement 25 Consolidated notes 50 Consolidated statement of changes in fixed assets 52 Report of the Supervisory Board 53 Bestätigungsvermerk des Abschlussprüfers 54 Audit certificate of the Auditor

22 20 Consolidated balance sheet as at 12/31/2005 Assets '000 '000 12/31/05 12/31/04 Long-term assets Intangible assets 4,961 3,678 Property, plant and equipment Deferred taxes ,826 4,529 Short-term assets Inventories Trade accounts receivable and other accounts receivable 5,968 3,675 Cash 1, ,864 4,790 13,690 9,319

23 Consolidated balance sheet as at 12/31/ Liabilities '000 '000 12/31/05 12/31/04 Shareholders equity Subscribed capital 8,202 6,500 Capital reserves 5,366 5,225 Currency conversion compensation items Accumulated result 7,281 7,016 6,366 4,691 Long-term liabilities Interest-bearing loans Pension commitments Tax provisions ,434 1,092 Short-term liabilities Trade accounts payable and other accounts payable 4,158 2,447 Short-term loans Other provisions 1,566 1,089 5,890 3,536 13,690 9,319

24 22 Consolidated income statement '000 '000 Sales income 24,620 23,630 Changes in inventories Other capitalized internal services Other operating income 1, Material expenses 7,856 6,674 Personnel expenses 14,611 13,686 Depreciation 773 2,103 Other operating expenses 3,122 3,592 Result from ordinary activities (EBIT) 41 1,746 Financial result Result before taxes 18 1,757 Income taxes Period result 265 1,782 Earnings per share in (undiluted) Earnings per share in (diluted)

25 Consolidated statement of changes in shareholders equity Number Sub- Capital Currency Consolidated Total of shares scribed Reserves Conv. Balance issued Capital Comp Items Loss/Profit '000 '000 '000 '000 '000 Shareholders equity as at 12/31/2004 / 01/01/2005 6,500,000 6,500 5, ,016 4,691 Currency translation differences Equity capital ratio of convertible bonds Cash capital increase 649, June 2005 Cash capital increase 714, August 2005 Costs of capital increase Cash capital increase 336, November 2005 Costs of capital increase Period result Shareholders capital as at 8,201,691 8,202 5, ,281 6,366 12/31/2005 Number Sub- Capital Currency Accumulated Total of shares scribed Reserves Conv. result issued Capital Comp Items '000 '000 '000 '000 '000 Shareholders capital as at 6,500,000 6,500 5, ,234 6,460 01/01/2004 Currency translation differences Period result 1,782 1,782 Shareholders capital as at 6,500,000 6,500 5, ,016 4,691 12/31/2005

26 24 Consolidated cash flow statement 2005 Cash flows from operating activities '000 '000 Result for period before taxes Adjustments for: Depreciation 773 2,103 Capitalized internal services Profits from the disposal of assets 2 30 Losses from the disposal of assets Changes to long-term reserves 5 4 Operating result before changes to net current assets Changes to inventories Changes in trade accounts receivable 1, Changes in other short-term assets Changes in trade accounts payable 1, Changes in other short-term liabilities 1, Cash generated from ongoing business activities Paid income taxes Cash flows from operating activities Cash flows from investment activities Acquisition of subsidiary companies less acquired net cash flows Acquisition of intangible assets and property, plant and equipment 1, Income from the sale of property, plant and equipment Cash flows used for investing activities 1, Cash flows from financing activities Capital increases 1,960 0 Income from long-term loans Capital procurement costs before deferred taxes, other redemption of loans 63 0 Cash flows from financial activities 1,932 0 Changes in liquidity Change in accumulated currency differences Liquidity at the start of the financial year Liquidity at the end of the period 1,

27 Consolidated notes 25 Consolidated notes for the financial year from 01/01/ to 12/31/2005 I. GENERAL INFORMATION TRIPLAN AG is a joint-stock company under German law and the parent company in the TRIPLAN Group. TRIPLAN AG is listed on the regulated market of the Frankfurt stock exchange. During the 2005 financial year TRIPLAN completed the move from General Standard to Prime Standard, improving the transparency of its share. Registered office Registered office of the company: Auf der Krautweide 32, Bad Soden (Germany). Business activity TRIPLAN positions itself through its two divisions. Its Engineering Services division offers its many years of expertise and wide know-how in plant planning and project management to customers in the pharmaceuticals, chemicals, fine chemicals, petrochemicals, biotechnology and food sectors. The services of the Technology Services division, meanwhile, are just as highly sought-after. In the form of ITandFactory, a solution provider, the division not only provides its customers with software products, but can also offer solution and process-oriented IT concepts. Application of IFRS Fundamental principles The consolidated financial statements of TRIPLAN AG, Bad Soden, for the 2005 financial year comply with the International Financial Reporting Standards (IFRS), previously International Accounting Standards (IAS), of the International Accounting Standards Board (IFRSB) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC), previously the Standing Interpretations Committee (SIC). On the basis of the European Union Regulation of 07/19/2002 (EC No. 1606/2002) and in accordance with Section 315a of the German Commercial Code (HGB), the applied IFRS standards must first be adopted by the European Commission. For this reason, only those IFRS standards that have already been adopted are applied to the consolidated financial statements as at 12/31/2005. All IFRS that had entered into force as at the balance sheet date have been applied to the consolidated financial statements. The consolidated financial statements have been prepared on the basis of historical acquisition/manufacturing costs. The financial statements of the companies included in the consolidated accounts have been prepared using uniform balance sheet and valuation principles in accordance with IAS 27 Consolidated and Separate Financial Statements. As part of its work to further develop the IFRS and to achieve convergence with US GAAP, the IASB has modified numerous standards as well as introducing many new standards. These standard were applied in the consolidated financial statements with effect from 01/01/2005 to the extent that they have been approved by the European Commission. This applies to the following standards: IFRS 2 (Share-based Payment), IFRS 3 ([Business Combinations] in conjunction with IAS 36 [Impairment of Assets] and IAS 38 [Intangible Assets]).

28 26 Consolidated notes Furthermore, the following standards were adopted by IASB/IFRIC during the course of the 2005 financial year but have not been applied to the consolidated financial statements as at 12/31/2005 due to their not yet being obligatory or not yet having been adopted by the European Commission: Amendment to IAS 1 (Capital Disclosures), Amendment to IAS 39 and IFRS 4 (Financial Guarantee Contracts), Amendment to IAS 21 (Net Investment in a Foreign Operation), Amendment to IFRS 4 (Revised Guidance on Implementing IFRS 4), IFRS 7 (Financial Instruments Disclosures), IFRIC 4 (Determining whether an Arrangement contains a Lease), IFRIC 5 (Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds), IFRIC 7 (Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies). This standards will not be applied by TRIPLAN until the 2006 financial year or later. The financial statements of the companies included in the financial statement were subject to uniform balance sheet and valuation principles. These financial statements, in accordance with IFRS, have been prepared according to the going concern principle, with all available information relating to the assessment of the risks being taken into account. The application of specific IFRS with regard to individual items of the financial statements is detailed in the notes below. Estimates and assumptions The preparation of accounts according to IFRS/IAS requires that certain estimates and assumptions be made with an effect on the amounts posted to the balance sheet and on the information contained in the notes. Correspondingly, the actual development may deviate from these estimates. Goodwill is verified annually on the basis of the smallest cash-generating unit to which the goodwill can be allocated, as well as on the basis of our operational three-year plan and assuming growth rates for the following period that are specific to the area of business. Any change in these influencing factors could result in higher/ lower unscheduled depreciation. Currency and degree of precision The financial statements of Triplan Ingenieur AG, Basel, Switzerland; ITandFactory AG, Gebenstorf, Switzerland and Venturis GmbH, Ettingen, Switzerland were prepared in Swiss francs. For the purposes of the consolidated financial statements, these individual financial statements have been translated using the modified balance sheet date method. A currency difference arose for the 2005 financial year due to the discrepancy between the rate at the balance sheet date and the average rate. The basis of the valuations based on the rate as at the balance sheet date in the consolidated financial statements is the rate as at 12/31/2005 of 1 euro = Swiss francs (previous year: 1 euro Swiss francs). Where the valuation is based on the average rate, the rate of 1 euro = Swiss francs was taken as the basis (previous year: 1 euro = Swiss francs). On balance, income from exchange rate differences totaling 13,000 was recorded during the financial year under review. The consolidated financial statements have been prepared in euros.

29 Consolidated notes 27 In some cases amounts have been rounded to the nearest thousand or nearest million of euros to improve the clarity of information. Balance sheet date The balance sheet date for the consolidated financial statements is the balance sheet date for the financial statements of the parent company (12/31). Acquisitions The acquisitions made during the financial year were the purchase of the operational business of IMA Ingenieurgesellschaft mbh, Kriftel (IMA) and the acquisition in full of ItDL Ingenieurtechnische Dienstleistungen GmbH, Karlsruhe (ItDL), both of which took place in the final quarter of Both companies provide engineering services, with the focus of IMA's activities lying in the chemical industry and ItDL specializing in services for the petrochemical sector. Within their fields, both companies cover the full range of services from plant design through to planning and operational management. In line with the segmenting of the TRIPLAN Group, both acquisitions were made within the Engineering division. Based on IFRS 3.67f, the acquired companies generated sales of 6.4 million during the 2005 financial year, with a net profit of -0.3 million. Sales of 1.8 million and a result of -0.1 million have been included in the consolidated financial statements. The result of the acquisitions is partly affected by special effects. The acquisition costs totaled 1.5 million, primarily relating to the costs for the acquired shares/costs for acquired assets. Costs in relation to legal advice and auditing services were also taken into account. The carrying amounts of the acquired assets amounted to 255,000. The purchase price was partly raised through the issue of 363,265 new bearer unit shares in TRIPLAN AG as part of real capital increases at an average issue price of The issue price was based on the average price of the last five trading days prior to the transaction being concluded as well as on a contractually agreed slightly higher share price. Group of consolidated companies In addition to the financial statements of the parent company, the consolidated financial statements of TRIPLAN AG include the individual statements of four subsidiaries with regard to which TRIPLAN AG directly or indirectly holds a 100% majority of voting rights. Not included are those subsidiaries that are of only minor importance with regard to presenting and assessing the asset, financial and income situation of the Group. ItDL Ingenieurtechnische Dienstleistungen GmbH, Karlsruhe, was included in the group of consolidated companies for the first time in The date of consolidation in accordance with IFRS is 10/01/2005. Consolidation methods The individual financial statements included in the consolidated financial statements were prepared in accordance with the relevant statutory requirements and have been audited by independent auditors. Capital consolidation was based on IFRS 3 using the carrying amount method by offsetting the acquisitions costs against the parent company's share of the shareholders' equity at the acquisition date. Intra-Group profit and loss, sales, expenses and income and receivables and liabilities have been eliminated. With regard to consolidation processes with an impact on the result, the income tax effects have been taken into account and deferred taxes applied.

30 28 Consolidated notes Financial instruments The financial instruments reported in the balance sheet (financial assets and financial liabilities) as defined in IAS 32 encompass certain net cash, trade accounts receivable and payable, long-term accounts receivable, loans and credits and certain other accounts receivable and liabilities based on contractual arrangements. When included in the balance sheet for the first time, these financial assets or liabilities are carried at historical costs corresponding to the current market value of the counter-trade taking into account transaction costs. Items are generally posted as at the trading date. The subsequent measurement varies for the different categories of financial asset or liability and is described in the balance sheet methods for the respective balance sheet items. Profits and losses from changes in the current market value of financial assets that are available for sale are included in the result for the period. With regard to assets, the management of financial risks is focused on the short-term availability of liquid assets whilst optimizing interest. With regard to the financing of durable investment goods, efforts are made in each case also to achieve long-term financing. The short-term requirement for liquid assets is covered as far as possible with bank current accounts, subject to interest at the standard conditions currently in force. Interest-rate risks are not hedged. Credit/default risks are countered by ongoing assessment and monitoring of clients. The general default risk depends on the overall amount of accounts receivable. During 2005 TRIPLAN AG made partial use of its conditional capital II to issue a convertible bond with a nominal value of 300,125. The convertible bond takes the form of a zero coupon convertible bond maturing on 05/14/2008. The bond may be converted for the first time in a ten-day exercise period following the 2006 General Meeting. Intangible assets Intangible assets are measured at historical or manufacturing cost. They are reported where it is likely that the future economic benefit attributable to that asset will be received by the company and where the historical or manufacturing costs of the asset can be reliably measured. Subsequent measurement is generally based on historical or manufacturing costs less accumulated scheduled depreciation and any accumulated impairments. Intangible assets are depreciated on a straight-line basis over the estimated useful life. The depreciation period and method are reviewed annually at the end of the financial year. (a) Software The historical costs of new software are capitalized and viewed as intangible assets provided that the costs do not form an integral component of the related hardware. Software is depreciated on a straight-line basis over a period of three to five years. Costs that arose to maintain the original economic benefit of existing software systems are charged to expenses if the work to maintain the benefit was carried out.

31 Consolidated notes 29 (b) Development costs Research and development costs are charged to expenses for the period to which they relate. An exception is made in this regard for product development costs that meet the following criteria: the product is clearly defined and the costs incurred are recorded separately and measured appropriately; the product is technically realizable; the product is either sold or used in the company; there exists a potential market for the product and/or its usability in the case of internal use is guaranteed and appropriate technical, financial and other resources still required for completion of the product must be available. reliable determination of the manufacturing costs during the development period is guaranteed. Development costs carried as assets are depreciated on a straight-line basis over the expected useful life. Depreciation is carried out over three years, commencing with the completion of the product and sale of the software; generally as of the beginning of the financial year following capitalization. Should there be signs of an impairment of the asset or should it emerge that the reasons for the unscheduled depreciation in prior periods no longer exist, the stated value of the development costs shall be adjusted accordingly. Goodwill Any excess of the costs of acquiring a company over the acquirer s share of the net fair value of the acquired company s identifiable assets and liabilities at the acquisition date is classed as goodwill and carried in the balance sheet as an asset. Goodwill is measured at historical costs minus accumulated depreciation and impairments. Due to the introduction of IFRS 3, which is binding on all financial statements prepared after 01/01/2005, goodwill is no longer subject to scheduled amortization. An impairment test is used in accordance with IFRS to determine any need for depreciation/appreciation. The residual carrying amounts are verified at each balance sheet date in terms of their future economic benefit. If there are signs that goodwill should be reduced, the achievable amount is calculated for the cash generating unit to which the goodwill relates. If the carrying amount is higher than the achievable amount, the goodwill is amortized on an unscheduled basis. Property, plant and equipment Property, plant and equipment are carried at cost less accumulated, scheduled depreciation and accumulated impairments. If items of property, plant and equipment are sold or cease to exist, their historical or manufacturing costs and the related accumulated depreciation and impairments are eliminated from the balance sheet, and the profit or loss resulting from their sale is recorded in the income statement. The original historical or manufacturing costs of items of property, plant and equipment encompass the purchase price including import duty and non-refundable taxes as well as all directly apportionable costs required to ensure that the asset is in an operational state and to locate it in its intended area of use. Expenses that arise once the useful life has begun (e.g. maintenance, service and renovation costs) are generally charged to income in the period in which the costs arise. If expenses lead to an additional future economic benefit that is expected to be achieved from use of an item of property, plant and equipment over and above its originally measured performance level, such expenses such be capitalized as subsequent costs for property, plant and equipment. Depreciation is calculated on a straight-line basis over the following estimated useful life: Technical plant and machinery 3 to 10 years Plant and equipment 3 to 10 years

32 30 Consolidated notes The useful life and depreciation methods are reviewed during each period to ensure that the depreciation method and period correspond with the expected economic benefit of items of property, plant and equipment. The beginning of the depreciation period is determined by when the asset is capitalized. The pro-rata-temporis method of depreciation is applied. Items of property, plant and equipment are not subject to any restraints on disposal. Leasing Assets used by the Group in the capacity of lessee and with regard to which the essential economic opportunities and risks remain with the lessor are not included in the balance sheet as operating leases. Leasing payments for operating leases are charged to expenses over the term of the lease agreement. Inventories Inventories are carried at the lower of historical/manufacturing cost and net realizable value, also taking into account a value adjustment for limited realizability. The net realizable value corresponds to the selling price in the ordinary course of business less cost of completion and selling costs. The historical or manufacturing costs are based primarily on weighted average costs. With regard to unfinished services, the costs include the relevant fixed and variable overheads. Accounts receivable and other assets Once accounts receivable and other assets with a fixed term have been included in the balance sheet for the first time, subsequent measurement is based on amortized historical costs taking into account individual value adjustments and using the effective interest method. Accounts receivable with a short term and other assets not subject to a fixed rate of interest are measured at their original invoice amount or nominal amount provided that the effect of a discounting process is insignificant. Those accounts receivable and other financial assets without a fixed term are measured at cost (nominal amount). All accounts receivable and other assets are subject to impairment testing. Other assets that are not covered by IAS 39 are measured at cost and are also subject to impairment testing. Liquid assets Liquid assets comprise cash, credit balances held at credit institutions and checks received. Shareholders equity The capital reserves result from payments in conjunction with capital measures and are reported less the costs incurred in relation to capital procurement (after deducting tax effects). They are available for offsetting against losses and for capital increases from company funds. Accumulated exchange rate differences result from currency translation differences arising from the consolidation of foreign subsidiaries financial statements. Pension provisions Pension provisions are measured by an expert in accordance with IAS 19 (as revised in 2004) Employee benefits, based on the present value of benefit entitlements.

33 Consolidated notes 31 Other short-term provisions A provision is only reported if the company faces a current (statutory or de factor) commitment due to a past event, it is likely that fulfilling that commitment will result in an outflow of resources and the amount of the commitment can be reliably calculated. Provisions are reviewed at each balance sheet date and adjusted in line with the best estimate at the time. If a significant interest-rate effect results from the date on which a commitment is met, the provision is included in the balance sheet at its present value. To the extent that no reliable estimate can be made in individual cases, no provision is made but a contingent liability is stated. Liabilities After being reported for the first time, all financial liabilities that are not derivative liabilities are measured at amortized historical costs. Once they have been reported for the first time, derivative liabilities are measured at their current market value. Realization of sales Sales are recorded if it is likely that the economic benefit associated with the corresponding transaction will be passed to the company in receipt of the service and if the amount of the sale can be reliably measured. Sales revenues are recorded less general sales tax and any price reductions/volume discounts provided that the delivery has been made and economic ownership together with the related risks and rewards has been transferred. Interest Interest is recorded in line with the effective interest received on assets. Foreign currencies Foreign currency transactions are recorded in the reporting currency by translating the foreign currency amount on the basis of the exchange rate between the reporting and foreign currency at the time of the transaction. Translation differences from the settlement of monetary items at rates that differ from the rate originally recorded during the period are charged to expenses or income for the period in which they occur. Foreign commercial operations The subsidiaries in the group of consolidated companies are independent financially, economically and in terms of their organizational structure. They are therefore to be viewed as economically independent foreign units. Their reporting currency in each case is the relevant national currency. The balance sheets included in the financial statements prepared by the foreign holdings in the group of consolidated companies are translated on the basis of the balance sheet rate as at the year-end, whilst the income statements are translated on the basis of the average rate for the financial year. All resulting translation differences are included in the accumulated exchange rate differences within shareholders equity. Borrowing costs Borrowing costs are not capitalized but expensed in the period in which they are incurred. The interest rate risk based on the short-term loan liabilities in the Group and an interest rate change of +/- 1% is approximately 2,000. Long-term loan liabilities are subject to a fixed interest rate.

34 32 Consolidated notes Income taxes / deferred taxes With regard to income taxes, the tax burden is based on the level of the annual result for the period and takes into account deferred taxes. Deferred taxes are calculated using the liability method. Deferred income taxes reflect the net tax expense/income from temporary differences between the carrying amount of an asset or debt in the Group balance sheet and in the tax balance sheet. Deferred tax claims and tax debts are measured on the basis of the tax rates expected to apply to the relevant period in which an asset is realized or a liability paid off. The measurement of deferred tax liabilities and claims takes account of the tax consequences that will probably result from the way in which temporary differences are reversed based on the estimate as at the balance sheet date. Deferred tax claims and liabilities are recorded independently of the time at which the temporary posting differences are likely to be reversed. A deferred tax claim should be included in the balance sheet for all temporary differences of relevance to income tax to the extent that it is likely that a taxable income will be available, against which the temporary difference can be applied. On each balance sheet date the company re-evaluates deferred tax claims that have not been included in the balance sheet and the carrying amount of deferred tax claims. The company will report a deferred tax claim that has not yet been included in the balance sheet if it has become likely that the future existence of taxable income will enable the deferred tax claim to be realized. Conversely, the carrying amount of a deferred tax claim will be reduced to the extent that it ceases to be likely that sufficient taxable income will be available to make partial or full use of the deferred tax claim. No deferred tax liabilities arise to the extent that non-distributed profits from foreign subsidiaries should remain invested in these companies for an indefinite period. Deferred tax liabilities are included in the balance sheet for all taxable temporary differences provided that the deferred tax liabilities do not originate from goodwill, the depreciation of which is not deductible for tax purposes. Impairment of assets Property, plant and equipment and intangible assets are subject to impairment testing whenever events or a change of circumstances suggest that the carrying amount might not be achievable. If the carrying amount of an asset exceeds its recoverable amount, impairment expenses are charged to income in the case of property, plant and equipment and intangible assets carried at cost. The recoverable amount is the higher of net realizable value and value in use. The net realizable value is the amount that can be achieved from selling the asset in a market transaction subject to standard conditions, whilst value in use is the present value of the estimated future cash flow expected from continuing use of an asset and its disposal at the end of its useful life. The recoverable amount is estimated for an individual asset or, should this not be possible, for the cash generating unit. If there is an indication that an impairment no longer exists or has been reduced, the impairment is reversed in the income statement. Contingent liabilities and accounts receivable A company may not post a contingent liability. A contingent liability must be stated, however, to the extent that the possibility of an outflow of resources with economic benefit is not improbable. Contingent accounts receivable are not included in the financial statements. However, they should be stated if an inflow of economic benefit is likely.

35 Consolidated notes 33 Events after the balance sheet date Events occurring after the balance sheet date that provide additional information on the state of the company as at the balance sheet date are included in the balance sheet. Events relating to value that occur after the balance sheet date are only stated in the consolidated notes. Cash flow statement The cash flow statement shows how the cash situation of the TRIPLAN Group has changed as a result of inflows and outflows over the course of the year under review. In accordance with IAS 7, a distinction is made between cash flow from operating, investing and financing activities. The net cash reported in the cash flow statement includes cash, checks and credit balances held at credit institutions. Structure of balance sheet and income statement The balance sheet and the income statement have been structured in accordance with IAS 1. To improve clarity, individual items have been grouped together in the balance sheet and income statement and reported separately in the notes. To ensure that the layout is easy to follow, balance sheet notes have only been included in the Notes. The income statement has been prepared on the basis of the total cost method. Comparative figures The previous year figures have, where necessary, been adjusted in line with the new accounting standards applied in Transactions with related parties Mr. Reinhard Meier, Chairman of TRIPLAN AG, subscribed during the previous financial year to 160,000 units of the convertible bond issue of TRIPLAN AG. In addition, Mr. Meier holds a stake of approximately 11% of the shares in TRIPLAN AG.

36 34 Consolidated notes II. Notes to the Balance Sheet - Assets The breakdown of the items included in the balance sheet and their development over the financial year are presented in the attached statement of changes in fixed assets. (1) (1) Intangible assets Intangible assets can be broken down as follows: 12/31/ /31/2004 thousands thousands Software 1, Goodwill 3,748 2,731 4,961 3,678 Intangible assets acquired for a consideration including goodwill were capitalized at cost and depreciated on a straight-line basis up to the 2004 financial year. With effect from the reporting period, goodwill is no longer subject to scheduled depreciation. Rather, an impairment test is required to be carried out at least annually. Of the goodwill, 1,300,000 can be attributed to the merger of Triplan Ingenieur GmbH with TRIPLAN AG. In addition, the consolidation of the acquisition of the CADISON companies resulted in goodwill of 2,762,000 (Technology Services division). In 2001 the acquisition of Venturis GmbH resulted in goodwill of 1,343,000 (Technology Services division). From 2002 to 2004 further post-sale installments in the amount of 94,000 arose in the course of contractual agreements, increasing the goodwill of Venturis GmbH. The acquisition of the operational business of IMA Ingenieurgesellschaft mbh resulted in goodwill of 681,000 (Engineering division). With the purchase of ItDL GmbH, goodwill from the founding of ItDL in the amount of 79,000 (Engineering division) was included in the acquisition. The consolidation of the acquisition of ItDL resulted in further goodwill of 325,000 (Engineering division). Goodwill developed as follows: Historical costs Depreciation Carrying amount thousands thousands thousands As at 01/01/05 5,650 2,919 2,731 Additions in , Transfers As at 12/31/05 6,735 2,970 3,748 With regard to software development costs for the further development of own software programs, 540,000 was capitalized in the current year and 375,000 in the 2004 financial year. Development costs totaling 298,000 were charged to income. (2) Property, plant and equipment The individual items are shown in the attached Annex. Items of property, plant and equipment are measured at cost less scheduled straight-line depreciation over a useful life of between three and ten years.

37 Consolidated notes 35 (3) Asset-side deferred tax accrual and deferral The deferred tax reimbursement claims result from loss carry-forwards. Due to the uncertainty surrounding the realization of the deferred taxes, a value adjustment was made to the extent that asset-side deferred taxes exceed liability-side deferred taxes. (4) Inventories 12/31/ /31/2004 thousands thousands Raw materials, auxiliary materials and operating materials 4 2 Unfinished products and services (5) Trade accounts receivable and other accounts receivable Trade accounts receivable and other accounts receivable are carried in the balance sheet at nominal value less value adjustments for discernible individual risks. Due to the TRIPLAN Group s very good client structure, the level of default risk is very slight. All trade accounts receivable and other accounts receivable are due within one year. 12/31/ /31/2004 thousands thousands Trade accounts receivable 5,417 3,450 Other accounts receivable ,753 3,567 (6) Accrued and deferred items The accrued and deferred items relate almost exclusively to advance payments made in relation to maintenance agreements, insurance policies and trade fairs. III. Notes to the Balance Sheet - Liabilities (7) Subscribed capital The fully paid-up basic capital as at the balance sheet date amounted to 8,201,691, divided into 8,201,691 unit shares, each with an accounting value of 1. During the reporting period, the company s basic capital was increased by 1,701,691 by means of three cash capital increases from 6,500,000 to 8,201,691. Additionally, a real capital increase of 363,265 has been agreed, although had not been officially implemented and entered into the commercial register by the balance sheet date. Taking into account this real capital increase, the basic capital amounts to 8,564,956. The entry was made in the commercial register on 01/20/2006. As part of the convertible bond issue in June 2005 from the conditional capital II, the company is now obliged upon conversion of the bonds to raise the basic capital by a further 300,125 from the conditional capital II.

38 36 Consolidated notes Authorized capital The General Meeting of 01/30/2001 agreed to an authorized capital I of 155,000 and an authorized capital II of 2,895,000. The Management Board is authorized, with the consent of the Supervisory Board, with regard to the authorized capital I and II, to raise the basic capital between now and 01/29/2006 by issuing up to 155,000 / 2,895,000 new shares in exchange for non-cash or cash contributions on one or several occasions but by no more than 155,000 / 2,895,000. Any subscription right for shareholders is excluded with regard to capital increases from the authorized capital I and II. The Management Board shall stipulate the issue amount of the new shares and may also stipulate the commencement of their profit entitlement in deviation from Section 60, paragraph 2 of the Joint Stock Companies Act (AktG). As resolved at the General Meeting of 08/24/2005, the authorized capital I was raised by 155,000 and replaced by the new authorized capital of 714,999. The Management Board may, with the Supervisory Board s consent, raise the company s basic capital between now and 24 August 2010 by issuing new bearer unit shares in exchange for cash contributions on one or several occasions but by no more than 714,999. Further, the Management Board, with the consent of the Supervisory Board, may exclude the subscription right of shareholders if the issue amount of the new shares is not significantly lower than the stock market price and the shares issued subject to the exclusion of a subscription right do not amount to more than 10% of the basic capital in total. The approved capital II totaling 2,895,000 was utilized to leave 1,193,309 by issuing new shares as part of capital increases whilst excluding the subscription right. Conditional capital I (share option plan) It was decided at the General Meeting of TRIPLAN AG on 06/25/2003 to raise the condition capital from 451,800. A conditional capital increase of up to 650,000 was subsequently agreed. The creation of conditional capital is be used to issue share options to the employees of TRIPLAN AG and its subsidiary companies. The option plan has a term of three years calculated from the date of the decision approving its creation. During this term, tranches from the total volume of the share option plan will be issued, with the exercise price being stipulated for each separate tranche. The option rights may not be exercised until the expiry of a blocked period of two years, calculated from the date on which the option rights are awarded. Following the expiry of this blocked period provision is made for a period of a further of five years (exercise period), resulting in a total term of seven years. As at 12/31/2004, a total of 455,700 share options had been granted, with an earliest possible exercise date of June The following is a breakdown of the share options based on the conditional capital: No. of shares At the beginning of reporting period i) outstanding options 455,700 ii) options granted 0 iii) options realized 361,700 Outstanding options at end of reporting period 94,000

39 Consolidated notes 37 The average exercise price for the outstanding share options is The weighted average of the remaining terms is 5.5 years. Conditional capital II (warrants and/or convertible bonds) The General Meeting of 06/24/2004 approved a conditional capital II in the amount of 2,600,000. The basic capital is raised conditionally to a nominal amount of 2,600,000 (conditional capital II). The conditional capital increase shall only be implemented to the extent that creditors of conversion rights or holders of warrants associated with the convertible bonds/warrants issued by the company up to 06/01/2009 exercise their conversion/option rights, or to the extent that those creditors who are obliged to convert their bonds issued by the company up to 06/01/2009 meet their conversion obligation. The new shares will entitle the holders to profit-sharing from the beginning of the financial year in which they are created through the exercising of conversion/option rights or the fulfillment of conversion obligations. The Management Board may, with the Supervisory Board s consent, stipulate the further details of any conditional capital increase. The subscription offer of May 2005 gave the shareholders of TRIPLAN AG the change to purchase zero coupon convertible bonds. The nominal amount of the bond and the issue amount were The convertible bond is secured by means of an assignment of the bonds to Triplan Ingenieur AG, Switzerland. No periodic interest payments are made on the bonds. Interest payments arise at the end of the term (05/15/2005 or 05/14/2008) from the difference between the issue amount and the repayment amount to be paid upon expiry with an effective rate of interest of approximately 10% p.a. Every bondholder, in accordance with the convertible bond conditions, has the irrevocable right (the conversion right), within an exercise period, to convert each bond with a nominal value of 1.00 into bearer unit shares of the issuer with voting rights. Any partial exercising of the conversion right is excluded. The bondholder s right to repayment of the bonds ceases with the entry into force of the conversion declaration; in place of the right to repayment, the issuer is bound to deliver shares in accordance with these convertible bond conditions. i. The conversion right may only be exercised within the following stipulated exercise periods, with business day being any day on which the commercial banks in Stuttgart are open for business. ii. The conversion right may also be exercised prematurely: 1. on the third business day after the ordinary general meeting of the issuer in 2006 and the 10 following business days (the "exercise period following the 2006 AGM ). 2. on the third business day after the ordinary general meeting of the issuer in 2007 and the 10 following business days (the "exercise period following the 2007 AGM ). A conversion obligation shall exist if and as soon as the closing price of the issuer s shares recorded in Xetra trading on the Frankfurt stock exchange exceeds 3.00 for 10 consecutive stock exchange trading days after 01/01/2006. Should these conditions be met, the issuer may collect the bonds and, in exchange, deliver TRIPLAN shares taking in account the conversion price in accordance with Section 5. The agency carrying out the conversion is hereby authorized to issue the subscription declaration on behalf of the bondholder in accordance with Section 198, paragraph 1 of the Joint Stock Companies Act (AktG). The convertible bond is included under long-term liabilities at a value of 297,000 i.e. its current market value. The development of shareholders equity is set out in detail in the statement of changes in shareholders equity.

40 38 Consolidated notes (8) Capital reserves The capital reserves include the extra funds from capital increases including the capital increase resulting from the 2001 flotation. The costs of the capital increase are included as a reduction in the capital reserves. To the extent that this results in income tax relief, the costs are recorded net: thousands thousands As at 01/01 5,225 5,225 Premium minus capital procurement costs As at 12/31 5,366 5,225 (9) Currency conversion compensation items The currency conversion compensation items result from the application of the modified balance sheet date method in translating into the reporting currency for consolidation purposes the financial statements of the foreign subsidiaries whose functional currency is the national currency thousands thousands As at 01/ Change during the posting period As at 12/ (10) Accumulated result The accumulated result was as follows: thousands Loss carryforward 7,016 Period deficit As at 12/31/2005 7,281 (11) Pension provisions Occupational pension provisions were as follows: thousands thousands Pension provisions Pension benefits are based on length of service and future estimated salary and pension trends. Part of the pension commitments is financed through insurance policies.

41 Consolidated notes 39 Present value of entitlements thousands thousands As at 01/ Service costs 0 0 Interest costs Pension payments Actuarial losses (gains) 12 6 Revaluation 0 0 As at 12/ Plan assets Balance as at 01/ Fund income 0 0 Employer contributions 0 0 Paid benefits Profits (losses) of plan assets 2005 (2004) Actuarial gains 0 2 Revaluation 0 0 Balance as at 12/ Financing status Pension commitments not covered by plan assets as at 12/ Unrealized profits Posted net value as at 12/ The following table shows the underlying actuarial assumptions for the pension plans: 12/31/ /31/2004 Weighted average assumptions Discount rate 6,0 % 6,0 % Expected fund income 4,0 % 4,0 % Salary trend 2,5 % 4,0 % Pension trend 2,0 % 2,0 % The components of the pension expenses for the period can be broken down for the corresponding financial years as follows: thousands thousands Service costs 0 0 Interest costs Expected plan income Transfer 0 0 Actuarial gains 2 2 Net pension costs 21 21

42 40 Consolidated notes (12) (12) Trade accounts payable and other liabilities The liabilities comprise the following individual items: 12/31/ /31/2004 thousands thousands Tax provisions Prepayments received 0 12 Trade accounts payable 2,753 1,437 Other liabilities 1, Liability-side accrued and deferred items ,158 2,446 (13) Short-term loans and guarantees Time deposits totaling 330,000 are held to secure credit lines and guarantees. (14) Other provisions Measurement of other provisions takes account of all discernible risks and uncertain liabilities. Other provisions primarily include amounts for holiday commitments, profit-sharing bonuses, warranties, accounting costs and contributions. Other provisions Description 01/01/2005 Allocation Utilization Elimination 12/31/2005 thousands thousands thousands thousands thousands Further personnel expenses Profit-sharing bonuses/commissions Costs of financial statement Supervisory Board costs Settlements Other Expenses totaling 70,000 for the auditor Herden Böttinger Borkel Neureiter GmbH were taken into account in 2005.

43 Consolidated notes 41 IV. IV. Notes to the Income Statement (15) Total revenues Total revenues (sales income, changes in inventories, other capitalized internal services and other operating income) of the TRIPLAN Group can be broken down by division as follows: thousands thousands Engineering Sales income 19,697 17,943 Changes in inventories Other capitalized internal services 0 0 Total revenues 19,889 17,674 Technology Services Sales income 5,346 6,216 Changes in inventories Other capitalized internal services Total revenues 5,922 6,534 Group Total revenues Total revenues 26,403 24,309 Full segment reporting is provided under VI.28. The breakdown used in this section was based on IAS/IFRS. Sales were realized in the following countries during the reporting period: thousands thousands Germany 13,774 14,368 Switzerland 8,740 6,979 Austria 1,053 1,225 Denmark UK France Rest of the world ,620 23,630 (16) Other operating income Other operating income primarily includes income from the capitalization of refund claims and insurance compensation.

44 42 Consolidated notes (17) Other capitalized internal services Own software was capitalized in accordance with IAS 38 with manufacturing costs in the amount of 540,000 (2004: 375,000). Both the purchase of external services and own expenses (primarily personnel) were included in the measurement. (18) Material expenses Material expenses comprised: thousands thousands Expenses for raw materials, auxiliary materials and operating materials and for procured goods Expenses for procured services 7,261 6,123 7,856 6,674 (19) Personnel expenses Personnel expenses can be broken down as follows: thousands thousands Wages and salaries 12,471 11,578 Social contributions and expenses for old-age pensions and support 2,139 2,108 14,611 13,686 (20) Depreciation Depreciation can be broken down as follows: thousands thousands Depreciation of goodwill Depreciation of own software Other depreciation of intangible assets and of property, plant and equipment Due to the introduction of IFRS 3, goodwill is no longer subject to scheduled depreciation with effect from the 2005 financial year. An impairment test is used to check for loss of value. In 2005 the impairment test revealed a need for depreciation only with regard to client bases acquired for a consideration in prior years in the amount of 51,000, recorded under depreciation of intangible assets. During the financial year, depreciation of 68,000 (previous year: 63,000) occurred with regard to current assets. This is included under Other operating expenses.

45 Consolidated notes 43 (21) Other operating expenses thousands thousands Cost of premises Vehicle costs Advertising, trade fair and travel costs Legal and consultancy costs Postage, telephone Insurance Other 972 1,187 3,122 3,592 Information on leasing expenses thousands thousands PC Leasing 7 13 Vehicle Leasing Other leasing arrangements (22) Financial result The financial result includes interest income in the amount of 8,000 (2004: 5,000) and interest expenses totaling 30,000 (2004: 16,000). (23) Income taxes The applied tax rate of 41% for German companies and 28% for Swiss companies for the purposes of reporting deferred tax was calculated in accordance with IFRS 12. In Switzerland, tax reporting relates to taxes levied at national, canton and local authority level. During the reporting year the asset-side deferred taxes were fully valued-adjusted due to the losses made to the extent that they could not be offset against corresponding liability-side deferred tax liabilities relating to the companies concerned. Tax expenses are composed as follows: thousands thousands Actual tax expenses Deferred tax expenses from the creation/ reversal of temporary differences Deferred tax expenses from items offset directly against shareholders equity

46 44 Consolidated notes The change in the balance from the deferred income tax items in the balance sheet can be broken down as follows: thousands thousands As at 01/ Deferred tax expenses from the creation/ reversal of temporary differences As at 12/ Deferred tax claims and deferred tax liabilities have been reported in the consolidated financial statements. The amounts are obtained from the historical statement of deferred tax liabilities, in particular through the capitalization of goodwill at an average tax rate of 36% and the historical capitalization of asset-side deferred taxes in the same amount from the loss carryforwards from the years 2000 to The transition between the tax amount and the product from the result before income taxes and the applicable tax rate is calculated as follows: thousands thousands Result before income taxes 18 1,757 Expected tax income Different tax rates Effect from loss carryforwards for tax purposes Reversal of temporary differences Reported tax expenses Deferred tax assets and liabilities are composed as follows: 01/01/ Expense/ 12/31/ Expense/ 12/31/ 2004 income 2004 income 2005 thousands thousands thousands thousands thousands Deferred tax claim Loss carryforwards for tax purposes Other Deferred tax liability Intangible assets Accounts receivable

47 Consolidated notes 45 (24) Earnings per share The undiluted earnings per share are calculated by dividing the result for the period attributable to shareholders by the weighted average number of unit shares outstanding during the period. The weighted average number of unit shares in 2005 was 6,739,698 (2004: 6,500,000). This gives a figure for undiluted earnings per share of (2004: -0.26). The diluted earnings per share takes account of potential shares from the convertible bond issue. No account is taken of the share option plan in place for employees as this has no effect on earnings per share. The diluted earnings per share amount to with a weighted average for unit shares of 6,903,328 in Taking into account the capital increase recorded on 01/20/2006, there was a theoretical loss per share, undiluted, of (2004: -0.20) and diluted of V. Cash flow statement (see Annex 5) (25) Cash flows from operating activities Ongoing activities resulted in cash flows of 121,000 in 2005 (2004: 549,000 inflow); this meant that the operating result before changes in the net current assets, at 265,000, was up on the previous year ( -20,000). (26) Cash flows used for investing activities The negative cash flow from investing activities amounted to -1,600,000 (2004: -176,000). The amount of 1,227,000 can be attributed to the acquisition of intangible assets and property, plant and equipment. (27) Cash flows from financial activities Cash flows from financing activities relate to inpayments from the cash capital increases and the share placement on the stock exchange. Also included in this item are the proceeds from the placement of the convertible bond and the redemption of loans that were taken over as part of the purchase of ItDL GmbH. (28) Financing funds The cash flow statement was calculated on the basis of net cash in the amount of 1,463,000 (previous year: 931,000). VI. Other information (29) Segment reporting For the purposes of segment reporting, a distinction is made between areas of activity in the primary segment. Engineering encompasses the activities of Triplan Ingenieur AG (Switzerland) and the Engineering division of TRIPLAN AG (Germany). ITandFactory GmbH, ITandFactory AG and Venturis GmbH make up the Technology Services division. Due to the lack of geographic distribution of the Group activities, reporting can only be provided on the basis of the primary reporting format business segment".

48 46 Consolidated notes The Group s operations are broken down into Engineering and Technology Services as follows: Reporting by business segment (segment reporting) 2005 Chargeable income Engineering Technology Services Total thousands thousands thousands Sales income 19,697 5,346 25,043 Changes in inventories Other capitalized internal services ,889 5,922 25,811 Chargeable expenses Material expenses 6, ,856 Personnel expenses 11,290 2,867 14,157 Depreciation Other 1,056 1, ,502 5,268 24,789 Segment result ,022 Costs of Group administration, Other 981 Operating result 41 Financial result 23 Result before taxes 18 Income taxes 283 Period result 265 In 2005 the impairment test revealed a need for depreciation only with regard to client bases acquired for a consideration in prior years in the amount of 51,000, recorded under depreciation of intangible assets of the Technology Services division. Reporting by business segment (segment reporting) 2004 Engineering Technology Services Total thousands thousands thousands Chargeable income Sales income 17,943 6,216 24,159 Changes in inventories Other capitalized internal services ,674 6,534 24,208

49 Consolidated notes 47 Chargeable expenses Engineering Technology Services Total thousands thousands thousands Material expenses 5,563 1,070 6,633 Personnel expenses 9,338 3,019 12,357 Depreciation 248 1,825 2,073 Other 1,671 1,089 2,760 16,820 7,003 23,823 Segment result Costs of Group administration, Other 2,103 Operating result 1,746 Financial result 11 Result before taxes 1,757 Income taxes 25 Period result 1,782 The costs incurred in the individual divisions can be charged directly to the income in the respective division. There were no major transactions between the divisions. Invoicing between the divisions is carried out on the basis of internal prices as in the case of external third parties. With regard to the Engineering division, close to 100% of the income was generated from services. Sales in Technology Services can be broken down into 61% from services (training, consultancy, maintenance and customer-specific adjustments) and 39% from deliveries (software and hardware). The sales of the TRIPLAN Group were primarily achieved through contracts for work. The remainder related to the sale of goods and the rendering of services within the framework of service contracts. TRIPLAN AG Segment balance sheet 2005 Investment in intangible assets and in property, plant Operating assets Operating liabilities and equipment thousands thousands thousands Engineering 8,783 6,144 1,564 Technology Services 3, Total segments 12,754 6,892 1,629 Other TRIPLAN Group 13,690 7,323 1,650

50 48 Consolidated notes TRIPLAN AG Segment balance sheet 2004 Investment in intangible assets and in property, plant Operating assets Operating liabilities and equipment thousands thousands thousands Engineering 4,883 3, Technology Services 4,192 1, Total segments 9,075 4, Other TRIPLAN Group 9,319 4, (30) Members of the Supervisory Board and of the Management Board The Management Board of TRIPLAN AG was composed as follows during the reporting period: Ralf Heimberg Speaker of the Board, until 06/30/2005 Reinhard Meier Sole director with effect from 07/01/2005 Mr. Heinz Braun was appointed as member of the Board with responsibility for Finance and Technology Services with effect from 01/01/2006. With effect from 04/01/2006, Mr. Walter Nehrbaß will replace Mr. Reinhard Meier as planned as the member of the Board responsible for the Engineering division. The Supervisory Board is composed as follows: Dr. Joachim Hohmann Chairman Management consultant, Bensheim, of 06/24/2004, Chairman with effect from 10/13/2004 Dieter Kunkel Engineer; Grenzach-Wyhlen Herbert Troup Partner in Troup, Fischer & Partner, Kassel, up to 06/24/2004 and again from 10/15/2004 until 12/31/2005 Mr. Herbert Troup is be replaced on the Supervisory Board by Mr. Rainer Schad as of 01/01/2006. (31) Total emoluments of the Supervisory Board and Management Board, and loans issued The total emoluments paid to the Supervisory Board for the 2005 financial year shall, as stipulated in the Articles of Association, be determined by the General Meeting following the close of the financial year ( 80,000; previous year: 76,000). Management Board Ralf Heimberg (to ) Salary including pension insurance subsidy 141, Company car 13, Severance payment 75, Reinhard Meier Salary 120, Current payment of retirement pension 43, Profit-sharing 120, (32) Employees TRIPLAN employed an average of 231 members of staff (previous year: 221).

51 Consolidated notes 49 (33) Contingent liabilities As a result of the loan writeoff by NORD/LB, there has resulted a liability from an income adjustment bond. With regard to the years 2004 to 2008, TRIPLAN is committed, subject to a limit of 2.0 million, to pay 50% of the respective net income (net profit) to NORD/LB in the event of a net profit being realized. (34) List of consolidated subsidiaries Share of Name Registered office capital % Main areas of activity ITandFactory GmbH Bad Soden, Germany 100 Sale of IT programs, consulting ITandFactory AG Gebenstorf, Switzerland 100 Sale of IT programs, consulting Venturis GmbH Ettingen, Switzerland 100 Software development Triplan Ingenieur AG Basel, Switzerland 100 Plant planning, consulting, services ItDL Ingenieurtechnische Karlsruhe, Germany 100 Plant planning, consulting, Dienstleistungen GmbH services Triplan Ingenieur s.r.o., Prag, Czech Republik 100 Plant planning, consulting, CZ services Due to its minor significance, Triplan Ingenieur s.r.o., Prague, is not included in the consolidated financial statements. (35) Other financial liabilities Other financial liabilities result solely from leasing and rental agreements (operating lease based on standard market conditions) and can be broken down as follows: Financial year Total Rent Leasing thousands thousands thousands onwards , (36) Declaration of compliance with the German Code of Corporate Governance The Supervisory Board and the Management Board have published a declaration of compliance in relation to the recommendations of the Government Commission of the German Code of Corporate Governance in accordance with Section 161 of the German Joint Stock Companies Act (AktG). Bad Soden, 03/22/2006 TRIPLAN AG Reinhard Meier Heinz Braun

52 50 Consolidated statement of changes in fixed assets as at 12/31/2005 Historical/manufacturing cost 01/01/05 Acquisitions in Currency Disposals in Transfers financial year conversion financial year I. Intangible assets 1. Concessions, commercial rights and similar rights and assets, licenses to such rights and assets 4, a) Concessions, commercial rights and similar rights and assets, licenses to such rights and assets 1, b) Development costs of software 3, Goodwill 5,650 1, ,634 1, II. Property, plant and equipment Plant and equipment 3, III. Financial assets Holdings in associated companies ,969 2,

53 Consolidated statement of changes in fixed assets as at 12/31/ Accumulated depreciation Buchwert 12/31/05 01/01/05 Acquisitions in Currency Disposals in Transfers 12/31/05 12/31/05 12/31/04 financial year conversion financial year ,931 4, ,717 1, ,827 1, , ,104 2, , ,609 2, ,862 3,747 2,731 12,540 6, ,579 4,961 3,678 3,466 2, , ,007 9, ,644 5,362 4,026

54 52 Report of the Supervisory Board Report of the Supervisory Board for the 2005 financial year The Supervisory Board fulfilled the tasks and duties incumbent upon it during the 2005 financial year. It monitored the work of the Management Board from which it received ongoing briefings, verbal and written, on the situation at TRIPLAN AG. The Supervisory Board carried out regular monitoring of the reporting dates with which the Management Board is obliged to comply. It verified all relevant business events, and held regular meetings with the Management Board dealing with business development, strategy and key events in the company. Matters that required the involvement of the Supervisory Board in accordance with statutory regulations or the articles of association were dealt with on an in-depth basis. The issues considered together with the Management Board included fundamental aspects of business, personnel and capital market policy, the economic situation of TRIPLAN AG, future business policy, acquisition and holding issues, risk management and strategy. The members of the Supervisory Board were also regularly available outside of the ordinary meetings to provide the Management Board with advice and to monitor its actions. The financial statements of TRIPLAN AG and the consolidated financial statements as at 12/31/2005, as well as the management report of TRIPLAN AG and the consolidated management report, have been audited by Herden Böttinger Borkel Neureiter GmbH, Hamburg, the auditors appointed by the General Meeting and commissioned by the Supervisory Board. The auditors found the accounts to be in accordance with the company s properly kept books and with the statutory requirements, awarding the financial statements of TRIPLAN AG and the consolidated financial statements for 2005 an unqualified audit certificate. Copies of the financial statement documents, the annual report and the reports from the auditors on their audit of the annual accounts and the consolidated annual accounts were made available to all of the members of the Supervisory Board in good time prior to the balance sheet meeting. The Supervisory Board has reviewed the documents and is agreement with the result of the audit. Having concluded its review, the Supervisory Board has no objections to the financial statements. The Supervisory Board, at its ordinary meeting of 04/11/2006, approved the financial statements and consolidated financial statements for the 2005 financial year as prepared by the Management Board. The financial statements are therefore duly approved. The following changes occurred with regard to the Company s corporate bodies in the 2005 financial year: Mr. Ralf Heimberg stood down with effect from 09/30/2005. Mr. Heinz Braun was appointed as member of the Management Board with responsibility for Finance and IT with effect from 01/01/2006. The Supervisory board would like to thank the Management Board for its work over the year. Its thanks also go to all of the employees of TRIPLAN AG for their positive contribution to the success enjoyed by the company in its 2005 financial year. Bad Soden, April 2006 Dr.-Ing. Joachim W. Hohmann Chairman of the Supervisory Board

55 Transcript of the Auditor s Certificate and Remarks 53 Transcript of the Auditor s Certificate and Remarks On conclusion of our audit we have issued the following unqualified audit certificate of 03/23/2006, a transcript of which is printed below, for the consolidated annual financial statements as at 12/31/2005 (Annexes 2 to 6) and the group management report for the 2005 financial year (Annex 1) of TRIPLAN AG, Bad Soden. Audit certificate issued by the auditor We have audited the consolidated annual financial statements consisting of the balance sheet, income statement, statement of changes in shareholders equity, cash flow statement and notes and the group management report of TRIPLAN Aktiengesellschaft, Bad Soden, for the financial year from 01/01 to 12/31/2005. The preparation of the consolidated annual financial statements and the group management report in accordance with IFRS as applicable in the EU and additional applicable provisions of commercial law as stipulated by Section 315a, paragraph 1 of the German Commercial Code (HGB) and other provisions of the company s articles of association is the responsibility of the company s legally authorized representatives. Our responsibility is to express an opinion on the consolidated annual financial statements and group management report based on our audit. We conducted our audit of the consolidated annual financial statements in accordance with Section 317 HGB, and the generally accepted German standards for the audit of financial statements promulgated by the German Institute of Auditors (IDW). Those standards require that we plan and perform the audit such that material misstatements affecting the presentation of the net assets, financial position and results of operations in the consolidated annual financial statements in accordance with the applicable accounting principles and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and evaluations of possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the internal control system and the evidence supporting the disclosures in the consolidated annual financial statement and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the financial statements of the companies included in the consolidated annual financial statements, the list of the consolidated companies, the accounting principles and consolidation principles used and significant estimates made by the legally authorized representatives, as well as evaluating the overall presentation of the consolidated annual financial statements and group management report. We believe that our audit provides a sufficiently sound basis for our opinion. Our audit did not result in any objections. In our opinion and on the basis of the findings of our audit, the consolidated annual financial statements comply with IFRS as applicable in the EU and additional applicable provisions of commercial law as stipulated by Section 315a, paragraph 1 of the German Commercial Code (HGB) and other provisions of the company s articles of association, and, in keeping with these principles provide a true and fair view of the net assets, financial position and results of the Group. The group management report is in accordance with the consolidated annual financial statements, gives an appropriate description of the state of the Group overall and accurately portrays the opportunities and risks associated with future development." We have issued this group audit report in accordance with the legal provisions and accepted reporting principles for the auditing of annual financial statements (IDW PS 450). Any use of the above transcript of the audit certificate except in this group audit report requires our prior consent. In the case of publication or dissemination of the consolidated annual financial statements and/or of the group management report in a form that differs from the certified edition (including translation into other languages), our renewed opinion must be sought if this form cites our audit certificate or refers to our audit. Reference is made to Section 328 HGB. Osnabrück, 03/23/2006 HERDEN BÖTTINGER BORKEL NEUREITER GmbH Auditors Tax Consultants (U. Böttinger) Auditor (M. Borkel) Auditor

56 54 Corporate Governance Corporate Governance Declaration of Compliance of TRIPLAN AG in relation to the German Code of Corporate Governance The Supervisory Board and the Management Board of TRIPLAN AG have submitted a declaration of compliance in relation to the recommendations of the Government Commission of the German Code of Corporate Governance in accordance with Section 161 of the German Joint Stock Companies Act (AktG). The declaration of compliance states: TRIPLAN AG complies with the recommendations of the Government Commission of the German Code of Corporate Governance, with the following exceptions: Contrary to the provision regarding D&O insurance (Directors and Officers liability insurance section 3.8 of the Code), the Company s D&O insurance has no deductible. Since the Supervisory Board is comprised of only three persons, no Supervisory Board committees are planned. (section 5.3 of the Code) A mandatory retirement age for members of the Supervisory Board (section of the code) is not planned. The judicial appointment of a member of the Supervisory Board was not limited in time until the next Shareholders Meeting (section of the code). Compensation of the members of the Supervisory Board is related solely to fixed shares. (section of the Code) The holdings of shares in the Company by members of its corporate bodies are not published beyond that which is required by law (section 6.6 of the Code). In contrast to the recommendation of 90 days, the Consolidated Annual Financial Statements for 2004 were published on 06/09/2005, after a period of 160 days (section of the Code).

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58 56 TRIPLAN History TRIPLAN has offered its engineering services to the process industry in Germanspeaking countries for 37 years. It is active in the growth sectors of pharmaceuticals and biotechnology, water treatment, nutrition and power generation, and is also an outsourcing partner in the area of factory planning. With its software tools and services, from CAD/CAE to lifecycle management, subsidiary ITandFactory GmbH is an innovative solutions provider TRIPLAN is founded in Bad Soden. The company initially provides engineering services to the chemicals and pharmaceuticals industries. From the very beginning it quickly becomes apparent that the company structure must be distributed and should be composed TRIPLAN follows its customers this time to Switzerland. A subsidiary, TRIPLAN Ingenieur AG, is founded in Reinach, near Basel. The company is successful in acquiring the first chemicals and pharmaceuticals operations there as its customers. At this time, the first major order is won, representing an investment of over DM 100 million. The increase in sales also means diversification. The Technology Services division is founded. The plant-planning tool, TRICAD, is the first product to be ready for the market. The TRICAD planning software solution hits the market. At the same time, the portfolio is enhanced by a focus on buildings engineering (TRICAD GT). TRIPLAN Ing. Ges. mbh is founded in Austria and becomes the latest outpost in TRIPLAN's strategy of international expansion. The TRICAD software now operates on the market-standard MicroStation base. From Austria it is just a hop over the border to the Czech Republic, and TRIPLAN Ing. s.r.o. is founded. In terms of technology, the first multipurpose plant designed using TRIPLAN's own modular technology is completed. Biotechnology is added as a further focus of TRIPLAN's engineering services. This year sees development of an innovative tool for industrial services the TRIBASE plant lifecycle database. of profit centers. TRIPLAN specializes in engineering for public authorities, and during a period hit by the global energy crisis, in energy saving solutions for production facilities.