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Fuhrländer

Annual Report 2004

2 3

Greeting 4

Fuhrländer Aktiengesellschaft

Highlights in 2004 6

Management Report 10

Income statement presentation 16

Annex 18

Supervisory board report 26

1999 2000 2001 2002 2003 2004 TEUR TEUR TEUR TEUR TEUR TEUR

Turnover 15.416 26.980 37.629 48.518 39.467 48.024

Total operating 16.226 26.461 42.394 45.836 49.206 39.936performance

Annual net profit 228 483 572 168 50 498

Total equity 3.236 3.720 4.292 3.884 3.934 4.432

Balance sheet total 7.335 21.200 21.735 27.864 24.920 22.611

Number of employees 22 33 59 84 97 112(annual average)

It is expected that there will be an

increase in the total operating profit

about 130% for 2005, at an annual net

profit of about 1,1% of the total operating

profit and an annual average about 130

people.

4 5

Dear shareholders, dear friends and interested parties!

„Friendly Energy – Friendly World”

– that is the slogan with which we are

progressing internationally. And the

prospects are good: because in the

global upward trend for wind power,

we are literally in our element amongst

the large-scale and static groups – some

months ago, Siemens also entered the

wind power market with the acquisition

of the Danish producer ANBonus.

In this context, the contacts to

international investors, planners and

partners make it clear: The demands

are not becoming smaller but more

exciting. Our employees are learning

more about dealing with other cultures

on a daily basis and require a high

degree of sensitivity and creativity.

The projects in Italy and Portugal

demonstrated clearly that Fuhrländer

is well capable of being a strong and

reliable international partner. We can

display our strengths such as flexibility

and above average commitment to

supply the investor with a turnkey wind

park.

This not only involves individual turbines

and small wind parks. Investors are

increasingly requesting long-term

projects with more than 100MW of total

yield. This will guarantee further secure

growth for us. Licensing agreements

entered into for turbines of the 1 MW

and 1.5 MW classes are opening up

significant perspectives for us. The

target markets China, North America

and Japan must be named here.

Our new 2.5 MW class range is also

creating a stir already: Due to the unique

construction details and performance

features, these multi-megawatt

turbines are suitable for use in many

European countries such as France. The

initial presentation at the spring fair in

Lyon earned a positive response.

Insurance companies are also giving

a positive assessment of the new

range because the FL2500 convinces

by features which can minimise

maintenance and service requirements.

Insurance companies are hoping for

better and faster handling of claims due

to the easily replaceable components

and the cost saving onboard crane.

Add to this the good reputation which

Fuhrländer enjoys in the insurance

sector thanks to fair dealings, robust

systems technology and quick service.

The FL2500 prototype is up and standing

completely tested and is waiting for the

160 m high lattice tower to be erected.

The practical test is scheduled to run

until next spring. The turbine will already

be presented to the broader public at

the industry trade fair HUSUMWIND in

September 2005.

Technology is one side of growth,

people are the other: That is why we are

continuing to invest in people and are

helping them to develop positively. This

is already the third year in which we are

clearly emphasizing training: this means

that we are providing qualifications

to around 40 young people in the

Waigandshain plant in future-oriented

professions like mechatronics and

electrical engineering.

Our vision thrives on social responsibility

towards people and their living

spaces. Our concept “partnership

not dominance” continues to bear

fruit internationally. The signing of

a contract for the manufacture and

installation of at least 165 wind turbines

in Brazil is creating the setting for the

construction of an on-site production

facility and a training centre in the

Federal State of Cearà in northern Brazil

which Fuhrländer wants to realise via a

subsidiary and in cooperation with state

authorities.

My thanks are also due to our employees

who accompany us on this route and are

working with us for progress. I would also

like to thank our customers, suppliers

and investors for their confidence as

they have a decisive share in the positive

development of the company.

„Friendly Energy – Friendly World” –

together, we want to create a future on

this planet which is worth living!

Waigandshain, May 2005

Fuhrländer Aktiengesellschaft

Joachim Fuhrländer

Chairman of the board of directors

6 7

Fuhrländer AG in 2004Some Highlights

Fuhrländer AG‘s defining characteristics are short decision-making processes, the

utilisation of opportunities and the firm desire to advance matters. We have proven

internationally, for example, that we are able to achieve turnkey wind parks in record

time. These unique characteristics are known throughout the industry and resulted in

further forward-looking cooperations in the financial year 2004 and which have the goal

of being able to act successfully and with increased presence on the international stage.

Technologie-Gesellschaft Waigandshain

/Homberg acquired the immediately

adjacent „Fuchskaute“ in the course of

this wind park development. According

to planning, an information and meeting

centre all around renewable energy is to

be created in cooperation with Kevag at

the highest point of the Westerwald of

more than 650m. Visitors from near and

far will be able to obtain an up-to-date

overview of this forward-looking topic.

Fuhrländer thereby strengthens its

ties with the region and promotes the

acceptance of wind energy in particular.

Despite headwind – most recently be-

fore the higher administrative court -,

the wind park Waigandshain/Homberg

went online on time. The 12 MD77 with

their 100 m tower already weathered the

first winter. Investor Kevag, the regional

power supplier from Koblenz, expresses

satisfaction with the turbines, their

availability and the cooperation with the

Fuhrländer team.

The planners forecast up to 40 million

kWh of clean wind power per annum.

This will facilitate the supply of environ-

mentally friendly energy to ca. 10,000

households.

An additional electricity line had to be

laid to the feeding point Höhn to bring

the 18MW wind park online. Fuhrländer

could also prove its competence in this

respect.

Following the takeover of the onshore

business of Pfleiderer AG by Fuhrländer-

Pfleiderer GmbH & Co.KG at the end of

2003, Fuhrländer technicians and me-

chanical engineers were kept extremely

busy in 2004 as the priority was to op-

timise the good PWE concept further

on behalf of the affiliated company and

to equip the already installed turbines

piece by piece to the Fuhrländer qual-

ity standard. The Azimuth slip-in guide,

for example, was reworked completely

so that the wind direction follow-up

works safely even at extreme summer

Young people without professional

training have worse opportunities to

master their lives themselves. That is

why Fuhrländer consistently invests in

the next generation to have enough

qualified employees for the future

growth of the company.

An additional 15 new trainees, who

started their professional life in the

Waigandshain plant in 2004, mean that

Fuhrländer now trains 36 junior mem-

bers of staff in technical and commercial

professions. We have our own appren-

tice training shop with the relevant jobs

and winter temperatures. In addition,

new angled interlocking gears also fa-

cilitate a quieter run and longer life. The

multi-component glass fibre reinforced

plastic nacelle facing was also revised

and equipped with the Fuhrländer

trademark.

Thus, the PWE600 became the FL600 in

a 2 weekly rhythm in the Waigandshain

plant.

Enormous logistical and technical efforts

were required to reinstall the turbines

back on the tower on time and to mini-

mise the stoppages of the wind park. In

and different test areas for e.g. electrical

engineering, electronics, construction

and hydraulics to ensure that this train-

ing takes place to the required quality

standard. In addition, the training team

was strengthened further: Ricarda Scheil

is responsible for the trainees in the

office. Ulrich Merten provides training

in the technical professions, supported

by Gerd Gregor who is looking after

the mechatronics trainees in particular.

Shop manager Jürgen Höppner coordi-

nates the deployment of the trainees

as part of their training in manufacture

and installation while Dietmar Hölper

as works manager handles the regular

theoretical training and adds to the pro-

fessional school education.

And whatever works for us is to become

reality in Brazil, for example, over the

coming months. In addition to the crea-

tion of a production facility, Fuhrländer,

via a subsidiary and with support by the

state authorities, also plans a large train-

ing shop with living units here to give

street children a future via professional

qualification.

addition the “empty” towers had to be

weighed down with heavy weights dur-

ing each two-week long maintenance

period to secure their stability.

We successfully faced this challenge

thanks to good preparation and a co-

ordinated method of working by the

purchasing, manufacturing and instal-

lation teams.

Wind park Waigandshain – online on time

The PWE 600 became the FL 600

Soon almost 40 trainees in Waigandshain – Fuhrländer consistently invests in youth and future

8 9

2,5 MW prototyp –soon to be tested in the field

The globally booming wind energy in-

dustry today realises wind turbines with

increasing efficiency. Megawatt models

of up to 5MW are announced. But does

rapid realisation of ever bigger turbines

really lead to success?

Fuhrländer AG, in cooperation with the

consulting engineers W2E, decided to

pursue another direction: in contrast to

the high performance 5 MW turbines,

the new 2.5MW turbine uses compo-

nents which can already be handled

technically today. In addition, the tur-

bine convinces by some extraordinary

features which will offer maximum op-

erational safety to the investor.

The dimensions of the new FL2500 are

impressive: The power house plus hub

weighs in at about 90 tons alone. The

entire technical equipment including

converter and transformer is located in

the 14 m long and just under 4m high

unit.

The FL 1000 – even better with its new design

In order to reflect the quality hidden

inside already on the outside, the

FL1000 tried and tested since 2004 is

now available with a new, elegant glass

fibre reinforced plastic casing which un-

derlines the reliability of the megawatt

turbine skilfully. The new design was put

on the tower in the wind park Welzheim

for the first time – to the delight of the

operators.

In the meantime, interested parties

from China, for example, have selected

this turbine concept.

The first FL 1500 for the Japanese market

Following the takeover of the Pfleiderer

onshore activities, Fuhrländer-Pfleiderer

GmbH installed its first 1.5 MW turbine

with a 77 m rotor and 85m hub height

and brought it online in the autumn of

2004: The turbine with variable speeds

and its unmistakable round power

house supplies ca. 1,000 households

at its location Sakata on the Japanese

island of Yamagata with clean wind

power. Further FL1500 are already on

their way to Japan.

A first unique feature: the rotor hub is

connected directly to the reinforced

machine support via a 6 ton heavy fric-

tion bearing. Therefore, all rotor forces

impact on the machine and not on the

gear. Rotor, bearing and gear can be

replaced individually in case of repair.

The engineer can reach the hub without

having to leave the power house.

Even the insurance companies were

convinced when presented with this

concept as lower costs can be expected.

An integrated on-board crane holds the

same promise: Even the large compo-

nents like gears and generator can be

replaced via a large drop bottom behind

the tower or lattice tower – totally with-

out expensive mobile crane!

In addition to the standard model with

2.5MW and 90 m rotor, a high wind

model with 2.7MW and 86 m rotor as

well as a low wind model with 2.3MW

and large 100 m rotor can be developed.

Internationale licensing agreements and cooperation

In addition to its own sales partner in

Zhuhai-City, Fuhrländer also entered

into a promising licensing agreement

with the company Baoding huiyang

Aviation Propeller Factory in 2004. The

Chinese intend to assemble and install

the FL 1000 with our support. Different

projects are already in their final phase.

Our cooperation partner AAER could

handle the intensified future pen-

etration of the North-American market

(Canada/USA) from Canada: planning in

this respect is in top gear. Assembly lines

for the FL1000 and FL1500 are planned

here.

It is planned that this trendsetter turbine

will be available with steel tube towers

of up to 100 m and lattice towers of up to

160 m. As a result, the turbine concept

offers all prerequisites to generate op-

timum clean wind power in any global

location.

The prototype with a hub height of

160 m is to be installed at a location in

Brandenburg in the summer of 2005.

Following successful tests, Fuhrländer

expects a serial production from 2006

onwards.

50 100 150 Tower height [m]

FL 30FL 100

FL 250

FL 600

FL 800

FL 1000

FL 1500

FL 2500

FL 2300

Output [kW]

The vast Fuhrländer turbine range

10 11

Management report on the financial statements of Fuhrländer Aktiengesellschaft as of 31st December 2004

Description of the business trends

On the whole, Fuhrländer Aktien-

gesellschaft concluded the financial year

2004 successfully. Remaining work on

wind parks installed over the previous

years and annual maintenance during

the first six months were followed by

new project starts from July onwards.

Although the start of construction

for the first wind turbines occurred

during the second half of 2004, a

significant increase in sales of 21.68%

when compared to the previous year

could be achieved. A positive annual

result was reached for this year – as in

the previous years -, whereby the net

income improved from TEUR 50 to TEUR

498. This resulted in an increase of the

net assets by 12.7% to TEUR 4,432 and

of the number of employees by 11.3%

to 112. The number of training places

in the areas of mechatronics, electrical

engineering, mechanical engineering,

metal construction and administration

was expanded from 23 places to 36

places.

Fuhrländer AG’s training programme has

been described as exemplary for years

beyond the location of the company

headquarters.

The provincial government of Rheinland-

Pfalz also views it as a significant and

continuing sign of social competence

and responsibility in this respect.

The projects in Italy and Portugal were

inspected and passed by surveyors

during the first half of 2004 and the first

maintenance jobs were carried out. In

addition, another subsidiary of the RWE

group followed the successful realisation

of the wind park in Italy with a further

project, the wind park Westerwald, in

cooperation with Fuhrländer AG. The 12

turbines of the model MD77 with 100m

high towers could be installed and put

into operation as contractually agreed.

Apart from orders for single turbines, a

binding purchasing agreement for the

installation of 10 additional turbines of

the model FLMD77 on 112 m high lattice

towers plus infrastructure was entered

into with the Danish investor in 2004,

who already owns Fuhrländer wind

parks.

This already provides a basic production

work-load for the first half of 2005.

The licensing agreements entered into in

2004 create essential perspectives and

market advantages for the group. The

various licensees are a Chinese industrial

enterprise as well as a subsidiary of

the Chinese state Energy Holding.

Each company provides the necessary

structures and technical equipment to

manufacture future turbines of the 1000

kW and 1.5MW classes under license.

The existing agreement with our

Japanese license partner underlines that

the efforts over the past years to open

up the Asian market can be described

as successful.

The newly developed FL2500 was

realised in cooperation with the

company W2E. The hall tests will run

until May 2005 before the installation

is expected to commence in June/July

2005.

The preliminary contracts for the

production and installation of at least

165 wind turbines in Brazil were agreed

and signed. The construction of a

separate production facility and a school

with training centre for the realisation of

the projects is intended in the Federal

State of Cearà in Northern Brazil.

Market position

Suppliers and manufacturers of wind

turbines have been increasingly

integrated and merged into groups

over recent years. In this respect,

companies with insufficient substance

to secure know how were taken

over by competitors and the turbine

concepts therefore became more and

more uniform. As a result, Fuhrländer

Aktiengesellschaft‘s German market

position has improved further from

eighth place in the previous year.

Fuhrländer AG has been amongst the

top companies in the area of service and

reliability for years. The improvement of

the availability of the Pfleiderer turbines

for the market has led to the creation

of higher confidence. We are expecting

the German market to lose significance

for the industry as a result of further

internationalisation.

Risk management

Circumstances, which could negatively

influence the company situation to a

significant degree, were not revealed

after the balance sheet date. The

general company risks were thoroughly

defined, assessed and – as far as possible

and sensible – minimised or passed on

to third parties.

As a result, bad debt risks were secured

in advance by bank certificates; warranty

risks were transferred to suppliers or

secured separately. In this respect in

particular, an extensive, combined

insurance package including warranty

insurance exists which is introduced

and managed by an internationally

experienced insurance broker in Munich.

Assumed negative developments in

the political framework conditions,

approval difficulties which occur for

new technologies, lacking willingness

to finance by banks, as well as

overestimated location yields by

individual offices in the past are in turn

equalised by an active penetration of

international markets. The international

markets, in particular, show the

largest growth rate and concrete

opportunities.

Turbine engineering is monitored by

independent inspections and expert

reports. Quality is assured in form

of model testing and certification by

institutes such as Germanischer Lloyd or

TÜV Bavaria.

In addition, turbine concepts are adapted

to the markets and expectations by

investors and operators. The expansion

of the turbine range by the 2500 kW

turbine and the Pfleiderer models

PWE 600 and PWE 1500 already put

Fuhrländer AG in pole global position

last year in relation to the product

profile.

The topic of water desalination receives

further focus and additional contacts for

the realisation are made. The market is

developing slowly but steadily in this

respect.

Fuhrländer Aktiengesellschaft is entered

in the commercial register in Montabaur

under the reference number HRB 6561. The

share capital remained unchanged during

the financial year 2004. The board of man-

agement is formed by Joachim Fuhrländer

(chairman) and Mr. Helmut W. Moll since

February 2004, the supervisory board

consists of three individuals, the chairman

is Mr. Werner Spiecker.

Financial statements 2004

12 13

The certification of the company

according to standards set by the TÜV

quality assurance system DIN EN ISO

9001 creates a further positive feature

associated with permanent adaptation.

An extensive solvency concept for

growth financing is being negotiated

with the company banks and the

Ministry of finance and commerce of the

Federal State Rheinland-Pfalz:

The Federal State Rheinland-Pfalz

issued a guarantor‘s undertaking on

18th July 2000 and absorbed a deficiency

guarantee to the extent of 70 % initially

and 60 % currently of the credits and

bank guarantees granted by the banking

pool of originally EUR 9,970,191.68. The

guarantee and the associated financing

are presently limited to 30th June 2005,

however, are to be extended beyond this

deadline. The application for extension

is still being processed at the time of the

audit. The guaranteed amount and the

granted credits were reduced as planned

by 5 % annually from 30th June 2003

onwards. Additional repayments are

agreed from 30th June 2005 onwards.

Shortages to be expected are

counteracted by project financing

and additional share capital creation

with further increasing sales. Decisive

discussions were held in this respect

and possibilities for expansion or

restructuring of the banking pool

were deliberated. Optimised solvency

planning, which was put in place in the

meantime, creates the required basis.

Strategic adaptation to company size,

growth and international profile were

implemented successfully and are

bearing the first fruit.

In terms of human resources, focus

points were set and an increase,

restructuring and refocusing of

responsibilities took place, which

resulted in a positive reduction of stress

for individual employees.

Strategies

New strategies for sustained utilisation

and security of jobs are required and

initiated. Fuhrländer AG clearly goes

into the direction of internationalisation

– already initialised 6 years ago. Internal

restructuring by country-specific

distribution of tasks with financial

and human resources planning as

well as project financing for solvency

planning are the essential tasks which

were realised. In addition, a country-

specific wealth creation sequence in the

relevant country achieves a competitive

advantage and secures well distributed

order potential. The approach of not only

representing a small part of know how

transfer, as common in competition,

but to have a job creation strategy

resulting from training, provision of

training material and the creation of

training places is creating higher local

acceptance and support.

The installation of offshore wind

parks is still not a company priority for

Fuhrländer AG as insurance companies

also are increasingly voicing their doubts

in this respect. Instead, the existing

turbine spectrum is to be optimised

further and the combination of wind

power with other technologies is to be

expanded and marketed more.

This means that pure production in

Germany will not be expanded further.

The Waigandshain location will

increasingly be regarded as a technology

centre, as already started. Training

seminars and programmes, maintenance

and service, small model manufacture,

monitoring and controlling as well

as additional qualification of staff are

goals for the coming years. This avoids

a strategic conflict and a subsequent

clear competition in the global market.

In addition, individual countries with

above average market potential require

creation of wealth on site.

Outlook

The turnkey installation of wind parks

in Germany and abroad according

to customer specifications, the

introduction of the 2.5 MW class to the

international market, the granting of

licenses of the turbine from 1 MW yield

upwards, marketing of the globally

leading FLAG monitoring system

supported by databases, the expansion

of the service concept and other joint

ventures are the tasks for the coming

financial year and the future.

The Waigandshain location will remain

the competence and know how centre.

Production is guaranteed by licenses,

joint ventures and own manufacturing

facilities, which are self-financed as

independent companies in the relevant

country. Only up to 10 wind turbine

manufacturers are sharing the global

market. This means an easily monitored

competition which can be counteracted

by our own strategies. Fuhrländer

Aktiengesellschaft is well equipped

to meet the market and competitive

requirements.

Risk report

The high share of project business

constitutes a particular risk for future

development. Decreasing margins for

individual projects can have significant

impact on the assets and earnings of the

company.

The dependence on political and legal

framework conditions is the risk for the

German market. Potential changes of

the EC and changes of fiscal frameworks

have to be mentioned in particular.

We refer to the application for extension

still in progress in relation to the

financing via the pool agreement of the

banks granting credit and the federal

guarantee at the time of presenting the

annual financial statements. There are

no indications that financing and the

federal guarantee will not be extended.

Furthermore, the limited market for

acquisitions could result in risks due to

a potential dependency on raw material

suppliers as well as in technical risks. On

the whole, the board of management

does not envision risks threatening the

continued existence of the company.

Subordinate status report

We compiled a report (subordinate

status report) on the relationship

with our majority shareholder and its

affiliated companies according to §312

Companies Act for the financial year

2004.

The final statement of the subordinate

status report reads as follows:

„The company received fair and

reasonable consideration for each and

every legal transaction carried out during

the financial year 2004 (1st January to 31st

December 2004) as listed in the report

on the relationship with our majority

shareholder and its affiliated companies

according to the circumstances known

to us at the time at which the legal

transactions were carried out. Other

measures were not taken or omitted in

the reporting period.”

Waigandshain, 31st. March 2005

Fuhrländer Aktiengesellschaft

Joachim Fuhrländer Helmut W. Moll

Chairman of the board of management Board of management

14 1514

Liabilities

A. EQUITY CAPITAL

I. Subscribed capital 2.881.350,00 2.881.350,00 II. Capital reserves 235.048,77 235.048,77 III. Statutory reserves 53.086,23 39.500,95 IV. Net profit 1.262.066,25 777.922,10

4.431.551,25 3.933.821,82

B. CONTRIBUTION OF DORMANT SHAREHOLDER 317.000,97 317.000,97

C. PROVISIONS

1. Provisions for taxes 336.168,49 76.600,55 2. Other provisions 5.095.730,00 3.890.698,63 5.431.898,49 3.967.299,18

D. LIABILITIES 1. Liabilities due to banks 1.357.821,52 1.983.858,74 3. Trade accounts payable 8.135.378,18 12.624.728,50 4. Notes payable 148.016,00 182.700,00 5. Accounts due to other group companies 1.982.983,14 1.386.886,76 6. Other liabilities 500.907,82 422.021,77 - thereof for taxes EUR 54.168,71 (previous year EUR 57.200,86) - thereof for social security EUR 90.818,81 (previous year EUR 79.155,83 )

12.125.106,66 16.600.195,77

E. DEFERRED CHARGES 305.122,96 101.434,43

22.610.680,33 24.919.752,17

Assets

A. FIXED ASSETS I. Intangible assets 1. Software/licences 14.832,50 19.705,50 2. Other rights 1.365,00 1966,50 16.197,50 21.672,00

II. Property, plant and equipment

1. Real property and buildings including buildings on leased land 1.696.690,49 1.730.545,33 2. Technical equipment, plant and machinery 52.922,00 66.033,00 3. Other assets, plant and office equipment 545.523,50 444,140,00 4. Prepayments and plant under construction 0,00 30.000,00 2.295.135,99 2.270.718,33

III. Financial assets 1. Shares in affiliated companies 115.000,00 115.000,00 2. Investments 0,00 1,00 115.000,00 115.001,00 2.426.333,49 2.407.391,33

B. CURRENT ASSETS

l. Inventories

1. Raw katerials, consumables and supplies 5.573.633,64 4.364.000,00 2. Finished products and work in process 1.513.820,00 12.186.000,00 3. Location rights 0,00 50.000,00 4. Advance payments 1.375.937,66 246.160,28 8.463.391,30 16.846.160,28 Less advance payments received -5.020.041,72 -14.301.744,09 3.443.349,58 2.544.416,19

II. Accounts receivable and other assets

1. Trade accounts receivable 9.676.002,66 13.161.053,53 2. Accounts receivable from affiliated companies 974.900,78 1.083.119,87 3. Other assets 1.959.023,18 4.355.508,50 12.609.926,62 18.599.681,90

III. Liquid funds 3.441.361,90 1.288.995,86 19.494.638,10 22.433.093,95

C. PREPAID EXPENSES 689.708,74 79.266,89 22.610.680,33 24.919.752,17

31.12.2004EUR

31.12.2003EUR

31.12.2004EUR

31.12.2003EUR

Balance

16 17

2004 2003 TEUR TEUR

1. Sales 48.023.550,90 39.466.682,99

2. Increase/decrease in work-in-progress -10.672.180,00 9.250.890,00

3. Other operating income 2.584.733,58 488.330,00

4. Cost of materials 27.914.929,16 34.532.465,16

5. Personnel expenses 4.202.734,63 3.472.840,66

6. Depreciation and amortisation costs and other write-offs 260.229,73 272.985,29

7. Other operating expenses 6.360.517,92 9.664.392,51

8. Other interest and similar income 70.989,13 182.260,40

9. Write-offs of financial assets 0,00 0,02

10. Interest and similar expenses 375.775,95 1.303.807,60

11. Profit/loss from ordinary operations 892.906,22 141.672,15

12. Taxes on income 357.647,74 57.468,39

13. Other taxes 9.868,16 6.486,41

14. Profit shares of the silents partner 27.660,89 27.672,00

15. Net income 497.729,43 50.045,35

16. Retained earnings from the previous years 777.922,10 130.379,02

17. Earnings transferred to legal reserves 13.585,28 2.502,27

18. Retained earnings 1.262.066,25 777.922,10

Profit and Loss Account for the period from 01.01. 2004 to 31.12.2004

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18 19

Annex

Income statementpresentation

1) General explanatory notes regarding the financial statements

The annual financial statements

for Fuhrländer Aktiengesellschaft,

Waigandshain, as of 31st December

2004 were prepared in accordance with

the accounting principles of the third

book of the German Commercial Code

and the additional regulations of the

Companies Act.

The accounting and valuation methods

used for the preparation of the previous

year’s financial statements were

retained.

The income statement presentation

was structured pursuant to §275 sect. 2

German Commercial Code applying the

cost summary method.

The annual financial statements

were prepared in accordance with

the regulations governing large

corporations.

Balance sheet (Annex I) and income

statement presentation (Annex II)

include the comparative amounts of the

previous year pursuant to §265 sect. 2

German Commercial Code.

1) Explanatory notes regarding the balance sheet

Intangible assets are included in the

balance sheet at purchase costs, reduced

by normal depreciations.

Property, plant and equipment

were valued at their purchase costs,

reduced by normal linear or declining

depreciation and under consideration of

their economic life.

The financial assets and securities were

included in the balance sheet under

acquisition costs, in parts reduced by

extraordinary depreciations.

The makeup and movement of the fixed

assets is reflected in the gross investor‘s

guide (see page 17).

The inventories were valued at purchase

or manufacturing costs. Appropriate

reductions were made for old stocks and

slow-selling parts. The manufacturing

costs include work-in-progress as well as

individual costs and shares of overhead

expenses and write-offs and leases

for tangible fixed assets required for

manufacture.

Accounts receivable and other assets as

well as cash in banks were valued at par

values. Unaccrued interest at a rate of

5.5 % was discounted for medium and

long-term receivables.

The risks contained in the accounts

receivable from trading were taken into

account by the creation of valuation

reserves.

The active deferred charges and prepaid

expenses include debt discounts to the

amount of EUR 30,743.82. The reversal

is made on the remaining terms of the

loans.

Accounts receivable and liabilities in

foreign currencies are calculated at

the daily exchange rate. Valuation

adjustments to the appropriate amounts

are created for accounts receivable and

other assets in doubt.

EUR 1,575,600.00 (previous year: EUR

2,074,810.00) of the accounts receivable

from trading have a remaining term of

more than one year.

All accounts due from affiliated

companies and other assets presented

in the balance sheet have a remaining

term of up to one year.

The listed provisions and accrued

liabilities were calculated to the amount

required for a sensible business analysis.

Uncertain liabilities and risks were

considered with appropriate amounts.

Liabilities due to banks are secured by

guarantees, storage security transfer of

ownership contract for all inventories,

assignment and land charges according

to a consortium agreement.

The trade accounts payable are secured

by standard retentions of title

Up to 1 year 1 to 5 years More than 5 years

EUR EUR EUR EUR

Liabilities due to banks 1.357.821,52 132.608,63 427.611,72 797.601,17

Advance payments received on account of orders 5.020.041,72 5.020.041,72 0,00 0,00

Trade accounts payable 8.135.378,18 7.969.618,18 165.760,00 0,00

Accounts due to affiliated companies 1.982.983,14 1.982.983,14 0,00 0,00 Notes payable 148.016,00 148.016,00 0,00 0,00

Other liabilities 500.907,82 500.907,82 0,00 0,00

Total: 17.145.148,38 15.754.175,49 593.371,72 797.601,17

The liabilities have the following remaining terms:

Remaining termTotal amount

EUR

Warranty 1.710.000,00

Service and maintenance 1.620.000,00obligations (including obli-gations from agreements taken over in 2004)

Invoices receivable 1.164.000,00

Residual holidays 207.000,00

Interest, court and legal costs 153.800,00

Refinishing of projects 100.000,00

Other 140.930,00

Total 5.095.730,00

Other provisions and accrued liabilities are listed separately pursuant to § 285 no. 12 German Commercial Code as follows:

20 21

Other interest and similar income with EUR 53,500.00 (previous year: EUR 47,200.00)

are related to affiliated companies. As in the previous year, interest and similar

expenses vis-à-vis affiliated companies were not accrued.

A partial disposition of earnings is available for the financial year 2004 on the basis of

the transfer into legal reserves which was considered for the creation of the annual

financial statements.

Chairman: Mr. Joachim Fuhrländer

(Chairman since 01/02/2004),

Master blacksmith

Herr Helmut W. Moll

(since 01/02/2004),

qualified engineer

The company avails of the option according to § 285 no. 9a German Commercial in association with § 286 sect. 4 German Commercial Code of not having to disclose the income of members of the board of management

3) Details of the income statement presentation

Sales break down as follows:

2004 2003

% %

Germany 63,27 71,31Internationally 36,73 28,69 100,00 100,00

The share of sales not directly connected

to the supply of wind turbines decreased

from TEUR 5,477 in the previous year to

TEUR 1,566.

The cost of materials breaks down as follows:

2004 2003

EUR EUR

Cost of raw materials and supplies 19.954.575,62 28.375.807,19

Cost of purchased services 7.910.353,54 5.758.064,28Cost of local rights 50.000,00 398.593,69 27.914.929,16 34.532.465,16

The personnel expenses break down as follows:

2004 2003

EUR EUR

Wages and salaries 3.552.892,87 2.920.306,76

Social security, pension and

other benefit costs 649.841,76 552.533,90thereof for pensions (10.212,64) (10.407,49) 4.202.734,63 3.472.840,66

Herr Norbert Orth,

Businessman

Herr Werner Genz,

(Substitute member of the

supervisory board),

Bank manager (retired)

Supervisory

board: Herr Werner Spiecker

(Chairman),

Financial manager (TWI)

Herr Klaus Kurt Geerdts

(Vice chairman),

Business consultant/

Colonel (retired)

4) Other Details

Detailsof members of the executive bodies

The members of the supervisory

board received remunerations of

EUR 24,000.00 in total in the financial

year.

Eight meetings of the supervisory

board were convened in 2004. Minutes

were kept regularly. The member of

the board of management Helmut

Moll received loans for project related

bonus payments to the amount of EUR

202,000.00 within the framework of

his independent activities according to

the general agreement of 14th January

2004. Further accounts due from bodies

of the company did not exist as of 31st

December 2004.

Name headquarters net assets share in assets last annual result

TEUR % TEUR

Fuhrländer International

GmbH Waigandshain 79 100,0 54

Fuhrländer

Pfleiderer

GmbH & Co. KG Neumarkt i. d. Opf. 98 90,0 -3

Fuhrländer Aktiengesellschaft holds shares in the following companies:

The other financial commitments (§ 285 no. 3 German Commercial Code) break down as follows:

Type of agreement Annually Total Remaining term

EUR EUR in months

car leasing 247.088,18 3 to 44

Machine and office 42.095,00 19 to 60equipment leasing

Office rent 78.000,00 455.000,00 70

Rent company site

Waigandshain 110.439,00 in definite in definite

no individual data due to

different ramaining terms

no individual date due to

different remaining terms

Average number of employees

in 2004:

Management: 2Employees: 34Industrial workers: 47Trainees: 29

22 23

We have audited the annual financial

statements for the business year from

1st January to 31st December 2004

under consultation of the accounts

and the management report provided

by Fuhrländer Aktiengesellschaft,

Waigandshain.

The accounting and preparation of

the annual financial statements and

management report in accordance

with German commercial law are the

responsibility of the company’s board

of management. Our responsibility is

to express an opinion on the annual

financial statements based on our audit

of the accounts and the management

report.

We conducted our audit in accordance

with § 317 HGB (German commercial

code) and the generally accepted

standards for the audit of financial

statements promulgated by the Institut

der Wirtschaftsprüfer (IDW). Those

standards require that we plan and

perform the audit in such a way that

misstatements materially affecting the

presentation of the net assets, financial

position and results of operations in

the annual financial statements in

accordance with accounting principles

generally accepted in Germany and

in the group management report are

detected with reasonable assurance.

Knowledge of the business activities and

the economic and legal environment of

the company and evaluations of possible

misstatements are taken into account in

the determination of audit procedures.

The effectiveness of the internal control

Auditor‘s opinion

Additional rental agreements exist for

different warehouses. These agreements

are not fixed-term and tied to the areas

used as regards the amounts.

Furthermore, a liability arising from

accounts due to affiliated companies to

the amount of EUR 124,627.40 exists.

In addition, a liability amounting to

EUR37,876.45 from an interest-free

financial contribution by the Federal

Ministry of Commerce and Labour exists

which has to be repaid if successful.

5) Details pursuant to the Companies Act

Class of shares:

The company‘s share capital following

the increase in capital in 2001 amounts

to EUR 2,881,350.00 (DM 5,635,430.77).

It is divided into 2,881,350 individual

shares. The shares are issued to the

owner.

Capital authorized for issue:

The board of management, with

approval by the supervisory board, is

authorised to increase the share capital

once or several times, however in total

by EUR 1,440,675.00 (DM2,817,715.39)

at maximum, up to 23rd August 2006

by issuing new individual shares for

cash deposits. The number of shares has

to increase in proportion to the share

capital.

Capital reserves:

The capital reserve of EUR 235,048.77

remains unchanged.

Legal reserves

The twentieth part of the net income

has to be transferred to the legal

reserves until the legal reserves and the

capital reserves jointly achieve the tenth

part of the share capital. This amounts

to EUR288,135.00. In 2003, the capital

reserves and the legal reserves already

amounted to EUR274,549.72. Therefore,

only EUR13,585.28 are transferred to the

legal reserves in 2004.

Waigandshain, 31st March 2005

Fuhrländer Aktiengesellschaft

Joachim Fuhrländer

Chairman of the board of management

Helmut W. Moll

Board of management

24 25

2004 2003 TEUR TEUR

I . Operations

Net income before distributions to the silent partner 526 78 Write-offs of financial assets 260 273 Additions on the basis of the company audit 0 -24

Cash Flow 786 327

Decrease (+) / Increase (-) of

Inventories 8.383 3.805

Accounts receivable from trading 3.485 -4.417 Accounts due from affiliated companies 108 203 Other accounts receivable and assets 2.397 -2.646 Marketable securities of current assets 0 2.750 Deferred charges and prepaid expenses -611 -37

13.762 -342 Decrease (+) / Increase (-) of

Provisions and accrued liabilities 1.465 1.966

Advance payments received -9.282 -3.716 Trade accounts payable -4.490 -1.759 Accounts due to affiliated companies 596 423 other liabilities 44 -573 Deferred charges and prepaid expenses 204 101 -11.463 -3.558 Accrued/retired funds from current operations 3.085 -3.573

II. Investments

Investments in property, plant and equipment and intangible assets -279 -249 Investments in financial assets 0 -90 Retired funds from investments -279 -339

III. Financing

Distributions to the silent partner -28 -28 Decrease (-) / Increase (+) financial liabilities -107 -77 Accrued/retired funds from financing -135 -105

IV. Changes in liquid assets

Changes in funds affecting payment 2.671 -4.017 Funds at the beginning of the period 637 4.654 Funds at the end of the period 3.308 637 thereof liquid assets 3.441 1.289 thereof short-term bank liabilities -133 -652

Statement of cash flows

The following cash flow presentation is subject to German accounting principles

standards no. 2 (DRS 2) of the German Standardisation Council (DSR):

system and the evidence supporting

the disclosures in the accounts, the

annual financial statements and the

management report are examined

primarily on a test basis within the

framework of the audit.

The audit includes assessing the used

accounting principles and the essential

analysis by the board of management

as well as the evaluation of the overall

presentation of the annual financial

statements and the management

report. We are of the opinion that our

audit provides a reasonably secure basis

for our analysis.

Our audit has not led to any

reservations.

In our opinion, the annual financial

statements give a true and fair view of

the net assets, financial position and

result of operations of the company in

accordance with accounting principles

generally accepted in Germany. Taken

as a whole, the management report

provides a suitable understanding

of the company’s position and

suitably presents the risks of future

developments.

Siegen, 13th May 2005

PwC Deutsche RevisionAktiengesellschaftWirtschaftsprüfungsgesellschaft

26 27

in regular meetings with the board

of management. Matters, which are

subject to the participation of the

supervisory board as required by law,

the articles of association or the rules of

procedure for the board of management,

were handled by the supervisory board

and, if required, decided. As a result,

the decision was reached to expand the

board of management with effect from

1/2/2004 already. Helmut W. Moll was

The supervisory board fulfilled the

tasks and duties assigned under law

and by the articles of association in

the financial year 2004. It requested

the board of management to provide

continuous information on the situation

of Fuhrländer Aktiengesellschaft. It

examined all business transactions of

special significance and was advised

on these business transactions as

well as the strategic development

Supervisory board report

appointed as additional member of the

board of management to strengthen

the company in particular in regards

to the increasingly more international

orientation.

The supervisory board convened

eight meetings in the audited year.

The supervisory board discussed

the development and situation of

Fuhrländer Aktiengesellschaft in its

meetings as well as the intended

business policies and business planning

for further internal and external and

therefore also international orientation.

Management was repeatedly available

to the members of the supervisory

board in an advisory capacity even

outside the meetings.

PwC Deutsche Revision Aktiengesell-

schaft Wirtschaftsprüfungsgesellschaft

audited the annual financial statements

as of 31/12/2004 as well as the

management report of Fuhrländer

Aktiengesellschaft. No objections

were raised. The auditor granted the

unrestricted official audit certificate.

The supervisory board examined the

annual financial statements as well as

the management report of Fuhrländer

Aktiengesellschaft and equally found

no cause to raise objections. The annual

financial statements presented by the

board of management were discussed

extensively by the supervisory board

during its meeting of 18/05/2005 in the

presence of the auditor. Following in-

depth examination, the annual financial

statements were then approved.

The supervisory board agreed to the

suggestion by the board of management

in relation to the use of the retained

earning.

The supervisory board would like

to thank the board of management

as well as the staff of Fuhrländer

Aktiengesellschaft again for their

commitment and the successful

performances of the past financial year!

Meinerzhagen, May 2005

Werner Spiecker

Chairman of the supervisory board

www.friendly-energy.de

© F

uhrl

änd

er A

G 5

/20

05

– Re

alis

atio

n: P

R-Se

rvic

e W

erb

eag

entu

r Gm

bH

, D- 3

570

8 H

aig

er

Auf der Höhe 4

D-56477 Waigandshain

Fon +49 (0) 26 64.99 66-0

Fax +49 (0) 26 64.99 66-33

mail@fuhrlaender.de

www.fuhrlaender.de