annual report2014/15
2
Schumag overview
2014/15 2013/14 2012/13 2011/12 2010/11
Orders receivedForeign share
eur mill.%
48,459,8
51,860,8
45,562,4
53,962,4
61,758,8
SalesForeign share
eur mill.%
49,761,8
49,461,5
48,861,4
57,462,1
59,261,0
Total operating performance eur mill. 52,9 50,3 49,2 60,2 64,5
Income from operations before depreciation (EBITDA)
eur mill. 5,2 5,5 3,0 2,4 2,2
Income from operations (EBIT) eur mill. 3,3 3,3 0,5 -0,3 -0,6
Income before taxes (EBT) eur mill. 2,3 1,9 -1,1 -2,4 -2,2
Property, plant and equipment (30-9)
eur mill. 15,7 17,0 18,2 19,6 20,5
Shareholders' equity (30-9)
eur mill. 7,4 6,5 6,5 8,2 13,4
Investments in property, plant and equipment
eur mill. 0,9 0,7 0,9 1,4 2,4
Depreciation of property, plant and equipment
eur mill. 1,7 2,0 2,2 2,2 2,4
Cash-flow from operating activities eur mill. 2,3 2,9 2,6 1,0 -1,6
Personnel expenses eur mill. 28,4 25,8 26,6 27,6 25,9
Number of employees incl. temporary workers (30-9)
625 631 643 709 735
3
contentS
This Annual Report 2014/15 is a translation of the original Schumag Geschäftsbericht 2014/15 prepared in the german language. Please note, that only the german original version is definitive and recognized as authentic. The english translation is provided for convinience only. The company disclaims responsibility for any misunderstanding or misinterpretation due to this translation. In case of any inconsistency or divergence in the english translation, the german original version shall prevail.
LETTEr TO ThE ShArEhOLDErS 4
rEPOrT OF ThE SuPErvISOry BOArD 6
COrPOrATE gOvErNANCE rEPOrT 12
DECLArATION OF COmPLIANCE 16
grOuP mANAgEmENT rEPOrT 20
general information on the group 20
report on economic position 22
macroeconomic and sector-specific general conditions 22
course of business 23
overall statement on the business situation 25
earnings position 26
Financial situation 28
assets situation 30
performance indicators 31
information to be provided by law 32
compensation report 32
information relevant to the takeover 34
Declaration on the management of the company 36
report of the Board of executive Directors on relations with affiliated companies 36
Subsequent events 37
report on opportunities and risks 37
outlook 44
CONSOLIDATED FINANCIAL STATEmENTS 46
contents consolidated financial statements 46
consolidated statement of financial position 48
consolidated statement of income 49
consolidated statement of comprehensive income 49
consolidated statement of changes in equity 50
consolidated statement of cash flows 51
notes to consolidated financial statements 52
INDEPENDENT AuDITOrS' rEPOrT 111
rESPONSIBILITy STATEmENT 112
Dear Shareholders,
Fiscal year 2014/15 was once again a challenge to our company. From macroeconomic perspective the previous
reporting period was changeable. While the first half of the fiscal year was still under the influence of the ongoing
recovery of global economy, the second half of the fiscal year was clearly impressed by the general economic
conditions as well as uncertainties concerning the Asian market and the strong development of the US Dollar. On
the whole, we were able to further strengthen the cooperation with our customers despite of the more difficult
market conditions. The restructuring measures initiated in the previous years show noticeable effects, so that
improvements compared to the previous year are recognisable.
Incoming orders decreased by 7% in the year under review and stayed at a regular level throughout the year. In
the period under review sales remained almost unchanged with an increase by 1%. Due to various machine failures
the demand of our customers was partly not fulfilled within the specified time. We are still making intensive
efforts to establish preventive service systems for the machines. In the year under review we have performed
disproportionately many maintenance work to increase process stability and useful life of the equipment. Never-
theless, the existing machinery is one of our biggest challenges. The total operating performance increased by 5%
during the period under review. The initiated measures for productivity increase are showing effect now.
The Group result before taxes amounting to EUR 1.9 million improved by EUR 0.4 million compared to the previous
year. The improved result is basically due to the implemented measures for productivity increase as well as
further cost savings in financing and other expenses. Despite of costs due to non-recurring effects we were able to
keep income from operations on a constant level.
The company continues to be in a not simple situation. Further restructuring measures are required. We will reach
our target of “achieving profitable growth in the future” if we consistently pursue the approach initiated in the
last few months. We have defined an additional programme of measures for this purpose which is currently being
implemented. Speed of implementation is limited because we are only able to use successively generated liquidity
surpluses.
1. Focus on core competenciesThe expenses of the subsidiary „BR Energy GmbH“ were reduced to a minimum. The operating activities were not
pursued. The company is in the process of winding up. In future, we will increasingly pursue the development of
additional market niches apart from the concentration on our core business and our know-how in this area.
We were able to further strengthen our customer relations and to create potential for the future. Our rating among
major customers has continued to improve, so that we are able to work on new projects deepened.
2. restructuringWe have to optimize our portfolio, to change or discontinue remaining loss fields and less profitable articles so
that these no longer have a permanent effect on our result. After elimination of articles in the previous years,
further adjustments were also made in the year under review with the consent of our customers.
4 letter to the Shareholders
letter to the ShareholDerS
Furthermore the sustainability of savings relating to internal costs and buying has to be secured. Our project
management must increase flexibility in order to meet the consistently high requirements of our customers. Other
expenses increased slightly in fiscal year 2014/15 by EUR 0.4 million which is mainly due to higher maintenance
expenses. The aged machinery is a big challenge for the future. Due to limited funds investments for moderniza-
tion and replacement can only be executed on a low level. In the year under review targeted investments for the
modernization of our machinery took place. We will also in future have to invest in further automation to remain
attractive in the market and not to loose the connection. In the area of sales we are in the meantime closer to our
customers in order to be able to profit more quickly from changes in the market. In addition, we are making efforts
to reduce our high dependency on the automotive industry and to drive forward the transition from a component
manufacturer to a system/sub-system supplier. To exploit the existing business opportunities within the near
future we are still missing the necessary funds.
3. FinancingDue to the specific corporate situation financing remains one of our primary duties. The cooperation with the fac-
toring partner obtained in the previous year is positive and could be further expanded. In the reporting period the
sale-and-lease-back contract, which began in the year 2010, has been completed according to plan. The provided
securities were released completely. Thereby the real property of Schumag is again totally unencumbered.
Dear shareholders,
I kindly request you to continue to place your confidence in our company. In spite of all restrictions we are on a
good way to achieve sustainable stability. Thank you for your previous trust and the support to the restructuring
of Schumag.
At this point my special thanks go to our employees as well as to their representatives in the relevant committees
who continue to stand by their company in difficult times.
Aachen, February 2016
The Board of Executive Directors
Dr. Johannes Ohlinger
5Schumag ag
Dear Shareholders,
Due to further restructuring measures, the current position of our company has clearly improved in fiscal year
2014/2015. The liquidity situation has been further stabilized but continues to be one of our greatest challenge.
The measures initiated by the Board of Executive Directors for further cost reduction and for productivity increase
noticeably show their effects and were decisive for the business success in fiscal year 2014/2015. The expected
improvement of the overall situation has materialized with non-recurring effects having a negative effect on the
result. Further measures such as in particular those for productivity increase have been initiated and are in the
process of implementation. This is to be consistently continued.
In the year under review changes in the composition of the shareholder representatives on the Supervisory Board
were recorded; the continuous monitoring of the management by the Board of Executive Directors was fully
ensured.
Overview of the activities of the Supervisory BoardIn fiscal year 2014/2015 the Supervisory Board exercised the duties for which it is responsible according to the
law, the articles of association and the rules of internal procedure. We regularly advised the Board of Executive
Directors with regard to the management of the company and supervised its activities. The standards for our
supervision were in particular the lawfulness, correctness, purposefulness and efficiency of the management by
the Board of Executive Directors as well as the efficiency of risk management. The Supervisory Board was directly
involved in decisions of essential significance for the company. In the period under review, the Board of Executive
Directors has informed us on a regular basis, both in writing and verbally, in a timely and comprehensive manner.
The focus was on the liquidity, revenue and financial situation, the corporate planning (namely investment,
personnel and financial planning), the course of business, strategic development as well as the current situation of
the company and the Group, the risk situation and the risk management as well as the financial reports involving
periods under twelve months (i.e. semi-annual and interim reports). Based on the reports we have intensively
looked into the situation and development of the company and the Group as well as the business transactions in
fiscal year 2014/2015.
Where the course of business deviated from the plans these deviations were explained to us in detail. The
strategic alignment of the company was coordinated with us by the Board of Executive Directors. Transactions of
essential significance to the company were discussed by us in detail on the basis of the reports submitted to us
by the Board of Executive Directors. We reviewed the reports submitted to us for plausibility and discussed them
with the Board where necessary. In addition, we requested supplementary information from the Board of Exe-
cutive Directors. The Supervisory Board has considered the legality and regularity of the company management,
the effectiveness of the internal control system and of the internal audit system, the capability of the company
organization and its economic efficiency as given.
After thorough examination, the Supervisory Board decided on the resolutions proposed by the Board of Executive
Directors.
66 report of the Supervisory Board
report oF the SuperviSory BoarD
meetings A total of four meetings of the Supervisory Board took place in fiscal year 2014/2015 (on October 2, 2014 and on
January 29, April 29 and September 11, 2015).
If necessary, the Supervisory Board passed resolutions by written consent in lieu of a meeting.
Apart from the meetings of the Supervisory Board, the Chairman of the Supervisory Board also had regular
contact with the Board of Executive Directors. He informed himself about the current business development and
essential transactions as well as the strategic business alignment.
Focal topics of the Supervisory Board meetings in fiscal year 2014/2015The activities of the Supervisory Board in the reporting year 2014/2015 included, apart from the current mo-
nitoring of the business development and planning, also particular measures which required the consent of the
Supervisory Board as well as the measures for the stabilization and improvement of the financing of the company
and the Group.
At the meeting on October 2, 2014 we mainly dealt with the economic key data of the company, the liquidity
situation as well as the preparation of the annual financial statements for fiscal year 2013/2014. As regards the
liquidity situation, the focus was on the future financing structure. Furthermore the Board of Executive Directors
presented the strategic planning and, taking that as a basis, the 3-year plan. Moreover, the current status of the
damage and insurance claims asserted by the company for violations of duties by executive bodies and of existing
legal disputes was discussed in general. In addition, the contract of employment of Dr. Ohlinger as a member of the
Board of Executive Directors was extended by two years until December 31, 2017; accordingly, the Supervisory
Board decided to once again appoint Dr. Ohlinger as member of the Board of Executive Directors until and inclu-
ding December 31, 2017 – terminating the appointment so far limited until December 31, 2015. That measure was
justified by the special circumstance that personnel continuity should be ensured on the top management level of
the company in due time with regard to the restructuring measures still in progress and taking into account that
Dr. Ohlinger is the only member of the Board of Executive Directors.
The annual financial statements, the consolidated statements and the dependency report for fiscal year
2013/2014, the report of the Supervisory Board for fiscal year 2013/2014 as well as the agenda for the general
meeting on April 30, 2015 were the main topics at the meeting on January 29, 2015. As recommended by the
audit committee, the annual financial statements and consolidated financial statements for fiscal year 2013/2014
prepared by the Board of Executive Directors were approved by the Supervisory Board. Before passing a resoluti-
on on the proposal to the general meeting regarding the election of the auditor, the Supervisory Board has verified
his independence and discussed the terms of the assignment. Furthermore the focus was mainly on the economic
key data and on the liquidity situation of the company.
At the meeting on April 29, 2015 we again mainly dealt with the economic key data of the company and discussed
how to further approach the damage and insurance claims asserted by the company for violations of duties by
executive bodies.
77Schumag ag
At the meeting on September 11, 2015 we dealt with the economic key data of the company, the liquidity situa-
tion and the corporate planning. The strategic plan prepared by the Board of Executive Directors and the 3-year
plan based on that were intensely debated. In accordance with the newly issued statutory provisions, the Supervi-
sory Board also dealt with the proportion of women in management positions, specifying the target figures for the
proportion of women in the Supervisory Board and in the Board of Executive Directors.
CommitteesFor an efficient exercise of its duties the Supervisory Board formed a personnel committee and as well as an audit
committee.
In the period under review the personnel committee consisted of the members Mr. Ralf Marbaise, Mr. Ekkehard
Brzoska and Mr. Jürgen Milion. During the meetings held by it, the committee dealt with matters concerning the
Board of Executive Directors.
In the reporting period the audit committee consisted of the members Mr. Ekkehard Brzoska, Mr. Jürgen Milion and
Mr. Hans-Georg Kierdorf (until January 29, 2015) and Mr. Ralf Marbaise (from September 11, 2015). During the
meeting held by it to prepare for the balance sheet meeting, the committee discussed the documentation of the
annual financial statements (including dependency report) for fiscal year 2013/2014. These were reviewed and
the approval of these financial statements was recommended.
Corporate governance and Declaration of ComplianceIn fiscal year 2014/2015 the Supervisory Board regularly dealt with Corporate Governance of the company. In this
process, it also reviewed the efficiency of its work, in particular the frequency of its meetings, their preparation
and holding as well as the provision of information. The current Declaration of Compliance of January 2016 was
approved by the Supervisory Board and publication of this Declaration of Compliance was released by the Board
of Executive Directors in accordance with the 2nd sentence of § 161 of the Stock Corporation Act. The Declaration
of Compliance is published on the website of the company. Schumag Aktiengesellschaft largely complies with the
recommendations of the German Corporate Governance Code in the version of May 5, 2015. The Report on Corpo-
rate Governance and the declaration on corporate management for fiscal year 2014/15 to which reference is made
here were discussed at the meeting on January 27, 2016 and decided by the Supervisory Board.
Annual and Consolidated Financial Statements The annual financial statements as September 30, 2015, the management reports for the stock corporation and for
the Group for fiscal year 2014/2015 (each including the explanatory report on the details according to § 289 (4)
and/or § 315 (4) of the Commercial Code) prepared by the Board of Executive Directors as well as the accounting
and the risk management system were reviewed by the auditors and/or Group auditors KPMG AG Wirtschaftsprü-
fungsgesellschaft, Düsseldorf, elected at the general meeting on April 30, 2015 and were each provided with the
unqualified audit certificate. Furthermore the auditors determined that the Board of Executive Directors had taken
all suitable measures which it was obligated to take according to § 91 (2) of the German Stock Corporation Act. It
has in particular established an adequate information and monitoring system which meets the requirements of
the company and appears to be useful according to its concept and actual handling to detect developments which
threaten the continued existence of the company in good time.
8 report of the Supervisory Board
The annual financial statements and the consolidated financial statements, the management report and the Group
management report were forwarded in their final version to all members of the Supervisory Board on January 12,
2016. The corresponding audit reports of the auditors were presented to all members of the Supervisory Board
also on January 12, 2016. The focus of the audit was placed in particular on the examination of proper accounting,
the efficiency of the internal control and risk management systems as well as the forecasts contained in the
respective reports. At the meeting of the audit committee on January 27, 2016 the representatives of the auditor
explained in detail the content of the respective audit report on the annual financial statements and consolidated
financial statements of Schumag Aktiengesellschaft and also presented the essential results of the audit of the
annual and consolidated financial statements as well as the management reports. On this occasion the committee
discussed and considered the presented documents and reports with the representatives of the auditor and with
the Board of Executive Directors. Special subjects of the discussions with the auditor and the Board of Executive
Directors were individual questions concerning balance sheet values and valuation according to the going concern
approach as well as the main audit points and the internal control system. At the balance sheet meeting of the Su-
pervisory Board on January 27, 2016 the results of its own examination were presented. The signed audit reports
provided with the audit certificates of the auditor were available. Representatives of the auditor also attended this
meeting and discussed the reports with the Board of Executive Directors and the Supervisory Board before resolu-
tions were passed on the approval of the financial statements and the available report of the Supervisory Board
The reports of the auditor were approved by the Supervisory Board. The final result of the Supervisory Board‘s
own examination which had been prepared by its audit committee fully corresponds to the result of the auditor’s
result. The Supervisory Board does not see any reason to raise objections to the submitted annual financial state-
ments and reports.
On January 27, 2016 the Supervisory Board approved the annual financial statements as well as the consolidated
financial statements of SCHUMAG Aktiengesellschaft for fiscal year 2014/2015. The annual financial statements
of SCHUMAG Aktiengesellschaft have therefore been adopted in accordance with § 172 of the German Stock Corpo-
ration Act.
Dependency reportThe report of the Board of Executive Directors on relations with affiliated companies prepared in accordance with
§ 312 of the German Stock Corporation Act (Dependency Report) was also reviewed by the auditors and provided
with the following unqualified audit certificate:
„After our dutiful review and assessment we confirm that
1. the actual details of the report are correct and
2. that the consideration received by the company in connection with the legal transactions mentioned
in the report was not inadequately high“
The dependency report as well as the corresponding audit report were also forwarded to the Supervisory Board
on January 12, 2016. The documents were discussed by the audit committee with the auditors and the Board of
Executive Directors at the meeting of the audit committee on January 27, 2016. At the balance sheet meeting of
the Supervisory Board on January 27, 2016 the results of its own examination were presented. The reports were
9Schumag ag
jointly discussed between the auditors, the Supervisory Board and the Board of Executive Directors. After the final
result of its own examination the Supervisory Board does not raise any objections to the final declaration of the
Board of Executive Directors included in the dependency report on the adequacy of consideration received by the
company in legal transactions with affiliated companies during the period under review and about the absence
of other reportable measures. The Supervisory Board agreed to the result of the examination of the dependency
report by the auditor.
Composition of Supervisory Board and Board of Executive Directors In fiscal year 2014/2015, the composition of the Supervisory Board has undergone the following changes:
The following persons resigned from their office as members of the Supervisory Board: Mr. Martin Kienböck with
effect from December 4, 2014 and Mr. Hans-Georg Kierdorf with effect from January 29, 2015. We thank both of
them for their constructive cooperation.
By order of Aachen District Court of February 3, 2015, Mr. Miaocheng Guo was appointed member of the
Supervisory Board with effect from February 7, 2015 for the resigning member, Mr. Martin Kienböck.
The judicial appointment remained in force until the date of the general meeting on April 30, 2015.
At the general meeting on April 30, 2015, Mr. Miaocheng Guo (for the resigning Mr. Martin Kienböck) and
Ms. Yun Guo (for the resigning Mr. Hans-Georg Kierdorf) were appointed members of the Supervisory Board
in a by-election.
There were no changes in the composition of the Board of Executive Directors.
The Supervisory Board would in particular like to thank all employees as well as the employee representatives
for their once again highly committed service as well as their cooperation in the interest of SCHUMAG Aktienge-
sellschaft.
Aachen, January 27, 2016
The Supervisory Board
Ralf Marbaise
Chairman of the Supervisory Board
10 report of the Supervisory Board
11Schumag ag
Corporate governance at SChumAgThe Board of Executive Directors and the Supervisory Board of SCHUMAG Aktiengesellschaft (“SCHUMAG”) declare
their support for good Corporate Governance inside and outside the Group. The general legal conditions of Corpo-
rate Governance are laid down in the German stock corporation law. Based on § 161 of the Stock Corporation Act
(AktG) the Board of Executive Directors and the Supervisory Board of a company quoted on the stock exchange
are required to provide an annual declaration as to whether or not and to which extent the recommendations of
the „Government Commission for the German Corporate Governance Code“ published in the official part of the
Federal Gazette were complied with (relating to the past) and will be complied with (relating to the future) in the
German Corporate Governance Code (the „Code“). The companies may deviate from it but are obligated in this
case to disclose this annually and to provide the reasons for the deviations („comply or explain“). This enables
the companies to take the needs of the specific branch of business or of the specific company into account. A
deviation from a recommendation of the Code for which good reasons are provided may be in the interest of good
corporate management. The German Corporate Governance Code is revised by the Government Commission at
regular intervals and is also adjusted to international developments. It provides essential legal regulations for the
management and supervision of German companies quoted on the stock exchange and includes internationally
and nationally accepted standards of good and responsible corporate management. Apart from stating the current
best practice of corporate management the Code also aims at making the German Corporate Governance System
transparent and comprehensible and wants to generally promote the confidence of international and national
investors, customers, employees and the public in the management and supervision of German companies quoted
on the stock exchange. The joint Declaration of Compliance published by the Board of Executive Directors and the
Supervisory Board according to § 161 of the German Stock Corporation Act once again documents that we comply
with the recommendations of the German Corporate Governance Code in the version of May 5, 2015 with just a
few exceptions. Deviations are justified and/or explained in each case. The current Declaration of Compliance of
January 2016 is an integral part of the declaration on corporate management and is also attached to this report.
This declaration is published on the homepage of our company in the section of Investor Relations / Corporate Go-
vernance where according to item 3.10 of the Code the previous Declarations of Compliance of the last five years
are also available.
general meetingAfter an invitation had been sent in due form and within the specified time the general meeting for fiscal year
2013/2014 took place at our offices in Aachen on April 30, 2015. In accordance with the German Corporate Go-
vernance Code the reports and documents required by law were not only displayed for inspection and sent to the
shareholders at their request but were also published on the homepage of SCHUMAG along with the agenda.
The resolutions on the items of the agenda of the general meeting and/or the respective voting results were publis-
hed on our homepage within seven days of the meeting according to §130 (6) of the German Stock Corporation Act.
12 corporate governance report
corporate governance report
management and Control StructureAccording to the German Stock Corporation Act SCHUMAG has a dual management and control structure with the
executive bodies of a Board of Executive Directors and a Supervisory Board.
With regard to the medium-sized organizational structure of SCHUMAG - in particular after the sale of the me-
chanical engineering division and the personnel adjustments in precision engineering - the Board of Executive
Directors consisted of only one person in fiscal year 2014/2015. The member of the Board of Executive Directors
who managed the company in fiscal year 2014/2015 according to the articles is mentioned below.
The Supervisory Board supervises the management of the Board of Executive Directors. It consists of six members.
According to the One-Third Participation Act two thirds of the members are shareholders and one third are emplo-
yees. The election of the shareholders represented on the Supervisory Board takes place at the general meeting.
The representatives of the employees are elected according to the provisions of the One-Third Participation Act.
The cooperation of these executive bodies is ruled by the articles of the company decided by the general meeting,
the rules of internal procedure of the Supervisory Board and of the Board of Executive Directors and by the deci-
sions of these executive bodies within the scope of the relevant legal provisions. This also includes determinations
about the facts to be reported by the Board of Executive Directors to the Supervisory Board and the extent of
reporting as well as the type of transactions of the Board of Executive Directors which require the consent of the
Supervisory Board.
Board of Executive Directors In fiscal year 2014/2015 the Board of Executive Directors of SCHUMAG consisted of the following member:
The emoluments of the Board of Executive Directors include the fixed remuneration payable on a monthly basis
and variable remuneration components.
The remuneration of the Board of Executive Directors for fiscal year 2014/2015 is shown in the overview below:
name Function entry resignation
Dr. Johannes ohlinger Sole director of the Board September 1, 2012 -
name Fixed remuneration variable remuneration total emoluments
eur eur eur
Dr. Johannes ohlinger 540.000,00 94.000,00 634.000,00
Total 540.000,00 94.000,00 634.000,00
13Schumag ag
Supervisory Board The report of the Supervisory Board included in the Annual Report 2014/2015 describes the focus of activi-
ties and the committees formed by this corporate body. The members of the Supervisory Board in fiscal year
2014/2015 as well as their individual remuneration determined by the articles are shown in the following table:
Transparency
Information to the shareholders of SCHUMAG and to the public is not only provided in the form of the statutory
publications and via the legally required communication channels. We use in particular the homepage of the
company for this purpose (www.schumag.de) where a wide range of information about SCHUMAG is published.
On this site all ad-hoc messages and the publications of notices about voting right shares received by us as well
as reportable securities transactions, the respective financial reports of the company, declarations on corporate
management and Corporate Governance Reports of the company as well as a finance calendar with all essential
dates are also available in the section of Investor Relations.
The Annual Report 2014/2015 is also made available in English on our homepage.
name compensation out-of-pocket expenses total
eur eur eur
ekkehard Brzoska 7.158,09 0,00 7.158,09
miaocheng guo (from February 7, 2015) 4.632,87 0,00 4.632,87
yun guo (from april 30, 2015) 2.982,54 0,00 2.982,54
martin Kienböck (to December 4, 2014) 1.272,55 0,00 1.272,55
hans-georg Kierdorf (to January 29, 2015)(deputy chairman of the Supervisory Board) 3.549,22 0,00 3.549,22
peter Koschel 7.158,09 538,35 7.696,44
ralf marbaise(chairman of the Supervisory Board) 14.316,18 2.951,33 17.267,51
Jürgen milion 7.158,09 81,68 7.239,77
Total 48.227,63 3.571,36 51.798,99
14 corporate governance report
Details on the holding of company shares by members of the Board of Executive Directors and the Supervisory BoardAs of September 30, 2015 Mr. Miaocheng Guo, as member of the Supervisory Board, indirectly held 2,183,164
individual shares corresponding to 54.6% of the shares issued by SCHUMAG. Mr. Peter Koschel, as member of the
Supervisory Board, indirectly held 1,090,705 individual shares corresponding to 27.3% of the shares issued by
SCHUMAG. The – possibly indirect – (total) shareholdings of members of the Supervisory Board amounts to a total
of 3,273,869 individual shares and thus exceeds 1% of the shares issued by SCHUMAG. As of September 30, 2015
the Board of Executive Directors did not hold any shares issued by SCHUMAG.
risk management, Accounting, AuditingAt SCHUMAG a risk management system for the early detection of essential risks is in place. It is described in more
detail in the Group Management Report.
In fiscal year 2014/2015 the accounting for the Schumag companies included in the consolidated financial
statements was for the tenth time prepared according to the International Financial Reporting Standards (IFRS).
The annual financial statements of SCHUMAG for fiscal year 2014/15 were prepared and continue to be prepared
according to the provisions of the German Commercial Code and the Stock Corporation Act.
For fiscal year 2014/15 the Supervisory Board instructed the auditors KPMG AG Wirtschaftsprüfungsgesellschaft,
Düsseldorf, who had been chosen by the general meeting on April 30, 2015. The declaration of independence of
the auditors was available to the Supervisory Board.
Aachen, January 2016
SCHUMAG Aktiengesellschaft
For the Supervisory Board The Board of Executive Directors
Ralf Marbaise Dr. Johannes Ohlinger
(Chairman)
15Schumag ag
The Board of Executive Directors and the Supervisory Board of a German joint-stock company which is listed on
the stock exchange are required according to § 161 of the Stock Corporation Act to declare once a year whether
or not the company has complied and continues to comply with the German Corporate Governance Code or which
recommendations of the Code were or are not followed and why not.
We declare according to §161 of the German Stock Corporation Act that since the last Declaration of Compliance of
January 2015 SCHUMAG Aktiengesellschaft („SCHUMAG“) has complied with the recommendations of the German
Corporate Governance Code („Code“) in the version of June 24, 2014 („Code 2014“) until the announcement of the
new version of the Code in the Federal Gazette on June 12, 2015 as well as the recommendations of the Code in
the version of May 5, 2015 („Code 2015“) from the time of its announcement in the Federal Gazette on June 12,
2015 and that it will comply in future with the recommendations of the Code 2015 with the following exceptions:
According to item 3.8 (2) of the Code a deductible of at least 10% of the damage up to at least 1 ½ times the
amount of the fixed annual remuneration of the board member should be agreed when taking out a D&O liability
insurance for the Board of Executive Directors. According to item 3.8 (3) a corresponding deductible should be
agreed in a D&O liability insurance for the Supervisory Board. A deductible for the Supervisory Board, as it is usu-
al practice with the majority of German companies, has so far not been agreed at SCHUMAG and will not be agreed
in future because the company holds the view that the agreement of such a deductible would have no behaviour-
controlling effect on the members of this executive body nor would it be suitable for motivation purposes.
According to the 1st sentence of item 4.2.1 of the Code the Board of Executive Directors should consist of several
persons and have one chairman or spokesman. With regard to the fact that SCHUMAG has the organizational struc-
ture of a medium-sized company the Executive Board consisted and will also in future consist of only one person.
In view of the difficult economic situation of the company this is also indicated for cost reasons alone.
According to item 4.2.3 (6) of the Code the chairman of the Supervisory Board is to inform the general meeting
about the basic elements of the emolument system and its changes. This has not been done and will not be done in
future because the basic elements of the emolument system have already been described in detail in the compen-
sation report included in the management report.
16 Declaration of compliance
Declaration oF compliance concerningthe german corporate governance coDe
According to the 1st and 2nd sentence of item 4.2.5 (3) the Code now recommends that in the compensation report
for fiscal years starting after December 31, 2013 certain emolument details should be provided for each member
of the Board of Executive Directors and that the model tables included in the Code should be used for providing
this information. Our company to which this recommendation applied for the first time for the fiscal year starting
on October 1, 2014 did not and will not follow this because the representations in the Notes to the annual and
consolidated financial statements appear to be sufficient and commensurate from the aspect of usefulness of the
information, also with regard to the fact that the Board of Executive Directors of our company currently consists
of only one person.
According to item 5.3.3 of the Code the Supervisory Board is supposed to form a nomination committee which
consists exclusively of representatives of the shareholders and proposes suitable candidates to the Supervisory
Board for its election proposals to the general meeting. This has not been done in the past and is not considered to
be done in future because the resolutions of the Supervisory Board on proposals for the election of Supervisory
Board members by the general meeting only require the majority of the votes of the four shareholders repre-
sented in the Supervisory Board anyway as stipulated in the §124 (3), sentence 5, 1st sub-clause, of the German
Stock Corporation Act.
According to the 1st sentence of item 5.4.1 (2) of the Code the Supervisory Board shall indicate concrete goals for
its composition which (with consideration of the specific corporate situation) are to take the international activi-
ties of the company, potential conflicts of interest, the number of independent members of the Supervisory Board,
an age limit for members of the Supervisory Board, and according to the Code 2015 now also a standard limit for
the period of membership in the Supervisory Board as well as diversity into consideration (according to the 2nd
sentence of item 5.4.1 (2) also in particular an appropriate participation of women). According to the 1st sentence
of item 5.4.1 (3) of the Code the proposals of the Supervisory Board to the relevant election boards should take
these goals into consideration and according to the 2nd sentence of item 5.4.1 (3) of the Code the goals of the
Supervisory Board and the status of their implementation are to be published in the Report on Corporate Gover-
nance. These recommendations were not followed in the past and will not be followed in future. The Supervisory
Board is of the opinion that a commitment to goals concerning its composition in terms of the Code and their
publication involve restrictions which are not appropriate compared to other criteria for proposals for the election
of Supervisory Board members and it would like to decide individually on proposals concerning its composition in
the respective concrete situation. Compliance with the new obligations of the law concerning the determination of
a target figure for the share of women in the Supervisory Board remains unaffected by the above (§ 111 (5) of the
German Stock Corporation Act in conjunction with the 1st sentence of § 25 (1) of the Introductory Act to the Stock
Corporation Act as well as § 289a (2), No. 4 of the German Commercial Code in conjunction with Art. 73 of the In-
troductory Act to the Commercial Code in the version of the law concerning the equal participation of women and
men in management positions in the private industry and in civil service of April 24, 2015, Federal Law Gazette I,
p. 642 et seq.).
According to item 5.4.1 (5) to (7) of the Code 2015 (previously item 5.4.1 (4) to (6) of the Code 2014) the Supervi-
sory Board shall, in its election proposals to the general meeting (for the election of shareholders to the Supervi-
sory Board), disclose the personal and business relations of each candidate with the enterprise, with the executive
bodies of the company and with a shareholder holding a material interest in the company (i.e. directly or indirectly
17Schumag ag
holding more than 10% of the voting shares), and this disclosure should be limited to those circumstance which, in
the appraisal of the Supervisory Board, a shareholder judging objectively would consider relevant to his election
decision. This recommendation has not been and will not be followed because in the opinion of the Board of
Executive Directors and the Supervisory Board the contents and extent of the requirements laid down in the Code
have not been sufficiently determined in this respect. In order to ensure the desired legal security of the election
of Supervisory Board members the company exclusively follows statutory disclosure requirements with regard to
its proposals to the general meeting of candidates to be elected to the Supervisory Board. In addition, it discloses
relations with related parties in the annual report in accordance with statutory requirements.
According to the 3rd sentence of item 5.4.3 of the Code the names of the candidates proposed to take the chair
of the Supervisory Board are to be disclosed to the shareholders. The names of the candidates proposed to take
the chair of the Supervisory Board are not and will also in future not be disclosed because the Supervisory Board
does not consider it practicable to vote at the general meeting for or against a candidate with regard to a potential
office as chairman in the elections to the Supervisory Board.
According to the 2nd sentence of item 5.4.6 (1) of the Code the chairmanship and the deputy chairmanship on the
Supervisory Board as well as the chairmanship and membership in committees shall be taken into consideration
for the emoluments of the Supervisory Board. Up to now, the articles of association of SCHUMAG only provide
for fixed remuneration components for members of the Supervisory Board and although the emoluments for
chairmanship and deputy chairmanship on the Supervisory Board are graded higher, the chairmanship and/or
membership in committees is not taken into consideration. This ruling is to be maintained for the time being with
regard to the organizational structure of the company.
According to the 1st sentence of item 5.5.3 of the Code the Supervisory Board should provide information in its re-
port to the general meeting about conflicts of interest which have occurred and how they were treated. As before,
SCHUMAG does not follow this recommendation and will not do so in future and will, as a rule, give priority to the
principle of confidentiality of the deliberations of the Supervisory Board (see also the 2nd sentence of §116 of the
German Stock Corporation Act and the 2nd sentence of item 3.5 (1) of the Code).
According to the 4th sentence of item 7.1.2 of the Code the consolidated financial statements should be available
to the public within 90 days of the end of the fiscal year and the interim reports within 45 days of the end of the
reporting period. This recommendation has not been and will not be followed for organizational reasons but the
company continues to aim at a timely publication.
Aachen, January 2016
Schumag Aktiengesellschaft
The Supervisory Board The Board of Executive Directors
18 Declaration of compliance
19Schumag ag
general inFormation on the group
Business model, targets and strategiesSchumag Aktiengesellschaft (Schumag AG) based in Aachen, Germany, is the parent company of the Schumag
Group. Subsidiaries of Schumag AG are Schumag Romania S.R.L. based in Timisoara, Chisoda, Romania, and BR
Energy GmbH (formerly Schumag BR Energy GmbH) based in Aachen, Germany.
The company now operates only in the segment of precision engineering. This comprises the production of high-
precision parts of steel. These are manufactured as per customer drawings in large numbers, even in the millions
range. Our performance spectrum extends far beyond the production of precision and standard parts. Due to our
special know-how we are in a position to offer specific production processes to our customers. This has led to our
long and excellent experience in equipment construction. A decisive factor for the sustained development of our
company is our close contact to customers and our comprehensive knowledge of the corresponding target markets
(Europe and America). According to our philosophy it is a basic prerequisite for success to identify technical
developments and offer comprehensive solutions on a timely basis. During more than 180 years of company
history Schumag has developed into an enterprise whose manufacturing know-how is still trend-setting in many
technologies.
The employees of Schumag distinguish themselves in particular by their high identification with the company and
their commitment to its targets. The structure of the workforce is characterized by the high qualification of our
employees. This results in the superior quality of our products which leads to our strong position in the market.
To meet future market requirement it is absolutely necessary to develop into a system and/or sub-system supplier.
Especially the Asian market with its continuing growth in the automotive area will increasingly determine the
structure of demand.
Steering systemSchumag AG has a steering system in place in order to be able to react adequately and in due time to changes of
the market, the environment and internal conditions.
Reporting and flow of information are essential elements of the steering system. Based on this system the Board
of Executive Directors is permanently informed about relevant key figures. Deviations from the target can thereby
be directly identified and discussed as soon as possible.
Our most significant performance indicators are the total operating performance, the EBIT and the liquidity ratio I.
The total operating performance is an indicator of our operating efficiency and is analysed by means of monthly
target-actual comparisons.
20 group management report
group management report
KonzernlageBericht
The EBIT figure facilitates a comparison of the operating profit of individual months. For our operational control
we take the EBIT according to the commercial accounting of Schumag AG as a basis. Essential deviations from the
EBIT under IFRS shown in the group accounting are to be found in the different assessment of fixed assets. We
regard these differences as inessential for current operational control.
The liquidity ratio I (ratio of cash & cash equivalent to current liabilities) is used to monitor the coverage of current
liabilities since our actions continue to be intensely focussed on liquidity.
In addition revenue as well as orders received and orders on hand are essential control variables.
research and developmentResearch activities are of minor significance in our line of business but will be relevant in future due to market
requirements.
The focus of development at Schumag is on the automation and rationalization of series processes. At the same
time we try to continuously improve process stability. We are currently working on the further development of
our own production machines which are supposed to be operating fully and/or partly automatically in future.
Further production units could be fully automated in the reporting period.
QualityThe analytical tools for continuous monitoring and for representation of the quality and productivity status are
continuously developed. The daily evaluations as well as the control loops observed have led to an improved
quality awareness among our employees and to an increase in productivity
At our measuring centre we have combined the areas of the measuring room and of test and measuring equip-
ment. The entire measuring centre is fully air-conditioned. We have thereby created the conditions to provide with
our measuring technology the ever increasing accuracies required by the market. This applies not only to the tests
carried out during production (especially form and position) but also to the area of the manufacture and calibrati-
on of measuring and test equipment
At the end of 2014 the quality management system according to ISO 9001:2008 and ISO TS 16949:2009 as well
as the integrated environmental management system according to ISO 14001:2004 + Cor 1:2009 were reviewed
within the scope of an audit and our existing certificates were successfully confirmed. In addition our management
system was extended by the requirement of an energy management system according to ISO 50001:2011 and was
successfully certified. Our Romanian subsidiary Schumag Romania S.R.L. has also been successfully re-certified
according to ISO 9001:2008 since April 2013.
KonzernlageBericht
21Schumag ag
report on economic poSition
macroeconomic and sector-specific general conditionsIn 2014 the global economy experienced a positive development with a growth rate (GDP) of 3.3%. After the
decelerated growth in the summer term of 2014 the global economy gained momentum again. With a 1.0% growth
in the fourth quarter of 2014 the global industrial production increased twice as much as in the two previous
quarters. The positive impulses came from the industrial states, in particular the USA and Japan. This contrasted
with weakening dynamics in the emerging nations.
In the first quarter of 2015 the global industrial production remained at the same level as in the previous quarter.
At a rate of 0.6% the global GDP increased to a lesser extent than forecast. The temporary setback in growth in the
USA caused by special influences was not fully compensated for by the recovery of economic activity in the Euro
zone. During the second quarter of 2015 increasing economic uncertainties in China affected the growth of the
global economy. The global industrial production slightly increased again not until towards the end of the second
quarter of 2015. In total, the global economy increased moderately and to a lesser extent than expected during
the first half of 2015 with a growth rate of 2.9%. Even at the beginning of the third quarter of 2015 the prospects
in some of the most important countries and regions of the global economy, particularly in China, were marked
by low dynamics. In October the IMF adjusted downwards its forecast for the global economic growth for 2015 to
3.1% and for 2016 to 3.6%.
After the stagnation of economic activity during the summer the German economy recorded a growth of GNP by
0.7% in the final quarter of 2014. In terms of the whole year 2014, the macroeconomic performance also develo-
ped slightly positive with a growth of 1.6%.
In the first quarter of 2015 the expansion of the economy was carried by the domestic demand. Especially the
robust development in the labour market, the declining crude oil prices and the positive real income development
had a favourable effect on the GNP which rose by 0.3%. In the further course of the year 2015 the moderate
but steady upswing of the German economy continued with a GNP growth rate of 0.4%. After a restrained first
quarter, the industrial production increased noticeably in the second quarter of 2015. This was stimulated by an
exchange-rate-related increase of foreign orders. During the autumn quarter of 2015 German economic activity
also continued its moderately upward development. In spite of the fact that in terms of the whole year the indus-
trial production rather moved sideways and that there was a weak development in the large emerging nations the
Federal Government forecasts a growth of GNP of 1.7% for 2015 and 1.8% for 2016.
Important markets for Schumag are the commercial vehicles market, the passenger car market as well as the
medical technology market.
The global market for passenger cars recorded a growth compared to 2014. The global production of passenger
cars in 2014 rose by 3.7% to 77.3 million cars. A growth driver was China with a 13.2% growth as well as Germany
with 6.1%, but also in the USA the production was expanded by 5.1%. The upward trend moderately continued
during the course of 2015. Upon the end of the third quarter of 2015, 5.5% more cars than in the same period of
the preceding year were licensed in Germany but production was increased only slightly by 2.1%.
22 group management report
The national commercial vehicles market developed in the same way. After a positive increase of registrations
of new vehicles and of production in 2014 the marked expanded to a lesser extent in the first three quarters of
2015. Compared to the previous year, in 2015 2.2% more commercial vehicles were licensed after the first nine
months and 2.5% more commercial vehicles were produced than in the same period of 2014. On the whole, the
market lost momentum in the 3rd quarter of 2015. The situation in the Euro zone presents itself as follows: After a
growth of 7.6% of newly registered vehicles in 2014 the market expanded in 2015 by 12.2% after nine months as
compared to the previous year.
The German medical technology sector recorded a growth of 2.3% in 2014 although in the second half of the year
a downturn of growth set in. Against this background, a stagnating market is expected for 2015 on the basis of
this trend.
Course of business
Due to the fact that, as in the previous years, no orders were received and no revenues were realized in the divisi-
on of plant engineering the operating activities in this segment were not pursued, also due to a lack of funds. The
key data therefore include only the figures from the area of precision engineering.
Precision engineeringIncoming orders in the period under review decreased by 7%. While we were able in the first half of the fiscal year
to eliminate further lossy articles from our product range, the general economic conditions as well as uncertainties
concerning the Asian market and the strong development of the US Dollar contributed particularly to a reduction
of incoming orders in the second half of the year. Compared to the previous year, sales remained almost constant
with a slight increase by 1%. In the last quarter of the period under review the decreased order inflow also
affected sales. Furthermore, we added a minor amount of new products to our production range. The permanent
establishment of new products as well as the resulting sales increases can often be measured only after another
12 to 24 months. Orders on hand decreased by 5%.
Key figures 2014/15 2013/14 change
eur mill. eur mill. eur mill. %
orders received 48,4 51,8 -3,4 -7
revenue 49,7 49,4 0,3 1
total operating performance 52,8 50,2 2,6 5
orders on hand (as of 30-9) 26,9 28,2 -1,3 -5
23Schumag ag
Compared to the previous year, sales and/or the increased total operating performance were realised with the same
number of personnel. Within the scope of restructuring, capacities were adjusted mainly in the administrative area.
In total, the company‘s average own workforce remained almost unchanged from October 2014 to September 2015.
In fiscal year 2014/15 the collective wage agreement to secure the production site („Standortsicherungstarifver-
trag“) which had been concluded in September 2013 continued to be in force.
Plant engineeringAs already mentioned above no orders were received and no revenues were realized in the division of plant engi-
neering in the two previous years.
Safeguarding of liquidityThe safeguarding of the pre-financing required for our production continues to be one of our primary duties. In the
period under review further positive liquidity effects were reached in particular due to the improvement of the
operating result. In addition, the existing third-party loan was extended by 2 years in June 2015. According to the
contract, the sale-and-lease-back transaction expired in the year under review, the stock of machinery was bought
back and is now owned by us again. The land charge provided as security was released so that our real property is
currently unencumbered.
24 group management report
Overall statement on the business situation
The improvement of the result situation expected by the company for the fiscal year 2014/15 materialized
partially. Basically due to results from the noticeable productivity increases obtained by various measures the
operational development in the year under review was satisfactory. By an efficient cost management we were also
able to keep overheads on a constant level. In contrast, special effects within the scope of personnel adjustments
strained our result.
The improvement of the result led to a further improvement of the return on equity, furthermore the capital ratio
increased from 16 % to 18 %.
The increase in total capital is in particular marked by the buildup of inventories as well as the increase in share-
holders’ equity. Financial balance existed at all times throughout the past fiscal year and liquidity was improved
by a total of EUR 1.1 million.
In summary, it is to be stated that the measures which had partly already been initiated in previous years showed
further positive effects in the operating area during the current fiscal year 2014/15. Special effects in connection
with personnel adjustments burdened the result of the reporting year. In total, the economic situation has eased
slightly but we have to continue to work consistently on a further improvement in all areas of the company.
The obstacle of an obsolete IT structure needs to be overcome.
Key figures 2014/15 2013/14 change
% % % points
return on sales 3,3 2,6 0,7
return on equity 21,9 20,6 1,3
working capital [eur mill.] 13,1 10,4 2,7
25Schumag ag
Earnings position
Total operating performanceWith slightly increased revenues the total operating performance was increased by 5%, in particular due to
noticeable productivity increases.
material and personnelThe reduction in the cost of materials in relation to the total operating performance by 1 percentage point is
largely due to increased inhouse production as well as to energy savings due to the installation of a unit-type
cogeneration station.
Although the average number of our own regular workforce was decreased compared to the previous year from
625 to 622 employees the rate of personnel expenses increased by 3 percentage point. This is not only due to
the increase in pay rates effective from April 2015 but in particular also to the special effects within the scope of
personnel adjustment measures. After the waiver of the year-end bonus in 2013 and 2014 the year under review
was burdened again by the year-end expenses.
The total rate of materials expenses and personnel expenses increased from 79 % to 81 %. Adjusted by special
effects the total rate amounts to 79 %.
2014/15 2013/14 change
eur mill. % eur mill. % eur mill. %
revenue 49,7 94 49,4 98 +0,3 +1
total operating performance 52,8 100 50,2 100 +2,6 +5
materials expenses -14,0 -27 -14,0 -28 0,0 0
personnel expenses -28,4 -54 -25,8 -51 -2,6 -10
Depreciation / amortization -1,8 -3 -2,2 -4 +0,4 +18
other expenses -5,3 -10 -4,9 -10 -0,4 -8
EBIT 3,3 6 3,3 7 0,0 0
Financial result -1,0 -2 -1,4 -3 +0,4 +29
Income before taxes 2,3 4 1,9 4 +0,4 +21
26 group management report
resultIn spite of productivity increase the EBIT remain constant on the level of the previous year (EUR +3.3 million).
In particular this is due to the non-recurring effects within the scope of personnel restructuring measures (EUR
-0.9 million) as well as to the expenses for the year-end bonus to be included again (EUR -0.7 million). By the
decrease of interest expenses the income before taxes was improved by EUR 0.4 million to EUR +2.3 million.
In the segment of precision engineering the result before taxes improved by EUR 0.4 million to EUR +2.5 million.
The result continued to be disproportionately burdened in particular by general administrative overheads in
connection with financing (sale-and-lease-back of machinery) and by the expenses resulting from the listing on
the stock exchange.
The result of the segment of plant engineering amounted to EUR -0.2 million as in the previous year and includes
only the negative contribution to operating income from BR Energy GmbH.
The result of other segments amounts also as in the previous year to EUR 0.0 million.
27Schumag ag
Financial situationThe financial management of the Schumag Group is centrally organized at Schumag AG and covers all Group com-
panies. All cash-flow-oriented aspects of the business activities are taken into consideration in this connection.
The aim is to secure sufficient liquidity and to reduce financial risks arising from changes in exchange rates,
interest rates and raw material prices.
The financial situation was further stabilized in fiscal year 2014/15 in particular by the improvement of the opera-
tive result as well as a strict liquidity management. We were able at all times to meet our payment obligations. The
liquidity ratio I increased from 38.7 % to 56.2 %.
To optimize our financing structure, off-balance-sheet forms of financing in the form of leasing transactions have
been used since fiscal year 2004/05. As of September 30, 2015 the leasing transactions still amount to a total
volume of EUR 0.4 million (previous year EUR 0.5 million).
For the major part liabilities are EUR based and short-term as well as without interest.
group cash-Flow Statement (short presentation) 2014/15 2013/14 change
eur mill. eur mill. eur mill.
net income 1,6 1,3 +0,3
Depreciation/amortization 1,8 2,2 -0,4
change in net current assets -0,4 0,0 -0,4
change in other items -0,7 -0,6 -0,1
Cash-flow from operating activities 2,3 2,9 -0,6
expenses for intangible assets and property, plant and equipment -0,9 -0,5 -0,4
proceeds from the disposal of property, plant and equipment 0,6 0,1 0,5
Cash-flow from investing activity -0,3 -0,4 +0,1
raising of financial liabilities for financing leasing 0,0 0,5 -0,5
redemption of financial obligations -0,7 -1,3 +0,6
outgoing payments -0,2 -0,3 +0,1
Cash-flow from financing activity -0,9 -1,1 +0,2
Changes in cash and cash equivalents affecting liquidity 1,1 1,4 -0,3
cash and cash equivalents at the start of the reporting period 2,0 0,6 +1,4
Cash and cash equivalents at the end of the reporting period 3,1 2,0 +1,1
28 group management report
Compared to the previous year, the cash flow from current operations has decreased by EUR 0.6 million to EUR 2.3
million. The cash effect from factoring amounted to EUR -1.1 million due to settlement effects as of the balance
sheet date.
Expenses for investments amounting to EUR 0.9 million refer in particular to targeted expenses for technical plants
and machinery (EUR 0.6 million). Proceeds from disposal of property, plant and equipment includes in particular
the reimbursement of the purchase price of a machine whose purchase was reversed.
Within the scope of our financing activities liabilities from financing leases (sale-and-lease-back) were fully redu-
ced by EUR 0.7 million. As part of the settlement of the contract Schumag bought back the relevant stock of machi-
nery in June 2015 and is now again their legal owner. In the year under review financial liabilities decreased by a
total of EUR 0.9 million and amount to EUR 1.4 million as of September 30, 2015. Liabilities to banks amounting to
EUR 0.4 million which are included in this amount refer to the overdraft facility of Schumag Romania.
29Schumag ag
Assets situation
30-9-2015 30-9-2014 change
eur mill. % eur mill. % eur mill. %
assets
Long-term assets
intangible assets and property, plant and equipment 15,8 39 17,2 44 -1,4 -8
investment property 4,1 10 4,1 11 0,0 0
Deferred taxes 0,2 0 0,1 0 +0,1 +100
other assets 1,6 4 1,9 5 -0,3 -16
21,7 54 23,3 60 -1,6 -7
Short-term assets
inventories 10,0 25 8,8 23 +1,2 +14
trade accounts receivable 3,5 9 2,0 5 +1,5 +75
other assets 2,0 5 2,7 7 -0,7 -26
liquid funds 3,1 8 2,0 5 +1,1 +55
18,6 46 15,5 40 +3,1 +20
40,3 100 38,8 100 +1,5 +4
Shareholders‘ equity and liabilities
Shareholders' equity 7,4 18 6,1 16 +1,3 +21
Long-term liabilities
pension provisions 22,8 57 22,9 59 -0,1 -0
other provisions and liabilities 1,4 3 0,4 1 +1,0 >+100
24,2 60 23,3 60 +0,9 +4
Short-term liabilities
provisions and accrued liabilities 1,8 4 1,7 4 +0,1 +6
trade accounts payable 1,8 4 1,7 4 +0,1 +6
other liabilities 5,1 13 6,0 15 -0,9 -15
8,7 22 9,4 24 -0,7 -7
40,3 100 38,8 100 +1,5 +4
30 group management report
Intangible assets and property, plant and equipment decreased by EUR 1.4 million at a depreciation volume of
EUR 1.8 million. Investments amounting to a total of EUR 0.9 million mainly referred to new technical plants and
machinery for the division of precision engineering (EUR 0.6 million).
After inventories had been clearly reduced in previous years to improve liquidity a targeted buildup of inventories
by EUR 1.2 million took place in the year under review in order to improve our readiness for delivery to specific
customers.
In particular due to settlement effects from factoring as of the balance sheet date trade receivables increased by
EUR 1.5 million.
The shareholders‘ equity of the Schumag Group increased due to the positive result after taxes (EUR +1.6 million)
by a total of EUR 1.3 million to EUR 7.4 million which is due to the other result not affecting net income (EUR -0.3
million). The capital ratio increased from 16 % to 18 %.
The effect arising from the change of actuarial assumptions with regard to pension provisions which is directly set
off against shareholders‘ equity without affecting net income amounts to EUR +0.5 million.
The remaining provisions and liabilities decreased slightly by a total of EUR 0.2 million.
Performance indicatorsWith regard to the analysis of the course of business and the situation of the company we report below on the
most significant performance indicators used for the internal control of the company.
The total operating performance clearly improved by EUR 2.6 million and the internal targets were reached.
Machine downtime was reduced as compared to the previous year. We continue to work on an increase in produc-
tivity and on a minimization of downtime by means of preventive maintenance and repair.
Due to the non-recurring effects within the scope of personnel restructuring measures not contained in the plan-
ning (EUR = 0.9 million) EBIT remain constant on the level of the previous year. In this respect, our expectations
have only partially fulfilled
Key figures prognosis 2014/15 actual 2014/15 target achievement 2014/15
total operating performance 50,0 – 51,0 eur mill. 52,8 eur mill. achieved
eBit > 3,3 eur mill. 3,3 eur mill. limited achieved
equidity ratio (30-9) > 38,7 % 56,2 % achieved
31Schumag ag
The liquidity ratio I increased from 38.7 % to 56.2 %. Improvements as compared to our internal planning were re-
corded with regard to both liquid funds and current liabilities. This is also due to the fact that the third-party loan
was extended by 2 years and is no longer shown as a current liability in the year under review. Adjusted by this
effect, the liquidity ratio I amounts to 47.6 %. The liquidity ratio I according to commercial accounting of Schumag
AG increased from 60.2 % to 162.1 % and/or adjusted to 106.4 %.
inFormation to Be proviDeD By law
Compensation reportThe compensation report outlines the principles applied to the fixing of the remuneration of the Board of Execu-
tive Directors and the Supervisory Board of Schumag AG.
The personnel committee of the Supervisory Board is in charge of the fixing of the remuneration of the Board of
Executive Directors pursuant to the internal rules of the Supervisory Board. For this purpose it takes the size and
structure of the company as a basis with consideration of the economic and financial situation of Schumag AG as
well as the remuneration paid at comparable companies.
The remuneration of the Board of Executive Directors is basically composed of fixed and variable elements. For
special performance the personnel committee may grant bonuses as part of the variable share of the remunerati-
on. The fixed remuneration is usually paid as a monthly salary. The variable remuneration depends on the Group‘s
operative income before tax. Payment is usually effected in the month in which the Supervisory Board approves
the consolidated annual financial statements. If a special compensation is granted, payment will be made by agree-
ment with the Supervisory Board.
An integral part of the remuneration of the Board of Executive Directors are also the direct pension commitments.
These are individually agreed with the members of the Board of Executive Directors.
No further benefits are promised in case of termination of the office as member of the Board of Executive Direc-
tors. However, severance payment may result from an individually agreed termination agreement. According to
the recommendations of the German Corporate Governance Code severance payments are limited to two annual
salaries.
32 group management report
The remuneration of the Board of Executive Directors is shown in the overview below:
Pension commitments to members of the Board of Executive Directors as of September 30, 2015 according to IFRS
amount to EUR 574,235.00 (previous year EUR 265,904.00). In return for the advance of pension commitments
Dr. Ohlinger waived personal claims to Schumag AG.
Emoluments of former members of the Board of Executive Directors or their survivors amounted to
EUR 706,862.40 (previous year EUR 680,918.07).
Pension commitments to former members of the Board of Executive Directors and their survivors according to
IFRS amount to EUR 10,543,622.00 (previous year EUR 10,500,517.00).
According to § 14 of the Articles each member of the Supervisory Board is granted a compensation per fiscal year
amounting to EUR 7,158.09 which is payable at the end of the fiscal year. The chairman receives twice the amount,
his deputy 1.5 times the amount. The compensation is granted in proportion to the term of office of the respective
member of the Supervisory Board. In addition, the members of the Supervisory Board are entitled to reimburse-
ment of expenses incurred in connection with the exercise of their office.
remunerations 2014/15 Dr. ohlinger total
eur eur
Fixed remuneration 540.000,00 540.000,00
variable remuneration 94.000,00 94.000,00
remuneration of the Board of Executive Directors (total) 634.000,00 634.000,00
remunerations 2013/14 Dr. ohlinger total
eur eur
Fixed remuneration 540.000,00 540.000,00
variable remuneration 54.000,00 54.000,00
remuneration of the Board of Executive Directors (total) 594.000,00 594.000,00
33Schumag ag
The remuneration of the Supervisory Board is shown in the overview below:
The members of the Supervisory Board and of the Board of Executive Directors are listed in item 30 of the Notes.
Information relevant to the takeoverThe details required according to § 315 (4), No. 1 to 9 of the German Commercial Code are listed below:
The subscribed capital of Schumag AG as of September 30, 2015 amounts to EUR 10,225,837.62 and is divided
into 4,000,000 individual share certificates payable to bearer. The shares of Schumag AG are listed for trade under
ISIN DE0007216707 (WKN 721670) in the regulated market (General Standard) of the Frankfurt/Main stock ex-
change; furthermore they are traded in the regulated unofficial market at the stock exchanges of Düsseldorf, Ber-
lin, Hamburg and Stuttgart and via the electronic trading system XETRA. The company has only one class of shares
and all shares grant the same rights and/or obligations. Each individual share entitles to one vote at the general
meeting. Further rights and obligations arising from the shares in the company are governed by the provisions of
the German Stock Corporation Act.
The details required according to § 315 (4), No. 3 of the German Commercial Code are mentioned in item 32 of the
Notes.
Based on a share sales contract of July 16, 2010 own shares purchased by the company in October 2009 within
the scope of a share buyback programme in a total number of 333,526, corresponding to 8.34% of the share capi-
tal were purchased by Mr. Norbert Thelen as the trustee of the company‘s employees. In his capacity as a trustee
Mr. Norbert Thelen exercises the control and voting rights for the employees.
According to § 6 (1) of the Articles of the company the Board of Executive Directors consists of either one or seve-
ral members. According to the Articles and pursuant to § 84 of the German Stock Corporation Act the members of
2014/15 2013/14
Fixedremuneration
eur
out-of-pocket expenses
eur
totalremuneration
eur
Fixedremuneration
eur
out-of-pocket expenses
eur
totalremuneration
eur
ekkehard Brzoska 7.158,09 0,00 7.158,09 7.158,09 0,00 7.158,09
miaocheng guo 4.632,87 0,00 4.632,87 0,00 0,00 0,00
yun guo 2.982,54 0,00 2.982,54 0,00 0,00 0,00
martin Kienböck 1.272,55 0,00 1.272,55 7.158,09 345,60 7.503,69
hans-georg Kierdorf 3.549,22 0,00 3.549,22 10.737,14 0,00 10.737,14
peter Koschel 7.158,09 538,35 7.696,44 7.158,09 2.646,79 9.804,88
ralf marbaise 14.316,18 2.951,33 17.267,51 14.316,18 2.135,44 16.451,62
Jürgen milion 7.158,09 81,68 7.239,77 7.158,09 70,00 7.228,09
48.227,63 3.571,36 51.798,99 53.685,68 5.197,83 58.883,51
34 group management report
the Board of Executive Directors are appointed and dismissed by the Supervisory Board. The appointment
may be effected for a maximum period of five years. This maximum period is to be taken into consideration also
in the event of a repeated appointment or extension of the term of office. Dismissal of members of the Board of
Executive Directors is allowed only for an important reason. In other respects reference is made with regard to
the appointment and dismissal of members of the Board of Executive Directors to the regulations provided in
§ 84, § 85 of the German Stock Corporation Act as well as to § 6 of the Articles of the company. The Articles do
not deviate from the aforementioned legal provisions, however.
Amendments to the Articles are always subject to a resolution of the general meeting which, pursuant to § 133 (1)
of the German Stock Corporation Act, is to be passed with a simple majority of votes and additionally according
to § 18 (3) of the Articles of the company in conjunction with § 179 (1) and (2) of the German Stock Corporation
Act with the simple majority of the capital represented at the voting unless other rulings are mandatory according
to legal regulations or the Articles. According to the law it is imperative that a resolution at the general meeting
is to be passed with a majority of three quarters of the share capital represented at the voting with regard to all
amendments to the Articles referring to the object of the company (§ 179 (2), sentence 2 of the German Stock
Corporation Act), the issue of preference shares without voting right (§ 182 (1), sentence 2 of the German Stock
Corporation Act), capital increases with exclusion of subscription right (§ 186 (3) of the German Stock Corporation
Act), the creation of conditional capital (§193 (1) of the German Stock Corporation Act), the creation of authorized
capital (§ 202 (2) of the German Stock Corporation Act) - possibly with authorisation to exclude the subscription
right (§ 203 (2), sentence 2 in conjunction with § 186 (3) of the German Stock Corporation Act) -, the regular or
simplified reduction of capital (§ 222 (1), sentence 2 and/or § 229 (3) of the German Stock Corporation Act) or
a change in the legal form (§ 233 (2) and/or § 240 (1) of the Law Regulating Transformation of Companies). The
Supervisory Board is authorized according to § 12 of the Articles to effect changes of the Articles which refer only
to the wording.
According to the resolution of the general meeting on April 30, 2015 the Board of Executive Directors is autho-
rized upon consent of the Supervisory Board to increase the share capital of the company during the period from
March 1, 2016 to April 29, 2020 issuing new individual shares certificates made out to bearer against cash and/or
by using receivables due from the company as contributions in kind, either once or several times by up to a maxi-
mum of EUR 2,556,459.41 (authorized capital 2015). The new shares participate in the profits from the start of
the fiscal year in which they were issued. On principle, the shareholders have a statutory subscription right to the
new shares issued by the company. In this respect the Board of Executive Directors is authorized, subject to the
consent of the Supervisory Board, to decide an exclusion of the statutory subscription right of the shareholders,
in fact for fractional amounts resulting from the subscription ratio and for capital increases up to an amount of
EUR 511,291.89 in total, using receivables due from the company as contributions in kind.
In the event of a takeover bid directed towards shares issued by the company which are admitted to the trade
in an organized market the general statutory duties and powers exist for the Board of Executive Directors. If a
takeover bid was received, the Board of Executive Directors and the Supervisory Board would have to make and
publish a well-founded statement on the takeover bid in accordance with § 27 of the German Securities Acquisition
and Takeover Act to put the shareholders in a position to decide on the bid based on their knowledge of the state
of affairs. According to § 33 of the German Securities Acquisition and Takeover Act the Board of Executive Direc-
35Schumag ag
tors would furthermore not be allowed after the announcement of a takeover bid to undertake any acts outside
the ordinary business which might prevent the success of the bid unless it was authorised to do so by the general
meeting or unless the Supervisory Board had given its consent to this or unless the search for a competitive bid
was concerned. The decisions of the Board of Executive Directors and of the Supervisory Board are to be geared
to the benefit of the company, its employees and shareholders. As of the balance sheet date the Articles did not
include any arrangements in the sense of § 33a to § 33c of the German Securities Acquisition and Takeover Act
(European Prohibition on Frustrating Action, European Breakthrough Rule, Reservation of Reciprocity).
Declaration on the management of the company The declaration on the management of the company according to § 289a of the German Commercial Code is publis-
hed on our website (www.schumag.de) under Investor Relations / Corporate Governance.
report of the Board of Executive Directors on relations with affiliated companies(Dependency report according to § 312 of the german Stock Corporation Act)A separate report has been prepared on the relations with affiliated companies pursuant to § 312 of the German
Stock Corporation Act. This report states among other things that no reportable measures existed which Schumag
AG initiated or omitted at the instigation of or in the interest of Meibah International GmbH, Munich as well as Mr.
Miaocheng Guo, China, or the companies affiliated with these.
The report closes with the following declaration:
„The Board of Executive Directors of Schumag Aktiengesellschaft, Aachen, declares that according to the circum-
stances of which the company was aware at the time when the legal transactions were carried out the company
always received reasonable compensation for each legal transaction.“
36 group management report
SuBSeQuent eventS
In October 2015 a new collective wage agreement to secure the production site („Standortsicherungstarifvertrag“)
with a retroactive term from October 1, 2015 until September 30, 2019 was concluded. Apart from the continu-
ation of the 37.5-hour week without wage adjustment the agreement also included the continued waiver of the
increase in pay rates of 4.3 % from May 2012. It was agreed that the company will catch up on the increase in pay
rates in 3 steps beginning from October 1, 2017. Just like the waiver of the year-end and holiday bonus for
2 years, this is a waiver subject to a condition subsequent.
In other respects there were no events of particular significance after the balance sheet date.
report on opportunitieS anD riSKS
Features of the internal control and risk management systemThe group-wide internal control and risk management system of Schumag is an integrated system which supports
management decisions for the safeguarding of the efficiency and profitability of business activities, for the early
identification of risks, for the adequacy and reliability of internal and external accounting and for compliance with
the legal regulations which are relevant to the company.
The risk management system was revised in fiscal year 2012/13 and continues to be composed of a large number
of components which are embedded in the operational and organizational structure of the company. The reliability
of this system is ensured by compliance with restrictive guidelines and the continuous monitoring of processes. By
incorporation of the risk management system in the reporting system as well as regular communication between
decision-makers an early detection of risks and the corresponding countermeasures are facilitated.
Our risk management manual describes the process of risk prevention. The systematic approach to risk manage-
ment creates an awareness towards an open dealing with risk-relevant data and their clear documentation and
forms the basis for entrepreneurial decisions, for the quality of planning, the efficiency of reporting on controlling
and the optimum use of company resources.
Our department heads and area managers are in charge of the identification of risks, their assessment and control
as well as their communication. Coordination is up to our risk manager. The assessment of our risks is carried out
by means of the risk expectation value. This value results from the qualification of potential effects of the risk in
connection with their probability of occurrence. The risk expectation value is classified as follows:
Low: up to and including EUR 0.1 million
Mean: from EUR 0.1 million up to and including EUR 0.2 million
High: from EUR 0.2 million
37Schumag ag
The aim is to point out early the different types of risks to the persons in charge at as many hierarchy levels of the
company as possible and to use the risk defence and control instruments developed within the scope of our risk
management in due time.
The business processes are subject to controls which are to make risks controllable. The measures and rules refer
to instructions for the separation of duties, signing regulations, restriction of signing authorization for payments to
a small number of persons (four-eyes principle), measures for IT security, etc.
Apart from this, our control and risk management system is assessed within the scope of the statutory audit of
the annual financial statements in so far as this is significant for the provision of an accurate picture of the assets,
financial and earnings position of Schumag.
This report on opportunities and risks analyses and describes the essential opportunities and risks of Schumag AG
and its subsidiaries which were identifiable until the end of the period under review.
Opportunities and risks relating to economic performance
Sales marketSchumag mainly operates in the markets for commercial vehicles and medical technology. Sales market risks occur
in different forms here. While the demand in the medical technology market remains at a relatively constant level
the commercial vehicle sector is decisively influenced by the overall situation in the global economy.
An essential share of our production in precision engineering will continue to be expected in the area of com-
ponent manufacture for diesel engines. Despite the current discussions regarding the observance of limit values
within the diesel exhaust scandal in our estimation this key technology will set the tone for the time being. We
are currently unable to assess in concrete terms when new and/or different driving technologies will replace the
current ones.
The permanently rising need for savings as well as the link-up to alternative driving technologies lead to a conti-
nuously increasing complexity of customer requirements. We are capable of facing this challenge because we see
a competitive and technology advantage in many of the products manufactured by us. We also try to utilize these
advantages by extending our offered range. We are in permanent discussions about this with our customers.
The structure of our offered range is consistently developed. Our customers are increasingly advised on production
technology and this cooperation leads to a technical improvement of the manufactured components.
With regard to the dependency on the automotive industry as well as some major customers, we see a concentra-
tion of risks.
As in previous years, the contract award of international, dollar-based projects was impaired by the EUR/USD
exchange rate relation.
Konzernlagebericht Konzernlagebericht 38 group management report
It is a typical feature of sales market risks that they have a decisive influence on the assets, financial and earnings
position of the company. We face the still existing risks arising from the uncertain development of the global
economy by an extension of our international market presence for the motor truck supply industry. In addition, we
are developing new sales strategies to achieve growth in the non-automotive sector. By increasing diversification
we expect not only to reduce sales market risks but also to develop new sales opportunities.
Due to the uncertainties with regard to future effects of the financial, economic and government debt crisis there
are no consistent forecasts for the development of foreign demand in the markets relevant to our company. There
is a continued latent risk of further reductions in sales. In addition, there is still a risk of sales-market-based losses
due to external factors such as the once again aggravating economic and financial crisis or the realignment of
customer buying behaviour.
We aim at a permanent extension of our production basis in order to meet the continuously increasing require-
ments of our customers. More than 180 years of experience in precision engineering are proof of our flexibility. In
future we will continue to concentrate on our core competencies.
Furthermore, our many years of experience allow us to offer equipment designs to our customers (in terms of
ideal solutions). We will also in future provide options to manufacture sophisticated high-tech components.
Within the scope of our corporate philosophy we deal with various process developments, also outside the
automotive sector. In addition, we intend to enforce further process developments and to establish ourselves in
existing market niches by an extension and intensification of our internal training activities.
The risk of major fluctuations in our order receipt and sales forecast is given due to the unstable demand behavior
of consumers as a result of the current emission problems in the diesel segment.
It has also become obvious that the change of owners has been positively accepted by our customers. With the
new majority shareholder we now have the chance to secure existing sales markets and open up new ones. It is also
in our customers‘ interest to extend our business relations in China with the support of the majority shareholder.
We classed the risk expectation value on the whole as „high“.
Schumag agSchumag ag 39Schumag ag
Procurement market
Procurement market risks are essentially divided into schedule, quantity and price risks. Especially in the steel
processing industry there has been a situation for several years that the emerging nations exert a considerable
influence on the above mentioned risks due to their demand behaviour. A particular feature of the company‘s risk
profile results from the fact that a large number of raw materials (in particular special alloys) can be exclusively
procured from only one or very few manufacturers.
It is hardly possible to quantify the procurement risks because these are in the end determined by the fact
whether or not a promised production can be carried out according to the requirements in terms of quantity, qua-
lity, price and delivery date. In the past fiscal year we had no significant procurement problems with regard to the
completion of our production orders. Since the demand behaviour of our customers from the automotive industry
tends to change at short notice it is hardly possible to derive from this a long-term requirements planning for our
procurement activities.
The risk structure as well as the different forms of risks have not significantly changed compared to the previous
year. There is a continuing trend to conclude framework contracts with suppliers which aim at the procurement
of the required materials on a just-in-time basis. This results in both chances (less capital being tied up) and risks
(increased dependency on suppliers).
By means of long-term purchasing contracts and active inventory management we continue to counteract price
increases and risks relating to scheduled delivery dates. Based on the specifications provided by our customers we
purchase our raw materials to a significant extent from certain suppliers. This does not lead to any dependencies
which might threaten the continued existence of the company.
There is a continued tendency that our customers enter into direct price negotiations with our raw material sup-
pliers. This results in a reduction of risks with regard to uncontrolled price increases.
Apart from this, a trend can be identified that our purchase orders concentrate on less and less suppliers. The
resulting bundling effect leads to clearly increased ordering volumes in individual cases which are increasingly
difficult to cover by a trade credit insurance which again leads to shorter times allowed for payment with our
suppliers.
We have classed the risk expectation value as „mean“.
Konzernlagebericht Konzernlagebericht Konzernlagebericht Konzernlagebericht Konzernlagebericht 40 group management report
Opportunities and risks arising from management and organization
ComplianceThe company is exposed to the general risk that statutory regulations and guidelines applicable within the scope
of its business activity are not complied with. We counteract this risk by means of compliance guidelines for our
employees. To implement a more restrictive handling of the internal control and risk management system an
adjustment of organisational arrangements took place in fiscal year 2012/13.
Internal examinations in fiscal year 2012/13 revealed signs that in the past members of executive bodies failed to
comply with regulations of the internal control and risk management system. At the same time interrogations by
investigating authorities took place within the scope of pending preliminary proceedings. The Board of Executive
Directors therefore initiated investigations to disclose any breach of duty by members of executive bodies with
regard to § 93 of the German Stock Corporation Act. Since we are very interested to clear up the events of the
past we are closely cooperating with the investigating authorities for the clarification of the underlying facts and
circumstances although the investigations are not directed at the company itself.
External law offices have been instructed to carry out internal investigations and to provide clarification. Since the
investigations have currently not been fully completed the Board of Executive Directors does not yet have suffici-
ent information to issue a final comment on the matter. Final judgements by the courts are currently not available.
Any opportunities and risks arising from the respective facts and circumstances such as damage claims or tax risks
to be included in the balance sheet have so far not been determined in sufficiently concrete terms.
We classed the risk expectation value as „high“.
Infrastructure risksIT risks have an increasing strategic significance due to the progressing automation in administration as well as
in production. Planning, control as well as communication are hardly conceivable without functioning IT systems.
A total failure of IT systems can in the worst case lead to an entire standstill of operations and would therefore
threaten our existence.
With regard to the introduction of the company-wide ERP software of SAP to replace old systems which was in-
terrupted in spring 2010 there is a risk due to the long interruption that the implementation costs are higher than
planned.
To cover the event of IT failure an emergency and contingency programme has already been worked out in previ-
ous fiscal years. To prevent unauthorized data access, firewall systems and virus scanners are used.
The risk structure has largely remained unchanged compared to the previous year. By the gradual abolishment of
the old systems we hope to achieve a clear reduction of this form of risk.
Schumag agSchumag agSSSchumagchumagchumag agagag 41Schumag ag
Again, in fiscal year 2014/15 operational capacity limits were sometimes reached. In addition, machine failures
due to the age of the machinery led to non-scheduled interruptions. This leads to high maintenance/repair ex-
penses and downtime. In spite of a improved liquidity situation the company is unable to invest in new modern
machinery to the required extent and the required structural adjustments can be initiated only to a limited extent.
We are currently making intensive efforts to work out preventive maintenance plans.
The current and future challenge is to facilitate additional rationalization potential by information technology and
at the same time to master the necessary adjustments in terms of security as well as financially.
We classed the risk expectation value on the whole as „high“.
Konzernlagebericht Konzernlagebericht Konzernlagebericht Konzernlagebericht Konzernlagebericht 42 group management report
Financial opportunities and risks
FinanceThe company is faced with a variety of financial risks and opportunities. These can be identified both in the opera-
tive business and in financing issues.
A financial imbalance may in the most unfavourable case lead to insolvency. The cause of this may be insufficient
internal financing and/or failure to obtain the required external financing.
Financial risks in the operative area are basically caused by fluctuations in interest rates, currencies and in the
purchase prices for raw materials and other materials. Due to short-term money investments within the scope of
our liquidity reserves during the period there are no essential risks caused by changes in interest rates. To prevent
exchange rate risks, any business transacted in foreign currency is at the same time hedged with higher volumes.
Short-term liquidity risks arising from fluctuations in payment flows are identified early by a rolling liquidity plan-
ning system. To control default risks Schumag pursues a consistent accounts receivable management. By the use of
actual factoring a major share of the default risk - which is attenuated by the credit standing of our customers - is
transferred to the factoring company.
We observe the development of our financial situation on the basis of short, medium and long-term forecasts.
Information about this is provided on a current basis within the scope of the reporting of our risk manager. Due
to the small volume of available liquidity essential revenue reductions and/or cost increases may lead to a distur-
bance of the financial balance.
By the clear improvement of the earnings position, the optimization of our working capital as well as the raising of
a third-party loan we have been able to maintain our financial balance. Our liquidity situation has currently eased.
In the event of a deterioration of the order situation and thus also of the financial situation there continues to be
the risk that the required additional external financing may not be available in due time. We continue to look for
new financing options.
We classed the risk expectation value on the whole as „high“.
External opportunities and risks
Water protection zonesIn the reporting period, the proceedings were still not finalized which have been going on for several years concer-
ning the reclassification of local water protection zones according to which the existing machinery of Schumag is
subject to preservation of the status quo and which threaten Schumag with extensive requirements in connection
with new investments and with regard to the use of existing industrial areas. With an extensive waste water and
precipitation water concept the company makes allowance for future water management changes.
We classed the risk expectation value on the whole as „mean“.
Schumag agSchumag agSSSchumagchumagchumag agagag 43Schumag ag
Insolvency receivablesWith regard to the receivables of Schumag AG due from its former parent company Babcock Borsig AG i.I. a full
valuation allowance was made in previous years for expected uncollectibility. Based on the reporting of the insol-
vency administrator a write-up amounting to EUR 1.5 million was made in fiscal year 2012/13. According to the
current interim report of the insolvency administrator risks continue to exist with regard to the time of payment
receipt and potential reductions of the insolvency dividend. Allowances were made for these risks by taking risk
deductions into account in the valuation. On the other hand, there are opportunities arising from a further potenti-
al improvement of the insolvency dividend. Compared to the previous year, we do not see any essential change in
the risk profile.
We classed the risk expectation value on the whole as „low“.
Court proceedingsRisks arising from court proceedings include those risks which due to completed or expected court proceedings
may have effects on the assets, financial and earnings position of the company.
We classed the risk expectation value on the whole as „low“.
outlooK
This Group Management Report includes details and forecasts which refer to the future development of Schumag.
The forecasts reflect estimations made on the basis of all information available to us at this time. If the assump-
tions on which the forecasts are based fail to materialize or if the risks occur which we mentioned in the risk
report, the actual results may deviate from the currently expected results.
After the operative activities of our subsidiary BR Energy GmbH have been discontinued for the most part due to
missing business success the division of plant engineering is currently in the process of winding up. The following
details therefore refer only to the division of precision engineering.
In spite of having realized a large number of restructuring measures and in spite of our strong position in the
market due to our technological unique selling proposition in the area of low manufacturing tolerances and our
considerable reputation in the market the company continues to be in a not simple situation. On the way to a
stabilization of our company we have reached important sub-goals. As already mentioned we will have to concen-
trate increasingly on our core competencies and further extend these in future.
The financial resources of our company as well as the machinery in need of renovation represent risks. A notice-
able reduction of these risks could be reached here if Schumag entered into a regulated financing scheme with the
support of the new strategic investor.
Konzernlagebericht Konzernlagebericht 44 group management report
The influence of the further development of pension accruals on the result before taxes and on equity due to the
continued policy of low interest rates is very difficult to assess.
In spite of current uncertainties in the Asian market, the strong development of the US Dollar as well as the ex-
haust gas problems with diesel vehicles we nevertheless expect that sales revenue will remain almost unchanged.
The adjusted economic figures of the Federal Government as well as the continuing uncertainties at the beginning
of the 3rd quarter of 2015 support our assumption. According to the current status we expect a sales revenue bet-
ween EUR 50 million and EUR 51 million for fiscal year 2015/16. The total operating performance for fiscal year
2015/16 is expected to be in the same range.
The implementation of various measures has relieved the liquidity situation in the year under review; however,
for a sustainable stabilization a continuation of our strict liquidity management will be required. Based on the
underlying premises which include clearly higher investments than in previous years we expect the liquidity
development to remain at a relatively constant level. As of September 30, 2016 we expect a liquidity ratio I on the
adjusted level of the previous year.
Further measures for productivity increase have been initiated and are in the process of implementation. In
addition, it will be important to stabilize overheads at the low level of fiscal year 2014/15 with long-term effect.
Taking the scenario as a basis which is most likely to occur, we expect to reach a considerable improvement of
EBIT due to the improvement of cost structures at an almost unchanged total operating performance for fiscal year
2015/16. The estimation refers to the EBIT control variable determined according to commercial law principles as
well as to the EBIT figure shown in our group financial statements prepared according to the principles of IFRS.
Aachen, December 30, 2015
Schumag Aktiengesellschaft
The Board of Executive Directors
Dr. Johannes Ohlinger
Schumag agSchumag agSSSchumagchumagchumag agagag 45Schumag ag
Konzernlagebericht Konzernlagebericht 464646
contentS conSoliDateD Financial StatementS
CONSOLIDATED STATEmENT OF FINANCIAL POSITION 48
CONSOLIDATED STATEmENT OF INCOmE 49
CONSOLIDATED STATEmENT OF COmPrEhENSIvE INCOmE 49
CONSOLIDATED STATEmENT OF ChANgES IN EQuITy 50
CONSOLIDATED STATEmENT OF CASh FLOWS 51
NOTES TO CONSOLIDATED FINANCIAL STATEmENTS 52
1. information on the company 52
2. accounting standards 52
3. acquisitions / Divestitures 65
4. Segment reporting 65
5. other operating income 68
6. personnel expenses 69
7. other operating expenses 70
8. Financial result 71
9. income taxes 72
10. earnings per share 75
11. intangible assets 76
12. property, plant and equipment 78
13. investment property 81
14. inventories 82
15. trade accounts receivable 82
16. other financial assets 83
17. other non-financial assets 84
18. cash and cash equivalents 85
19. Shareholders' equity 85
20. pension provisions 88
21. other provisions 93
22. Financial debts 94
23. trade accounts payable 96
24. other financial liabilities 96
25. other non-financial liabilities 97
26. contingent liabilities and other financial commitments 98
27. Financial instruments 99
28. leasing 102
29. related parties 104
30. remuneration of the Board of executive Directors and the Supervisory Board 106
31. Services of the auditor 108
32. Details of existing shareholdings 108
33. list of shareholdings 110
34. Declaration according to § 161 of the german Stock corporation act 110
35. additional information to the consolidated statement of cash flows 110
36. Subsequent events 110
w
47
Konzernlagebericht
explained in notes 30-9-2015 30-9-2014
teur teur
assets
Long-term assets
intangible assets (11) 70 174
property, plant and equipment (12) 15.725 17.012
investment property (13) 4.112 4.112
Deferred tax assets (9) 247 130
other financial assets (16) 1.575 1.822
other non-financial assets (17) 5 12
21.734 23.262
Short-term assets
inventories (14) 10.044 8.847
trade accounts receivable (15) 3.499 2.038
current income tax assets 25 59
other financial assets (16) 1.719 2.448
other non-financial assets (17) 238 166
cash and cash equivalents (18) 3.099 1.993
18.624 15.551
Total assets 40.358 38.813
Shareholders‘ equity and liabilities
Shareholders' equity (19)
capital subscribed 10.226 10.226
generated shareholders' equity -2.791 -4.083
Equity attributable to owners of the company 7.435 6.143
Long-term liabilities
pension provisions (20) 22.833 22.883
other long-term provisions (21) 9 15
Deferred tax liabilities (9) 0 17
Financial liabilities (22) 1.000 35
other financial liabilities (24) 408 286
24.250 23.236
Short-term liabilities
Short-term provisions (21) 1.831 1.749
current income tax liabilities (9) 888 239
Financial liabilities (22) 439 2.289
trade accounts payable (23) 1.812 1.665
other financial liabilities (24) 3.276 3.094
other non-financial liabilities (25) 427 398
8.673 9.434
Total shareholders‘ equity and liabilities 40.358 38.813
conSoliDateD Statement oF Financial poSition
Konzernlagebericht 48
conSoliDateD Financial StatementS
consolidated Financial Statements
Schumag agSchumag ag
explained in notes 2014/15 2013/14
teur teur
Net profit/loss 1.627 1.266
profits resulting from asset ceiling (20) 2 134
remeasurement of the net defined benefit liability for pension plans (20) -500 -2.972
Deferred taxes (9) 162 966
Items that will never be reclassified to profit or loss -336 -1.872
Foreign operations - foreign currency translation differences (19) 1 12
Items that are or may be reclassified to profit or loss 1 12
Other comprehensive income -335 -1.860
Total comprehensive income, attributable to owners of the company 1.292 -594
explained in notes 2014/15 2013/14
teur teur
revenue (4) 49.741 49.398
changes in inventories 1.114 -994
other own work capitalized 3 25
other operating income (5) 1.993 1.822
Total operating performance 52.851 50.251
materials expenses -13.990 -14.041
personnel expenses (6) -28.413 -25.785
Depreciation / amortization (11-13) -1.842 -2.183
other operating expenses (7) -5.289 -4.924
Income from operations 3.317 3.318
Finance income 10 0
Finance expenses -1.025 -1.390
Financial result (8) -1.015 -1.390
Income before taxes 2.302 1.928
income taxes (9) -675 -662
Net profit/loss, attributable to owners of the company 1.627 1.266
Earnings per share (Eur) (10) 0,41 0,32
both non-diluted and diluted
conSoliDateD Statement oF comprehenSive income
conSoliDateD Statement oF income
SSSchumagchumagchumag agagag 49Schumag ag
Konzernlagebericht
conSoliDateD Statement oF changeS in eQuity
Konzernlagebericht 50
generated shareholders´ equity
Subscribedcapital
teur
currencytranslation
teur
retainedearnings
teur
group accumulated
deficit
teur
Share-holdersequity
teur
Balance as of 1-10-2013 10.226 -1 6.095 -9.583 6.737
net profit 0 0 0 1.266 1.266
other comprehensive income 0 12 -1.872 0 -1.860
Total comprehensive income 0 12 -1.872 1.266 -594
Balance as of 30-9-2014 10.226 11 4.223 -8.317 6.143
Balance as of 1-10-2014 10.226 11 4.223 -8.317 6.143
net profit 0 0 0 1.627 1.627
other comprehensive income 0 1 -336 0 -335
Total comprehensive income 0 1 -336 1.627 1.292
Balance as of 30-9-2015 10.226 12 3.887 -6.690 7.435
the consolidated statement of changes in equity is discussed in detail in note 19 of the consilidated financial statements.
consolidated Financial Statements
Schumag agSchumag agSSSchumagchumagchumag agagag 51Schumag ag
2014/15 2013/14
teur teur
net profit/loss 1.627 1.266
Depreciation/amortization 1.842 2.183
changes in pension provisions -1.128 -1.421
other payment affecting gain/loss 535 538
result from disposals of long-term assets -109 -14
changes in deferred taxes 28 425
changes in inventories -1.197 895
changes in trade accounts receivable -1.502 345
changes in other assets 999 4
changes in trade account payable 147 -520
changes in other liabilities and provisions1) 1.132 -698
payments for social compensation plan -42 -131
Cash-flow from operating activities 2.332 2.872
payments related to intangible assets -12 -21
payments related to property, plant and equipment -890 -468
proceeds from the disposal of property, plant and equipment 557 43
Cash-flow from investing activities -345 -446
proceeds from acceptance of financial liabilities 0 516
repayment of financial liabilities -711 -1.336
repayment of liabilities from finance leases (other) -174 -247
Cash-flow from financing activities -885 -1.067
Changes in cash and cash equivalents affecting liquidity 1.102 1.359
changes in cash and cash equivalents due to foreign exchange rate movements 4 -4
cash and cash equivalents at the beginning of the reporting period 1.993 638
Cash and cash equivalents at the end of the reporting period 3.099 1.993
outgoing payments for interests 434 587
incoming payments from interests 10 0
outgoing payments for taxes on income 11 53
incoming payments from taxes on income 46 23
the consolidated statement of cash flows is discussed in detail in note 35 of the consolidated financial statements. 1) without payments for social compensation plan
conSoliDateD Statement oF caSh-FlowS
52
1. inFormation on the companySchumag Aktiengesellschaft (Schumag AG) is a listed corporation based in Nerscheider Weg 170, 52076 Aachen
which is registered at the Aachen District Court under registration number HRB 3189. The fiscal year includes
the period from October 1 to September 30 of the following year. The consolidated financial statements for the
fiscal year from October 1, 2014 to September 30, 2015 were released for disclosure to the supervisory board on
December 30, 2015 by a resolution of the Board of Executive Directors.
The Schumag Group with its companies Schumag AG, Aachen, and Schumag Romania S.R.L., Timisoara, Chisoda/
Romania, operates in the sector of precision engineering. Due to the fact that, as in the previous years, no orders
were received and no revenues were realized in the division of plant engineering in which the subsidiary
BR Energy GmbH (formerly Schumag BR Energy GmbH) operated the operating activities in this segment were not
pursued, also due to a lack of funds.
2. accounting StanDarDS2.1 BasesThe consolidated financial statements were prepared on the going concern basis. The consolidated financial state-
ments of Schumag AG were prepared according to the regulations of the International Financial Reporting Stan-
dards (IFRS) effective on the balance sheet date as applicable in the European Union and additionally according to
the commercial rules applicable according to § 315a (1) of the Commercial Code. In this connection, all mandatory
IFRS recognized by the European Union were taken into account. On principle, the financial statements are prepa-
red on the basis of historical acquisition and production cost unless current values according to IFRS 1 were stated
at the time of conversion to IFRS. In application of IAS 1 the balance sheet is divided into non-current and current
assets and liabilities. Current assets and liabilities are those which are due and payable within one year. According
to IAS 1.56 deferred taxes are shown as non-current assets and liabilities. The income statement is structured
according to the total-expenditure format. The currency of the financial statements is the Euro, all amounts are
indicated in thousand euros (TEUR) according to commercial rounding unless they are stated differently. Deviations
from the non-rounded amounts may result. To improve clarity individual items are combined in the income state-
ment and in the balance sheet and are separately explained in the Notes.
noteS to conSoliDateD Financial StatementS
notes to consolidated Financial Statements
53
2.2 ConsolidationIn addition to Schumag AG all subsidiaries are included in the consolidated financial statements. The subsidiaries
are consolidated from the date on which control is obtained until the date when control ends. In connection with
first-time capital consolidation the acquisition cost of the participating interests is set off against the current
values of the acquired assets and liabilities including contingencies. A remaining difference on the assets side is
shown as goodwill. A remaining difference on the liabilities side is booked as income after re-examination. Assets
and liabilities of the included companies which are transferred to the consolidated financial statements are subject
to the below mentioned uniform accounting and valuation methods. All relations within the Group as well as
interim results from trade between the included companies are fully eliminated within the scope of consolidation.
The companies included in the consolidated financial statements are individually stated in Note 33. The annual
financial statements of BR Energy GmbH were prepared as of the balance sheet date of the parent company. For
Schumag Romania S.R.L. interim financial statements were available as of the balance sheet date.
2.3 Accounting and valuation methods
2.3.1 Foreign currency translation:
The functional currency of Schumag AG and of the domestic Group companies is the Euro. Transactions in foreign
currency are recorded at the exchange rate which is effective at the time of posting of the transaction. Assets and
liabilities in foreign currency are valued at the exchange rates effective on the balance sheet date. Translation
differences arising in this connection are recorded with effect on net income.
The foreign Group company prepares its annual financial statements in the currency in which it predominantly
transacts business as measured by its business operations, its transactions and its payment flows. Translation to
the Euro Group currency takes place according to the closing rate method. Except for shareholders‘ equity which is
translated at historical exchange rates, balance sheet items are translated to euros at the exchange rates effective
on the balance sheet date, expenses and income are translated at monthly average exchange rates. The resulting
translation differences are shown without effect on net income in a separate item under shareholders‘ equity.
The exchange rates of foreign currencies in the Group have developed as follows:
current rate on balance sheet date average rate
1 eur = 30-9-2015 30-9-2014 2014/15 2013/14
romania ron 4,42 4,41 4,44 4,47
Schumag ag
54
2.3.2 revenue recognition:
Revenues are always recorded if it is likely that the economic benefit will go to the Group and that the amount of
this benefit can be reliably determined. revenues from goods sales are recognized upon shipment of the products
and goods to customers as soon as the transfer of risks to buyer has taken place. In this connection potential
discounts or other price reductions are deducted. Potential risks arising from complaints about products and
goods and due to warranty are deferred. revenues from services are recorded in so far as the service has been
rendered. Income from interest is recognized pro rata temporis taking into account the outstanding receivables as
of the balance sheet date and the interest rates to be applied according to the effective interest method. rental
income from operating leases, in particular in connection with the property held as a financial investment is recor-
ded on a pro rata temporis basis for the term of the corresponding leases.
2.3.3 Borrowing costs:
Borrowing costs which can be directly assigned to the acquisition, construction or manufacture of qualifying assets
are capitalized as part of the acquisition and/or production cost of the respective asset. Qualifying assets are as-
sets which require a considerable period of time to be turned into the intended condition in which they are ready
for use or ready for sale. Such borrowing costs have so far not occurred. All other borrowing costs are recorded
with effect on net income in the period of their incurrence.
2.3.4 Earnings per share:
The calculation of earnings per share is based on the result after tax and the weighted number of common shares
issued on average. No dilution effects resulted in the shown reporting period.
2.3.5 government grants:
Government grants are recorded only if it is sufficiently certain that the connected conditions are met and that the
grants will be provided. Investment subsidies for the acquisition or construction of property, plant and equipment
reduce the acquisition or production cost of the respective assets. In subsequent periods a corresponding reduction
of scheduled depreciation will therefore take place. Other government grants or government assistance are set up
as deferred income and recognized as income over the underlying period or the expected life of the respective
asset.
2.3.6 Intangible assets:
Intangible assets with an indefinite useful life do not exist at the company. Intangible assets with a limited useful
life are valued at cost less regularly scheduled straight-line depreciation (amortization method). The useful life is
determined based on the period of the underlying contract and on the expected use of the intangible asset. De-
velopment cost is not capitalized, but is recorded with effect on net income in the period in which it was incurred
because at the Schumag Group the creation process cannot be divided into a research and a development phase.
The main reason for this is that the activities for the improvement of production and of the products are exclu-
sively of an iterative nature. This means that the activities are not geared to clearly definable new products or
notes to consolidated Financial Statements
55
production processes but that they deal with gradual and current improvements of always the same products and
production processes. The products made and the production processes remain basically unchanged. It is therefore
from a cost account point of view impossible to determine the development cost on an accrual basis. Goodwill is
not stated either.
2.3.7 Property, plant and equipment:
Property, plant and equipment are valued at acquisition or production cost less accumulated depreciation. The
production cost of self-constructed plants include beside direct costs, appropriate allocations of material and
manufacturing overheads and an appropriate share of general administrative costs for those areas involved in the
construction of the plants. Borrowing costs were not capitalized because no long-term manufacturing work is on
hand. The cost of general overhauls is capitalized with the plant provided that the criteria for capitalization are
fulfilled. Current maintenance and repair costs are immediately expensed with effect on net income. As a matter of
principle, property, plant and equipment are written off only upon disposal from the Group or if no more economic
benefit is expected from the continued use or sale of the asset.
Property, plant and equipment which are subject to wear and tear are depreciated on a scheduled straight-line
basis over their useful life. The following useful lives are taken as a basis here:
useful life of intangible assets 2014/15 2013/14
years years
Software 5 5
useful life of property, plant & equipment 2014/15 2013/14
years years
Buildings 7 – 50 7 – 50
lndustrial plants and machinery 4 – 20 4 – 20
working and office equipment and other facilities 3 – 23 3 – 23
Schumag ag
56
2.3.8 Investment property:
Investment property includes land and buildings which are used to obtain rental income and not for the company’s
own production purposes. At Schumag AG parts of the land and buildings held at the company’s headquarters in
Aachen are rented out and are held as a financial investment. The valuation of the included buildings at the time of
transfer was effected according to IAS 40 in conjunction with IAS 16.5. The investment property includes land and
buildings which are stated in the balance sheet at their acquisition or production cost less scheduled depreciation
over their useful life.
2.3.9 Impairment of value:
The book values of intangible assets, property, plant and equipment and of the property held as a financial invest-
ment are reviewed as of each balance sheet date. If there are signs for a impairment of value, an impairment test
will be carried out. Non-scheduled depreciation will be effected if the recoverable amount is lower than the book
value. If the reasons for the impairment of value no longer exist, the corresponding write-up will be effected up to
a maximum of the amortised cost (see Note 2.4.5)
2.3.10 Leasing:
Leasing contracts are classified as either financing or operating leases. Leasing agreements in which the Schumag
Group acting as a lessee bears all essential chances and risks connected with the ownership of an asset are treated
as financing leases. Assets used within a financing lease are recorded at the lower of the fair value of the leased
property or the present value of the minimum lease payments, depreciation then takes place over the estimated
useful life or the shorter period of the lease. All other leasing agreements in which the Schumag Group acts as a
lessee are classed as operating leases. In this case the lease payments to be made are expensed on a straight-line
basis over the term of the lease. Leasing agreements in which the Group is the lessor and in which it does not
transfer all essential chances and risks connected with the title to an asset to the lessee are classed as operating
leases. The leased asset remains on the Group balance sheet and is subject to scheduled depreciation. Revenue
recognition of the leasing payments received is effected on a straight-line basis over the term of the lease.
2.3.11 Income Taxes:
Actual income tax claims and income tax liabilities for the current period and earlier periods are assessed at the
amount in which a refund from the tax office and/or a payment to the tax office is expected. The calculation of
actual income taxes is effected on the basis of the tax rates and tax laws effective as of the balance sheet date in
those countries where the Schumag Group earns taxable income. Deferred tax assets are recorded for temporary
differences between the values assigned in the IFRS balance sheet and in the tax balance sheet of the consolidated
companies as well as for consolidation processes and tax loss carryforwards. Deferrals are set up in the amount of
the expected tax burden and/or tax relief in subsequent years. The underlying tax rates are indicated in Note 9.
Deferred tax assets are only included when it is sufficiently probable that the future tax reduction will be realized.
Deferred tax assets and deferred tax liabilities are offset if they relate to income taxes levied by the same tax
authority and if it is intended to offset the actual tax liabilities and refund claims on a net basis or to realize tax
claims and tax liabilities at the same time.
useful life of investment property 2014/15 2013/14
years years
Software 10 – 40 10 – 40
notes to consolidated Financial Statements
57
2.3.12 Inventories:
Inventories are carried at acquisition cost or production cost. If the market prices and/or the fair values based on
the net realizable values are lower, these values will be stated. The net realizable value corresponds to the sales
proceeds realizable in normal transaction less costs to sell which can be directly allocated to the respective asset.
Acquisition and production costs are determined on the basis of the first-in-first-out method (fifo). Production
costs include, direct costs as well as overhead cost of material and production at normal utilization of the produc-
tion plants provided that such costs are incurred in connection with the production process. General administration
costs are also included provided that they relate to the production process.
2.3.13 Pension provisions:
Pension provisions are determined by means of actuarial calculations based on the projected unit credit method
with consideration of expected future compensation and pension adjustments. Revaluations of the net liability ari-
sing from defined benefit pension plans as well as gains and losses from asset ceiling are set off against retained
earnings under other results without affecting income and are shown in the consolidated statement of comprehen-
sive income.
2.3.14 Other provisions:
Other provisions are set up when there is a present obligation as a result of a past event and when there is a prob-
able outflow of resources whose amount can be reliably estimated. The amount of the provision is the probable
amount required to settle the obligation. The probable amount to settle long-term obligations is discounted if the
effect of discounting is material. In this case, valuation of the provision is done at present value. Interest effects
are shown in the financial result.
Schumag ag
58
2.3.15 Financial instruments:
Financial instruments are contracts which give rise to a financial asset in one entity and to a financial liability
or equity instrument in another entity. The balancing of financial instruments in connection with a regular-way
purchase or sale is effected as of the date of performance, i.e. the date on which the asset is delivered.
Financial assets at Schumag are composed of credits granted and receivables as well as liquid funds. First-time
recognition of a financial asset is effected at the fair value plus transaction costs. Transaction costs incurred in con-
nection with the purchase of financial assets valued at fair value with effect on net income are directly recorded
with effect on net income. Subsequent valuation is effected according to the assignment of the financial assets to
one of the following categories under IAS 39 which are subject to different valuation principles:
Financial assets valued at fair value with effect on net income*
Financial assets to be held to maturity*
Loans and receivables
Financial assets available for sale*
Effective derivatives as hedging instruments *
* currently not relevant at the Schumag Group
In the category of „loans and receivables“ the trade accounts receivable, other financial assets as well as cash and
cash equivalents are recorded at the Schumag Group. They are valued at amortized cost.
If objective signs point to a substantial decrease in the value of these financial assets, an examination takes
place to determine if the carrying value exceeds the present value of the future cash-flows. If this is the case, a
valuation allowance amounting to the difference in value is made using a valuation adjustment account, and the
loss due to the decrease in value is recorded with effect on net income. The present value of the future cash-flows
is discounted at the original effective interest rate of the financial asset. If the reasons for the previous valuation
adjustments no longer exist, the corresponding write-ups are effected by adjustment of the valuation adjustment
account, but not in excess of amortized cost.
Financial assets are written off if the contractual rights to payments arising from the financial assets no longer
exist, if the receivables are classed as non-collectible and if all securities have been utilised or if financial assets
are transferred with all essential risks and chances. If a written-off receivable is later classed as collectible again
because of an event which occurs after the write-off, the corresponding amount is recognised as income. An objec-
tive signs of a decrease in value are temporary delays of payments which are not even eliminated after a demand
for payment to the debtor or which exist due to a legal dispute.
notes to consolidated Financial Statements
59
Financial liabilities at Schumag relate to financial debts, trade accounts payable and other financial liabilities.
Financial liabilities are assigned to the following categories:
Financial liabilities valued at fair value with effect on net income*
Financial liabilities valued at amortized cost
* currently not relevant at the Schumag Group
First-time recognition of the financial liability is effected at the fair value of the consideration received and/or at
the value of the means of payment received less any transaction costs incurred. Subsequent valuation is effected
at amortized cost for the category of „Financial liabilities valued at amortized cost“, otherwise they are valued at
the fair value. Financial liabilities are written off if the contractual liabilities have been paid, cancelled or if they
have expired.
The amortized cost of a financial asset or of a financial liability is the amount at which a financial asset or a
financial liability was valued at the first recording, less any redemption and any non-scheduled depreciation for
decreases in value or uncollectible accounts as well as plus or less the accumulated distribution of any difference
between the original amount and the amount repayable upon maturity (premium), which is distributed over the
term of the financial asset or financial liability using the effective interest method.
For short-term receivables and liabilities the amortized cost always corresponds to the nominal amount and/or the
repayment amount. The fair values shown in the balance sheet usually correspond to the market prices of the fi-
nancial assets and liabilities. If no fair values are directly available, these are calculated using recognized valuation
methods and current market parameters. The fair value option is not used at the Schumag Group.
Derivative financial instruments are shown at their current value. The control of financial risks (in particular
currency risks) by using derivative financial instruments is described in Note 27.
Schumag ag
Konzernlagebericht Konzernlagebericht Konzernlagebericht Konzernlagebericht Konzernlagebericht 60
2.3.16 Asset values from reinsurance cover:
Asset values from reinsurance cover are stated under other financial assets at their fair values determined accor-
ding to actuarial principles.
2.3.17 Segment reporting:
According to the so-called management approach, reporting by segment is geared to the internal organizational
and reporting structure of Schumag. The data on which internal control variables are based are derived from the
consolidated financial statements prepared according to IFRS.
2.4 Essential discretionary decisions, estimations and assumptions
In the preparation of the consolidated financial statements the Board of Executive Directors uses discretionary
decisions, estimations and assumptions that affect the reported amount of income, expenses, assets and debts as
well as the contingencies shown in the consolidated financial statements. The uncertainty connected with these
assumptions and estimations may lead to results, however, which, in future periods, call for considerable adjust-
ments of the carrying value of the assets or debts concerned. The assumptions made as of the balance sheet date
are of particular significance with regard to the following items:
2.4.1 Operating lease relationships - group as lessor:
Schumag has concluded a leasing contract for the industrial letting of real property. An analysis of the contractual
conditions showed that all relevant chances and risks connected with the ownership of the rented-out properties
remain with the Group. The contract is therefore shown in the balance sheet as an operating lease so that the let
property is recorded under real property held as a financial investment in accordance with IAS 40.
2.4.2 Income taxes:
Uncertainties exist with regard to the amount and time of accrual of future taxable profits. If the actual results de-
viate from the assumptions made and/or from future changes of such assumptions, it may be necessary to adjust
the already recorded tax revenue and tax expenses. Based on information available at the time of preparation
of the consolidated financial statements Schumag sets up provisions for potential effects of field tax audits. The
amount of such provisions is based on various factors such as e.g. the experience from earlier field tax audits and
different interpretations of the tax regulations by the taxable company and the tax authority in charge.
Deferred taxes are also stated for tax loss carryforwards. Their realization depends on the future taxable profits
of the respective company and on the tax regulations. If there are doubts about the realization of tax loss carry-
forwards, the corresponding valuation allowances are made for the deferred tax assets in individual cases. Based
on the transfer of more than 50% of the shares in June 2014 the losses brought forward until that date were fully
cancelled. It is expected that loss carryforwards of the German subsidiary accrued after this time will be no longer
usable in view of the shutdown of the plant engineering division. Therefore a full valuation allowance has been
made for the determined deferred tax assets.
2.4.3 Pension provisions:
The present value of pension obligations is determined by means of actuarial calculations. In this connection
the actuarial valuation is effected on the basis of various assumptions. This also includes the determination of
the discount rates as well as estimates of the future development of annuities and probabilities of death. Due to
notes to consolidated Financial Statements
Schumag agSchumag ag 61
the complexity of the valuation, of the underlying assumptions and their long-term character a defined benefit
pension obligation reacts extremely sensitive to changes in these assumptions. The assumptions made by Schumag
which are reviewed as of each balance sheet date are stated in Note 20.
2.4.4 Other provisions:
Other provisions also cover risks resulting from legal disputes and proceedings. In order to determine the amount
of the provisions, the facts relating to each case, the size of the claim, claims awarded in similar cases and inde-
pendent expert advice are considered along with assumptions regarding the probability of a successful claim and
the range of possible claims. The actual costs can deviate from these estimates.
2.4.5 Non-scheduled depreciation (impairments):
It is to be determined as of each balance sheet date whether or not there are signs for a potential decrease in the
value of intangible assets and of property, plant and equipment and in the value of real property held as a financi-
al investment. In addition, the Group determines as of each balance sheet date if there are signs for a decrease in
the value of financial assets.
In the impairment tests to be carried out in the presence of signs for decreases in value the balance sheet carrying
values of the assets are compared with the recoverable amounts of the assets. The recoverable amount is the high-
er of the net realizable value and the value in use of the asset. The value in use is determined for each individual
asset and corresponds to the cash value of the expected cash flow. If no recoverable amount can be determined
at the level of the individual asset, the determination will be effected for cash generating units to which the
corresponding asset is assigned. For the definition of the cash generating units the segments are used (see Note 4).
For the determination of the value in use a pretax interest rate corresponding to market conditions is used. The
determinations are based on budget calculations and forecasts by the management which usually cover a planning
period of three years and include assumptions for short to medium-term market developments. Cash flow fore-
casts which exceed the detailed planning period are calculated on the basis of suitable growth rates.
The estimate of the cash flows and the assumptions are based on the information available as of the respective
balance sheet date and may deviate from actual developments. Assumptions and estimates refer, among other
things, to expected proceeds from product sales, to the recoverability of the asset, to the discount rate as well as
to material and energy prices.
A previously recorded impairment loss is reversed only if, since the inclusion of the last impairment loss, a change
has resulted in the assumptions used to determine the recoverable amount. The write-up is limited to the effect
that the carrying value of an asset must not exceed its recoverable amount nor the carrying value which would
have resulted after consideration of scheduled depreciation if no impairment loss had been recorded for the asset
in previous years.
Schumag ag
Konzernlagebericht Konzernlagebericht 62
2.5 Effects of new and changed accounting standards2.5.1 First-time application of IFrS as applicable in the European union
In fiscal year 2014/15 the following new and/or changed standards and interpretations were applied for the first
time. Their first-time application has no essential effects on the consolidated financial statements unless stated
otherwise
IFrS 10 “Consolidated Financial Statements” was published on May 12, 2011 and included in EU law on Decem-
ber 11, 2012 and is to be applied for the first time to fiscal years starting on or after January 1, 2014. IFRS 10
introduces a consistent consolidation model where the criterion of control is used as a basis for consolidation of
all associations. IFRS 10 partially replaces IAS 27 „Consolidated and separate financial statements“ and completely
replaces SIC 12 „Consolidation - special purpose entities“.
IFrS 11“Joint Arrangements” was published on May 12, 2011 and included in EU law on December 11, 2012 and
is to be applied for the first time to fiscal years starting on or after January 1, 2014. IFRS 11 lays down principles
for the accounting in which an entity exercises joint control of a joint venture or joint operation and replaces
IAS 31 „Interests in joint ventures“ and SIC 13 „Jointly Controlled Entities - Non-Monetary Contributions by
Venturers“.
IFrS 12 “Disclosures of Interests in Other Entities” was published on May 12, 2011 and included in EU law on
December 11, 2012 and is to be applied for the first time to fiscal years starting on or after January 1, 2014.
IFRS 12 combines, expands and replaces all disclosure requirements for subsidiaries, joint arrangements,
associated companies and not consolidated structured companies. Due to the new IFRS 12, IAS 27 and IAS 28
had to be replaced as well.
IAS 27 “Separate Financial Statements” was published on May 12, 2011 and included in EU law on December 11,
2012 and is to be applied for the first time to fiscal years starting on or after January 1, 2014. The amended
IAS 27 now focuses on accounting and notes of subsidiaries, joint arrangements and associated companies which
are relevant for financial statements according to IFRS.
IAS 28 “Investments in Associates and Joint Ventures” was published on May 12, 2011 and included in EU law on
December 11, 2012 and is to be applied for the first time to fiscal years starting on or after January 1, 2014. The
amended IAS 28 prescribes the accounting for investments in associated companies and sets out requirements for
the application of the equity method when accounting shares in associated companies and joint ventures.
Amendments to IAS 32“Offsetting Financial Assets and Financial Liabilities” were published on December 16,
2011 and included in EU law on December 13, 2012 and is to be applied for the first time to fiscal years starting
on or after January 1, 2014. The amendment clarifies the requirements for balancing financial assets and financial
liabilities and eliminates inconsistencies in current practice.
Amendments to IFrS 10, IFrS 11 and IFrS 12 “Consolidated Financial Statements, Joint Arrangements and
Disclosures of Interests in Other Entities - Transition Guidance” were published on June 28, 2012 and included in
EU law on April 4, 2013 and is to be applied for the first time to fiscal years starting on or after January 1, 2014.
The amendments clarify transition guidance and provide transition reliefs for the first-time-adoption of the above
mentioned standards.
notes to consolidated Financial Statements
Schumag agSchumag ag 63
Amendments to IFrS 10, IFrS 12 and IAS 27 “Investment Entities” were published on October 31, 2012 and
included in EU law on November 20, 2013 and is to be applied for the first time to fiscal years starting on or after
January 1, 2014. The amendments define investment entities as independent companies which are excluded from
the consolidation requirements in IFRS 10. Due to fair value accounting, the information benefit of the financial
reports shall be increased.
IFrIC 21 “Levies” was published on May 20, 2013 and included in EU law on June 13, 2014 and is to be applied for
the first time to fiscal years starting on or after June 17, 2014. The interpretation of IAS 37 “Provisions, Contin-
gent Liabilities and Contingent Assets” clarifies the accounting for levies, other than those in IAS 12, and clarifies
in particular when an entity has to record a liability.
Amendments to IAS 36 “Recoverable Amount Disclosures for Non-Financial Assets” were published on May 29,
2013 and included in EU law on December 19, 2013 and is to be applied for the first time to fiscal years starting
on or after January 1, 2014. The amendments affect the indication of information regarding the calculation of the
recoverable amount of asset relief measures if this amount is based on fair value less costs of sell.
Amendments to IAS 39 “Novation of Derivatives and Continuation of Hedge Accounting” were published on
June 27, 2013 and included in EU law on December 19, 2013 and is to be applied for the first time to fiscal years
starting on or after January 1, 2014. The amendment achieves that a change of a contracting party of a hedging
instrument to a central counterparty, as a result of law or regulation, does not end a hedging relationship if speci-
fic conditions are met.
2.5.2 Not yet considered IFrS
The effects on the consolidated financial statements of Schumag of the IFRS so far not applied in fiscal year
2014/15 and/or not recognized by the European Union were examined. As a matter of principle, Schumag does
not intend to apply these prematurely and assumes that the application of the new standards and/or the changed
standards as well as their interpretations already recognized by the European Union mentioned below will have
no essential effects on the consolidated financial statements unless indicated otherwise:
Amendments to IAS 19 “Defined Benefit Plans: Employee Contributions” were published on November 21, 2013
and included in EU law on December 17, 2014 and is to be applied for the first time to fiscal years starting on or
after February 1, 2015. The amendments allow to recognize contributions of employees or third parties to defined
benefit pension plans as a reduction of current service costs in the period in which servicing has been rendered if
contributions are independent from the number of service years.
Annual Improvements to IFrSs 2010-2012 Cycle were published on December 12, 2013 and included in EU law
on December 17, 2014 and is to be applied for the first time to fiscal years starting on or after February 1, 2015.
In context of collective changes, clarifications and smaller amendments to IFRS 2 „Share-based Payment“, IFRS 3
„Business Combinations“, IFRS 8 „Operating Segments“, IFRS 13 „Fair Value Measurement“, IAS 16 „ Property, Plant
and Equipment“, IAS 24 „Related Party Disclosures“ as well as IAS 38 „ Intangible Assets“ were published.
Annual Improvements to IFrSs 2011-2013 Cycle was published on December 12, 2013 and included in EU law
on December 18, 2014 and is to be applied for the first time to fiscal years starting on or after February 1, 2015.
In context of collective changes, clarifications and smaller amendments to IFRS 1 „First-time Adoption of IFRS“,
Schumag ag
64
IFRS 3 „Business Combinations“, IFRS 13 „Fair Value Measurement“ as well as IAS 40 „Investment Property“ were
published.
Amendments to IAS 16 und IAS 41 “Bearer Plants” were published on June 30, 2014 and included in EU law on
November 23, 2015 and is to be applied for the first time to fiscal years starting on or after January 1, 2016. The
amendments clarify that fruit-bearing plants are to be accounted as tangible assets as their utilization is comparable.
Amendments to IFrS 11 “Accounting for Acquisitions of Interests in Joint Operations” were published on May 6,
2014 and included in EU law on November 24, 2015 and is to be applied for the first time to fiscal years starting
on or after January 1, 2016. The amendments clarify that the acquisition of shares in a joint operation which con-
stitutes a business has to be accounted in application of IFRS 3. Additionally, all relevant requirements for notes
must be met.
Amendments to IAS 16 und IAS 38 “Clarification of Acceptable Methods of Depreciation and Amortisation” were
published on May 12, 2014 and included in EU law on December 2, 2015 and is to be applied for the first time to
fiscal years starting on or after January 1, 2016. The amendments provide further guidelines for determining an
acceptable method of depreciation. Revenue-based methods are not permitted for property, plant and equipment
and for intangible assets only permitted in exceptional cases.
Annual Improvements to IFrSs 2012-2014 Cycle were published on September 25, 2014 and included in EU law
on December 15, 2015 and is to be applied for the first time to fiscal years starting on or after January 1, 2016.
In context of collective changes, amendments to IFRS 5 „Non-current Assets Held for Sale and Discontinued Opera-
tions“, IFRS 7 „Financial Instruments: Disclosures“, IAS 19 “Employee Benefits” as well as IAS 34 “Interim Financial
Reporting” were made.
Amendments to IAS 1 “Disclosure Initiative” were published on December 18, 2014 and included in EU law on
December 18, 2015 and is to be applied for the first time to fiscal years starting on or after January 1, 2016. The
amendments mainly include clarifications regarding the judgment of the materiality of notes, the representation of
additional items on the balance sheet and the statement of comprehensive income, the structure of notes as well
as the representation of significant accounting policies.
Amendments to IAS 27 “Equity Method in Separate Financial Statements” were published on August 12, 2014 and
included in EU law on December 18, 2015 and is to be applied for the first time to fiscal years starting on or after
January 1, 2016. With the amendments the equity method is again allowed as accounting option for shares in
subsidiaries, joint ventures and associate companies in separate financial statements of an investor. The existing
options for a valuation of acquisition costs or according to IAS 39 / IFRS 9 will remain. Since 2005 using the equity
method for shares in separate financial statements (of parent company) has not been allowed according to IAS 27.
notes to consolidated Financial Statements
65
3. acQuiSitionS / DiveStitureS
In fiscal year 2014/15 no company acquisitions took place.
Acquisitions or divestitures are currently not planned. The discontinuation of the segment of plant engineering is
not yet classed as Discontinued Operations because the shutdown was not finished with final effect in fiscal year
2014/15.
4. Segment reportingFor corporate control purposes the Group is organized in segments according to products. Services are of secon-
dary significance. The allocation of assets and depreciation to segments is effected according to the economic
power. Assets which are shared by the segments are assigned according to their pro-rata use. Due to the internal
organizational and reporting structure the following segments result according to IFRS 8:
The segment of precision engineering produces high-precision automotive parts, components for precision
measuring and indicating equipment, precision axles for a wide range of household appliances, components for
medical and optical equipment, standard precision parts for injection moulding and pressure die-casting as well as
precision parts in small lot sizes manufactured according to the customers‘ drawings.
The discontinued segment of plant engineering included the production of components for the energy sector,
in particular for oil and gas supply systems as well as power plants and nuclear power stations.
Business activities which cannot be assigned to any other segment are shown under Other segments.
These currently include activities connected with the real property held as a financial investment (see Note 13).
Schumag ag
66
An amount of TEUR 19,970 (previous year TEUR 21,423) of the non-current assets is allotted to Germany, and
TEUR 1,764 (previous year TEUR 1,839) to Romania.
Segments 2014/15 (teur) precision engineering Systems engineering other segments group
revenue 49.741 0 0 49.741
total operating performance 51.522 0 1.329 52.851
income from operations 2.708 -106 715 3.317
income before taxes 2.491 -207 18 2.302
Finance income 10 0 0 10
Finance expenses -227 -101 -697 -1.025
Depreciation / amortization -1.842 0 0 -1.842
capital expenditure 902 0 0 902
long-term assets 17.621 1 4.112 21.734
average number of employees 622 0 0 622
Segments 2013/14 (teur) precision engineering Systems engineering other segments group
revenue 49.398 0 0 49.398
total operating performance 49.008 0 1.243 50.251
income from operations 2.735 -87 670 3.318
income before taxes 2.157 -188 -41 1.928
Finance income 0 0 0 0
Finance expenses -578 -101 -711 -1.390
Depreciation / amortization -2.182 -1 0 -2.183
capital expenditure 767 0 0 767
long-term assets 19.149 1 4.112 23.262
average number of employees 625 0 0 625
notes to consolidated Financial Statements
67
The following non-cash impairment losses are included in the consolidated statement of income and are fully
allocated to the segment of precision engineering:
As in previous year in fiscal year 2014/15 a minimum of 10% of Group revenues were realized with two customers
of the segment of precision engineering. Customer sales amounted to TEUR 7,995 (previous year 8,989) and
TEUR 6,321 (previous year TEUR 4,493).
An essential key figure for the control of the segments by the Board of Executive Directors as the main decision-
makers is the figure of income from operations.
An aggregation of segments did not take place.
Breakdown of revenues by regions
impairment losses 2014/15 2013/14
teur teur
on intangible assets and property, plant & equipment -100 -130
on accounts receivable and other assets -40 0
-140 -130
location 2014/15 2013/14
teur % teur %
germany 18.991 38,2 19.015 38,5
remaining eu countries 9.028 18,2 8.617 17,4
other europe 2.303 4,6 876 1,8
north america 14.375 28,9 16.263 32,9
latin america 3 0,0 0 0,0
asia 5.041 10,1 4.627 9,4
49.741 100,0 49.398 100,0
Schumag ag
68
5. other operating income
rental income includes in particular income from the letting of the investment property to SMS group.
Income from disposal of property, plant and equipment refers in particular to the rescission of a machine
purchase from fiscal year 2012/13.
Income from ChP allocation included the income from the levy according to the Combined Heat & Power Act
refunded by the grid operator due to the utilisation of a unit-type cogeneration station.
Income from the write-off of liabilities apply in main to commitments regarding early retirement arrangements.
Income from surrender values results from reinsurance contracts which do not represent qualified insurance
policies in terms of IAS 19.
Other income includes other grants, income from offsetting of costs as well as a large number of other items.
2014/15 2013/14
teur teur
rental income 1.246 1.197
income from the disposal of property, plant and equipment 116 33
income from chp allocation 113 0
Foreign currency gains 106 102
income from the write-off of liabilities 57 10
income from surrender values 50 48
other 305 432
1.993 1.822
notes to consolidated Financial Statements
69
6. perSonnel expenSeS
Contributions amounting to TEUR 1,835 (previous year TEUR 1,805) were paid to pension insurance institutes.
Average number of employees
2014/15 2013/14
teur teur
wages and salaries -23.687 -21.504
Social security contributions and retirement benefit expenses and welfare benefits -4.726 -4.281
thereof retirement benefit expenses -422 -105
-28.413 -25.785
2014/15 2013/14
hourly workers 510 506
Salaried employees 80 88
apprentices 32 31
622 625
Schumag ag
70
7. other operating expenSeS
Other expenses include further administration and selling expenses not related to certain contracts.
2014/15 2013/14
teur teur
maintenance -1.735 -1.184
consulting fees -347 -432
insurance costs -323 -384
it costs -261 -272
other services purchased -234 -212
leasing and rental costs -214 -240
Factoring -181 -262
Foreign currency losses -126 -106
other -1.868 -1.832
-5.289 -4.924
notes to consolidated Financial Statements
71
8. Financial reSult
Interest and similar expenses include financing costs for pension commitments amounting to TEUR -598 (previous
year -748) (see also Note 20).
Total interest income as well as total interest expense for financial assets or liabilities which are valued without
effect on income at the fair value break down as follows:
2014/15 2013/14
teur teur
other interest and similar income 10 0
Financial income 10 0
interest and similar expenses -1.025 -1.390
Financing expenses -1.025 -1.390
Financial result -1.015 -1.390
2014/15 2013/14
teur teur
total interest income 9 0
total interest expense -424 -644
Schumag ag
72
9. income taxeS
Effective from January 1, 2008, corporate income tax of 15% and thereon a solidarity surcharge of 5.5% is uni-
formly levied on distributed and retained earnings. In addition to corporate income tax, income generated in Ger-
many is subject to trade income tax. This varies as a function of the municipality in which the company is located.
The rate for Schumag AG as well as for BR Energy GmbH amounts to 16.625% (previous year 16.625%) so that for
both companies deferred taxes are included at 32.5% (previous year 32.5%).
Income generated by foreign Group companies is taxed at the income tax rates to be applied in the respective
countries of domicile. For foreign companies, deferred taxes are calculated using the following tax rates to be
applied in the individual countries of domicile:
Income taxes shown in the consolidated statement of income break down as follows:
2014/15 2013/14
teur teur
actual taxes
Schumag ag -647 -237
-647 -237
thereof for previous years 2 2
Deferred taxes
tax expenses -442 -625
tax income 414 200
-28 -425
Taxes shown in the consolidated statement of income -675 -662
2014/15 2013/14
% %
romania 16 16
notes to consolidated Financial Statements
73
The direct set-off of actuarial profits or losses against retained earnings results in deferred taxes recorded under
other comprehensive income amounting to TEUR 162 (previous year TEUR 966).
Deferred taxes result from the following temporary differences between the values assigned in the tax balance
sheet and the valuation of assets and liabilities according to IFRS:
Deferred tax expense Deferred tax income
2014/15 2013/14 2014/15 2013/14
teur teur teur teur
property, plant and equipment -12 -31 334 160
inventories and accounts receivable -45 -107 26 3
pension provisions -112 -173 0 0
other provisions and liabilities -273 -314 50 31
other 0 0 4 6
-442 -625 414 200
Deferred tax assets Deferred tax liabilities
30-9-2015 30-9-2014 30-9-2015 30-9-2014
teur teur teur teur
inventories and receivables 116 139 0 4
pension provisions 3.132 3.081 0 0
other provisions and liabilities 563 799 0 13
tax loss carryforwards 128 61 0 0
other 0 0 2 6
valuation allowance for deferred taxes -128 -61 0 0
thereof tax loss carryforwards -128 -61 0 0
gross value 3.860 4.056 3.613 3.943
netting -3.613 -3.926 -3.613 -3.926
Balance sheet value 247 130 0 17
Schumag ag
74
The assessment of the probability of a reversal of the differences in valuation and the use of tax loss carryfor-
wards are decisive for the assessment of the value of deferred tax assets. This depends on the accrual of future
taxable profits during the periods in which valuation differences are reversed and tax loss carryforwards can be
claimed. The option to use tax loss carryforwards may be cancelled in the event of a change in shareholders. Based
on experience and on the expected development of taxable income, it is assumed that the advantages of deferred
tax assets will be realized.
In Germany, tax losses can be carried forward for an indefinite period but can be set off against generated profits
only to a limited extent. In case of a change in shareholders tax loss carryforwards may be cancelled completely
or partially. Essential foreign tax loss carryforwards do not exist. As of September 30, 2015 valuation allowances
were made for domestic tax loss carryforwards amounting to TEUR 394 (previous year TEUR 186).
Tax reconciliationtThe income taxes resulting from the application of the tax rate of Schumag AG of 32.5 % (previous year 32.5 %) can
be reconciled to the reported income taxes as follows:
2014/15 2013/14
teur teur
Income before taxes 2.302 1.928
expected tax expense (tax rate of Schumag ag) -748 -627
tax effects from non-deductible expenses -15 -6
tax effect from deviating foreign tax rates 60 6
Deferred taxes due to tax loss carryforwards so far not taken into account 64 1
not stated and/or valuation allowance for deferred taxes -67 -54
other tax effects 31 18
reported tax -675 -662
Tax rate 29,3 % 34,3 %
notes to consolidated Financial Statements
75
10. earningS per Share
There were no dilution effects.
2014/15 2013/14
net profit/loss (in teur) 1.627 1.266
weighted number of shares issued on average 4.000.000 4.000.000
earnings per share according to iFrS (in eur) 0,41 0,32
Schumag ag
76
11. intangiBle aSSetS
Development 2014/15 Software
teur
Acquisition costs
Balance as of 1-10-2014 890
additions 12
Disposals 71
Balance as of 30-9-2015 831
Amortization
Balance as of 1-10-2014 716
additions scheduled 49
additions non-scheduled 67
Disposals 71
Balance as of 30-9-2015 761
Net book value as of 30-9-2015 70
Development 2013/14 Software
teur
Acquisition costs
Balance as of 1-10-2013 1.092
additions 21
Disposals 223
Balance as of 30-9-2014 890
Amortization
Balance as of 1-10-2013 717
additions scheduled 96
additions non-scheduled 126
Disposals 223
Balance as of 30-9-2014 716
Net book value as of 30-9-2014 174
notes to consolidated Financial Statements
77
Goodwill as well as self-constructed intangible assets are not available.
The stated non-scheduled depreciation refers to the item of depreciation in the consolidated statement of income.
In the division of precision engineering the expected useful value was deducted for depreciation.
Schumag ag
78
12. property, plant anD eQuipment
Development 2014/15
land and buildings
teur
machinery and technical
equipment teur
Factory and office
equipmentteur
advance payments and constr. in progress
teurtotalteur
acquisition / production cost
Balance as of 1-10-2014 15.796 23.962 6.908 183 46.849
exchange differences -2 0 -1 0 -3
additions 4 579 292 15 890
Disposals 0 549 269 0 818
transfers 0 27 0 -27 0
Balance as of 30-9-2015 15.798 24.019 6.930 171 46.918
Depreciation
Balance as of 1-10-2014 3.591 20.454 5.636 156 29.837
exchange differences 0 1 0 0 1
additions scheduled 413 891 389 0 1.693
additions non-scheduled 0 33 0 0 33
Disposals 0 108 263 0 371
Balance as of 30-9-2015 4.004 21.271 5.762 156 31.193
Net book value as of 30-9-2015 11.794 2.748 1.168 15 15.725
notes to consolidated Financial Statements
79
Property, plant and equipment include 2 (previous year 5) leased production machines for the precision enginee-
ring division of which the beneficial ownership is to be assigned to the Group as the lessee.
Development 2013/14
land and buildings
teur
machinery and technical
equipment teur
Factory and office
equipmentteur
advance payments and constr. in progress
teurtotalteur
acquisition / production cost
Balance as of 1-10-2013 15.758 23.979 6.920 235 46.892
exchange differences 15 1 7 0 23
additions 21 489 209 27 746
Disposals 0 584 228 0 812
transfers 2 77 0 -79 0
Balance as of 30-9-2014 15.796 23.962 6.908 183 46.849
Depreciation
Balance as of 1-10-2013 3.140 20.007 5.349 156 28.652
exchange differences 4 -2 4 0 6
additions scheduled 447 1.020 490 0 1.957
additions non-scheduled 0 4 0 0 4
Disposals 0 575 207 0 782
Balance as of 30-9-2014 3.591 20.454 5.636 156 29.837
Net book value as of 30-9-2014 12.205 3.508 1.272 27 17.012
Schumag ag
80
Acquisition cost and the net book value of the leased property, plant and equipment are stated below:
Property, plant and equipment of the precision engineering division sold in December 2010 within the scope of a sale-and-
lease-back transaction, especially production machines, were repurchased in June 2015 after execution of the leasing con-
tract. They were already continued to be stated under property, plant and equipment because in this case again the beneficial
ownership is to be assigned to the Group as the lessee.
The corresponding liabilities from financing leases are explained in Note 22.
Non-scheduled depreciation is stated in the consolidated statement of income in the item of depreciation / amortization.
30-9-2015 30-9-2014
acquisition cost teur
net book valueteur
acquisition costteur
net book valueteur
machinery and technical equipment 658 70 988 353
658 70 988 353
notes to consolidated Financial Statements
81
13. inveStment property
The investment property stems from a change of use of company real property in fiscal year 2008/09. Based on
an expert opinion dated October 30, 2014 a total fair value amounting to TEUR 4,454 was determined which is
above the stated acquisition and production cost and which takes the pro rata land use in relation to the built-upon
area into account. The value of the underlying expert opinion has been determined by an officially appointed and
certified expert (HypCert) using the income approach and assuming an interest rate of 7.80 %.
The letting of the property results in rental income amounting to TEUR 1,240 (previous year TEUR 1,194) as well
as directly attributable operating expenses of TEUR 606 (previous year TEUR 566) (see also Note 28).
Development 2014/15
teur
acquisition / production cost
Balance as of 1-10-2014 4.804
Balance as of 30-9-2015 4.804
Depreciation
Balance as of 1-10-2014 692
Balance as of 30-9-2015 692
Net book value as of 30-9-2015 4.112
Development 2013/14
teur
acquisition / production cost
Balance as of 1-10-2013 4.804
Balance as of 30-9-2014 4.804
Depreciation
Balance as of 1-10-2013 692
Balance as of 30-9-2014 692
Net book value as of 30-9-2014 4.112
Schumag ag
82
14. inventorieS
An amount of TEUR 1,269 (previous year 1,229) of inventories stated in the consolidated statement of financial
position is capitalized at the net disposal value.
In the reporting period, inventories amounting to TEUR 13,990 (previous year TEUR 14,041) were expensed.
Decreases in the value of inventories increased the cost of materials in the precision engineering division by
TEUR 251 (previous year TEUR 238).
15. traDe accountS receivaBleTrade accounts receivable are as follows:
Valuation allowances developed as follows:
30-9-2015 30-9-2014
teur teur
raw materials and factory supplies 1.706 1.623
work in progress 5.199 4.501
Finished goods 3.139 2.723
10.044 8.847
2014/15 2013/14
teur teur
Balance as of 1-10 109 108
addition with effect on net income 40 0
retransfer with effect on net income 0 -10
utilization without effect on net income 0 11
Balance as of 30-9 149 109
not declined in value
neither declined nor
overdue
teur
overdue up to 30
days
teur
overdue 31 to 60
days
teur
overdue 61 to 90
days
teur
overdue 91 to 180
days
teur
overdue 181 to 360
days
teur
overdue more than 360 days
teur
30-9-2015 3.499 3.293 113 68 8 10 7 0
30-9-2014 2.038 1.956 18 8 8 48 0 0
Book value
teur
notes to consolidated Financial Statements
83
16. other Financial aSSetS
Other financial assets are neither decreased in value nor are they past due.
receivables from affiliated companies are due from Hangzhou Meibah Precision Machinery Co., LTD., Tonglu
County, Hangzhou/China.
Composition of other assets:
receivables due from the former parent company include the insolvency claim to the former parent company
Babcock Borsig AG i.I. which was scheduled to the expected value in fiscal year 2012/13 and whose settlement is
to be estimated after more than one year
Asset values from reinsurance cover do not represent qualified insurance policies in terms of IAS 19.
receivables due from the factoring company are based on receivables sold as of the balance sheet date amoun-
ting to TEUR 4,074 (previous year TEUR 6,251).
30-9-2015 30-9-2014
teurthereof short-term
teur
teurthereof short-term
teur
receivables from affiliated companies 64 64 2 2
other assets 3.230 1.655 4.268 2.446
3.294 1.719 4.270 2.448
30-9-2015 30-9-2014
teur teur
receivables due from former parent company 1.500 1.500
asset values reinsurance cover 563 592
receivables due from factoring company 487 1.517
Security deposits 332 321
pledged cash in banks 225 225
other 123 113
3.230 4.268
Schumag ag
84
Security deposits refer in particular to liabilities from leasing contracts as well as to securities in connection with
pending litigation.
Pledged cash in banks serves to secure individual bank guarantees.
Valuation allowances for other financial assets developed as follows:
17. other non-Financial aSSetS
Other non-financial assets are neither decreased in value nor are they past due.
Tax refund claims include in particular VAT refund claims.
2014/15 2013/14
teur teur
Balance as of 1-10 82 213
addition without effect on net income 0 13
utilization without effect on net income 0 -144
Balance as of 30-9 82 82
30-9-2015 30-9-2014
teurthereof short-term
teur
teurthereof short-term
teur
advances paid 2 2 1 1
accruals and deferrals 187 182 138 126
tax refund claims 54 54 39 39
243 238 178 166
notes to consolidated Financial Statements
85
18. caSh anD caSh eQuivalentS
19. ShareholDerS‘ eQuityThe shareholders‘ equity consists exclusively of the equity held by the owners of the parent company.
Subscribed capitalThe fully paid-in share capital of Schumag AG amounts to EUR 10,225,837.62 and is divided into 4,000,000 indivi-
dual share certificates. The shares are payable to bearer.
According to the resolution of the general meeting of April 30, 2015 the Board of Executive Directors is entitled
subject to the consent of the Supervisory Board to increase the share capital of the company during the period
from March 1, 2016 to April 29, 2020 by the issue of new individual share certificates payable to bearer either
against cash and/or by using amounts owed by the company as contributions in kind; this can be done either once
or several times but only by a maximum amount of EUR 2,556,459.41 (Authorized capital 2015). The option to
subscribe to new shares can be excluded, namely for fractional amounts and in case of capital increases up to a
total amount of EUR 511,291.89 using amounts owed by the company as contributions in kind.
generated shareholders‘ equityThe difference between the historical exchange rates at the time of acquisition and the rate used to translate equi-
ty of a company as of the balance sheet date is recorded separately in equity as currency translation and is shown
as affecting net income only upon the disposal of a company.
retained earnings include, apart from the effects of the changeover of the consolidated financial statements
from the German Commercial Code to IFRS as of October 1, 2004, the reassessment of the net liability from de-
fined benefit plans as well as other changes to be made under IFRS without affecting net income.
30-9-2015 30-9-2014
teur teur
cash in banks 3.088 1.981
cash on hand 11 12
3.099 1.993
Schumag ag
86
The set-off of the revaluation of the net liability from defined benefit plans and of the deferred taxes allotted to
this without affecting net income against retained earnings has developed as follows:
The group accumulated deficit includes accumulated group results as well as the withdrawal from the capital
reserve (TEUR 15,893) as well as from the statutory profit reserve (TEUR 511) made in fiscal year 2012/13.
Relevant for a dividend distribution to be decided by the shareholders’ meeting is the accumulated profits of
Schumag Aktiengesellschaft, Aachen, according to the Commercial Code.
Maßgeblich für eine durch die Gesellschafterversammlung zu beschließende Ausschüttung ist der handelsrecht-
liche Bilanzgewinn der Schumag Aktiengesellschaft, Aachen.
2014/15 2013/14
teur teur
Balance as of 1-10 -4.111 -2.105
revaluation of the net liability from defined benefit plans -500 -2.972
Deferred taxes 162 966
Change -338 -2.006
Balance as of 30-9 -4.449 -4.111
Maßgeblich für eine durch die Gesellschafterversammlung zu beschließende Ausschüttung ist der handelsrecht-
liche Bilanzgewinn der Schumag Aktiengesellschaft, Aachen.
notes to consolidated Financial Statements
87
Other comprehensive income
Capital managementThe most important aims of the capital management of Schumag AG are to secure the continued existence of the
company, to obtain a reasonable minimum interest on the capital employed, to obtain a high rating of its credit
standing and to create sufficient liquidity reserves. With consideration of all interested parties involved (sharehol-
ders, employees and other stakeholders) these aims are to be achieved in particular by a reduction of the cost of
capital, an optimization of the capital structure and the use of an effective risk management.
In the past fiscal year as well as during the period of preparation of the financial statements the capital manage-
ment furthermore concentrated on the maintenance of the required liquidity. This was in particular accomplished
by the targeted reduction of inventories as well as the further use of factoring.
In addition, we are looking for further financing options and discuss a large number of different forms of financing
which are to secure the continued need for capital.
The economic equity currently corresponds to the balance sheet equity. As of September 30, 2015 the capital ratio
increased from 16 % to 18 % in particular due to the positive result after taxes.
2014/15 attributable to the owners of the parent company
currency translationteur
retained earningsteur
totalteur
Foreign operations - foreign currency translation differences 1 0 1
profits resulting from asset ceiling 0 2 2
remeasurement of the net defined benefit liability for pension plans (after tax) 0 -338 -338
Other results after taxes 1 -336 -335
2013/14 attributable to the owners of the parent company
currency translationteur
retained earningsteur
totalteur
Foreign operations - foreign currency translation differences 12 0 12
profits resulting from asset ceiling 0 134 134
remeasurement of the net defined benefit liability for pension plans (after tax) 0 -2.006 -2.006
Other results after taxes 12 -1.872 -1.860
Schumag ag
88
20. penSion proviSionS
In addition to government pension schemes the employees of Schumag AG who joined the company before
January 1, 1994 are entitled to benefits based on the company pension benefit plan of January 1, 1994. Benefits
depend on years of service. In addition, special pension commitments exist for former and current members of the
Board of Executive Directors. Company pension commitments are financed by pension provisions. The valuation
using the projected unit credit method according to IAS 19 was carried out under the following assumptions:
Assumptions used to determine the defined benefit obligation (weighted average)
Pension commitments in Germany are determined with consideration of biometric accounting principles according
to the mortality tables ‚Richttafeln 2005 G‘ published by Prof. Dr. Klaus Heubeck. The projected increase of wages
and salaries is not reported due to the pension regulations. Sickness costs of employees are not stated.
The future pension entitlements partly compare with assets from insurance policies which - in so far as these are
classed as qualified insurance policies according to IAS 19 - are shown as pension assets (plan assets). Financing of
plan assets exists only for special covenants.
30-9-2015 30-9-2014
% %
interest rate 2,40 2,55
projected pension increase 1,75 1,75
Fluctuation 1,25 1,25
notes to consolidated Financial Statements
89
Development of the net liability from defined benefit plans
The net liability from defined benefit plans corresponds to the pension provisions stated in the consolidated
statement of financial position.
Composition of the revaluation of the net liability from defined benefit plans
Since the introduction of the direct offsetting of the revaluation of the net liability from defined benefit plans
against retained earnings according to IAS 19.93A actuarial losses in a total amount of TEUR 6,591 (previous year
TEUR 6,091) were recorded in the other comprehensive income without taking deferred taxes into consideration.
2014/15 2013/14
teur teur
present value of future pension entitlements as of 1-10 24.155 21.790
current service cost 203 68
past service cost 175 0
interest expense 598 748
revaluation of the net liability from defined benefit plans 500 2.972
pension benefits paid -1.441 -1.423
Present value of future pension entitlements as of 30-9 24.190 24.155
Fair value of plan assets as of 1-10 -1.272 -1.054
expected income from plan assets -18 -19
employer's contributions -65 -65
effects from asset ceiling -2 -134
Fair value of plan assets as of 30-9 -1.357 -1.272
Net liability from defined benefit plans 22.833 22.883
2014/15 2013/14
teur teur
losses (+) from change in financial assumptions 432 2.650
losses (+) /gains (-) based on experience-related adjustments 68 322
500 2.972
Schumag ag
90
Composition of net pension expenses
In the consolidated statement of income the net interest expenses are shown in the financial results, and the cur-
rent service cost is recorded in personnel expenses.
Pension obligations are determined on the basis of actuarial expert opinions. Risks exist with regard to the amount
of pension obligations, especially due to changes in the valuation assumptions applied such as the interest rate for
accounting purposes, the projected pension benefits and the mortality tables. The following sensitivity reflection
shows which effects potential changes in the valuation assumptions in a reasonable approach would have had at
the balance sheet date on the defined benefit obligations while being based on the same premises.
2014/15 2013/14
teur teur
current service cost -203 -68
past service cost -175 0
net interest expense -580 -729
Net pension expenses -958 -797
notes to consolidated Financial Statements
91
Sensitivity reflection
Apart from an increase in pension obligations, changes in the valuation assumptions may also lead to higher net
pension expenses and pension payments even compared to previous expectations.
30-9-2015 Defined benefit obligation change
teur teur %
Balance sheet value 24.190 – –
actuarial interest + 0,50% 22.800 -1.390 -5,7
actuarial interest - 0,50% 25.734 1.544 6,4
projected pension increase + 0,25% 24.668 478 2,0
projected pension increase - 0,25% 23.732 -458 -1,9
life expectancy + 1 year 25.219 1.029 4,3
30-9-2014 Defined benefit obligation change
teur teur %
Balance sheet value 24.155 – –
actuarial interest + 0,50% 22.760 -1.395 -5,8
actuarial interest - 0,50% 25.703 1.548 6,4
projected pension increase + 0,25% 24.753 598 2,5
projected pension increase - 0,25% 23.580 -575 -2,4
life expectancy + 1 year 25.159 1.004 4,2
Schumag ag
92
Breakdown of defined benefit obligations into groups of persons entitled to benefits
All pension commitments are non-lapsable. The weighted average term of defined benefit obligation amounts as in
previous year to 13 years.
Payments expected to be made for fiscal year 2015/16 with regard to the pension commitments granted as of
September 30, 2015 amount to TEUR 1,433. The payments are currently fully financed from the operating cash-
flow.
Plan assets are basically externally financed. In the next fiscal year the employer‘s contributions to plan assets for
existing contracts are expected to amount to TEUR 65. If the actual income from plan assets from the insurance
policies was lower than previously assumed, the net liability arising from defined benefit plans would increase. In
addition, future pension payments for special commitments would in this case have to be partly financed from the
operating cash-flow.
The issue of a comfort letter in favour of the employees transferred to SMS Meer within the disposal of the
mechanical engineering division with regard to the transferred pension claims results in contingent liabilities for
Schumag AG. We assess the probability of claims being made on the basis of the comfort letter as low due to the
current credit standing of the purchaser of the mechanical engineering division. We are not aware of any indica-
tors which would call for a different assessment.
Defined benefit obligation 30-9-2015 30-9-2014
teur % teur %
active claimants 3.370 13,9 3.003 12,4
retired claimants with rested benefits 3.208 13,3 3.048 12,6
pensioners 17.612 72,8 18.104 75,0
24.190 100,0 24.155 100,0
notes to consolidated Financial Statements
93
21. other proviSionS
Provisions for orders comprise contingent losses and warranties. Valuation is effected on the basis of empirical
values.
Provisions for legal commitments include the expected litigation costs for a lawsuit in which Schumag was sued
for the payment of fees from a terminated consultancy agreement.
Other provisions include in particular provisions for annual financial statements cost.
provisions for orders provisions for legal commitments other total
teur teur teur teur
Balance as of 30-9-2014 1.557 13 194 1.764
additions 1.528 117 136 1.781
utilization -1.557 -2 -146 -1.705
Balance as of 30-9-2015 1.528 128 184 1.840
thereof short-term 1.528 128 175 1.831
thereof long-term 0 0 9 9
Schumag ag
94
22. Financial DeBtS
Financial debts are composed as follows:
Liabilities to banks include the utilisation of a overdraft facility of Schumag Romania for an unlimited period for a
maximum of TEUR 500 at an interest rate of 1-month-Euribor plus 2.7 %. It is secured by a land charge amounting
to TEUR 650. The collateral takers are entitled to realize the existing securities after setting a reasonable time-
limit if an important reason exists for this, in particular if Schumag fails to meet its due obligations from the credit
agreements.
Liabilities from financing leases (sale-and-lease-back) resulted from the sale-and-lease-back transaction carried
out in December 2010 with regard to the sold property, plant and equipment of the precision engineering division
(see Note 12). Schumag has repurchased the sold property, plant and equipment in June 2015 after execution of
the leasing contract and is now again their legal owner. The land charge amounting to TEUR 1,000 provided as
security for liabilities from financing leases (sale-and-lease-back) was released. Minimum leasing rate according to
the short-term leasing liability of TEUR 688 amounted to TEUR 727 and the interest share accordingly to TEUR 39.
30-9-2015 30-9-2014
teur
thereofshort-term
teur
teur
thereofshort-term
teur
liabilities to banks 404 404 427 427
liabilities from finance leases (Sale-and-lease-back) 0 0 688 688
liabilities from finance leases (other) 35 35 209 174
other loans 1.000 0 1.000 1.000
1.439 439 2.324 2.289
notes to consolidated Financial Statements
95
Liabilities from financing leases (others)
Liabilities from financing leases (others) result from 2 plants (previous year 5) within the property, plant and
equipment which constitute beneficial ownership within the scope of a financing lease (see Note 12).
Other loans include a granted third-party loan for a total of TEUR 1,000 with a originally term until June 30, 2015.
It was extended until June 30, 2017. The interest on this loan is 2 % above the base rate but amounts to a mini-
mum of 5.0 % p.a. The transfer of ownership of machinery legally owned by Schumag AG serves as security. The
book value of this machinery as of September 30, 2015 amounts to TEUR 2,480 (previous year TEUR 1,630).
maturities of financial debts
The aims and methods of financial risk management are described in Note 27.
30-9-2015
less than 1 yearteur
1 to 5 years teur
totalteur
mininum leasing rate 36 0 36
interest share 1 0 1
leasing liability 35 0 35
30-9-2014
less than 1 yearteur
1 to 5 years teur
totalteur
mininum leasing rate 184 36 220
interest share 10 1 11
leasing liability 174 35 209
Schumag ag
30-9-2015 30-9-2014
teur teur
up to 1 year 439 2.289
1 to 5 years 1.000 35
1.439 2.324
96
23. traDe accountS payaBle
As in the previous year, all trade accounts payable fall due within a period of less than one year.
24. other Financial liaBilitieS
Liabilities to personnel mainly include christmas bonuses, personnel costs for early retirement arrangements,
anniversary bonuses, severance pay as well as holiday bonuses
The liabilities arising from early retirement arrangements are secured by a bank guarantee in the amount of the
statutory obligation for insolvency insurance.
As of September 30, 2015 guarantee credit lines promised with binding effect were available to Schumag AG in an
amount of TEUR 750 (previous year TEUR 1,500). The utilisation of this credit line amounted as in previous year
to TEUR 500. To secure the granted guarantee credit lines pledged bank balances amounting to TEUR 75 (previous
year TEUR 225) serve as security.
30-9-2015 30-9-2014
teur
thereofshort-term
teur
teur
thereofshort-term
teur
liabilities to personnel 3.417 3.009 2.865 2.579
liabilities within the scope of social security 44 44 61 61
other liabilities 223 223 454 454
3.684 3.276 3.380 3.094
notes to consolidated Financial Statements
97
maturities of other financial liabilities
25. other non-Financial liaBilitieS
Tax liabilities mainly refer to wage tax and value added tax for the month of September.
30-9-2015
less than 1 yearteur
1 to 5 years teur
total teur
liabilities to personnel 3.009 408 3.417
liabilities within the scope of social security 44 0 44
other liabilities 223 0 223
3.276 408 3.684
30-9-2014
less than 1 yearteur
1 to 5 years teur
total teur
liabilities to personnel 2.579 286 2.865
liabilities within the scope of social security 61 0 61
other liabilities 454 0 454
3.094 286 3.380
30-9-2015 30-9-2014
teur
thereofshort-term
teur
teur
thereofshort-term
teur
tax liabilities 427 427 398 398
427 427 398 398
Schumag ag
98
26. contingent liaBilitieS anD other Financial commitmentS
Within the scope of the collective wage agreement to secure the production site which was concluded in Septem-
ber 2013 a waiver of year-end and holiday bonus for 2 years which is subject to a condition subsequent as well as
an increase of the collectively agreed wage by 4.3 % from May 2012 which amounts to a total volume of approx.
TEUR 7,000 were agreed. We are currently unable to determine with certainty the occurrence and time of the
condition subsequent and the resulting payments which are made as a function of reaching the specified balance
sheet ratio and which may also be effected in partial amounts.
Other financial commitments are stated at the value of the agreed future payments.
The commitments from long-term rental and leasing contracts have the following maturities:
Further details on operating leasing agreements are described in Note 28.
other financial commitments 30-9-2015 30-9-2014
teur teur
commitments relating to power supplies (own use) 520 160
commitments relating to long-term rental and leasing contracts 491 609
commitments relating to gas supplies (own use) 414 30
commitments relating to maintenance and service 307 184
commitments arising from orders already placed for investments 31 205
1.763 1.188
other financial commitments 30-9-2015 30-9-2014
teur teur
less than 1 year 204 211
1 to 5 years 287 398
491 609
notes to consolidated Financial Statements
99
27. Financial inStrumentS
Book values by category
The fair value of the financial instruments approximately corresponds to the book value.
Book value30-9-2015
loans and receivables
Financial liabilities valued at amortized cost
teur teur teur
trade accounts receivable 3.499 3.499 –
other financial assets 3.294 3.294 –
cash and cash equivalents 3.099 3.099 –
Financial assets 9.892 9.892 –
Financial debts (without financing leasing) 1.404 – 1.404
Financial debts from financing leasing 35 – 35
trade accounts payable 1.812 – 1.812
other financial liabilities 3.684 – 3.684
Financial liabilities 6.935 – 6.935
Book value30-9-2014
loans and receivables
Financial liabilities valued at amortized cost
teur teur teur
trade accounts receivable 2.038 2.038 –
other financial assets 4.270 4.270 –
cash and cash equivalents 1.993 1.993 –
Financial assets 8.301 8.301 –
Financial debts (without financing leasing) 1.427 – 1.427
Financial debts from financing leasing 897 – 897
trade accounts payable 1.665 – 1.665
other financial liabilities 3.380 – 3.380
Financial liabilities 7.369 – 7.369
Schumag ag
100
Net gains and losses arising from financial instruments
The net result from the category of „Loans and receivables“ essentially includes exchange gains arising from recei-
vables in foreign currencies as well as losses from valuation allowance of receivables.
The net result of the category of „Financial liabilities valued at amortized cost“ in particular includes exchange los-
ses and gains arising from payables in foreign currencies, income from the release of liabilities as well as expenses
from the accumulation of liabilities.
Derivative financial instrumentsThe derivative financial instruments used within the Group are covering transactions used in individual cases to
control the risks arising from currency fluctuations of individual receivables.
No derivative financial instruments were shown in the consolidated statement of financial position as of the cur-
rent and the previous year‘s balance sheet date.
Financial risk management The essential financial liabilities used by the Group - except for derivative financial instruments - include financial
debts, trade accounts payable and other financial liabilities. The main purpose of these financial liabilities is the
financing of the business activities of the Group. The Group disposes of trade accounts receivable and other finan-
cial assets as well as means of payment directly resulting from its business activity.
The Group is exposed to currency, default and liquidity risks. It is up to the Group management to control these
risks. Within the scope of corporate planning the management is permanently informed about potential and actual
financial risks.
Foreign currency risks: Changes in foreign exchange rates can lead to a decline in the value of financial instru-
ments. Foreign currency risks are especially prevalent in accounts payable and receivable that are not denomina-
ted in the local currency of the Schumag companies, or for future foreign currency transactions. To hedge exchange
rate risks, foreign exchange forward contracts are used in individual cases. Commodities futures and financial
derivatives are not used.
2014/15 2013/14
teur teur
loans and receivables 56 103
Financial liabilities valued at amortized cost -67 -106
-11 -3
notes to consolidated Financial Statements
101
Default risks: Default risks exist if the contracting parties fail to fulfil their contractual obligations. The book
value of all financial assets represents the maximum default risk of Schumag. Due to the global activities and the
diversified customer structure of Schumag as well as the use of real factoring there is no significant concentration
of default risk.
Liquidity risks: The solvency of the Schumag Group as well as its liquidity supply are monitored by a continuously
adjusted liquidity planning scheme.
Schumag ag
102
28. leaSing
Financing lease - Schumag as a lesseeIn this respect we refer to Note 22.
Financing lease - Schumag as a lessorSchumag does not appear as a lessor within the scope of financing leases.
Operating lease - Schumag as a lesseeOperating leases in which Schumag is the lessee only include the leasing of motor vehicles and usually run for
a fixed term of 36 months. In addition, a unit-type cogeneration station is leased from August 2014. The lease
contract includes a purchase option for the unit-type cogeneration station after expiry of the contract term of
48 months.
The obligations resulting from non-cancellable operating leases are due and payable as follows:
In the income from operations of fiscal year 2014/15 minimum leasing payments amounting to TEUR 169 (previ-
ous year TEUR 182) were recorded as expense.
Operating lease - Schumag as a lessorWithin the scope of operating leases Schumag essentially lets the investment property. Schumag AG received an
advance rent payment for the first five years of the rental agreement from SMS group amounting to TEUR 2,500
which is deferred on a straight-line basis for a period of 5 years as from December 1, 2008. The fixed rental period
amounts to a total of 10 years.
30-9-2015
less than 1 year teur
1 to 5 years teur
totalteur
nominal value of minimum leasing payments 160 274 434
30-9-2014
less than 1 year teur
1 to 5 years teur
totalteur
nominal value of minimum leasing payments 161 379 540
notes to consolidated Financial Statements
103
The future minimum leasing payments arising from non-cancellable operating leases fall due as follows:
30-9-2015
less than 1 yearteur
1 to 5 years teur
more than 5 years teur
totalteur
nominal value of minimum leasing payments 628 1.361 0 1.989
30.9.2014
less than 1 yearteur
1 to 5 years teur
more than 5 years teur
totalteur
nominal value of minimum leasing payments 628 1.989 0 2.617
Schumag ag
104
29. relateD partieS
Related parties of Schumag AG (not including members of executive bodies of the indicated companies as well as
further companies associated with these) for the periods under review are stated below:
As far as the shareholders are concerned reference is made to the information on voting rights held which is
provided in Note 32.
The board members are listed in Note 30.
Shareholders
meibah international gmbh (as from 23-6-2014)
miaocheng guo (as from 23-6-2014)
enprovalve p. Koschel unternehmensberatung ltd. (Birmingham/gB)
peter Koschel
norbert thelen
Board members (= members of the management in key positions)
Supervisory Board Schumag ag
Board of executive Directors Schumag ag
other
hangzhou meibah precision machinery co., ltd. (as of 23-6-2014)
enprovalve p. Koschel unternehmensberatung ltd. (Düsseldorf)
notes to consolidated Financial Statements
105
Transactions with related parties
Information on the remuneration of the board members is provided in the compensation report within the group
management report.
2014/15
Business relationsShareholders
teurBoard members
teurothersteur
remuneration of board members 0 686 0
accounts receivable 40 0 0
outstanding liabilities 2 3 0
2013/14
Business relationsShareholders
teurBoard members
teurothersteur
remuneration of board members 0 653 0
accounts receivable 19 0 0
outstanding liabilities 2 106 0
Schumag ag
106
30. remuneration oF the BoarD oF executive DirectorS anD the SuperviSory BoarD
Pension commitments to members of the Board of Executive Directors as of September 30, 2015 amount to
TEUR 574 (previous year TEUR 266). In return for the increase of his pension commitments Dr. Ohlinger waived
personal claims to Schumag AG.
Payments to former members of the Board of Executive Directors or their survivors amounted to TEUR 707 (previ-
ous year TEUR 681).
For pension commitments to former members of the Board of Executive Directors and their survivors an amount
of TEUR 10,544 (previous year TEUR 10,501) has been set aside.
In other respects reference is made to the compensation report within the management report of Schumag AG.
The members of the Supervisory Board and of the Board of Executive Directors of Schumag AG and their member-
ships in supervisory boards and other control panels are listed below:
Supervisory Boardralf marbaise, Aachen
Chairman
Chairman of the Works Council of Schumag Aktiengesellschaft, Aachen
no further memberships
hans-georg Kierdorf, Edinburgh/Great Britain (until January 29, 2015)
Deputy Chairman (until January 29, 2015)
Management Consultant
Further memberships
Kierdorf Immobilien- und Vermögensverwaltungs-GmbH, Cologne
(member of the Advisory Board)
2014/15 2013/14
teur teur
remuneration of the Board of Executive Directors 634 594
thereof fixed remuneration 540 540
thereof variable remuneration 94 54
remuneration of the Supervisory Board 52 59
thereof fixed remuneration 48 54
thereof out-of-pocket expenses 4 5
notes to consolidated Financial Statements
107
Ekkehard Brzoska, Mülheim/Ruhr
Self-employed merchant
no further memberships
miaocheng guo, Tonglu, province of Zhejiang, People‘s Republic of China (since February 7, 2015)
Managing director of Hangzhou Meibah Precision Machinery Co., Ltd.,
and of Hangzhou Maximum Real Estate Co., Ltd.,
both based in Tonglu, province of Zhejiang, People‘s Republic of China
no further memberships
yun guo, Tonglu, province of Zhejiang, People‘s Republic of China (since April 30, 2015)
Sales manager of Hangzhou Meibah Precision Machinery Co., Ltd., Tonglu, province of Zhejiang, People‘s Republic
of China and Managing director of Meibah International GmbH, Munich
no further memberships
martin Kienböck, Ratingen (until December 4, 2014)
Pensioner (former managing director of Balcke-Dürr GmbH, Ratingen)
no further memberships
Peter Koschel, Berlin
General Manager Enprovalve P. Koschel Unternehmensberatung Ltd.,
Birmingham/Great Britain
no further memberships
Jürgen milion, Alsdorf
Production Manager of Schumag Aktiengesellschaft, Aachen
no further memberships
Board of Executive DirectorsDr. Johannes Ohlinger, Zweibrücken/Pfalz
Graduate Economist
Memberships
Herz Jesu Missionare, Homburg/Saar (Member of the Board of Trustees of the Foundation)
Schumag ag
108
31. ServiceS oF the auDitor
The following fees for the audit services carried out and/or still to be carried out by KPMG AG Wirtschaftsprü-
fungsgesellschaft, Düsseldorf, were recorded as expense in the consolidated statement of income.
32. DetailS oF exiSting ShareholDingSEuro-IB Ltd., London, United Kingdom, informed our company according to § 21 (1) of the German Securities
Trading Act that its share in the voting rights of Schumag Aktiengesellschaft, Nerscheider Weg 170, 52076 Aachen,
Germany, on October 1, 2011 fell below the thresholds of 3 %, 5 %, 10 % and 15 % and amounted to 1.95 % (78,003
voting rights) on this date.
Mr. Alexander von Ungern-Sternberg, United Kingdom, informed our company according to § 21 (1) of the German
Securities Trading Act that his share in the voting rights of Schumag Aktiengesellschaft, Nerscheider Weg 170,
52076 Aachen, Germany, on October 1, 2011 fell below the thresholds of 3 %, 5 %, 10 % and 15 % and amounted
to 1.95 % on this date (78,003 voting rights) and that thereof 1.95 % (78,003 voting rights) are to be attributed to
him according to § 22 (1), sentence 1, No. 1 of the German Securities Trading Act.
Mr. Norbert Thelen, Germany, informed our company according to § 21 (1), sentence 1 of the German Securities
Trading Act that his share in the voting rights of Schumag Aktiengesellschaft, Nerscheider Weg 170, 52076
Aachen, Germany, on October 1, 2011 fell below the thresholds of 10 % and 15 % and that it amounts to 8.34 %
(333,526 voting rights) on this date.
Enprovalve P. Koschel Unternehmensberatung Ltd., Birmingham, United Kingdom, informed our company according
to § 21 (1) of the German Securities Trading Act that its share in the voting rights of Schumag AG, Nerscheider
Weg 170, 52076 Aachen, Germany, on June 21, 2013 fell below the thresholds of 30 % and 50 % of the voting
rights and amounted to 27.3 % (1,091,905 voting rights) on this date.
2014/15 2013/14
teur teur
audit services 110 112
other services 38 51
148 163
notes to consolidated Financial Statements
109
Mr. Peter Koschel, Germany, informed our company according to § 21 (1) of the German Securities Trading Act that
his share in the voting rights of Schumag Aktiengesellschaft, Nerscheider Weg 170, 52076 Aachen, Germany, on
June 21, 2013 fell below the thresholds of 30 % and 50 % of the voting rights and amounted to 27.3 % (1,091,905
voting rights) on this date and that thereof 27.3 % (1,091,905 voting rights) are to be attributed to him according
to § 22 (1), sentence 1, No. 1 of the German Securities Trading Act and that voting rights are attributed to him from
the following controlled company whose share in the voting rights of Schumag Aktiengesellschaft amounts to 3 %
or more:
Enprovalve P. Koschel Unternehmensberatung Ltd., Birmingham, United Kingdom.
Meibah International GmbH (formerly Blitz 14-69 GmbH), Munich, Germany, informed our company according to
§ 21 (1), sentence 1 of the German Securities Trading Act that its share in the voting rights of Schumag Aktienge-
sellschaft, Nerscheider Weg 170, 52076 Aachen, Germany, on June 23, 2014 exceeded the thresholds of 3 %, 5 %,
10 %, 15 %, 20 %, 25 %, 30 % and 50 % and amounted to 52.15 % (2,085,807 voting rights) on this date.
Mr. Miaocheng Guo, China, informed our company according to § 21 (1), sentence 1 of the German Securities Tra-
ding Act that his share in the voting rights of Schumag Aktiengesellschaft, Nerscheider Weg 170, 52076 Aachen,
Germany on June 23, 2014 exceeded the thresholds of 3 %, 5 %, 10 %, 15 %, 20 %, 25 %, 30 % and 50 % and amoun-
ted to 52.15 % (2,085,807 voting rights) on this date and that thereof 52.15 % (2,085,807 voting rights) are to
be attributed to him according to § 22 (1), sentence 1, No. 1 of the German Securities Trading Act and that voting
rights are attributed to him from the following controlled company whose share in the voting rights of Schumag
Aktiengesellschaft amounts to 3 % or more:
Meibah International GmbH, Munich, Germany.
According to the currently available information on voting rights the following parties are currently holding shares
in Schumag AG:
meibah international gmbh: 52,15 %
enprovalve p. Koschel unternehmensberatung ltd.: 27,30 %
norbert thelen (trustee workforce): 8,34 %
euro iB: 1,95 %
owned by diverse shareholders: 10,26 %
According to the announcement of Meibah International GmbH in the Federal Gazette of September 9, 2014 this
company obtained another 2.43 % of the voting rights of Schumag Aktiengesellschaft within the scope of the
public voluntary takeover bid so that its share in the voting rights now amounts to about 54.58 %. The amount of
shares owned by diverse shareholders therefore decreases to 7.83 %.
Schumag ag
110
33. liSt oF ShareholDingS
34. Declaration accorDing to § 161 oF the german StocK corporation act
In January 2015 the Board of Executive Directors and the Supervisory Board of Schumag AG issued the current
Declaration of Compliance concerning the German Corporate Governance Code according to § 161 of the German
Stock Corporation Act and made it permanently available to the public on the Internet at www.schumag.de.
35. aDDitional inFormation to the conSoliDateD Statement oF caSh FlowS
In fiscal year 2013/14 non-cash investment activities amounting to TEUR 278 were carried out within the scope of
fixed asset additions from financing leasing.
Incoming and outgoing payments for interest as well as for income taxes are to be allocated to the cash flow from
current operations.
Further details on the consolidated statement of cash flows are included in the section on the financial situation in
the Group Management Report.
36. SuBSeQuent eventS
In October 2015 a new collective wage agreement to secure the production site („Standortsicherungstarifvertrag“)
with a retroactive term from October 1, 2015 until September 30, 2019 was concluded. Apart from the continuation
of the 37.5-hour week without wage adjustment the agreement also included the continued waiver of the increase
in pay rates of 4.3 % from May 2012. Just like the waiver of the year-end and holiday bonus for 2 years, this is a
waiver subject to a condition subsequent.
In other respects there were no events of particular significance after the balance sheet date.
Aachen, December 30, 2015
Schumag Aktiengesellschaft
The Board of Executive Directors
Dr. Johannes Ohlinger
company and registered office Share Schumag ag nominal capital Shareholders´ equity1) net income after tax1)
Br energy gmbh, aachen 100% teur 100 teur 02) teur -207
Schumag romania S.r.l.,timisoara, chisoda/romania 100% tron 9.560 teur 1.4643) teur 1403)
1)acc. to the respective national law 2)deficit not covered by shareholders‘ equity: teur 3.777 3)Balance sheet date 31-12-2014
notes to consolidated Financial Statements
We have audited the consolidated financial statements prepared by Schumag Aktiengesellschaft, Aachen, comprising
the consolidated statement of financial position, consolidated statement of income, consolidated statement of com-
prehensive income, consolidated statement of changes in equity, consolidated statement of cash-flows and the notes
to the consolidated financial statements, as well as the group management report for the fiscal year from October 1,
2014 to September 30, 2015. The preparation of the consolidated financial statements and the group management
report in accordance with IFRSs as adopted by the EU, and the additional requirements of German commercial
law pursuant to Section 315a (1) of the German Commercial Code [HGB] are the responsibility of the company‘s
management. Our responsibility is to express an opinion on the consolidated financial statements and on the group
management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with Section 317 HGB and German
generally accepted standards for the audit of financial statements promulgated by the German Institute of Public
Auditors [IDW]. Those standards require that we plan and perform the audit such that misstatements materially
affecting the presentation of the net assets, financial position and results of operations in the consolidated financial
statements in accordance with the applicable financial reporting framework 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 expectations as to possible misstatements are taken into account in the determination of audit
procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the
disclosures in the consolidated financial statements and the group management report are examined primarily on
a test basis within the framework of the audit. The audit also includes assessing the annual financial statements of
those entities included in consolidation, the determination of entities to be included in consolidation, the accounting
and consolidation principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements and group management report. We believe that our audit provi-
des a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with the IFRSs as ad-
opted by the EU, the additional requirements of German commercial law pursuant to Section 315a (1) HGB and give
a true and fair view of the net assets, financial position and results of operations of the group in accordance with
these requirements. The group management report is consistent with the consolidated financial statements and as
a whole provides a suitable view of the group‘s position and suitably presents the opportunities and risks of future
development.
Düsseldorf, January 12, 2016
KPMG AG
Wirtschaftsprüfungsgesellschaft
Kamping Schwarz
Wirtschaftsprüfer Wirtschaftsprüfer
[German Public Auditor] [German Public Auditor]
111Schumag ag
inDepenDent auDitorS’ report
Konzernlagebericht Konzernlagebericht
To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated financial
statements give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group,
and the Group management report includes a fair review of the development and performance of the business and
the position of the Group, together with a description of the principal opportunities and risks associated with the
expected development of the Group.
Aachen, December 30, 2015
Schumag Aktiengesellschaft
The Board of Executive Directors
Dr. Johannes Ohlin
Konzernlagebericht Konzernlagebericht Konzernlagebericht 112112 responsibility statement
reSponSiBility Statement
PrECISION ENgINEErINg
Automotive subsupplied parts high-precision components for
modern diesel injection systems, components for passenger cars, trucks and stationa-ry motors (e.g. pump-jet or common rail systems)
air mixing and petrol injection systems
Servo-steering and servo-brakes
automatic transmission
hydraulic high-pressure pumps
pressure reducing valves for hydraulic systems
variable cam control
electric motor shafts (fuel pumps, air-conditioning systems, servomotors, etc.)
Precision measuring and indicating instruments components for electricity, gas and water meters, etc.
household appliances precision axes for a wide range of household appliances
medical technologycomponents for medical and optical devices (e.g. microscopes, optical measuring devices, medication)
Precision standard parts for plastic injection moulding and diecasting
ejector pins and ejector sleeves
Sprue bushings and sprue puller bushings
guide bolts and guide bushes
centering units
parts for hotrunner systems
Drawing-compliant precison parts in small batches
hydraulic pistons and pressure relief valves
Shafts, axes and core pins for mechanical engineering
pistons, valve inserts and valve rods for hydraulic systems
Special parts made to drawings
Editor
SCHUMAG Aktiengesellschaft
Nerscheider Weg 170
D-52076 Aachen
Conception/Designs
[email protected] I Würselen
Photo
Carl Brunn I Aachen
Druckerei Ralf Küster I Aachen
113Schumag ag
excerpt From the range oF proDuctS
SChumAg Aktiengesellschaft
P.O.B. 52 02 64 I D-52086 Aachen
Nerscheider Weg 170 I D-52076 Aachen
Telephone Switchboard +49 24 08 12-0
Fax Switchboard +49 24 08 12-218
Managing Board +49 24 08 12-211
Precision Parts +49 24 08 12-277
Standard Parts +49 24 08 12-285
E-mail Precision Parts [email protected]
Standard Parts [email protected]
Internet www.schumag.de
Schumag romania S.r.L.
Loc. Chisoda DN 59 Km 8 + 550 m stânga
307221 Chisoda / Timis
Romania
Telephone +40 2 56 27 39-66
Fax +40 2 56 27 39-62
E-mail [email protected]