offering memorandum - nordex · offering memorandum oberhausen, germany global offering of up to...

206
OFFERING MEMORANDUM Oberhausen, Germany Global Offering of up to 36,000,000 Ordinary Bearer Shares without par value of Nordex AG Nordex Aktiengesellschaft, a stock corporation organized under the laws of the Federal Republic of Germany (‘‘Nordex AG’’, ‘‘Nordex’’ or the ‘‘Company’’), and its existing shareholders are offering an aggregate of 31,300,000 of Nordex’s ordinary bearer shares without par value having a calculated nominal value (rechnerischer Nennbetrag) of E1.00 per share (the ‘‘Offered Shares’’) (up to 36,000,000 Offered Shares if the over-allotment option referred to below is exercised in full). The Offered Shares are being offered in a public offering in Germany, in private placements outside Germany and the United States to non-U.S. persons in reliance on Regulation S under the United States Securities Act of 1933, as amended (the ‘‘Securities Act’’), and in the United States in reliance on Rule 144A under the Securities Act (‘‘Rule 144A’’) to ‘‘qualified institutional buyers’’ only (as defined in such rule) (the ‘‘Offering’’). Prior to the Offering, there has been no public market for the Offered Shares. The Offered Shares have been admitted to the regulated market (Geregelter Markt), for trading on the Neuer Markt segment, of the Frankfurt Stock Exchange. The Offer Price is E9 per Offered Share. INVESTING IN THE OFFERED SHARES INVOLVES RISKS. SEE ‘‘RISK FACTORS’’ BEGINNING ON PAGE 18. Offer Price E9 Nordex’s existing shareholders, Borsig Energy GmbH and Nordvest A/S (the ‘‘Selling Shareholders’’), have granted Dresdner Kleinwort Wasserstein an option, exercisable for the account of the Managers for 30 days after the commencement of trading of the Offered Shares on the Neuer Markt, to purchase up to 4,700,000 additional Offered Shares at the Offer Price, solely to cover over-allotments, if any (the ‘‘Over-allotment Option’’). The Offered Shares have not been and will not be registered under the Securities Act and are being offered and sold outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act (‘‘Regulation S’’) and in the United States only to ‘‘qualified institutional buyers’’ in reliance on Rule 144A. Prospective purchasers are hereby notified that the seller of the Shares may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. The Offered Shares are not transferable except in accordance with the restrictions described under ‘‘Notice to Investors’’. The Offered Shares are offered severally by the Managers (as defined in ‘‘Underwriting and Sale’’) subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that the delivery of the Offered Shares will be made on or about April 4, 2001 in book-entry form through the facilities of Clearstream Banking AG. JOINT LEAD MANAGERS Dresdner Kleinwort Wasserstein Sole Bookrunner WestLB Panmure Co-Managers BHF-BANK COMMERZBANK SECURITIES HypoVereinsbank The date of this Offering Memorandum is March 30, 2001

Upload: trandiep

Post on 19-Jul-2018

229 views

Category:

Documents


0 download

TRANSCRIPT

OFFERING MEMORANDUM

Oberhausen, Germany

Global Offering of up to 36,000,000 Ordinary Bearer Shareswithout par value of Nordex AG

Nordex Aktiengesellschaft, a stock corporation organized under the laws of the Federal Republic of Germany (‘‘NordexAG’’, ‘‘Nordex’’ or the ‘‘Company’’), and its existing shareholders are offering an aggregate of 31,300,000 of Nordex’sordinary bearer shares without par value having a calculated nominal value (rechnerischer Nennbetrag) of E1.00 pershare (the ‘‘Offered Shares’’) (up to 36,000,000 Offered Shares if the over-allotment option referred to below is exercisedin full). The Offered Shares are being offered in a public offering in Germany, in private placements outside Germanyand the United States to non-U.S. persons in reliance on Regulation S under the United States Securities Act of 1933, asamended (the ‘‘Securities Act’’), and in the United States in reliance on Rule 144A under the Securities Act (‘‘Rule 144A’’)to ‘‘qualified institutional buyers’’ only (as defined in such rule) (the ‘‘Offering’’).

Prior to the Offering, there has been no public market for the Offered Shares. The Offered Shares have been admitted tothe regulated market (Geregelter Markt), for trading on the Neuer Markt segment, of the Frankfurt Stock Exchange. TheOffer Price is E9 per Offered Share.

INVESTING IN THE OFFERED SHARES INVOLVES RISKS. SEE ‘‘RISK FACTORS’’ BEGINNING ON PAGE 18.

Offer Price E9

Nordex’s existing shareholders, Borsig Energy GmbH and Nordvest A/S (the ‘‘Selling Shareholders’’), have grantedDresdner Kleinwort Wasserstein an option, exercisable for the account of the Managers for 30 days after thecommencement of trading of the Offered Shares on the Neuer Markt, to purchase up to 4,700,000 additional OfferedShares at the Offer Price, solely to cover over-allotments, if any (the ‘‘Over-allotment Option’’).

The Offered Shares have not been and will not be registered under the Securities Act and are being offered andsold outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act(‘‘Regulation S’’) and in the United States only to ‘‘qualified institutional buyers’’ in reliance on Rule 144A.Prospective purchasers are hereby notified that the seller of the Shares may be relying on the exemption from theprovisions of Section 5 of the Securities Act provided by Rule 144A. The Offered Shares are not transferableexcept in accordance with the restrictions described under ‘‘Notice to Investors’’.

The Offered Shares are offered severally by the Managers (as defined in ‘‘Underwriting and Sale’’) subject to receipt andacceptance by them and subject to their right to reject any order in whole or in part. It is expected that the delivery ofthe Offered Shares will be made on or about April 4, 2001 in book-entry form through the facilities of ClearstreamBanking AG.

JOINT LEAD MANAGERS

Dresdner Kleinwort WassersteinSole Bookrunner

WestLB Panmure

Co-Managers

BHF-BANK COMMERZBANKSECURITIES

HypoVereinsbank

The date of this Offering Memorandum is March 30, 2001

This Offering Memorandum (the ‘‘Offering Memorandum’’) is for use exclusively in connection with theoffer and sale of the Offered Shares to investors outside the Federal Republic of Germany.

In connection with the Offering, no dealer, salesman or any other person has been authorized to giveany information, or to make any representation, other than those contained in this OfferingMemorandum, and, if given or made, such information or representation must not be relied upon ashaving been authorized by Nordex or any Manager. Neither the delivery of this Offering Memorandumat any time nor any sale made hereunder shall, under any circumstances, create any implication thatthere has been no change in the affairs of Nordex since the date hereof or that the information setforth herein is correct as of any date subsequent to the date hereof. No representation or warranty,express or implied, is made by the Managers as to the accuracy or completeness of the informationcontained herein. In making an investment decision, prospective investors must rely on their ownexamination of Nordex and the terms of the Offering, including the merits and risks involved. Anyreproduction or distribution of this Offering Memorandum, in whole or in part, and any disclosure of itscontents or use of any information herein for any purpose, other than considering an investment in theOffered Shares offered hereby, is prohibited. Each offeree of the Offered Shares, by accepting deliveryof this Offering Memorandum, agrees to the foregoing.

This Offering Memorandum does not constitute an offer to sell or a solicitation of an offer to buy, norshall there be any sale of, any Offered Shares to any person in any circumstances or in any jurisdictionin which it is unlawful to make such an offer, solicitation or sale. For a description of certain furtherrestrictions on the offer and sale of the Offered Shares (see ‘‘The Offering — General Information’’). Inaddition, for a description of the transfer restrictions imposed, and the representations andacknowledgments that each person acquiring Shares will be deemed to make, with respect to thedelivery of Offered Shares to investors in the Offering and in subsequent resales or other transfers, see‘‘Notice to Investors’’. Investors should be aware that they may be required to bear the financial risks ofthis investment for an indefinite period of time.

THE OFFERED SHARES OFFERED IN THE OFFERING HAVE NOT BEEN RECOMMENDED BY OR APPROVEDBY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER FEDERAL OR STATESECURITIES COMMISSION OR REGULATORY AUTHORITY OF OR IN THE UNITED STATES, NOR HAS ANYSUCH AUTHORITY REVIEWED OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFERINGMEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE UNDER THE LAWSOF THE UNITED STATES.

No action has been or will be taken to permit a public offering in any jurisdiction other than Germany,where action would be required for that purpose. This Offering Memorandum may not be distributed inany jurisdiction except in accordance with the legal requirements applicable in such jurisdiction.

This Offering Memorandum has not been approved as an investment advertisement pursuant tosection 57 of the Financial Services Act 1986 and may not be issued or passed on in the UnitedKingdom except to a person who is of a kind described in Article 11(3) of the Financial Services Act(Investment Advertisements) (Exemptions) Order 1996.

Notice to New Hampshire ResidentsNeither the fact that a registration statement or an application for a license has been filed under thischapter with the state of New Hampshire nor the fact that a security is effectively registered or aperson is licensed in the state of New Hampshire constitutes a finding by the secretary of state thatany document filed under RSA 421-B is true, complete and not misleading. Neither any such fact northe fact that an exemption is available for a security or a transaction means that the secretary of statehas passed in any way upon the merits or qualifications of or recommended or given approval to anyperson, security or transaction. It is unlawful to make, or cause to be made, to any prospectivepurchaser, customer or client any representation inconsistent with the provisions of this paragraph.

S-2

Forward-looking InformationThis Offering Memorandum includes ‘‘forward-looking statements’’ within the meaning of Section 27A ofthe Securities Act and Section 21E of the Exchange Act. All statements other than statements of historicalfacts included in this Offering Memorandum, including, without limitation, those regarding the Company’sfinancial position, business strategy, plans and objectives of management for future operations (includingdevelopment plans and objectives relating to the Company’s products), are forward-looking statements.Such forward-looking statements involve known and unknown risks, uncertainties and other factors whichmay cause the actual results, performance or achievements of the Company or industry results to bematerially different from any future results, performance or achievements expressed or implied by suchforward-looking statements. Such forward-looking statements are based on numerous assumptionsregarding the Company’s present and future business strategies and the environment in which theCompany will operate in the future. Among the important factors that could cause the Company’s actualresults, performance or achievements to differ materially from those in the forward-looking statementsinclude, among others, ‘‘Reorganization of the Nordex Group’’, ‘‘Organizational Structure, Accounting,Management of Growth’’, ‘‘Dependence on Outside Suppliers’’, ‘‘Establishment of In-house Production ofRotor Blades’’ and ‘‘Dependence on a Key Product’’, in conjunction with ‘‘Governmental Regulation’’.Additional factors that could cause actual results, performance or achievements to differ materiallyinclude, but are not limited to, those discussed under ‘‘Risk Factors’’. These forward-looking statementsspeak only as of the date of this Offering Memorandum. The Company expressly disclaims any obligation orundertaking to release publicly any updates or revisions to any forward-looking statement containedherein to reflect any change in the Company’s expectations with regard thereto or any change in events,conditions or circumstances on which any such statement is based.

Presentation of Financial InformationThe Pro Forma Consolidated Financial Statements for the fiscal years ended September 30, 1998, 1999and 2000 (the ‘‘IAS Pro Forma Consolidated Financial Statements’’) and the Pro Forma ConsolidatedInterim Financial Statements as of December 31, 2000 (the ‘‘IAS Pro Forma Consolidated InterimFinancial Statements’’), contained in the Offering Memorandum have been prepared in accordance withthe accounting principles set forth in the International Accounting Standards (‘‘IAS’’) issued by theInternational Accounting Standards Committee. IAS differs in certain significant respects fromgenerally accepted accounting principles in the United States (‘‘US GAAP’’) and from the accountingprinciples specified by the German Commercial Code (Handelsgesetzbuch) (‘‘HGB’’). Certain differencesamong IAS and US GAAP and HGB are discussed herein under ‘‘Summary of Certain Differences AmongGerman (HGB), United States (US GAAP) and International (IAS) Accounting Principles’’.

The comparative figures for the first quarter of fiscal year 1999/2000, contained in the IAS Pro FormaConsolidated Interim Financial Statements and also included in the Offering Memorandum under‘‘Financial Information’’, are based solely upon the Company’s internal statistical records, which havebeen provided because the Company’s information technology system was converted to SAP R3 duringthe first quarter of fiscal year 1999/2000. It is also possible that, for the same reason, the Company willnot present complete IAS previous year comparative figures in its quarterly report for the period fromJanuary 1, 2001 to March 31, 2001.

In this Offering Memoradum, references to ‘‘DM’’ or Deutsche Mark are to the legal currency of theFederal Republic of Germany; references to ‘‘$’’ or ‘‘U.S. dollar’’ are to the legal currency of the UnitedStates; references to ‘‘ESP’’ are to pesetas, the legal currency of Spain; references to ‘‘FRF’’ are to francs,the legal currency of France; references to ‘‘GRD’’ are to drachmas, the legal currency of Greece; andreferences to ‘‘euro’’, ‘‘E’’ or ‘‘EUR’’ are to the legal currency of the member states of the EuropeanUnion participating in the Economic and Monetary Union. The legally fixed conversion rate ofE1.00=DM 1.95583 was fixed on December 31, 1998.

Exchange Rate InformationOn January 1, 1999, the euro became the common currency of the eleven member states of theEuropean Union’s Economic and Monetary Union, which includes Germany. In these countries, the

S-3

national currency (in Germany, the Deutsche Mark) will remain legal tender until January 1, 2002. FromJanuary 1, 2002 through June 30, 2002, both the euro and the respective national currencies will belegal tender. After June 30, 2002, the euro will be the sole legal tender in these countries. FromJanuary 1, 1999, the relative value of the Deutsche Mark to the euro has been fixed at DM 1.95583 pereuro. This rate will remain unchanged for as long as the Deutsche Mark continues to be legal tender inGermany. Thus, the developments of the euro and Deutsche Mark exchange rates will be in absoluteparallel from January 1, 1999.

The euro is a fully convertible currency. Except in limited embargo circumstances, there are no legalrestrictions in Germany on international capital movements and foreign exchange transactions. Intheory, the euro has freely floating exchange rates against currencies outside the euro zone, althoughcentral banks sometimes try to limit short-term exchange rate fluctuations by intervening in foreignexchange markets. Prices quoted for the Offered Shares on the Neuer Markt segment of the FrankfurtStock Exchange are, and are expected to continue to be, quoted in euro.

Solely for convenience purposes, the table below sets forth, for the periods and dates indicated, certaininformation concerning the noon buying rates in the City of New York for cable transfers as certifiedfor customs purposes by the Federal Reserve Bank of New York (the ‘‘Noon Buying Rate’’) for the euroexpressed in U.S. dollars per E1.00:

Noon Buying Rates for euro per U.S. dollar

High Low Period Average(1) Period End

1999 1.1812 1.0023 1.0588 1.0072

2000 1.0335 0.8270 0.9207 0.9388

2001 (through March 30, 2001) 0.9535 0.8794 0.9260 0.8794

(1) The average of the Noon Buying Rates on the last business day of each full month during the relevant period.

Notice to InvestorsBecause of the following restrictions, purchasers in the United States are advised to consult legalcounsel prior to making any offer, resale, pledge or transfer of Offered Shares. Terms used in thissection that are defined in Rule 144A or in Regulation S are used herein as defined therein.

The Offered Shares have not been, and will not be, registered under the Securities Act or under thesecurities or ‘‘blue sky’’ laws of any State of the United States and may not be offered, sold or delivered,directly or indirectly, in the United States except pursuant to an effective registration statement or inaccordance with an applicable exemption from the registration requirements of the Securities Act andin accordance with any applicable securities or ‘‘blue sky’’ laws of any State. Accordingly, the OfferedShares are being offered and sold (i) in the United States only to ‘‘qualified institutional buyers’’ withinthe meaning of Rule 144A (each, a ‘‘QIB’’) and (ii) outside the United States to non-U.S. personspursuant to Regulation S. For the purposes hereof, the term ‘‘United States’’ shall have the meaninggiven by Regulation S.

Each purchaser of Offered Shares within the United States pursuant to Rule 144A, whether in theOffering or thereafter, by accepting delivery of this Offering Memorandum, will be deemed to haverepresented, agreed and acknowledged that:

(1) It is a QIB within the meaning of Rule 144A and is acquiring such Offered Shares for its ownaccount or for the account of a QIB; it is aware, and each beneficial owner of such Offered Shareshas been advised, that the sale of such Offered Shares to it is being made in reliance on Rule 144A,and it is aware that such Offered Shares are restricted securities under the Securities Act and maynot be deposited into any unrestricted depositary facility, unless at the time of such deposit suchOffered Shares are no longer restricted securities.

(2) It understands that the Offered Shares have not been and will not be registered under the Securities Actand agrees that if it should sell or transfer Offered Shares it will do so only in compliance with theSecurities Act and only (A)(i) pursuant to Rule 144A to an institutional investor that the sellerreasonably believes is a QIB within the meaning of Rule 144A purchasing for its own account or for the

S-4

account of a QIB, whom the seller has informed, in each case, that the resale or transfer is being made inreliance on Rule 144A; (ii) in an offshore transaction in compliance with Rule 903 or Rule 904 ofRegulation S; (iii) pursuant to an exemption from the registration requirements of the Securities Actprovided by Rule 144 thereunder (if available), subject, in each such case, to the receipt by Nordex of anopinion of counsel or such other evidence that it may reasonably require that such sale or transfer is incompliance with the Securities Act; or (iv) pursuant to an effective registration statement under theSecurities Act and (B) in accordance with all applicable securities laws of the States of the United States.No representation can be made as to the availability of the exemption provided by Rule 144 under theSecurities Act for the resale of Offered Shares.

(3) If it is acquiring Offered Shares for the account of one or more QIBs, it represents that it has soleinvestment discretion with respect to each such account and that it has full power to make theforegoing acknowledgments, representations and agreements on behalf of each such account.

(4) It acknowledges that Nordex, the Managers, the Selling Shareholders, their affiliates and others willrely upon the truth and accuracy of the foregoing acknowledgments, representations andagreements.

Prospective investors are not to construe the contents of this Offering Memorandum as legal, businessor tax advice. Each prospective investor should consult its own legal advisor, business advisor and taxadvisor as to legal, business and tax related matters concerning the transaction.

In making an investment decision, investors must rely on their own examination of Nordex and theterms of the Offering, including the merits and risks involved. The Offered Shares have not beenrecommended by any federal or state securities commission or other regulatory authority. Furthermore,the foregoing authorities have not confirmed the accuracy or determined the adequacy of thisdocument. Any representation to the contrary is a criminal offense under the laws of the United States.Investors should be aware that they may be required to bear the financial risks of this investment foran indefinite period.

Until 40 days after the later of the commencement of the Offering and the last closing date of theOffering, an offer, sale or transfer of Offered Shares within the United States by any dealer (includingdealers who are not participating in the Offering) may violate the registration requirements of theSecurities Act if such offer or sale is made otherwise than in accordance with Rule 144A thereunder.

Due to the restrictions on the offer and sale of securities in the United States under United Statessecurities laws and regulations, there can be no assurance that any offer of pre-emptive rights toshareholders of Nordex to subscribe for and acquire Offered Shares will be open to U.S. holders ofOffered Shares.

IN CONNECTION WITH THE OFFERING, DRESDNER KLEINWORT WASSERSTEIN AND ANY OF ITSAFFILIATES, ON BEHALF OF THE MANAGERS, MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICHSTABILIZE OR MAINTAIN THE MARKET PRICE OF THE OFFERED SHARES AT A PRICE WHICH MIGHT NOTOTHERWISE PREVAIL. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. SUCHSTABILIZATION TRANSACTIONS, IF CARRIED OUT, MAY BE EFFECTED ON THE FRANKFURT STOCKEXCHANGE, THE OVER-THE-COUNTER MARKET OR OTHERWISE IN ACCORDANCE WITH GERMAN LAWAND MARKET PRACTICES, WHICH MAY DIFFER SIGNIFICANTLY FROM THE RULES AND PRACTICESGOVERNING STABILIZATION TRANSACTIONS IN OTHER COUNTRIES.

Available InformationIf, at any time, Nordex is neither subject to Section 13 or 15(d) of the United States Securities ExchangeAct of 1934, as amended (the ‘‘Exchange Act’’), nor exempt from reporting pursuant to Rule 12g3-2(b)thereunder, it will furnish, upon request, to any owner of Offered Shares offered hereby, or anyprospective purchaser designated by any such owner, the information required to be deliveredpursuant to Rule 144A(d)(4) under the Securities Act. Nordex will also furnish to each such owner allnotices of shareholders’ meetings and other reports and communications that are made generallyavailable to shareholders by Nordex.

S-5

Service of Process and Enforcement of JudgementsThe Company is organized under the laws of Germany. Most of the assets of the Company are locatedoutside the United States. In addition, all of the members of the Company’s management board(Vorstand) and of the supervisory board (Aufsichtsrat) reside outside the United States and all orsubstantially all of their assets are located outside the United States. Investors in the Offered Sharesmay not be able to effect service of process in the United States upon the Company and upon themembers of the Company’s management board and supervisory board. As a result, it may not bepossible for investors to enforce judgments of United States courts predicated upon the civil liabilityprovisions of United States laws against the Company, the members of the Company’s managementboard and supervisory board and their assets. The Company has been advised by its German legalcounsel that there is doubt as to the enforceability in Germany of judgments of United States courts ofcivil liabilities predicated solely upon the laws of the United States. In addition, awards of punitivedamages in actions brought in the United States or elsewhere may be unenforceable in Germany.

S-6

Nordex AG

Oberhausen, Germany

Offering Memorandum

March 30, 2001

for

18,000,000 bearer shares– with a stated value of E1.00 per share –

from the capital increase against cash contributionsresolved at the Company’s General Shareholders’ Meeting

on February 21, 2001

and for

13,300,000 bearer shares– with a stated value of E1.00 per share –

to be sold by the Selling Shareholders

as well as for up to

4,700,000 bearer shares– with a stated value of E1.00 per share –

to be sold by the Selling Shareholders, if required pursuant to theOver-allotment Option granted to Dresdner Bank Aktiengesellschaft

each carrying full dividend entitlement for fiscal year 2000/2001

– German Securities Identification Code (WKN) 587 357 –– ISIN DE 000 587 357 4 –

– Expected stock exchange symbol ‘‘NDX’’ –

and

Company Reportin respect of

52,050,000 bearer shares– with a stated value of E1.00 per share –

(aggregate share capital)Nos. 00,000,001 – 52,050,000

each carrying full dividend entitlement for fiscal year 2000/2001i.e., from October 1, 2000

composed of

18,000,000 placed bearer shares– with a stated value of E1.00 per share –

from the capital increase against cash contributionsresolved at the Company’s General Shareholders’ Meeting on February 21, 2001

and

13,300,000 placed bearer shares– with a stated value of E1.00 per share –from the holdings of Selling Shareholders

– German Securities Identification Code (WKN) 587 357 –

and

20,750,000 bearer shares subject to lock-up– with a stated value of E1.00 per share –from the holdings of Selling Shareholders

of which up to

4,700,000 bearer shares– with a stated value of E1.00 per share –

from the holdings of Selling Shareholders have been loaned toDresdner Bank Aktiengesellschaft

in connection with an Over-allotment Option granted to Dresdner Bank Aktiengesellschaft,which will for this purpose be released under a freely tradeable securities identification code

and

400,000 bearer shares– with a stated value of E1.00 per share –

from the holdings of a Selling Shareholder made available to Dresdner Bank Aktiengesellschaft andWestdeutsche Landesbank Girozentrale

as a loan in their capacity as Designated Sponsors,which will for this purpose be released under a freely tradeable securities identification code

– German Securities Identification Code (WKN) 621058 –

as well as for up

3,400,000 bearer shares– with a stated value of E1.00 per share –

relating to subscription rights for ordinary bearer sharesfrom the conditional capital increase resolved at the Company’s General Shareholders’ Meeting

on February 21, 2001, relating to share subscription rights

of

Nordex Aktiengesellschaft

Oberhausen, Germany

for admission to the Geregelter Markt (Regulated Market)and to trading on the

Neuer Markt

of the Frankfurter Wertpapierborse (Frankfurt Stock Exchange)

2

Table of Contents

Notice to New Hampshire Residents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2Forward-looking Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3Presentation of Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3Exchange Rate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3Notice to Investors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-4Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-5Service of Process and Enforcement of Judgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Responsibility for the Contents of this Offering Memorandum/Company Report. . . . . . . . . . 6Inspection of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Subject of the Offering Memorandum/Company Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Summary of the Offering Memorandum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Overview of the Nordex Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Selected Financial Data of the Nordex Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Earnings per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Allotment Principles, Reserved Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Designated Sponsors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Stock Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Lock-up Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Stabilization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Selling Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15German Takeover Code and Principles for the Allocation of Share Issues to Private

Investors and Recognition of the Neuer Market Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Certification of Shares, Payment Date and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Dividend Rights and Transferability of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Risks Related to the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Risks Inherent in the Market and Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Legal Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Risks in Connection with the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Market Environment and Regulatory Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Environmental Policy – Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Regulatory Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Introduction and Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33The History of the Nordex Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Structure of the Nordex Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34The Wind Turbine Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Competition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Products and Production. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Sales and Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Logistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Customers and Suppliers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Material Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55Management and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

3

Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58Real Estate and Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Relationships with Principal Shareholders, the Babcock Borsig Group and thePedersen Family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65Relationships with Babcock Borsig Group Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65Agreements with Associated Companies of the Pedersen Brothers. . . . . . . . . . . . . . . . . . . . . . . . . 67

General Information on the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68Formation, Development and Reorganization of the Group Structure . . . . . . . . . . . . . . . . . . . . . . 68Additional Company-law Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69Company Name, Registered Office, Fiscal Year and Duration of the Company . . . . . . . . . . . . 70Objects of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72Free Float . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72Earnings per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73Application of Profits and Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73Notices, Paying and Depositary Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73Termination and Dissolution of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74Formation Auditor and Auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74Auditor for the Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Information on the Company’s Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Nordex Energy GmbH, Ostseebad Rerik . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Sudwind Energy GmbH, Oberhausen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Nordex Rotor GmbH, Rostock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77Nordex Automation GmbH, Oberhausen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77Nordex Planungs- und Vertriebsgesellschaft mbH, Bad Essen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Executive Bodies of the Company, Employee and Management Share Scheme . . . . . . . . . . 79General Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79Management Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79Supervisory Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81Employee and Management Share Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Management’s Discussion and Analysis of Financial Condition and Results ofOperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87Historical Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87Overview of the Nordex Group Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87Companies Included in the Consolidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87Comparison of Fiscal Years 1999/2000, 1998/1999 and 1997/1998 . . . . . . . . . . . . . . . . . . . . . . . . 89First Quarter of Fiscal Year 2000/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100Taxation of Company Profits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100Taxation of Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101Taxation of Capital Gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103Special Rules for Credit Institutions, Financial Services Institutions and Financial

Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104Inheritance and Gift Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104Other Taxes in Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

4

Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1Combined Pro Forma Consolidated Financial Statements of Taifun AG for the twelvemonths ended September 30, 1998, 1999 and 2000, according to IAS . . . . . . . . . . . . . . . . . . . . F-3Annual Financial Statements for the Abbreviated Fiscal Year from August 25 toSeptember 30, 2000, according to HGB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-35Pro Forma Consolidated Interim Statements of Taifun AG (now Nordex AG) as ofDecember 31, 2000, according to IAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-41Annual Financial Statements of Nordex GmbH (now Nordex Energy GmbH) for theFiscal Year ended September 30, 2000, according to HGB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-64

Recent Developments and Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1Summary of Certain Differences Among German (HGB), United States (US GAAP) and

International (IAS) Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1Fundamental Differences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1Tangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2Pension Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-3

Certain U.S. Federal Income Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4Sale or other Disposition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-5Passive Foreign Investment Company Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6Backup Withholding and Information Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6

Underwriting and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-7

5

General Information

Responsibility for the Contents of this OfferingMemorandum/Company ReportNordex Aktiengesellschaft, Oberhausen, (‘‘Nordex AG’’, ‘‘Nordex’’ or the ‘‘Company’’ or, together with itsconsolidated subsidiaries, the ‘‘Nordex Group’’ or the ‘‘Group’’) and the underwriters (the ‘‘Managers’’) asdefined in ‘‘The Offering—General Information’’ of this offering memorandum/company report (the‘‘Offering Memorandum’’) assume liability for the contents of this Offering Memorandum pursuant toSection 13 of the Verkaufsprospektgesetz (German Sales Prospectus Act) and Section 77 of theBorsengesetz (German Stock Exchange Act) (each in conjunction with Sections 45 et seq. of theBorsengesetz) and represent that, to the best of their knowledge, the information contained in thisOffering Memorandum is correct and that no material information has been omitted.

Inspection of DocumentsAll documents that are publicly available, referred to in this Offering Memorandum insofar as theyrelate to the Company as well as all future annual and interim reports are available for inspection atthe Company’s registered office, Centroallee 265, 46049 Oberhausen, Germany, and at the offices ofDresdner Bank Aktiengesellschaft, Jurgen-Ponto-Platz 1, 60301 Frankfurt am Main (‘‘Dresdner Bank’’),during regular business hours.

Subject of the Offering Memorandum/Company ReportThis Offering Memorandum is issued in respect of 18,000,000 new bearer shares from the capitalincrease against cash contributions resolved at the Ordinary General Shareholders’ Meeting of theCompany on February 21, 2001 (the ‘‘New Shares’’) and 13,300,000 bearer shares from the holdings ofBorsig Energy GmbH, Oberhausen, and Nordvest A/S, Give, Denmark (the ‘‘Selling Shareholders’’) (see‘‘The Offering—Selling Shareholders’’) and up to 4,700,000 bearer shares from the holdings of theSelling Shareholders (see ‘‘The Offering—General Information’’), which will initially be made available byway of a loan to Dresdner Bank for the purpose of allotment of a greater number of shares in theplacement, if bids are submitted for more than 31,300,000 Shares (the ‘‘Over-allotment Option’’). AllShares carry full dividend entitlement for fiscal year 2000/2001, which commenced on October 1, 2000.

This Offering Memorandum also serves as a Company Report in respect of the Company’s aggregateshare capital amounting to EUR 52,050,000, comprised of 52,050,000 bearer shares with a stated valueof EUR 1.00 each (the ‘‘Aggregate Share Capital’’), each carrying full dividend entitlement for fiscal year2000/2001 which commenced on October 1, 2000, and up to 3,400,000 bearer shares relating tosubscription rights for bearer shares from the conditional capital increase resolved by the GeneralMeeting of the Company on February 21, 2001.

All of the bearer shares of the Company have a stated value of EUR 1.00 per bearer share and arehereinafter referred to as ‘‘Nordex Shares’’.

Amounts contained in this Offering Memorandum in ‘‘DM’’, ‘‘Deutsche Mark’’, ‘‘EUR’’, ‘‘euro’’ or ‘‘E’’ referto the legal currency of the Federal Republic of Germany. The legally fixed conversion rate ofEUR 1 = DM 1.95583 was fixed on December 31, 1998.

6

Summary of the Offering Memorandum

The following is a summary of certain information contained in this Offering Memorandum and shouldbe read in conjunction with the more detailed information and the financial statements of theCompany, including the notes thereto (see ‘‘Financial Information’’) appearing elsewhere in thisOffering Memorandum. As this summary may not contain all of the key information needed byinvestors, the entire Offering Memorandum should be read carefully.

Overview of the Nordex GroupThe Nordex Group, comprising six domestic German and five foreign companies, develops and producestechnologically advanced wind turbines with an emphasis on high performance turbines, in particularmegawatt turbines. The Company regards itself as a systems developer, focused on its key capabilities:the development and engineering of large wind turbines, the development and production of controlsand electrical technology for its wind turbines and the development and manufacture of rotor bladesfor megawatt wind turbines. In addition, the Nordex Group has positioned itself as a provider ofservices such as the technical planning of wind farm systems, from the identification of suitable sitesto the technical implementation of wind farms, including connection to the grid, as well as theservicing of wind turbines.

In the fiscal year ended September 30, 2000, the Nordex Group had an average of 573 employees andgenerated sales revenues of approximately E273 million and EBIT (earnings before interest and taxes)of approximately E13.2 million based on the IAS Pro Forma Consolidated Financial Statements.

Nordex’s overall strategy is to increase its worldwide market share through a combination of organicand external growth and to be one of the world’s top three manufacturers of wind turbines. To thisend, the Nordex Group intends to build upon its technological advantage in the megawatt segment andalso to further expand its international presence. Nordex’s strategy also focuses on increasingprofitability through the introduction of more intensively industrial manufacturing.

The OfferingOffered Shares: The offering (the ‘‘Offering’’) consists of 36,000,000 shares (the

‘‘Offered Shares’’):

(a) 18,000,000 New Shares from the capital increase againstcash contributions resolved at the Ordinary GeneralShareholders’ Meeting on February 21, 2001 which wasentered in the commercial register on March 30, 2001 and

(b) 13,300,000 shares from the holdings of the SellingShareholders, as well as

(c) up to 4,700,000 shares from the holdings of the SellingShareholders as part of the Over-allotment Option grantedto Dresdner Bank (the ‘‘Option Shares’’).

Lead manager: Dresdner Bank, with Westdeutsche Landesbank Girozentrale asco-lead manager.

The Offering, Offering Period, PriceRange and Offer Price:

The Offering consists of a public offering of the Offered Shares inthe Federal Republic of Germany, an international privateplacement outside the Federal Republic of Germany and theUnited States (the ‘‘United States’’) to non-US persons in relianceon Regulation S of the United States Securities Act of 1933, asamended (the ‘‘Securities Act’’) and a private placement inreliance on Rule 144A of the Securities Act (‘‘Rule 144A’’) toinstitutional investors in the United States by way of a

7

bookbuilding process. The initial price range (the ‘‘Price Range’’)within which offers could be placed was E11 to E14 per OfferedShare and was announced on March 19, 2001 at Dresdner Bankand published in the Frankfurter Allgemeine Zeitung on March20, 2001 and subsequently in the Bundesanzeiger (GermanFederal Gazette). The Price Range was subsequently reduced toE9 to E11.50. The offer period (the ‘‘Offer Period’’) within whichoffers could be made was from March 20, 2001 to March 30,2001. The offer price (the ‘‘Offer Price’’) at which all OfferedShares will be settled was fixed on March 30, 2001 and will bepublished in the Frankfurter Allgemeine Zeitung on April 2, 2001and subsequently in the Bundesanzeiger.

Allotment: The Offered Shares are expected to be allotted on or beforeApril 2, 2001.

Share capital: Prior to the capital increase in connection with the Offering, theCompany’s share capital amounted to E34,050,000, representedby 34,050,000 bearer shares with a nominal value of E1.00 pershare; following the implementation of the capital increase inconnection with the Offering, the Company’s share capitalamounts to E52,050,000 and is represented by 52,050,000bearer shares with a nominal value of E1.00 per share.

Over-allotment Option: Dresdner Bank has been granted an option to acquire up to4,700,000 shares loaned by the Selling Shareholders to cover theOver-allotment Option in full or in part on the same termsapplying to the 31,300,000 Offered Shares within 30 calendardays following the commencement of trading of the OfferedShares for trading on the Neuer Markt of the Frankfurt StockExchange.

Stabilization: In connection with this Offering, Dresdner Bank, as stabilizationagent, may, on behalf of the Managers and in accordance withgeneral market practice, exercise the Over-allotment Option orperform other transactions affecting the Company’s shares and/or any derivatives relating to the shares which might stabilizethe market price of the shares or any derivatives relating to theshares or maintain the price at a level that would not be possiblewithout the implementation of such measures. Dresdner Bankwill be responsible for the technical implementation of suchmeasures; stabilization measures may not be undertaken anylater than 30 days after trading has begun in the Company’sshares. These measures may be discontinued at any time.

Preferential subscriptionrights:

Up to 2,760,000 of the Offered Shares, representing up to 8.8%of the Offered Shares, excluding the Option Shares, werereserved for preferential subscription by the shareholders ofBDAG Balcke-Durr AG in Oberhausen (‘‘Bakcke-Durr AG’’), withthe exception of Babcock Borsig Beteiligungs GmbHshareholders. Balcke-Durr AG shareholders have thepreferential right to acquire one share in Nordex AG for everytwo shares they hold in Balcke-Durr AG.

Preferential allocation: Up to a total of 626,000 additional shares, representing up to 2%of the Offered Shares (excluding the Option Shares), were offeredto the employees of the Nordex Group, the members of the

8

Management Board of Nordex AG and the managing directors ofNordex AG subsidiaries and business partners by way of apreferential allotment; an offer of preferential allotment was notmade to members of the Supervisory Board of the Company.

Listing: There has been no public trading of shares of Nordex AG prior tothe Offering. The shares of Nordex AG were admitted to theGeregelter Markt on March 30, 2001 for trading on the NeuerMarkt of the Frankfurt Stock Exchange. Trading on the NeuerMarkt is expected to commence under the symbol ‘‘NDX’’ on April2, 2001.

Use of proceeds: Nordex plans to use the net proceeds of the Offering for generalbusiness purposes, primarily to strengthen its position on theglobal market through further developments in technology andthe development of new products, as well as through internaland external growth. In addition, the proceeds will be used toreduce the Group’s liabilities.

In particular, substantial funds from the net proceeds of theOffering will be used in the further development of the NordexGroup’s technologies and invested in the development of newproducts. Nordex AG also intends to use a further substantialproportion of the net proceeds of the Offering to expand theNordex Group’s production capacity and to increase productionof rotor blades. Of the Company’s approximately E92.6 millionliabilities to the Babcock Borsig Group, E75 million are intendedto be repaid out of the net proceeds of the Offering. Theremaining E17.6 million will not be repaid any earlier than thedate six months from the first day of trading of the OfferedShares on the Neuer Markt. In the Company’s opinion,repayment of these debts will not affect its planned growthfor the period through fiscal year 2002/2003. Finally, Nordexintends to finance possible acquisitions from the proceeds of theOffering, provided and to the extent that individual acquisitionsare not financed by granting shares to the seller.

The pro rata proceeds from the Offering of the shares will bepaid to the Selling Shareholders after the costs to be borne bythem have been deducted.

Lock-up Agreements: Nordex AG has irrevocably agreed with Deutsche Borse AG, andthe Selling Shareholders of the Company have irrevocably agreedwith Nordex AG that, in accordance with the relevant provisionsof the German Stock Corporation Act, they will not either directlyor indirectly offer any Nordex shares on or off a stock exchange,sell or market any Nordex shares nor take any other measureswhich have the economic effect of a sale for a period of sixmonths commencing on the first day of trading of the OfferedShares on the Neuer Markt, expected to take place on April 2,2001.

In addition, the Company has agreed with Dresdner Bank, for anadditional period of six months to neither (a) directly orindirectly issue, sell, offer, contract to sell or otherwise dispose ofor make an offer relating to any shares of the Company or othersecurities or uncertified rights which are convertible into or

9

exchangeable for shares of the Company or which represent theright to receive shares of the Company, in particular (i) to utilizeauthorized capital or (ii) propose a capital increase to theGeneral Shareholders’ Meeting, nor (b) to conclude anytransactions (including derivatives transactions) that have thesame economic effect as a sale of the Company’s shares, withoutthe prior written approval of Dresdner Bank, which can only bewithheld for good cause.

The Selling Shareholders have also agreed, for a period of 12months commencing on the first day of trading of the OfferedShares on the Neuer Markt, to (a) neither initiate nor approve themeasures named in the preceding paragraph and to (b) neitherdirectly nor indirectly offer, sell or market the shares of theCompany remaining in their possession or other securities thatare convertible into or exchangeable for shares of the Companyor which represent the right to receive shares of the Company(or any other transactions that have the same economic effectas a sale, including derivatives transactions), without the priorwritten approval of Dresdner Bank, which can only be withheldfor good cause.

This agreement (the ‘‘Lock-up Agreement’’) does not apply to (i)the Company’s capitalization measures, which the FrankfurtStock Exchange has exempted from the lock-up according toSection 7.3.9 of the rules and regulations of the Neuer Markt orto (ii) the sale of shares of the Company by the SellingShareholders to one or more strategic investors, insofar as thepurchasers subject themselves to the lock-up for the remainderof the term of the Lock-up Agreement.

Entitlementto dividends:

The Offered Shares have full dividend rights from the fiscal year2000/2001 (i.e., as of October 1, 2000).

Voting rights: Each Nordex share entitles the holder to one vote at the GeneralShareholders’ Meeting.

Payment and delivery: The delivery of the shares, in book-entry form, against paymentof the Offer Price plus the usual securities commission isexpected to be made on April 4, 2001 through ClearstreamBanking AG, Frankfurt am Main.

Designated Sponsorsfor the Neuer Markt:

Dresdner Bank and Westdeutsche Landesbank Girozentrale.

German SecuritiesCode Number (WKN):

The German Securities Code (WKN) for the shares admitted toimmediate trading is 587 357, the interim German SecuritiesCode (WKN) for the shares from the holdings of the SellingShareholders that are subject to the Lock-up Agreement is621 058. The ISIN-Code is DE 000 587 357 4.

10

Selected Financial Data of the Nordex GroupThe following overview of selected financial data of the Nordex Group should be read inconjunction with the section ‘‘Management’s Discussion and Analysis of Financial Condition andResults of Operations’’ and the financial data contained in the ‘‘Financial Information’’ of thisOffering Memorandum, which contain more detailed information. The selected financial data isbased on the IAS Pro Forma Consolidated Financial Statements and the IAS Pro FormaConsolidated Interim Financial Statements, each of which have been prepared in accordancewith International Accounting Standards (‘‘IAS’’). BDO Deutsche WarentreuhandAktiengesellschaft audited the Company’s IAS Pro Forma Consolidated Financial Statementsand issued these with an audit opinion. BDO Deutsche Warentreuhand Aktiengesellschaftreviewed the IAS Pro Forma Consolidated Interim Financial Statements prepared by the Companyas of December 31, 2000. Due to the migration of the Company’s IT systems to SAP R3, thecomparative figures as of December 31, 1999 contained in these IAS Consolidated FinancialStatements are based solely on the Company’s subsequent statistical records. These comparativefigures were not reviewed by BDO Deutsche Warentreuhand Aktiengesellschaft. The historicalresults presented only provide a limited indication of the results which can be expected in thefuture since Nordex has only existed in its current legal form for a short time and the statementswere thus prepared on the basis of assumptions (see ‘‘Management’s Discussion and Analysis ofFinancial Condition and Results of Operations – Companies included in the consolidation’’ and‘‘Risk factors – Reorganization of the Nordex Group’’).

IAS Pro Forma ConsolidatedFinancial Statements as of

IAS Pro FormaConsolidated

Interim FinancialStatements as of

September 30,1998

September 30,1999

(audited)September 30,

2000

December 31,2000

(unaudited,reviewed)

thousands of euro (E)

Income statement

Net sales 82,477 223,743 272,670 63,004

Total operating performance 85,260 232,624 270,191 69,129

Cost of materials 66,594 188,880 203,777 50,766

Personnel expenses 6,000 12,751 19,206 5,695

Interest and similar expenses 406 989 3,381 954

Profit from ordinary operations 2,481 10,123 10,349 1,005

Balance sheet

Fixed assets 4,479 12,822 21,447 41,803

Current assets 24,873 86,954 129,785 125,536

Total assets 29,395 81,994 153,101 169,847

Equity 7,146 12,663 16,014 37,134

Current liabilities and accruals(Maturity up to 1 year) 21,574 65,708 133,966 129,422

Long-term accruals and liabilities 0 720 316 0

Other financial obligations, (Maturity 1-5 years) 797 2,750 2,178 1,135

Earnings per ShareThe Company was founded on August 25, 2000 and was entered in the commercial register onSeptember 19, 2000. Under the assumption that 34,050,000 bearer shares had already been issued atthe beginning of the fiscal year 1997/1998, the earnings per share would have been as follows:

Fiscal year 1997/1998

Fiscal year 1998/1999

Fiscal year 1999/2000

Net profit in E millions 1.60 6.53 6.43

Number of Nordex AG’s shares 34,050,000 34,050,000 34,050,000

Earnings per share in E 0.05 0.19 0.19

11

The Offering

General InformationThe 18,000,000 New Shares from the capital increase against cash contributions resolved by theOrdinary General Shareholders’ Meeting on February 21, 2001, for which Selling Shareholders’ statutorysubscription rights were excluded, and the 13,300,000 bearer shares from the holdings of SellingShareholders, of which 10,636,305 are from the holdings of Borsig Energy GmbH and 2,663,695 arefrom the holdings of Nordvest A/S and – to the extent that the Over-allotment Option is exercised – upto 4,700,000 Option Shares (of which up to 3,758,694 are from the holdings of Borsig Energy AG andup to 1,941,306 are from the holdings of Nordvest A/S) were offered for sale without obligation by theManagers under the leadership of Dresdner Bank and Westdeutsche Landesbank Girozentrale as JointLead Managers and by BHF-BANK Aktiengesellschaft, COMMERZBANK Aktiengesellschaft andBayerische Hypo-und Vereinsbank Aktiengesellschaft (the ‘‘Managers’’) during the Offer Period fromMarch 20, 2001 to March 30, 2001 in the Federal Republic of Germany by way of a public offering andoutside the Federal Republic of Germany and the United States by way of an international privateplacement in reliance on Regulation S of the Securities Act and to institutional investors (qualifiedinstitutional buyers) in the United States to non-U.S. persons by way of a private placement in relianceon Rule 144A in the context of a bookbuilding process within a Price Range of E9 to E11.50 per offeredshare, following a reduction of the Price Range from E11 to E14 per offered share. The Price Rangewas initially announced on March 19, 2001 during a press conference at Dresdner Bank and publishedin the Frankfurter Allgemeine Zeitung on March 20, 2001 and subsequently in the Bundesanzeiger(German Federal Gazette). The reduction of the Price Range was published on March 27, 2001 in theFrankfurter Allgemeine Zeitung and subsequently in the Bundesanzeiger.

Purchase offers were accepted for whole shares only, in quantities of at least 50 shares, and could besubmitted without a limit or with limits denominated in 25 cents, 50 cents, 75 cents or whole euroamounts within the applicable Price Range. Unlimited purchase offers were treated as limited purchaseoffers at the upper end of the Price Range. Upon submission of their purchase offers, prospectiveinvestors obligated themselves to purchase shares at a price below their price limit. The Offer Price ofE9 per offered share, at which the 18,000,000 New Shares and the 13,300,000 shares from theholdings of the Selling Shareholders and – if the Over-allotment Option is exercised – the 4,700,000Option Shares will be settled was determined on March 30, 2001 on the basis of purchase offersreceived by the end of the Offer Period. The Offer Price is expected to be published in the FrankfurterAllgemeine Zeitung on April 2, 2001 and subsequently in the Bundesanzeiger. Purchase offers werereceived without obligation by the Managers during normal business hours and subject to the entryinto the commercial register of the capital increase against cash contributions. In particular, in theevent that the number of Offered Shares is insufficient to cover all purchase orders at the Offer Price,the Managers reserve the right to reject purchase orders, in whole or in part. Investors who havesubmitted a bid through one of the Managers may obtain information on the number of sharesallocated to them from that Manager as from April 2, 2001.

Dresdner Bank has been granted an Over-allotment Option to acquire up to 4,700,000 shares loaned bythe Selling Shareholders to cover the Over-allotment Option in full or in part on the same termsapplying to the 31,300,000 Offered Shares within 30 calendar days following the commencement oftrading of the Offered Shares on the Neuer Markt of the Frankfurt Stock Exchange.

The 18,000,000 New Shares were acquired by Dresdner Bank in exchange for payment of their issueprice of E1.00 per share, for the account of the Managers, with the obligation to ensure theirplacement at the Offer Price.

The difference between the issue price and the Offer Price of the 18,000,000 New Shares less thecommission and expenses of the Managers to be borne by the Company, will be paid to the Company(see ‘‘—Use of Proceeds’’). The proceeds from the offer of the 13,300,000 shares from the holdings ofSelling Shareholders and the up to 4,700,000 Option Shares made available as a loan from the holdingsof the Selling Shareholders – if the Over-allotment Option is exercised – will be paid to the Selling

12

Shareholders. In each case, the costs of this offer will be deducted before the proceeds of the Offeringare made available.

The up to 36,000,000 Nordex shares offered for sale, and a further 400,000 shares which will be loanedto Dresdner Bank in its capacity as Designated Sponsor by a Selling Shareholder, have been assignedthe German Securities Code (WKN) 587 357 and ISIN DE 000 587 357 4. The 16,050,000 bearer shares,which are subject to Lock-up Agreements in accordance with the Neuer Markt rules and regulations inthe same way as the 400,000 shares released by their Securities Code Number for the activities of aDesignated Sponsor, will be offered under German Securities Code Number 621 058.

The nominal value of each bearer share is E1.00.

Allotment Principles, Reserved AmountNo agreements relating to the allotment procedure existed between Nordex AG and Dresdner Bank atthe beginning of the Offer Period, except for the preferred allotment for preferential subscription rightsand preferential allotment described below. The Company and the Managers will observe the ‘‘Principlesfor the Allocation of Share Issues to Private Investors’’ (the ‘‘Principles of Allotment’’) published byGermany’s Borsensachverstandigenkommission (Stock Exchange Committee) at the Bundesministeriumder Finanzen (German Federal Finance Ministry) on June 7, 2000. Nordex AG and the Managers expectto determine the detailed provisions of the allotment principles by April 2, 2001 and expect to publishthem as required by the Principles of Allotment on April 4, 2001.

Up to 2,760,000 shares were reserved for preferential subscription rights to be granted to theshareholders of Balcke-Durr AG, with the exception of Babcock Borsig Beteiligungs GmbH shareholders,representing up to 8.8% of the Offered Shares, excluding the Over-allotment Option and if the Over-allotment Option is exercised in full, 7.7% of the Offered Shares. The shareholders of Balcke-Durr AGwere offered one share in Nordex AG, under the conditions of the Offering for every two shares theyhold in Balcke-Durr AG. Details on exercising the preferential subscription rights were published byBalcke-Durr AG on March 17, 2001 in the Frankfurter Allgemeine Zeitung and inWertpapiermitteilungen, and on March 20, 2001, in the Bundesanzeiger and were alsocommunicated to Balcke-Durr AG’s shareholders through their custodial banks.

Up to 626,000 shares were reserved for preferential allotment to the employees of the Nordex Group,the Company’s Management Board, the managing directors of Nordex AG’s subsidiaries and businesspartners. This represents up to 2% of the Offered Shares (excluding the Over-allotment Option) and upto 1.73% of the Offered Shares if the Over-allotment Option is exercised in full. No offer of preferentialallotment was made to the Company’s Supervisory Board members. If the employees of the NordexGroup and the members of the Management Board of Nordex AG took advantage of the opportunity toacquire preferential allotments, they were offered a preferential allotment of Nordex shares, dependingon their respective purchase offers, with a total selling price of a maximum of E10,000 per recipient.Business partners were granted the opportunity to subscribe for Nordex shares under this preferentialallotment up to a selling price of E15,000 per recipient.

Otherwise, the general terms of sale, including the Offer Price to be paid by all other investors, alsoapplied to the preferential allotment.

Designated SponsorsDresdner Bank and Westdeutsche Landesbank Girozentrale have been appointed by the Company asdesignated sponsors (the ‘‘Designated Sponsors’’) for the Neuer Markt.

Stock Exchange ListingApplication has was for admission to the Geregelter Markt for trading on the Neuer Markt all of NordexAG’s original capital amounting to E52,050,000 and the up to 3,400,000 bearer shares with regard tooption rights for bearer shares from the contingent capital increase against cash contributions resolvedby the General Shareholders’ Meeting on February 21, 2001. The admission for trading was approvedon March 30, 2001 by the Listing Committee of the Frankfurt Stock Exchange and trading on the NeuerMarkt is expected to commence under the symbol ‘‘NDX’’ on April 2, 2001.

13

Of the bearer shares to be admitted for trading, 16,050,000 shares from the holdings of the SellingShareholders with German Securities Code (WKN) 621 058 and the 4,700,000 Option Shares and afurther 400,000 shares which have been loaned for the Over-allotment Option and for the activities ofthe Designated Sponsor and released by their Securities Code are subject to a Lock-up Agreement inaccordance with the Neuer Markt rules and regulations and to the Lock-up Agreement agreed betweenDresdner Bank and the Selling Shareholders (see ‘‘—Lock-up Agreements’’). The 16,050,000 shares heldby the Selling Shareholders and – to the extent that the Over-allotment Option is not exercised – the4,700,000 Option Shares will be listed under this Securities Code until the lock-up period expires andwill not be included in the initial listing scheduled for April 2, 2001. On the day the lock-up periodexpires, which is expected to be October 3, 2001, these shares will be assigned the German SecuritiesCode (WKN) 587 357 and subsequently included in the listing.

Lock-up AgreementsNordex AG has irrevocably agreed with Deutsche Borse AG, and the Selling Shareholders haveirrevocably agreed with Nordex AG that, in accordance with the relevant provisions of the GermanStock Corporation Act, they will not either directly or indirectly offer any Nordex shares on or off astock exchange, sell or market any Nordex shares or take any other measures which have the economiceffect of a sale for a period of six months commencing on the first day of trading of the Offered Shareson the Neuer Markt, expected to be April 2, 2001. In the case of an infringement of the Lock-upAgreements, the Selling Shareholders have agreed with Deutsche Borse AG to pay a contractualpenalty. This penalty is calculated as the difference between the Offer Price and the proceeds of thesale or, where the proceeds of such sale do not exceed the Offer Price, the difference between theacquisition cost and the Offer Price.

In accordance with Sections 7.2.9 and 2. 2. (1) of the Neuer Markt rules and regulations, DeutscheBorse AG may exempt Nordex AG from the lock-up on the basis of a justified application by theCompany.

In addition, the Company has agreed with Dresdner Bank, in accordance with the provisions of theGerman Stock Corporation Act, for an additional period of six months, to neither (a) directly orindirectly issue, sell, offer, contract to sell or otherwise dispose of or make an offer relating to anyshares of the Company or other securities or uncertified rights which are convertible into orexchangeable for shares of the Company or which represent the right to receive shares of theCompany, in particular (i) to utilize authorized capital or (ii) propose a capital increase to the GeneralShareholders’ Meeting, nor (b) to conclude any transactions (including derivatives transactions) thathave the same economic effect as a sale of shares, without the prior written approval of DresdnerBank, which can only be withheld for good cause. This Lock-up Agreement does not apply to theCompany’s capitalization measures (e.g. capital increases against non-cash contributions), which theFrankfurt Stock Exchange has exempted from the lock-up pursuant to Section 7.3.9 of the rules andregulations of the Neuer Markt, provided the purchaser of any such new shares agrees to comply withthe lock-up rules for the remainder of the term of the Lock-up Agreement.

The Selling Shareholders have also agreed with Dresdner Bank, for a period of 12 months, commencingon the first day of trading of the Offered Shares on the Neuer Markt, to (a) neither initiate nor approvethe measures named in the preceding paragraph and not to (b) offer, sell or market the sharesremaining in their possession or other securities that are convertible into or exchangeable for shares ofthe Company or which represent the right to receive shares of the Company without the prior writtenapproval of Dresdner Bank, which can only be withheld for good cause; this restriction also applies toany other transactions that have the same economic effect as a sale, including derivatives transactions.This Lock-up Agreement does not apply to the Company’s capitalization measures (e.g. capital increasesagainst non-cash contributions) or the sale of Nordex shares by the Selling Shareholders to one ormore strategic investors, insofar as the purchasers subject themselves to the lock-up rules for theremainder of the term of the Lock-up Agreement.

The Nordex shares held by the Selling Shareholders – to the extent that they are not made available tothe Designated Sponsors to fulfill their duties as sponsors and are released for this by their Securities

14

Code – will be held under a separate Securities Code (WKN 621 058) and will not be included in theinitial listing expected on April 2, 2001.

Selling Shareholders can also make Nordex shares available to the Designated Sponsors as a loan atany time against remuneration, if requested by the Designated Sponsors. These shares, which will bereleased by their Securities Code Number in this case, may only be used by the Designated Sponsors toperform their duties and will be reassigned to the Selling Shareholders after the expiration of thesecurities loan.

The granting of stock options in the context of the Company’s employee and management equitycompensation plan is not affected by the restrictions outlined above.

StabilizationIn conjunction with this Offering, Dresdner Bank, as the stabilization agent, may, on behalf of theManagers and in accordance with general market practice, exercise the Over-allotment Option orperform other transactions affecting the Company’s shares and/or any derivatives relating to theshares which might stabilize the market price of the shares or any derivatives relating to the shares ormaintain the price at a level that would not be possible without the implementation of such measures.Dresdner Bank will be responsible for the technical implementation of such measures; stabilizationmeasures may not be undertaken any later than 30 days after trading has begun in the Company’sshares. These measures may be discontinued at any time.

Selling ShareholdersNordex AG is owned by Borsig Energy GmbH (80.5%) and Nordvest A/S (19.5%). Following the Offering,not including the exercise of the Over-allotment Option and the related capital increase, the interests inthe share capital of Nordex AG held by Borsig Energy GmbH and Nordvest A/S will decline toapproximately 32.22% and approximately 7.64%, respectively.

If the Over-allotment Option is exercised in full, Borsig Energy GmbH and Nordvest A/S will holdapproximately 25.00% and approximately 5.84% of the share capital of Nordex AG, respectively.

Borsig Energy GmbH is a wholly-owned subsidiary of Balcke-Durr AG, a listed company. In turn,Babcock Borsig AG, a listed company, holds an interest of approximately 67% in Balcke-Durr AG.

Use of ProceedsThe proceeds from the placement of the 18,000,000 New Shares offered by the Company amount toapproximately E162 million. The total costs of the Offering, including commissions paid to theManagers amounting to approximately E13.6 million, will amount to approximately E19 million, ofwhich, approximately E9.5 million will be borne by the Company.

The net proceeds of approximately E152.5 million will be used for general business purposes, primarilyto strengthen Nordex’s position on the global market through further developments in technology anddevelopment of new products, as well as through internal and external growth. In addition, a portion ofthe net proceeds will be used to reduce Group’s liabilities.

In particular, substantial funds from the net proceeds of the Offering will be used in the furtherdevelopment of the Nordex Group’s technologies and invested in the development of new products.Nordex AG also intends to use a further substantial proportion of the net proceeds of the Offering toexpand the Nordex Group’s production capacity and to increase production of rotor blades. Of theCompany’s approximately E92.6 million liabilities to the Babcock Borsig Group, E75 million areintended to be repaid out of the net proceeds of the Offering. The remaining E17.6 million will not berepaid any earlier than the date six months from the first day of trading of the Offered Shares on theNeuer Markt. In the Company’s opinion, the repayment of these liabilities will not affect the growthforecast for the entire forecast period of the business plan, i.e. through fiscal year 2002/2003. Finally,

15

Nordex intends to finance possible acquisitions from the net proceeds of the Offering, provided and tothe extent that individual acquisitions are not financed by granting shares to the seller.

The net proceeds from the placement of the shares belonging to the Selling Shareholders, and of theOption Shares, will accrue to the Selling Shareholders.

Approximately E119.7 million, less the costs to be borne by them, will accrue to the SellingShareholders from the sale of their 13,300,000 existing shares. If the Over-allotment Option granted toDresdner Bank is exercised in full, the Selling Shareholders will receive, in addition, up to approximatelyE42.3 million from the sale of the up to 4,700,000 Option Shares made available by them. The costs ofthe placement of the existing shares and the Option Shares will be borne by the Selling Shareholders.

German Takeover Code and Principles for the Allocation of ShareIssues to Private Investors and Recognition of the Neuer MarketRegulationsIn accordance with Neuer Markt regulations, Nordex AG has recognized the Ubernahmekodex (GermanTakeover Code) issued by the German Stock Exchange Committee at the German Federal FinanceMinistry and has agreed to observe the Principles of Allocation. In addition, the Company has agreedwith Deutsche Borse AG to recognize the current version of the Neuer Markt regulations as binding.

Certification of Shares, Payment Date and DeliveryThe shares are represented by global certificates, lodged with Clearstream Banking AG, Frankfurt amMain as the securities clearing and deposit bank. The shares will be credited to the shareholders incollective securities accounts. In accordance with the Articles of Association, shareholders are notentitled to physical shares certificates. The delivery of the shares, in book-entry form, against paymentof the Offer Price plus the usual securities commission is expected to be made on April 4, 2001 throughClearstream Banking AG, Frankfurt am Main.

Dividend Rights and Transferability of SharesThe shares offered in this Offering Memorandum have full dividend rights from the current fiscal year2000/2001 (i.e., as of October 1, 2000) and are freely transferable bearer shares.

16

Capitalization

The following table presents the capitalization of the Company as of September 30, 2000 and as ofDecember 31, 2000, in accordance with IAS.

The table should be read in conjunction with

– the sections in this Offering Memorandum entitled ‘‘Management’s Discussion and Analysis ofFinancial Condition and Results of Operations’’ and

– the HGB financial statements of Taifun AG (now Nordex AG), in respect of which an audit reportwas issued, the audited IAS Pro Forma Consolidated Financial Statements and the unaudited IASPro Forma Consolidated Interim Financial Statements, both of which have been reviewed by theauditors, included elsewhere in this document.

Nordex AGHGB

(audited)

Nordex EnergyGmbH (IAS)(unaudited)

GroupPro Forma(audited)

GroupPro Forma

(unaudited,reviewed) As Adjusted1

as of Sept. 30, 2000 as of Dec. 31, 2000

EUR thousand

Total long-term liabilities 0 0 317 0 0

Subscribed capital 50 53 307 34,050 52,050

Capital reserves 0 6,047 6,047 3,577 147,577

Accumulated profits/losses -2 10,518 9,660 -493 -493

Equity 48 16,618 16,014 37,134 199,134

Total capital reserves 48 16,618 16,331 37,134 199,134

1 Reflects the capitalization of the Nordex Group as of December 31, 2000 as adjusted to reflect the issue of the 18 million New Shares inthe Offering, as if the Offering had occured on December 31, 2000.

17

Risk Factors

Prospective investors should carefully consider the specific risk factors set forth below, inaddition to the other information contained in this Offering Memorandum, before making adecision to purchase Offered Shares in the Offering.

Risks Related to the CompanyReorganization of the Nordex Group

The Nordex Group has only existed in its current legal form for a short time. After the formation ofNordex AG on August 25, 2000, several companies from the wind energy systems division of theBalcke-Durr Group were merged into the Group with the aim of consolidating the Balcke-Durr Group’swind energy activities under the centralized management of Nordex AG as a holding company.Accordingly, Nordex Automation GmbH’s business activities that were not related to wind energy werespun-off to a Babcock Borsig Group company by way of a transfer of net assets. The Nordex Group,therefore, has no historical financial data as a consolidated group, and its IAS Pro Forma ConsolidatedFinancial Statements are therefore only of limited value for comparisons.

The new corporate structure, which was necessary in order to integrate the merged companies underthe centralized management of Nordex AG, including company-wide internal and external planning,financial control and reporting systems, is still being established. As is commonly the case with young,high-growth companies, this effort will require a high level of human and financial resources. Therecan be no assurance that the rapid integration of these companies will succeed or will have the desiredeffect over the long term. If this effort were to be unsuccessful or delayed, the business, financialcondition and results of operations of the Nordex Group could be materially adversely affected.

Holding Structure and Profit and Loss Transfer Agreements

The Nordex Group in its current corporate structure was recently formed from the merger of several ofthe Group’s affiliates (see ‘‘General Information on the Company—Formation, Development andReorganization of the Group Structure’’). Nordex AG, which was formed in August 2000, currentlyfunctions solely as a holding company. The Company’s assets, therefore, currently consist primarily ofinterests in its operating subsidiaries. As a result, Nordex AG is principally dependent on the receipt ofdividends and distributions from its operating subsidiaries to cover its operating and other expensesand, if necessary, to pay dividends and distributions to its shareholders. For this reason, Nordex AG hasconcluded profit transfer and, in some cases, control agreements with its five directly held subsidiaries.In addition, Nordex AG has also undertaken to cover possible losses incurred by its subsidiaries, whichcould lead to a reduction in Nordex AG’s net profits available for distribution as dividends. As a result ofthese arrangements, if the dividends and distributions Nordex AG receives from its subsidiaries arelower than anticipated, this could have a material adverse effect on Nordex AG’s business, financialcondition and results of operations.

Organizational Structure, Accounting, Management of Growth

Because the Nordex Group was created very recently, the management and organizational structure ofthe Group is still being established. The Chairman of Nordex AG’s Management Board, Dr. DietmarKestner, the Chief Financial Officer Rudolf Schulz, and the Vice-President for Sales, Carsten Pedersen,who has been active in the wind energy sector since the mid-1980s, have only been employed byNordex AG since the end of 2000.

In addition, due to the reporting requirements necessitated by the Offering, the Company’s financialand accounting systems will be subject to increased demands in the future, as the Company complieswith International Accounting Standards. The Group’s accounting and bookkeeping systems, itsreporting systems and the cost accounting data on which these systems are based do not yetcompletely meet these increased demands (see ‘‘Management’s Discussion and Analysis of FinancialCondition and Results of Operations – First Quarter of Fiscal Year 2000/2001’’). Because the NordexGroup was not restructured until the end of 2000, it has so far only been able to adapt certain of its

18

organizational structures to meet these demands. This has resulted in a strong dependence on humanand technical resources from outside the Nordex Group, in particular from Borsig Energy GmbH. Inaddition, problems could arise with respect to the Group’s ability to recruit suitable professional staff,which could have adverse consequences for the rapid establishment of the necessary structures.

The planned internal and external growth of the Nordex Group also requires the continual adaptationof its organizational structures. In order to be able to manage this planned growth, the ManagementBoard and Supervisory Board intend to develop their human resources and technical andorganizational structures, especially in terms of accounting, planning and operational and financialcontrol systems. Moreover, the Company’s risk management system for early identification of adversedevelopments has not yet been set up completely.

The Company will be faced with considerable organizational challenges to its ability to effectivelymanage its current and future growth. There can be no assurance that delays in adapting andexpanding existing structures, and in introducing new organizational measures or new internalsystems, will not have adverse effects on the business, financial condition and results of operations ofthe Nordex Group. Furthermore, there can be no assurance that additional structural measures beyondthose currently planned will not prove necessary, a situation that could result in an increase in theoperating expenses of the Nordex Group, which in turn could have a material adverse effect on itsbusiness, financial condition and results of operations.

Dependence on a Key Product

The future development of the Nordex Group will depend on the acceptance of wind turbines, whichare comparatively new products. Nordex AG’s subsidiaries have focused on the development andmanufacture of wind turbines since 1985. The future market acceptance of the Group’s products isdifficult to assess, particularly in the case of the newly-developed Nordex N-80, currently the world’slargest production wind turbine. The N-80 was first offered for sale in Spring 2000, and, as of February28, 2001, only four units had been completed and put into commission. In addition, the potential salesthat could be generated from wind turbines produced by the Nordex Group are largely dependent ongovernmental support for power generation from wind energy (see ‘‘—Legal Risks—GovernmentalRegulation’’). There can be no assurance that the Company’s efforts to market its products, which willresult in it incurring considerable costs, will bring anticipated results or that the Company will reach itsstrategic goal of establishing this new technology as the standard for the wind energy sector. If theCompany is unable to reach its goal of selling its new products in a greater scope than previouslyachieved, and thereby improve its market position, the Company’s business, financial condition andresults of operations could be materially adversely affected.

Technical Risks and Technologies Utilized

The operation of wind turbines is subject to technical and physical risks, especially considering that forsome models, such as the Nordex N-80, there is no experiential data on long-term, full-time operation.For this reason, no definitive statements can be made about the service life of such wind turbines ortheir components, or about their long-term operational reliability. While the direct risk from limitedoperational reliability and reduced life of wind turbines is borne by the wind farm operator, disputesbetween wind turbine manufacturers and wind farm operators based on actual or alleged productdefects are relatively common (see ‘‘—Legal Risks—Litigation Risk’’).

Because the Nordex Group sources key components for the wind turbines it produces and sells fromoutside suppliers, without having any control over the production process, the Group is subject to therisk that components manufactured by outside suppliers could be defective. Whether or not the NordexGroup is able to assert claims against its outside suppliers resulting from such defects is not onlydependent on the respective contractual agreements, but also on the creditworthiness of the relevantoutside supplier. Such defects, particularly if the Nordex Group is unable to assert claims for damagesagainst its outside suppliers, could have a long-term adverse effect on the business, financial conditionand results of operations of the Company.

19

The repeated occurrence of technical problems could adversely affect the profitability of planned windfarms as well as Nordex AG’s market position, due to the resulting deterioration of the Company’sreputation. For this reason, there can be no assurance that technical and physical risks will not have anadverse effect on the business, financial condition and results of operations of the Nordex Group.

Dependence on Outside Suppliers

The Company has established strategic relationships with a number of suppliers in order to concentrateits efforts on its core competencies. As a result, the Nordex Group is substantially dependent on thetimely deliveries of high-quality components by outside suppliers. If the Group’s orders increase,deliveries by suppliers to the Nordex Group could be delayed, which would result in the Group beingunable to complete the orders on time. Accordingly, the business, financial condition and results ofoperations of the Company could be materially adversely affected.

Furthermore, the Company’s ability to provide products may be adversely affected by capacityconstraints and defective components from outside suppliers. The Group is generally unable to switchoutside suppliers immediately, because some components are custom developed and produced bysuppliers for the Group. Although the Company pursues a strategy of maintaining at least two to threeoutside suppliers for each component, the market is dominated by just a few suppliers, particularly forrotor blades. Only two rotor blade manufacturers currently meet the Nordex Group’s delivery andquality requirements, so the Company is in the process of setting up in-house rotor blademanufacturing operations at its Nordex Rotor GmbH subsidiary. However, there is a risk that theNordex Group may still have to depend on these few rotor blade manufacturers. A possible priceincrease resulting from the fact that the number of manufacturers is limited, or a shortage of the high-quality rotor blades required by Nordex, could materially adversely affect the business, financialcondition and results of operations of the Company.

Establishment of In-House Production of Rotor Blades

The Nordex Group did not begin setting up in-house production of rotor blades, through Nordex RotorGmbH, until early 2000, and as a result, the Company has limited experience in this area. There can beno assurance that new production facilities will not continue to require substantial financial andhuman resources, or that producing rotor blades in-house will not cost more than purchasing suchblades from outside suppliers. Greater independence from individual suppliers will temporarily impactthe Company’s resources. This is because, while the Company will have to maintain its in-houseproduction of rotor blades to reduce its dependence on the few global rotor blade manufacturers, it willalso especially have to develop the product expertise the Company considers necessary for megawattrotor blades. If it were necessary for the Company to manufacture small series of rotor blades underunprofitable conditions for a longer period than anticipated, this would materially adversely affect thebusiness, financial condition and results of operations of the Company.

Move to a New Production Site

Nordex Rotor GmbH aims to move its production activities to new assembly plants in Fall 2001. TheCompany will carefully plan this move with Nordex Rotor GmbH. However, there can be no assurancethat this move will not result in production stoppages or a temporary reduction in production capacity.In addition, there can be no assurance that there will be no initial technical and/or organizationalproblems with the production of rotor blades at the new production facility. This could reduceproduction capacity, increase production costs and produce defects. Such problems could have amaterial adverse effect on the business, financial condition and results of operations of the Company.

Risks Inherent in Future Acquisitions of Companies and Equity Interests, and their Integrationinto the Nordex Group

The Company plans to acquire additional complementary companies or equity interests, and to groworganically, in order to strengthen its position in the German and international markets. A portion ofthe proceeds of the Offering is expected to be used for this purpose. Although Nordex AG will performdue diligence on potential targets with the care required by prudent business policy, acquisitions carrya significant business risk which could have material adverse effects on the business, financial

20

condition, results of operations and continued existence of the Company. The success of theseacquisitions and participations, and the improvement of the Company’s market position, depends, inpart, on the integration into the Nordex Group of acquired companies. Even if the Companyinvestigates the financial and legal risks associated with target companies to be acquired, agrees priceadjustment clauses and receives adequate warranties from the sellers, there can be no assurance thatfuture occurrences would not result in specific acquisitions or equity interests losing their valueconsiderably or entirely. Such consequences could have material adverse effects on the business,financial condition and results of operations of the Nordex Group.

Risk of Entry into New Markets

In the fiscal year 1999/2000, the Nordex Group generated approximately 44% of its revenue outsideGermany; the majority of this share was generated in Denmark, Egypt, the United States, China, Spainand Portugal. The limited number of wind turbine facilities available in Germany requires the Companyto expand its business activities within and outside of Europe and to consider forming foreignsubsidiaries and sales alliances. As the Company develops its global operations, it faces numerouschallenges, including the burden and expense of complying with a wide variety of foreign laws andregulatory requirements, potentially adverse tax consequences, tariffs and other trade barriers,difficulties in staffing and managing foreign operations, cultural and language differences, fluctuationsin currency exchange rates, increasingly complex legal product requirements and related liability issues.

If the Company does not appropriately anticipate changes and continue to adapt its practices to meetthese challenges, its growth could be impeded. If the Company’s entry into new markets were delayedor even unsuccessful, this could materially adversely affect the business, financial condition and resultsof operations of the Company.

Dependence on Senior Executives

The financial success of the Nordex Group is largely attributable to the efforts of the managingdirectors of Nordex AG’s subsidiaries and the leadership of senior executives employed by BorsigEnergy GmbH. The future financial success of the Nordex Group depends on highly qualified managerscontinuing to work for the Nordex Group and furthering its interests in the long term. If such managerswere to leave the Group, this could have a material adverse affect on the Group’s business, financialcondition and results of operation of the Group.

Recruiting and Employees

The successful attainment of the Nordex Group’s corporate goals is heavily dependent on its ability torecruit, retain and train highly qualified employees, particularly in the areas of mechanical engineering,electrical engineering and rotor blade development. Extremely important for Nordex’s continuedsuccess are employees who, in addition to training in the above-mentioned areas, have experience indesigning and developing wind turbines. Suitable marketing and sales employees, who should generallyhave a technical background and knowledge of the particulars of wind turbine construction, are equallyin demand. There is a risk that due to overall growth, particularly of the market for wind turbines, andthe resulting demand for suitably trained professionals, retaining an insufficient number of qualifiedemployees could become a barrier to growth for the Nordex Group and prevent it from reaching itsgoals. This could materially adversely affect the business, financial condition and results of operationsof the Group.

Research and Development

The Nordex Group invests substantial resources in the development of its products. However, the Groupdoes not undertake its own research activities. The Group is further developing the mechanical andelectronic components of its wind turbines, in order to reduce the costs of producing electricity bybuilding larger, more powerful and thus more efficient turbines (see ‘‘Business—Research andDevelopment’’). Specifically, the Group plans to make significant investments in the coming fiscal yearsin the development of a five megawatt offshore wind turbine. There can be no assurance that newproducts and the further development of existing wind turbines will be technically successful, will notexperience delays, will not incur higher costs than originally expected, or will succeed on the market.

21

No assessment can be made based on the basis of current information available today as to whetherthe development of a five megawatt turbine will be technically successful. If this development wereunsuccessful, the Company could be faced with substantial development costs with the possibility ofno related future earnings to offset these costs. This would have material adverse effects on thebusiness, financial condition and results of operations of the Nordex Group.

Fluctuations in Quarterly Results

In the past, the sales revenue and results from business activities of Nordex AG and its subsidiarieshave significantly fluctuated each quarter. The Company believes the quarterly results of its businesswill continue to vary from quarter to quarter due to a number of factors, such as strong fluctuations inincoming orders or the timing of new or improved product launches. A large portion of the NordexGroup’s operating expenses are fixed costs and cannot be adjusted according to short-termfluctuations in business activities. As a result, a decrease in sales revenue in a given quarter can have anegative impact on the results of the Nordex Group for that quarter. For this reason, there is a risk thatthe results from business activities of the Nordex Group in future quarters will fall below the analysts’and investors’ expectations. As a result, the market price of the Offered Shares could be materiallyadversely affected.

Tax Situation

Nordex AG, which was formed on August 25, 2000, and the consolidated Nordex Group, have not beensubject to any tax audits to date. However, some of its subsidiaries were subject to tax audits for theperiod from 1993 to 1995. These audits covered corporation, trade and value added tax as well asinvestment grants. The most recent tax audit was at Nordex Energy GmbH and took place in August1997. Nordex Automation GmbH received notification of a pending audit, but no audit was performed,and the right reserved by the authorities to re-audit the company has since been rescinded. No auditshave taken place at NPV Planungs- & Vertriebsgesellschaft mbH, Sudwind Energy GmbH or NordexRotor GmbH. An income tax audit was performed at Nordex Automation GmbH for the period fromDecember 1, 1991 to December 31, 1995, however, the audit did not result in any assessments. Anincome tax audit was also performed at NPV Planungs- & Vertriebsgesellschaft mbH for the periodfrom August 1, 1997 to September 30, 1999, which resulted in a request for payment of additional taxamounting to E1,000. The Company believes that the tax returns submitted were complete and correct,and that the tax assessments/provisions for taxes reflect the actual circumstances, and therefore doesnot anticipate any significant changes to tax assessments already made resulting in the payment ofadditional tax in the event of an internal audit. However, the tax authorities have the right to requestthe payment of additional tax at a later date due to differing interpretations of the facts, which couldhave material adverse effects on the business, financial condition and results of operations of theCompany.

22

Risks Inherent in the Market and CompetitionCompetition and Market Acceptance

The wind turbine business varies greatly depending on the region, but is highly competitive in certainmarkets. The key factors defining this competition are the capacity, reliability and quality of products,technological edge over the competition, price, the ability to fulfill local market requirements and thescope and quality of maintenance and training services. Some of the current or potential competitorsof the Nordex Group have access to greater financial, technical, human, marketing, purchasing andother resources. These competitors could react more quickly to new or emerging technologies or tochanges in customer requirements, or invest more resources in product development and sales, ordeliver competitive products more rapidly or at a lower price than the Nordex Group (see‘‘Business—Competition’’). In addition, competitors could form alliances through equity investments orcooperation deals, thus making their offerings more attractive and intensifying the competitionfurther. Such competition could lead to a decline in prices, reduced sales revenue and profit margins,and a decline in the Company’s market share, which could have material adverse effects on the NordexGroup and its business, financial condition and results of operations.

The level of demand for the Company’s products continues to be dependent on among other things,the development of the market for wind turbines, the performance of services and the type of powergeneration used to satisfy demand for electricity. A key factor for the success of power generation fromwind energy is the cost at which the electricity can be produced and the scope of financial support forthis type of power generation (see ‘‘—Legal Risks—Governmental Regulation’’). There can be noassurance that such costs can be kept low, or that there will be continued financial support for thispower generation. Discontinued support could have material adverse effects on the Company’sbusiness, financial condition and results of operations.

Technological Change

There is a trend in the Company’s markets toward larger and more powerful wind turbines, increasedefficiency and ease of maintenance, and the continuing technical development of wind turbines. Thefurther development of products featuring new technologies by Nordex or its competitors could causethe Group’s existing products to be regarded as outdated and unsaleable. The future success of theNordex Group will depend on its ability to continually and quickly develop and launch new andimproved products, which are also in step with technological developments and new standards, andmeet the constantly increasing requirements of its customers. Due to uncertainty in assessing futuretechnological developments, it is uncertain whether such products will be successful. A substantialdelay in launching new products could significantly impact the ultimate success of a product and otherrelated products, and also impede the further sale of predecessor products. There can be no assurancethat the Nordex Group will succeed in launching timely, new products, that the new products launchedwill be accepted to any significant degree in their respective markets, or that such acceptance willendure. Each of these circumstances could have material adverse effects on the business, financialcondition and results of operations of the Nordex Group.

Internationalization and Foreign Exchange Factors

The Nordex Group already generates a portion of its revenue and earnings in markets outside theEuropean Union’s Economic and Monetary Union, particularly in Denmark (approximately 39% offoreign revenue) in China (approximately 25%) and in the United States (approximately 14%). Thesubsidiaries active in foreign markets and the Chinese equity interest held by Nordex Energy GmbHhave not yet been consolidated either because they were of minor importance or because Nordex didnot exercise the level of control specified by the principle of control according to IAS 27. The NordexGroup generally minimizes risks from exchange rate fluctuations through applicable rate hedgingtransactions. In the past, the Company’s receivables and liabilities in foreign currencies wereinconsequential. Declining exchange rates for relevant foreign currencies could, however, affect thefinancial condition and results of operations adversely in the future, if the planned expansion of theCompany’s business abroad leads to a corresponding increase in receivables and liabilities denominatedin foreign currencies, and if the rate hedging transactions do not completely cover the risk in question.

23

Legal RisksLitigation Risk

Various Nordex Group companies are currently involved in a number of legal disputes, either pendingor threatened, with a variety of customers or suppliers, including: Aerpac Aerodynamics-Product andConsultancy B.V.; ITA S.A., through a former subsidiary of Nordex Energy GmbH, Ekter Aioliki S.A.;Energiekontor Windkraft GmbH; BOREAS Energie GmbH; Wehrle Werk AG; and Atlas EnergieanlagenGmbH and Gothaer Versicherungsbank VVAG, seeking recourse on guarantees or asserting claims fordamages. The conflict with ITA S.A. was resolved in an out-of-court settlement, following which thepending lawsuits were withdrawn. (see ‘‘Business—Litigation’’).

The outcome of these disputes is unclear. No forecast can be made as to whether the threatenedlitigation can be settled out of court and whether damages will be incurred. The Company or therelevant Nordex Group companies could be found liable or required to pay considerable damages as aresult of out-of-court negotiations in an amount exceeding provisions, or to pay substantial costs forthe repair of defective wind turbines or wind turbine components. In addition, the Company may haveto pay its own and the other party’s legal costs.

The Company’s majority shareholder, Borsig Energy GmbH, has indemnified the Company fromobligations to third parties arising from disputes currently known to it with respect to AerpacAerodynamic Products and Consultancy B.V., including the necessary costs of the retrofit programdeveloped for this purpose up to an agreed maximum of DM 20 million (plus the costs of the retrofitprogram). The indemnity also covers claims asserted by the Danish buyer of Ekter Aioliki S.A., due to itsdispute with ITA S.A. and the Companies contractually related to ITA S.A. respectively, and fromdisputes with Wehrle Werk AG, Energiekontor Windkraft GmbH, BOREAS Energie GmbH and AtlasEnergieanlagen GmbH & Co. KG Windpark Neuruppin.

Obligations to pay damages and repair turbines could have a material adverse effect on the Company’sreputation, and therefore indirectly or directly, for example in the event that the maximum amount ofthe indemnity is exceeded, have an adverse effect on the business, financial condition and results ofoperations of the Company.

No predictions can be made about the outcome of disputes in which the Nordex Group is suing thirdparties on warranties or asserting claims for damages (see ‘‘Business—Litigation’’). If the Groupcompanies’ claims are unsuccessful, the considerable expenses already paid for repairs to wind turbineswould not be recovered. In addition, it is possible that the court costs incurred would have to be borneby Nordex Group companies. This could have material adverse effects on the business, financialcondition and results of operations of the Company.

Product Defect Risk, Product Liability

The Nordex Group generally gives its customers warranties on its wind turbines, covering capacityrange, maximum noise level and servicing of delivered wind turbines. Compliance with capacity rangeand noise level are demonstrated when wind turbines are delivered, and Nordex provides servicing for aperiod of two to five years from the time the turbine is delivered.

There is a risk that the wind turbines developed, manufactured and sold by the Nordex Group could bedefective. Although the wind turbines are tested comprehensively before delivery and ongoingproduction is subject to quality assurance measures, there can be no assurance that defects will notarise during the operation of wind turbines that would entitle the respective wind turbine operators toseek compensation based on warranties. The Nordex Group carries warranty insurance on its machines,generally for the duration of the warranty for the wind turbines delivered. The insurance policies coverclaims by customers arising from warranties. If the problem is caused by a defective component froman outside supplier, Nordex can seek compensation from the relevant supplier (see ‘‘—Risks Related tothe Company—Technical Risks and Technologies Utilized’’). However, if no claim can be asserted againsta supplier, and the defect affects a large number of the relevant product or products from various windturbine series, claims by customers based on warranties could have a material adverse effect on thebusiness, financial condition and results of operations of the Nordex Group.

24

In addition, there is a risk that product liability claims could also be filed against the Company or one ofits subsidiaries if third parties are harmed by defective products that were offered for sale by a NordexGroup company.

Claims for damages against a Nordex Group company could have material adverse effects on thebusiness, financial position and results of operations of the Company, particularly when these claimswere not covered or not completely covered by the insurance policies purchased by the Company (see‘‘Business—Insurance Policies’’). In addition, malfunctions could damage the reputation of the productsdeveloped by the Company and therefore impair the marketability of its products.

Insurability of Risks

The Nordex Group holds insurance policies for the wind turbines it sells, which generally coverconstruction, manufacturing and assembly defects for which the relevant Nordex Group company isliable. Such insurance normally covers the first two years of operation of the wind turbines. Due to theNordex Group’s past high insurance claim record, there can be no assurance that the Nordex Group willbe able to obtain similar insurance coverage in the future at the same or not significantly higher cost.Higher insurance premiums, or the inability to use insurance to cover expenses for repairing defectiveproducts, would have a material adverse effect on the business, financial condition and results ofoperations of Nordex AG, provided the Nordex Group is not able to pass on increased expenses tocustomers through higher prices for wind turbines.

Governmental Regulation

Depending on location, power generation from renewable energies can be more expensive thanproducing electricity from coal, natural gas, oil or nuclear fuel, so the suppliers and producers ofelectricity from renewable sources are often dependent on political support—whether financial or legal(see ‘‘Market Environment and Regulatory Background’’). Any changes in the relevant regulatoryenvironment could have an adverse effect on the markets served by the Nordex Group, which in turnwould have a material adverse effect on the business, financial condition and results of operations ofNordex AG.

In the past, the decrease or elimination of governmental grants and support in a country has had asustained negative impact on the wind energy market share in that country. Although governmentaldevelopment programs will likely be in effect until the ratio of wind energy-produced power to totalpower usage has reached a level consistent with political goals, no forecasts can be made about whenthis level will be reached in each country. If government support were terminated, this could makeproducing electricity from wind energy unprofitable. The opportunities for the Nordex Group to sellwind turbines would drop sharply, which in turn would have material adverse effects on the business,financial condition and results of operations of the Company.

There can be no assurance that the currently regulations will not be amended, specifically with respectto minimum prices or undertakings to purchase a minimum volume of energy in accordance with theAct on Granting Priority to Renewable Energies (EEG). This could have a material adverse effect on thebusiness, financial condition and results of operations of the Company.

General Legal Environment and Suitable Sites

Wind turbines emit noise, light effects (such as rotating shadows and reflected flashes of light from therotor blades when the sun is shining), and ice throws in winter. Wind turbines also are sometimesregarded as detrimental to the beauty of the local environment, particularly by residents of neighboringresidential areas.

Laws and other regulatory measures govern the construction and operation of wind turbines (in termsof allowable noise levels, distance from buildings, and permissibility of construction projects in naturereserves). Due to these legal regulations, and the widely different wind conditions in various regions,only a limited number of suitable sites are available for wind turbines in Germany and a number ofother countries. There can be no assurance that changes in regulations will not be made and that thenumber of suitable sites will not decline further. This could lead to a decline in investment

25

opportunities for wind turbine and wind farm operators, which could adversely affect the sale of windturbines and the business, financial condition and results of operations of the Company.

The EU directive amending the directive on the assessment of the effects of certain public and privateprojects on the environment (Directive 97/11/EC of March 3, 1997) will strengthen, and has intensifiedin those states where the directive has been converted into national law, the regulatory framework forthe erection of wind farms. It requires that the member states of the European Union either introduce acase by case assessment which decides whether the assessment of the effects on the environment isnecessary or, at their discretion, determine criteria or thresholds upon fulfilment of which anassessment of environmental compliance is required prior to the erection of a wind farm. On the basisof this directive the Federal Republic of Germany plans to introduce a regulation within this year whichwill provide for a preliminary examination prior to the erection of a wind farm with three or more windturbines to ascertain whether this could have a negative impact on the environment. Among thecriteria of this regulation, the legislator plans to distinguish between wind farms with three to five andwind farms with six or more wind turbines. If the proposed wind farm is found likely to have a materialimpact on the environment, an assessment of the effects on the environment will be prepared,generally taking up to several months. It cannot be excluded that the introduction of this regulationcould lead to delays or even render impractical currently planned wind power projects.

Infringement of Third-party Rights

There is the risk that the Nordex Group could be involved in legal disputes based on allegedinfringement of intellectual property rights claimed by third parties. Claims asserted by third partiesand the resulting legal proceedings could, if successful, result in substantial claims for damages againstthe Group. Nordex does not have insurance to cover any such claims. Legal disputes with third partiesconcerning patents or other intellectual property rights could also result in the Nordex Group beingrequired to limit or halt the manufacture, sale or use of products in which Nordex utilizes the infringedor allegedly infringed third-party intellectual property right. If the Nordex Group were affected by suchdisputes, this could have a material adverse effect on its business, financial condition and results ofoperations.

Due to a patent application filed by a US-based competitor for variable-speed wind turbines, theNordex Group is currently unable to sell a portion of the wind turbines it produces in the United States.However, the Company believes that the Group can still penetrate this market, because it can marketand sell wind turbines in the United States that are not affected by this limitation. In addition, theCompany believes that it could sell the affected turbines in the United States without infringing uponanother company’s patent by making certain technical adaptations to these turbines which could bepossible with a reasonable amount of effort.

Risks in Connection with the OfferingInfluence of Selling Shareholders, Sale of Shares

After the capital increase and placement of the shares in the course of the Offering, Borsig EnergyGmbH and Nordvest A/S will together hold up to approximately 40% of Nordex AG’s share capital if theOver-allotment Option is not exercised.

Borsig Energy GmbH and Nordvest A/S will, therefore, still be able to exert substantial influence on theCompany. Borsig Energy GmbH and Nordvest A/S, especially operating together, are in a position,depending on the attendance at future General Shareholders’ Meetings of the Company, to stronglyinfluence the outcome of decisions governed by the German Public Companies Act, independent of thevotes of other shareholders. These decisions include matters such as the resolution on the utilization ofnet profits, the election and removal of Supervisory Board members, the appointment of an auditor,and corporate actions and changes to the Articles of Association. This could materially adversely affectthe Company’s business, financial condition and results of operations.

Two of the six members of the Company’s Supervisory Board are presently nominated by the BabcockBorsig Group and one of the six by Nordvest A/S, which is controlled by the Pedersen family. BorsigEnergy GmbH and Nordvest A/S have agreed to exercise their rights in the Company’s General

26

Shareholders’ Meeting of Nordex AG in such a way that the candidate nominated by Nordvest A/S iselected to the Supervisory Board (see ‘‘Relationships with Principal Shareholders, the Babcock BorsigGroup and the Pedersen Family’’).

After the expiry of the lock-up period for shareholders and the Lock-up Agreements entered into withDresdner Bank (see ‘‘The Offering—Lock-up Agreements’’), the Selling Shareholders will be able to selltheir shares. If the Selling Shareholders divest extensively, this could lead to an increased number ofNordex shares available, which could be detrimental to the market price of the Company’s shares.

Valuation of the Nordex Group as part of the Planned Merger

As part of the merger of Balcke-Durr AG and Babcock Borsig AG, which was reported in the press and isscheduled for the second half of 2001, a valuation will be performed of the Balcke-Durr Group in whichthe value of the interest held by Balcke-Durr AG in Nordex AG will be determined. The Companyanticipates that a preliminary valuation report for Balcke-Durr AG will be published (expected at thebeginning of April 2001), initially without the valuation of Nordex AG. In a second step, the value ofNordex AG will be included, taking into account the valuation established as part of the bookbuildingprocess and included in the above report. The valuation of Nordex AG in this expert opinion could differfrom the Offer Price determined on the basis of pre-marketing and bookbuilding by Nordex AG inconsultation with the Joint Lead Managers and the Selling Shareholders, and from the market pricethat develops following the listing, due, inter alia, to the differing legal premise behind the valuationrequired for the merger. Such discrepancies in valuations could have a material adverse effect on thefuture development of the market price of Nordex shares.

High Volatility on the Neuer Markt, no Public Market for the Company’s Shares

The Company has applied for admission to trading on the Neuer Markt of the Frankfurt StockExchange, a market segment established on March 10, 1997, for innovative growth companies inGermany. The companies listed on the Neuer Markt typically have a comparatively high risk-rewardratio. For this reason, the share prices and trading turnover of such companies have often been subjectto considerable volatility in the past, which is often either unrelated to the business success of suchcompanies or not related to the degree implied by such fluctuations. The considerable volatility ofshares on the Neuer Markt could have a material adverse effect on the Company’s share price.

Before the Offering, there was no public market for the Company’s shares. The Offer Price will bedetermined by Dresdner Bank in consultation with the Company and the Selling Shareholders followingcompletion of the bookbuilding process. There can be no assurance that the Offer Price will correspondto the price at which the Offered shares are traded subsequent to the Offering, nor that active tradingin the Company’s shares will develop and be sustained after the Offering. This could have a materialadverse effect on the market price of the Company’s shares.

27

Market Environment and Regulatory Background

The market environment for the manufacture and sale of wind turbines is characterized by a range ofenvironmental and regulatory factors, some of which vary greatly at a regional and national level.

Factors having a significant effect upon the market environment are: the local wind conditions (windregime), as wind turbines can only be operated economically in regions with appropriate windconditions (see ‘‘Business—Technical Background’’), and state subsidies provided for generatingelectricity from wind energy.

The costs of generating electricity using wind energy can currently only compete with the costs ofgenerating electricity from non-renewable energy sources in regions with excellent wind conditions,such as the coastal regions of Denmark and the UK. It is not possible to predict if and when the costs ofgenerating electricity using wind energy in non-coastal regions, such as Germany, will be able tocompete with the costs of generating electricity from conventional energy sources. In most regions,accordingly, electricity generation depends on state support for wind turbine operators to be able torun their farms economically. This support depends on the relevant environmental policies and onspecific wind conditions in the region.

Furthermore regional markets are at varying degrees of maturity – although there are already a largenumber of wind turbines in operation in Germany, Denmark, The Netherlands and the US that havebeen erected over the last 10 years, the market for wind turbines in Spain, Greece, Egypt and China hasgrown, inter alia, in the last 2-3 years as these countries have introduced subsidies. The nominal outputrequired by the various markets corresponds to the relevant market’s degree of maturity. In Germany,for example, the greatest demand is for turbines with a high nominal output, whereas in marketswhere the electricity generation by way of wind turbines is still in its early stages, demand is for smallerturbines with a lower nominal output. In this regard, it should also be taken into consideration thatestablishing and operating high output wind turbines, such as the Nordex N-80 model, requiressophisticated infrastructure such as fully developed road connections, heavy lifting cranes, etc. (see‘‘Business—Logistics’’).

Globally, the market for wind turbines depends on a small number of international manufacturers ofwind turbines and accordingly, other local manufacturers have a large number of operators aspotential customers (see ‘‘Business—Competition’’).

Environmental Policy – BackgroundThe Earth does not have an unlimited supply of fossil energy sources such as oil and gas which areused currently, and generating electricity from fossil energy sources releases carbon dioxide (CO2),which is thought to be responsible for the so-called greenhouse effect.

In order to combat the greenhouse effect at a global level, the Kyoto Climate Summit was held in 1997to further implement the commitments agreed upon at the Rio Earth Summit in Rio de Janeiro, Brazil.According to the minutes of the Kyoto Summit, the participating countries agreed to a long-termreduction of their CO2 emissions. The minutes contain, inter alia, a resolution which provides that by2010, all countries signing the minutes would reduce their CO2 emissions by an average of 5%compared to the level of emissions for 1990. In addition, countries of the European Union entered intoan agreement to reduce CO2 emissions in 1998. As a result, the Federal Republic of Germany has toreduce its CO2 emissions by up to 21% by 2010. In order to reach this target, the Gesetz uber denVorrang erneuerbarer Energien (The Act on Granting Priority to Renewable Energies (EEG)) came intoeffect in Germany on April 1, 2000. At European level, the Altener Program was implemented onFebruary 28, 2000 (Decision No. 646/2000/EC of the European Parliament and the European Council).This long-term program introduced a comprehensive concept for the promotion of renewable energy.

In contrast to fossil energy sources and nuclear energy, wind power is clean, inexhaustible and freelyavailable. As a result, with the exception of investment costs, the costs of operating wind turbines arecomparatively low. In the Company’s view, wind energy thus represents a promising future market.

28

Nordex AG believes that generating energy using wind power will become an important alternative togenerating electricity using fossil fuels. The Company attributes this to a number of factors: the factthat generating electricity using wind power will receive long-term state support because of politicalpressure; the fact that prices for fossil fuels will rise due to their increasing scarcity; and the fact thatlower prices for wind turbines will cause the costs of generating electricity using wind power tocontinue to fall. In this regard, the Company believes that the performance of turbines will increase,and wind farms with as many as 20 turbines will be able to contribute significantly to electricity supply.Even today, a Nordex N-80 wind turbine in a location with excellent wind conditions (e.g. coastalregions in Denmark or the UK) can generate up to 8.5 million kWh per year, while at an equivalentlocation in Germany a similar turbine can generate approximately 6.5 million kWh per year. Thesefigures correspond to the average consumption of approximately 1,600 and 1,200 householdsrespectively, or approximately 6,500 to approximately 8,500 tonnes of CO2 emissions if the samequantity of electricity were to be generated by burning coal. (Source: German Wind Energy Association– 25 Facts)

Regulatory BackgroundOpportunities for the sale of wind turbines produced by the Nordex Group also depend to a significantextent on the relevant legal framework for erecting and operating these facilities in Germany and manyother countries. For example, legal requirements may restrict the erection and operation of turbines. InGermany in particular, legal construction and noise emission requirements must be complied with,which can mean actual or legal restrictions on erecting or operating wind turbines in certain locations.On the other hand, certain legal incentives (those provided for by the EU in Germany, for example)could lead to an increased demand for wind turbines. The regulatory framework created by the EU inGermany, for instance, led to a substantial increase in the sale of new wind turbines in 2000.

Regulatory Framework for Supplying Electricity into Networks and Promoting Renewable Energy

Renewable energy is promoted in line with relevant national laws. Support ranges from regulations onsupplying electricity to the network which prescribe fixed prices for electricity generated by renewableenergy sources (e.g. Germany and Spain), tax credits (e.g. US) through to green certificate systems (e.g.Denmark).

Promotion in Germany

In Germany, the Act on Granting Priority to Renewable Energies (EEG) dated March 29, 2000, whichsuperseded the Stromeinspeisungsgesetz (German Act on Supplying Electricity from RenewableEnergies into the Public Grid) dated December 7, 1990 with effect from April 1, 2000, is of keyimportance to the construction of facilities for the generation of renewable energy. According toSection 1 of the EEG, the Act aims to protect the climate and the environment by enabling the growthof long-term energy supply and to substantially increase the contribution of electricity supplygenerated by renewable energy. The European Court of Justice has in a judgment of March 13, 2001,held that the German Act on Supplying Electricity from Renewable Energies into the Public Grid is notcontrary to European Law. The Company therefore believes that it is not likely that the EEG, whichsupersedes that Act is contrary to European Law. The Act regulates the supply of and payment forelectricity generated from wind energy and other sources (Section 2 of the EEG). In the case of suchsupply, the Act requires grid operators, i.e. electricity suppliers that operate grids for general supply, toconnect plants that generate electricity from renewable energy sources to the grid. These suppliersmust purchase electricity and pay the legally stipulated amount as prescribed by Sections 4 to 8 of theEEG. Section 7 of the EEG applies to electricity from wind energy. The Section prescribes a payment ofDM 0.178 (approximately EUR 0.09) per kWh for a period of five years from the date the plantcommences operations. Once this period has expired, the payment requirement becomes subject toother regulations, but continues in effect. The minimum payment prescribed by Section 7 (1) of the EEGis reduced by 1.5% each year, starting on January 1, 2002, and applies to all plants that commenceoperations after such date. A specific regulation is in place for plants located at least three nauticalmiles from the coast and which are due to continue in operation up to and including December 31,

29

2006. The period of operation for these plants according to Section 7 paragraph 1 no. 1 of the EEG andSection 7 paragraph 2 no. 2 of the EEG, is nine years.

According to Section 12 of the EEG, the Bundesministerium fur Wirtschaft und Technologie (the FederalMinistry of Economy and Technology) is required to issue a report to the German parliament on theimplementation of the Act by June 30 every second year following the implementation of the Act(initially on June 30, 2002) in conjunction with other ministries. In particular, ministries must makerecommendations regarding any changes in payment methods to be taken into account fromtechnological developments and market developments for new plants. A change in payment rates ispossible by passing an amendment to the Act.

The transmission of electricity generated using wind turbines is generally unproblematic for plantoperators. This is because wind turbine operators are paid by grid operators for the electricity theysupply in line with the EEG, and they are not involved in the resale and marketing of electricity once ithas been fed into the grid. As a result, wind turbine operators do not therefore need to negotiate termsfor the transmission of wind generated electricity (this has been known to result in litigation). Windturbine operators will face this problem according to the EEG, if they decide not to supply electricity tothe grid in order to supply customers directly. In such exceptional circumstances, plant operators maydemand that grid operators transmit electricity in accordance with Section 6 of theEnergiewirtschaftsgesetz (EnWG – Energy Industry Act) and Section 19 (4) no. 4 of the Gesetzgegen Wettbewerbsbeschrankungen (GWB – Act Against Restraints on Competition). Plant operatorsare then required to pay grid operators for electricity transmission. In the majority of cases, thismethod is not economically viable as electricity prices currently attainable are far below minimumcompensation rates prescribed by Section 7 of the EEG. Nevertheless, if electricity generated using windenergy were to be subject to special marketing methods, for example as ‘‘green’’ electricity, in theory itcould be possible for the price achieved to be higher than from the amount currently prescribed by lawplus transmission fees.

Promotion in other countries

In other countries, in particular in Europe, legal regulations on electricity supply and the promotion ofrenewable energy that are comparable or similar to German regulations already exist (e.g. in Spain) orare being promulgated (e.g. in France). In some countries, generating electricity through wind energy isalso being promoted by a system of green certificates, which the wind turbine operators receive andwhich they can sell to electricity suppliers, thereby enabling them to meet obligations to generate aportion of the electricity they sell in an environmentally acceptable manner.

In Spain an act similar to the EEG exists (last amended in 1999), which requires electricity suppliers topurchase electricity and to make payments at a level set by the state. The price of supply is adjusted inline with changes in the price of electricity for end users, the price of oil, gas and interest rates. As aconsequence, the act resulted in a price level of ESP 10.43 per kWh in 2000, or approximately DM0.123, and no changes are due in 2001.

In France, an act on supplying electricity to the grid, comparable to the EEG in Germany, is in theprocess of being enacted. This act is scheduled to take effect in 2001, and prescribes a price of FRF 0.55per kWh, or approximately DM 0.164, for supplying electricity to the grid for an initial period of fiveyears.

In the UK and Ireland, electricity generated from wind energy is promoted by a commitment by energysuppliers to purchase a certain minimum quantity of electricity from renewable energy sources. Apurchasing organization representing energy suppliers organizes tenders for this purpose, which allowtechnically certified wind farm projects that can supply cost-effective electricity to be selected; thesewind farms are awarded long-term electricity supply contracts. Because large areas of the UK andIreland that offer excellent wind conditions are environmentally protected areas (national parks),developing wind farm projects is problematic, although a range of directives have been promulgated toregulate and promote the planning of such projects.

30

The US provides federal support for operating wind turbines by providing tax credits — so-calledProduction Tax Credit. This credit amounts to approximately E0.161 per kWh generated from renewableenergy. The US regime of granting tax benefits is scheduled to continue until the end of 2001. TheCompany expects this to be extended. At an individual state level, the US also supports the expansionof generating electricity using wind energy as part of a so-called Renewable Portfolio System (RPS),and promotes such generation by stipulating a legally fixed proportion of electricity that must begenerated from renewable sources.

A similar system is also implemented in Denmark and the UK, among others. In these cases Energysuppliers can elect to either generate electricity from renewable sources directly, or to fulfill thiscommitment by purchasing so-called green certificates from wind farm operators. These greencertificates need to be freely tradable, in order to encourage a market for trading in certificates.However, establishing and maintaining such a trading system can run into problems when it comes topractical implementation. For example, Denmark has postponed introducing green certificates untilJanuary 2002, and has stipulated a fixed price of 1.3 Eurocents per kWh of electricity supply(approximately E0.013) until such time.

Promotion of renewable energy in developing countries

In developing countries, electricity generation from renewable energy sources is promoted in part bynational development aid programs from industrial nations, which either fully or partially finance windfarm projects in developing countries or which grant interest-free or low-interest loans for specificpurposes. In addition to national programs, the World Bank and international development aidinstitutions also fund programs. An additional method of advancing electricity generation fromrenewable energy in developing countries is granting state guarantees to safeguard the delivery ofwind turbines. During the fiscal year 1999/2000 approximately 20% of all wind turbines sold by theNordex Group were supplied under development aid programs.

Legal Requirements for Constructing and Operating Wind Turbines

The current legal framework does not permit wind turbines to be erected in all locations with sufficientwind conditions.

In order to erect a wind turbine in Germany, a turbine must initially comply with construction, planningand building regulations, and must comply with the provisions of the Baugesetzbuch (BauGB – FederalBuilding Code), the Baunutzungsverordnung (BauNVO – Federal Land Utilization Ordinance) and therelevant state building regulations. In addition, the erection of a turbine must also meet therequirements imposed by the Bundesimmissionsschutzgesetz (BimSchG – German Pollution ControlAct) and regulations relating to the preservation of nature and the environment. Whether or not theseregulations are fulfilled depends on the individual case. However, according to Section 35 paragraph 1no. 6 of the BauGB, wind turbines are granted special privileges, which means that they comply withthe law on planning building projects even if they are erected outside an area subject to constructionplanning law, where they would otherwise generally not be approved. Approval can, for example, bewithheld because of side effects caused by wind turbines, such as increased noise levels. The maximumpermissible noise levels are set out in the Technische Anleitung zum Schutz gegen Larm (TechnicalInstructions on Noise Abatement). Maximum levels of permissible shadow cast by the wind turbines arealso imposed. In future, an environmental audit will have to be carried out in certain circumstances,prior to the construction of wind farms (See ‘‘Risk Factors — Legal Risk — General Legal Environmentand Suitable Sites’’).

Specifications imposed by building law and other public law legal requirements for constructing andoperating wind turbines also exist in many other European and Non-European countries.

In Spain, for example, the entitlement to build wind turbines is regulated differently in differentregions. In most of the Spanish federal states (autonomıas) a legal framework for the construction ofwind farms is now in place. Requirements imposed by pollution control legislation generally play alesser role in the approval process, as the population density in most coastal regions is lower incomparison to Germany. Environmental studies and special permission are required for the

31

construction of wind turbines in remote areas (declaracion de utilidad publica). During the approvalprocess several public announcements, have to be made concerning the relevant wind project.Announcements issued by the authorities on the technical environmental impact of wind turbines are adecisive factor in whether planning permission (dictamen medioambiental) will be granted or not.

32

Business

Introduction and OverviewThe Nordex Group develops and produces technologically advanced wind turbines with an emphasis onhigh performance turbines, in particular megawatt turbines. The Company regards itself as a systemsdeveloper, focused on its key capabilities: the development and engineering of large wind turbines, thedevelopment and production of controls and electrical technology for its wind turbines, and thedevelopment and manufacture of rotor blades for megawatt wind turbines. In addition, the NordexGroup has positioned itself as a provider of services such as the technical planning of wind farmsystems, from the identification of suitable sites to the technical implementation of wind farms,including connection to the grid, as well as the servicing of wind turbines. The Nordex Group does notoperate its own wind turbines, except for prototypes which it uses for its own development purposes.

Nordex AG is a holding company. It directly holds 100% of the share capital of each of its fivesubsidiaries. It has a management role which involves it in exercising on a group-wide basis functionssuch as planning and strategy, the coordination of purchasing and sales, development and othercentral administrative functions.

In recent years, the Nordex Group has focused on the development and production of key componentsfor wind turbines (namely controls, grid connections and, more recently, rotor blades for megawattwind turbines). The Group has also established a supply management function for some of the othercomponents which are available on the open market, such as masts, gears, rotor blades (to the extentthe Group does not produce these itself), the production of each of which is contracted to two to threeleading outside suppliers, predominantly on the basis of long-term supply agreements. Although theNordex Group has only been manufacturing rotor blades since early 2000, it has already succeeded inrecruiting development personnel with a high level of technical expertise.

The turnkey production of wind turbines and wind farms as well as their maintenance and servicing arecarried out by Nordex Energy GmbH and Sudwind Energy GmbH. Nordex and Sudwind turbines aremanufactured by Nordex Energy GmbH in Rostock, Germany. Nordex Rotor GmbH produces some ofthe rotor blades required for the wind turbines produced by the Nordex Group, particularly for the N-80and N-62 models. Nordex Automation GmbH develops and produces electronic controls and the‘‘Nordex Control’’ control software for the majority of the wind turbines Nordex manufactures, and alsodevelops and produces electrical and electronic components for wind farms, including gridconnections. NPV Planungs- & Vertriebsgesellschaft mbH handles the technical planning of windfarms as well as sales of the Nordex Group’s wind turbines, principally in Germany, The Netherlands,Switzerland, Belgium and Austria. The Nordex Group’s activities therefore cover most aspects of thewind power industry, other than wind farm operations from the development of sites for wind turbinesthrough to the turnkey construction of wind farms.

The Nordex Group’s product line comprises turbines of all performance classes currently on the market,ranging from small wind turbines to the most powerful wind turbine in production in the world today,the N-80, which has a rotor diameter of 80m and a nominal output of 2.5 megawatts (see ‘‘—Productsand Production’’). Besides the Federal Republic of Germany, the Nordex Group’s main establishedmarkets are Denmark, Spain and China. The Nordex Group has also been successful recently in sellingits products in France, Greece, North America and in Egypt, where the Nordex Group is the dominantsupplier of wind turbines in what is still a relatively small market.

In the fiscal year ended September 30, 2000, the Nordex Group had an average of 523 employees andgenerated sales revenues of approximately E273 million and EBIT (earnings before interest and taxes)of approximately E13.2 million based on the IAS Pro Forma Consolidated Financial Statements.

As of February 20, 2001 Nordex had produced 1,528 wind turbines. The total nominal output of theseturbines is equivalent to approximately 1,013 megawatts.

33

The History of the Nordex GroupThe Nordex Group’s wind energy business traces its roots back to Nordex A/S, which was founded in1985 by the Pedersen brothers, one of whom, Carsten Pedersen, is currently a member of theManagement Board of Nordex AG. In 1996, the Balcke-Durr Group acquired a 51% stake in NordexEnergy GmbH, and thus entered the market for wind turbine production.

The following are the significant milestones in the Company’s development:

1985 Formation of Nordex A/S in Give, Denmark, by the Pedersen brothers. Construction of thefirst turbine with a capacity of 75 kW.

1987 Launch by Nordex A/S of the N-27/250 kW, the largest production wind turbine on theworld market at the time.

1991 Formation of Nordex Energy GmbH under the name. Nordex Energie Anlagen GmbH as asales company in Rinteln, Germany.

1992 Establishment of production facilities in Rerik, Germany. Installation of the 100th Nordexwind turbine.

1995 Construction by Nordex Energy GmbH of the N-54, world’s first series production windturbine in the megawatt that is now the market standard – 157 N-54 wind turbines hadbeen built by January 10, 2001.

1996 Acquisition by the Balcke-Durr Group of a 51% stake in Nordex Energy GmbH.

1997 Opening by Nordex of sales offices in Spain and China.

1998 Construction of the first N-60 prototype, a further development of the N-54, with acapacity of 1,300 kW. Construction of the 1000th megawatt turbine. Formation of a jointventure in China. The Balcke-Durr Group increased its stake in Nordex Energy GmbH to75% and also acquired NPV Planungs- & Vertriebsgesellschaft mbH. Opening by Nordex ofa sales office in Turkey.

1999 Installation by Nordex of its 1000th wind turbine. Formation of Sudwind Energy GmbHand Nordex Rotor GmbH. Establishment of the production center in Rostock, Germany.Formation of Nordex Iberica Borsig Energy S.A.

2000 Construction by Nordex of the first N-80, 2,500 kW turbine (currently the largest and mostpowerful series production wind turbine in the world) and the first S-70, 1,500 kW turbine.Formation of Nordex USA, Inc. and establishment of branch offices in Egypt and Greece.

Restructuring of the Nordex Group by transfer of the current subsidiaries into Nordex AG(previously Taifun AG).

2001 Intended placement and listing of the Company’s Shares.

Structure of the Nordex GroupNordex AG, founded as ‘‘Taifun AG’’ in 2000, functions as the strategic holding company of the NordexGroup. Nordex AG manages and coordinates the business activities of its five wholly-ownedsubsidiaries and is responsible, in particular, for coordinating purchasing, sales and developmentactivities on a world-wide basis, as well as for making decisions on the location of production sites.Further, Nordex AG provides the entire Nordex Group with cost-efficient services achieved through thecentralization of management and coordination activities such as corporate planning, finance andforeign exchange management, tax planning, patent and industrial property right management, andinvestor and public relations, as well as management and personnel functions.

The Nordex Group has organized its various business areas into five wholly-owned subsidiaries. It hasdone so in order to tailor the various components it produces on the supply-side to suit each of the

34

manufacturers, customers and suppliers active in the market, to enable each aspect of the business tohave its own market presence and to be able to respond quickly to market developments through smallmanageable and flexible units.

Nordex Energy GmbH, Rostock (moving to Norderstedt), which produces medium-sized predominantlystall-regulated and large predominantly pitch-regulated wind turbines (see ‘‘—Products andProduction’’) and constructs turnkey wind farms, has four subsidiaries of its own, all of which arewholly-owned except for Xi’an Nordex Windturbines Co. Ltd., China in which it holds a 40% stake.

Sudwind Energy GmbH, Oberhausen, Germany also produces and sells wind turbines, although theseare exclusively the pitch-regulated variant (see ‘‘—Products and Production’’). The Nordex Groupbelieves that it is advantageous for it to maintain a two-pronged market presence with its twodifferent brands, ‘‘Nordex’’ and ‘‘Sudwind’’.

Nordex Rotor GmbH in Rostock has been producing rotor blades, a key component of wind turbines,since February 2000. The production of rotor blades constitutes, together with the engineering andspecification of the turbines, the principal area of technical knowhow involved in the manufacture ofwind turbines. Nordex Rotor GmbH is also responsible for servicing and maintaining the rotor blades itmanufactures.

NPV Planung & Vertrieb GmbH in Norderstedt, Germany is responsible for planning wind farm projectsand for selling Nordex and Sudwind turbines in Germany, other German-speaking countries, Belgiumand The Netherlands.

Nordex Automation GmbH, Oberhausen, Germany develops and produces electronic controls, includingsoftware, and all electrical components up to the grid connection for wind turbines and wind farms.The reason for Nordex Automation GmbH’s having a separate market presence is that the companyhandles orders for Nordex Group customers directly in addition to developing and producingcomponents for the Nordex Group’s own wind turbines.

The following Chart shows the current structure of the Group:

Nordex IbéricaBorsig Energy S.A.Barcelona, Spain

Xi'an Nordex Windturbines*

Corp. Ltd, Xi'an, China

Nordex Hellas e.p.e

Athens, Greece

Nordex USA Inc.

Dallas, USA

Nordex Omnical Energy Services

(Shanghai) Co Ltd. Shanghai, China

NordexEnergy GmbH

Nordersted/Rerik

SüdwindEnergy GmbHOberhausen

NordexRotor GmbH

Rostock

NPV Planung &Vertrieb GmbH

Bad Essen/Nordersted

NordexAutomation GmbH

Oberhausen

Nordex AGOberhausen

* All companies are wholly-owned with the exception of Nordex Energy GmbH’s 40% interest in Xi’an Nordex Windturbines.

Nordex Energy GmbH’s subsidiaries, Nordex Iberica Borsig Energy S.A., Nordex Hellas e.p.e., NordexOminical Energy Services (Shanghai) Co Ltd., Nordex USA Inc. and Xi’an Nordex Windturbines Corp. Ltd.,are not included in the consolidated financial statements of Nordex AG.

35

The Wind Turbine MarketSupply of the global market for wind turbines is dominated by a small number of companies whiledemand is highly fragmented on a global, national and regional level. The wind turbine market is agrowth market and has experienced rapid growth at times, particularly during the 1990s. As a result ofextraordinary factors, growth in the United States and Spain, two major wind energy markets, declinedin 2000 due to tax-related issues and unusually lengthy approval processes. In 2001, however, windturbine manufacturers expect growth to recover strongly, both in terms of the number of turbines soldand in terms of revenues.

Key factors driving growth in recent years were continuous improvement in the efficiency of windturbines and a trend toward increasingly large and powerful turbines as well as a favorable climate interms of tax legislation and environmental laws. As there is a limited number of suppliers of windturbines, so the number of outside suppliers of complex components for wind turbines, such as rotorblades, is also limited. Consolidation has occurred in the area of outside suppliers as well, to such anextent that the entry into the market or the insolvency of a major outside supplier can have anoticeable knock-on effect on the price structure of individual manufacturers of wind turbines.

The wind turbine market is closely linked with the market for electricity from renewable sources. In thepast, the share of electricity used in Germany produced from renewable energy sources increased fromapproximately 4.6% in 1997 to approximately 6% in 1999, and amounted to approximately 5,528million kW/h (Elektrizitatswirtschaft, 1999 (2000) vol. 24).

According to a study by BTM Consult ApS1 dated March 2000, newly installed megawatt capacityworldwide is expected to grow from 3,922 megawatts in 1999 to 9,175 megawatts in 2004, an increaseof approximately 234%. This study also anticipates that increased cost-efficiency of wind turbines,taking account of environmental factors, will result in average annual growth of approximately 18.8%worldwide.

According to a study by the Paris-based International Energy Agency (IEA) (World Energy Outlook2000), global electricity consumption is expected to increase by approximately 32% in the periodbetween 2000 and 2010 to approximately 19,989 TWh. According to the provisional figures from thestudy by BTM Consult ApS relating to 2000 (which has not yet been published), the production ofelectricity from wind power is expected to increase from a forecast level of 40.73 TWh in 2000 toapproximately 392.45 TWh in 2010. A comparison of these two studies suggests that the proportion ofelectricity from wind energy will increase from approximately 0.27% in 2000 to approximately 1.96% in2010.

Market Development from 1997 to 1999 and in 2000

The aggregate megawatt capacity of wind turbines sold worldwide grew from approximately 7,636megawatts in 1997 to 10,153 megawatts in 1998 and 13,932 megawatts in 1999. This statistic showsan acceleration in the increase in megawatt capacity sold and reflects the trend toward wind turbineswith increasingly large nominal outputs. Whereas megawatt capacity sold rose by 33% from 1997 to1998, it increased by 37% from 1998 to 1999.

36

1 BTM Consult ApS describes itself as an independent consulting firm focusing on renewable energy sources and was formed in 1986 withits registered office in Denmark. The company’s employees have, in some cases, up to twenty years experience in the wind energy market.Five years ago, BTM began producing an annual survey of the wind energy market. The sources of BTM’s market data include relevantprofessional energy sector journals and estimates by consultants, top employees of wind turbine manufacturing companies andgovernmental institutions. The figures used in this document are based on a market study conducted by BTM in March 2000 relating to1999 and the provisional figures provided by BTM from the market study relating to 2000, which is expected to be published at thebeginning of April 2001.

The following table illustrates the annual worldwide development of newly installed megawatt capacityas well as the aggregate installed megawatt capacity for wind turbines in the past three years:

1997 1998 1999Average growth

1997 to 1999 20001)

Newly installed megawatt capacity 1,566 2,597 3,922 4,500

Annual growth 21% 66% 51% 50.1% 15%

Aggregate installed capacity (as at year-end) 7,636 10,153 13,932 18,432

Growth of aggregate installed megawatt capacity ascompared to prior year 26% 33% 37% 27.5% 32%

(Source: BTM Consult ApS – March 2000)

1) Provisional figures from an as yet unpublished study by BTM Consult ApS relating to 2000

According to the provisional figures from a draft study currently being prepared by BTM Consult ApSrelating to 2000, which has not yet been published (BTM Consult ApS – February 2001 (draft)), a totalcapacity of 4,500 megawatts was newly installed worldwide in 2000, representing an increase of 15%on the previous year. The increase in 2000 was thus at a substantially lower rate than in previous years.In the opinion of BTM Consult ApS, this slowdown was due, in part, to developments in the US, wheretax subsidies via Production Tax Credits expire at the end of 2001, and where there is currentlyuncertainty as to whether and in what manner electricity generation using wind energy will continueto be subsidized. However, the Company expects that the current tax subsidies will be extended.Elsewhere, the development of the Spanish market, where installations reached only approximately1,100 megawatts, contributed to the predicted overall low increase for 2000. BTM Consult ApS believesthat, in the US in particular, installed megawatt capacity will again increase considerably (source: BTMConsult ApS – February 2001 (draft)).

Of the 3,922 megawatt capacity which was newly installed worldwide in 1999 (prior year: 2,597megawatts), 3,192 megawatts, or approximately 81% (prior year: 68%) was installed in Europe. In1999, Germany was the leading European country with 1,568 megawatts of newly installed capacity(prior year: 793 megawatts), followed by Spain with 932 megawatts and Denmark with 325 megawatts.These countries thus accounted for approximately 88.5% of newly installed capacity in Europe in 1999.Asian countries accounted for only 115 megawatts in 1999 (approximately 2%; prior year: 147megawatts, or approximately 5%). In 1999 in the United States, the third largest single marketworldwide, new installations amounted to 477 megawatts, which was lower than the total in 1998(577 megawatts). This 477 megawatts of new installations in the United States in 1999 represented87% of newly installed capacity for the whole of the American continent, which totaled 548megawatts (1998: 658 megawatts).

37

The following table illustrates newly installed megawatt capacity in selected countries and regions from1997 to 1999 and in 2000:

Newly installed megawatt capacity

Total installedmegawatt

capacity to end1999

Newly installedmegawatt

capacity(1)

Country/Region Year Year Year1997 1998 1999 1999 2000

Germany 533 793 1,568 4,442 1,665

United States 29 577 477 2,445 N/A

Spain 262 368 932 1,812 1,100

Denmark 285 310 325 1,738 600

India 120 82 43 1,035 N/A

UK 55 10 24 362 N/A

China 67 54 25 262 N/A

Greece 0 26 103 158 N/A

Portugal 20 13 10 61 N/A

France 8 8 4 25 N/A

Turkey N/A 9 0 9 N/A

Europe (total) 1,318 1,766 3,192 9,737 N/A

Asia (total) 196 147 115 1,376 N/A

American continent (total) 43 658 548 2,667 N/A

(Source: BTM Consult ApS – March 2000)

(1) Provisional figures from an as yet unpublished study by BTM Consult ApS relating to 2000

According to the provisional figures from the as yet unpublished draft study relating to 2000 currentlybeing prepared by BTM Consult ApS, Germany, Spain and Denmark were in 2000 once again the mostimportant global markets, accounting for approximately 80% of total megawatt capacity installed in2000. BTM Consult ApS forecasts that newly installed megawatt capacity in the United States in 2000will prove to have been significantly lower than in the previous year (source: BTM Consult ApS –February 2001 (draft)).

Total megawatt capacity installed worldwide up to the end of 1999 was 13,932 megawatts (prior year:10,153 megawatts), distributed across a total of 43,545 wind turbines (prior year: approximately 38,761wind turbines) at the end of 1999, corresponding to an average capacity per wind turbine installedworldwide in 1999 of approximately 320 kW (prior year: c. 262 kW) (source: BTM Consult ApS – March2000).

A comparison of total installed kilowatt capacity to total installed turbines shows on the one hand thatthe average capacity of wind turbines installed has increased significantly in recent years, but also thatthere are considerable country-specific differences with regard to the size of turbines installed.Whereas in Germany the average capacity of all wind turbines operated increased from an average of623 kW in 1997 to 919 kW in 1999, the average capacity in Spain increased only from 422 kW in 1997to 589 kW in 1999 (source: BTM Consult ApS – March 2000).

The following table illustrates the development of the average nominal output of installed windturbines in selected countries:

Development of average nominal output(per turbine) in kW

Country Year1997 1998 1999

Germany 623 783 919

Sweden 550 590 775

Denmark 560 687 750

United States 707 723 720

UK 514 615 617

Spain 422 504 589

(Source: BTM Consult ApS – March 2000)

38

According to the provisional figures from the as yet unpublished draft study currently being preparedby BTM Consult ApS relating to 2000, this trend toward higher capacity wind turbines increased furtherin 2000. Based on its provisional figures for 2000, BTM Consult ApS estimates that the average turbinesize in the German market was approximately 1,100 kW.

The reason for the rise in average capacity is the trend toward installing increasingly powerful windturbines. The number of megawatt turbines rose from around 128 in 1997 to over 800 in 1999 and theshare of the total market for megawatt wind turbines increased from approximately 9.7% in 1997 and16% in 1998 to approximately 26.8% in 1999.

The following table illustrates the number of megawatt wind turbines – which constitute the corebusiness of the Nordex Group – installed up to 1997 and in 1998 and 1999 and the megawatt capacityrepresented by these turbines and the share of the global market of each class:

Development of the installation ofmegawatt turbines

Yearup to 1997 1998 1999

Number of megawatt wind turbines per year 128 332 802

Installed megawatt capacity per year 153 417 1,076

(Source: BTM Consult ApS – March 2000)

Of the 5,519 new wind turbines installed worldwide in 1999, 802 were megawatt wind turbines,representing a share of the wind turbine market of approximately 14.5%. In terms of installed capacity,1,076 megawatts out of the 4,021 megawatts of newly installed capacity in 1999 representedmegawatt turbines, a market share of approximately 26.8%.

The following table gives an overview of new wind turbines installed worldwide in 1999 by capacity:

Capacity range(in kW)

No. ofwind turbines

Installedcapacity

Market share(by capacity)

Avg. capacityper wind

turbineComments onmarket trend

Small wind turbines C500 kW 666 198 4.9% 297kW declining

Medium-sized wind turbines 500-999 kW 4,051 2,748 68.3% 678kWstable/declining

slightly

MW-class D1MW 802 1,076 26.8% 1,342 kW increasing

Total 5,519 4,022 100% 729 kW

(Source: BTM Consult ApS – March 2000)

Projected Market Development up to 2003

For the coming years, the BTM Consult ApS study of March 2000 expects a further increase in theworldwide installed megawatt generating capacity from wind turbines to a total of 38,300 megawattsin 2003. This would represent an increase of approximately 175% in installed megawatt capacitycompared to the position at the end of 1999. In Europe this study anticipates growth of approximately192%, from 9,737 megawatts to 28,427 megawatts during the same period. In Asia, the studyanticipates an increase from 1,376 megawatts (at the end of 1999) to 3,346 megawatts (at the end of2003), which would represent an increase of approximately 143%.

According to the provisional figures taken from the as yet unpublished draft study currently beingprepared for 2000, BTM Consult ApS forecasts an annual growth rate in the number of installed windturbines of at least 15% for the years 2001 to 2005. In this forecast, BTM Consult ApS anticipates asubstantial increase in installed wind turbines in the US in 2001, but stagnation of new installations in2001 in the Danish and German markets. According to BTM Consult ApS, this stagnation should start togive way from 2002 on, due to planned offshore installations. BTM Consult ApS forecasts that growthmarkets, such as Turkey, France and Italy will make a tangible contribution to the total number ofturbines installed in Europe from 2002 onwards. In addition, BTM Consult ApS also expects a slightincrease in the number of installations in China and India. According to BTM Consult ApS’s initial

39

forecasts, Northern Africa, primarily Egypt, Morocco and Tunisia are expected to show stable growth inthe number of installations.

The following table contains information taken from the BTM Consult ApS report for 2000 andillustrates the market forecast up to 2003 based for installed megawatt capacity for selected countriesand regions, which are important to the Company:

Country/Region

Totalinstalled

MW at endof 1999

Newlyinstalled

MW in1999 Forecast 2000 to 2003 in MW

Newlyinstalled

MW from2000 to

2003

Totalinstalled

MW at endof 2003

1999 1999 2000e 2001e 2002e 2003e Subtotal Total

Germany 4,442 1,568 1,400 1,600 1,200 1,500 5,700 10,142

Spain 1,812 932 1,500 1,500 1,500 1,800 6,300 8,112

Denmark 1,738 325 300 200 300 400 1,200 2,938

UK 362 24 50 100 200 300 650 1,012

Greece 158 103 100 100 150 150 500 658

Portugal 61 10 30 30 40 50 150 211

France 25 4 75 100 125 200 500 525

Turkey 9 0 20 100 100 150 370 379

United States 2,445 477 300 600 400 500 1,800 4,245

China 262 25 150 150 200 300 800 1,062

India 1,035 43 100 150 200 300 750 1,785

Europe (total) 9,737 3,192 4,010 4,445 4,615 5,620 18,690 28,427

Americancontinent(total) 2,667 548 400 800 600 750 2,550 5,217

Asia (total) 1,376 115 330 380 530 730 1,970 3,346

(Source: BTM Consult ApS – March 2000)

The Company anticipates that the cost of electricity generated from wind energy as compared withconventional energy sources will decline significantly, although the price of wind-generated electricityis strongly influenced by the location of the turbines. The Company believes that in a few years’ time,wind turbines in favorable coastal locations will be able to produce electricity more economically thangas-powered plants. The Company bases this belief on the continued decrease in the cost of producingpower from wind energy per kWh, and on increases as in the price of fossil fuels. The Company believesthat the reduction in the cost of producing power from wind energy will come from a reduction ininvestment costs of wind turbines per kW of installed capacity. In the period from 1991 to 2000,investment costs per kW of installed capacity declined by approximately 40% (source: BTM ConsultApS-March 2000). According to the March 2000 study by BTM Consult ApS, costs per installed kW areexpected to fall by another 15%-20% in the next five years.

The Company believes that the falling investment costs per installed kW are principally the result of thecontinually increasing kW capacity per turbine, which is increasing faster than turbine manufacturingcosts. In the coming years, the Company believes that the nominal output of wind turbines willincrease further.

CompetitionThe competitive position of the Nordex Group is characterized by strong market concentration ofmanufacturers of wind turbines. In 1999 approximately 92% of the global market for wind turbines,measured by installed capacity, was accounted for by only eight manufacturers, including the NordexGroup (source: BTM Consult ApS – March 2000). Some individual regional markets such as China, Egyptor The Netherlands are dominated by just two or three suppliers. The Nordex Group’s primarycompetitors in the wind turbine manufacturing market are the Danish producers, NEG Micon A/S,

40

Vestas Wind Systems A/S and Bonus Energy, the Spanish manufacturers Gamesa Eolica and Made, theGerman company Enercon GmbH and the US manufacturer Enron Wind Corp. (Tacke/Zond).

The following diagram illustrates the market shares of the Nordex Group and its competitors based onthe number of new turbines installed worldwide in 1999:

Market share 1999

Enercon12.5%

Vestas16.6%

Gamesa12.6%

Bonus8.6%

Made5.6%

Other7.7%

Enron (Tacke/Zond)

9.2%

NEG Micon19.4%

Nordex7.8%

(Source: BTM Consult ApS – March 2000)

According to the provisional results of the study by BTM Consult ApS relating to 2000, the NordexGroup increased its market share from 7.8% in 1999 to approximately 8.4% in 2000 (Source: BTMConsult ApS – February 2001 (draft)).

NEG Micon A/S, a listed company, was created in the mid-1990s from the merger of the Danishmanufacturers Nordtank Energy Group and Micon, which had both been active in the market since theearly 1980s, and the acquisition of another Danish manufacturer, Windworld. NEG Micon was theglobal market leader in 1999 in terms of total installed capacity (source: BTM Consult ApS – March2000).

Vestas Wind Systems A/S, also a listed company, is a Danish manufacturer that has been in the windenergy business since it first developed and has wind turbines installed in countries around the world.Vestas produces the key components of its wind turbines such as rotor blades, controls and somemasts (source: BTM Consult ApS – March 2000).

Gamesa Eolica, a joint venture between the Gamesa Group, Vestas and Sodena, was formed in the early1990s. Gamesa is the largest wind turbine manufacturer in Spain and has been a listed company since2000 (source: BTM Consult ApS – March 2000).

Enercon GmbH, which was formed in the mid-1980s, is the leading German wind turbine manufacturerin terms of installed turbines. Enercon uses a particularly high percentage of components produced in-house in its wind turbines (source: BTM Consult ApS – March 2000).

Enron Wind Corp. (Tacke/Zond) is a subsidiary of the US-based Enron Group, one of the world’s largestsuppliers of gas technology. In the mid-1990s, Enron launched its activities in the wind energy sectorwith the acquisition of Zond Systems Inc., a company which had formerly focused exclusively ondeveloping wind turbines, and Tacke GmbH, a German turbine manufacturer (source: BTM Consult ApS– March 2000).

Bonus Energy is a Danish manufacturer that also has decades of experience in the wind turbine market.Bonus is a pioneer in the area of active stall regulation (source: BTM Consult ApS – March 2000).

Made Energias Renovables is a wholly-owned subsidiary of the Spanish energy group Grupo Endesaand has a market presence in Tunisia and China as well as Spain (source: BTM Consult ApS – March2000).

41

The main characteristics that distinguish the Nordex Group from its competitors are the fact that itmanufactures both stall-regulated and pitch-regulated (variable and constant rotational speed) windturbines and that it can provide the entire range of services itself, from the development of key turbinecomponents through to the manufacture of rotor blades and controllers to grid connection. Anotherfeature which distinguishes it from its competitors is that Nordex has a policy of acquiring in themarket other standardized components with relatively low margins instead of manufacturing thesecomponents more expensively in-house, (see ‘‘—Products and Production—Production Sites andCapacity’’).

The following table shows a comparison of the types of wind turbine produced by the Nordex Groupand its main competitors:

Manufacturer Primary wind turbine type produced:

Nordex Stall-regulated wind turbines with constant rotational speed and variable-speed pitch-regulated wind turbines

Bonus Energy Stall-regulated wind turbines with constant rotational speed and with active stallregulation

Enercon GmbH Variable-speed pitch-regulated wind turbines and multiple generators

Enron Wind Corp. Variable-speed pitch-regulated wind turbines

Gamesa Eolica Variable-speed pitch-regulated wind turbines

Made Stall-regulated wind turbines with constant rotational speed

NEG Micon A/S Stall-regulated wind turbines with constant rotational speed and pitch-regulated windturbines

Vestas Wind Systems A/S Pitch-regulated wind turbines with OptiSlip (variable-speed)

The total market for wind turbines increased by approximately 46% in 1999 as compared to 1997 interms of newly installed capacity. As one of the leading companies in the megawatt, the Nordex Groupwas able to increase its global share of this growing market from approximately 4.3% in 1997, toapproximately 5.0% in 1998, and further to approximately 7.8% in 1999. This corresponds to anaverage increase of approximately 28% per year (source: BTM Consult ApS – March 2000). According tothe provisional results of the BTM study for 2000, the Nordex Group held a market share of 8.4% in2000 (source: BTM Consult ApS – February 2001 (draft)). In terms of megawatt turbines, which in 1999reached a 26.8% share of the total market based on newly installed capacity (prior year: 16%), theNordex Group had a market share of 20.4% in 1999 calculated on the basis of installed capacity.Enercon also captured a market share of approximately 20.4%, while Bonus held approximately 18.7%(source: BTM Consult ApS – March 2000).

The following diagram illustrates the market share held by the Nordex Group and its competitors in themegawatt segment in terms of installed capacity in 1999:

Market share in the megawatt in 1999

Other7.3%

Enercon20.4%

Bonus18.7%

Vestas17.7%

Enron (Tacke/Zond)

15.5%

Nordex20.4%

(Source: BTM Consult ApS – March 2000)

42

StrategyNordex’s overall strategy is to increase its worldwide market share through a combination of internaland external growth and to be one of the world’s top three manufacturers of wind turbines. To thisend, the Nordex Group intends to build upon its technological advantage in the megawatt segment andalso to further expand its international presence. Nordex’s strategy also focuses on increasingprofitability through the introduction of more intensive industrial manufacturing. Measures plannedfor the implementation of this strategy include:

Expansion of Nordex’s Technological Advantage in the Megawatt-Class

The Nordex Group believes that it has a technological lead in the construction of large-scale, megawattturbines and plans to increase this lead through the introduction of new megawatt wind turbines to itsproduct range and continued development of its existing types of wind turbines. The particular focus inthis area will be on the development of a new blade technology for rotor blades with a length of morethan 40m, and the construction of new wind turbines with a capacity of over 2.5 megawatts.

As a further long term objective, the Company plans to develop offshore wind turbines, i.e. windturbines that can be operated in wind farms on the open sea up to 40km from the coast. In order toserve the needs of the offshore market, which has already begun to develop with smaller turbinescloser to shore, the Company plans, in the medium term, to develop an offshore version of the N-80.The Company believes that there will be market demand in the long term for larger, higher capacityturbines for operation in offshore wind farms out at sea. For this reason, the Company has entered intoa joint venture with Jacobs Energie GmbH, a manufacturer of wind turbines, and pro + proEnergiesysteme GmbH & Co. KG, a development company, for the development of a 5-megawatt modelwith a rotor diameter of up to 120m. Plans for the development of such offshore wind turbines arecurrently at a very early stage, however, due to the highly exacting technical and physical requirementsand the demanding conditions in which such turbines would operate.

Improvement in the Cost-efficiency of Generating Power from Wind Energy

The Company aims to improve substantially the cost-efficiency of power generation from wind energyby reducing significantly the cost of generating electricity per kWh from the turbines it manufacturesand sells. Nordex plans to achieve this goal both by cutting manufacturing and assembly costs, and byreducing operating costs of its wind turbines and infrastructure costs. Series production of windturbines, turbine weight reduction and the cutting of installation costs through a time-saving plug-and-play assembly are primary factors in reducing manufacturing and assembly costs.

In order to reduce the operating costs of its wind turbines, the Company is developing a ConditionMonitoring System currently as an addition to its Nordex Control system. This system will enableoperators to diagnose errors early while the turbines are in operation and is intended to help preventbreakdowns, lengthen maintenance intervals for wind turbines in operation, and thus reducemaintenance costs.

The Company believes that these measures, together with the planned increase in capacity rating, willfurther improve the cost-effectiveness of generating power from wind energy.

Consistent and Early Presence in International Growth Markets

In order to increase its share of the world market, the Nordex Group plans to focus on expansionoverseas while continuing to expand within Germany, and aims, therefore, to increase its presence inregional markets where it is already active and at the same time build up a presence in new regionalmarkets. The Company considers the most interesting future markets to be: Spain in particular, due tothe existing law regarding the supply of electricity into the public grid and its good wind conditions;the UK, due to especially good wind conditions and the availability of tax credits for electricitygenerated from renewable sources; the United States, also due to good wind conditions and taxsubsidies for wind turbines; France, where a law on power from renewable energies is being drafted;and China, where the level of demand for energy is high and where the Nordex Group already has astrong presence.

43

The Nordex Group has already established its own sales subsidiaries or offices in Germany andDenmark, as well as nearly all of its important growth markets such as Spain, China and the UnitedStates. In order to expand its existing presence in regional markets, the Company is pursuing a multi-pronged strategy tailored to each market: whereas in Germany the Nordex Group is focusing on thesale of large, megawatt turbines and the completion of large scale projects, in other markets it willconcentrate on the sale of mid-sized turbines (such as the N-50/N-60) and the expansion of regionalsales (e.g. in Spain and France) and the establishment of its own sales structures (e.g. in the UK). InChina, the Company’s goal is to secure its market position by utilizing locally provided servicing and bymanufacturing wind turbines through its joint venture. In addition to growing organically, theCompany intends to acquire competitors or enter into strategic partnerships in order to move into newmarkets.

Reinforcement of Servicing Activities

The Company plans to increase customer loyalty in its established markets through the building up of acustomer-oriented, international servicing network, thereby securing and building up a furtheradvantage over its competitors. A key element in reinforcing the Nordex Group’s servicing activities —in addition to the further expansion of service centers — is its own control technology, Nordex Control.This control technology monitors and controls wind turbines continuously through built-in sensors. Inthe future, the data will not only be reported to the Nordex Group’s control center electronically, butwill also be available for customers to view via a Web browser.

In order to increase the quality of its services further, the Company has put in place an ongoingprogram to improve the level of qualification of its employees. A Servicing Academy was founded atthe end of 2000 for this purpose, which is also open to employees of partner companies.

Products and ProductionThe core competency of the Nordex Group is the development and engineering of large wind turbines,the development and manufacture of control systems for wind turbines, including grid connections,and the development and manufacture of rotor blades for megawatt wind turbines.

Technical Background

A wind turbine comprises a mast, a nacelle, which contains the essential mechanical and electricalparts, and a rotor. However, the generation of electricity by a state-of-the-art wind turbine is a resultof the specific interplay of various highly developed and synchronized components.

The technical achievement in developing a wind turbine lies in harnessing the wind, the speed of whichchanges continually from minute to minute, and the power of which fluctuates depending on the airtemperature, to generate a stable level of power whatever the wind conditions. The goal of thetechnical efforts and optimization, therefore, is to generate the highest constant level of power outputpossible from all possible wind conditions. The keys to achieving this are: the rotor blades must extractthe maximum amount of energy from the wind and convert it into torque, the drive train along withthe gear and the generator must efficiently convert the captured energy to electricity with as littlecapacity lost as possible, the power output of the wind turbine itself must be limitable to preventdamage to the turbine and adjustable to cope with the entire range of possible wind speeds, thecontrolling electronics of variable-speed wind turbines must control the interplay of all componentsand optimize the amount of energy captured from the wind, the wind turbine and its individualcomponents must be highly robust to withstand the forces acting on it and to seek to achieve problem-free operation for as long as possible.

44

The following figure illustrates the key components of a wind turbine:

The rotor blades

The rotor blades form the motor of the wind turbine. The wind turbine uses the rotor blades to collectkinetic energy from the wind and to convert this energy into a rotation of the rotor. The area swept bythe rotor blades (length of the rotor blade *p), the aerodynamic profile of the rotor blades and therotational speed of the rotor are the key factors determining the capacity of the wind turbine. Inturbines with stall-regulation, the rotor blades are fixed to the hub, whereas in turbines with pitch-regulation, they are attached so that they can rotate along their longitudinal axis. Wind turbines aremanufactured today almost exclusively with three rotor blades.

Energy conversion via the drive train and generator

The rotor blades are attached to the hub, which in turn is connected to the rotor shaft. The rotor shafttransfers the revolutions of the rotor to a gear, which itself is linked to the generator of the windturbine by way of a coupling. The unit comprising the rotor shaft, gear and generator is termed thedrive train of the wind turbine.

The generator at the end of the drive train converts the revolutions of the rotor blades into electricalpower. The wind turbine’s gear serves to increase the rotational speed of the rotor to match the speedof the generator. Depending on the technical design, the generator can be operated either at aconstant rotational speed (stall regulation) or at a variable speed.

Power regulation and limitation (stall and pitch regulation)

Depending on the technique employed to regulate and limit their capacity, wind turbines are generallyclassified as stall-regulated or pitch-regulated.

Stall regulation

In a wind turbine with stall regulation, power regulation is achieved by causing the air flow to stall bymeans of the aerodynamic profile of the blade when a certain wind speed is exceeded, preventing thewind turbine from capturing an increasing amount of energy. In order to increase the energy yield inlower power classes, it is possible to design the generator in such a way that it can operate twodifferent nominal rotational speeds in order to generate power more efficiently at various wind speeds.

Stall-regulated wind turbines are braked through the front 1.5m to 3m of the relevant rotor bladewhich can be rotated around its longitudinal axis. This is achieved through a hydraulic mechanism

45

which can turn the blade tip ‘‘out of the wind’’, acting as a type of aerodynamic brake similar to thelanding flaps of an airplane. The brakes in every wind turbine serve as emergency brakes and —similarly to the hand brake in a car — to immobilize and secure the mechanical components.

Pitch regulation

In a wind turbine with pitch regulation, power regulation is achieved by mounting the rotor blades onthe hub so that they can be rotated around their longitudinal axis, in order to control theiraerodynamic properties and thus their capacity to capture energy according to the wind conditions.When wind speeds (and thus the wind’s energy content) are low, the rotor blades can be turned ‘‘intothe wind’’ so that their angle of attack is maximized and, when a strong air flow creates too muchenergy, they can be turned out of the wind. Pitch-regulated wind turbines are braked by allowing therotor blades to flap like flags in the wind.

In addition, the nominal rotational speed of the generator in wind turbines with pitch regulation can beadjusted to the prevailing wind conditions. These turbines are therefore also described as variable-speed wind turbines. In these units, an inverter is installed between the generator and the power grid,which enables the generator to generate electricity at different frequencies.

The electronic controls in variable-speed wind turbines

In variable-speed wind turbines with pitch regulation, the electronic controls are the ‘‘brain’’ of theturbine and adjust the angle of incidence of the rotor blades with the generator to keep them workingsmoothly together. A key element of the Nordex Group’s expertise is comprised in its electroniccontrols. The electronic controls measure the generator’s power output and, through the pitchregulation adjust the angle of incidence of the rotor blades accordingly. If the generator’s power outputappears to be dropping, the rotor blades are turned slightly more into the wind, but if the generator’spower output exceeds a pre-defined maximum limit, the electronic controls cause the pitch regulationsystem to turn the rotor blades out of the wind.

The use of pitch regulation and the related control options ensures that the wind turbine produces themaximum possible energy output from the wind in all wind conditions, taking into account not onlyvariable wind speeds, but also the energy density of the wind. The colder the air, i.e. the denser the airsurrounding the wind turbine, the higher the energy density. Consequently, cold wind blowing at thesame speed as a warm wind carries more kinetic energy than the warm wind. In order to obtain optimalenergy output, the angle of incidence of the rotor blades can be adjusted as necessary. The advantagesinherent in this method for the optimization of output, in turbines with a capacity of approximately 1.5megawatts or more or in regions with particularly difficult wind conditions, outweigh the substantialadditional costs of-pitch regulated systems.

Other wind turbine components

Another component in the development of which the Nordex Group has considerable expertise is thesupport system, i.e. the mast of the wind turbine. Strong forces act on the mast over the entire life ofthe wind turbine; the nacelle of Nordex’s largest turbine, the N-80, weighs approximately 84 tonnes,and the rotor weighs approximately 49 tonnes. The turbine’s mast has to withstand these forces andprovide a secure foundation to the nacelle and the rotor without swaying due to changes in wind force,as this would result in the destruction of the turbine. The support systems used by the Nordex Groupare manufactured by various outside suppliers to the specifications of Nordex Energy GmbH.

The power generated by the wind turbine, usually at a voltage of 700 volts, is converted by atransformer to a ‘‘medium’’ voltage of 10 to 30,000 volts—depending on the grid operator—andsupplied into the grid. When several wind turbines are operated together on a wind farm, the operatormust ensure that turning on or stopping the wind turbines does not cause electrical surges to be fedinto the utility’s power grid, which could cause damage when the electricity reaches power customers.

The Nordex Group’s Product Range

The Nordex Group’s product range covers the range of wind turbine types currently available on themarket, from the N-29 with 250 kW nominal output to the N-80 with 2,500 kW nominal output, which,

46

due to their various sizes and nominal outputs, are suitable for use in the most varied economic andgeographical circumstances. The following table provides an overview of the types of wind turbinescurrently offered by the Nordex Group:

Type of

wind turbine Nominal output

Rotor diameter/

swept area Mast height

Year first

installed

Number of

installed

units(1)

NORDEX N-29 250 kW 29 m / 660 m2 30-50 m 1987 287

NORDEX N-43 600 kW 43 m / 1,452 m2 40-78 m 1995 420

NORDEX N-50 800 kW 50 m / 1,963 m2 46-70 m 1999 53

NORDEX N-54 1,000 kW 54 m / 2,290 qm 60-70 m 1995 163

NORDEX N-60/62 1,300 kW 60/62 m / 2,828-3,018 m2 46-85 m 1997 293

Sudwind S-70/77 1,500 kW 70/77 m / 3,848-4,656 m2 60-100 m 2000 21

NORDEX N-80 2,500 kW 80 m / 5,025 m2 60-100 m 2000 4

(1) As of February 20, 2001

The prices for Nordex and Sudwind turbines range from DM 0.4 million to DM 4.05 million, dependingon the model and specifications.

Apart from their nominal output and size, the various wind turbines comprising the Nordex Group’sproduct range vary primarily in the technology used for output regulation. Whereas for its smallerturbines the Nordex Group principally uses the less complex stall regulation technology, the largerNordex turbines, starting at 1.5 megawatt capacity, are equipped with pitch regulation. The Companybelieves that the advantages offered by the higher energy yield of these models compensate for thehigher costs associated with pitch regulation.

The following overview illustrates the distribution of Nordex turbines in the Group’s most importantsales markets as of February 20, 2001:

Country N-27/29 N-43 N-46 N-50 N-54 N-60/62 S-70/77 N-80 Total

China 30 84 4 114

Denmark 31 30 44 34 139

Egypt 105 105

France 1 28 29

Germany 196 102 27 9 150 223 21 4 721

Greece 1 35 36

India 263 263

Japan 5 6 1 12

Spain 25 25

United States 1 1 10 8 20

Other 19 4 3 23 49

Total 547 420 27 53 163 293 21 4 1,528

Capacity (MW) 116.45 252.00 16.65 42.40 163.00 380.90 31.50 10.00 1,012.90

In addition to smaller wind turbines with capacity of less than one megawatt, the Nordex Groupprimarily develops and produces megawatt wind turbines. Particularly notable in the Nordex Group’sproduct range are the N-80, the largest wind turbine in series production, the smaller S-70 and thestall-regulated N-54 and N-60 turbines.

The 2.5 megawatt Nordex N-80

Nordex’s N-80 is the world’s largest and most powerful wind turbine currently in series production. Therotor of the variable-speed N-80 consists of three rotor blades, each approximately 39m long, withpitch-regulated angle of incidence adjustment. The rotor blades are made of glass fiber-reinforcedpolyester using carbon fibers and can, by using a double-fed asynchronous generator and electricalpitch regulation as well as an inverter, be operated at a variable rotational speed of 10 to 19revolutions per minute, which corresponds to wind speeds of 3m/s to 25m/s. The turbine is controlled

47

through a programmable logic control and is equipped with the ‘‘Nordex Control’’ remote monitoringsystem, which allows all essential operating parameters to be transmitted to the Nordex control center.

The relatively low rotational speed, which due to the variable-speed design can be reduced to 10revolutions per minute, ensures a comparatively low noise level for a turbine of this size withoutcompromising capacity. In addition, the low rotational speed of the rotor is not perceived as disturbingby bystanders, because only rotational speeds that are faster than the human heart beat are oftenperceived as disturbing.

The 1.5 megawatt Sudwind S-70

Sudwind Energy GmbH’s S-70 is the ‘‘little sister’’ of the N-80 and is technically very similar. With arotor diameter of 70m and tower heights of 65 – 85m, the pitch-regulated, variable-speed S-70achieves a nominal output of 1.5 megawatts, which can be reached at wind speeds as low as 14 m/s.The S-70 is produced and sold, pursuant to a licensing agreement between Sudwind Energy GmbH andpro + pro Energiesysteme GmbH & Co. KG (see ‘‘—Intellectual Property Rights – Patents, Trademarksand Licenses’’).

Nordex N-54 and N-60

The Nordex N-54 and the N-60, which was developed from the N-54, are designed to a differentunderlying technical concept from the N-80 and S-70. The N-54 and N-60, which are among the bestselling wind turbines produced by the Nordex Group, are stall-regulated, and the generator units arecomprised of a pole-changeable asynchronous generator. The pole-changeable function of theasynchronous generator enables the N-54 and N-60 to operate at two different nominal rotationalspeeds which can be switched while the turbine is in operation, thus increasing the energy yield invariable wind conditions.

The N-54 generates a nominal output of 1,000 kW at wind speeds between 14 m/s and 25 m/s with arotor diameter of 54m and tower heights of 60m to 70m.

The N-60 generates a nominal output of 1.3 megawatts with a rotor diameter of 60m or 62m andtower heights of 60m to 85m. The N-60 can be operated at wind speeds of between 3 m/s and 25 m/s.

Production Sites and Capacity

The Nordex Group’s strategy is to develop and manufacture key components of wind turbines in-house,while at the same time coordinating the sourcing of low margin components commonly available onthe open market from outside suppliers. The Nordex Group concentrates its production on keycomponents such as rotor blades for its N-80 and N-60 large-scale wind turbines, control systems andelectrical components including the grid connection, as well as the engineering of its turbines. Theremaining components are sourced from other manufacturers of which some belong to the BabcockBorsig Group (see ‘‘—Material Contracts’’ and ‘‘Relationships with the Majority Shareholders, theBabcock Group and the Pedersen family’’). In addition to various small parts, third-party componentsprincipally include towers, molded parts, rotor blades, generators and mechanical components (gears,pitch bearings, shafts, brakes, etc.).

The rotor blades produced in-house for the N-80 and N-60 models are manufactured for Nordex byNordex Rotor GmbH in Rostock, the production facilities for which are still in the process of beingfitted out. The Nordex Group currently manufactures only 30m and 40m rotors for the N-60 and N-80models, while some of the rotor blades for the N-60 are sourced from other manufacturers. NordexRotor GmbH had 74 employees as of December 31, 2001.

The control systems including the related software and electrical components, including switchcabinets, are produced by Nordex Automation GmbH in Rostock.

Nordex Energy GmbH’s completed wind turbines are assembled at the Rostock and Give, Denmark sitesas well as in a joint venture in Xi’an, China. Sudwind Energy GmbH does not manufacture anycomponents, but instead outsources the production of its wind turbines primarily to Nordex EnergyGmbH and to a lesser degree to other production facilities. Sudwind Energy GmbH maintains anassembly plant in Lichtenau (near Paderborn) for servicing and maintenance.

48

The maximum weekly production capacity of Nordex Energy GmbH currently amounts to 12-14megawatt wind turbines and 7-8 smaller wind turbines. Wind turbines for entire wind farms areproduced in series at a production speed which is coordinated to the assembly speed of completedturbines at the construction site. Assembly of the individual wind turbines at the construction site takesthree to four days. Producing the wind turbines in this manner enables the Nordex Group to avoidhaving to maintain an interim warehouse facility for fully assembled turbines and thus to savewarehouse space and costs.

The Nordex Group employed 401 people in its production activities as of December 31, 2000.

Nordex pursues a strategy of having several suppliers in order to ensure that required components areavailable at all times (see ‘‘—Customers and suppliers ‘‘). The majority of components are delivered just-in-time to avoid unnecessary warehousing costs.

As of February 20, 2001, the Nordex Group produced a total of 1,528 wind turbines. The total nominaloutput of these turbines amounts to approximately 1,013 megawatts.

ServicesThe Nordex Group’s aim is to cover the entire technical value chain with its products and services, fromthe identification of suitable sites and the planning of wind farms to their technical implementation. Inaddition to the production of wind turbines, this involves the provision of an extensive list of servicessuch as:

Planning of wind farm systems Planning wind farm systems includes identifying suitable sites,inspecting the sites, calculating capacity and sound levels, andanalyzing safety and network capacity. These services areprovided by NPV Planungs- & Vertriebsgesellschaft GmbH forNordex.

Development and technicaldesign of wind farms

The overall design process of a wind farm involves bringingtogether the individual turbines and electrical components into atotal solution while taking into account safety and capacityfactors. These services are also provided by NPV Planungs- &Vertriebsgesellschaft mbH for Nordex.

Construction of wind turbines The construction of wind turbines or entire wind farms isundertaken by the Nordex Group, with the exception of site-preparation and foundation work. First the tower is erected, afterwhich the masts, nacelle and rotor blades are positioned andassembled with the aid of cranes. The final steps are theinstallation of electrical components, grid connections andcommissioning.

Maintenance and service Nordex offers maintenance services for its wind turbines, whichinclude around-the-clock remote monitoring and maintenanceand repair of the units. Nordex’s full-service package currentlyincludes a five-year guarantee on the wind turbine and five yearsof free maintenance including the cost of materials. The pricesfor these packages amount to between DM 16,000 (N-50) andDM 48,000 (N-80) per year.

49

Sales and MarketingNordex AG manages and coordinates the sales and marketing activities of the Nordex Group, but doesnot itself sell any products due to its function as a holding company and therefore does not generateany significant revenue directly.

The Nordex Group’s sales activities are divided according to the following geographical regions:Northern Europe, Southern Europe/South America, China/India and North America. The companies ofthe Nordex Group have built a strong international sales network and maintain sales branches orrepresentative offices in the following locations:

City Country Activity

Norderstedt Germany Sales

Give Denmark Sales/Production

Beijing, Xi’an China Sales/Production*

Victoria Australia Sales

Cairo Egypt Sales

La Plaine St.-Denis France Sales

Athens Greece Sales

Tokyo Japan Sales

Lower Hutt New Zealand Sales

Molde Norway Sales

Barcelona Spain Sales

Kalix Sweden Sales

Istanbul Turkey Sales

Dallas United States Sales

*Joint venture

The Nordex Group thus has a local presence in the key growth markets of Germany, Spain, Denmark,the United States and China.

As of December 31, 2000, the Nordex Group employed 59 people in sales, of whom 22 were employedby Nordex Planungs- und Vertriebsgesellschaft mbH, 36 by Nordex Energy GmbH, and one by SudwindEnergy GmbH.

The wind turbines produced by the Nordex Group are primarily sold by companies of the Group, theforeign sales and marketing companies owned by Nordex Energy GmbH and to a lesser degree,particularly in the case of Sudwind turbines, through sales partnerships and alliances. In Germany andother German-speaking countries, The Netherlands and Belgium, turbines are sold by Nordex Planungs-und Vertriebsgesellschaft mbH, in Spain they are sold by Nordex Iberica Borsig Energy S.A. (a subsidiaryof Nordex Energy GmbH), in China by Nordex Omnical Energy Services (Shanghai) Co. Ltd. (also asubsidiary of Nordex Energy GmbH), and in Denmark and Egypt by branch offices of Nordex EnergyGmbH. In the United States, sales are handled by Nordex USA Inc., Dallas, a wholly-owned subsidiary ofNordex Energy GmbH. The Nordex Group also maintains sales offices or representations in Australia,France, Greece, Japan, New Zealand, Norway and Sweden. A significant proportion of sales isconducted with approximately 20 ‘‘key accounts’’.

In the past, the Nordex Group was able to take advantage of international outlook of the BabcockBorsig Group and the Balcke-Durr Group in establishing its own international sales network. TheCompany believes that the Nordex Group’s separation from the Babcock Borsig Group will not have anyadverse effects on Nordex’s sales activities.

Nordex’s sales activities are also supported to a lesser degree by its own sales companies and offices —by sales alliances and independent sales partners. Nordex Energy GmbH has entered into a salesalliance with Thyssen Mannesmann Industries S.A. in Paris for the French market. The Nordex Groupplans to expand its sales activities further in the future (see ‘‘—Strategy’’).

50

The Company’s marketing is mainly through advertisements placed in professional industry journals,attendance at national and international energy fairs such as the Hanover Fair, PowerGen, WindTechHusum and PowerExpo as well as conferences and professional seminars (e.g. the AWEA and BWEAconferences).

LogisticsThe delivery and assembly of wind turbines can, at times, constitute a considerable logistical challengefor the Nordex Group. A complete wind turbine (including tower and rotor blades) weighs up to 310tonnes (N-80 with 80m tower). A single rotor blade from the Nordex N-80 weighs around 10 tonnesand measures approximately 39m long; the nacelle weighs approximately 84 tonnes. Insofar astechnically possible and economically feasible, the wind turbines are, prior to delivery, broken downinto separate components that can be assembled quickly and cost-effectively at the construction site.Separating the wind turbine into individual components is, however, subject to technical and economiclimitations.

These technical and economic constraints put high demands on the logistical operations of the NordexGroup, particularly in terms of transport vehicles and the state of transport routes. These logisticalchallenges can create considerable problems for the Nordex Group, above all in regions with less welldeveloped infrastructures. The Nordex Group therefore investigates technical feasibility beforeaccepting a contract. The costs of transport and assembly, which can total up to 10% of the ordervolume, can make the delivery of wind turbines over a certain size substantially more expensive incertain regions. The Company can partly reduce transport costs for the wind turbines by sourcingcomponents commonly available on the market, such as towers for the wind turbines, from localsuppliers.

Customers and SuppliersThe Nordex Group’s customers are mainly wind turbine operators, which include retail investmentfunds, set up for the purpose of operating wind farms, and some publicly traded companies such asEnergiekontor AG and Plambeck Neue Energien AG, which exclusively or chiefly produce electricityfrom renewable energies.

In fiscal year 1999/2000, the Nordex Group generated approximately 54% of its revenues(approximately EUR 147 million) from its ten biggest customer, and the share of revenuesattributable to the biggest customer for that year was approximately 10.2%. The Nordex Group’sbiggest customers include in particular Prokon GmbH, Windpark Ihlewitz and Boreas Energie GmbH,which together generated approximately 25% of the Group’s revenue in fiscal year 1999/2000, withProkon GmbH accounting for approximately 10.2%, Windpark Ihlewitz for approximately 7.6% andBoreas Energie GmbH for approximately 7.2% of this revenue. In the fiscal year 1998/1999 the threebiggest customers (Energiekontor, Prokon and seeba) accounted for approximately 19.7% of theGroup’s revenue.

In the production of its wind turbines Nordex uses mainly standard components, which it purchasesfrom several different manufacturers or dealers. The Company pursues a strategy of having severalsuppliers in order to have at least two suppliers for each component, thus reducing its dependence onindividual suppliers and allowing it to operate with a comparatively low level of resources.

For rotor blades, however, the Nordex Group faces a market situation that is quasi-monopolistic. TheNordex Group primarily purchases its rotor blades from LM Glasfiber A/S, the market leader for rotorblades, since this company, together with NOI Rotortechnik GmbH, meets the Company’s requirementsas to quality and financial soundness.

The Nordex Group follows an intelligent supply management system by which the majority of thecomponents are delivered just-in-time in order to avoid unnecessary warehousing costs, and whichcombines the in-house manufacture of certain complex product parts and core components of its windturbines with the outsourcing of project-specific series production and the procurement of lowermargins components commonly available on the open market.

51

The chief suppliers of towers are Welcon A/S, a company in which the Pedersen family holds aninterest, and OMNICAL GmbH, a Babcock Borsig Group company. The main suppliers of gears are A.Friedrich Flender AG, a former Babcock Borsig Group company, and Eickhoff Maschinenfabrik. The mainsuppliers of generators are Loher AG, also a former Babcock Borsig Group company, and VA Tech ELINEB9 Motoren GmbH. The Group mainly purchases electrical components and inverters from IntegralDrive Systems AG and Schaltanlagen-Elektronik-Gerate GmbH & Co. KG and hubs and turbine framesfor its wind turbines from, among others, Babcock Gießerei GmbH. See also the section entitled‘‘Relationships with the Principal Shareholders, the Babcock Group and the Pedersen family’’ for moreinformation on the companies belonging to the Babcock Borsig Group or the Pedersen family’sholdings. The Company is of the opinion that the agreements with Babcock Borsig Group companiesand companies in which the Pedersen family holds interests were concluded on standard market termsand conditions on an arm’s-length basis.

Material ContractsIn addition to standard agreements for the purchase or supply of components and the sale of windturbines, the Nordex Group has concluded the following agreements with associated companies (see‘‘Relationships with Principal Shareholders, the Babcock Borsig Group and the Pedersen family’’).

Service agreement between Nordex AG and Borsig Energy GmbH

On January 1, 2001, Nordex AG and Borsig Energy GmbH entered into a service agreement stipulatingthat Nordex AG can utilize the employees and resources of Borsig Energy GmbH in the areas of law,taxation, investments, financing, personnel consulting, accounting and reporting, information services,and auditing. Remuneration is set at cost of documented expenses plus a margin of 2%. The agreementis unlimited in term and can be terminated by Borsig Energy GmbH with six months’ notice, no earlierthan December 31, 2001, and by Nordex AG at the end of a quarter with one month’s notice.

Master agreement between Nordex Energy GmbH and Omnical GmbH

On October 1, 1998, Nordex Energy GmbH and Omnical GmbH, a Babcock Borsig Group company,entered into a master agreement pursuant to which Nordex Energy GmbH undertakes to purchase fromOmnical GmbH at least 50% of the tubular steel towers for wind turbines ordered from Nordex EnergyGmbH, a subsidiary of Nordex Energy GmbH, or another Group company or licensee. This purchaseundertaking applies to all wind turbines installed in Scandinavia, the Benelux countries or Germany, orin any other country insofar as Nordex Energy GmbH does not procure the tubular steel towers fromanother manufacturer in that country. Omnical GmbH is not obliged to accept orders from NordexEnergy GmbH. If it does not, Nordex Energy GmbH is free to award the contracts to third parties. Theagreement is unlimited in term and can only be terminated for good cause. Good cause will exist inparticular if Omnical or any of its affiliates no longer belongs to the Balcke-Durr Group.

Master agreement between Nordex Energy GmbH and Welcon A/S

On October 1, 1998, Nordex Energy GmbH and Welcon A/S, a company belonging to the PedersenBrothers’ holdings, entered into a master agreement in which Nordex Energy GmbH undertakes topurchase from Welcon A/S at least 50% of the tubular steel towers for wind turbines ordered fromNordex Energy GmbH, a subsidiary of Nordex Energy GmbH or another Group company, or a licensee.The agreement can only be terminated for good cause.

Master agreements between Nordex Energy GmbH/Sudwind Energy GmbH and Loher AG

On October 1, 2000, Nordex Energy GmbH and Loher AG, a former Babcock Borsig Group company,entered into a master agreement covering the supply of generators by Loher AG, particularly for N-43,N-50, N-54, N-60 and N-80 wind turbines, and all other components ordered by Nordex Energy GmbHfrom Loher AG. There is no purchase requirement on behalf of Nordex Energy GmbH. Nordexguarantees to purchase at least 70% of the total euro value of its requirement for individual types ofgenerators per fiscal year from Loher AG on the condition that the generators offered by Loher AG arecompetitive in terms of price, quality, warranty, availability and dependability of after-sale service. Thevalue of the generators purchased from Loher AG in any given fiscal year may not exceed 80% of the

52

total value of its requirement for generators in the prior fiscal year. The agreement may be terminatedno earlier than September 30, 2010. After that, the agreement can be terminated at the end of a yearwith six months’ notice. The agreement applies to all controlled subsidiaries of Nordex Energy GmbH,i.e. all subsidiaries in which Nordex Energy GmbH holds an interest of more than a 25% blockingminority, except Sudwind Energy GmbH, with which a separate agreement has been concluded.

An agreement relating to the Sudwind S-70 with the same terms and conditions was also entered intoon October 1, 2000 between Sudwind Energy GmbH and Loher AG.

Master agreements between Nordex Energy GmbH/Sudwind Energy GmbH and A. Friedrich Flender AG

On October 1, 2000, Nordex Energy GmbH and A. Friedrich Flender AG, a former Babcock Borsig Groupcompany, entered into a master agreement on the supply of gears, particularly for N-43, N-50, N-54,N-60 and N-80 wind turbines, as well as all other components ordered by Nordex Energy GmbH fromA. Friedrich Flender AG. There is no purchase requirement on behalf of Nordex Energy GmbH. Nordexguarantees to purchase at least 70% of the total euro value of its requirement for individual types ofgears per fiscal year from A. Friedrich Flender AG on the condition that the gears offered by A. FriedrichFlender AG are competitive in terms of price, quality, warranty, availability and dependability of after-sale service. The value of the gears purchased from A. Friedrich Flender AG in a given fiscal year maynot exceed 80% of the total value of its requirement for gears in the prior fiscal year. The agreementmay be terminated no earlier than September 30, 2010. After that, the agreement can be terminated atthe end of a year with six months’ notice. The agreement applies to all controlled subsidiaries of NordexEnergy GmbH, i.e. all subsidiaries in which Nordex Energy GmbH holds an interest in excess of a 25%blocking minority, except Sudwind Energy GmbH, with which a separate agreement has beenconcluded.

An agreement with the same terms and conditions relating to the Sudwind S-70 was entered into onOctober 1, 2000 between Sudwind Energy GmbH and A. Friedrich Flender AG.

Licensing agreement between Sudwind Energy GmbH and pro + pro Energiesysteme GmbH & Co. KG

On January 24, 2000, Sudwind Energy GmbH and pro + pro Energiesysteme GmbH & Co. KG enteredinto a non-exclusive licensing agreement limited to Germany for the manufacture and sale of S-70wind turbines (see ‘‘Business – Intellectual property rights – Patents, trademarks and licenses’’).

Master agreements between Nordex Energy GmbH/Sudwind GmbH and Babcock Gießerei GmbH

On August 7 and 18, 2000, Sudwind Energy GmbH and Babcock Gießerei GmbH entered into a masteragreement for the supply of hubs. This agreement does not stipulate a minimum volume and applies toall deliveries up to December 31, 2001. On March 7, 2001, Nordex Energy GmbH and Babcock GießereiGmbH entered into a corresponding agreement which provides for a fixed term until December 31,2003, with the option to extend the agreement until December 31, 2005.

The Company is of the opinion that the agreements described above contain standard market termsand conditions and were entered into on arm’s-length terms.

Research and DevelopmentThe Nordex Group places great emphasis on continued development work. Mastery of the constructionof wind turbines in their entirety requires a precise interplay among the individual component partsand ensures the efficiency of the products. However, the Nordex Group does not conduct its ownresearch.

The core components of wind turbines, in particular the control technology (including software), therotor blades, electrical components and the pitch regulation system, determine the quality of theoverall turbine and therefore are developed and improved primarily by the Company’s own employees.The Nordex Group’s internal know-how ranges from the technical design of the wind turbine, to thefunctioning of the blades, to control and inverter technology.

53

As of December 31, 2000, the Nordex Group’s research and development department employed a totalof 34 people, 14 of whom worked in mechanical engineering, ten in technology, five in productoptimization and offshore development, and five in other areas of research and development.

The following table gives an overview of the Company’s research and development expenses and thepercentage represented by these expenses of overall revenue for fiscal years 1997/1998, 1998/1999and 1999/2000 (all figures are based on the IAS Pro Forma Consolidated Financial Statements):

Research and developmentFiscal year

1997/1998Fiscal year

1998/1999Fiscal year

1999/2000EUR thousand

Nordex Energy GmbH 1,060.4 2,498.2 4,042.3

Nordex Rotor GmbH 0 0 0

Sudwind Energy GmbH 0 0 0

Nordex Planungs- und Vertriebsgesellschaft mbH 0 0 0

Nordex Automation GmbH 0 0 0

Total 1,060.4 2,498.2 4,042.3

in % of revenue for the relevant fiscal year 1.28% 1.11% 1.48%

The technical development of a wind turbine prototype, which takes approximately one-and-a-halfyears, is generally followed by field testing lasting approximately one year, certification and typeapproval. The process of approval serves to document the structural engineering required forconstruction permit and to prevent the requirement to audits of individual turbines. To receive typeapproval, the construction principles of the wind turbine are first tested and certified by an expert bodyfor wind turbines. This certification then serves as the basis for type approval.

During field testing, the prototype is installed on a suitable windy site and tested under normaloperating conditions. Depending on the length of this test phase and the type of wind turbine, theCompany can incur considerable costs, although the electricity generated during the field test can inpart defray these costs.

54

Intellectual Property RightsPatents, Trademarks and Licenses

Most of the components and processes the Nordex Group uses to develop and manufacture windturbines are state-of-the-art, and therefore free of third-party intellectual property rights claims. Incertain cases the Nordex Group protects itself further by concluding licensing agreements for the useof components and processes to which third parties hold intellectual property rights. Insofar as legallypossible, the Nordex Group protects the components and processes it develops in-house.

The Nordex Group holds the following intellectual property rights:

Description Type Number Date of application

Nordex Energy GmbHProcess for controlling electricity fed into

the grid by wind turbines and thecorresponding circuitry

European patentapplication filed

EP 0 877 475 A1 Apr. 29, 1998

Process for controlling electricity fed intothe grid by wind turbines and thecorresponding circuitry

National patentapplication filed

DE 197 19 308 May 7, 1997

Device for improving grid compatibility ofwind turbines with asynchronousgenerators

National utility patent DE 296 21 449 U1 Dec. 10, 1996

‘‘Nordex Control’’ trademark /logo National trademark DE 300 23 078 Mar. 24, 2000

‘‘Nordex Control’’ logo Community trademark 158 4077 Mar. 22, 2000

‘‘Nordex’’ trademark National trademark DE 300 76 017 Oct. 13, 2000

On January 24, 2000, Sudwind Energy GmbH and pro + pro Energiesysteme GmbH & Co. KG enteredinto a non-exclusive licensing agreement limited to Germany for the manufacture and sale of S-70wind turbines. The licensing agreement was entered into for an initial fixed term ending on September30, 2001 and will be extended until September 30, 2003 if Sudwind Energy GmbH has paid to thelicensor the licensing fees for at least 25 wind turbines by September 30, 2001. Provided that SudwindEnergy GmbH pays the licensing fees for an additional 75 wind turbines by September 30, 2003, theagreement will be extended by an additional two years. If Sudwind Energy GmbH has paid licensingfees for more than 100 wind turbines by September 30, 2005, the licensing agreement will be extendedindefinitely with the licensor reserving the right to terminate the agreement if Sudwind Energy GmbHpays licensing fees for less than five wind turbines in any period of 12 months. To the extent thatSudwind Energy GmbH sold S-70 wind turbines outside of Germany in the past, it obtained thelicensor’s approval prior to each delivery by notifying pro & pro Energiesysteme GmbH & Co. KG of itsintention to make such delivery. The Company believes that pro & pro Energiesysteme GmbH & Co. KGwill continue to grant individual approvals to sell the wind turbines outside the license territory toSudwind Energy GmbH in the future. In addition, the Company is of the opinion that pro & proEnergiesysteme GmbH & Co. KG will give Sudwind Energy GmbH timely notice if it intends to grantlicenses to third parties abroad and will offer Sudwind Energy GmbH the opportunity to acquire suchlicense.

Internet Domain Names

Internet domain names may only be registered once due to the current organization of the World WideWeb. Registration, therefore, grants the holder exclusive rights of use. The registration of a domaindoes not, however, grant exclusive property rights against the use of the domain by third parties.Moreover, third parties that hold older rights to trademarks or names used in the registered domaincan prohibit others from using such domain.

55

The Nordex Group has registered the following Internet domain names, among others:

nordex.ag nordex.de nordex.dk

nordex-online.de nordex-online.dk nordex-online.com

nordex-energy.com suedwind.com suedwind-online.de

suedwind-online.com suedwind-energy.com npv-online.com

npv-planungundvertrieb-de nordex-automation.com nordex-rotor.com

nordex-windenergie.de nordex-windkraftanlagen.de nordex-windpower.com

nordex-windturbines.com nordex-aktie.de nordex-ipo.de

Management and EmployeesThe Nordex Group had an average of 523 employees in fiscal year 1999/2000. The following table liststhe average number of employees by activity over the past three fiscal years.

ActivityFiscal year 1997/

1998Fiscal year 1998/

1999Fiscal year 1999/

2000

Production 72 195 325

Research and development 6 20 32

Sales and marketing 18 28 31

Administration 49 97 135

Total 145 340 523

As of September 30, 2000, the Nordex Group employed approximately 137 people overseas. Themajority, approximately 128 employees, worked in manufacturing at Nordex Energy GmbH in Give,Denmark. Other employees of the Nordex Group were employed in sales and marketing companies andoffices in countries including Spain, Greece, the United States, Turkey, France and China.

As of December 31, 2000, the Nordex Group had a total of 634 employees, 401 of whom wereemployed in production, 34 in research and development, 59 in sales and 140 in administrations, i.e. inthe areas of purchasing, technical settlement and services, accounting and human resources. Inaddition, as of December 31, 2000, the Nordex Group had an additional 15 trainees, 14 of whom wereemployed by Nordex Energy GmbH and one by Nordex Automation GmbH.

For the Nordex Group to achieve its strategic aims (see ‘‘—Strategy’’), highly qualified personnel must beemployed at all levels of the Group. The employees of the Nordex Group therefore continually undergotraining and professional development. As part of the Offering, the employees in Germany will have theoption to acquire Nordex shares and thus to participate in the financial success the Nordex Group aimsto achieve. The issue of stock options as part of an employee and management equity compensationplan is intended to further increase the attractiveness of the Nordex Group to qualified managers andprofessionals, in that these employees will profit from future increases in the Company’s value (see‘‘Executive Bodies of the Company—Employee and Management Share Scheme’’). There have been nowork interruptions at Nordex AG to date.

The Nordex Group is managed by the Management Board of the Company, which currently comprisesthree members (see ‘‘Executive Bodies of the Company—Employee and Management Share Schemeand—Management Board’’). The next level of management consists of other managers at Nordex AG aswell as managing directors of Nordex subsidiaries.

Due to the short period of time Nordex Group has existed in its current legal form, no Group workscouncil has been formed to date at Nordex AG itself. Work councils are in existence for Nordex EnergyGmbH and Nordex Automation GmbH. No works councils have been formed at Nordex Rotor GmbH,Sudwind Energy GmbH and Nordex Planungs- und Vertriebsgesellschaft mbH.

No collective bargaining agreements are currently in place at Nordex AG. Collective bargainingagreements exist at Nordex Automation GmbH in relation to the relocation of the registered office andworks holiday rules.

56

Since it ceased being a member of the Babcock Borsig Group, Nordex AG has not been subject to co-determination regulations. The Supervisory Board of Nordex AG therefore comprises only shareholderrepresentatives.

InvestmentsThe following table is an overview of the Nordex Group’s investments, taking into account subsidiesreceived, for the past three fiscal years in thousands of euro. This table is prepared on the basis of theIAS Pro Forma Consolidated Financial Statements:

InvestmentsFiscal year

1997/1998Fiscal year

1998/1999Fiscal year

1999/2000

EUR thousand

Intangible assets 893 2,369 4,457

Property, plant and equipment 1,241 7,601 9,267

Financial assets 0 774 240

Total 2,134 10,744 13,964

Of the investments in intangible assets totaling approximately EUR 7,719 thousand in the past threefiscal years, approximately EUR 2,125 thousand were related to the type approval for wind turbines andsoftware purchases (EUR 404 thousand in fiscal year 1997/1998; EUR 567 thousand in fiscal year 1998/1999; EUR 1,154 thousand in fiscal year 1999/2000). Other investments related to development costsfor new wind turbines totaling approximately EUR 3,328 thousand (EUR 489 thousand in fiscal year1997/1998; EUR 1,528 thousand in fiscal year 1998/1999; EUR 1,312 thousand in fiscal year 1999/2000) and licenses and similar assets totaling EUR 2,266 thousand (EUR 290 thousand in fiscal year1998/1999; EUR 1,976 thousand in fiscal year 1999/2000).

Investments in property, plant and equipment in the past three fiscal years amounting toapproximately EUR 18,109 thousand primarily comprise investments in the assembly plant in Rostockof approximately EUR 2,546 thousand (EUR 41 thousand in fiscal year 1998/1999; EUR 2,505 thousandin fiscal year 1999/2000). In addition, of the investments in property, plant and equipment in the lastthree fiscal years, EUR 1,128 thousand was spent on the purchase of jigs (EUR 239 thousand in fiscalyear 1997/1998; EUR 763 thousand in fiscal year 1998/1999; EUR 126 thousand in fiscal year 1999/2000), EUR 1,260 thousand (in fiscal year 1998/1999) on financing the purchase of a mobile crane, EUR1,199 thousand on operating and office equipment in fiscal year 1999/2000 and approximately EUR4,377 thousand on exhibiting prototypes (EUR 229 thousand in fiscal year 1997/1998; EUR 1,812thousand in fiscal year 1998/1999; EUR 2,336 thousand in fiscal year 1999/2000). Other investments inproperty, plant and equipment primarily related to wind turbines, processing equipment, assembly andtransport equipment and other technical plant and equipment as well as workshop fittings, vehicles,tools and office and operating equipment.

Investments in financial assets in the past three fiscal years amounting to approximately EUR 1,014thousand mainly related to Nordex Energy GmbH’s equity investments in China in the Xi’an NordexWindturbines Corp. Ltd. (in fiscal year 1998/1999) and in Nordex Omnical Energy Services (Shanghai)Co Ltd. in Shanghai (in fiscal year 1998/1999).

These investments were mainly financed through the Babcock Borsig Group’s clearing system, whichwill be maintained up to the Offering and is scheduled to be discontinued on April 4, 2001.

The Company plans to invest approximately EUR 21 million in the current fiscal year, approximatelyEUR 14.7 million of which will be earmarked for the construction of Nordex Rotor GmbH’s newassembly plants in Rostock on the GVZ site (see ‘‘—Real Estate and Real Property’’). This undertaking isbeing subsidized with a 35% investment grant from the federal state of Mecklenburg-Vorpommern.The net investment by the Company will amount to approximately EUR 10 million. Furthermore, NordexAG also intends to invest in the further development of wind turbines, particularly in the constructionof prototypes, software implementation, expansion of the production facilities in Rostock andexpansion of sites abroad. In the first quarter of the current fiscal year to December 31, 2000, the

57

Company has already invested approximately EUR 2,931 thousand in Nordex Energy GmbH and NordexRotor GmbH, principally in property, plant and equipment. Future investments will be financedprimarily from funds accruing from the Offering.

Insurance PoliciesThe Company believes that the companies of the Nordex Group have adequate insurance coverage. TheNordex Group has insurance coverage for fire/loss of business due to fire, legal liability, transport andautomobile risks through master agreements concluded by Babcock Borsig AG for itself and all of itsaffiliated companies. These affiliate agreements remain in effect unchanged from the time the NordexGroup ceases to be a member of the Babcock Borsig Group until the next annual maturity date onSeptember 30, 2001, although Nordex AG may terminate the policies earlier if desired. The Companybelieves that it will be able to conclude new insurance policies with the same or similar terms andconditions. In addition, Nordex Energy GmbH and Sudwind Energy GmbH have concluded an assemblyinsurance agreement. Nordex Energy GmbH and Sudwind Energy GmbH have two year warrantyinsurance for all wind turbines. These insurance policies cover damage such as material constructionand assembly faults, to the extent the Nordex Group is liable (see ‘‘Risk Factors—Legal Risk—Insurabilityof Risks’’).

Real Estate and Real PropertyThe administrative office of Nordex AG is located in rented offices at Bornbrach 2, 22848 Norderstedt(near Hamburg), Germany. Nordex Energy GmbH’s production facilities are located at Erich-Schlesinger-Str. 50, 18059 Rostock, Germany and 7323 Give, Svindbaek, Denmark. Nordex RotorGmbH’s manufacturing plant for rotor blades is also located at Erich-Schlesinger-Str. 50, 18059Rostock.

58

The following table provides an overview of the location, purpose and approximate area of all key realestate rented by the Nordex Group (totaling approximately 61,600m2):

Location Purpose Approx. area in m2

Nordex Energy GmbH

Norderstedt Administration 2,862

Rostock Production 21,825

Give, Denmark Sales/Manufacturing 13,434

Nordex Planungs- und Vertriebsgesellschaft mbH

Bad Essen Sales 280

Rerik Sales 250

Ergenzingen Sales 110

Nordex Rotor GmbH

Rostock Production 15,233

Nordex Automation GmbH

Oberhausen Administration/Sales 599

Rostock Production 4,553

Sudwind Energy GmbH

Oberhausen Administration 450

Lichtenau Service/Training 1,100

Nordex Iberica Borsig Energy S.A.

Barcelona Sales 260

Nordex Omnical Energy Services (Shanghai) Co Ltd.

Shanghai Sales /Servicing 350

Nordex Hellas e.p.e

Athens Sales 70

Nordex USA inc.

Dallas Sales 220

In addition to the rented facilities for production and administration, Nordex Energy GmbH also ownstwo properties in Rerik measuring approximately 1,606m2 and 5,082m2, including an office building,assembly plant and an office block. In addition, the Nordex Group also operates a test turbine on thesmaller of the two properties. Nordex Energy GmbH plans to sell this property as part of moving theCompany’s administration to Norderstedt (near Hamburg).

The Nordex Group also maintains a number of sales offices and branch offices (see ‘‘—Sales andMarketing’’) and approximately 13 service centers which provide maintenance for wind turbines forwhich Nordex is responsible.

On October 16, 2000 Nordex Rotor GmbH entered into a purchase agreement with the city of Rostockto acquire four adjacent lots with a total area of approximately 40,000m2 in 18146 Rostock, GroßeRampe (‘‘GVZ Property’’), for the construction of a new assembly plant. Rotor blade manufacture isscheduled to start on site in the fourth quarter of 2001. Pursuant to this purchase agreement, NordexRotor GmbH undertook to develop the property itself and use it for commercial purposes. The purchaseagreement stipulates that the property is to be used for the building of a production facility forindustrial equipment, particularly wind turbines and wind turbine components. Nordex Rotor GmbH is

59

not authorized to construct other buildings not serving this purpose. To secure development andensure utilization of the property in line with the agreement, the city of Rostock has reserved the rightto repurchase the property. In the event that Nordex Rotor GmbH sells the property within five yearsafter its acquisition, Nordex Rotor GmbH must pay over any profit made on the sale to the city ofRostock.

On September 27, 1999, Nordex Energy GmbH made a notarized offer valid from August 31, 2004, toOctober 31, 2004, to purchase 32,395m2 of land on Erich-Schlesinger-Straße, Rostock, which it hasbeen renting since September 1, 1999. Rental payments made up to the date of purchase will bededucted from the purchase price. Therefore the parties understand that the entire purchase price willhave been paid by the time the offer can be accepted. A notice of exemption pursuant to Article 1,Section 4, Paragraph 3 of the Umweltrahmengesetz (Environmental Framework Act) of June 29, 1999,in the form laid down by Article 12 of the Gesetz zur Beseitigung von Hemmnissen bei derPrivatisierung von Unternehmen und zur Forderung von Investitionen (Act for the Removal of Barriersto the Privatisation of Companies and the Promotion of Investment) of March 22, 1999, was issued tothe former owner of the aforementioned site. This notice exempts 90% of the overall costs of measuresnecessary for averting risks caused by residual waste. The exemption is expected to be transferred toLandesgesellschaft Mecklenburg-Vorpommern and thereafter to Nordex Energy GmbH. If this occurs,Nordex Energy GmbH will be required to bear 10% of the costs for measures to avert the risk caused byresidual waste. For measures to avert the risk caused by residual waste, which arose after July 1, 1990and prior to September 1, 1999, Nordex Energy GmbH will assume the first DM 500,000 of the costs forsuch measures. Landesgesellschaft Mecklenburg-Vorpommern will assume any costs betweenDM 500,001 and DM 1 million. Costs exceeding DM 1 million will be borne by Nordex Energy GmbH.

LitigationExcept for the matters detailed below, neither the Company nor its subsidiaries have been involved inany legal or arbitration proceedings that have had or could have a material influence on the economicposition of the Company or on its subsidiaries in the past two fiscal years or since their formation. Withthe exception of the matters detailed below, to the best of the Company’s knowledge and that of itssubsidiaries, no such proceedings are currently threatened.

In an agreement dated November 22, 2000, Borsig Energy GmbH undertook to release the Companyfrom obligations resulting from litigation with Aerpac Aerodynamic Products and Consultancy B.V.(including the costs required for the retrofit program agreed for this purpose – up to an agreedmaximum amount), from the claims made by the Danish purchaser of Ekter Aioliki S.A. due to thiscompany’s litigation with ITA S.A., and from claims arising out of disputes with Wehrle Werk AG,Energiekontor Windkraft GmbH, BOREAS Energie GmbH and Atlas Energieanlagen GmbH & Co. KGWindpark Neuruppin. These disputes and litigation are described below. With the exception of the costsfor the retrofit program, this liability release undertaking applies up to a maximum total amount of DM20 million. In the light of the current status of the disputes and litigation, including a settlementagreed with ITA S.A., the Company believes that this amount is sufficient.

Litigation with Aerpac Aerodynamic Products and Consultancy B.V.

Aerpac Aerodynamic Products and Consultancy B.V. (‘‘Aerpac’’) is one of Nordex Energy GmbH’s long-standing suppliers for rotor blades. Nordex Energy GmbH concluded a master supply agreement for thesupply of rotor blades with this company in early 1999. In this contract, Nordex Energy GmbHundertook to purchase at least one set of blades per week. The contract was to run until December 31,2003.

Having ascertained material technical defects, Nordex Energy GmbH, having given notice andthreatened to reject future shipments, terminated the agreement for good cause on October 25, 2000.Nordex Energy GmbH cancelled the orders it had already given under the contract.

Aerpac asserts that the termination of the agreement was not based on good cause and that thedefects were not development or manufacturing defects, but rather damage resulting from bladevibration due to the rotor being overburdened. Aerpac therefore demands that Nordex Energy GmbH

60

accept and pay for the rotor blades it has ordered (including the cancelled orders) in fulfilment of themaster supply agreement, and that Nordex Energy GmbH settle its invoices for rotor blades that havealready been supplied. The demands made by Aerpac in an out-of-court letter from its lawyers totalDM 10,551,124.

The Company believes that Nordex Energy GmbH properly terminated the agreement, and the demandthat it accept and pay for rotor blades is therefore unfounded. It has rejected the claim for payment forthe rotor blades already supplied on the grounds that Aerpac was committed to supplying the rotorblades free of charge according to a number of agreements concluded by the contracting parties andas a result of warranty obligations. To date neither Aerpac nor Aerpac’s insolvency administrator havechallenged the termination in court or sued for payment.

In addition, Nordex Energy GmbH believes that, due to the alleged defects in the rotor blades suppliedby Aerpac, it has a claim against Aerpac for the costs of necessary repairs and restoration work on therotor blades (a so-called retrofit program) which it carried out itself, which it could offset against anyclaims made by Aerpac. However, it is not likely that this claim will be realized, as insolvencyproceedings were commenced in relation to Aerpac’s assets at the end of January 2001.

Litigation in connection with Ekter Aioliki S.A.

Several claims have been brought in court in Greece against Nordex Energy GmbH’s former subsidiary,Ekter Aioliki S.A. (‘‘Ekter’’), Athens, by ITA S.A. (‘‘ITA’’). In addition, claims were also brought against otherdefendants including Nordex Energy GmbH.

All of these disputes relate to a 15 turbine wind power project in Tourla, Greece, in respect of whichEkter acquired various rights from ITA, in particular, a letter of engagement relating to land leases, apartial authorization from the local authorities to erect wind turbines as well as planning documents.Nordex Energy GmbH held a 90% interest in Ekter, which acted as the project company for this projectuntil December 1999. On the basis of these planning documents, and with ITA’s assistance, Ekteracquired the authorization to erect a wind park. For this assistance, ITA received compensation underan agreement entered into between Ekter and ITA prior to the acquisition of Ekter by Nordex EnergyGmbH, which stipulated, inter alia, that a certain other manufacturer’s wind turbines should be erected.This, however, is no longer planned, due to Nordex Energy GmbH’s acquisition of Ekter. Instead, Nordexwind turbines are planned to be erected. The agreement provides for a reassignment of the rightsarising from the letter of engagement relating to the land leases in such an event. In addition, theagreement provides for an automatic transfer of these rights to ITA against repayment of certainamounts paid to ITA by Ekter in the event that a subsidy is not granted by the Greek state to Ekter.Ekter’s subsidy application was refused. However, a corresponding subsidy application by a Danishcompany, to which Nordex Energy GmbH in December, 1999, had sold all its shares in Ekter, wassuccessful.

The business purchase agreement included an indemnity obligation from Nordex Energy GmbH to thepurchaser, which extends to any possible litigation against Ekter. The outcome of the aboveproceedings is of interest to Nordex Energy GmbH, as any damages can be recovered by the purchaserdirectly from Nordex Energy GmbH.

Initially, ITA brought a claim for reassignment of all rights relating to the wind power project to anarbitration tribunal in Athens. ITA asserted that, inter alia, Ekter had negligently not fulfilled itsobligation to obtain the subsidy which was a condition precedent for the transfer of the rights relatingto the wind power project. Therefore, under the terms of the contract, Ekter was obliged to assign allrights in the wind power project to ITA. Ekter contested the claim. In an arbitral award dated May 31,2000, the arbitrator found in favour or ITA. Ekter lodged an appeal with a court of appeals on June 16,2000, against this arbitral award. The appeal was rejected by a court order dated February 28, 2001.Ekter plans to lodge a further appeal, on the basis of procedural errors, with the Areopag, the Greeksupreme civil court.

In addition, ITA sued Ekter as well as 12 other defendants, with which it had contractual relations,including Nordex Energy GmbH, for damages in an amount of GRD 1,883.7 million, (approximately DM

61

10.8 million). Ekter disputes the claim with respect to its legal basis and amount. The claim is split intoan amount of GRD 1,584 million, (representing approximately DM 9.1 million) for lost subsidies andGRD 299.7 million, (representing approximately DM 1.7 million) for commissions lost because of theuse of Nordex wind turbines instead of the wind turbines of a certain other manufacturer as initiallystipulated. Although they were obliged by the arbitral award to reassign all the rights in the windpower project, ITA asserts that both claims arose because the defendants had taken control of the windpower project fraudulently and had obtained an authorization for the wind power project by fraud. Inrespect of the damages claim relating to the lost subsidies, ITA alleges that it would have received thesesubsidies if it had developed the project. Ekter, however, is of the opinion that Greek subsidy law onlyprovides for the granting of subsidies to investors in a project and not to a project developer such asITA. In respect of the lost commissions, ITA argues that it would have been paid by the other windturbine manufacturer, if its wind turbines had been erected instead of Nordex wind turbines, as is nowenvisaged. In addition, ITA bases its claim for damages, inter alia, on alleged criminal conduct bymembers of the board of Ekter. However, the department of the state prosecutor of Athens has rejectedcriminal proceedings initiated by ITA against these board members.

In a second action, ITA claims damages in an aggregate amount of GRD 3,883.7 million (approximatelyDM 22.3 million) from seven defendants, including Ekter and Nordex Energy GmbH, as joint debtors. Aproportion of the damages claimed (GRD 1,883.7 million) covers the same claims as the first action.With respect to the claim of GRD 1,883.7 million, ITA asserts that the defendants had moved aheadwith the project despite the arbitral award and ITA thereby suffered a loss of commissions and profitsthat it could otherwise have expected to have received for performance of the project. The defendantsare of the opinion that the arbitral award in respect of the assignment of the authorization to erectwind turbines in particular is unenforceable and Ekter may therefore continue with the project.Furthermore, ITA claims a further GRD 2 billion (approximately DM 11.5 million), asserting that thedefendants had sought to obtain an advantage by way of unfair competition by erecting their windturbines. ITA has not yet substantiated the damage with respect to the amount of GRD 2 billion.However, no Nordex wind turbines have been erected.

In a provisional injunction proceeding, ITA tried to prevent Ekter as well as four other defendants frombeginning construction work on the site in Tourla. However, ITA’s motion was dismissed by the districtcourt of Chalkida, Greece, in a court order dated September 13, 2000. The court stated that Ekter hadno other obligation than to pay to ITA the contractual compensation and to erect wind turbines of acertain manufacturer. Furthermore, the authorization to erect wind turbines, which was addressed toEkter, was not assignable.

Meanwhile, Ekter itself has brought claims for damages of GRD 299.985 million (approximately DM 1.7million) against ITA, asserting that ITA unjustly obtained the arbitral award by deceiving the arbitratorin Athens with misstatements and by inducing the witnesses to give misstatements. The damagesclaimed by Ekter relate to the damage to its reputation.

In the meantime, the conflicts described above have as of March 27, 2001 been fully resolved pursuantto an out-of-court settlement between (i) Nordex Energy GmbH and Ekter and (ii) ITA and othercompanies contractually related to ITA to which certain claims had been transferred. The out-of-courtsettlement was validly entered into, however, in order to ensure its continued effectiveness underGreek law, it needs to be registered with the Greek tax authorities. This can be effected by Ekter and willbe done shortly. In this settlement, Nordex Energy GmbH has agreed to make a compensatory paymentof a mid-seven-digit million Deutsche Mark amount to ITA and the companies that are contractuallyrelated to ITA, which has already partly been paid. This compensatory payment is in line with theamount which the Company calculated as representing the potential risk involved in this conflict. Ekteralso agreed to withdraw it lawsuit against ITA. In return, ITA and the companies that are contractuallyrelated to it have agreed, with Ekter and Nordex Energy GmbH, to waive their rights under the arbitralaward of May 31, 2000 and all claims under the contract dated October 23, 1997 between Ekter andITA. ITA has also agreed to withdraw the pending lawsuits, and the formal withdrawal of the lawsuitshas been initiated. Finally, ITA and the companies contractually related to it have agreed to recognizeEkter as being solely entitled to the Tourla wind energy project and not to assert any claims inconnection with the project in the future.

62

Before construction of the wind park can begin, the Greek authorities must set a new deadline for theerection of the park, which was interrupted by the lawsuits. The Company believes that this decisionwill be made in Ekter’s favor. Should this not be the case, and should Ekter be hindered in continuingthe wind energy project, the Danish acquirer could assert claims for millions of Deutsche Marks indamages for non-performance, particularly with respect to consequential damages, against NordexEnergy GmbH. However, the Company believes that any such claims would be exaggerated, because, inthe Company’s opinion, the contract with the Danish acquirer excludes potential consequential losses.

Litigation with Wehrle-Werk AG

Nordex Automation GmbH is currently involved in an out-of-court dispute with Wehrle-Werk AG(‘‘Wehrle’’), Emmendingen, Germany. This dispute relates to a contract which was concluded by BabcockProzeßautomation GmbH with Wehrle in 1999 concerning the planning, delivery, disassembly andassembly of the electrical engineering and control technology of a furnace. This contract predates thespin off by Babcock Prozeßautomation GmbH of its ‘‘non-wind activities’’ (see ‘‘ Relationships withPrincipal Shareholders, the Babcock Borsig Group and the Pedersen Family’’).

Nordex Automation GmbH demands final payment under this contract together with payment foradditional services performed. Wehrle demands that Nordex Automation GmbH pay a contractualpenalty for delay as well as reimbursement for costs for repairing defects itself. The Company believesthat if this dispute should be taken to court, and if the court were to accept Wehrle’s argument, thenthere is a risk that Nordex Automation GmbH would have to pay up to DM 510,000 to Wehrle,irrespective of its own claim amounting to DM 306,258, as well as the costs of litigation.

Litigation with Gothaer Versicherungsbank VVAG

Gothaer Versicherungsbank has made an out-of-court claim against Nordex Energy GmbH for thereimbursement of insurance payments totaling DM 142,488.83 made by Gothaer Versicherung to itspolicyholder, under a business interruption insurance policy, for damage to a wind turbine allegedlydue to Nordex Energy GmbH’s negligence in repairing a defect. Nordex Energy GmbH disputes that itacted negligently, and refers to a provision in the contract excluding liability. GothaerVersicherungsbank has indicated that it believes this provision is invalid.

Disputes Resulting from Warranties

In the course of the Nordex Group’s ongoing business activities, warranty claims are made against theCompany for defects in wind turbines. Depending on the type of defect claimed, the number ofturbines affected and the period for which these claims are asserted (provided that the defects arecovered by the warranty) some of the Company’s customers assert that they have substantial claimsagainst the Company.

Some of the claims may prove to be unsubstantiated, and some will be settled by repair workconducted by the Company, as provided for in the contracts.

The principal warranty claims currently being made against Nordex Group are set out below. TheCompany believes that these could result in litigation.

Dispute with Energiekontor Windkraft GmbH

Nordex Energy GmbH constructed three wind farms with a total of 50 wind turbines for three limitedpartnerships, for which Energiekontor EK GmbH had arranged the provision of the capital, and whichare managed by Energiekontor Windkraft GmbH (together ‘‘Energiekontor’’). In an out-of-court dispute,Energiekontor asserts that some of the wind turbines supplied do not meet contractually guaranteedqualities, which will, or could, result, inter alia, in reduced reliability of individual turbines. To the extentNordex Energy GmbH accepts the validity of these assertions, it has been undertaking, and iscontinuing with, improvement and optimization work on the affected wind turbines. In the Company’sopinion, further potentially more far-reaching, substantial claims presented thus far by Energiekontorare not sufficiently substantiated.

63

Disputes with BOREAS Energie GmbH

Nordex Energy GmbH constructed three wind farms with a total of 18 N-60 and N-62 wind turbines forBOREAS Energie GmbH and a group of limited partnerships (the ‘‘wind-farm operating companies’’), forwhich BOREAS Energie GmbH is responsible for project management and general management(together ‘‘BOREAS’’). BOREAS has demanded out-of-court that Nordex Energy GmbH repair defects inthe controls and the rotor blades of the wind turbines it has supplied. In three agreements in January2001, Nordex Energy GmbH and these wind-farm operating companies have agreed, inter alia, thatvarious defects will be repaired by Nordex, that the output data for individual turbines will beexamined, and that Nordex Energy GmbH will pay compensation for any resulting lower capacity in linewith the contract.

Litigation with Atlas Energieanlagen GmbH & Co. KG Windpark Neuruppin

Sudwind Energy GmbH supplied and erected a total of four wind turbines to Atlas EnergieanlagenGmbH & Co. KG Windpark Neuruppin (‘‘Atlas’’) for a wind farm in Neuruppin. Atlas has sued SudwindEnergy GmbH for performance in connection with the delivery, construction and commissioning of oneturbine, and has also sued for damages totaling DM 168,209.08 plus 9.5% interest from the time theclaim was made, and has also sued for reimbursement of all further damages resulting from the totalloss of one turbine. Atlas asserts that Sudwind Energy GmbH negligently caused the total loss of a windturbine supplied to Atlas. If Atlas should succeed in this litigation, Sudwind Energy GmbH would beobliged to erect the wind turbine free of charge for Atlas and to pay the damages claimed, togetherwith interest and all further damages resulting from the loss of the wind turbine.

64

Relationships with Principal Shareholders, the BabcockBorsig Group and the Pedersen Family

In the past, the Nordex Group companies were closely integrated with the Babcock Borsig Group, andmaintained a series of business relationships with the Pedersen family, which held a 25% interest inNordex Energy GmbH until the contribution of its interest to Nordex AG. The Pedersens have beenactive in the wind energy business since the mid-80’s.

Relationships with Babcock Borsig Group CompaniesPosition within the Group

The Nordex Group companies, with the exception of Nordex AG, were formerly part of the Balcke-DurrGroup. Balcke-Durr AG is an indirect subsidiary of Babcock Borsig AG. Babcock Borsig AG (togetherwith its subsidiaries, the ‘‘Babcock Borsig Group’’) is listed on the official market (Amtlicher Handel) ofthe Berlin, Dusseldorf, Frankfurt, Hamburg and Munich stock exchanges. With revenues of over EUR 6billion (55% generated abroad) and approximately 30,600 employees worldwide, the Babcock BorsigGroup is a major international mechanical and plant engineering, energy and environmentaltechnologies group (financial data refers to the fiscal year ended September 30, 2000). Its subsidiaryBalcke-Durr AG is listed on the official market of the Frankfurt, Berlin and Dusseldorf stock exchangesand its business is in the area of energy systems. Balcke-Durr AG had approximately 5,900 employeesas of September 30, 2000 and generated consolidated revenues of over EUR 1.4 billion in the fiscal yearSeptember 30, 2000.

Prior to the Offering, Babcock Borsig AG (through its subsidiary Balcke-Durr AG and Balcke-Durr AG’swholly-owned subsidiary Borsig Energy GmbH) held approximately 80.5% of the share capital ofNordex AG. Subsequent to the Offering, assuming that the Over-allotment Option is exercised in full,Borsig Energy GmbH will hold just over 25% (if the Over-allotment Option is not exercised,approximately 32%) of the voting rights and Shares of the Company. The Babcock Borsig Group willtherefore continue to hold an interest of approximately 25% (if the Over-allotment Option is notexercised, approximately 32%) of Nordex AG. This shareholding will enable the Babcock Borsig Group,through its subsidiary Borsig Energy GmbH, to block important decisions of the Company (in particular,amendments to the Articles of Association) and thereby influence the business development of NordexAG (see ‘‘Risk Factors—Influence of Selling Shareholders, Sale of Shares’’).

In addition, two of the members of the supervisory board of Nordex AG also hold additional positionswithin the Babcock Borsig Group: these are Dr. Hans W. Fechner, the supervisory board chairman, whois a Generalbevollmachtigter (general manager) of Babcock Borsig AG and deputy managing boardchairman of Balcke-Durr AG and Supervisory Board member Michael von Cappeln, who is inter alia adeputy managing board member of Babcock Borsig AG and managing board member of Balcke-DurrAG.

The Nordex Group companies also made up a significant portion of the Balcke-Durr Group. For thisreason, the General Meeting of Balcke-Durr AG gave authority to the Management Board until August30, 2001 to instruct Borsig Energy GmbH to implement the necessary measures for the listing andpublic offering of Nordex AG on March 15, 2001, in which external shareholders of Balcke-Durr AG(apart from Babcock Borsig Beteiligungs GmbH, a subsidiary of Babcock Borsig AG) would be given theopportunity to acquire shares in Nordex as part of a preferred allotment (see ‘‘The Offering—AllotmentPrinciples, Reserved Amount’’).

Contractual and Other Relationships with the Babcock Borsig Group Companies

The subsidiaries of Nordex AG were subsidiaries within the Balcke-Durr Group before its wind energyoperations were transferred to and brought under the management of Nordex AG and Borsig EnergyGmbH had entered into profit transfer agreements or control and profit transfer agreements withSudwind Energy GmbH, Nordex Automation GmbH, Nordex Planungs- und Vertriebsgesellschaft mbHand Nordex Rotor GmbH, which were terminated with good cause by Borsig Energy GmbH on

65

December 14, 2000, the date on which the notification of their contribution to Nordex AG became validby entry of the capital increase in the commercial register. The subsidiaries of Nordex AG alsoterminated certain inter-company agreements on January 25, 2001 (see ‘‘General Information on theCompany — Additional Company-law Matters’’).

As a consequence of its former position in the Balcke-Durr Group, Nordex AG and its subsidiaries arestill a party to numerous service agreements with the Balcke-Durr Group companies and the BabcockBorsig Group companies, which are still in effect.

Most of these agreements concern the supply of key wind turbine components and the provision ofmanagement and administrative resources as well as the provision of office space.

The following are some of the principal agreements (see also ‘‘Business—Material Contracts’’):

– Service agreement between Nordex AG and Borsig Energy GmbH dated February 22, 2001 coveringthe provision of employees and administrative resources;

– Master agreement between Nordex Energy GmbH and Omnical GmbH dated September 30, 1998covering the delivery of tubular towers;

– Master agreement between Nordex Energy GmbH and Loher AG dated August 24/25, 2000covering the delivery of wind generators;

– Master agreement between Nordex Energy GmbH and A. Friedrich Flender AG dated August 24/25,2000 covering the delivery of transmission gears;

– Master agreement between Sudwind Energy GmbH and Loher AG dated August 24/25, 2000covering the delivery of wind generators;

– Master agreement between Sudwind Energy GmbH and A. Friedrich Flender AG dated August 24/25, 2000 covering the delivery of transmission gears; and

– Master agreement between Nordex Energy GmbH/Sudwind GmbH and Babcock Gießerei GmbHcovering the delivery, processing and painting of rotor hubs and frames dated March 7, 2001 andAugust 7/18, 2000, respectively.

Nordex Automation GmbH, formerly Babcock Prozeßautomation GmbH, and Borsig ProzeßautomationGmbH, Oberhausen, also entered into an agreement on November 15, 2000 concerning the hiving offof non-wind activities from the Nordex Group. This agreement provided for the process automation forthe power plants division (comprising the project planning, sales, technical and commercialmanagement, and project engineering units), which was previously a part of Nordex AutomationGmbH’s business in addition to its wind turbine business, to be transferred with all rights andresponsibilities from Nordex Automation GmbH to Borsig Prozeßautomation GmbH. This transferincluded, in particular, the uncompleted delivery and contracts for works and services of NordexAutomation GmbH, as well as those still covered by guarantees. Because the contractual partners ofNordex Automation GmbH were not requested to consent to the transfer of the legal rights andresponsibilities contained within those contracts, Nordex Automation GmbH remains liable for anyliability arising therefrom. The Company estimates that the total risk of having to fulfil any claims orrecourse from guarantees amounts to less than EUR 1 million. In addition, there is a risk that NordexAutomation GmbH could be faced with claims by guarantors who provided sureties or guarantees inconnection with delivery contracts or contracts for works and services to customers of NordexAutomation GmbH in respect of certain risks. To cover the two risks mentioned above, Balcke-Durr AGand Nordex AG signed an indemnification agreement on November 22, 2000, pursuant to whichBalcke-Durr AG will indemnify Nordex AG and its subsidiaries in the event any claims are raised.

No geographic or sector-specific restrictions on competition are imposed on Nordex AG, in relation toeither former or current Babcock Borsig Group companies. The Company believes that the agreementswith the Babcock Borsig Group companies were concluded on the basis of standard market terms andconditions on arm’s-length terms.

66

Agreements with Associated Companies of the Pedersen BrothersThe Nordex Group also maintains business relationships with companies controlled by Nordvest A/S, acompany majority-owned by Carsten Pedersen and Jens Pedersen. In particular, Nordex Energy GmbHand Welcon A/S, the parent company of Nordvest A/S, concluded a master agreement dated September30, 1998, covering the delivery of steel tubing masts. Carsten Pedersen is also a managing boardmember of Nordex AG and Jens Pedersen holds general power of attorney for Nordex Energy GmbHand Nordex AG.

The Pedersen brothers, Nordvest A/S, Welcon A/S, Nordex Energy GmbH, Borsig Energy GmbH andNordex AG entered into an agreement dated 23 November 2000. This agreement provides inter alia,that, with effect from November 11, 2000, Nordex Energy GmbH will pay to Welcon A/S DM 500 foreach wind turbine with a rotor diameter between 33m and 50m and DM 1,000 for each wind turbine ofover 50m manufactured by or for the account of Nordex Energy GmbH, or by or for the account of oneof its subsidiaries or another Group company or licensee. This obligation results from an earliershareholder agreement among the parties dated September 25, 1998, which has otherwise expired.Nordex Energy GmbH has agreed to pay these amounts in return for the transfer of all Welcon A/S’sintellectual property rights to Nordex Energy GmbH, and the transfer of know-how to Welcon A/S. Theobligation applies up to a ceiling of DM 3 million during the term of the agreement.

In addition, it was agreed that Borsig Energy GmbH will, within the legal limits, exercise its rights inNordex AG’s General Shareholders’ Meeting to ensure that a candidate nominated by Nordvest A/S iselected to the supervisory board.

No geographic or sector-specific restrictions on competition are imposed on Nordex AG, in relation toeither former or currently existing companies forming part of the Pedersen brothers holdings.

67

General Information on the Company

OverviewNordex AG was founded on August 25, 2000 as ‘‘Taifun AG’’, with the principal object of acting as aholding company for all of the Balcke-Durr Group’s wind power activities, which included NordexEnergy GmbH, including its foreign subsidiaries, Sudwind Energy GmbH, Nordex Automation GmbH,Nordex Rotor GmbH and Nordex Planungs- und Vertriebsgesellschaft mbH. The economic origins of theNordex Group date back to 1991, when Nordex Energy GmbH was formed as ‘‘Nordex EnergieanlagenGmbH’’. Since its formation, this company has been active in the fields of manufacturing and sellingwind turbines.

Formation, Development and Reorganizationof the Group StructureNordex AG is entered in the commercial register of the Oberhausen Local Court under the number HRB3659. The general meeting of the Company which took place on February 21, 2001 passed a resolutionto relocate the Company’s registered office to Rostock; this decision has not yet been registered withthe commercial register. The Company expects to apply for registration of the relocation of itsregistered office in April 2001 after the capital increase for the Offering has been registered (see‘‘Capitalization’’). At the time this Offering Memorandum was approved, the Company’s share capitaltotaled EUR 34,050,000.00.

Nordex AG was formed by Borsig Energy GmbH, Oberhausen, Germany, as ‘‘Taifun AG’’ (hereinafterreferred to as ‘‘Nordex AG’’) with the adoption of its Articles of Association on August 25, 2000. TheCompany was registered in the commercial register of Oberhausen Local Court on September 19, 2000under the number HRB 3659 with share capital of EUR 50,000.00. The share capital comprised 50,000no-par value bearer shares with a nominal value of EUR 1.00 each. Since the Company’s formation itsregistered office has been in Oberhausen.

Borsig Energy GmbH, Nordvest A/S, Give, Denmark and the Company agreed, pursuant to acontribution and share transfer agreement that Borsig Energy GmbH and Nordvest A/S wouldcontribute all of the interests which they held in their respective companies active in the wind powersector to Nordex AG, then ‘‘Taifun AG’’, in return for the issue of new shares in Nordex AG. In thecontribution and share transfer agreement, Borsig Energy GmbH transferred to Nordex AG all of theinterests it held in Nordex Energy GmbH (registered office in Rerik), in Sudwind Energy GmbH(registered office in Oberhausen), in Nordex Rotor GmbH (registered office in Rostock), in NordexAutomation GmbH (registered office in Oberhausen) and in Nordex Planungs- und VertriebsgesellschaftmbH (registered office in Bad Essen). Nordvest A/S transferred all of the interests it held in NordexEnergy GmbH to the Company, which now holds all the shares in the companies named above. In allcases, these transfers were conditional upon the entry in the commercial register of the capital increaseand the performance of the post-formation acquisition within the meaning of section 52 of theAktiengesetz (German Public Companies Act).

In order to implement the contribution and share transfer agreement, Nordex AG’s General Meeting onNovember 23, 2000 resolved to increase the Company’s share capital by EUR 34,000,000 from EUR50,000 to EUR 34,050,000 in exchange for non-cash contributions by issuing 34,000,000 bearer shares.Shareholders statutory preemption rights were excluded. Of the 34,000,000 new shares, Borsig EnergyGmbH subscribed for and acquired 27,357,500 bearer shares against the following contributions: anequity interest with a nominal value of DM 78,000 (75% of the ordinary share capital) in Nordex EnergyGmbH, four equity interests with a total nominal value of DM 100,000 (100% of the ordinary sharecapital) in Nordex Planungs- und Vertriebsgesellschaft mbH, an equity interest with a nominal value ofEUR 25,000 (100% of the ordinary share capital) in Nordex Rotor GmbH, an equity interest with anominal value of EUR 25,000 (100% of the ordinary share capital) in Sudwind Energy GmbH and anequity interest with a nominal value of DM 200,000 (100% of the ordinary share capital) in NordexAutomation GmbH. Nordvest A/S acquired 6,642,500 new shares against a contribution of two equity

68

interests it held with a total nominal value of DM 26,000 in Nordex Energy GmbH. As Nordex AG’scapital increase in exchange for non-cash contributions exceeded 10% of the capital in place at thetime the resolution was passed and because this capital increase was implemented within two years ofthe Company’s formation, it was subject to the post-formation acquisition provisions laid down bysection 52 of the Aktiengesetz (German Stock Corporations Act). The Supervisory Board accordinglysubmitted its post-formation report on December 5, 2000. The Duisburg-based firm of auditors Fasseltund Partner has been appointed by the local court of Oberhausen to audit the non-cash contributionand post-formation acquisition. Fasselt und Partner submitted a report on the non-cash contributionand post-formation acquisition dated December 8, 2000. The auditor’s report concluded with thefinding:

‘‘On completion of our audit in accordance with professional standards and in compliance withsections 34 and 52 (4) of the Aktiengesetz (AktG – German Stock Companies Act), we certify that,on the basis of the documents, books and written records, together with the declaration andevidence provided to us, that the audit of the post-formation acquisition for Taifun AG did not giverise to any reservations, and that the information contained in the post-formation acquisitionreport by the Supervisory Board of Taifun AG is in line with statutory provisions. The value of thenon-cash contributions totaled the theoretical nominal value of EUR 34,000,000 of the bearershares to be granted.’’

In addition, the General Meeting on November 23, 2000 resolved authorized capital (see‘‘Capitalization—Authorized Capital’’).

The Extraordinary General Meeting of Nordex AG on December 8, 2000 accepted the non-cashcontribution agreement as a post-formation acquisition contract.

The capital increase, the post-formation acquisition and the authorized capital were filed with thecommercial register on December 8, 2000 and were entered in the commercial register on December14, 2000.

Additional Company-law MattersOn January 26, 2001, the Extraordinary General Meeting of Nordex AG resolved, among other matters,to change the Company’s name from ‘‘Taifun AG’’ to ‘‘Nordex AG’’, to change the objects of theCompany and to amend the rest of the Company’s Articles of Association, in particular with regard tothe size of the Supervisory Board, the location of the General Meeting and the Management Board’spowers of representation. The resolutions were filed with the commercial register and were registeredon February 12, 2001.

On February 1, 2001 Nordex AG concluded profit transfer agreements with its subsidiaries NordexEnergy GmbH, Sudwind Energy GmbH, Nordex Automation GmbH, Nordex Planungs- undVertriebsgesellschaft mbH and Nordex Rotor GmbH as well as control contracts with some of thesecompanies, which were approved by Borsig Energy GmbH and the companies’ shareholders’ meetingson February 21, 2001 and by Nordex AG’s Ordinary General Meeting on February 21, 2001. In order toavoid any uncertainty as to when agreements which had previously existed with Borsig Energy GmbHhad been terminated, Borsig Energy GmbH and Nordex AG agreed that they would each put the otherin the position that they would have been in, had the relevant agreements between Borsig EnergyGmbH and the subsidiaries of Nordex AG been terminated as of October 1, 2000 and had suchagreements been entered into, at the same time, between Nordex AG and its subsidiaries. As a result,Borsig Energy GmbH waived its profit participation right and – insofar as direct-control contractsapplied – it also waived the exercise of its right of control. In return, Nordex AG made an undertakingto reimburse Borsig Energy GmbH for any losses that may occur. The company agreements withSudwind Energy GmbH and Nordex Automation GmbH were filed with the Commercial Register onMarch 8, 2001. The company agreements between Sudwind Energy GmbH and Nordex AutomationGmbH were declared at the commercial register on March 8, 2001 and entered in the commercialregister on March 26, 2001 and March 22, 2001 respectively. The Agreement with Nordex Planungs-und Vertriebsgesellschaft mbH will shortly be declared at the commercial register.

69

In addition to the approval of the company agreements with Nordex AG’s direct subsidiaries, theCompany’s Ordinary General Meeting on February 21, 2001 passed a resolution to discharge theManagement Board and Supervisory Board for the short period ending September 30, 2000, elected sixnew members of the Supervisory Board (see ‘‘Executive Bodies of the Company, Employee andManagement Share Scheme—Supervisory Board’’), appointed BDO Deutsche WarentreuhandAktiengesellschaft to audit the Company’s financial statements for the fiscal year to September 30,2001 and resolved to increase the share capital by up to EUR 18,000,000 with regard to the Offering, aswell as to create authorized capital and contingent capital for employee share option schemes (see‘‘Capitalization’’ and ‘‘Executive Bodies of the Company, Employee and Management Share Scheme—Employee and Management Share Scheme’’). In addition, this general meeting resolved to relocate theCompany’s registered office to Rostock (see ‘‘General Information on the Company—Company Name,Registered Office, Fiscal Year and Duration of the Company’’) and to amend Article 17 of the Articles ofAssociation (Remuneration of the Supervisory Board).

Company Name, Registered Office, Fiscal Year and Durationof the CompanyThe Company bears the name Nordex AG.

The Company has its registered office in Oberhausen, where the Company was founded. The Companyintends to relocate its registered office to Rostock, where the principal production site of the NordexGroup is located, after the Offering. The Company’s ordinary general meeting passed a resolution tothis effect on February 21, 2001, which will only be entered in the commercial register after the capitalincrease of up to EUR 18,000,000, which was resolved on February 21, 2001, has been entered in thecommercial register, in line with the instructions issued to the Management Board by the generalmeeting. The relocation is scheduled to be entered in the commercial register in April 2001.

The fiscal year of the Company commences on October 1 each year, and ends on September 30 of thefollowing year. In 2000, the Company had a short fiscal period from August 25, 2000 to September 30,2000.

The Company was incorporated for an unlimited duration.

Objects of the CompanyAccording to the Company’s Articles of Association, its objects are to manage, run, acquire and disposeof companies in Germany and abroad that focus on the areas of industrial production, sales andservices, in particular in the field of ‘‘alternative energy’’. The Company may also conduct its ownactivities in these business areas. The Company may establish branches in Germany and abroad andacquire stakes in German and foreign companies. It may also carry out all activities that are conduciveto promoting the Company’s business purpose. In addition, the Company is authorized to spin-off itsoperations either fully or in part to associated companies or to transfer these operations to associatedcompanies.

CapitalPrior to the implementation of the capital increase in connection with the Offering, the Company’sshare capital totaled EUR 34,050,000 and was composed of 34,050,000 bearer shares with a calculatednominal value of EUR 1.00 each. The form of the share certificates and the profit participationcertificates and renewal coupons is determined by the Management Board in agreement with theSupervisory Board. Claims by shareholders for individual or other certification are excluded.

The Ordinary General Meeting resolved on February 21, 2001 to increase the share capital against cashcontributions by up to EUR 18,000,000 from EUR 34,050,000 to up to EUR 52,050,000 in order tocreate new shares, by issuing up to 18,000,000 New Shares each with a nominal value of EUR 1.00 inthe ordinary share capital. The New Shares carry profit participation rights from October 1, 2000. Theshareholders’ preemption rights have been excluded. Dresdner Bank is to underwrite and acquire theshares at their issue price of EUR 1.00 per share, subject to an undertaking to offer the shares, via an

70

underwriting syndicate lead-managed by Dresdner Bank, to interested investors in the Federal Republicof Germany as part of a public offering and in countries outside the Federal Republic of Germany aspart of a private placement at a placement price which had yet to be determined. The differencebetween the issue price of EUR 1.00 and the placement price is to be transferred to the Company. Theincrease in share capital will only be implemented to the extent that Dresdner Bank subscribes for all ofthe New Shares subject to the conditions mentioned above on one occasion by May 31, 2001. Theresolution for the increase in share capital would have become invalid if such subscription had nottaken place by May 31, 2001. The Management Board is authorized, with the approval of theSupervisory Board, to determine further details of the capital increase and its implementation. TheGeneral Meeting waived the report of the Management Board on the reason for the exclusion ofpreemption rights to be submitted to it. In addition, the Supervisory Board is authorized to amendArticle 4 (1) of the Articles of Association (Amount and split of share capital) with effect from the timeat which the implementation of the capital increase is registered so that it is in line with theimplemented capital increase. The capital increase in the amount of EUR 18,000,000, and thecorresponding amendment of § 4 of the Company’s Articles of Association, which is expected to beentered in the commercial register on April 2, 2001.

Authorized Capital

The ordinary general meeting on February 21, 2001 resolved on the one hand to amend the existingauthorized capital totaling EUR 17,025,000 created by the extraordinary general meeting of theCompany on November 23, 2000, by making a corresponding amendment to Article 4 (2) of the Articlesof Association (authorized capital I) and, on the other hand, to create additional authorized capitaltotaling EUR 9,000,000 by adding a new paragraph (4) to Article 4 of the Articles of Association(authorized capital II).

According to the provisions relating to authorized capital I, the Management Board is authorized toincrease the Company’s ordinary share capital on one or several occasions by March 1, 2005, with theapproval of the Supervisory Board, by issuing new shares in exchange for cash or non-cashcontributions up to a maximum amount of EUR 17,025,000. The new shares carry profit participationrights from the start of the fiscal year in which they are issued (authorized capital I). In addition, afterapproval by the Supervisory Board, the Management Board is also authorized to decide on theexclusion of the shareholders’ statutory preemption rights. Preemption rights may be excluded in thecase of capital increases in exchange for non-cash contributions, in particular for the purpose ofacquiring companies, parts of companies and equity interests, in the case of capital increases inexchange for cash contributions for an amount of up to EUR 3,405,000 in order to issue the new sharesat an amount which is not materially below the quoted price (section 186 (3) of the Aktiengesetz), andalso in order to issue shares to employees of the Company and its associated companies. Insofar as theManagement Board does not utilize these powers to exclude preemption rights, the shareholders’preemption rights can only be excluded for transactions involving fractional amounts. TheManagement Board is also authorized, with the approval of the Supervisory Board, to have the newshares underwritten by a credit institution or an underwriting syndicate with an undertaking that theseare offered to shareholders for subscription by way of an indirect subscription right. The ManagementBoard is authorized, with the approval of the Supervisory Board, to determine further details relating tothe capital increases relating to authorized capital I and their implementation.

According to the provisions relating to authorized capital II, the Management Board is authorized toincrease the Company’s ordinary share capital on one or several occasions until March 1, 2005, withthe approval of the Supervisory Board, by issuing new shares against cash or non-cash contributionsby a maximum of EUR 9,000,000. The new shares carry profit participation rights from the start of thefiscal year in which they are issued (authorized capital II). In addition, after approval by the SupervisoryBoard the Management Board is also authorized to decide on the exclusion of the shareholders’statutory subscription rights. Subscription rights may be excluded in the case of capital increasesagainst non-cash contributions, in particular with the purpose of acquiring companies, parts ofcompanies and equity interests, in the case of capital increases against cash contributions for anamount of up to EUR 1,800,000 in order to issue the new shares at an issuing amount which is notsubstantially below the listed price (section 186 (3) of the Aktiengesetz), and also in order to issue

71

shares to employees of the Company and its associated companies. Insofar as the Management Boarddoes not utilize these powers to exclude subscription rights, the shareholders’ subscription rights canonly be excluded for fractions. The Management Board is also authorized, with the approval of theSupervisory Board, to have the new shares underwritten by a credit institution or an underwritingsyndicate with an undertaking that these are offered to shareholders for subscription by way of anindirect subscription right. The Management Board is authorized, with the approval of the SupervisoryBoard, to determine further details relating to the capital increases from authorized capital II and theirimplementation.

The changes to the authorized capital I and the authorized capital II are scheduled to be entered in thecommercial register on April 2, 2001.

Conditional Capital

The ordinary general meeting of the Company passed a resolution on February 21, 2001 to createconditional capital for the purposes of an employee share scheme as follows:

The share capital of the Company has been conditionally increased by EUR 3,400,000 by issuing up to3,400,000 bearer shares. The conditional capital increase serves to safeguard shareholder’s preemptionrights which will be issued by the Company by March 31, 2005 as a result of the authorization of theManagement Board and Supervisory Board on February 21, 2001. Such Board approval is an expresscondition for an issue of conditional capital. The conditional capital increase is only to be implementedto the extent that the preemption rights are issued and exercised. The New Shares carry dividend rightsfrom the start of the fiscal year in which the preemption rights can be exercised (see ‘‘Executive Bodiesof the Company, Employee and Management Share Scheme’’).

The conditional capital increase was entered in the commercial register on March 22, 2001.

ShareholdersThe following table shows the Company’s shareholder structure and the forecast breakdown ofownership pre- and post-Offering taking into account the Over-allotment Option.

Share capital pre-Offering

Share capital post-Offering

(excluding Over-allotment

Option)

Share capital post-Offering

(after Over-allotment Option

has been fully exercised)

Shareholder Shares (approx.)% Shares (approx.)% Shares (approx.)%

Borsig Energy GmbH 27,407,500 80.49 16,771,195 32.22 13,012,501 25.00

Nordvest A/S 6,642,500 19.51 3,978,805 7.64 3,037,499 5.84

Total Selling Shareholders 34,050,000 100.00 20,750,000 39.87 16,050,000 30.84

Preferred allotment (Friends and Family)max. 626,000 1.20 626,000 1.20

Free float 30,674,000 58.93 35,374,000 67.96

of which preferred subscription byshareholders of Balcke-Durr AG max. 2,760,000 5.30 2,760,000 5.30

Total 34,050,000 100.00 52,050,000 100.00 52,050,000 100.00

Free FloatIf all of the shares offered are placed, approximately 69.16% of the share capital of Nordex AG will beheld by the general public (including the approximately 5.30% of shares acquired by the shareholdersof Balcke-Durr AG under a preferred allotment and an additional amount of approximately 1.20% heldby shareholders who were offered Shares by way of a preferred allotment). If the Over-allotmentOption is not exercised, approximately 60.13% of Nordex AG’s share capital will be held by the generalpublic, including the approximately 5.30% of shares acquired by to the shareholders of Balcke-Durr AGby way of a preferred subscription and an additional amount of approximately 1.20% of shares held bythe shareholders who were offered Shares by way of a preferred allotment as part of the Friends andFamily program.

72

Earnings per ShareThe following table shows the Nordex Group’s earnings per share for the last three fiscal years basedon the IAS Pro Forma Consolidated Financial Statements. In order to allow comparisons to be madeover the period, this table assumes an imputed number of 34,050,000.0 shares (i.e. the number ofshares prior to the capital increase for the Offering); however, the Company did not actually exist forthe entire period nor did it have any issued capital that would have corresponded to this number ofshares.

Fiscal year1997/1998

Fiscal year1998/1999

Fiscal year1999/2000

Imputed number of shares 34,050,000 34,050,000 34,050,000

Net profit for the period in EUR 1,595,195.27 6,530,252.18 6,434,596.58

Imputed earnings per share in EUR 0.05 0.19 0.19

DividendsNo dividends were paid in respect of the short fiscal period in 2000 (August 25, 2000 to September 30,2000). The Company has not paid any dividends in the past.

Application of Profits and Dividend PolicyThe general meeting decides on the application of accumulated profits. In so doing, it is bound by theadopted financial statements of Nordex AG, which must be prepared in line with the provisions of theHandelsgesetzbuch (HGB – German Commercial Code). When approving the financial statements, theManagement Board and the Supervisory Board can also transfer more than half of the accumulatedprofits to other retained earnings. The accumulated profits are distributed to the shareholders insofaras this is resolved by the general meeting. As the shares of the Company are deposited exclusively inclearing systems, dividends are paid out in accordance with the rules of the relevant clearing system. Ingeneral, dividend payments are made to shareholders via their custodial bank’s clearing account.

In the event of a capital increase, the dividend rights for new shares may depart from those describedin section 60 of the Aktiengesetz.

Profit transfer agreements exist between Nordex AG and Nordex Energy GmbH, Nordex Planungs- undVertriebsgesellschaft mbH and Nordex Rotor GmbH, and direct-control agreements and profit transferagreements exist with Sudwind Energy GmbH and Nordex Automation GmbH (see ‘‘—AdditionalCompany-law Matters’’).

The Company’s ability to pay dividends and the amount of the relevant dividends will depend on theearnings generated in the relevant fiscal year and the dividends of the Company’s subsidiaries as wellas on the financial position of the Company and, in particular, its subsidiaries. Any future dividends willtherefore depend on the Company’s and its subsidiaries’ operating results as well as the liquidityrequirements of the Nordex Group; its tax-related and regulatory circumstances will also affect theCompany’s ability to pay dividends in the future. At present, the Company intends to retain the bulk ofits future profits.

Notices, Paying and Depositary AgentsIn accordance with the Company’s Articles of Association, notices by the Company are published solelyin the Bundesanzeiger (German Federal Gazette). Notices relating to the shares must also be publishedin at least one national journal of record approved by the Frankfurt Stock Exchange.

The depositary function will be transferred to the underwriting banks listed at the end of this OfferingMemorandum, to which shareholders may submit certificates from their custodial bank or ClearstreamBanking AG concerning the proper deposit of the shares in return for the issue of admission cards forthe General Meeting.

73

The paying agency function, which is centralized at Dresdner Bank, will also be transferred to theunderwriting banks. The exercise of preemption rights may also take place at the underwriting banks.

Termination and Dissolution of the CompanyOther than in the event of insolvency, the Company may be liquidated by a resolution of the generalmeeting passed by a majority of 75% of the represented share capital. The assets of the Companyremaining after liabilities have been discharged will be distributed among the shareholdersproportionately according to the number of shares held by each shareholder. The Company wasincorporated for an unlimited duration.

Formation Auditor and AuditorThe founders prepared a report on the Company’s formation and the members of the managing boardand the supervisory board audited the formation. In their formation audit report of August 25, 2000,the members of the Management Board and the supervisory Board state:

‘‘According to our findings, the formation complies with statutory provisions. The disclosures of thefounder relating to the acquisition of shares and contributions to the share capital are accurateand complete. The Articles of Association do not contain any stipulations relating to specialbenefits for individual shareholders or to any compensation or remuneration for the formation orits preparation. According to Article 27 of the Articles of Association, the Company assumed theformation costs, which are estimated at EUR 1,000. There are no objections to the method adoptedin relation to the formation costs.’’

No external formation audit by a court-appointed formation auditor was conducted in accordance withsection 33 (2) of the Aktiengesetz as none of the conditions which require that an external formationaudit be carried out within the meaning of the Aktiengesetz be conducted applied.

BDO Deutsche Warentreuhand Aktiengesellschaft, Konrad-Adenauer-Ufer 79-81, 50668 Cologne,audited the financial statements of Nordex AG (founded as ‘‘Taifun AG’’) according to theHandelsgesetzbuch for the abbreviated fiscal year from August 25, 2000 to September 30, 2000 andissued these with an unqualified audit report which can be found in the financial section of thisOffering Memorandum.

In addition, BDO Deutsche Warentreuhand Aktiengesellschaft, Konrad-Adenauer-Ufer 79-81, 50668Cologne, audited Nordex AG’s (founded as ‘‘Taifun AG’’) IAS Pro Forma Consolidated FinancialStatements for the fiscal years ended September 30, 1998, 1999 and 2000 and issued an audit report inrespect thereof which can be found in the financial section of this Offering Memorandum. BDODeutsche Warentreuhand, Konrad-Adenauer-Ufer 79-81, 50668 Cologne, reviewed the IAS Pro FormaConsolidated Interim Financial Statements prepared by the Company as of December 31, 2000. Thecomparative figures as of December 31, 1999 included in these consolidated interim financialstatements were not reviewed.

The IAS Pro Forma Consolidated Financial Statements for the fiscal years ended September 30, 1998,1999 and 2000, the IAS Pro Forma Consolidated Interim Financial Statements as of December 31, 2000,the non-consolidated financial statements of Nordex AG produced in accordance with the provisions ofthe Handelsgesetzbuch for the abbreviated fiscal year from August 25, 2000 to September 30, 2000and non-consolidated financial statements of Nordex GmbH (now Nordex Energy GmbH) produced inaccordance with the provisions of the Handelsgesetzbuch for the fiscal year 1999/2000 are all includedin the financial section of this Offering Memorandum.

BDO Deutsche Warentreuhand Aktiengesellschaft, Konrad-Adenauer-Ufer 79-81, 50668 Cologne, wasappointed by the Ordinary General Meeting of the Company on February 21, 2001 as the auditor forthe fiscal year ending September 30, 2001.

74

Auditor for the SubsidiariesThe fiscal year of each subsidiary of Nordex AG commences on October 1 each year and ends onSeptember 30 of the following year.

The financial statements of Nordex GmbH (now Nordex Energy GmbH) produced in accordance withthe provisions of the Handelsgesetzbuch for the fiscal years 1997/1998, 1998/1999 and 1999/2000were audited by BDO Deutsche Warentreuhand Aktiengesellschaft and were each issued with anunqualified audit report.

The financial statements (HGB) of Sudwind Borsig Energy GmbH (now Sudwind Energy GmbH) for theshort fiscal period from March 22, 1999 to September 30, 1999 and for the fiscal year 1999/2000 wereaudited by BDO Deutsche Warentreuhand Aktiengesellschaft and were each issued with an unqualifiedaudit report.

The financial statements (HGB) of Borsig Rotortechnik GmbH (now Nordex Rotor GmbH) for the fiscalyear 1999/2000 were audited by BDO Deutsche Warentreuhand Aktiengesellschaft and were issuedwith an unqualified audit report.

The financial statements (HGB) of Babcock Prozeßautomation GmbH (now Nordex Automation GmbH)for the fiscal years 1997/1998, 1998/1999 and 1999/2000 were audited by BDO Dr. Vonderreck undSchulte GmbH Wirtschaftsprufungsgesellschaft and were each issued with an unqualified audit report.

The financial statements (HGB) of Nordex Planungs- und Vertriebsgesellschaft mbH (in future: NPVPlanung & Vertrieb GmbH) for the fiscal years 1997/1998, 1998/1999 and 1999/2000 were audited byBDO Deutsche Warentreuhand Aktiengesellschaft and were each issued with an unqualified auditreport.

75

Information on the Company’s Subsidiaries

Nordex AG is a holding company which has held a 100% interest in five companies since acquiringtheir shares from Borsig Energy GmbH in fiscal year 2000/2001. These five companies focus ondifferent areas of the development, manufacture and marketing of wind turbines.

Unless otherwise stated, the following information refers to the IAS Pro Forma Consolidated FinancialStatements of Taifun AG (now Nordex AG) as of September 30, 2000.

Nordex Energy GmbH, Ostseebad RerikAs part of the Nordex Group, Nordex Energy GmbH develops, engineers and manufactures windturbines under the ‘‘Nordex’’ brand name. It also produces turnkey wind farms and services andmaintains wind turbines.

Interest: 100% (following acquisition of the interest held by Borsig EnergyGmbH in fiscal year 2000/2001)

Activity: The object of the company is to develop, manufacture andmarket environmentally friendly power generation facilities.

Managing Directors: Dr Dietmar J. Kestner (Chairman of the management), CarstenPedersen, Dr Thomas Tschiesche, Theo Becker and Ulrich Kossak.

Employees at the balancesheet date:

405

Net sales: EUR 248,438 thousand

Capital stock: EUR 54 thousand, the conversion of the ordinary share capital tothe Euro was entered into the commercial register onJanuary 18, 2001

Reserves: EUR 6,047 thousand

Reserves for treasury shares: -

Net earnings: EUR 10,518 thousand

Net income: EUR 3,983 thousand

Book value of shares in Nordex AGas of December 31, 2000:

EUR 16,693 thousand

Receivables from/liabilities toNordex AG:

0

Sudwind Energy GmbH, OberhausenAs part of the Nordex Group, Sudwind Energy GmbH engineers wind turbines under the brand name‘‘Sudwind’’. It also maintains and services wind turbines.

Interest: 100% (following acquisition of the interest held by Borsig EnergyGmbH in fiscal year 2000/2001)

Activity: The object of the company is to develop, manufacture andmarket energy systems of all types, in particular wind turbines.

Managing Directors: Wilhelm Hecking

Employees at the balance sheetdate:

26

Net sales: EUR 24,811 thousand

76

Capital stock: EUR 25 thousand

Reserves: EUR 0

Net earnings: EUR 83 thousand

Net income: EUR 1,176 thousand

Book value of shares in Nordex AGas of December 31, 2000:

EUR 63 thousand

Receivables from/liabilities toNordex AG:

0

Nordex Rotor GmbH, RostockNordex Rotor GmbH, whose production facilities are under construction, currently manufactures rotorblades exclusively for the Nordex Group and performs services such as repairing rotor blades producedin-house as well as those purchased from the Nordex Group by third parties.

Interest: 100% (following acquisition of the interest held by Borsig EnergyGmbH in fiscal year 2000/2001)

Activity: The object of the company is to design and manufacture rotorblades for wind turbines and to perform all accompanyingbusiness.

Managing Directors: Heinz Jorg Glahr, Dietmar Knunz

Employees at the balance sheetdate:

57

Net sales: EUR 2,032 thousand

Capital stock: EUR 25 thousand

Reserves: 0

Net accumulated loss: EUR (534) thousand

Net loss: EUR (690) thousand

Book value of shares in Nordex AGas of December 31, 2000:

EUR 25 thousand

Receivables from/liabilities toNordex AG:

0

Nordex Automation GmbH, OberhausenNordex Automation GmbH produces electronic controls, including software and electrical componentsfor wind turbines, as well as the electrical equipment for entire wind farms up to and including gridconnection. In some cases, Nordex Automation GmbH also implements orders directly for customers ofNordex Energy GmbH.

Interest: 100% (following acquisition of the interest held by Borsig EnergyGmbH in fiscal year 2000/2001)

Activity: The object of the company is to implement process engineeringtechnology in electrical, process control and automationequipment, to supply the associated equipment componentsand to assemble and operate them. The purpose of the companyis also to deliver planning, consulting and project management

77

services as well as expert opinions in the above-mentioned areasin Germany and abroad.

Managing Directors: Gerd Beckert

Employees at the balance sheetdate:

50

Net sales: EUR 19,633 thousand

Capital stock: EUR 103 thousand

Reserves: 0

Net accumulated loss: EUR (649) thousand

Net income: EUR 1,528 thousand

Book value of shares in Nordex AGas of December 31, 2000:

EUR 14,851 thousand

Receivables from/liabilities toNordex AG:

0

Nordex Planungs- und Vertriebsgesellschaft mbH, Bad EssenAs part of the Nordex Group, Nordex Planungs- und Vertriebsgesellschaft mbH, the generalshareholders’ meeting of which has resolved to change the company name to NPV Planung & VertriebGmbH and which change was entered in the commercial register on March 19, 2001, plans wind farmprojects and markets Nordex and Sudwind turbines primarily in Germany, in other German-speakingcountries and in Belgium.

Interest: 100% (following acquisition of the interest held by Borsig EnergyGmbH in fiscal year 2000/2001)

Activity: The object of the company is to plan, operate and marketenvironmentally-friendly energy production facilities.

Managing Directors: Jorg Hempel and Dr. Thomas Tschiesche

Employees at the balance sheetdate:

20

Net sales: EUR 10,551 thousand

Capital stock: EUR 52 thousand (the conversion to euro was entered in thecommercial register on March 19, 2001).

Reserves: 0

Net earnings: EUR 86 thousand

Net income: EUR 5,138 thousand

Book value of shares in Nordex AGas of December 31, 2000:

EUR 5,947 thousand

Receivables from/liabilities toNordex AG:

0

78

Executive Bodies of the Company, Employee andManagement Share Scheme

General MeetingsThe General Meetings of the Company are convened either at the Company’s headquarters or in a cityof at least 100,000 inhabitants in the Federal Republic of Germany. General Meetings are convened bythe Management Board. Notice of the agenda of a General Meeting must be published at least onemonth prior to the last day on which shareholders may deposit their shares. The day of publication andthe last day for deposit shall not be counted towards this one-month period. If all of the shareholdersare present, General Meetings can pass resolutions without having to observe the provisions in theCompany’s Articles of Association concerning the location and convening of the meeting, provided thatno shareholders object to the resolution.

The right to attend and vote at General Meetings is accorded to those shareholders who deposit theirshares with the Company, a German notary public, a securities clearing and deposit bank or with one ofthe other agents whose details are given in the notice of the meeting. The deposit of shares must bedone by the end of the fifth working day before the date of the General Meeting and the shares mustremain so deposited until the end of the general meeting. For this purpose Saturday is not considered aworking day. The requirement to deposit the shares can also be satisfied if, with the approval of thedepositary, another credit institution blocks the shares from the last day of deposit until the end of thegeneral meeting. If the last day for deposit is a Saturday, Sunday or a public holiday then the last dayfor deposit shall fall on the following working day. In the event that the shares are deposited with aGerman notary public or a securities clearing and deposit bank, the deposit certificate to be issued bythis agent must be submitted to the Company no later than the first working day (excluding Saturdays)after the last day on which shares can be deposited.

Each share entitles the holder to one vote at the General Meeting. Unless otherwise stipulated by theAktiengesetz, resolutions at general meetings are passed by a simple majority of the votes cast. To theextent that the Aktiengesetz also requires a majority of the share capital represented to passresolutions, a simple majority of the capital represented is sufficient insofar as this is permitted by law.

The General Meeting is chaired by the Chairman of the Supervisory Board or, in his absence, by anothermember of the Supervisory Board appointed by the Chairman. If neither the Chairman of theSupervisory Board nor the deputy appointed by him chair the meeting, the Supervisory Board elects ashareholder representative to chair the General Meeting. In the election process for the Chairman ofthe general meeting, if a simple majority is not reached in the first round of voting, a second round ofvoting is held between the two people who received the highest numbers of votes in the first round. Atie is decided by drawing lots. The Chairman has the discretion to change the order in which items onthe agenda will be discussed from the order in which they appear in the published agenda for themeeting. The chairman also determines the type of voting procedure and the form in which it will takeplace.

Management BoardThe Management Board is made up of at least two members. The Supervisory Board appoints themembers of the Management Board and stipulates their number. The Supervisory Board may appointreplacement members of the Management Board, and may appoint one member of the ManagementBoard to be the chairman of the Management Board.

Resolutions of the Management Board are passed by a majority of votes cast. If a Chairman has beenappointed, he or she will have the casting vote in the event of a tied vote. The Management Board willagree on the by-laws it will operate under to the extent that these have not been laid down by theSupervisory Board.

The Company is legally represented by two members of the Management Board or by one member ofthe Supervisory Board together with an authorized signatory (Prokurist). The Supervisory Board may

79

exempt individual Management Board members from the restrictions contained in section 181 BGB sothat such Management Board members are able to conduct legal transactions involving the Companyas a representative of a third party (multiple representation). The Company’s Management Board iscurrently made up of the following members, all of whom can be reached via Nordex AG, Centroallee265, 46049 Oberhausen, Germany:

Name Position

Dr. Dietmar J. Kestner Production, supply management, technology and service

Carsten Pedersen Sales

Rudolf H. Schulz Finance

Dr. Dietmar J. Kestner (age 44) is the current Chairman of the Company’s Management Board. Afterstudying engineering, Dr. Kestner took a doctorate in the field of energy and power station technologyat the University of Essen. He started his career with Vereinigte Kesselwerke AG as a project engineerand subsequently worked for Riley Stoker Corp. in the US, where he was employed as Product Managerand Director International Sales and Marketing then for StandardKessel GmbH, where he held theposition of Head of Sales. He then went on to work for Babcock-Omnical Industrie Kessel GmbH wherehe was the spokesman for the Management Board and, in 1997, he moved to Turbo-Lufttechnik GmbHwhere he was the Chairman of the Management Board. In 2000 he became Chairman of theManagement Board of Borsig Energy GmbH. Dr. Kestner has been a member of Nordex AG’sManagement Board since the Company’s formation on August 25, 2000. He became the Chairman ofthe Management Board on January 22, 2001.

Carsten Pedersen (age 37) is a member of Nordex AG’s Management Board and is responsible forsales. After completing his education at the Herning Technical School in Herning, Denmark, Mr.Pedersen began his professional career with Brande Beholder og Kedel Fabrik in Give, Denmark. Mr.Pedersen commenced his studies at the Herning Business College in 1984. Carsten Pedersen became amanaging partner of Nordex Energy GmbH in 1987 and has been a member of Nordex AG’sManagement Board since December 21, 2000.

Rudolf H. Schulz (age 33) is a member of Nordex AG’s Management Board and is responsible forfinance. He studied at the Universities of Kaiserslautern, Germany and Glasgow, Scotland from 1988 to1994, and graduated with a degree in management and engineering. In 1995, he started hisprofessional career with Babcock Borsig AG and, in 1996, moved to DB Management Consulting AG tobecome a project manager, returning to Babcock Borsig AG in 1997 as assistant to the Chairman of theManagement Board. He became Managing Director of Balcke Durr Energietechnik GmbH in February1999 and simultaneously became Executive Vice President of BDT Engineering Corp., United States, aposition he held until December 2000. He became a member of Nordex AG’s Management Board onDecember 21, 2000.

In addition to their duties as members of the Management Board, Dietmar Kestner and CarstenPedersen are also managing directors of Nordex Energy GmbH.

None of the members of the Management Board conducts any significant activities outside the NordexGroup that are of importance to the Company. Mr. Pedersen is a member of the Supervisory Board ofthe listed company Gentech A/S in Copenhagen.

The members of the Company’s Management Board did not receive any remuneration for their dutiesin the short fiscal period which ran from August 25 to September 30, 2000. In the current fiscal year2000/2001, the total remuneration for the members of the Management Board is expected to totalapproximately EUR 950,000. As part of the Offering, the members of the Management Board wereoffered preferential subscription rights for shares in the Company at their issue price up to a totalvalue of EUR 10,000. Only Dr. Kestner took up this opportunity and subscribed for shares in the amountof E10,000 – i.e. 1,110 shares. In addition, as part of the Offering, the members of the ManagementBoard will be granted subscription rights to shares in the Company. The members of the Company’sManagement Board received approximately 166,667 stock options pursuant to the Option Terms andConditions 2001 (see ‘‘—Employee and Management Share Scheme’’).

80

The Company has not granted any loans to members of the Management Board nor has it assumed anyguarantees or issued any similar assurance for the benefit of the members of the Management Board.]

Supervisory BoardThe Company’s first Supervisory Board was made up of three members, who were elected inaccordance with section 1 30 (3) of the Aktiengesetz. The Supervisory Board was discharged onFebruary 21, 2001 following the short fiscal period. The Extraordinary General Meeting held on January26, 2001 resolved to increase the number of Supervisory Board members. As a result, the SupervisoryBoard is now made up of six members. It is composed in accordance with statutory provisions.Supervisory Board members are elected for a period of four years which runs until the end of theGeneral Meeting in the fourth fiscal year at which shareholders pass a resolution formally approvingthe actions of the Management Board and the Supervisory Board, unless a resolution to the contrary ispassed by the General Meeting. The fiscal year in which the Supervisory Board members are elected isnot taken into account when calculating this period. Members of the Supervisory Board may be re-elected. Replacement members may be elected. If a Supervisory Board member resigns before the endof his term of office without being replaced, the next General Meeting must hold a by-election to fillthe post for the remainder of the resigned member’s term of office. The same applies if an electedmember declines to assume the position to which he has been elected. Each member of the SupervisoryBoard can resign his or her office, subject to a notice period of one month, by way of a writtendeclaration to the Chairman of the Supervisory Board or to the Management Board. The SupervisoryBoard may waive this notice period. A resolution of the General Meeting passed by a simple majority issufficient to revoke the appointment of a member of the Supervisory Board, elected by the GeneralMeeting without having been nominated by the shareholders prior to the end of this member’s term ofoffice, provided that this resolution is proposed jointly by the Managing and Supervisory Boards.

The Supervisory Board elects a Chairman and Deputy Chairman from among its members for theduration of the elected member’s term of office on the Supervisory Board. If the Chairman or DeputyChairman retires before the end of his term of office, the Supervisory Board must elect a replacementfor the remaining term without delay. The Chairman of the Supervisory Board only delegates themaking of declarations of intent by the Supervisory Board and its committees to his deputy in theevent that he is unable to make such declaration himself.

The Supervisory Board will adopt its own by-laws in line with statutory provisions and those of theCompany’s Articles of Association. The Supervisory Board is authorized to make amendments to theArticles of Association.

The Company’s Supervisory Board is currently made up of the following members, who can all bereached via Nordex AG, Centroallee 265, 46049 Oberhausen, Germany:

Name Main activities, Place of residence

Dr. Hans W. Fechner (Chairman)Member of the Management Board of Babcock Borsig AG,Ratingen, Dusseldorf, Germany

Flemming Pedersen (Deputy Chairman)Director of Brande Investerings & Finanzierungsselkas, Give,Denmark

Hans BergerDeputy Chairman of the Management Board of LandesbankSchleswig Holstein, Kiel, Germany

Michael von CappelnDeputy Chairman of the Management Board of BDAG Balcke-Durr AG, Krefeld, Germany

Dr. Gerd Jager Member of the Management Board of RWE AG Essen, Germany

Bernd Sattig Management Consultant, Leonberg, Germany

Dr. Hans W. Fechner (age 47)

Mr Fechner is the Chairman of the Supervisory Board of the Company. After studying for a degree inElectrical Engineering and Nuclear Reactor Technology at the Technical Rheinisch-WestfalischeUniversity in Aachen, he started his career as a development engineer with Rossel Meßtechnic GmbH.After that he worked as a research and product engineer at the Centre for Nuclear Research in Julich

81

which he left in 1989 to join the Vereinte Kesselwerke AG, Dusseldorf as Head of Division. In 1991, MrFechner was appointed Speaker of the Management Board of Babcock Prozeßautomation GmbH,Oberhausen. In 1997 he became a Director of Balcke-Durr AG. Since 2000 he has been the ManagingDirector of Babcock Borsig Power GmbH, Oberhausen, responsible for the energy technology sector ofthe Babcock Borsig Group. In 2000 Mr Fechner also became a deputy member of the ManagementBoard of Babcock Borsig AG and Chairman of the Board of Balcke-Durr AG. Mr Fechner is also amember of the Supervisory Boards of BBP Service GmbH, Austrian Energy GmbH and Loher AG.

Flemming Pedersen (age 66)

Mr Pedersen is the Deputy Chairman of the Supervisory Board of the Company. Following a commercialtraining he started his career in 1963 as a self-employed man when he founded the company BrandeBeholder & Kedel Fabrik. In 1984 he developed the first prototype of a 85 kilowatt wind turbine. In 1985he founded Welcon A/S as ‘‘Nordex A/S’’, which took over the know-how relating to the manufacture ofwind turbines developed by Brande Beholder & Kedel Fabrik. Mr Pedersen does not sit on any otherSupervisory Board.

Michael von Cappeln (age 48)

Having obtained a degree in Economics from the University of Duisburg, Mr von Cappeln started workin 1980 at Deutsche Babcock AG. In 1984 he left to become Head of the Finance and AccountsDepartment of DB Thermal PTY Ltd in Johannesburg (South Africa), from where he returned to Balcke-Durr GmbH as Head of Controlling in 1987. Other posts held by him during his career were Head of theFinance and Accounts Department of Balcke-Durr AG and Commercial Management Director of Balcke-Durr GmbH. Since 2000 Mr von Cappeln has been the Deputy Chairman of the Supervisory Board ofBalcke-Durr AG. Mr von Cappeln also holds a post in the Supervisory Boards of the followingcompanies: Babcock Industrierohrleitungsbau GmbH (Chairman), Borsig GmbH (member), Krantz-TKT(member), Pirp-Tec GmbH (Deputy Chairman).

Hans Berger (age 51)

Following his bank apprenticeship, Mr Berger occupied numerous positions with Sparkasse Kiel. Hestopped work in order to study at the Institute for Savingsbanks and Credit in Bonn (Lehrinstitut furdas kommunale Sparkassen—und Kreditwesen), where he graduated in the field of businessadministration of savingsbanks. He returned to Sparkasse Kiel, where in 1983 he became DivisionalDirector and, in 1986, a member of the Management Board. Since 1996 Mr Berger has been the DeputyChairman of the Management Board of Landesbank Schleswig-Holstein, Kiel. In addition Mr Berger ison the Supervisory Board of dvg Hannover Datenverarbeitungsgesellschaft mbH in Hannover,Hamburgische Landesbank Girozentrale in Hamburg, Flender Werf AG, Deka DeutscheKapitalanlagegesellschaft mbH in Frankfurt am Main and S-online Schleswig-Holstein GbR in Kiel.Mr Berger is also Honorary Consul for the Republic of Iceland in Schleswig-Holstein.

Dr.-Ing. Gerd Jager (age 49)

Mr Jager studied engineering at the Technical University of Rheinisch-Westfalia (Rheinisch-Westfalische Technische Hochschule) in Aachen and then started work at Rheinisch-WestfalischeElektrizitatswerke AG (RWE), where he has held numerous positions since 1977. In 1992 he wasappointed Head of Controlling and Central Administration and held this post until he was elected tothe Management Board of RWE Energie Aktiengesellschaft. Since 2000 Mr Jager has been a member ofthe Management Board of RWE Power Aktiengesellschaft.

Bernd Sattig (age 58)

Mr Sattig studied business administration at the Polytechnik of Pforzheim. Having finished his studiesin 1966, he started work at Deutsche Dunlop-Gruppe in Hanau, where, until 1973, he held a number ofposts in the human resources department, his last being that of Head of Human Resources.

In 1973 he joined the ITT Automotive-Gruppe, initially as Head of Human Resources of Alfred TevesGmbH (Frankfurt am Main) and then as Managing Director when in 1978 he joined SWF Auto-ElectricGmbH in Bietigheim-Bissingen as Director of Operations. Other positions held within the ITT

82

Automotive-Gruppe were, from 1993, Director of Operations and member of the Management Board ofITT Automotive Europe GmbH (Frankfurt am Main) and from 1994, Managing Director of the ElectricalSystems Division of ITT Automotive Europe GmbH in Bietigheim-Bissingen. Since 1998 Mr Sattig hasworked as a self-employed management consultant in Leonberg. Mr Sattig is a member of theSupervisory Board of G. Mohr Prazisionsteile GmbH, Karlsbad.

The Supervisory Board’s remuneration is set out in the Articles of Association. Accordingly to the latter,in addition to the reimbursement of any expenses incurred by a member in conducting his duties, eachmember of the Supervisory Board receives remuneration in the sum of EUR 15,000 for each full yearfor which he has been a member of the Supervisory Board. The Chairman receives twice this sum, andthe Deputy Chairman receives one-and-a-half times this sum. In addition to the reimbursement ofexpenses and remuneration, value added tax is also reimbursed. Further, the Company may concludepersonal liability insurance (D&O insurance) for the members of the Supervisory Board and pay theassociated insurance premiums.

The former members of the Supervisory Board who held office for the short fiscal period which ranfrom August 25, 2000 to September 30, 2000, and who have since resigned from the SupervisoryBoard, did not receive any remuneration or reimbursement for expenses. For the fiscal year 2000/2001,which commenced on October 1, 2000, the members of the Supervisory Board will receiveremuneration in line with the Articles of Association.

The Company has not made any loans to the members of the Supervisory Board nor has it assumed anyguarantees or issued any similar assurance for the benefit of the Supervisory Board members.

Employee and Management Share SchemeTo allow employees and management members to participate in its equity, the Company intends, firstly,to grant the employees and management members subscription rights for shares and, secondly, toenable employees and management members to acquire shares in the context of a preferentialallotment.

Stock Option Plan

In order to allow employees and management of the Company and its associated companies to acquireequity in the Company, the Management Board was authorized, by way of a resolution passed by theGeneral Meeting on February 21, 2001, to grant subscription rights for up to a total of 3,400,000 bearershares in the Company to the employees and members of the management of the Company and of thecompanies in which the Company either directly or indirectly holds a majority interest (the ‘‘NordexGroup’’). The subscription rights may be granted on one or more occasions before March 31, 2005 andsuch grant requires the approval of the Supervisory Board. To the extent that the subscription rightsbenefit the Management Board, the Supervisory Board is authorized to grant them. Of the subscriptionrights, up to 580,000 (approximately 17.1%) may be allocated to members of the Company’sManagement Board, up to 1,020,000 (30%) may be allocated to the Managing Directors of associatedcompanies, up to 440,000 (approximately 13.9%) may be allocated to the Company’s employees and upto 1,360,000 (40%) may be allocated to employees of associated companies. Beneficiaries who belongto more than one of the groups named above will only receive subscription rights as a member of onesuch group and shall be entitled to shares only from the number of the subscription rights allocated tothe group in question.

The Company’s Management Board will determine the individual beneficiaries and the number ofsubscription rights to be granted to each of these. To the extent that these subscription rights are to begranted to members of the Management Board, this will be determined by the Supervisory Board.Subscription rights may only be granted to beneficiaries during two 15-day periods, one beginning onthe first bank working day following the annual Ordinary General Meeting of the Company and theother beginning on the first bank working day following the publication of the results for the thirdquarter (each a ‘‘Subscription Rights Period’’). In addition, options to subscribe shares granted as part ofthe Company’s Offering may be granted during an additional Subscription Rights Period commencingon March 20, 2001 and ending on April 2, 2001 at 9.00 a.m.

83

Exercise of the subscription rights must be staggered. Up to one third of the rights may be exercisedtwo years after they are initially granted, another third may be exercised three years after they areinitially granted, and the remaining third can be exercised four years after they are initially granted(‘‘Waiting Periods’’). The terms and conditions for the issue of options to subscribe shares may alsoforesee longer Waiting Periods before the rights may be exercised for the first time. The subscriptionrights remain valid for a maximum term of eight years from the date on which they are granted. Theterms and conditions for the issue of options to subscribe shares may specify a shorter term whichhowever may not be less than five years. Subscription rights may only be exercised during two 15-dayperiods in each year. The first such period begins on the first bank working day after the annualOrdinary General Meeting of the Company and the second begins on the first bank working day afterthe publication of results for the third quarter (each an ‘‘Exercise Period’’). If and to the extent that anExercise Period falls either fully or partially within a period during which Nordex AG publishes an offerin the Bundesanzeiger (German Federal Gazette) to its shareholders to subscribe new shares or bondscarrying conversion or subscription rights, or if an Exercise Period falls either fully or partially in theperiod between the end of a fiscal year and the day on which the shares of the Company carryingsubscription rights are quoted ‘‘ex rights’’ for the first time on the Frankfurt Stock Exchange, thesubscription rights may not be exercised and the relevant Exercise Period will be extended by theappropriate number of exercise days on which the subscription rights could not be exercised.

The subscription rights are issued free of charge. When the subscription rights are exercised, the holdermust pay an exercise price for each such exercise. The exercise price corresponds to the average closingprice for the Company’s shares quoted on the Xetra system on the Frankfurt Stock Exchange on the tentrading days prior to the end of the Subscription Rights Period in which the relevant subscription rightswere granted (‘‘Reference Price’’), plus a fixed premium of 25% of the Reference Price as performancetarget. For options offered as part of Nordex AG’s Offering, the exercise price is the issue price plus afixed premium of 25% as performance target.

The subscription rights are non-transferable. Subscription rights lapse if the beneficiary’s contract ofemployment with Nordex AG or with an associated company ends – for whatever reason – and is notreplaced with another such contract with another company associated with Nordex AG. This does notinclude subscription rights for which the relevant Waiting Period has expired. These rights may beexercised once only, in the Exercise Period following the end of the employment contract. Differentarrangements can be made in the event of the beneficiary’s retirement, incapacity or death, or if anassociated company should cease to be a member of the Nordex Group.

The Management Board has been authorized, subject to the approval of the Supervisory Board, todetermine the further details of the terms and conditions of the options to subscribe shares togetherwith matters relating to the issue and characteristics of the new shares for subscription.

To facilitate the exercise of the stock options, which the Management Board and Supervisory Boardwere authorized to issue by a resolution passed by the General Meeting on February 21, 2001, theGeneral Meeting also resolved to create contingent capital totaling EUR 3,400,000 (see ‘‘GeneralInformation on the Company’’ and ‘‘Capitalization’’).

Option Terms and Conditions 2001

As part of its Offering, the Company intends to grant rights to subscribe for its bearer shares to itsemployees and to senior managers of the Company as well as to companies in the Nordex Group. Theextent to which the Company will use the authorization granted by the General Meeting onFebruary 21, 2001 in this regard to issue further capital will depend on the placement price.

A resolution concerning the terms and conditions for the issue of options to subscribe shares in thisfirst tranche was passed on March 8, 2001 by the Management Board and approved by the SupervisoryBoard on March 19, 2001 (the ‘‘Option Terms and Conditions 2001’’). The Option Terms and Conditions2001 stipulate that the number of options to be granted to individual beneficiaries depends on whichcategory to which the employee belongs and, in the case of the members of the Management Board,also the Offer Price of the shares of Nordex AG. The Company has defined five employee categories forthis purpose: category one comprises the members of the Company’s Management Board; category

84

two comprises the managing directors of Nordex Energy GmbH and Sudwind Energy GmbH; categorythree comprises the managing directors of the other subsidiaries and divisional leaders within theNordex Group; category four comprises other managers and professionals employed by the NordexGroup; and category five comprises the other employees. The Company has set a fixed amount ofoptions for employees in categories two to five. For category two there are 67,000 options, for categorythree there are 23,000 options, for category four there are 10,000 options and for category five thereare 1,667 options reserved. For category one, i.e., the Management Board of the Company, theCompany has determined certain amounts (the ‘‘Option Amount’’). This amount is divided by the OfferPrice of the Company’s shares in order to derive the number of shares to be granted to each relevantbeneficiary. On the basis of an Offer Price below EUR 12.00 per share, the Option Amount totals EUR1,500,000; on the basis of an Offer Price of EUR 15.00 per share and above, the Option Amount equalsEUR 2,500,000. For an Offer Price between EUR 12.00 and EUR 15.00, the Option Amount increases ona linear basis from EUR 1,500,000 to EUR 2,500,000.

Further, the Option Terms and Conditions 2001 supplement the resolution of the General Meeting onFebruary 21, 2001, that the subscription rights are to be granted personally to the beneficiary and thatthese subscription rights are non-transferable. Beneficiaries are not permitted to dispose ofsubscription rights, to grant sub-interests in them or establish trusts over them. Further, beneficiariesare not permitted to enter into short positions or comparable futures transactions that are theeconomic equivalent of selling the options. In the event that the Company’s employment contract withthe beneficiary is terminated, for whatever reason, the subscription rights will expire insofar as thesecould not be exercised at the point in time when the contract was terminated and the beneficiary willnot receive any compensation in respect thereof. The beneficiary can exercise subscription rights onone occasion from tranches that could have been but were not exercised at the time the contract wasterminated, in the Exercise Period that follows the time at which such notice is given. In the event thatthe beneficiary is moving directly between two companies in the Nordex Group, is retiring or isincapacitated, the subscription rights will remain in force unchanged. In the event of the beneficiary’sdeath, the beneficiary’s heirs/legatees are authorized, upon proving their entitlement, to exercise thesesubscription rights under the same conditions. This also applies in the event of part of the Company’soperations being spun off, or if a company should cease to be a member of the Nordex Group.Subscription rights of beneficiaries who have retired or taken early retirement or subscription rightsthat can be exercised by heirs/legatees, remain in force unchanged. The last possible time at which thesubscription rights can validly be exercised is the Exercise Period starting on the day following theOrdinary General Meeting at which the shareholders formally approve Managements’ actions for thefiscal year 2004/2005. Any subscription rights that are not exercised in this Exercise Period will expirewithout compensation being payable.

The first tranche of subscription rights capable of being exercised in accordance with the Option Termsand Conditions 2001 will, after a lock-up period of two years, be capable of being exercised on the dayfollowing the Ordinary General Meeting at which shareholders formally approve the actions of theManaging and Supervisory Boards for the fiscal year 2001/2002, which date shall however be no earlierthan March 1, 2003 (‘‘Tranche 1’’). Up to 33% of the subscription rights granted can be exercised inTranche 1. The second tranche capable of being exercised can be exercised from the day following theOrdinary General Meeting at which the shareholders formally approve the actions of the ManagementBoard and the Supervisory Board for the fiscal year 2002/2003, which shall not however be earlier thanMarch 1, 2004 (‘‘Tranche 2’’), and the third tranche capable of being exercised can be exercised from theday following the Ordinary General Meeting at which the shareholders formally approve the actions ofthe Management Board and the Supervisory Board for the fiscal year 2003/2004 which shall nothowever be earlier than March 1, 2005 (‘‘Tranche 3’’). In Tranche 2, the beneficiaries can exercise anadditional 33% of the subscription rights granted and the remaining 34% of the subscription rightsgranted can be exercised in Tranche 3.

If Nordex AG increases its share capital by issuing new shares or issues bonds with warrants containingsubscription or conversion rights for shares or performs other corporate actions listed below andgrants subscription rights to the shareholders, the exercise price will be adjusted in accordance withthe following provisions. In the event of a capital increase against contributions or the issuance of

85

bonds carrying subscription or conversion rights, the exercise price will be reduced by the amountcorresponding to the average price of the subscription rights granted to the shareholders on all tradingdays on the Frankfurt Stock Exchange. The reduced exercise price applies with effect from the firsttrading day on the Frankfurt Stock Exchange following expiration of the subscription period for thenew shares or bonds carrying conversion or subscription rights. The exercise price will not be reduced ifthe option holders are granted a subscription right. In the event of a capital increase from corporateresources, the contingent capital created to secure the options will be increased in the same proportionas the share capital (Section 218 of the AktG – German Public Limited Companies Act). In the eventthat the share capital is increased pursuant to Section 207 Paragraph 2 Sentence 2 of the AktG withoutissuing new shares, the capital increase from corporate resources will not affect the legal status of theoption holders. If, in contrast, new shares are issued, the option holders will be provided with as manyadditional shares when exercising their option as if they had already exercised their option at the timeof the capital increase from corporate resources. Fractions of shares arising as a result of a capitalincrease from corporate resources will not be provided when the option is exercised, but will be sold atbest for the account of the option holder. The proceeds will be provided to the option holder when theshares are issued. In the event of a capital reduction, the exercise price or the option ratio will not beadjusted in those cases where the capital reduction does not change the aggregate number of sharesor the capital reduction is linked to a capital repayment or the purchase of own shares. In the event ofa capital reduction by the consolidation of shares without a capital repayment or the purchase of ownshares without a change in capital (stock split), the number of shares for which one option may beacquired at the exercise price will be reduced or increased in proportion to the capital reduction orstock split.

Friends and Family Program

As part of the public offering, up to a total of 626,000 shares, which equates to approximately 2% ofthe Offered Shares, (excluding the Over-allotment Option) were offered by way of a preferentialallotment to Nordex Group employees, members of Nordex AG’s Management Board and managers ofNordex AG’s subsidiaries as well as business partners as part of a so-called Friends and Family program.No such preferential offer was made to members of the Company’s Supervisory Board.

As part of the Offering, all employees of Nordex in Germany and Denmark acquired the right topreferential subscription rights to shares in the Company with a current value of up to EUR 10,000 atthe issue price.

In addition, as part of the Offering, selected business partners of the Company were granted theopportunity to subscribe for shares of the Company with a current value of up to EUR 15,000 at theissue price as part of a preferential allotment within the Offering. To this extent the usual offeringconditions apply. Subscription orders by business partners in excess of the intended payment volumewill not be given preferential treatment.

86

Management’s Discussion and Analysis of FinancialCondition and Results of Operations

Historical Financial InformationThe following discussion and analysis of financial condition and results of operations of the Nordex Groupshould be read in conjunction with (i) the IAS Pro Forma Consolidated Financial Statements for the fiscalyears ended September 30, 1998, 1999 and 2000, prepared in accordance with International AccountingStandards and audited by BDO Deutsche Warentreuhand Aktiengesellschaft (‘‘BDO’’), in respect of whichan audit opinion has been issued, and (ii) the IAS Pro Forma Interim Consolidated Financial Statements forthe first quarter of fiscal year 2000/2001, prepared in accordance with IAS and reviewed by BDO. The IASPro Forma Financial Statements and the IAS Pro Forma Consolidated Interim Financial Statements for thefirst quarter of fiscal year 2000/2001 are included in the Offering Memorandum under ‘‘FinancialInformation’’ and comply in all material aspects with the requirements of IAS.

The comparative figures for the first quarter of fiscal year 1999/2000, contained in the IAS Pro FormaInterim Consolidated Financial Statements and also included in the Offering Memorandum under‘‘Financial Information’’, are based solely upon the Company’s internal statistical records provided,because the Company’s information technology system was converted to SAP R3 during the firstquarter of fiscal year 1999/2000. Accordingly, no comparative analysis of these two interim periods hasbeen provided herein.

Overview of the Nordex Group CompaniesNordex AG is the parent Company of the Nordex Group and is a holding company which conducts itsactivities through its five subsidiaries, Nordex Energy GmbH (formerly Nordex GmbH), Sudwind EnergyGmbH (formerly Sudwind Borsig Energy GmbH), Nordex Rotor GmbH (formerly Borsig RotortechnikGmbH), Nordex Automation GmbH (formerly the wind energy technology division of BabcockProzeßautomation GmbH) and Nordex Planungs- und Vertriebsgesellschaft mbH (in future: NPVPlanning & Vertrieb GmbH). The Nordex Group is active in the field of developing and manufacturingwind turbines, the technical planning and fitting out of wind farms and servicing wind turbines andwind farms.

The Company, now named Nordex AG, was formed by Borsig Energy GmbH as ‘‘Taifun AG’’ and wasentered into the commercial register of Oberhausen Local Court on September 19, 2000.

Pursuant to a contribution and share transfer agreement between Borsig Energy GmbH, Nordvest A/S,of Give, Denmark and Nordex AG, Borsig Energy GmbH and Nordvest A/S contributed all of theinterests they held in Nordex Energy GmbH, Sudwind Energy GmbH, Nordex Rotor GmbH, NordexAutomation GmbH and Nordex Planungs- und Vertriebsgesellschaft mbH are transferred to Nordex AGin return for the issue of new shares of Nordex AG (see ‘‘General Information on the Company —Formation, Development and Reorganization of the Group Structure’’).

Prior to the restructuring of the Group, profit and loss transfer agreements and in some cases controlagreements existed between Borsig Energy GmbH and NPV Planungs- und Vertriebsgesellschaft mbH,Nordex Automation GmbH, Sudwind Energy GmbH and Nordex Rotor GmbH. These contracts withBorsig Energy GmbH have been terminated, and the termination of the profit and loss transferagreements did not result in any financial burden for the Nordex Group. Nordex AG has not enteredinto any profit and loss transfer agreements with its shareholders.

Companies Included in the ConsolidationThe following discussion, analysis and financial information for the Nordex Group for the three fiscalyears ended September 30, 1998, 1999 and 2000 includes three of the Group’s subsidiaries, NordexEnergy GmbH, Nordex Planungs- und Vertriebsgesellschaft mbH and Nordex Automation GmbH. Inaddition, Sudwind Energy GmbH is included for the two fiscal years ended September 30, 1999 and

87

2000; Nordex Rotor GmbH and Nordex AG, as holding company, are included for the fiscal year endedSeptember 30, 2000, only.

However, only the wind energy technology division of the former Babcock Prozeßautomation GmbH(now Nordex Automation GmbH) was included in the IAS Pro Forma Consolidated Financial Statementsand the IAS Pro Forma Consolidated Interim Financial Statements; the conventional power planttechnology division, which was spun off from the former Babcock Prozeßautomation GmbH as ofOctober 1, 2000 pursuant to the Purchase and Transfer Agreement dated November 15, 2000, was notincluded. In addition, Nordex Planungs- und Vertriebsgesellschaft mbH was included in the IAS ProForma Consolidated Financial Statements for the Fiscal Year 1997/1998 only for the stub periodbeginning as of January 1, 1998 through September 30, 1998, since Nordex Planungs-undVestriebsgesellschaft mbH was acquired with economic effect as of January 1, 1998 from its thenmajor shareholder, Borsig Energy GmbH. Another of the Company’s subsidiaries, Sudwind EnergyGmbH (formed as Sudwind Borsig Energy GmbH on March 22, 1999), is included in the ConsolidatedGroup as of fiscal year 1998/1999. Since the results of Nordex Rotor GmbH (formed as BorsigRotortechnik GmbH on September 21, 1999) and Nordex AG as holding company (formed as Taifun AGon August 25, 2000) were not material for prior years, their results are included beginning with thefiscal year ended September 30, 2000.

The following table shows a summary of the consolidated Group structure as of December 14, 2000,the date the Group’s current legal structure was established. The IAS Pro Forma Consolidated FinancialStatements have been based on this Group structure to allow for comparability.

Name PercentInterest in subsidiary

– as of Dec. 31, 2000 –

Year of initial inclusionin the Pro Forma

consolidated Group

Nordex Energy GmbH— formerly Nordex GmbH — 100.00 Nordex AG, Oberhausen 1997/1998

Nordex Planungs- und Vertriebsgesellschaft mbH— 100.00 Nordex AG, Oberhausen 1997/1998

NORDEX Automation GmbH— formerly Babcock ProzeßautomationGmbH — 100.00 Nordex AG, Oberhausen 1997/1998

Sudwind Energy GmbH— formerly Sudwind Borsig Energy GmbH – 100.00 Nordex AG, Oberhausen 1998/1999

Nordex Rotor GmbH— formerly Borsig Rotortechnik GmbH — 100.00 Nordex AG, Oberhausen 1999/2000

Nordex AG— formerly Taifun AG —

19.5180.49

Nordvest A/S, Give (Denmark)Borsig Energy GmbH, Oberhausen 1999/2000

Nordex Energy GmbH’s foreign subsidiaries are Nordex Iberica Borsig Energy S.A., Spain, Ekter Eoliki,A.E., Greece, Nordex Omnical Energy Services (Shanghai) Co. Ltd., China, Nordex Hellas E.P.E., Greece,and Nordex USA Inc., United States. These companies are primarily involved in sales and distributionand are not included in the consolidated Group as the results were not material for prior years. NordexEnergy GmbH’s subsidiaries are included in the IAS Pro Forma Consolidated Financial Statements forthe fiscal years 1998/1999 and 1999/2000 at amortized cost.

Nordex Energy GmbH’s 40% interest in Xi’an Nordex Wind Turbine Co. Ltd., China, was not included inthe consolidated Group, as it is neither a subsidiary nor an associated undertaking according to IAS.

88

Comparison of Fiscal Years 1999/2000, 1998/1999and 1997/1998

Results of Operations

The following table shows a three-year comparison of selected data and key figures relating to theGroup’s results of operations:

Fiscal yearsResults of operations 1999/ 2000 1998/1999 1997/ 1998

EUR thousand

Net sales 272,670 223,743 82,477

Total operating performance 270,191 232,624 85,259

Depreciation/amortization expense 3,725 2,096 862

Operating profit 13,214 10,000 2,816

Net financial result -2,865 122 -335

Taxes* 3,914 3,592 885

Net income 6,435 6,530 1,595

Cost of materials ratio1 75.4% 81.2% 78.1%

Personnel expenses ratio2 7.1% 5.5% 6.9%

Return on sales3 2.4% 2.9% 1.9%

Return on equity4 101.3% 104% 25.5%

* Income taxes and other taxes

1 Cost of materials : total operating performance

2 Personnel expenses : total operating performance

3 Net income : net sales

4 Net income : equity (less retained profits)

In addition to the above, selected figures from the Group’s pro forma consolidated income statementsare analyzed below.

Net sales and total operating performance

Net sales, which amounted to EUR 82.5 million in fiscal year 1997/1998, increased by approximately171% to EUR 223.7 million in fiscal year 1998/1999, and by approximately 22% to EUR 272.7 million infiscal year 1999/2000.

Nordex Energy GmbH was the strongest performing unit and chief contributor to net sales. On anunconsolidated basis, its sales accounted for EUR 77.1 million, approximately 93% of the NordexGroup’s total sales in fiscal year 1997/1998. In fiscal year 1998/1999, on an unconsolidated basis thissubsidiary contributed EUR 211 million (approximately 94%) of the Nordex Group’s total sales and EUR248 million (approximately 91%) in fiscal year 1999/2000. The Group’s main source of sales in fiscalyear 1998/1999 was the newly developed N-60/62 wind turbine with a total output of 1.3 megawatts.In the following fiscal year, foreign sales (in particular from the Iberian peninsula, Greece, Denmark,China and the United States) increased in particular due to the successful commencement of theCompany’s internationalization program, which was also reflected in the strategic establishment andexpansion of the Company’s foreign subsidiaries. The downturn in domestic sales during the sameperiod was due primarily to Nordex Energy GmbH’s focusing heavily on developing the next generationN-80 wind turbine which prevented it from being able to meet the demand for smaller turbines fromthe market and its existing customers.

Sudwind Energy GmbH, which was included in the consolidation beginning with fiscal year 1998/1999,produces wind turbines, erects turnkey wind farms and services wind turbines. Its net sales increasedby approximately 127% from EUR 10.9 million in fiscal year 1998/1999 to EUR 24.8 million in fiscalyear 1999/2000. This increase was primarily due to the expansion of its business with sales of themature S-46 wind turbine, which has a total output of 0.6 megawatt, and the introduction of themodern S-70 wind turbine, which has a total output of 1.5 megawatts.

89

With the exception of the development and provision of technical equipment for wind farms, theGroup’s other consolidated subsidiaries are primarily involved with providing parts, sales anddistribution services for Nordex Energy GmbH and Sudwind Energy GmbH.

During the periods under review, the proportion of foreign sales to sales generated in Germanydeveloped as follows:

Net sales Fiscal years1999/2000 1998/1999 1997/1998

EUR thousand % EUR thousand % EUR thousand %

Germany 152,319.0 55.9 173,792.9 77.7 79,975.4 96.9

Foreign sales 120,351.0 44.1 49,949.9 22.3 2,501.2 3.1

Total 272,670.0 100.0 223,742.8 100.0 82,476.6 100.0

While net sales in the periods under review increased, work in process also increased by approximately193% from EUR 2.8 million in fiscal year 1997/1998 to EUR 8.4 million in fiscal year 1998/1999, andthen decreased EUR -3.2 million in fiscal year 1999/2000.

In fiscal year 1999/2000, the effect of using the percentage-of-completion method required by IAS 11resulted in a decrease in inventories. This method leads to sales being recognized before the transfer ofrisk according to German commercial law, and thus to a technical reduction in the item ‘‘work inprocess’’. This effect will be reversed when these orders are actually invoiced. At present, these effectsare expected to balance each other out after a maximum of two years, depending on the period forwhich the Nordex Group has advance orders.

Total operating performance, which compensate for these effects, increased during each of the periodsunder review. Total operating performance increased by approximately 173% from EUR 85.2 million infiscal year 1997/1998 to EUR 232.6 million in fiscal year 1998/1999 and by approximately 16% to EUR270.1 million in fiscal year 1999/2000.

Cost of materials

Cost of materials, increased by approximately 183% from EUR 66.6 million in fiscal year 1997/1998 toEUR 189 million in fiscal year 1998/1999, and by approximately 7% to EUR 204 million in fiscal year1999/2000. In addition to an increase in net sales, the relatively high cost of materials in fiscal year1998/1999 compared to 1997/1998 was primarily due to the fact that for larger wind farms (e.g., theZafarana project in Egypt), assembly aids such as cranes, were accounted for as purchased services. Inthe following fiscal year 1999/2000, these types of components were leased, leading to a decrease inthe cost of materials purchased in fiscal year 1999/2000 compared to the previous fiscal year. Leasepayments are not recorded and disclosed under cost of materials, but as other operating expenses,insofar as they do not constitute finance leases under IAS.

Also contributing to the increase in cost of materials, the cost of raw materials and supplies increasedby approximately 196% from EUR 52.7 million in fiscal year 1997/1998 to EUR 156 million in fiscal year1998/1999, and by approximately 7% to EUR 167 million in fiscal year 1999/2000. In addition, EUR 13.8million was spent on services purchased in fiscal year 1997/1998, EUR 32.9 million in fiscal year 1998/1999 and EUR 37.3 million in fiscal year 1999/2000. The services purchased primarily relate to freight,sales commissions, outsourced services for order fulfillment, outside labor and the changes in contract-related accruals.

The increased use of outside labor in fiscal year 1998/99 also contributed to a temporary increase in thecost of materials ratio and, at the same time, to proportionately lower personnel expenses.

Personnel expenses

Expenses for wages and salaries and for social security taxes increased disproportionately to theincrease in the number of employees during the period under review, by approximately 113% from EUR6 million in fiscal year 1997/1998 to EUR 12.8 million in fiscal year 1998/1999, and by approximately50% to EUR 19.2 million in fiscal year 1999/2000. The disproportionate increase in personnel expenses

90

was due primarily to the Company initially paying very low entry-level wages in the German state ofMecklenburg-Vorpommern, but these were adjusted when market conditions changed. The averagenumber of employees increased by approximately 134% from 145 in fiscal year 1997/1998 to 340 infiscal year 1998/1999, and by approximately 53% to 523 in the following year.

Depreciation/amortization expense

Depreciation/amortization expense constituted an insignificant percentage of the Group’s sales duringthe period under review due to the low level of components manufactured within the Group. Theestablishment of industrial rotor blade manufacturing facilities had not yet had a significant effect ondepreciation/amortization expense as of September 30, 2000.

Depreciation/amortization expense increased by approximately 144% from EUR 0.86 million in fiscalyear 1997/1998 to EUR 2.10 million in fiscal year 1998/1999, and by approximately 78% to EUR 3.73million in the following fiscal year. Amortization of intangible assets accounted for EUR 0.21 million oftotal depreciation/amortization expense in fiscal year 1997/1998 and EUR 0.64 million in fiscal year1998/1999, representing an increase of approximately 205%, and increased again by approximately116% in fiscal year 1999/2000 to EUR 1.38 million. Amortization of intangible assets relates todevelopment costs capitalized pursuant to IAS and to purchases of licenses, software and similar rights.Increased depreciation during the period under review was primarily caused by the Nordex Group’soverall increase in investments during the period (see ‘‘—Comparison of Fiscal Years 1999/2000, 1998/1999 and 1997/1998—Financial Conditions’’).

Other operating expenses

Other operating expenses increased by approximately 113% from EUR 9.9 million in fiscal year 1997/1998 to EUR 20.1 million in fiscal year 1998/1999, and by approximately 60% to EUR 32.2 million infiscal year 1999/2000. There are several reasons for the changes:

Outside and support services decreased by approximately 16% from EUR 0.44 million in fiscal year1997/1998 to 0.37 million in fiscal year 1998/1999, and then increased by approximately 1060% toEUR 4.29 million in fiscal year 1999/2000. This increase was primarily due to the Nordex Group’ssubstantially increased outsourcing of services both in general administration expenses and in researchand development. Expenses for maintenance, legal and consultancy and advertising costs and costs forequipment leases increased at similarly high rates.

The Group’s establishment of production facilities in Rostock and the expansion of its vehicle fleet alsocaused an increase in maintenance costs. The increased legal and consulting costs were due to theGroup’s increased activities overseas, increased use of local advisors and increased purchases ofplanning services. The increase in costs for equipment leases reflected the increase in the vehicle fleetfor exhibitions and servicing activities.

Leasing rights expenses amounting to EUR 0.74 million were incurred for the first time in fiscal year1999/2000 because the Company leased land in Denmark. These long-term leases are expected to beinvoiced to the customer when the relevant wind turbine is transferred to the customer.

Non capitalized commissions expenses increased by approximately 65% from EUR 3.23 million in fiscalyear 1997/1998 to EUR 5.33 million in fiscal year 1998/1999, and decreased by approximately 45% toEUR 2.90 million in 1999/2000. Commissions primarily depend on the Group’s progress in theconstruction of wind turbines. In the case of larger projects in particular, commissions can increaserapidly and unevenly as a result. This effect influenced the Group’s domestic business substantially infiscal year 1998/1999. Outside of Germany, commissions have been increasingly paid to third partiesand are accounted for as consulting services.

Advertising expenses increased similarly by approximately 335% from EUR 0.55 million in fiscal year1997/1998 to EUR 2.39 million in fiscal year 1998/1999, but decreased by approximately 62% to EUR0.91 million in fiscal year 1999/2000. These changes were primarily due to the fact that the key tradefairs for the Nordex Group, the Hannover Fair (energy sector) and the Husum Fair, are both held everytwo years only or the Group participates in such fairs only every other year. Accordingly, the Group

91

incurs significant expenses for these fairs every other year. Costs relating to the changing of theNordex Energy GmbH and Sudwind Energy GmbH company logos also had a significant effect upon theGroup’s advertising expense in fiscal year 1998/1999.

Certain imputed personnel and administrative expenses for Nordex AG have been included in order toimprove the comparability of the IAS Pro Forma Consolidated Financial Statements. These expensesincreased by approximately 27% from EUR 1.88 million in fiscal year 1997/1998 to EUR 2.39 million infiscal year 1998/1999, and by approximately 12% to EUR 2.69 million in 1999/2000.

The increase in receivables written off or written down in fiscal year 1999/2000 primarily related tothree large individual items amounting to approximately EUR 0.24 million. The remainder was due tosmaller items in the servicing field.

Operating profit

The Group’s operating profit increased by approximately 355% from EUR 2.8 million in fiscal year 1997/1998 to EUR 10.0 million in fiscal year 1998/1999, and by approximately 31% to EUR 13.2 million infiscal year 1999/2000. These increases resulted from the changes in the line items analyzed above andfrom an improvement in the ratio of fixed costs to net sales.

Net financial result

The development of the net financial result shown in the following table was influenced significantly byincreasing interest expenses during the period under review, resulting from the Group’s increased useof the Babcock Borsig Group’s clearing account in connection with the expansion of the Group’svolume of business. This relates in particular to interest expenses incurred in fiscal year 1999/2000,which increased by approximately 242% to EUR 3.38 million compared to EUR 0.99 million in fiscalyear 1998/1999. However, fiscal year 1998/1999 was marked by unusually high prepayments bycustomers, and thus the Group’s reduced need for borrowing, due to the fact that theStromeinspeisungsgesetz (the German law relating to the supplying of electricity from renewableenergy sources into the public grid) which was about to be repealed.

Fiscal years1999/2000 1998/1999 1997/1998

EUR thousand

Other interest and similar income 516 1,111 70

Other interest and similar expense -3,381 -989 -406

Net financial result -2,865 122 -336

Taxes

Taxes comprises current, imputed, deferred and other taxes.

There were no current taxes on income for fiscal year 1997/1998. Current taxes on income increasedapproximately 173% from EUR 0.87 million in fiscal year 1998/1999 to EUR 2.38 million in fiscal year1999/2000. This growth was due primarily to the improvement in Nordex Energy GmbH’s results. Dueto the fact that Borsig Energy GmbH and the other subsidiaries were considered a single entity for taxpurposes, these companies were not separately taxed in the past. For reasons of comparability, imputedtaxes have been calculated for the earnings transferred to Borsig Energy GmbH, as well as for theadjusted intra-group allocations within the Babcock Borsig Group and for the imputed expenses ofNordex AG. These imputed taxes amounted to EUR – 0.26 million for fiscal year 1997/1998, EUR 0.70million for fiscal year 1998/1999 and EUR 2.14 million for fiscal year 1999/2000. As a result of theGroup’s adoption of IAS for financial statements that had previously been prepared in accordance withGerman accounting standards, deferred taxes were required to be calculated for the three fiscal yearsduring the period under review, but did not represent any net cash outflow. Deferred taxes were carriedat EUR 1.14 million for fiscal year 1997/1998, EUR 2.04 million for fiscal year 1998/1999 and EUR -0.63million for fiscal year 1999/2000. Other taxes primarily related to transport and vehicle taxes and werenot significant.

92

In total, the average pro forma income tax burden during the period under review for the Nordex Groupwas approximately 37%.

Net income

Net income after consolidation increased by approximately 408% from EUR 1.6 million in fiscal year1997/1998 to EUR 6.53 million in fiscal year 1998/1999, and decreased by approximately 1% to EUR6.43 million in fiscal year 1999/2000 due primarily to the negative net financial result.

Liquidity

The following table sets forth the development of the Group’s liquidity during the periods indicated:

Fiscal years1999/2000 1998/1999 1997/1998

EUR thousand

Cash flow from operating activities -44,886 18,868 -379

Cash flow from investing activities -12,090 -10,497 -1,947

Cash flow from financing activities -7,913 -4,104 -1,290

Change in cash and cash equivalents -64,889 4,266 -3,615

Cash and cash equivalents at beginning of period 2,407 -1,859 1,756

Cash and cash equivalents at end of period -62,482 2,407 -1,860

thereof:Cash in hand and at bank 2,634 371 588

Intercompany clearing account credit/(debit) balances -64,936 2,095 -2,447

Current liabilities due to banks -180 -59 0

-62,482 2,407 -1,859

The fluctuations in cash flow from operating activities resulted from strong increases in sales duringthe period under review. In particular, the investment backlog in fiscal year 1999/2000 that was causedby the uncertainty surrounding the Gesetz uber den Vorrang erneuerbarer Energien (Renewable EnergyDirective) coupled with associated planning difficulties, led to incoming orders being delayed until themiddle of fiscal year 1999/2000. This contributed to a high level of receivables on the balance sheetdate at September 30, 2000, the unusually high level of receivables at the end of fiscal year 1999/2000was primarily due to the date of the balance sheet, and returned to pre-September 30, 2000 levels inthe first quarter of fiscal year 2000/2001.

The negative cash flow from investing activities in fiscal year 1999/2000 was due primarily to capitalexpenditures for property, plant and equipment and intangibles. The major contributing factors werethe capitalization of development costs, prototypes and software required in connection with theGroup’s conversion to the SAP R3 cost accounting program. In addition, in fiscal years 1998/1999 and1999/2000, the Nordex Group increasingly invested in its production facilities in Rostock.

The main contributing factors to the negative cash flow from financing activities in fiscal year 1999/2000 were profit transfers to shareholders resulting from profit and loss transfer agreements whichwere still in force at that time, and which placed a burden on the Company’s financial position. Prior tofiscal year 1999/2000, almost all of the overall requirement for cash and cash equivalents werefinanced by the Babcock Borsig Group by way of the inter-company clearing account.

In the first year following the Company’s Offering, a portion of earnings will initially be used to set upstatutory reserves, and the Company’s positive future cash flow will be used to meet operatingfinancing requirements. Nordex does not plan to pay any dividends in the fiscal years following theOffering. Part of the net proceeds of the Offering will be used, among other things, to repay theGroup’s liabilities to the Babcock Borsig Group, which will improve the Group’s negative net financialresult (see ‘‘The Offering — Use of Proceeds’’).

93

Financial Condition

The key figures for the results of the Company’s operations on the dates used for comparison were:

On the balance sheet dateSept. 30,

2000Sept. 30,

1999Sept. 30,

1998

EUR thousand

Total assets 153,101 81,994 29,395

Fixed assets 21,447 12,822 4,479

Current assets 129,785 68,954 24,873

Equity 16,014 12,663 7,146

Accruals 19,696 8,203 3,013

Liabilities and deferred income 114,751 57,682 18,561

Investments1 13,724 9,970 2,134

Equity ratio2 10.5% 15.4% 24.3%

Fixed assets to net worth ratio3 74.7% 98.7% 159.6%

1 taken from the pro forma consolidated statements of cash flow

2 Equity : total assets

3 Equity : fixed assets

Fixed assets

Intangible assets

Intangible assets increased by approximately 160% from EUR 1.06 million on September 30, 1998 toEUR 2.76 million on September 30, 1999 and by approximately 111% to EUR 5.83 million on September30, 2000. Concessions, industrial-property and similar rights in particular increased by approximately148% from EUR 0.88 million on September 30, 1998 to EUR 2.18 million on September 30, 1999, andby approximately 108% to EUR 4.55 million on September 30, 2000. In fiscal year 1999/2000, SudwindEnergy GmbH acquired licenses to produce, distribute and erect the S-70 wind turbine from pro + proEnergiesysteme GmbH & Co. KG. of Rendsburg, Germany. Resulting advance payments to this licensorbeginning September 30, 1998 are attributed directly to intangible assets until they become due andare disclosed as a liability.

Prepayments for intangible assets in the amount of EUR 0.18 million were capitalized as of September30, 1998. As of September 30, 1999 the amount capitalized amounted to EUR 0.58 million and, as ofSeptember 30, 2000, these capitalized prepayments amounted to EUR 1.27 million.

Property, plant and equipment

The value of property, plant and equipment increased during the period under review by approximately172% from EUR 3.42 million as of September 30, 1998 to EUR 9.29 million as of September 30, 1999,and by approximately 57% to EUR 14.6 million as of September 30, 2000. The following table shows abreakdown of the various components on the relevant balance sheet dates:

Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 1998EUR thousand

Land and buildings 3,059 819 726

Production plant and machinery 3,519 3,922 1,545

Other plant, factory and office equipment 3,398 2,432 912

Prepayments on property, plant and equipment, and constructionin progress 4,663 2,114 235

Property, plant and equipment 14,639 9,287 3,418

The largest increases, from EUR 0.23 million as of September 30, 1998 to EUR 2.11 million as ofSeptember 30, 1999 and to EUR 4.66 million as of September 30, 2000 were recorded in prepaymentson property, plant and equipment and construction in progress. Other plant, factory and officeequipment increased by approximately 167% from EUR 0.91 million on the balance sheet date ofSeptember 30, 1998 to EUR 2.43 million as of September 30, 1999, and by approximately 39% to

94

EUR 3.40 million as of September 30, 2000. These increases were primarily due to the establishment ofproduction facilities for Nordex Energy GmbH and Nordex Automation GmbH in Rostock, to the costsof establishing Nordex Rotor GmbH’s rotor blade production at the same location as well as to theestablishment of new branches for Sudwind Energy GmbH and the expansion of its activitiesaccompanied by an increase in its volume of business and internationalization.

Financial assets

Financial assets increased by approximately 27% from EUR 0.77 million as of September 30, 1999 toEUR 0.98 million as of September 30, 2000. The Company did not hold any equity interests as ofSeptember 30, 1998. The Company held interests in associated companies of EUR 0.23 million as ofSeptember 30, 1999 and EUR 0.22 million as of September 30, 2000. These interests related to NordexGmbH’s foreign subsidiaries, Nordex Iberica Borsig Energy S.A., Spain, Ekter Eoliki A.E., Greece, andNordex Omnical Energy Services (Shanghai) Co. Ltd., China. The Company’s 40% interest in Xi’an NordexWind Turbine Co. Ltd., China, increased by approximately 40% from EUR 0.54 million as of September30, 1999 to EUR 0.76 million as of September 30, 2000.

Current assets

Inventories

The Company’s inventories increased by approximately 32% from EUR 16.6 million as of September 30,1998 to EUR 21.9 million as of September 30, 1999, and then decreased by approximately 37% to EUR13.9 million as of September 30, 2000. This decrease was primarily due to the increase in prepaymentsreceived, which were deducted from the inventories for reporting purposes.

Required write-downs for raw materials and supplies were insignificant during the period under review.Raw materials and supplies mainly comprise wind turbine components. Work in process relates to windturbines under construction and prepayments made for project development, as well as to rights andinfrastructure in connection with erecting wind turbines for which no customer-specific orders existedat the relevant balance sheet date. Reasonable write-downs were made for slow-moving items and forinventories whose fair market prices were below their carrying values.

Prepayments represent the situation on the particular balance sheet date in each case, and, therefore,can provide only a limited amount of information.

Inventories Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 1998EUR thousand

Raw materials and supplies 27,785 29,742 14,171

Work in process 8,190 11,403 2,967

Prepayments made 9,746 4,756 4,435

45,721 45,901 21,573

Less prepayments received 31,817 23,985 5,012

Total 13,904 21,916 16,561

Future receivables under long-term construction contracts

This item is used to record orders which have not yet been completed, but which were accounted foraccording to their percentage of completion. This item comprises the accrued contract costs incurredas of the balance sheet date, proportionate revenues recognized using the ‘‘cost-to-cost’’ method forthe relevant contracts and the amount of the accrued contract costs for contracts for which it was notpossible to reliably calculate the total contract revenue. Prepayments received were deducted.

Future receivables under long-term construction contracts increased significantly by approximately1,171% from EUR 1.07 million as of September 30, 1998 to EUR 16.7 million as of September 30, 1999.This significant increase was primarily due to the Group’s expansion of its business and to a high levelof construction in progress prior to the end of the fiscal year. Orders in progress doubled to EUR 35.1million as of September 30, 2000.

95

The Company believes that profits partially realized to date from projects in process will remain afterthese projects have been finally invoiced.

Receivables and other current assets

Receivables and other current assets increased by approximately 350% from EUR 6.7 million as ofSeptember 30, 1998 to EUR 30.0 million as of September 30, 1999, and by approximately 160% to EUR78.2 million as of September 30, 2000. The substantial increase in trade receivables from EUR 4.2million as of September 30, 1998 to EUR 20.0 million as of September 30, 1999, and to EUR 63.4 millionas of September 30, 2000 resulted primarily from the expansion of the Group’s business.

More than half of the Group’s receivables as of September 30, 2000 were foreign receivables.

Receivables and other current assets Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 1998

EUR thousand

Trade receivables 63,364 20,012 4,182

Due from Babcock Borsig Group companies 11,808 9,110 631

Receivables from under investor/investee relations 9 0 256

Sundry current assets 3,004 841 1,584

Total 78,185 29,963 6,652

Receivables due from Babcock Borsig Group companies relates to companies in the Babcock BorsigGroup, which are not included in the consolidated Nordex Group, and mainly relates to tradereceivables and receivables from clearing accounts.

Cash and cash equivalents

This cash and cash equivalents item decreased by approximately 37% from EUR 0.59 million as ofSeptember 30, 1998 to EUR 0.37 million as of September 30, 1999, and increased by approximately611% to EUR 2.63 million as of September 30, 2000.

However, because, for clearing purposes in the inter-company clearing account of the Babcock BorsigGroup, all accounts were generally settled by the parent company each working day, the above figuresonly relate to cash and cash equivalents on the balance sheet dates and are of no particular economicsignificance.

Equity

The following table shows that the Group’s equity increased by approximately 77%, fromEUR 7.15 million on September 30, 1998 to EUR 12.7 million September 30, 1999, and byapproximately 26% to EUR 16.0 million on September 30, 2000. The additional paid in capital remainedunchanged at EUR 6.05 million as of September 30, 1999.

Pro forma net earnings was derived from net income, retained profits/accumulated losses broughtforward, adjustments for intra-group allocations, imputed expenses for Nordex AG and profit transfers.

Equity Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 1998

EUR thousand

Capital stock 307 232 207

Additional paid-in capital 6,047 6,047 6,047

Pro forma net earnings 9,660 6,384 893

Total 16,014 12,663 7,146

Accruals

Accruals increased by approximately 172% from EUR 3.0 million as of September 30, 1998 to EUR 8.2million as of September 30, 1999, and by approximately 140% to EUR 19.7 million as of September 30,2000. These accruals were primarily comprised of tax accruals and sundry accruals. The sundry accrualsas of September 30, 2000 of EUR 16.5 million were primarily related to contracts (including warranties,follow-up costs and penalties) and personnel related accruals. The Company issues general warranties

96

with terms of between two and five years for its N-50 and N-60 wind turbines, amounting toEUR 25,600 per turbine, amounting to a total of EUR 11.34 million for Nordex Energy GmbH andEUR 173,000 for Sudwind Energy GmbH. Other sundry accruals relate mainly to unpaid invoices, costsfor the preparation of the Group’s annual financial statements and risks resulting from legalproceedings.

The substantial increase in tax accruals, from EUR 0.9 million to EUR 3.2 million as of September 30,2000, was necessary due to an increased actual income tax burden in line with Nordex Energy GmbH’sincreased earnings.

Liabilities and deferred income

The Company’s liabilities and deferred income increased substantially during the period under review.Liabilities and deferred income increased by approximately 210% from EUR 18.6 million as ofSeptember 30, 1998 to EUR 57.7 million as of September 30, 1999, and increased approximately 100%to EUR 114.6 million as of September 30, 2000. The most significant growth was related to liabilitiesdue to companies in the Babcock Borsig Group in line with the increase in inter-company clearingaccount debit balances and reflects the Nordex Group’s increased liquidity requirements.

Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 1998

EUR thousand

Prepayments received 0 47 0

Due to banks 180 59 0

Trade payables 44,122 34,097 8,424

Due to Babcock Borsig Group companies 63,152 19,117 9,356

Sundry liabilities 7,132 4,315 781

Total 114,586 57,635 18,561

First Quarter of Fiscal Year 2000/2001The following discussion of the IAS Pro Forma Consolidated Interim Financial Statements for the firstquarter of fiscal year 2000/2001 does not include a comparison to the corresponding quarter in fiscalyear 1999/2000. Due to the fact that Nordex Energy GmbH which, as of December 31, 1999, accountedfor approximately 68% of the profits of what is now Nordex Group, changed its accounting software toSAP/R3 in November 1999, the only financial information available for the first quarter of fiscal year2000/2001 was derived from the Group’s internal statistics. Nonetheless, in order to give investors anestimation of the development of, and trends in, certain key items in the IAS Pro Forma ConsolidatedInterim Financial Statements, in some instances references are made to the Group’s internal statisticalinformation or to the results of the previous fiscal year. The Company considers that the informationthus derived gives an accurate representation of the development of its business, but that it is notpossible to specify percentage changes in items due to the unavoidable possibility of significantdeviations which is inherent to statistical analysis and comparisons of results. In the Company’s view itis possible that the quarterly report for the period from January 1, 2001 to March 31, 2001 will also notinclude a complete set of prior year comparative figures drawn up according to IAS.

97

Results of Operations

Selected data and ratios for the first quarter of fiscal year 2000/2001 are set out below:

EUR thousand

Net sales 63,004

Total operating performance 69,129

Operating profit 1,925

Net financial result - 920

Taxes(1) 585

Quarterly net income 420

Cost-of-materials ratio(2) 73.4%

Personnel expenses ratio(3) 8.2%

Return on equity 0.7%

1 income and other taxes

2 costs-of-materials : total operating performance

3 personnel expenses : total operating performance

Net sales and total operating performance

Net sales according to IAS were EUR 63 million in the first quarter of fiscal year 2000/2001. Althoughthe Company has no experience on which it can rely to judge, given that it has been producingquarterly results under IAS for such a short period of time, the Company’s experience is that net salestend to be weak compared to the rest of the year. German taxation regulations required wind turbinesunder construction to be completed by the end of the calendar year to qualify for certain tax benefits.Each wind turbine under construction as of September 30 was accounted for under IAS according tothe percentage of completion method, with the result that a large proportion of domestic sales hadbeen accounted for in the fourth quarter of the previous fiscal year.

In addition to total operating performance of approximately EUR 69 million, contracts worth EUR 112million were concluded in the first quarter of fiscal year 2000/2001. The Company only considerscontracts as concluded, where the buyer has provided proof of financing and received approval forconstruction and to supply the electricity into the electricity network.

The proportion of overseas sales decreased from approximately 44.1% in fiscal 1999/2000 to slightly inexcess of 33% in the first quarter of fiscal year 2000/2001. This was primarily due to the furthersignificant expansion of Sudwind Energy GmbH, which sells mainly to the domestic market.

Cost of materials

The cost of materials and services purchased amounted to EUR 50.8 million in the first quarter of fiscalyear 2000/2001. The cost-of-materials ratio was 73.4% compared to 75.4% in fiscal year 1999/2000.The Company expects that the cost-of-materials ratio will again rise to the level of the previous years.

Personnel expenses, other operating expenses

Personnel expenses and the personnel expenses ratio for the first quarter of fiscal year 2000/2001amounted to EUR 5.7 million and 8.2%, respectively. The Company expects an increase in totaloperating performance over the remainder of the fiscal year and as a result a slightly lower personnelexpenses ratio.

Other operating expenses for the first quarter of fiscal year 2000/2001 amounted to EUR 9.5 million.Included in this figure is a provision of EUR 223 thousand for expenses related to the Offering.

Operating profits, net financial result

In the first quarter of fiscal year 2000/2001, the Group made an operating profit of EUR 1.9 million. Thenet financial result was due almost entirely to interest on the Babcock Borsig Group inter-companyclearing of EUR -0.9 million.

98

Liquidity

Cash flow from operations in the first quarter of fiscal year 2000/2001 was negative at EUR 5.5 million.This was due primarily to the increase in inventories and the reduction of liabilities. A perceptiblereduction in customer receivables compensated for this to an extent.

Both cash flow from financing activities (approx. EUR 20 million) and cash flow from investmentactivities (approx. EUR -22 million) were, in the first quarter of fiscal year 2000/2001, influencedsignificantly by extraordinary factors due to the fact that the Nordex Group was consolidated for thefirst time and the capital of Nordex AG was increased. Similar extraordinary factors are not expected inthe following quarters.

Financial Condition

The following table compares the financial position as of December 31, 2000 to the position as ofSeptember 30, 2000.

as ofDecember 31,

2000

as ofSeptember 30,

2000

EUR million

Total assets 169.8 153.1

Fixed assets 41.8 21.4

Current assets 125.5 129.8

incl. receivables from supplies and services 45.2 63.4

Accruals 20.4 19.7

Liabilities 109.0 114.6

incl. financing 72.5 64.9

Fixed assets

The main change in fixed assets was to intangible assets in the period from September 30, 2000 toDecember 31, 2000. The increase of EUR 20.4 million in fixed assets from September 30, 2000 toDecember 31, 2000 was due primarily to goodwill resulting from the first time consolidation of thecapital of the companies comprising the Group. The increase in tangible fixed assets was on a similarlevel to depreciation. Planned investments, especially into rotor blade production, will have an effectonly in the following quarters.

Current assets

Current assets as at December 31, 2000 amounted to EUR 125.5 million and consisted of inventoriesand receivables from customers. There was a slight reduction in current assets from the position atSeptember 30, 2000, mainly due to the reduction of receivables.

As compared with the position at September 30, 2000, receivables from clients as of December 31,2000 declined to EUR 45.2 million. Historically, receivables from clients have generally been paid within90 days. The default risk for receivables from clients has been low, since orders were only acceptedwhere there was proof of financing.

Accruals

Accruals as of December 31, 2000 amounted to EUR 20.4 million, representing a slight increase sincethe beginning of fiscal year 2000/2001. Accruals relate primarily to contract related accruals andpersonal accruals. The Company maintained its methodology for accounting and for valuation.

Liabilities

Liabilities as of December 31, 2000 amounted to EUR 109.0 million, of which EUR 72.5 million relatedto the Babcock Borsig Group to inter-company clearing facility. The inter-company clearing liabilities asof March 31, 2001 (expected to be approximately EUR 92.6 million) are expected to be repaid out of theproceeds of the Offering.

99

TaxationThe following section provides an overview of selected tax regulations in the Federal Republic ofGermany. The discussion does not claim to present a comprehensive explanation of all the informationwhich could be required before any purchase decision is made regarding the shares on offer. Theexplanations are based on the taxation provisions effective in Germany at the time this OfferingMemorandum went to print. These may be subject to revision; any changes may also have a retroactiveeffect under certain circumstances. The discussion relates solely to income tax (excluding church tax),corporation tax, the solidarity surcharge, trade tax, and inheritance and gift tax and does not addressall aspects of these types of taxation. It does not address the individual tax situation of each investor.Prospective investors are therefore strongly advised to consult a tax adviser regarding the taxconsequences in their particular case of acquiring, holding or transferring shares.

In 2000, the German Parliament passed the Steuersenkungsgesetz (Tax Reduction Act) to reduce taxrates and reform corporate taxation. The reform lowers the corporation tax rate homogeneously to25% plus a solidarity surcharge of 5.5% starting in the 2001 assessment period. The corporation taximputation procedure will be replaced for private individuals by what is known as theHalbeinkunfteverfahren. According to this, only 50% of dividend payments and taxable capital gainsfrom the disposal of shares held as part of private assets should be subject to income tax. Corporationsare insofar exempted from taxation. The Tax Reduction Act becomes effective from January, 1 2001generally. However, as Nordex has a business year deviating from the calendar year (October, 1 toSeptember, 30) and the Company will not switch over to a calendar year as business year via anincomplete business year the provisions of the Tax Reduction Act will be applicable later on (see below).

Taxation of Company ProfitsAktiengesellschaften (German public companies) domiciled in the Federal Republic of Germany aresubject to both trade tax and corporation income tax and a solidarity surcharge (Solidaritatszuschlag)with their profits. Trade tax may be deducted as an operating expense when calculating the amount ofincome subject to corporation tax.

The assessment basis for trade tax is the trading profit, which is determined according to theKorperschaftssteuergesetz (KStG – German Corporation Income Tax Act) from the taxable incomeadjusted for certain additions and deductions. The trade tax liability is derived by applying a percentagerate to the trading result; this percentage rate depends on the effective assessment rate determined bymunicipalities for the areas they cover. If an Aktiengesellschaft maintains operating establishments invarious municipalities, the total trade tax liability is determined by the rates applicable in each of thesemunicipalities. Dependent on the municipality the range for the trade tax burden is generally between12% and 21% of the trading profit.

The income of Nordex that is subject to corporation income tax is calculated on the basis of theCompany’s trade balance accounts, taking into account special income tax and corporation income taxregulations.

Including September, 30 2001 (assessment period 2001) the corporation income tax rate for Nordex is40% for retained and 30% for distributed earnings. A solidarity surcharge in the amount of 5.5% ischarged on the corporate income tax owed. There are exceptions to this rule for the Company’s taxexempt foreign income and contributions by shareholders that increase the Company’s net worth (socalled EK 04 respectively steuerliches Einlagekonto). Given the fact that the solidarity surcharge is notdeductible, the corporate income tax and solidarity surcharge result in an effective tax burden (aftertrade tax), assuming full distribution, of 31.94%.

From October 1, 2001 on (assessment period 2002) the corporate income tax rate for Nordex will behomogeneously 25%. A solidarity surcharge of 5.5% will be charged on the corporation income taxassessed. Including the non deductibility of the solidarity surcharge, this results in an effective taxliability on the Company’s income (after trade tax) of 26.375%. Taking into account that the solidaritysurcharge is not deductible the effective burden of the income amounts to 26.375% (after trade tax). Ifthe Company receives dividend distributions from other companies which are unlimitedly subject to

100

corporation income tax a special tax rate is applicable under certain preconditions. In the event thatduring the assessment period 2002 dividends are distributed which stem from earnings made in earlieryears by the distributing company, which were burdened with a corporate income tax of 45% (EK 45),40% (EK 40) respectively, these dividend distributions are subject to a special tax rate of 45%, 40%respectively on part of the Company. Operating expenses of the Company related in financial terms tosuch equity interests reduce with priority the Company’s income burdened with 25%; such operatingexpenses can generally not be deducted from the Company’s income burdened with 45%, 40%respectively. The special tax rate is also applicable for other distributions (for example ‘‘hiddendistribution’’) to the Company in its assessment period 2002, which are not based on the resolutionordering the distribution of profits pursuant to the provisions of corporate law.

If the Company receives in the assessment period 2002 domestic dividends subject to the special taxrate of 45%, 40% respectively the Company’s final balances of the so called EK 45, EK 40 respectivelywhich have to be determined as of September 30, 2001 will be increased retroactively. On September30, 2001 all final balances of the Company’s equity (EK) will be determined – probably retroactively –and converted into EK 02 and EK 40. Within this conversion corporation income tax credit could be lost.As of September 30, 2002 the remaining corporation income tax credit in the amount of 1/6 of theresolved EK 40 will be determined. If the Company distributes dividends to its shareholders up to theyear 2017 the Company’s corporation income tax credit and the corporation income tax liability will bereduced to an amount of 1/6 of the respective dividend distribution. If during this period the Companyreceives dividend distributions, which led at the distributing company to a reduction of corporationincome tax credit as set out above, the Company’s corporation income tax credit is increased by thisamount. Corporation income tax credits which are not reduced until the year 2017 will be lost.

Dividend distributions received by the Company from domestic corporations in 2002 for the year 2001are tax exempt, if the distributing corporation has a business year corresponding to the calendar year.If the distributing corporation has a fiscal year not corresponding to the calendar year, the dividenddistributions executed for the fiscal year ending in 2001 will be tax exempt. Special rules apply in caseswhere the distributing domestic corporation builds an incomplete business year.

From the assessment period 2002 dividend distributions received by the Company from foreigncorporations are – subject to certain exceptions – tax exempt. However, 5% of the foreign dividends aredeemed as non deductible business expense.

Taxation of DividendsShareholders Subject to Unlimited Tax Liability in Germany

Dividend payments made by the Company before September 30, 2002 are subject to withholding tax ata rate of 25% of the dividend approved by the shareholders’ general meeting (‘‘cash dividend’’, that isthe dividend less corporate income tax and withholding tax). For such distributions paid after October1, 2002 the withholding tax is reduced to 20% of the cash dividend. A solidarity surcharge of 5.5% islevied in both cases, increasing the effective tax liability to 26.375% until September 30, 2002 or 21.1%after October 1, 2002. Withholding tax and the solidarity surcharge are deducted from the tax liabilityas part of the assessment. Instead, individuals who hold the shares as part of private assets may alsohave part or all of their withholding tax reimbursed or exempted if they have submitted an applicationfor exemption or a non-assessment certificate. Otherwise the withholding tax is levied, regardless if orto what extent the distribution is tax exempt on the level of the shareholder.

Dividends distributed by Nordex up to September 30, 2002 to individuals who hold the shares as part ofprivate assets (private investors) are fully subject to German income tax plus the solidarity surcharge. Inthe case of such dividend distributions by Nordex, the income from capital assets (gross dividend) ofprivate investors consists of (i) the net amount actually received (net dividend) plus (ii) the possiblywithholding tax withheld amounting to 25% of the cash dividend plus the solidarity surcharge of 5.5%on this amount (a total of 26.375% of the cash dividend) and (iii) the corporation income tax withheldby the company (corresponding to the corporation income tax credit). Up to September 30, 2002,private investors can offset the withholding tax withheld (plus solidarity surcharge) and thecorporation income tax withheld by the company (excluding the solidarity surcharge paid by the

101

Company, which is known as the ‘‘shadow burden’’) against their income tax liability (plus solidaritysurcharge). The purpose behind this corporation income tax imputation procedure is the prevention ofdouble taxation of corporations and shareholders as well as the taxation of dividends according to thepersonal tax situation of shareholders with unlimited tax liability. The basis for determining thesolidarity surcharge to be paid by the shareholder is reduced by the amount of the corporation incometax credit.

After October 1, 2002, only 50% of dividend payments by Nordex to private investors will be subject toincome tax (plus solidarity surcharge). At the corporation level, the distribution tax rate of 30% is nolonger applicable; at the shareholder level, the corporation income tax credit is not available anymore.

Private investors are entitled to a savings allowance of DM 3,000.00 p.a. in 2001, E1,550.00respectively (DM 6,000.00 p.a. in 2001, E3,100.00 from 2001 respectively in the case of married couplesfiling jointly). In addition, a blanket deduction for income-related expenses in the amount of DM 100.00p.a., E51.00 p.a. from 2002 respectively (DM 200.00 p.a. in 2001, E102 p.a. from 2001 respectively inthe case of married couples filing jointly) is granted unless the expenses involved are demonstrated tohave actually exceeded that amount. From October 1, 2002 on only 50% of the expenses related infinancial terms to the Nordex dividends can be deducted, regardless in which assessment period theexpenses accrued.

If the Nordex shares are held as part of the operating assets of a commercial sole proprietor or acommercial partnership, the gross dividend is subject to trade tax unless the taxpayer held at least 10%of the Company’s share capital at the beginning of the relevant tax period. For the purposes of theincome tax levied on a sole proprietor, the dividend is up to September 30, 2002 fully, after October 1,2002 only to 50% included in the calculation of income from trade. In the case of partnerships, thedividend is included in the uniform and itemised declaration and is allocated to the partners fromthere; the taxation of these partners depends on their legal form.

After October 1, 2002, shareholders not subject to corporation income tax can only deduct 50% ofoperating expenses related in financial terms to the Nordex dividends, regardless in which assessmentperiod they accrue.

In the case of shareholders subject to corporation tax, the gross dividend is subject to trade tax untilSeptember 30, 2002 unless the taxpayer held at least 10% of the Company’s share capital at thebeginning of the relevant tax period. After October 1, 2002, the dividends will be exempt from trade tax.Up to September 30, 2002, dividends paid to shareholders subject to corporation income tax are taxablemay be subject to corporation income tax with a special tax rate. The above statements on thecalculation of income under the imputation procedure and on the special tax rate apply accordingly.

Nordex Dividends distributed to corporations will no longer be taxed after October 1, 2002. A minimumequity interest or holding period is not specified. However, the dividends may be subject to asupplementary tax. Operating expenses directly related to tax-free Nordex dividends in financial termsmay not be deducted as operating expenses.

Shareholders not Subject to Unlimited Tax Liability

Dividend payments made by the Company before September 30, 2002 are subject to withholding tax ata rate of 25% of the dividend approved by the shareholders’ general meeting (‘‘cash dividend’’, that isthe dividend less corporate income tax and withholding tax). For such distributions paid after October1, 2002 the withholding tax is reduced to 20% of the cash dividend. A solidarity surcharge of 5.5% islevied in both cases, increasing the effective tax liability to 26.375% until September 30, 2002 or 21.1%after October 1, 2002. Withholding tax and the solidarity surcharge are deducted from the tax liabilityas part of an assessment. If a double taxation agreement applies, the investment income tax (plussolidarity surcharge) on dividend distributions paid to shareholders not resident in Germany bycorporations domiciled in Germany may be reduced. To claim this benefit, the shareholder entitled tothe benefit or his agent must file an application with the German tax authorities (Bundesamt furFinanzen, Friedhofstraße 1, D-53221 Bonn) pursuant to the double taxation agreement for a reduction

102

or a refund of the amount by which the rate of the regular withholding tax withheld or to be withheldexceeds the maximum permissible rate under the relevant double taxation agreement.

Subject to the application of Council Directive No.90/435/EEC dated July 23, 1990 (known as the‘‘Parent-Subsidiary Directive ‘‘) a partial or complete exemption – e.g. by way of a refund -may be madeon application by corporations which are resident for tax purposes in another state of the EU. For theParent-Subsidiary Directive to apply, the parent company must have under certain circumstances inparticular its tax domicile in another member state of the European Union, its equity interest in theGerman subsidiary must have existed for an uninterrupted period of at least twelve months and it mustamount to at least one quarter (or one-tenth in special cases) of the nominal capital.

Shareholders who are not assessed for taxation in Germany are not entitled to any crediting of thecorporation income tax paid by the corporation and the withholding tax withheld.

Dividends distributed by the Company on shares, which are held by an appointed permanentrepresentative in Germany or which are part of the assets of an operating establishment or a fixedplace in Germany, which is run by a foreign legal person are subject to German corporate income taxwith a regular rate of 25% plus 5.5% solidarity surcharge thereon until September 30, 2002. Thetransfer of profits from the operating establishment or the fixed place to the foreign parent company isexempt from withholding tax. Shareholders as individuals are subject to German income tax with theearnings received from the permanent establishment or fixed place with their individual income taxrate, but at least with 25% plus solidarity surcharge thereon. If the creditable taxes exceed thecorporate income tax plus solidarity surcharge on the earnings of the operating establishment, therespective exceeding amount will be refunded.

Dividend distributions to foreign corporations holding the shares as business assets in a permanentestablishment or fixed place of business in Germany or via an appointed permanent representative inGermany are -subject to certain exceptions- generally exempt from corporate income tax, trade tax andsolidarity surcharge from October 1, 2002. Expenses directly related to such dividends in financial termsmay not be deducted as operating expenses.

From October 1, 2002 dividends distributed by the Company to holders not subject to corporationincome tax are subject to the semi-income method.

Taxation of Capital GainsShareholders Subject to Unlimited Tax Liability in Germany

Capital gains from the disposal of Nordex shares held as part of private assets by natural persons withunlimited tax liability are only subject to income tax if (i) the shares are sold within one year of beingacquired or if after the expiration of this period (ii) the shares arise from contributions pursuant tosection 21 Reorganisation Tax Act (Umwandlungsteuergesetz) or (iii) the shareholder directly orindirectly held or holds a significant equity interest. Up to September 30, 2002, a significant equityinterest exists if the shareholder (in case of a gratuitous acquisition also his legal predecessor) held atany time within the last five years a direct or indirect interest of at least 10% in the share capital. AfterOctober 1, 2002, a significant equity interest exists if at any time within the five years prior to thedisposal a direct or indirect interest of at least 1% existed or exists.

Up to September 30, 2002, taxable capital gains from the disposal are subject to full income tax (plussolidarity surcharge). In line with the Halbeinkunfteverfahren, 50% of these capital gains will be subjectto income tax (plus solidarity surcharge) after October 1, 2002. Only half of the expenses related to thecapital gains from disposal of Nordex shares in financial terms may be deducted, regardless in whichassessment period the expenses accrue.

Losses from the disposal of shares incurred by a private investor may be of little or no relevance totaxation. Losses incurred by shareholders who are individuals from a disposal that occurs within oneyear after the acquisition of the shares can only be offset against the capital gains that the shareholderreceived in the same calendar year from other private taxable sales transactions according to section23 Income Tax Act (Einkommensteuergesetz). Losses that are not offset reduce the shareholder’s

103

income from private sales transactions in the previous calendar year or in the following calendar years.If individuals subject to unlimited tax liability realise capital gains from private sales transactions theseearnings remain tax exempt as long as they are less than DM 1,000 p.a. per person in 2001, E512 from2002, respectively.

For commercial sole proprietors, capital gains from disposal of Nordex shares are subject to full tradetax and income tax (plus solidarity surcharge). After October 1, 2002, only half of these profits will beexempted from income tax (plus solidarity surcharge). Only 50% of operating expenses related to thedividends in financial terms may be deducted, regardless in which assessment period they accrue.Claims relating to losses from disposal are also limited.

For commercial partnerships, capital gains from disposal are subject to full trade tax up toSeptember 30, 2002, from October 1, 2001 only to 50%. They are also included in the uniform anditemised declaration and are allocated to the partners from there; the taxation of these partnersdepends on their legal form.

For taxpayers subject to corporation income tax, gains from the disposal of Nordex shares up toSeptember 30, 2002 are subject to full trade tax and corporation tax (plus solidarity surcharge). AfterOctober 1, 2002, gains from the disposal of Nordex shares generated by shareholders with corporationincome tax liability will be tax-free. Operating expenses directly related in financial terms to tax-freecapital gains from disposal will not be deductible. Losses from disposal may not be claimed.

Shareholders Subject to Limited Tax Liability in Germany

If a shareholder with limited tax liability in Germany receives capital gains from the disposal of Nordexshares, these gains are subject to taxation in Germany if (i) the shares are part of the operating assetsof an operating establishment in Germany or for which a permanent representative is appointed inGermany or (ii) the shareholder as an individual (in case of a gratuitous acquisition also his legalpredecessor) directly or indirectly held at any moment within the last five years prior to the sale of theshares at least 10% (or at least 1% after October 1, 2002) of the Company’s share capital or (iii) if theshares arose through contributions pursuant to section 21 Tax Reorganisation Act(Umwandlungssteuergesetz) or (iv) they are subject to taxation under the requirements of anextended limited tax liability pursuant to section 2 of the AStG (Auslandssteuergesetz -German ForeignTax Act). Should a double taxation agreement apply, it is possible that capital gains from disposal maynot be taxable in Germany.

Special Rules for Credit Institutions, Financial Services Institutionsand Financial EnterprisesIf credit institutions and financial services institutions hold or dispose of shares to be deemed part ofthe trading book in accordance with section 1 (12) of the Gesetz uber das Kreditwesen (KWG -GermanBanking Act), neither the Halbeinkunfteverfahren nor tax exemption applies to dividends or capitalgains from disposal. The same applies to shares acquired by financial enterprises within the meaning ofthe KWG with the aim of generating own-account trading profits in the short term. This also applies tocredit institutions, financial services institutions and financial enterprises domiciled in a differentEuropean Union member state or in another state which is part o the European Economic Area.

Inheritance and Gift TaxTransfers of shares through inheritance or by way of a gift are subject to inheritance or gift tax if thetestator, the donor or the acquirer is a ‘‘national ‘‘as defined in section 2 (1) of theErbschaftsteuergesetz (ErbStG -German Inheritance Tax Act). Otherwise they are only subject totaxation if (i) the shares are part of the operating assets of a permanent establishment in Germanyrespectively for which a permanent representative is appointed in Germany or (ii) the shareholder aloneor together with related persons directly or indirectly held at least one-tenth of the share capital of thecompany in the moment of the acquisition or (iii) if the requirements of an extended limited tax liabilitypursuant to section 4 of the AStG are met.

104

The above-mentioned tax liability can be limited by one of the few double taxation agreements existingfor inheritance and gift tax.

Other Taxes in GermanyThe sale, holding or transfer of shares in Germany is not subject to any stock exchange turnover tax,company tax, stamp duty, or similar tax. The transfer or merger of at least 95% of the shares can giverise to real estate transfer tax if the Aktiengesellschaft, or companies in which the Aktiengesellschaftholds a direct or indirect equity interest, holds real property in Germany.

105

[This page is intentionally left blank]

Financial information

Page

(Combined) Pro Forma Consolidated Financial Statements of Taifun AG for the twelvemonths ended September 30, 1998, 1999 and 2000 according to IAS F-3

(Combined) Pro Forma Consolidated Balance Sheets as of September 30, 1998, 1999 and2000 according to IAS F-3

(Combined) Pro Forma Consolidated Income Statements for the twelve months endedSeptember 30, 1998, 1999 and 2000 according to IAS F-5

(Combined) Pro Forma Consolidated Statements of Cash Flow for the twelve monthsended September 30, 1998, 1999 and 2000 according to IAS F-6

(Combined) Pro Forma Consolidated Statement of Changes in Equity for the twelvemonths ended September 30, 1998, 1999 and 2000 according to IAS F-7

Notes to the (Combined) Pro Forma Consolidated Financial Statements for the full fiscalyears ended September 30, 1998, 1999 and 2000 according to IAS F-8

(Combined) Fixed-Asset Analysis of the Pro Forma Group as of September 30, 1998, 1999and 2000 F-29

Independent Auditor’s Certificate F-32

Annual Financial Statements for the Abbreviated Fiscal Year from August 25 toSeptember 30, 2000 according to HGB F-35

Management Report for the Abbreviated Fiscal Year from August 25 to September 30,2000 F-35

Balance Sheet for the Abbreviated Fiscal Year from August 25 to September 30, 2000 F-36

Income Statement for the Abbreviated Fiscal Year from August 25 to September 30, 2000 F-37

Notes to the Financial Statements for the Abbreviated Fiscal Year from August 25 toSeptember 30, 2000 F-38

Auditor’s Opinion F-40

Pro Forma Consolidated Interim Statements of Taifun AG (now Nordex AG) as ofDecember 31, 2000, according to IAS F-41

Pro Forma Consolidated Balance Sheet according to IAS as of December 31, 2000, withstatistical data as of December 31, 1999 F-41

Pro Forma Consolidated Income Statement according to IAS for the three months endedDecember 31, 2000, with statistical data for the three months ended December 31, 1999 F-43

Pro Forma Consolidated Statement of Cash Flows according to IAS for the three monthsended December 31, 2000 with statistical data for the three months ended December 31,1999 F-44

Pro Forma Consolidated Statement of Changes in Equity according to IAS for the threemonths ended December 31, 2000, with statistical data for the three months endedDecember 31, 1999 F-45

Notes to the Pro Forma Consolidated Interim Statements according to IAS for the threemonths ended December 31, 2000, with statistical data for the three months endedDecember 31, 1999 F-46

Fixed-asset Analysis of the Pro Forma Group as of December 31, 2000, and (withstatistical data) December 31, 1999 F-59

F-1

Page

Independent Auditor’s Certificate of Review of the Consolidated Interim Statements as ofDecember 31, 2000 F-61

Annual Financial Statements for the Fiscal Year ended September 30, 2000, accordingto HGB

Management Report for the Fiscal Year ended September 30, 2000 of Nordex EnergyGmbH F-64

Balance Sheet for the Fiscal Year ended September 30, 2000 F-67

Income Statement for the Fiscal Year ended September 30, 2000 F-68

Notes to the Financial Statements for the Fiscal Year ended September 30, 2000 F-69

Fixed Asset Analysis for the Fiscal Year ended September 30, 2000 F-74

Auditor’s Opinion F-75

F-2

(Combined)pro forma CONSOLIDATED BALANCE SHEETS

according to IASin a subsumed 3-year presentation

as of September 30, 2000as of September 30, 1999as of September 30, 1998

Assets

Note

Balance atSep. 30, 2000

pro forma

Balance atSep. 30, 1999

pro forma

Balance atSep. 30, 1998

pro forma

E E E

A. Fixed assets (5.1)

I. Intangible assets

1. Concessions, franchises, industrial-propertyand similar rights and assets, as well as licensesthereto 4,554,282.41 2,182,357.28 883,186.32

2. Prepayments on intangibles 1,270,960.32 579,284.00 177,976.41

5,825,242.73 2,761,641.28 1,061,162.73

II. Property, plant and equipment

1. Land and buildings 3,058,658.79 818,956.47 725,616.39

2. Production plant and machinery 3,518,700.77 3,921,845.74 1,545,267.23

3. Other plant, factory and office equipment 3,398,352.04 2,431,732.42 912,003.98

4. Prepayments on property, plant andequipment, and construction in progress 4,662,885.52 2,114,063.80 234,955.53

14,638,597.12 9,286,598.43 3,417,843.13

III. Financial assets

1. Shares in unconsolidated group companies 222,330.78 233,761.11 0.00

2. Investments 760,784.92 540,044.38 0.00

983,115.70 773,805.49 0.00

21,446,955.55 12,822,045.20 4,479,005.86

B. Current assets

I. Inventories (5.2)

1. Raw materials and supplies 27,785,126.16 29,741,689.59 14,170,865.73

2. Work in process 8,189,596.97 11,403,473.02 2,966,961.15

3. Prepayments made 9,745,945.40 4,755,606.68 4,434,790.57

45,720,668.53 45,900,769.29 21,572,617.45

less prepayments received (31,816,916.18) (23,984,574.53) (5,011,695.55)

13,903,752.35 21,916,194.76 16,560,921.90

II. Future receivables under long-termconstruction contracts (5.3) 35,062,530.25 16,704,467.81 1,072,303.40

III. Receivables and other current assets (5.4)

1. Trade receivables 63,364,341.85 20,011,839.42 4,182,167.51

2. Due from Babcock Borsig Group companies 11,807,700.37 9,110,075.31 630,549.79

3. Receivables under investor/investeerelations 8,781.48 0.00 255,645.94

4. Sundry current assets 3,003,784.41 841,124.62 1,583,559.77

78,184,608.11 29,963,039.35 6,651,923.01

IV. Cash and cash equivalents 2,634,180.25 370,633.34 587,620.73

129,785,070.96 68,954,335.26 24,872,769.04

C. Prepaid expenses and deferred charges (5.5) 1,316,310.03 79,441.10 43,665.28

D. Deferred tax assets (6.10) 552,986.71 137,955.24 0.00

153,101,323.25 81,993,776.80 29,395,440.18

F-3

Equity & liabilities

Note

Balance atSep. 30, 2000

pro forma

Balance atSep. 30, 1999

pro forma

Balance atSep. 30, 1998

pro forma

E E E

A. Equity (5.6)

I. Capital stock 306,561.92 231,561.92 206,561.92

II. Additional paid-in capital 6,047,049.08 6,047,049.08 6,047,049.08

III. Pro forma net earnings 9,660,374.79 6,384,188.00 892,730.80

16,013,985.79 12,662,799.00 7,146,341.80

B. Accruals (5.7)

1. Tax accruals 3,179,384.71 868,897.12 82,260.22

2. Sundry accruals 16,516,703.83 7,334,227.39 2,930,479.50

19,696,088.54 8,203,124.51 3,012,739.72

C. Future payables under long-term constructioncontracts (5.8) 0.00 590,097.30 0.00

D. Liabilities (5.9)

1. Prepayments received 0.00 47,167.44 0.00

2. Due to banks 180,262.11 58,562.98 0.00

3. Trade payables 44,121,740.03 34,097,308.88 8,424,436.86

4. Due to Babcock Borsig Group companies 63,152,135.44 19,117,281.81 9,355,579.51

5. Sundry liabilities 7,131,778.73 4,314,841.10 781,313.78

114,585,916.31 57,635,162.21 18,561,330.15

E. Deferred income (5.10) 165,251.93 46,476.43 0.00

F. Deferred tax liabilities (6.10) 2,640,080.68 2,856,117.35 675,028.51

153,101,323.25 81,993,776.80 29,395,440.18

F-4

(Combined)pro forma CONSOLIDATED INCOME STATEMENTS

according to IASin a subsumed 3-year presentation

for the twelve months ended September 30, 2000for the twelve months ended September 30, 1999for the twelve months ended September 30, 1998

Note1999/00

pro forma1998/99

pro forma1997/98

pro forma

E E E

Net sales (6.1) 272,669,814.84 223,742,801.56 82,476,587.43

Change in inventories of work in process (6.2) (3,213,876.05) 8,436,511.87 2,782,896.07

Work and material capitalized (6.3) 735,399.55 444,670.55 0.00

Total operating performance 270,191,338.34 232,623,983.98 85,259,483.50

Other operating income (6.4) 1,973,699.62 1,191,065.76 897,484.15

Cost of materials (6.5)

cost of raw materials and supplies (166,500,959.01) (156,020,672.38) (52,747,855.91)

cost of services purchased (37,276,316.89) (32,859,080.43) (13,845,817.20)

Gross profit 68,387,762.06 44,935,296.93 19,563,294.54

Personnel expenses (6.6)

(a) wages and salaries (16,806,910.28) (11,211,819.34) (5,216,417.18)

(b) social security taxes (2,398,742.33) (1,538,926.27) (783,680.16)

Amortization of intangible assets and depreciation ofproperty, plant and equipment (6.7) (3,725,019.82) (2,096,032.78) (862,057.71)

Other operating expenses (6.8) (32,242,773.24) (20,088,169.96) (9,885,015.53)

Operating profit 13,214,316.39 10,000,348.58 2,816,123.96

Other interest and similar income (6.9) 516,156.93 1,110,856.41 70,445.35

Other interest and similar expenses (6.9) (3,381,480.21) (988,672.70) (405,895.16)

Net financial result (2,865,323.28) 122,183.71 (335,449.81)

Profit from ordinary operations 10,348,993.11 10,122,532.29 2,480,674.15

Income taxes (6.10)

current taxes (2,376,192.57) (869,930.44) 0.00

imputed taxes (2,139,535.64) (703,692.55) 263,560.23

deferred taxes 631,068.14 (2,043,133.61) (1,141,783.80)

Other taxes (6.11) (29,736.46) 24,476.49 (7,255.31)

Net income 6,434,596.58 6,530,252.18 1,595,195.27

Adjustment for pro forma group fee apportionment andimputed taxes 4,829,520.30 3,090,692.55 1,618,439.77

Profit transfer (7,987,930.09) (4,129,487.53) (1,229,370.33)

Profit/(loss) carryover 6,384,188.00 892,730.80 (1,091,533.91)

Pro forma net earnings 9,660,374.79 6,384,188.00 892,730.80

F-5

(Combined)pro forma CONSOLIDATED STATEMENTS OF CASH FLOWS

according to IASin a subsumed 3-year presentation

for the twelve months ended September 30, 2000for the twelve months ended September 30, 1999for the twelve months ended September 30, 1998

1999/00 1998/99 1997/98pro forma pro forma pro forma

E E E

I. Operating activities

Net income 6,434,596.58 6,530,252.18 1,595,195.27

Adjustment for pro forma group fee apportionment and imputedtaxes 4,829,520.30 3,090,692.55 1,618,439.77

Amortization/depreciation of fixed assets 3,725,019.82 2,096,032.78 862,057.71

Gains from/Losses on fixed-asset disposal (259,916.36) 57,907.99 10,898.81

Change in inventories 8,012,442.41 (5,355,272.86) (10,333,874.87)

Change in future receivables under long-term constructioncontracts (18,358,062.44) (15,632,164.42) 3,510,249.73

Change in receivables and sundry current assets (48,221,568.76) (23,311,116.34) (2,608,170.70)

Change in tax accruals 2,310,487.59 786,636.90 0.00

Change in sundry accruals 9,182,476.44 4,403,747.89 1,135,828.37

Change in future payables under long-term construction contracts (590,097.30) 590,097.30 0.00

Change in liabilities (excl. intercompany clearing account andliabilities due to banks) (10,201,310.67) 43,557,074.87 2,633,914.48

Change in deferred tax assets (415,031.47) (137,955.24) 676,092.50

Change in deferred tax liabilities (216,036.67) 2,181,088.85 465,691.29

Change in prepaid expenses and deferred charges (1,236,868.93) (35,775.82) 55,118.74

Change in deferred income 118,775.50 46,476.42 0.00

Cash flow from operating activities (44,885,573.96) 18,867,723.05 (378,558.90)

II. Investing activities

Cash inflow from the disposal of property, plant and equipment 1,873,672.26 246,645.61 187,314.74

Cash outflow for capital expenditures for intangibles and property,plant and equipment (13,723,698.35) (9,969,820.23) (2,134,017.33)

Cash outflow for capital expenditures for financial assets (239,987.72) (773,805.49) 0.00

Cash flow from investing activities (12,090,013.81) (10,496,980.11) (1,946,702,59)

III. Financing activities

Cash inflow from increases in capital stock 75,000.00 25,000.00 0.00

Cash outflow to Babcock Borsig Group companies under profit andloss transfer agreements (7,987,930.09) (4,129,487.53) (1,229,370.33)

Cash dividend distributed by Nordex Planungs- undVertriebsgesellschaft mbH 0.00 0.00 (60,332.44)

Cash flow from financing activities (7,912,930.09) (4,104,487.53) (1,289,702.77)

Change in cash and cash equivalents (64,888,517.86) 4,266,255.41 (3,614,964.26)

Cash and cash equivalents at beginning of period 2,406,833.21 (1,859,422.21) 1,755,542.05

Cash and cash equivalents at end of period (62,481,684.65) 2,406,833.20 (1,859,422.21)

thereof:

cash on hand and in bank 2,634,180.25 370,633.34 587,620.73

intercompany clearing account credit/(debit) balances (64,935,602.79) 2,094,762.84 (2,447,042.94)

current liabilities due to banks (180,262.11) (58,562.98) 0.00

(62,481,684.65) 2,406,833.20 (1,859,422.21)

F-6

(Combined)pro forma STATEMENTS OF CHANGES IN EQUITY

according to IASin a subsumed 3-year presentation

for the twelve months ended September 30, 2000for the twelve months ended September 30, 1999for the twelve months ended September 30, 1998

1999/00pro forma

1998/99pro forma

1997/98pro forma

E E E

Equity at beginning of fiscal year 12,662,799.00 7,146,341.00 5,162,077.09

Capital stock

annual opening balance 231,561.92 206,561.92 206,561.92

addition from the formation of Sudwind Borsig EnergyGmbH, Oberhausen 0.00 25,000.00 0.00

additions from initial inclusion of Borsig RotortechnikGmbH, Rostock, in the consolidation group andformation of Taifun AG, Oberhausen 75,000.00 0.00 0.00

annual closing balance 306,561.92 231,561.92 206,561.92

Additional paid-in capital

annual opening/closing balance 6,047,049.08 6,047,049.08 6,047,049.08

Profit/loss carryover

annual opening balance 0.00 0.00 (1,091,533.91)

prior-year pro forma net earnings 6,384,188.00 892,730.80 0.00

book transfer to pro forma net earnings (6,384,188.00) (892,730.80) 1,091,533.91

annual closing balance 0.00 0.00 0.00

Pro forma net earnings

annual opening balance 6,384,188.00 892,730.80 0.00

profit/(loss) carryover 0.00 0.00 (1,091,533.91)

net income 6,434,596.58 6,530,252.18 1,595,195.27

adjustment for pro forma group fee apportionment andimputed taxes 4,829,520.30 3,090,692.55 1,618,439.77

profit transferred to Borsig Energy GmbH under P&Ltransfer agreements (7,987,930.09) (4,129,487.53) (1,229,370.33)

annual closing balance 9,660,374.79 6,384,188.00 892,730.80

Equity at end of fiscal year 16,013,985.79 12,662,799.00 7,146,341.80

F-7

NOTESto the (COMBINED)

pro forma CONSOLIDATED FINANCIAL STATEMENTSaccording to IAS in subsumed presentation

for the full fiscal years endedSeptember 30, 2000,

September 30, 1999, and September 30, 1998

(1) Group definitionThe Taifun Group, whose Oberhausen, Germany, based parent is Taifun AG, develops, manufactures andmarkets wind turbines. For details of the operations of the Taifun Group’s sole division, Wind Energy,reference is made to the segment report.

Taifun’s (combined) pro forma consolidated financial statements as of September 30, 2000, September30, 1999, and September 30, 1998, have been prepared in accordance with the applicable rules of theInternational Accounting Standards Committee (IASC) in view of the proposed flotation of Taifun AG infiscal 2000/01. The financial statements, prepared in deutsche mark (DM), were transformed into euros(E) at the official rate of E1.00 = DM 1.95583. The (combined) pro forma consolidated financialstatements conform in every material respect with the provisions of the International AccountingStandards (IAS).

The prerequisites for preparing consolidated accounts under the terms of IAS 22 and 27 will not be metuntil early 2001 since this month only will see the inception of Taifun AG’s business operations. Untilthen, its subsidiaries are organizationally fully integrated in Borsig Energy GmbH and included in thegroup of BDAG Balcke-Durr AG. Taifun AG is under no obligation according to the German CommercialCode (‘‘HGB’’) to prepare consolidated accounts for the periods under review since the structure of abusiness combination (‘‘group’’) was de jure not created until after entry in the Commercial Register onDecember 14, 2000. Moreover, Taifun AG is under no obligation to publish exempting consolidatedfinancial statements according to internationally accepted accounting principles pursuant to Art. 292aHGB, nor has the Company applied for the admission to trading on organized securities markets.

With a view to providing comparability in the periods under review with the group structure created inearly 2001, (combined) pro forma consolidated financial statements were prepared for the fiscal years1997/98, 1998/99 and 1999/2000 in derogation of the de facto, de jure and economic situation (cf.Note 3 hereinbelow) and predicated on the assumptions that (i) Taifun AG had held during said periodsthe shares in the companies included in the underlying quasi-group of consolidated companies and (ii)the subsequently created group structure had then already existed (cf. Note 2 hereof). For formulatingthe (combined) pro forma consolidated financial statements, the companies included therein preparedopening balance sheets in conformity with IAS, either as of the beginning of the respective periods orthe date of their first-time inclusion.

When constructing the (combined) pro forma consolidated financial statements, all IAS in force andeffect for fiscal 1999/2000 were applied for all three fiscal periods. The (combined) pro formaconsolidated financial statements were developed from the included companies’ separate annualaccounts (HGB-based, restated according to IAS) with due regard to the necessary consolidationentries. The recognition, disclosure and valuation rules required by IAS were applied, including theconsistency principle. The accounting and valuation methods used in the (combined) pro formaconsolidated financial statements were throughout the same as those adopted and applied by TaifunAG. New insights acquired by the date the (combined) pro forma consolidated financial statementswere prepared are duly reflected.

With a view to optimizing comparability with the future actual situation within the Taifun Group, thecost allocations and group fee apportionment charged in the periods under review to the subsidiaries

F-8

were eliminated from net incomes and replaced by imputed future personnel and administrativeexpenses of Taifun AG, duly accounting for the tax effects. In order to prevent fictitious changes in thepro forma group equity, the income statements were adjusted in the lines after net income by insertingan item headed, ‘‘adjustment for pro forma group fee apportionment and imputed taxes.’’ Any profit &loss transfer agreements in effect during the periods under review (cf. Note 2) and the ensuing cashoutflows and decreases in equity at the subsidiaries were not reversed lest the true and fair view oftheir financial position be biased. The imputed taxes on such earnings were properly accounted for. Torender the results of operations comparable, the profits transferred including imputed taxes (netbalance) were deducted after net income only, i.e. in the profit appropriation account. Therefore, thepro forma net earnings do not represent the retained earnings under the terms of Art. 268(1) HGB.

The restatements made to reconcile the financial-accounting net incomes for fiscal 1997/98,1998/99 and 1999/2000 to each period’s pro forma group net income and pro forma net earnings ofthe group according to IAS present the following picture:

1999/00 1998/99 1997/98

E E E

Preconsolidation net income according to HGB 12,667,004.28 7,088,964.26 1,975,731.96

Development costs capitalized according to IAS 38 646,057.84 1,124,433.11 391,036,03

Accounting for public grants according to IAS 20 (1,429,245.20) (306,775.13) 0.00

Application of the PoC method according to IAS 11 (2,054,153.71) 4,151,473.23 2,035,740.83

Elimination of general allowances for doubtful accounts (6,646.80) 150,123.60 4,039.20

Accounting for accrued expenses according to IAS 37 0.00 0.00 (51,129.19)

Recognition/utilization of contract-related accruals due to newinsights 590,097.30 (590,097.30) 0.00

Provision for deferred taxes according to IAS 12 631,068.14 (2,043,133.61) (1,141,783.80)

Accounting in a group dimension for capital leasesaccording to IAS 17 247,334.54 56,188.14 0.00

Intercompany profit elimination according to IAS 27, net (27,384.17) (10,231.57) 0.00

Adjustment for group fee apportionment for improvedcomparability, net (2,690,000.00) (2,387,000.00) (1,882,000.00)

Imputed taxes on the net of adjusted group fee apportionmentand P&L transfer (2,139,535.64) (703,692.55) 263,560.23

Pro forma group net income according to IAS 6,434,596.58 6,530,252.18 1,595,195.27

Transfer of HGB-based profit to Borsig Energy GmbH under P&Ltransfer agreements (7,987,930.09) (4,129,487.53) (1,229,370.33)

Elimination of net balance of adjusted group fee apportionmentand loss carryover from first-time inclusion of BorsigRotortechnik GmbH 2,689,984.65 2,387,000.00 1,882,000.00

Elimination of imputed taxes 2,139,535.65 703,692.55 (263,560.23)

IAS P/L carryover from prior year 6,384,188.00 892,730.80 (1,091,533.91)

Pro forma group net earnings according to IAS 9,660,374.78 6,384,188.00 892,730.80

(2) Consolidation groupFor comparison, the (combined) pro forma consolidated financial statements 1999/2000, 1998/99 and1997/98 as from the date of formation or organization, include, in addition to Taifun AG all subsidiariesover which Taifun AG can exercise a controlling influence as and when the group structure de factomaterialized. Changes in the consolidation group have been accounted for.

Taifun AG, Oberhausen, Germany (the ‘‘Company’’), was formed on August 25, 2000 (Doc. Reg. UR 405/2000 of Helmut Hubbers, notary public in and for Oberhausen). Borsig Energy GmbH, Oberhausen,subscribed for the capital stock of E50,000 in exchange for the grant of 50,000 shares of commonstock without par value (‘‘no-par shares’’) at E1.00 each. The incorporation was recorded and certifiedby the Commercial Register of the Oberhausen Local Court (no. HRB 3659) on September 19, 2000.

F-9

On November 23, 2000, Borsig Energy GmbH and Nordvest A/S executed a contribution & sharetransfer agreement (Doc. Reg. UR 1860/2000 of Dr. Herbert Asschenfeldt, notary public in and forHamburg) and, subject to the condition precedent that Taifun AG’s general meeting adopt anaffirmative resolution on said contribution & share transfer agreement, agreed to make thiscontribution in kind in exchange for stock of the Company.

As resolved by the extraordinary general meeting of November 23, 2000, Taifun AG’s capital stock wasraised by way of contribution in kind by E34,000,000 to E34,050,000 (Doc. Reg. UR 624/2000 ofHelmut Hubbers, notary public in and for Oberhausen). Out of the 34,000,000 newly issued bearershares of stock (cum dividend), 27,357,500 were subscribed and acquired by Borsig Energy GmbH, and6,642,500 by Nordvest A/S, Denmark.

In exchange for the 27,357,500 shares of stock acquired, Borsig Energy GmbH transferred to theCompany as contribution in kind:

– one share of E39,880.77 at par (corresponding to 75% of the share capital) in Nordex GmbH, Rerik,registered at the Commercial Register of the Local Court of Rostock under number HRB 5010;

– four shares of a total E51,129.19 at par (corresponding to 100% of the share capital) of NordexPlanungs- und Vertriebsgesellschaft mbH, Bad Essen, registered at the Commercial Register of theLocal Court of Osnabruck under no. HRB 17795;

– one share of E25,000.00 at par (corresponding to 100% of the share capital) of BorsigRotortechnik GmbH, Rostock, registered at the Commercial Register of the Local Court of Rostockunder no. HRB 8218;

– one share of E25,000.00 at par (corresponding to 100% of the share capital) of Sudwind BorsigEnergy GmbH, Oberhausen, registered at the Commercial Register of the Local Court ofOberhausen under no. HRB 3656;

– one share of E102,258.37 at par (corresponding to 100% of the share capital) of BabcockProzessautomation GmbH, Oberhausen, registered at the Commercial Register of the Local Court ofOberhausen under no. HRB 2147.

In exchange for the 6,642,500 shares of stock acquired, Nordvest A/S transferred to the Company ascontribution in kind two shares of a total E13,293.59 at par (corresponding to 25% of the sharecapital) of Nordex GmbH, Rerik, registered at the Commercial Register of the Local Court of Rostockunder number HRB 5010.

The consent to the contribution & share transfer agreement of November 23, 2000, was endorsed byTaifun AG’s extraordinary general meeting of December 8, 2000 (Doc. Reg. UR 667/2000 of HelmutHubbers, notary public in and for Oberhausen), this time under the terms of a postformation agreementwithin the meaning of Art. 52 German Stock Corporation Act (‘‘AktG’’).

After such contribution, Taifun AG’s capital stock amounts to DM 66,596,012 or E34,050,000, whichwas recorded by the Commercial Register of the Local Court of Oberhausen on December 14, 2000,under HRB 3659.

With respect to the companies contributed, direct-control and/or P&L transfer agreements existedbetween Borsig Energy GmbH, Oberhausen, and the following of its subsidiaries: Borsig RotortechnikGmbH, Rostock; Nordex Planungs- und Vertriebsgesellschaft mbH, Bad Essen; BabcockProzessautomation GmbH, Oberhausen; and Sudwind Borsig Energy GmbH, Oberhausen. In itsrepresentation dated December 7, 2000, Borsig Energy GmbH, Oberhausen, irrevocably stated andagreed to terminate such agreements as and when it no longer held the majority in said subsidiaries.

F-10

In the years under review, the consolidation group covered these German companies:

Share capital atpar at

9-30-2000

Share capital atpar at

9-30-1999

Share capital atpar at

9-30-1998

E E E

Nordex GmbH, Ostseebad Rerik 53,174.36 53,174.36 53,174.36

Nordex Planungs- und Vertriebs-gesellschaft, Bad Essen 51,129.19 51,129.19 51,129.19

Babcock Prozessautomation GmbH, Oberhausen 102,258.37 102,258.37 102,258.37

Sudwind Borsig Energy GmbH, Oberhausen 25,000.00 25,000.00 —

Borsig Rotortechnik GmbH, Rostock 25,000.00 — —

Taifun AG, Oberhausen 50,000.00 — —

Babcock Prozessautomation GmbH (‘‘BPA’’), Oberhausen, previously had two divisions, Power Plants andWind Energy. As of October 1, 2000, by share sale & transfer agreement of November 15, 2000, thePower Plants division was spun off and the company with its remaining division, Wind Energy,contributed to Taifun AG. With a view to improving comparability, separate segment financialinformation (balance sheet and income statement) was prepared for BPA’s Wind Energy division andincluded in the (combined) pro forma consolidated financial statements.

In fiscal 1997/98, Nordex Planungs- und Vertriebsgesellschaft mbH was included only for the ninemonths ended September 30, 1998, since this company had been acquired by Borsig Energy GmbH witheconomic effect as of January 1, 1998.

The consolidation group changed in fiscal 1998/99 when Sudwind Borsig Energy GmbH (organized onMarch 22, 1999) was newly included. For lack of materiality, consolidation of another subsidiary, viz.Borsig Rotortechnik GmbH (formed on September 21, 1999, only) was waived.

In the fiscal year 1999/2000, Borsig Rotortechnik GmbH (organized on September 21, 1999) and theparent company were newly consolidated. The consolidation group as of September 30, 2000,corresponds to the group structure now being created de jure.

The change in the number of consolidated subsidiaries impacts on the comparability of the pro formagroup’s financial position, performance and results of operations with the prior year’s. The cumulativeeffects of the addition of Sudwind Borsig Energy GmbH, Borsig Rotortechnik GmbH and Taifun AG onmajor balance sheet lines and on net income are summarized below:

1999/00 1998/99

E E

Fixed assets 4,245,745.73 1,193,169.14

Deferred tax assets/(liabilities) 73,093.78 (19,633.10)

Inventories 1,822,367.88 964,522.40

Future receivables from l/t construction contracts 1,611,844.10 0.00

Receivables and sundry current assets 10,937,568.12 2,859,679.00

Cash & cash equivalents 278,531.22 7,555.67

Equity (377,691.29) 53,982.40

Accruals 2,481,799.69 761,303.39

Liabilities 16,625,607.75 4,148,321.46

Net income 459,073.85 80,748.42

F-11

In its separate financial statements, Nordex GmbH discloses the following shares in group companies(as intercorporate investments):

1999/00 1998/99 1997/98

Nordex Iberica Borsig Energy S.A., Barcelona, Spain

Nordex GmbH shareholding [%] 100 100 0

Investment book value in the separate financial statements ofNordex GmbH [E1,000] 15 15 0

Ekter Eoliki A.E., Athens, Greece

Nordex GmbH shareholding [%] 0 90 0

Investment book value in the separate financial statements ofNordex GmbH [E1,000] 0 31 0

Nordex Omnical Energy Services (Shanghai) Co. Ltd., Shanghai,PR China

Nordex GmbH shareholding [%] 100 100 0

Investment book value in the separate financial statements ofNordex GmbH [E1,000] 188 188 0

Nordex Hellas E.P.E., Greece

Nordex GmbH shareholding [%] 100 0 0

Investment book value in the separate financial statements ofNordex GmbH [E1,000] 18 0 0

Nordex USA, Inc., United States

Nordex GmbH shareholding [%] 100 0 0

Investment book value in the separate financial statements ofNordex GmbH [E1,000] 1 0 0

For lack of materiality, Nordex GmbH’s non-German subsidiaries were not consolidated, which is inaccordance with IASC Framework paragraph 12 in conjunction with paragraphs 29, 30. Said foreignsubsidiaries are responsible for handling Nordex GmbH contracts and providing local technologicalsupport. The shares in the Nordex GmbH subsidiaries listed above were accounted for at amortized costin the (combined) pro forma consolidated financial statements for fiscal 1998/99 and 1999/2000 inaccordance with IAS 39.4 and IAS 39.66/67. As of September 30, 1998, Nordex GmbH did not own anyshares in group companies.

In addition, Nordex GmbH has held since fiscal 1998/99 a 40% equity interest in Xian Nordex WindTurbine Co. Ltd., Xian, PR China, which was incorporated in the fiscal year 1998/99 and renders localassistance in the production of wind turbines. In Nordex GmbH’s financial statements as of September30, 2000, this investment is carried at a book value of kE760.8 (up from kE539.9 in 1998/99).Controlling shareholder is the Chinese government. Since this investee is not controlled by NordexGmbH as defined in IAS 27, the investment has not been included in the consolidation group, nor has itbeen carried at equity under the terms of IAS 28 since Nordex GmbH does not have the power toparticipate in this investee’s financial and operating policy decisions. Therefore, this investee is not anassociated affiliate under the terms of IAS 28 and has been accounted forat amortized cost in the (combined) pro forma consolidated financial statements 1999/2000 and1998/99 pursuant to the financial instruments rules of IAS 39.4 and IAS 39.66/67.

The fiscal year of Taifun AG and all its consolidated subsidiaries is not the calendar year butcommences on October 1 and closes on September 30 of the succeeding year.

(3) Consolidation proceduresAccording to IAS 27 and 22, initial capital consolidation is governed by the date of acquisition, which,pursuant to IAS 22.20, is the date at which control of the net assets and operations of consolidatablesubsidiaries is effectively transferred to Taifun AG as acquirer and transferee.

F-12

Since Taifun AG will not commence with its operations before early 2001 and its subsidiaries will untilthen remain fully integrated at the organizational level with Borsig Energy GmbH or the BDAG Balcke-Durr AG Group, no effective group structure in terms of a control of the contributed subsidiariesexisted in 2000 despite the agreements consummated in November/December 2000.

This is why capital consolidation has been waived when preparing the (combined) pro formaconsolidated financial statements for the fiscal years ended September 30, 1998, September 30, 1999,and September 30, 2000; instead, the equity of the subsidiaries has been merely footed up. For thesame reason, no pro forma goodwill amortization has been shown either.

Another reason for the nonrecognition of pro forma goodwill amortization or pro forma releases ofbadwill from capital consolidation in the (combined) pro forma consolidated financial statements isthat the relevant amounts required to determine goodwill or badwill could not be reliably measuredwhen preparing the financial statements (IASC Framework paragraphs 86 et seq. in conjunction withpar. 83). This refers to the shares in Taifun AG’s subsidiaries, which the provisions of IAS 22.21 et seq.require to be recognized at cost and which, after having been transferred as agreed at book value byBorsig Energy GmbH and Nordvest A/S to Taifun AG, would have had to be offset against the IAS equityof such subsidiaries. The relevant equity (early 2001) was not determinable when the financialinformation was prepared.

The expected future goodwill amortization will adversely affect performance in future consolidatedfinancial statements. In consolidation, all receivables and payables among consolidated subsidiarieswere mutually offset, without producing any exchange gains or losses.

The aggregate total of kE27.4 (net balance) (up from kE10.2 in 1998/99) representing (i) intercompanyprofits which in fiscal 1999/2000 were made from intragroup transfers within inventories, as well as (ii)the prorated profits realized according to the percentage-of-completion method, was eliminated inconsolidation. The accounting for capital leases according to IAS 17 (from the group’s vantage point)resulted in fiscal 1999/2000 in income of kE247.3 (up from kE56.2 in 1998/99). Consequently,consolidation transactions in fiscal 1999/2000 raised income (including the allocable deferred taxes) bykE130.9 (up from kE27.1 in 1998/1999).

Moreover, all expenses and income originating from intragroup transfers of goods/services and fromintercompany allocations were mutually netted in consolidation.

In addition, the group fees apportioned and charged in the periods under review were in consolidationeliminated from net income and replaced by imputed future personnel and administrative expenses ofTaifun AG, duly accounting for the imputed tax effects, cf. Note (1).

(4) General accounting and valuation details(4.1) ClassificationThe classification rules of Art. 266 HGB (after adjustment to specific IAS disclosure requirements) wereapplied for preparing the IAS-based balance sheets. The income statements according to IAS arepresented in the full-cost format in analogy to the classification provisions of Art. 275(2) HGB. Majordeviations from the HGB-oriented disclosure format are, in particular, attributable to the derivationfrom IAS-based net income of pro forma net earnings, cf. Note (1).

(4.2) Details of accounting and valuation methodsWithin intangible assets, mainly purchased licenses and software were capitalized. Internally createdintangible assets (i.e., prototype development costs) were capitalized whenever permitted by IAS 38.

Intangible assets and property, plant & equipment were stated at cost and, where applicable, amortizedor depreciated systematically on a straight-line basis over the anticipated useful lives of the underlyingassets. For additions to personal property (plant & equipment) in the first half of the fiscal year, the fullannual depreciation rate was applied while for additions in the second 6-month period, half this annualrate was used. Low-value assets (under German law, valued at net cost of E409 or less each) were full

F-13

written off in the year of their addition, however, no significant effects on the group’s net income werethus caused. In the fixed-asset analysis, low-value assets are imputed to have been disposed of in theyear of their addition.

In accordance with IAS 20, any investment grants and/or allowances received for the purchase of fixedassets were treated as a reduction in asset cost.

The production cost components to be included according to IAS were recognized wherever the costswere reliably measurable. The cost of borrowings was recognized as a charge to income.

Amortization of intangible assets and depreciation of property, plant & equipment were based on thefollowing asset ranges (useful lives):

Useful life Rate charged

Capitalized development costs 5 years 20%

Licenses, EDP software and similar rights 2-5 years 20%-50%

Land and equivalent titles, and buildings 10-25 years 4%-10%

Production plant and machinery 4-12 years 8.33%-25%

Factory and office equipment 2-18 years 5.56%-50%

For the movements of fixed assets, reference is made to the fixed-asset analyses attached to theseNotes.

Financial assets were stated at cost.

Deferred taxes were recognized in accordance with IAS 12 and resulted from the restatement of theseparate annual accounts as well as from consolidation transactions.

The following facts and circumstances underlay deferred taxation in the separate financial statements:

IAS 12 strictly requires that deferred tax assets be capitalized on tax loss carryovers wherever an offsetagainst profits available in future periods is reasonably likely. At the amount of the deferred tax assets,the current tax expense was out of proportion to the disclosed net income. For preparing the(combined) pro forma consolidated financial statements, deferred tax assets were capitalized for taxlosses carried over by Nordex GmbH from 1997 and earlier periods to the extent that such losses couldbe claimed from the German IRS. The deferred tax assets were released at the amounts needed tooffset taxes on the profits earned in 1998 and 1999.

In addition, according to IAS 12, temporary differences between the assets, accruals and liabilitiesrecognized in the IAS-based accounts and the corresponding tax bases entail the obligatory disclosureof deferred tax assets or liabilities. Deferred tax assets or liabilities were recognized for temporarydifferences at the amount at which the current tax expense shown was out of proportion to the statedprofit or loss. In the years under review, deferred tax assets or liabilities were solely recognized foreffects of the restatement according to IAS since the HGB-based financial statements of Nordex GmbHpresented only insignificant temporary differences versus the corresponding tax bases and all othersubsidiaries were bound by P&L transfer agreements with Borsig Energy GmbH. The resultant, yetunrecognized, deferred taxes are negligible.

An obligation under IAS 12 to recognize deferred taxes ensued from certain consolidation transactions,viz. the elimination of intercompany profits when applying the percentage-of-completion method, aswell as from physical trade transactions and the accounting for transactions based on capital leasesfrom a group vantage point.

For enhanced comparability, the deferred taxes were calculated on the basis of future tax rates, viz. acorporate income tax rate of 25%, a solidarity surtax thereon of 5.5%, and municipal trade tax onincome at the local factor of the municipality of residence of each subsidiary.

Deferred tax assets and liabilities were disclosed separately in the balance sheets and not netted unlesstheir offset could be claimed against the same tax office.

F-14

The calculation of imputed taxes, too, was based on future tax rates, cf. Note (1).

Inventories include raw materials and supplies (operating stores), as well as work in process (goods/services). In conformity with IAS 2, raw materials and supplies were stated at purchase cost. Allowanceswere charged for slow-moving items, varying according to age and product, and for inventories whosefair market prices were below their carrying values. Work in process for which no customer contractexisted and to which IAS 11 did hence not apply were valued at production cost pursuant to IAS 2. Theproduction cost components to be included according to IAS 2 were recognized wherever the costswere reliably measurable. Borrowing costs were not included in production cost. Provided and to theextent that in specific cases production cost (including any overheads yet to be incurred) wasforeseeable to outweigh expected net revenues, the underlying asset was written down to its lower netrealizable value. Moreover, prepayments made on inventories were stated, and those received onaccount of inventories were deducted, at their face values.

Future receivables under long-term construction contracts (i.e., costs and estimated earnings in excessof billings) were accounted for according to their percentage of completion (‘‘PoC’’) according to IAS 11where based on a specific customer contract and contract costs were reliably allocable. Proratedearnings were realized according to the PoC where the latter as well as total contract costs andrevenues were reliably determinable in conformity with IAS 11. The PoC was determined by using thecost-to-cost method, i.e., by relating the costs incurred to the estimated total contract costs. Applyingthis PoC to revenues, the resulting portion of total contract revenues was realized accordingly. Contractcosts comprise all direct costs allocable to the contract, as well as all indirect costs separately billable tothe customer (as defined in IAS 11) and if reliably measurable. Costs of debt were expensed. If thecontract revenues were not determinable with reasonable reliability, valuation was based on contractcosts according to IAS 11.

When determining contract costs and revenues, any new insights with respect to the periods underreview at the time the (combined) pro forma consolidated financial statements were prepared wereduly taken into account. Losses incurred for specific contracts and ascertained subsequently were alsoaccounted for.

In the balance sheet, this item was disclosed as ‘‘future receivables under long-term constructioncontracts’’ and, in the income statement, under net sales. Where specific contracts produced a loss onbalance, such loss was shown separately on the liabilities side as ‘‘future payables under long-termconstruction contracts.’’ In the income statement, such losses were disclosed as cost of materials.Prepayments received on contracts were offset against ‘‘future receivables under l/t constructioncontracts’’ unless the total turned into a negative balance (i.e., a payable).

Trade receivables and sundry current assets were recognized at par, duly allowing for any and allforeseeable risks. General allowances for doubtful accounts were eliminated when restating theseparate financial accounts to conform to IAS.

Cash & cash equivalents are valued at par.

In accordance with IAS 37, the sundry accruals provide for all uncertain obligations to third parties.Provisions were made wherever current legal or economic commitments existed that resulted from pastevents and whose settlement was probable to entail an outflow of resources embodying economicbenefits. Accruals were measured on the basis of best estimates. Discounting was waived for lack ofmateriality.

Liabilities were recognized at the amounts repayable.

Expenses and income of the periods were recognized when realized, regardless of the payment date.Revenues were recognized when the agreed product or service was provided or when realized early asrequired by the PoC method under IAS 11. Period-related income and expenses were only accountedfor to the extent allocable to the period.

F-15

(4.3) Currency translationNon-DM transactions were translated at their historical rates into deutsche mark (DM). Currencytranslation gains and losses were recognized in net income. Translation at the current closing rateunder the terms if IAS 21 was waived for lack of materiality.

(5) Comments on balance sheet lines(5.1) Fixed assets

9-30-2000 E21,446,955.559-30-1999 E12,822,045.209-30-1998 E4,479,005.86

The following intangible assets were capitalized within fixed assets:

9-30-2000 9-30-1999 9-30-1998

E E E

Concessions, franchises, industrial-property and similar rights andassets as well as licenses thereto 4,554,282.41 2,182,357.28 883,186.32

Prepayments on intangibles 1,270,960.32 579,284.00 177,976.41

5,825,242.73 2,761,641.28 1,061,162.73

Intangible assets mainly include acquired licenses and software, as well as internally createdintangibles (development costs) according to IAS 38.

Capitalized property, plant & equipment breaks down as follows:

9-30-2000 9-30-1999 9-30-1998

E E E

Land and buildings 3,058,658.79 818,956.47 725,616.39

Production plant and machinery 3,518,700.77 3,921,845.74 1,545,267.23

Other plant, factory and office equipment 3,398,352.04 2,431,732.42 912,003.98

Prepayments on PP&E, and construction in progress 4,662,885.52 2,114,063.80 234,955.53

14,638,597.12 9,286,598.43 3,417,843.13

In fiscal 1999/2000 land and buildings were written down by E30,297.37 to the recoverable amountaccording to IAS 36.

In fiscal 1999/2000, government grants of E1,787,947.69 (up from E306,775.13) were received forcapital expenditures for property, plant & equipment and deducted from cost as required by IAS 20.

The leases for property, plant & equipment chiefly include noncapitalizable operating leases under theterms of IAS 17. In consolidation for the (combined) pro forma consolidated financial statements, onemobile crane within production plant and machinery was capitalized at E1,260,334.49 in fiscal 1998/99. From the group’s viewpoint, this addition constitutes a lease subject to capitalization according toIAS 17.8. The crane is depreciated over eight years. The lease expenses (rents) were eliminated duringconsolidation in fiscal 1999/2000 at E404,876.51 and in fiscal 1998/99 at E134,958.78.

The financial assets of E983,115.70 as of 9-30-2000 (9-30-1999: E773,805.49; 9-30-1998: E0.00)reflect the subsidiaries not included in the pro forma consolidation group, as well as the investee ofNordex GmbH, cf. Note (2).

F-16

(5.2) Inventories9-30-2000 E13,903,752.35

9-30-1999 E21,916,194.769-30-1998 E16,560,921.90

9-30-2000 9-30-1999 9-30-1998

E E E

Raw materials and supplies 27,785,126.16 29,741,689.59 14,170,865.73

Work in process 8,189,596.97 11,403,473.02 2,966,961.15

Prepayments made 9,745,945.40 4,755,606.68 4,434,790.57

45,720,668.53 45,900,769.29 21,572,617.45

less prepayments received (31,816,916.18) (23,984,574.53) (5,011,695.55)

13,903,752.35 21,916,194.76 16,560,921.90

The raw materials and supplies substantially include Nordex GmbH’s inventories and, to a minor extent,Sudwind GmbH’s and Borsig Rotortechnik GmbH’s. In 1999/2000, a major write-down of kE544.5 (upfrom kE521.5 in 1998/99 and kE146.2 in 1997/98) was charged for slow-moving, obsolete or thoseinventories of Nordex GmbH whose cost exceeded market prices. WIP refers to wind turbines underconstruction, as well as to intermediate input for project development, rights and infrastructure inconnection with wind turbines for which no specific customer contract had been received as of therespective closing dates for the pro forma group accounts or whose contract costs were not reliablydeterminable.

(5.3) Future receivables under I/t construction contracts9-30-2000 E35,062,530.25

9-30-1999 E16,704,467.819-30-1998 E1,072.303.40

9-30-2000 9-30-1999 9-30-1998

E E E

Accumulated contract costs 103,100,967.36 75,566,421.45 13,203,469.79

Earnings realized pro rata 4,632,278.07 6,704,105.19 2,577,511.54

107,733,245.43 82,270,526.64 15,780,981.33

less prepayments received (72,670,715.18) (65,566,058.83) (14,708,677.93)

35,062,530.25 16,704,467.81 1,072,303.40

This caption covers work in process accounted for according to the PoC method of IAS 11 and breaksdown into the contract costs accumulated by balance sheet date and the prorated contract earningsrealized and determined according to the cost-to-cost method, as well as into contracts the revenuesfrom which were not reliably measurable. Prepayments received (billings paid) were duly deducted fromthe future contract receivables. Contracts producing a net loss were shown as ‘‘future payables underl/t construction contracts,’’ cf. Note (5.8).

F-17

(5.4) Receivables and other current assets9-30-2000 E78,184,608.11

9-30-1999 E29,963,039.359-30-1998 E6,651,923.01

9-30-2000 9-30-1999 9-30-1998

E E E

Trade receivables 63,364,341.85 20,011,839.42 4,182,167.51

Due from Babcock Borsig Group companies 11,807,700.37 9,110,075.31 630,549.79

Receivables under investor/investee relations 8,781.48 0.00 255,645.94

Sundry current assets 3,003,784.41 841,124.62 1,583,559.77

78,184,608.11 29,963,039.35 6,651,923.01

Specific bad-debt allowances of E534,554.70 were charged to trade receivables as of September 30,2000 (E642,428.09 at 9-30-1999, E406,681.56 at 9-30-1998).

The accounts due from Babcock Borsig Group companies largely refer to receivables from BabcockBorsig AG, Oberhausen; BDAG Balcke-Durr AG, Oberhausen; Nordex Iberica Borsig Energy S.A., Spain;Nordex USA Inc., United States; and Nordex Hellas E.P.E., Greece. After netting the debit and creditbalances, the intercompany account for the intragroup cash management funds provided by BabcockBorsig AG showed E2,094,762.84 in Taifun’s favor as of 9-30-1999. For details of intercompanypayables, see Note (5.9).

The receivables under investor/investee relations comprised as of 9-30-2000 accounts due from XianNordex Wind Turbine Co. Ltd., Xian, PR China, and as of 9-30-1998, from Nordvest A/S, Give, Denmark.

The trade receivables, accounts due from Babcock Borsig Group companies and receivables underinvestor/investee relations all had a remaining term of one year or less in the periods under review.

Breakdown of the sundry current assets:

9-30-2000 9-30-1999 9-30-1998

E E E

Due from tax office 15,788.69 520,889.12 1,219,946.62

Short-term loans 1,782,874.79 0.00 102,258.38

Subsidies and investment grants 688,459.37 0.00 0.00

Due from employees 71,773.94 65,864.48 41,746.85

Insurance claims receivable 204,516.75 204,516.75 0.00

All other 240,370.87 49,854.27 219,607.92

3,003,784.41 841,124.62 1,583,559.77

The sundry current assets as of 9-30-2000 and 9-30-1999 were due within one year while those as of9-30-1998 included E3,067.75 with a remaining term above one year.

(5.5) Prepaid expenses & deferred charges9-30-2000 E1,316,310.03

9-30-1999 E79,441.109-30-1998 E43,665.28

This caption principally covers prepayments for insurance premiums, assessed frontage, rents, andnonrecurring lease payments.

F-18

(5.6) Equity9-30-2000 E16,013,985.79

9-30-1999 E12,662,799.009-30-1998 E7,146,341.80

9-30-2000 9-30-1999 9-30-1998

E E E

Capital stock 306,561.92 231,561.92 206,561.92

Additional paid-in capital earnings 6,047,049.08 6,047,049.08 6.047,049.08

Pro forma net earnings 9,660,374.79 6,384,188.00 892,730.80

16,013,985.79 12,662,799.00 7,146,341.80

In the (combined) pro forma consolidated financial statements 1999/2000, 1998/99 and 1997/98,capital consolidation was waived in favor of adding up all equity. For reasons of comparability, nominority interests (Nordvest A/S) were shown—cf. Note (3)—since Nordvest A/S meantime directly holdsa stake in Taifun AG. The pro forma net earnings disclosed within equity does not equal the netearnings after profit appropriation (retained earnings), cf. Note (1).

For the movement of equity items, see the statement of changes in equity.

(5.7) Accruals9-30-2000 E19,696,088.54

9-30-1999 E8,203,124.519-30-1998 E3,012,739.72

Pro forma groupcarryover Utilization Release Addition 9-30-1998

E E E E E

Tax accruals 82,260.22 0.00 0.00 0.00 82,260.22

Sundry accruals

contract-related 1,465,351.74 510,919.67 869,059.11 1,920,162.71 2,005,535.67

personnel-related 281,110.13 280,518.89 591.24 580,424.48 580,424.48

remaining 48,189.26 42,725.83 5,463.43 344,519.35 344,519.35

1,876,911.35 834,164.39 875,113.78 2,845,106.54 3,012,739.72

10-1-1998 Utilization Release Addition 9-30-1999

E E E E E

Tax accruals 82,260.22 42,091.70 40,168.52 868,897.12 868,897.12

Sundry accruals

contract-related 2,005,535.67 36,036.87 26,331.53 3,791,180.56 5,734,347.83

personnel-related 580,424.48 444,496.27 30,090.80 1,100,715.73 1,206,553.14

remaining 344,519.35 339,524.74 4,994.61 393,326.42 393,326.42

3,012,739.72 862,149.58 101,585.46 6,154,119.83 8,203,124.51

10-1-1999 Utilization Release Addition 9-30-2000

E E E E E

Tax accruals 868,897.12 65,494.47 0.00 2,375,982.06 3,179,384.71

Sundry accruals

contract-related 5,734,347.83 4,706,177.96 145,838.16 12,735,774.83 13,618,106.54

personnel-related 1,206,553.14 1,097,180.65 3,535.07 1,373,268.93 1,479,106.35

remaining 393,326.42 378,798.68 12,993.86 1,417,957.06 1,419,490.94

8,203,124.51 6,247,651.76 162,367.09 17,902,982.88 19,696,088.54

The tax accruals provide for accrued real-estate, municipal-trade and corporate-income tax liabilities.

F-19

The sundry accruals, recognized in accordance with and required by IAS 37, provide for obligations thatexist at the legal or economical level, whose settlement will probably result in an outflow of resourcesembodying economic benefits, and whose amount can be determined reliably. Discounting was waivedfor lack of materiality. The contract-related accruals refer to flat-rate and specific warranties, follow-upcosts, and penalties, while the personnel-related accruals substantially provide for accrued vacationand leave, profit shares and Workers Compensation Insurance premiums. The remaining sundryaccruals refer to liabilities accrued for invoices not yet received, for annual closing and audit costs, andfor litigation risks.

(5.8) Future payables under l/t construction contracts9-30-2000 E0.00

9-30-1999 E590,097.309-30-1998 E0.00

This line reflects the losses from work in process accounted for according to the PoC method (IAS 11).

(5.9) Liabilities9-30-2000 E114,585,916.31

9-30-1999 E57,635,162.219-30-1998 E18,561,330.15

9-30-2000 9-30-1999 9-30-1998

E E E

Prepayments received 0.00 47,167.44 0.00

Due to banks 180,262.11 58,562.98 0.00

Trade payables 44,121,740.03 34,097,308.88 8,424,436.86

Due to Babcock Borsig Group companies 63,152,135.44 19,117,281.81 9,355,579.51

Sundry liabilities 7,131,778.73 4,314,841.10 781,313.78

114,585,916.31 57,635,162.21 18,561,330.15

All substantial liabilities have a remaining term of one year or less.

In the years under review, the accounts due to Babcock Borsig Group companies were mostly owed toBabcock Borsig AG, Oberhausen; Flender AG, Bocholt; Babcock Giesserei GmbH, Oberhausen; and LoherAG, Ruhstorf. After netting the debit and credit balances, the intercompany clearing account for theintragroup cash management funds provided by Babcock Borsig AG showed net debts ofE64,935,602.79 as of 9-30-2000 (E2,447,042.94 as of 9-30-1998). For details of intercompanyreceivables, see Note (5.4).

Breakdown of sundry liabilities:

9-30-2000 9-30-1999 9-30-1998

E E E

Fiscal taxes 4,291,115.30 1,822,205.97 109,220.87

Social security taxes 295,527.83 255,920.98 97,633.16

Due to employees 541,408.78 918,981.65 267,930.98

Mobile crane capital lease 720,499.35 1,125,375.70 0.00

License agreement 777,163.66 0.00 0.00

EU grant 0.00 155,705.62 300,568.05

Remaining items 506,063.81 36,651.18 5,960.72

7,131,778.73 4,314,841.10 781,313.78

F-20

(5.10) Deferred income9-30-2000 E165,251.93

9-30-1999 E46,476.439-30-1998 E0.00

The deferred income is basically related to prepayments received for maintenance services, machineinsurance contracts and warranties for a wind turbine, as well as from a purchasing pool.

(5.11) Contingent liabilities

No contingent liabilities existed in the periods under review.

(5.12) Other financial obligations9-30-2000 E2,486,863.61

9-30-1998 E3,167,720.699-30-1997 E946,592.97

Breakdown of other financial obligations:

Maturity TotalC 1 year 1-5 years

E E E

Obligations under leases

as of 9-30-2000 308,225.24 2,178,638.37 2,486,863.61

as of 9-30-1999 417,626.56 2,750,094.13 3,167,720.69

as of 9-30-1998 149,501.98 797,090.99 946,592.97

(6) Comments on the income statement

(6.1) Net sales1999/00 E272,669,814.84

1998/99 E223,742,801.561997/98 E82,476,587.43

For the breakdown and analysis of net sales by geographical markets (regions), reference is made to thesegment report. In 1999/2000, net sales to Babcock Borsig Group companies amounted toE9,982,952.22 (E1,967,760.26 in 1998/99, E1,259,496.75 in 1997/98).

Contrary to the separate HGB-based financial statements, net sales also include revenues from PoCaccounting under IAS 11, cf. Note (5.3).

(6.2) Change in inventories of WIP1999/00 (E3,213,876.05)

1998/99 E8,436,511.871997/98 E2,782,896.07

This income statement line discloses the changes in inventories of work in process (goods/services)which are not accounted for according to the PoC method of IAS 11.

(6.3) Work and material capitalized1999/00 E735,399.55

1998/99 E444,670.551997/98 E0.00

This caption accounts for the production cost of internally manufactured wind turbine prototypes androtor casting molds.

F-21

(6.4) Other operating income1999/00 E1,973.699.62

1998/99 E1,191,065.761997/98 E897,484.15

Breakdown of major items of other operating income:

1999/00 1998/99 1997/98E E E

Insurance benefits/refunds 567,191.42 248,091.63 151,982.20

Foreign-exchange gains 425,875.74 31,250.33 58,249.18

Gains from fixed-asset disposal 301,579.52 148,891.74 20,962.56

Income from the compounding of receivables 210,868.08 1,538.58 28,692.73

Expense allowances 96,269.83 186,978.57 240,073.70

Income from sideline business 0.00 230,444.08 345,364.04

Remaining items 371,915.03 343,870.83 52,159.74

1,973,699.62 1,191,065.76 897,484.15

(6.5) Cost of materials1999/00 E203,777,275.90

1998/99 E188,879,752.811997/98 E66,593,673.11

Breakdown of the cost of materials:

1999/00 1998/99 1997/98

E E E

Cost of raw materials & supplies 166,500,959.01 156,020,672.38 52,747,855.91

Cost of services purchased 37,276,316.89 32,859,080.43 13,845,817.20

203,777,275.90 188,879,752.81 66,593,673.11

The cost of raw materials and supplies was mainly incurred for components, operating stores, freightcharges, and energy. The cost of services purchased resulted from outsourced freights, changes incontract-related accruals, sales commissions, outsourced services for contract handling, and outsidelabor.

(6.6) Personal expenses1999/00 E19,205,652.61

1998/99 E12,750,745.611997/98 E6,000,097.34

1999/00 1998/99 1997/98

E E E

Wages and salaries 16,806,910.28 11,211,819,34 5,216,417.18

Social security taxes, pension expense and related employeebenefits 2,398,742.33 1,538,926.27 783,680.16

19,205,652.61 12,750,745.61 6,000,097.34

The annual average headcount in the pro forma group came to 523 in fiscal 1999/2000 (340 in fiscal1998/99, and 145 in fiscal 1997/98). As of 9-30-2000, the workforce comprised 558 employees (387 asof 9-30-1999, and 194 as of 9-30-1998).

F-22

(6.7) Amortization/depreciation1999/00 E3,725,019.82

1998/99 E2,096,032.781997/98 E862,057.71

1999/00 1998/99 1997/98

E E E

Intangible assets 1,377,556.82 644,461.56 206,648.27

Land and buildings 151,013.11 41,220.03 36,203.32

Production plant and machinery 912,682.75 532,375.89 315,792.79

Other plant, factory and office equipment 1,283,767.14 877,975.30 303,413.33

3,725,019.82 2,096,032.78 862,057.71

As required by IAS 36, write-down to the recoverable amount was charged at E30,297.37 to land andbuildings in fiscal 1999/2000.

(6.8) Other operating expenses1999/00 E32,242,773.24

1998/99 E20,088,169.961997/98 E9,885,015.53

1999/00 1998/99 1997/98

E E E

Outside and support services 4,292,133.11 369,042.37 435,357.63

Insurance 2,558,146.31 1,307,131.64 309,499.40

Travel 2,656,453.03 1,609,135.01 654,417.67

Maintenance 1,983,008.01 135,508.41 167,011.05

Legal, consultancy and auditing 1,609,578.48 340,828.05 175,530.14

Commissions 2,904,614.03 5,328,648.72 3,225,518.99

Equipment leases 1,445,024.30 420,855.25 170,350.15

Costs allocated 1,463,067.93 875,306.76 303,194.35

Postage, phone, telex 1,014,245.42 429,314.35 279,439.85

Rents 1,161,752.12 484,072.12 355,038.92

Allocations by Babcock Borsig Group companies 755,527.32 848,325.58 281,210.53

Leasing rights 741,440.32 0.00 0.00

Foreign exchange losses on receivables and payables 512,567.10 107,222.74 18,781.38

Advertising 907,078.42 2,393,913.55 547,565.13

Pro forma expenses of Taifun AG 2,690,000.00 2,387,000.00 1,882,000.00

Receivables written off/down 422,102.06 207,039.08 135,767.25

Losses on fixed-asset disposal 41,663.15 206,799.74 31,861.37

Remaining items 5,084,372.13 2,638,026.59 912,471.72

32,242,773.24 20,088,169.96 9,885,015.53

F-23

(6.9) Net financial result1999/00 E(2,865,323.28)

1998/99 E122,183.711997/98 E(335,449.81)

1999/00 1998/99 1997/98

E E E

Other interest and similar income 516,156.93 1,110,856.41 70,445.35

Interest and similar expenses (3,381,480.21) (988,672.70) (405,895.16)

(2,865,323.28) 122,183.71 (335,449.81)

Most of the interest income and expenses originated from intercompany clearing account (credit/debit)balances with Babcock Borsig Group companies. In addition, the net financial result covers interestincome from customers (trade receivables), bank interest, expenses for guaranty commissions, andinterest expenses for suppliers and prepayments received.

(6.10) Income taxes1999/00 E3,884,660.07

1998/99 E3,616,756.601997/98 E878,223.57

The income taxes line substantially accounts for the current taxes of Nordex GmbH, as well as forimputed taxes—cf. Note (1)—and the recognition of deferred tax assets and liabilities, cf. Note (4.2.).Imputed and deferred taxes were calculated by using future tax rates. When computing the deferredtaxes, a rate of 25% as stated in the statutory German Corporate Tax Reform 2001, plus 5.5% thereonas solidarity tax was used. Determination of deferred municipal trade taxes was predicated on theapplicable municipal factors.

F-24

A detailed breakdown of income taxes is shown in the table below. Deferred taxes are shown non-netted.

1999/00 1998/99 1997/98

E E E

Profit from ordinary operations 10,348,993.11 10,122,532.29 2,480,674.15

Non-income tax (expenses)/refund (29,736.46) 24,476.49 (7,255.31)

Earnings before taxes (EBT) 10,319,256.65 10,147,008.78 2,473,418.84

Current tax expenses of the period (2,376,192.57) (869,930.44) 0.00

Imputed tax (burden)/relief on net adjustment for group feeapportionment and P&L transfer (2,139,535.64) (703,692.55) 263,560.23

Increase in deferred taxes for the period:

application of the PoC method (75,724.37) (1,520,261.47) (790,216.94)

accounting for public grants (15,941.57) 0.00 0.00

accounting for assets under capital leases (99,881.38) (22,691.65) 0.00

capitalization of development costs (232,438.40) (404,547.94) (140,686.56)

elimination of change in general allowance for doubtful accounts (25,330.93) (55,062.05) (1,452.58)

utilization of deferred tax assets from loss carryovers 0.00 (407,567.12) (268,525.39)

change in future payables from l/t construction contracts (212,304.75) 0.00 0.00

(661,621.40) (2,410,130.23) (1,200,881.47)

Decrease in deferred taxes for the period:

application of the PoC method 811,633.42 26,669.50 59,097.67

accounting for public grants 445,038.68 123,889.09 0.00

change in future receivables from l/t construction contracts 0.00 212,305.77 0.00

elimination of change in general allowance for doubtful accounts 24,958.71 0.00 0.00

elimination of intercompany profits 11,058.73 4,132.26 0.00

1,292,689.54 366,996.62 59,097.67

Income tax expense as per income statement (3,884,660.07) (3,616,756.60) (878,223.57)

Total actual burden from current, imputed and deferred taxesin the fiscal year approx. 37% approx. 36% approx. 36%

(6.11) Other taxes1999/00 E29,736.461998/99 (E24,476.49)

1997/99 E7,255.31

The other (i.e., non-income) taxes basically cover vehicle and real-estate taxes.

(7) Comments on the cash flow statementThe cash flow statement shows the changes in the flow of funds during the years under review. Inaccordance with IAS 7, a distinction is made between the cash flows from (i.e. the net cash used in orprovided by) operating, investing and financing activities.

The cash & cash equivalents as shown in the cash flow statement comprises cash on hand and in bank.Current liabilities due to banks were deducted. Included in cash & cash equivalents were, moreover,debit and credit balances of the intercompany clearing account provided by Babcock Borsig AG forintragroup cash management purposes since such funds represent cash equivalents under the terms ofIAS 7. Also included were interest receivables and payables.

The indirect approach was adopted to determine the cash flow from operating activities. The changesin balance sheet lines ensue from the difference of each fiscal year’s closing balances versus theprevious year. The cash flow from investing activities breaks down into cash outflows for expendituresfor intangible assets, property, plant & equipment and financial assets, as well as into cash inflowsfrom fixed-asset disposal. The cash flow from financing activities was provided by cash inflows from

F-25

capital stock increases in the wake of the incorporation of Taifun AG, Borsig Rotortechnik GmbH, andSudwind Borsig Energy GmbH. Further cash used in financing activities involved cash outflows underthe P&L transfer agreements and one cash dividend distributed by Nordex Planungs- undVertriebsgesellschaft mbH prior to executing the P&L transfer agreement with Borsig Energy GmbH.

On balance, the change in cash & cash equivalents in fiscal 1999/2000 was a decrease byE64,888,517.86 (in fiscal 1998/99 an increase by E4,266,255.41, and in fiscal 1997/98 a decrease ofE3,614,964.26), mainly attributable to the utilization or redemption of funds from the aforesaidintercompany clearing account.

(8) Details of related-party transactionsAt the legal and organizational levels, the Taifun Group was in the years under review part of BorsigEnergy GmbH, Oberhausen, and the group of BDAG Balcke-Durr AG, Oberhausen. First-tier parent isBabcock Borsig AG, Oberhausen. In the years under review, a controlling stake in all subsidiariesincluded in the (combined) pro forma consolidated financial statements was held by Borsig EnergyGmbH, which, except for Nordex GmbH, owned 100% of the shares in said subsidiaries. In fiscal 1997/98, Nordvest A/S, Give, Denmark, owned a 49% stake in Nordex GmbH and, in fiscal 1998/99 through1999/2000, one of 25%. This ownership structure is the reason why the Babcock Borsig Groupcompanies were able to exercise a significant influence over the business and financial policy of TaifunAG’s pro forma subsidiaries.

In addition, the integration of Taifun AG’s pro forma subsidiaries into the Babcock Group resulted in theintercompany accounts due from and to Babcock Borsig Group companies at the three balance sheetdates, cf. Notes (5.4), (5.9). Major transactions involved, in particular, the aforementioned intercompanyclearing. Furthermore, the Taifun Group generated sales to Babcock Borsig Group companies in fiscal1999/2000 of E9,982,952.22 (E1,967,760.26 in fiscal 1998/99, and E1,259,496.75 in fiscal 1997/98).

(9) Details of the boards of Taifun AG, OberhausenSupervisory Board members appointed for Taifun AG’s short fiscal year ended September 30, 2000:

– Dr.-Ing. Hans Fechner, Dusseldorf

– Dipl.-Okonom Ludger Kramer, Kempen

– Dr. Siegfried Michelfelder, Gummersbach

Taifun AG’s initial Executive Board members appointed by the Supervisory Board on August 25, 2000,and December 21, 2000:

– Dipl.-Wirtsch.-Ing. Rudolf Schulz, Hamburg (as from December 21, 2000)

– Dipl.-Oec. Michael von Cappeln, Krefeld (up to December 21, 2000)

– Dr.-Ing. Dietmar Kestner, Essen

– Carsten Risvig Pedersen, Brande, Denmark (as from December 21, 2000)

(10) Segment reportThe Taifun Group’s business activities encompass the development, production and marketing of windturbines. Apart from development and production, upstream project development services arerendered, the appropriate rights acquired, and the infrastructures created in order to install windturbines on suitable sites and locations. Such activities require to be depicted in the primary segmentreport since the major risks and rewards originate therefrom, in contrast to the various geographicalsales markets of Taifun AG, which form the secondary segment.

F-26

Primary segment report

The Wind Energy operations cannot be further subdivided into reasonable segments with discrete risksand returns, as required by IAS 14. Therefore, the primary segment report according to IAS 14 dealswith the Taifun Group’s sole business segment, allocating to this segment long-term income andexpenses in order to portray the Group’s performance. The report that follows includes, besides netsales, the change in inventories of work in process (goods/services), work and material capitalized andother income earned from operating activities. In addition, the interest income and interest expensewere fully included in segment income/expense since within the Taifun Group these items are notattributable to financing activities, which is in accordance with IAS 14 and, by analogy, IAS 7—cf. Note(7). Major expenses allocated to the segment include the cost of materials, personnel expenses,amortization/depreciation, and other operations-related expenses, whereas any nonrecurring ornonperiodic items, below-the-line factors, tax expenses and tax income were not allocated to thesegment.

Major assets and liabilities not allocated to the segment include tax accruals, tax claims and tax debts,as well as deferred taxes. Any such other assets or liabilities as serve long-term financing purposesunder the terms of IAS 14 and (by analogy) IAS 7—cf. Note (7)—and are not allocable to the segment donot exist.

Wind Energy Unallocated Taifun Group1999/00 1998/99 1997/98 1999/00 1998/99 1997/98 1999/00 1998/99 1997/98

E1,000 E1,000 E1,000 E1,000 E1,000 E1,000 E1,000 E1,000 E1,000

SEGMENT REVENUE 271,079.41 234,199.85 85,721.99 271,079.41 234,199.85 85,721.99

SEGMENT RESULT 9,723.54 9,917.53 2,161.66 9,723.54 9,917.53 2,161.66

thereof amortization/depreciation offixed assets 3,725.02 2,096.03 862.06 3,725.02 2,096.03 862.06

EXTRAORDINARY FACTORS 625.45 205.00 319.01 625.45 205.00 319.01

Income taxes 3,884.66 3,616.76 878.22 3,884.66 3,616.76 878.22

Other taxes 29.74 (24.48) 7.26 29.74 (24.48) 7.26

GROUP NET INCOME 6,434.60 6,530.25 1,595.20

SEGMENT ASSETS 152,532.55 81,334.93 28,175.49 152,532.55 81,334.93 28,175.49

thereof capital expenditures forfixed assets 15,471.76 10,743.63 2,134.02

Deferred tax assets 552.99 137.96 0.00 552.99 137.96 0.00

Other tax claims 15.79 520.89 1,219.95 15.79 520.89 1,219.95

OPERATING ASSETS 153,101.33 81,993.78 29,395.44

SEGMENT LIABILITIES 126,976.76 63,783.76 21,382.59 126,976.76 63,783.76 21,382.59

Equity 16,013.99 12,662.80 7,146.34 16,013.99 12,662.80 7,146.34

Tax accruals 3,179.38 868.90 82.26 3,179.38 868.90 82.26

Deferred tax liabilities 2,640.08 2,856.12 675.03 2,640.08 2,856.12 675.03

Current tax liabilities 4,291.12 1,822.20 109.22 4,291.12 1,822.20 109.22

OPERATING CAPITAL 153,101.33 81,993.78 29,395.44

Secondary segment report

The Taifun Group sells its products on the following regional markets:

Net sales1999/00 1998/99 1997/98

E1,000 E1,000 E1,000

Germany 152,319.0 173,792.9 79,975.4

Abroad 120,351.0 49,949.9 2,501.2

272,670.0 223,742.8 82,476.6

No significant non-German branches exist as defined in IAS 14.

F-27

(11) Earnings per shareFor determining the earnings per share while ensuring comparability, the number of bearer shares ofstock held in Taifun AG as parent as of December 14, 2000, by Borsig Energy GmbH, Oberhausen, andNordvest A/S, Denmark, was retroactively used as basis for the fiscal years 1999/2000, 1998/99, and1997/98.

1999/2000 1998/1999 1997/1998E E E

Capital stock = number of shares of Taifun AG at Dec. 14, 2000 34,050,000.00 34,050,000.00 34,050,000.00Group net income 6,434,596.58 6,530,252.18 1,595,195.27

EpS: earnings per E1 of Taifun AG’s capital stock 0.19 0.19 0.05

Oberhausen, February 9, 2001

sgd. Dipl.-Wirtsch.-Ing.Rudolf Schulz

(Executive Board member)

sgd. Dr.-Ing.Dietmar Kestner

(Executive Board member)

sgd.Carsten Risvig Pedersen

(Executive Board member)

F-28

F-29

(Combined) fixed-asset analysis of the pro forma groupas of September 30, 1998

Gross values Amortization/depreciation Net values

Pro formagroup

carryoverAdditionspro forma

Booktransfers

pro formaDisposals

pro forma

Balance at9-30-1998

pro forma

Pro formagroup

carryoverAdditionspro forma

Booktransfers

pro formaDisposals

pro forma

Balance at9-30-1998

pro forma

Balance at9-30-1998

pro forma

Balance at9-30-1997

pro forma

E E E E E E E E E E E E

Intangible assetsConcessions, franchises, industrial-property and

similar rights and assets, as well as licensesthereto 477,334.67 714,859.41 106,516.79 4,269.29 1,294,441.58 208,874.74 206,648.27 0.00 4,267.75 411,255.26 883,186.32 268,459.93

Prepayments on intangibles 205,051.94 177,815.86 (106,516.79) 98,374.60 177,976.41 0.00 0.00 0.00 0.00 0.00 177,976.41 205,051.94682,386.61 892,675.27 0.00 102,643.89 1,472,417.99 208,874.74 206,648.27 0.00 4,267.75 411,255.26 1,061,162.73 473,511.87

Property, plant and equipmentLand and buildings 903,313.07 16,121.32 0.00 0.00 919,434.39 157,614.68 36,203.32 0.00 0.00 193,818.00 725,616.39 745,698.39Production plant and machinery 2,593,902.44 238,640.89 0.00 0.00 2,832,543.33 971,483.31 315,792.79 0.00 0.00 1,287,276.10 1,545,267.23 1,622,419.13Other plant, factory & office equipment 901,819.19 757,366.6 0.00 171,099.80 1,488,085.99 401,238.2 303,413.33 0.00 128,569.52 576,082.01 912,003.98 500,580.99Prepayments on property, plant & equipment, and

construction in progress 63,049.41 229,213.25 0.00 57,307.13 234,955.53 0.00 0.00 0.00 0.00 0.00 234,955.53 63,049.414,462,084.11 1,241,342.06 0.00 228,406.93 5,475,019.24 1,530,336.19 655,409.44 0.00 128,569.52 2,057,176.11 3,417,843.13 2,931,747.92

Financial assetsShares in unconsolidated group companies 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.005,144,470.72 2,134,017.33 0.00 331,050.82 6,947,437.23 1,739,210.93 862,057.71 0.00 132,837.27 2,468,431.37 4,479,005.86 3,405,259.79

Low-value assets added, and immediately written off, within thefiscal year are deemed to have been disposed of in the same year.

F-30 (Combined) fixed – asset analysis of the proforma groupas of September 30, 1999

Gross values Amortization/depreciation Net values

Balance at10-1-1998

pro formaAdditionspro forma

Booktransfers

pro formaDisposals

pro forma

Balance at9-30-1999

pro forma

Balance at10-1-1998

pro formaAdditionspro forma

Booktransfers

pro formaDisposals

pro forma

Balance at9-30-1999

pro forma

Balance at9-30-1999

pro forma

Balance at9-30-1998

pro forma

E E E E E E E E E E E E

Intangible assetsConcessions, franchises, industrial-property and

similar rights and assets, as well as licensesthereto 1,294,441.58 1,983,647.01 0.00 41,543.57 3,236,545.01 411,255.26 644,461.56 0.00 1,529.09 1,054,187.73 2,182,357.28 883,186.32

Prepayments on intangibles 177,976.41 401,307.59 0.00 0.00 579,284.00 0.00 0.00 0.00 0.00 0.00 579,284.00 177,976.411,472,417.99 2,384,954.60 0.00 41,543.57 3,815,829.01 411,255.26 644,461.56 0.00 1,529.09 1,054,187.73 2,761,641.28 1,061,162.73

Property, plant and equipmentLand and buildings 919,434.39 134,560.12 0.00 0.00 1,053,994.51 193,818.00 41,220.04 0.00 0.00 235,038.04 818,956.47 725,616.39Production plant and machinery 2,832,543.33 2,912,759.98 322.58 5,524.51 5,740,101.38 1,287,276.10 532,375.89 0.00 1,396.35 1,818,255.64 3,921,845.74 1,545,267.23Other plant, factory & office equipment 1,488,085.99 2,658,114.72 0.00 947,340.91 3,198,859.80 576,082.01 877,975.3 0.00 686,929.93 767,127.38 2,431,732.42 912,003.98Prepayments on property, plant & equipment, and

construction in progress 234,955.53 1,879,430.85 (322.58) 0.00 2,114,063.80 0.00 0.00 0.00 0.00 0.00 2,114,063.80 234,955.535,475,019.24 7,584,865.67 0.00 952,865.42 12,107,019.49 2,057,176.11 1,451,571.23 0.00 688,326.28 2,820,421.06 9,286,598.43 3,417,843.13

Financial assetsShares in unconsolidated group companies 0.00 233,761.11 0.00 0.00 233,761.11 0.00 0.00 0.00 0.00 0.00 233,761.11 0.00Investments 0.00 540,044.38 0.00 0.00 540,044.38 0.00 0.00 0.00 0.00 0.00 540,044.38 0.00

0.00 773,805.49 0.00 0.00 773,805.49 0.00 0.00 0.00 0.00 0.00 773,805.49 0.006,947,437.23 10,743,625.76 0.00 994,408.99 16,696,653.99 2,468,431.37 2,096,032.79 0.00 689,855.37 3,874,608.79 12,822,045.20 4,479,005.86

Low-value assets added, and immediately written off, within thefiscal year are deemed to have been disposed of in the same year.

F-31

(Combined) fixed-asset analysis of the pro forma groupas of September 30, 2000

Gross values Amortization/depreciation/write-down Net values

Balance at10-1-1999

pro formaAdditionspro forma

Investmentgrant received

in fiscal1999/2000

Booktransfers

pro formaDisposals

pro forma

Balance at9-30-2000

pro forma

Balance at10-1-1999

pro formaAdditionspro forma

Reduction ininvestmentgrant/book

transfersDisposals

pro forma

Balance at9-30-2000

pro forma

Balance at9-30-2000

pro forma

Balance at9-30-1999

pro forma

E E E E E E E E E E E E E

Intangible assetsConcessions, franchises, industrial-

property and similar rights & assets,as well as licenses thereto 3,236,545.01 3,437,358.66 0.00 312,147.46 43,236.92 6,942,814.21 1,054,187.73 1,377,556.82 0.00 43,212.75 2,388,531.8 4,554,282.41 2,182,357.28

Prepayments on intangibles 579,284.00 1,019,162.54 0.00 (327,486.22) 0.00 1,270,960.32 0.00 0.00 0.00 0.00 0.00 1,270,960.32 579,284.003,815,829.01 4,456,521.20 0.00 (15,338.76) 43,236.92 8,213,774.53 1,054,187.73 1,377,556.82 0.00 43,212.75 2,388,531.80 5,825,242.73 2,761,641.28

Property, plant and equipmentLand and buildings 1,053,994.50 309,202.02 (365,011.27) 2,500,204.29 60,277.99 3,438,111.55 235,038.03 151,013.11 0.00 6,598.38 379,452.76 3,058,658.79 818,956.47Production plant and machinery 5,740,101.38 2,358,865.48 (583,638.88) 108,960.05 3,035,306.51 4,588,981.52 1,818,255.64 946,768.50 (9,427.98) 1,685,315.41 1,070,280.75 3,518,700.77 3,921,845.74Other plant, factory & office equipment 3,198,859.81 2,813,030.98 (336,722.32) (71,196.19) 561,960.74 5,042,011.54 767,127.39 1,289,682.34 (30,572.97) 382,577.26 1,643,659.50 3,398,352.04 2,431,732.42Prepayment on property, plant &

equipment, and construction inprogress 2,114,063.80 5,886,658.97 (815,207.86) (2,522,629.39) 0.00 4,662,885.52 0.00 0.00 0.00 0.00 0.00 4,662,885.52 2,114,063.80

12,107,019.49 11,367,757.45 (2,100,580.33) 15,338.76 3,657,545.24 17,731,990.13 2,820,421.06 2,387,463.95 (40,000.95) 2,074,491.05 3,093,393.01 14,638,597.12 9,286,598.43Financial assetsShares in unconsolidated group

companies 233,761.11 19,247.18 0.00 0.00 30,677.51 222,330.78 0.00 0.00 0.00 0.00 0.00 222,330.78 233,761.11Investments 540,044.38 220,740.54 0.00 0.00 0 760,784.92 0.00 0.00 0.00 0.00 0.00 760,784.92 540,044.38

773,805.49 239,987.72 0.00 0.00 30,677.51 983,115.70 0.00 0.00 0.00 0.00 0.00 983,115.70 773,805.4916,696,653.99 16,064,266.37 (2,100,580.33) 0.00 3,731,459.67 26,928,880.36 3,874,608.79 3,765,020.77 (40,000.95) 2,117,703.8 5,481,924.81 21,446,955.55 12,822,045.20

Low-value assets added, and immediately written off, within thefiscal year are deemed to have been disposed of in the same year.

INDEPENDENT AUDITOR’S CERTIFICATE

As of December 14, 2000 (date of Commercial Register entry), the Wind Energy business segment wasspun off by and from Borsig Energy GmbH, Oberhausen, a subsidiary of Ratingen-based BDAG Balcke-Durr AG (Group of Babcock Borsig AG, Oberhausen) and contributed to Taifun AG, a subsidiary ofBorsig Energy GmbH, Oberhausen (holding a stake of 80.49%).

Partly, the operations of the Taifun Group were in the past conducted within legally independententities, partly as unincorporated divisions of certain group companies of Borsig Energy GmbH,Oberhausen, and included in the group accounts of BDAG Balcke-Durr AG, Ratingen. Taifun AGprepared (combined) pro forma consolidated financial statements for the three 12-month periods(fiscal years) ended September 30, 2000, 1999 and 1998, and presented such statements in a3-year summarized format that retroactively combines the entities now owned by Taifun AG. Theaccounting and other transactions are explained in greater detail in the notes to the (combined) proforma consolidated financial statements of Taifun AG.

For the periods under review, the (combined) pro forma consolidated financial statements of Taifun AGinclude apart from the Wind Energy business segment of Babcock Prozessautomation GmbH,Oberhausen, also Nordex Planungs- und Vertriebsgesellschaft mbH, Bad Essen; Sudwind EnergietechnikGmbH, Oberhausen; Borsig Rotortechnik GmbH, Rostock; and Nordex GmbH, Rerik.

Previously, the operations of Babcock Prozessautomation GmbH, Oberhausen (‘‘BPA’’), comprised thetwo divisions (business segments) of Power Plants and Wind Energy. As of October 1, 2000, PowerPlants was spun off and BPA with the remaining Wind Energy division contributed to Taifun AG, acompany organized on August 25, 2000.

Subsidiaries of Nordex GmbH, Rerik, were not included in the consolidation group since their impact onthe Taifun Group’s financial position and results of operations was insignificant. According to IAS,another investee of Nordex GmbH, Rerik, was stated at amortized cost according to IAS as anyinfluence on the investee’s business and financial policies could be safely ruled out under IAS terms.Except for Babcock Prozessautomation GmbH’s Wind Energy division, the operations of the TaifunGroup were conducted in the past by legally independent companies, and these were included in thegroup accounts of BDAG Balcke-Durr AG. The same procedure was adopted analogously and indirectlyfor the Wind Energy segment, viz. by including Babcock Prozessautomation GmbH, a BDAG Balcke DurrAG Group company, as the latter’s unincorporated segment.

The annual financial statements of the companies included in the 3-year presentation of the(combined) pro forma consolidated financial statements were prepared and audited in accordance withGerman Commercial Code provisions, whereupon, based on our audits, we issued our unqualifiedopinion on each. Such separate financial statements were restated to conform to IAS in order toformulate the (combined) pro forma consolidated financial statements on the basis of groupwideuniform accounting and valuation principles. Separate IAS-based segment financial statements wereprepared for the Wind Energy segment of Babcock Prozessautomation GmbH. All companies wereconsolidated in the (combined) pro forma consolidated financial statements as of September 30, 2000/1999/1998 in accordance with IASC rules mainly as follows and as described in greater detail in thenotes thereto:

The IAS require that initial capital consolidation be made as of the date of acquisition, which is definedas the date at which control over net assets and business operations of the companies included in theconsolidation group actually passes to Taifun AG as transferee. According to current information, theseprerequisites will be met in early 2001 only, which is substantially why capital consolidation waswaived for the (combined) pro forma consolidated financial statements, also in conformity with theopinion of IDW, the German institute of sworn public auditors. Consequently, no goodwill amortizationor release of badwill was disclosed in the (combined) pro forma consolidated financial statements, noteven for comparative purposes. In the future IAS-based consolidated financial statements of Taifun AG,such expected goodwill amortization will burden the results of operations. In contrast, intercompany

F-32

balances (receivables, payables, income, expenses, gains, losses) and intercompany profits wereeliminated according to IAS.

With a view to ensuring best practicable comparability of the (combined) pro forma consolidatedfinancial statements with the future actual accounts of the Taifun Group, the group fees apportionedin each of the years under review were eliminated from net income and replaced by imputed future proforma personnel and administrative expenses of Taifun AG. In the profit appropriation account belownet income, such adjustments were reversed to develop pro forma net earnings. The P&L transferagreements in force and effect in the fiscal years under review and the related cash outflows andequity decreases were not reversed when developing the (combined) pro forma consolidated financialstatements lest the view of the financial position and results of operations be biased or turn untrue.Instead, in an effort to enhance interperiod comparability of the results of operations in the yearsunder review, the profits or losses already transferred were carried over below net income to arrive atthe pro forma group’s net earnings, duly accounting for the imputed taxes thereon.

Taifun AG’s (combined) pro forma consolidated financial statements in the 3-year summarizedpresentation for the three fiscal years ended September 30, 2000/1999/1998, consist of pro formabalance sheets, pro forma income statements, pro forma statements of changes in equity, pro formacash flow statements and the notes to such pro forma financial statements and are meant in aneconomically reasonable format to show the significant effects on the Taifun AG Group’s financialposition, results of operations and cash flows, premised on the assumption that the spin-off had beeneffected as of October 1, 1997. However, the (combined) pro forma consolidated financial statementsas herein presented do not necessarily provide information about the effects on the Taifun AG Group’sfinancial position, results of operations and cash flows that would or might actually have occurred inthe periods under review if the events and transactions had actually happened or been made as ofOctober 1, 1997.

We audited the IAS-based (combined) pro forma consolidated financial statements as presented byTaifun AG in a 3-year format subsuming the fiscal years ended September 30, 2000/1999/1998. Thepreparation and contents of the (combined) pro forma consolidated financial statements are theresponsibility of the Company’s Executive Board.

Our responsibility is, based on our audit, to express an opinion on whether the subsumed 3-yearpresentation of the (combined) pro forma consolidated financial statements conforms with theapproaches, procedures, assumptions and premises described in the notes thereto as well as, generally,with International Accounting Standards (IAS).

We conducted our audit in accordance with German auditing regulations and with due regard togenerally accepted standards on the audit of financial statements as established by IDW as well as,where applicable and appropriate, additionally to the International Standards on Auditing (ISA) of theInternational Federation of Accountants (IFAC). Said standards require that we plan and perform theaudit to obtain reasonable assurance about whether, subject to the aforesaid procedures detailed in thenotes, the (combined) pro forma consolidated financial statements in their subsumed 3-yearpresentation are free of any material misstatements. An audit includes examining, on a test basis, theevidence supporting the amounts and disclosures in the (combined) pro forma consolidated financialstatements. An audit also includes assessing the accounting principles used, and significant estimatesmade, by the auditee’s legal representatives, as well as evaluating the overall presentation of the(combined) pro forma consolidated financial statements. We believe that our audit provides areasonable basis for our opinion.

F-33

It is our opinion that the (combined) pro forma consolidated financial statements as prepared by TaifunAG and presented in a subsumed 3-year format, which are in conformity with IAS, present in allmaterial respects a fair view (as derived from the consolidated financial statements of BDAG Balcke-Durr AG) of the financial position, the results of operations and the cash flows in the fiscal years of thebusiness units and subsidiaries extracted from such BDAG consolidated financial statements, all subjectand with regard to the approaches, procedures, assumptions and premises disclosed.

Cologne, February 9, 2001

BDO Deutsche WarentreuhandAktiengesellschaft

Wirtschaftsprufungsgesellschaft

(Dr. Scheur)Wirtschaftsprufer

(Siebert)Wirtschaftsprufer

F-34

MANAGEMENT REPORTFOR THE ABBREVIATED FISCAL YEAR

FROM AUGUST 25 TO SEPTEMBER 30, 2000

TAIFUN AG was formed on August 25, 2000, for the purpose of repackaging as a holding company theBalcke-Durr Group’s Wind Energy operations. The Company’s incorporation results from its entry onSeptember 19, 2000, in the Commercial Register of the Local Court of Oberhausen.

In the short fiscal year under review, the Company did not yet engage in any operations.

Consequently, no potentially ruinous risks are identifiable.

Outlook:The first quarter of fiscal 2000/01 saw the inception of the Company’s activities as holding company ofthe Balcke-Durr Group’s Wind Energy operations. In this context, the Company’s general meetingresolved on November 23, 2000, to raise the capital stock from E0.05 million by E34 million to E34.05million in exchange for contributions in kind. Under this noncash capital increase in exchange foraltogether 34 million no-par shares of stock, Borsig Energy GmbH (a Balcke-Durr AG subsidiary)contributed its shareholdings in the five Wind Energy operations, viz. Nordex GmbH, Sudwind BorsigEnergy GmbH, Nordex Automation GmbH, NPV Nordex Planungs- und Vertriebs GmbH and BorsigRotortechnik GmbH, while Nordvest A/S, Denmark, contributed its minority interest in Nordex GmbH.The capital increase entry in the Commercial Register has been applied for and is still pending; theshareholdings will be contributed in due accordance with the postformation regulations of the GermanStock Corporation Act (‘‘AktG’’).

The Company has planned to go public in the spring of 2001 to fund its future growth; the Offering willprobably be placed at the New Market of the Frankfurt/Main stock exchange. To this end, theCompany’s capital stock will in spring 2001 be increased by an aggregate total E18 million against cashcontributions while excluding the subscription right of previous stockholders.

According to corporate plans, the new stock from this capital increase, plus part of the bearer shares ofno-par stock existing at December 31, 2000, which represent a E1 share each in the capital stock, willbe offered by a banking syndicate to institutional investors at a price established by book-building, inthe Federal Republic of Germany in an initial public offering and, in several countries outside ofGermany, by way of international private placement. In addition, the Company will apply for its entirecapital stock to be admitted for public trading at the Regulated Market of the Frankfurt/Main stockexchange once trading at the New Market has commenced.

Inter alia, the cash inflow expected by the Company from the Offering will be used to fund the furtherinternal and external growth of the Nordex Group, certain developments of new, and enhancements ofexisting, products as well as the proposed reinforcement of the Nordex Group’s market position.Moreover, the proceeds would be applied to finance potential M&A transactions and strategic alliances,as well as to repay part of the Nordex Group’s liabilities to the Balcke-Durr Group.

In the new fiscal year, the Company will continue as a pure holding company. The necessary humanresources, mainly for Finance, Personnel and Legal Affairs, will gradually be acquired.

Oberhausen, December 6, 2000

sgd. Dr. KestnerExecutive Board member

sgd. von CappelnExecutive Board member

F-35

ANNUAL FINANCIAL STATEMENTS FOR THE ABBREVIATEDFISCAL YEAR

FROM AUGUST 25 TO SEPTEMBER 30, 2000

BALANCE SHEET

Assets

9-30-2000 8-25-2000

DM ’000 DM ’000

Current assets

Due from banks 98 98

98 98

Equity and liabilities

9-30-2000 8-25-2000

DM ’000 DM ’000

Equity

Capital stock 98 98

Net loss (3) 0

95

Accruals

Sundry accrued liabilities 3 0

98 98

F-36

ANNUAL FINANCIAL STATEMENTS FOR THE ABBREVIATEDFISCAL YEAR

FROM AUGUST 25 TO SEPTEMBER 30, 2000

INCOME STATEMENT

8-25 to 9-30-2000

DM ‘000

Sundry operating expenses –3

Loss from ordinary operations –3

Net loss for the period –3

F-37

ANNUAL ACCOUNTS FOR THE ABBREVIATED FISCAL YEARFROM AUGUST 25 TO SEPTEMBER 30, 2000

NOTES TO THE FINANCIAL STATEMENTS

(I) GeneralAt the balance sheet date, the Company presented the size criteria of a small stock corporation underthe terms of Art. 267(1) German Commercial Code (‘‘HGB’’) but has applied voluntarily the principlesgoverning large corporations in accordance with Art. 267(3) HGB.

The annual financial statements of TAIFUN AG for the short fiscal year from August 25 to September30, 2000, have been prepared according to the applicable HGB provisions.

The figures stated in the balance sheet at 8-25-2000 correspond to the opening balance sheet.

(II) Accounting and valuation methodsThe provision for the sundry accrued liabilities has been measured to adequately account for allidentifiable risks and uncertain obligations.

(III) Comments on the balance sheetCapital stock

The Company’s capital stock amounts to approx. DM 98,000 (E50,000) and is divided into 50,000 bearershares of no-par stock at E1.00 each.

Sundry accrued liabilities

These cover accrued annual closing fees and expenses.

(IV) Comments on the income statementSundry operating expenses

This line basically includes the annual closing fees and expenses.

(V) Additional disclosuresWorkforce

In the short period under review, the Company had no employees of its own.

Boards

Appointed as Supervisory Board members:

Dr.-Ing. Hans Fechner, Dusseldorf,Dipl.-Okonom Ludger Kramer, Kempen,Dr. Siegfried Michelfelder, Gummersbach.

Appointed as Executive Board members:

Dipl.-Oec. Michael von Cappeln, KrefeldDr.-Ing. Dietmar Kestner, Essen

Ownership

All of the Company’s stock (100%) is held by Borsig Energy GmbH, Oberhausen.

F-38

Group affiliation

TAIFUN AG as well as Borsig Energy GmbH are group companies of Babcock Borsig AG, Oberhausen.

Oberhausen, December 6, 2000

sgd. Dr. KestnerExecutive Board member

sgd. von CappelnExecutive Board member

F-39

AUDITOR’S OPINION

We audited the annual accounts (including the accounting system) and management report preparedby TAIFUN AG, Oberhausen, for the abbreviated fiscal year from August 25 to September 30, 2000. Theaccounting and preparation of the annual accounts and management report in accordance withGerman Commercial Code regulations are the responsibility of the Company’s Executive Board. Ourresponsibility is, based on our audit, to express an opinion on the annual accounts (with due regard tothe accounting system) and management report.

We conducted our annual audit in accordance with the provisions of Art. 317 HGB and with due regardto generally accepted standards on the audit of financial statements as established by IDW, theInstitute of Sworn Public Auditors in Germany. Those standards require that we plan and perform theaudit to obtain reasonable assurance that any misstatement or fraud which has a material impact onthe view of the net assets, financial position and results of operations as presented by the annualaccounts in accordance with generally accepted accounting principles and by the management reportis identified. When planning the audit procedures, knowledge and understanding of the Company’sbusiness, its economic and legal environment as well as sources of potential errors are given dueconsideration. In view of the Company’s size and purpose, an audit includes examining, solely throughvarious individual audit procedures, the evidence supporting the amounts and disclosures in theaccounting and annual accounts. An audit also includes assessing the accounting principles used, andsignificant estimates made, by the Company’s Executive Board, as well as evaluating the overallpresentation of the annual accounts and management report. We believe that our audit provides areasonable basis for our opinion.

Our audit did not result in any objections or exceptions.

It is our opinion that the annual accounts, with due regard to accounting principles generally acceptedin Germany, present fairly, in all material respects, the Company’s net assets, financial position andresults of operations. The management report gives a true and fair view of the Company’s overallposition and the risks inherent in its future development.

Cologne, December 15, 2000

BDO Deutsche WarentreuhandAktiengesellschaft

Wirtschaftsprufungsgesellschaft

(Dr. Scheur)Wirtschaftsprufer

(Siebert)Wirtschaftsprufer

F-40

Pro forma CONSOLIDATED BALANCE SHEETaccording to IAS as of December 31, 2000,

with statistical data as of December 31, 1999

Assets

Note

Balance at12-31-2000

pro forma

Balance at12-31-1999

pro forma

E E

A. Fixed assets (5.1)

I. Intangible assets1. Concessions, franchises, industrial-property and similar rights

and assets, as well as licenses thereto 4,575,407.64 2,289,905.16

2. Pro forma goodwill 20,047,901.67 0.00

3. Prepayments on intangibles 1,501,598.70 563,945.24

26,124,908.01 2,853,850.40

II. Property, plant & equipment

1. Land and buildings 2,350,160.49 856,922.51

2. Production plant and machinery 3,501,661.60 3,721,970.88

3. Other plant, factory and office equipment 3,989,640.70 2,608,414.39

4. Prepayments on property, plant & equipment, and constructionin progress 4,853,098.21 2,542,898.02

14,694,561.00 9,730,205.80

III. Financial assets

1. Shares in unconsolidated group companies 222,330.78 203,083.60

2. Investments 760,784.92 540,044.38

983,115.70 743,127.98

41,802,584.71 13,327,184.18

B. Current assets

I. Inventories (5.2)

1. Raw materials and supplies 31,515,937.27 18,476,025.78

2. Work in process 14,314,883.74 26,596,677.61

3. Prepayments made 10,151,460.83 7,628,474.87

55,982,281.84 52,701,178.26

less prepayments received (17,910,672.27) (5,559,368.70)

38,071,609.57 47,141,809.56

II. Future receivables under long-term construction contracts (5.3) 25,884,414.85 20,486,496.06

III. Receivables and sundry current assets (5.4)

1. Trade receivables 45,176,536.69 20,183,361.34

2. Due from Babcock Borsig Group companies 10,449,516.35 1,960,313.72

3. Sundry current assets 2,834,947.61 1,326,132.53

58,461,000.65 23,469,807.59

IV. Cash & cash equivalents 3,118,909.49 354,325.55

125,535,934.56 91,452,438.76

C. Prepaid expenses & deferred charges 1,635,373.58 15,157.00

D. Deferred tax assets (6.7) 873,554.96 130,238.31

169,847,447.81 104,925,018.25

F-41

Equity and liabilities

Note

Balance at12-31-2000

pro forma

Balance at12-31-1999

pro forma

E E

A. Equity (5.5)

I. Capital stock 34,050,000.00 256,561.92

II. Additional paid-in capital 3,577,668.00 6,047,049.08

III. Pro forma net earnings/(pro forma accumulated deficit) (493,258.53) 5,844,337.66

37,134,409.47 12,147,948.66

B. Accruals (5.6)

1. Pension accruals 148,759.86 0.00

2. Tax accruals 3,866,811.55 1,323,514.34

3. Sundry accruals 16,433,430.51 8,929,836.24

20,449,001.92 10,253,350.58

C. Future payables under long-term construction contracts (5.7) 0.00 475,695.74

D. Liabilities

1. Due to banks 121,588.74 0.00

2. Trade payables 29,044,981.71 44,633,897.29

3. Due to Babcock Borsig Group companies (5.8) 74,451,697.00 33,117,424.40

4. Sundry liabilities 5,354,659.80 2,181,128.31

108,972,927.25 79,932,450.00

E. Deferred income 511.29 57,895.62

F. Deferred tax liabilities (6.7) 3,290,597.88 2,057,677.65

169,847,447.81 104,925,018.25

F-42

Pro forma CONSOLIDATED INCOME STATEMENTaccording to IAS

for the three months ended December 31, 2000with statistical data

for the three months ended December 31, 1999

Note

First Quarterfor Fiscal

Year 2000/2001pro forma

First Quarterfor Fiscal

Year 1999/2000pro forma

E E

Net sales (6.1) 63,003,701.96 28,045,088.78

Change in inventories of work in process 6,125,286.76 15,193,204.59

Total operating performance 69,128,988.72 43,238,293.37

Other operating income (6.2) 526,210.68 309,607.35

Cost of materials (6.3)

cost of raw materials and supplies (40,328,659.31) (28,979,812.15)

cost of services purchased (10,437,730.95) (6,028,352.76)

Gross profit 18,888,809.14 8,539,735.81

Personnel expenses (6.4)

(a) wages and salaries (4,943,532.65) (3,276,731.22)

(b) social security taxes (751,713.73) (729,943.00)

Amortization of intangible assets and depreciation of property,plant & equipment (1,751,921.00) (530,925.87)

Other operating expenses (6.5) (9,516,745.69) (4,995,913.87)

Operating profit/(loss) 1,924,896.07 (993,778.15)

Other interest and similar income 34,118.79 34,790.26

Interest and similar expenses (954,118.90) (215,261.32)

Net financial result (6.6) (920,000.11) (180,471.06)

Profit/(loss) from ordinary operations 1,004,895.96 (1,174,249.21)

Income taxes (6.7)

current (687,763.33) (454,617.22)

imputed 442,006.88 122,150.09

deferred (329,948.95) 790,722.78

Other taxes (8,918.17) (4,176.16)

Quarterly net income/(loss) 420,272.39 (720,169.72)

Adjustment for pro forma group fee apportionment and imputedtaxes 652,493.13 550,349.91

Profit transfer (243.52) (370,030.53)

Pro forma profit carryover 9,660,374.79 6,384,188.00

Elimination of pro forma profit carryover plus the subsidiaries’quarterly net income/(loss) as of Dec. 31, 2000, due to proforma capital consolidation (11,226,155.32) 0.00

Pro forma net earnings/(pro forma accumulated deficit) (493,258.53) 5,844,337.66

F-43

Pro forma CONSOLIDATED STATEMENT OF CASH FLOWSaccording to IAS

for the three months ended December 31, 2000,with statistical data

for the three months ended December 31, 1999

First Quarter forFiscal Year

2000/2001pro forma

First Quarter forFiscal Year

1999/2000pro forma

E E

I. Operating activities

Quarterly net income/(loss) 420,272.39 (720,169.72)

Adjustment for pro forma group fee apportionment and imputed taxes 652,493.13 550,349.91

Amortization/depreciation of fixed assets 1,751,921.00 530,925.87

(Gains from)/Losses on fixed-asset disposal (24,487.56) 0.00

Change in inventories of goods (24,167,857.22) (25,225,614.80)

Change in future receivables from long-term construction contracts 9,178,115.40 (3,782,028.24)

Change in receivables and sundry current assets 19,723,607.46 6,493,231.77

Change in pension accruals 148,759.86 0.00

Change in tax accruals 687,426.84 454,617.22

Change in sundry accruals (83,273.32) 1,595,608.85

Change in future payables from long-term construction contracts 0.00 (114,401.56)

Change in liabilities (excl. intercompany clearing account and liabilities due to banks) (13,147,511.42) (2,773,633.91)

Change in deferred tax assets (320,568.25) 7,716.93

Change in deferred tax liabilities 650,517.20 (798,439.71)

Change in prepaid expenses & deferred charges (319,063.54) 64,284.10

Change in deferred income (164,740.64) 11,419.19

Cash flow from operating activities (5,014,388.67) (23,706,134.10)

II. Investing activities

Cash inflow from the disposal of property, plant & equipment 896,182.84 86,407.68

Cash outflow for capital expenditures for intangibles and property, plant andequipment (22,979,245.45) (1,122,472.53)

Cash flow from investing activities (22,083,062.61) (1,036,064.85)

III. Financing activities

Cash inflow from increase in capital stock 33,743,438.08 25,000.00

Cash inflow from transfer to additional paid-in capital (2,469,381.08) 0.00

Change in pro forma net earnings due to pro forma capital consolidation (11,226,155.32) 0.00

Cash dividend distributed by Nordex Planungs- und Vertriebsgesellschaft mbH (243.52) 0.00

Profit transfer to Borsig Energy GmbH under P&L transfer agreements 0.00 (370,030.53)

Cash flow from financing activities 20,047,658.16 (345,030.53)

Change in cash & cash equivalents (7,049,793.12) (25,087,229.48)

Cash & cash equivalents at beginning of period (62,481,684.65) 2,406,833.20

Cash & cash equivalents at end of period (69,531,477.77) (22,680,396.28)

thereof:

cash on hand and in bank 3,118,909.49 354,325.55

intercompany clearing account credit/(debit) balances (72,528,798.52) (23,034,721.83)

current liabilities due to banks (121,588.74) 0.00

(69,531,477.77) (22,680,396.28)

F-44

Pro forma STATEMENT OF CHANGES IN EQUITYaccording to IAS

for the three months ended December 31, 2000,with statistical data

for the three months ended December 31, 1999

First Quarter forFiscal Year

2000/2001pro forma

First Quarter forFiscal Year

1999/2000pro forma

E E

Equity at beginning of fiscal year 16,013,985.79 12,662,799.00

Capital stock

quarterly opening balance 306,561.92 231,561.92

capital increase due to changeover to the euro (E) 2,438.08 0.00

addition of the subsidiaries to Taifun AG by contribution in kind 34,000,000.00 0.00

elimination due to pro forma capital consolidation of the subsidiaries to be included (259,000.00) 0.00

addition from initial inclusion of Borsig Rotortechnik GmbH, Rostock, in theconsolidation group 0.00 25,000.00

quarterly closing balance 34,050,000.00 256,561.92

Additional paid-in capital

quarterly opening balance 6,047,049.08 6,047,049.08

transfer to Taifun AG’s additional paid-in capital of share premiums from thecontributions 3,577,668.00 0.00

elimination due to pro forma capital consolidation of the subsidiaries to be included (6,047,049.08) 0.00

quarterly closing balance 3,577,668.00 6,047,049.08

Profit/loss carryover

Pro forma net earnings as of September 30 9,660,374.79 6,384,188.00

book transfer to pro forma net earnings (9,660,374.79) (6,384.188.00)

quarterly closing balance 0.00 0.00

Pro forma net earnings

quarterly opening balance 9,660,374.79 6,384,188.00

elimination of the subsidiaries’ pro forma profit carryover as of 12-31-2000 due topro forma capital consolidation (9,503,162.99) 0.00

elimination of the subsidiaries’ pro forma net income/loss as of 12-31-2000 due topro forma capital consolidation (1,722,992.33) 0.00

quarterly net income/(net loss) 420,272.39 (720,169.72)

adjustment for pro forma group fee apportionment and imputed taxes 652,493.13 550,349.91

profit transfer to Borsig Energy GmbH under P&L transfer agreements 0.00 (370,030.53)

cash dividend distributed by Nordex Planungs- und Vertriebsgesellschaft mbH (243.52) 0.00

quarterly closing balance (493,258.53) 5,844,337.66

Equity at quarter-end as of December 31 37,134,409.47 12,147,948.66

F-45

NOTES to the pro forma CONSOLIDATED INTERIMSTATEMENTS

with selected explanatory disclosures according to IAS 34for the 3-month period ended December 31, 2000

(1) Group definitionThe Taifun Group, whose Oberhausen, Germany, based parent is Taifun AG, develops, manufactures andmarkets wind turbines. For details of the operations of the Taifun Group’s sole division, Wind Energy,reference is made to the segment report.

In view of Taifun AG’s proposed IPO in fiscal 2000/01, we prepared (combined) pro forma consolidatedfinancial statements for the fiscal years 1997/98, 1998/99, and 1999/2000 in accordance with theprovisions of the International Accounting Standards (IAS). In connection with the applicableaccounting obligations and in derogation of the de facto economic situation, we presented pro formaconsolidated interim statements for the 3 months ended December 31, 2000, in accordance with IAS34. For comparative purposes, we used for the like-for-like (LFL) prior-year quarter (10-1 to 12-31-1999) figures based on statistical data. The pro forma consolidated interim statements for the 3-monthperiod ended December 31, 2000 (‘‘First Quarter for Fiscal Year 2000/2001’’), conform in every materialrespect with the provisions of the International Accounting Standards.

The prerequisites for preparing consolidated accounts under the terms of IAS 22 and 27 will not be metuntil early 2001 since this period only will see the inception of Taifun AG’s business operations. Untilthen, its subsidiaries are organizationally fully integrated in Borsig Energy GmbH and included in thegroup of BDAG Balcke-Durr AG.

The pro forma consolidated interim statements for the 3-month period ended December 31, 2000, weredeveloped from the included companies’ separate annual accounts (restated according to IAS) with dueregard to the necessary consolidation entries and to balance sheet continuity versus the (combined)IAS-based pro forma consolidated financial statements as of September 30, 2000. The financialstatements, prepared in DM, were transformed into euros (E) at the final official rate of E1.00 = DM1.95583. The same approach was adopted to develop the accounting figures for the LFL quarter, viz.First Quarter for Fiscal Year 1999/2000. The recognition, disclosure and valuation rules required by IASwere applied, including the consistency principle. The accounting and valuation methods used in thepro forma consolidated interim statements were throughout the same as those adopted and applied byTaifun AG. The accounting and currency translation methods adopted for the (combined) pro formaconsolidated financial statements for the fiscal year ended September 30, 2000, were consistentlyapplied to these interim accounts. New insights acquired by the date the pro forma consolidatedinterim statements were prepared are duly reflected.

With a view to optimizing comparability with the future actual situation within the Taifun Group(meantime the Nordex Group), the cost allocations and apportioned group fees charged in the 3-monthperiod under review to the subsidiaries were eliminated from quarterly net income and replaced byimputed future personnel and administrative expenses of today’s Nordex AG (formerly Taifun AG), dulyaccounting for the tax effects. In order to prevent fictitious changes in the pro forma group equity, theincome statements were adjusted in the lines after quarterly net income by inserting an item headed,‘‘adjustment for pro forma group fee apportionment and imputed taxes.’’

The subsidiaries’ prorated P/L carryovers from the (combined) IAS-based pro forma consolidatedfinancial statements and their pro rata temporis (p.r.t.) results for the quarter ended December 31,2000, were eliminated under the pro forma capital consolidation within the profit appropriationaccount of the income statement where the quarterly net income was developed into the pro formaquarterly net earnings. The pro forma net earnings do not represent the retained earnings under theterms of Art. 268(19 German Commercial Code (‘‘HGB’’). Goodwill amortization has not been disclosed,cf. Note (3) hereinbelow.

F-46

The restatements made to reconcile the financial-accounting net income in the interim accounts as ofDecember 31, 2000, and the figures as of December 31, 1999, to each period’s pro forma group netincome and pro forma net earnings of the group according to IAS present the following picture:

First Quarter forFiscal Year

2000/2001

First Quarter forFiscal Year

1999/2000E E

Preconsolidation quarterly net income/(loss) acc. to HGB (408,274.32) 1,244,048.68

Development costs capitalized according to IAS 38 853,763.66 115,418.68

Recognition of public grants according to IAS 20 18,030.13 0.00

Application of the PoC method according to IAS 11 839,745.61 (2,499,950.98)

Elimination of general allowances for doubtful accounts 0.00 (6,525.74)

Release of future payables under l/t construction contracts 0.00 114,401.56

Provision for deferred taxes according to IAS 12 (329,948.95) 790,722.78

Accounting in a group dimension for capital leases according to IAS 17 61,833.64 61,833.64

Elimination of intercompany profits according to IAS 27 37,615.74 10,231.57

Adjustment for group fee apportionment for improved comparability, net (1,094,500.00) (672,500.00)

Imputed taxes on the net of adjusted group fee apportionment and P&L transfer 0.00 122,150.09

Imputed taxes on adjustment for group fee apportionment 442,006.88 0.00

Pro forma quarterly group net income/(loss) acc. to IAS 420,272.39 (720,169.72)

Transfer of HGB-based profit to Borsig Energy GmbH under P&L transferagreements (243.52) (370,030.53)

Elimination of imputed taxes and group fee apportionment 652,493.13 550,349.91

IAS profit carryover from prior year 9,660,374.79 6,384,188.00

Elimination of the subsidiaries’ IAS profit carryover and of their quarterly netincome/loss as of 12-31-2000 due to pro forma capital consolidation (11,226,155.32) 0.00

Pro forma group net earnings/(accumulated deficit) according to IAS (493,258.53) 5,844,337.66

(2) Consolidation groupFor comparison, the pro forma consolidated interim statements for the 3-month period endedDecember 31, 2000, include besides Taifun AG (today: Nordex AG) as the future parent all subsidiariesover which Taifun AG can exercise a controlling influence as and when the group structure has defacto materialized in early 2001.

In the quarters ended December 31, 2000 and 1999, the group of consolidated companies comprisedthe following German subsidiaries:

Share capital12-31-2000

Share capital12-31-1999

E E

Taifun AG (today Nordex AG), Oberhausen 34,050,000.00 —

Nordex Energy GmbH, Ostseebad Rerik (formerly Nordex GmbH) 54,000.00 53,174.36

NPV Planung und Vertrieb GmbH, Bad Essen (formerly Nordex Planungs- undVertriebsgesellschaft mbH) 52,000.00 51,129.19

Nordex Automation GmbH, Oberhausen (formerly Babcock Prozessautomation GmbH) 103,000.00 102,258.37

Sudwind Energy GmbH, Oberhausen (formerly Sudwind Borsig Energy GmbH) 25,000.00 25,000.00

Nordex Rotor GmbH, Rostock (formerly Borsig Rotortechnik GmbH) 25,000.00 25,000.00

The consolidation group changed versus the LFL quarter 1999 through the addition of Taifun AG, whichwas organized on August 25, 2000. The interperiod comparability is mainly affected by the acquisitionby Taifun AG of the stakes in its future subsidiaries from the legal predecessors Borsig Energy GmbHand Nordvest A/S. In its interim accounts as of December 31, 2000, Taifun AG shows financial assets ofE37,580,106.07. In all other respects, Taifun AG’s addition to the consolidation group did not materiallybias comparability.

F-47

Taifun AG’s capital stock of E34,050,000.00, divided into 34,050,000 no-par shares at E1.00 each, washeld at December 31, 2000, by the following owners:

12-31-2000E %

Borsig Energy GmbH, Oberhausen 27,407,500.00 80.49

Nordvest A/S, Give, Denmark 6,642,500.00 19.51

34,050,000.00 100.00

Nordex Energy GmbH (formerly Nordex GmbH) showed the following shares in subsidiaries (groupcompanies) as of December 31, 2000 and 1999:

NameRegistered

office

Book valueas of

12-31-2000 Interest in

Book valueas of

12-31-1999 Interest inE1,000 (= kE) % kE %

Nordex Iberica Borsig Energy S.A. Barcelona 15 100 15 100

Nordex Omnical Energy Services(Shanghai) Co. Ltd. Shanghai 188 100 188 100

Nordex Hellas E.P.E. Greece 18 100 — —

Nordex USA Inc. United States 1 100 — —

In the 3-month period ended December 31, 1999, the stake in Ekter Eoliki A.E., Athens, was divested.

For lack of materiality, Nordex Energy GmbH’s aforesaid non-German subsidiaries were notconsolidated, which is in accordance with IASC Framework paragraph 12 in conjunction withparagraphs 29, 30. Said foreign subsidiaries are responsible for handling Nordex Energy GmbHcontracts and providing local technological support. The shares in these subsidiaries were accountedfor at amortized cost in accordance with IAS 39.4 and IAS 39.66/67.

In addition, Nordex Energy GmbH has held since fiscal 1998/99 a 40% equity interest in XIAN NordexWind Turbine Co. Ltd., Xian, PR China. Since the controlling shareholder is the Chinese government andthis investee is hence not controlled by Nordex Energy GmbH as defined in IAS 27.12, the investmenthas neither been included in the consolidation group, nor has it been stated at equity under the termsof IAS 28 since Nordex Energy GmbH does not have the power to participate in this investee’s financialand operating policy decisions. Therefore, the investee is carried at amortized cost pursuant to thefinancial instruments rules of IAS 39.4 and IAS 39.66/67. As of December 31, 2000 and 1999, theinvestment book value amounted to kE760.8 and kE539.9, respectively.

The direct-control and profit and loss transfer agreements existing in the fiscal years 1997/98, 1998/99and 1999/2000 between the then shareholder Borsig Energy GmbH and the subsidiaries NPV Planungund Vertrieb GmbH (formerly Nordex Planungs- und Vertriebsgesellschaft mbH), Nordex AutomationGmbH (formerly Babcock Prozessautomation GmbH, Wind Energy division), Sudwind Energy GmbH(formerly Sudwind Borsig Energy GmbH) and Nordex Rotor GmbH (formerly Borsig Rotortechnik GmbH)will be terminated in fiscal 2000/01 with civil-law effect as from October 1, 2000. Correspondingagreements will be made by and between today’s Nordex AG and the consolidated subsidiaries andunder these, Nordex AG will economically be entitled to the annual P/L of its subsidiaries as fromOctober 1, 2000.

The intercompany receivables, payables, income, gains, losses and expenses from P&L transfergenerated at the level of the subsidiaries and included in the pro forma consolidated interimstatements were eliminated in consolidation.

The fiscal year of Taifun AG and all its consolidated subsidiaries is a non-calendar year that commencesOctober 1 and closes September 30, 2000.

F-48

(3) Consolidation proceduresAccording to IAS 27 and 22, initial capital consolidation is governed by the date of acquisition, which,pursuant to IAS 22.20, is the date at which control of the net assets and operations of consolidatablesubsidiaries is effectively transferred to Taifun AG as acquirer and transferee.

Since today’s Nordex AG (formerly Taifun AG) will not start up its operations before early 2001 and itssubsidiaries will until then remain fully integrated at the organizational level with Borsig Energy GmbHand the BDAG Balcke-Durr AG Group, no effective group structure, and hence no control of thecontributed subsidiaries, existed in 2000 despite the agreements consummated in November/December2000.

In the pro forma consolidated interim statements, capital consolidation was effected pro forma(i) to ensure that the equity as of December 31, 2000, is best comparable to that at September 30, 2000,and (ii) lest the group’s net assets should be overstated as of December 31, 2000. For such pro formacapital consolidation, the equity interests (financial assets) of, acquired with legal effect as of 12-14-2000 by, Taifun AG in the subsidiaries included in the pro forma consolidation group were offsetagainst such subsidiaries’ IAS-based equity as of January 1, 2001, the resulting difference being shownas pro forma goodwill, which was thus determinable on a best-estimate basis. Since, when theindividual subsidiaries were transferred and contributed to Taifun AG, this nonmonetary transactionconstituted merely a restructuring process within the Babcock Borsig Group, the investment bookvalues carried in Taifun AG’s balance sheet underlay not only pro forma capital consolidation but alsothe determination of pro forma goodwill. No goodwill amortization was charged since the groupstructure was not created until early 2001. On this basis and assuming a 15-year period of benefit, theanticipated annual goodwill amortization will amount to kE1,336.5.

In consolidation, all receivables and payables among consolidated subsidiaries were mutually offset,without producing any foreign exchange gains or losses.

In First Quarter for Fiscal Year 2000/2001, no intercompany profits were made, whether withininventories or in the form of prorated profits realized according to the percentage-of-completionmethod. The accounting for capital leases according to IAS 17 (from the group’s vantage point) resultedin First Quarter for Fiscal Year 2000/2001 and First Quarter for Fiscal Year 1999/2000 each in income ofkE61.9.

Moreover, all expenses and income originating from intragroup transfers of goods/services and fromintercompany allocations and intragroup P&L transfers were all mutually netted in consolidation, cf.Note (2).

In addition, the external group fees apportioned and charged in the quarters under review were inconsolidation eliminated from quarterly net income and replaced by imputed future personnel andadministrative expenses of today’s Nordex AG, duly accounting for the imputed tax effects, cf. Note (1).

(4) General accounting and valuation details(4.1) ClassificationThe classification rules of Art. 266 HGB (after adjustment to specific IAS disclosure requirements) wereapplied for preparing the IAS-based balance sheet. The income statement according to IAS is presentedin the full-cost format in analogy to the classification provisions of Art. 275(2) HGB. Major deviationsfrom the HGB-oriented disclosure format are, in particular, attributable to the derivation from IAS-based quarterly net income of pro forma net earnings, cf. Note (1).

(4.2) Accounting and valuation methodsThe accounting, valuation and currency translation methods underlying the (combined) pro formaconsolidated statements 1997/98, 1998/99 and 1999/2000 were consistently applied when preparingthe pro forma consolidated interim statements for the quarter ended December 31, 2000.

F-49

(5) Comments on selected balance sheet lines(5.1) Fixed assets

12-31-2000 E41,802,584.7112-31-1999 E13,327,184.18

Breakdown of intangibles within fixed assets:

12-31-2000 12-31-1999E E

Concessions, franchises, industrial-property and similar rights 4,575,407.64 2,289,905.16

Pro forma goodwill 20,047,901.67 0.00

Prepayments on intangibles 1,501,598.70 563,945.24

26,124,908.01 2,853,850.40

Intangible assets include development costs (less amortization) of E3,015,290.64 as of December 31,2000, under the terms of IAS 38. The intangible assets total at December 31, 2000, soared from thelevel of the (combined) pro forma consolidated statements 1997/98, 1998/99 and 1999/2000 due tothe disclosure of a pro forma goodwill, which was developed as shown below:

NordexEnergyGmbH

IAS12-31-2000

NPV Planungund Vertrieb

GmbHIAS

12-31-2000

NordexAutomation

GmbHIAS

12-31-2000

SudwindEnergyGmbH

IAS12-31-2000

NordexRotorGmbH

IAS12-31-2000

TotalIAS

12-31-2000E E E E E E

Financial assets at bookvalue 16,693,065.74 5,948,177.07 14,850,830.04 63,033.60 24,999.62 37,580,106.07

Share capital 54,000.00 52,000.00 103,000.00 25,000.00 25,000.00 259,000.00

Additional paid-in capital 6,047,049.08 0.00 0.00 0.00 0.00 6,047,049.08

Net earnings/(acc. deficit) 12,046,494.43 62,936.47 (625,521.13) 102,743.02 (360,497.47) 11,226,155.32

Equity 18,147,543.51 114,936.47 (522,521.13) 127,743.02 (335,497.47) 17,532,204.40

Goodwill/(badwill) (1,454,477.77) 5,833,240.60 15,373,351.17 (64,709.42) 360,497.09 20,047,901.67

Based on a period of benefit of 15 years, annual goodwill amortization amounts to kE1,336.5.

Breakdown of capitalized property, plant and equipment:

12-31-2000 12-31-1999E E

Land and buildings 2,350,160.49 856,922.51

Production plant and machinery 3,501,661.60 3,721,970.88

Other plant, factory and office equipment 3,989,640.70 2,608,414.39

Prepayments on PP&E, construction in progress 4,853,098.21 2,542,898.02

14,694,561.00 9,730,205.80

For capital expenditures for property, plant and equipment in First Quarter for Fiscal Year 2000/2001,public grants of E18,030.13 were received and, in accordance with IAS 20, deducted from cost.

As of December 31, 2000, a leased mobile crane was shown as capitalized since from the group’svantage point, the transaction is a capital lease. The rents, which were expensed in the separatestatements at E101,219.09 (unchanged versus First Quarter for Fiscal Year 1999/2000), wereconsequently eliminated in the pro forma consolidated interim statements for the quarter endedDecember 31, 2000.

F-50

(5.2) Inventories12-31-2000 E 38,071,609.57

12-31-1999 E47,141,809.56

12-31-2000 12-31-1999E E

Raw materials and supplies 31,515,937.27 18,476,025.78Work in process (WIP) 14,314,883.74 26,596,677.61Prepayments made 10,151,460.83 7,628,474.87

55,982,281.84 52,701,178.26less prepayments received (17,910,672.27) (5,559,368.70)

38,071,609.57 47,141,809.56

The raw materials and supplies as of December 31, 2000, substantially include Nordex Energy GmbH’sinventories and, to a minor extent, Sudwind Energy GmbH’s and Nordex Rotor GmbH’s. WIP refers towind turbines under construction, as well as to intermediate input for project development, rights andinfrastructure in connection with wind turbines for which no specific customer contract had beenreceived as of the respective closing dates for the quarterly pro forma consolidated balance sheets orwhose contract costs were not reliably determinable.

(5.3) Future receivables under I/t construction contracts12-31-2000 E25,884,414.85

12-31-1999 E20,486,496.06

12-31-2000 12-31-1999E E

Accumulated contract costs 99,816,686.52 64,332,264.50Earnings realized pro rata 5,438,926.82 4,239,175.08

105,255,613.34 68,571,439.58less prepayments received (79,371,198.49) (48,084,943.52)

25,884,414.85 20,486,496.06

This caption covers work in process accounted for according to the PoC method of IAS 11 and breaksdown into the contract costs accumulated by the interim balance sheet date and the prorated contractearnings realized and determined according to the cost-to-cost method, as well as into contracts therevenues from which were not reliably measurable. Prepayments received (billings paid) were dulydeducted from the future contract receivables. Contracts producing a net loss were shown as ‘‘futurepayables under l/t construction contracts,’’ cf. Note (5.7).

(5.4) Receivables and sundry current assets12-31-2000 E58,461,000.65

12-31-1999 E23,469,807.59

12-31-2000 12-31-1999E E

Trade receivables 45,176,536.69 20,183,361.34

Due from Babcock Borsig Group companies 10,449,516.35 1,960,313.72

Sundry current assets 2,834,947.61 1,326,132.53

58,461,000.65 23,469,807.59

The accounts due from Babcock Borsig Group companies refer to those companies which are notincluded in the Taifun consolidation group and mainly reflect intercompany trade transactions.

F-51

(5.5) Equity12-31-2000 E37,134,409.47

12-31-1999 E12,147,948.66

12-31-2000 12-31-1999E E

Capital stock 34,050,000.00 256,561.92

Additional paid-in capital 3,577,668.00 6,047,049.08

Pro forma net earnings/(accumulated deficit) (493,258.53) 5,844,337.66

37,134,409.47 12,147,948.66

In the pro forma consolidated statements as of December 31, 2000, capital consolidation was effectedpro forma for comparability reasons, cf. Note (3). For the movement of equity items, see the statementof changes in equity.

(5.6) Accruals12-31-2000 E20,449,001.92

12-31-1999 E10,253,350.58

10-1-1999 Utilization Release Addition 12-31-1999E E E E E

Tax accruals 868,897.12 0.00 0.00 454,617.22 1,323,514.34

Sundry accruals

contract-related 5,734,347.83 267,405.65 0.00 2,269,102.59 7,736,044.77

personnel-related 1,206,553.14 525,124.48 31,131.54 160,238.34 810,535.46

remaining 393,326.42 21,830.12 0.00 11,759.71 383,256.01

8,203,124.51 814,360.25 31,131.54 2,895,717.86 10,253,350.58

10-1-2000 Utilization Release Addition 12-31-2000

E E E E E

Pension accruals 0.00 0.00 0.00 148,759.86 148,759.86

Tax accruals 3,179,384.71 0.00 442,807.90 1,130,234.74 3,866,811.55

Sundry accruals

contract-related 13,618,106.54 3,510,381.82 127,000.00 2,726,788.05 12,707,512.77

personnel-related 1,479,106.35 537,199.90 25,053.30 897,056.84 1,813,909.99

remaining 1,419,490.94 69,642.03 0.00 562,158.84 1,912,007.75

19,696,088.54 4,117,223.75 594,861.20 5,464,998.33 20,449,001.92

The tax accruals provide for accrued real-estate, municipal-trade and corporate-income tax liabilities.

The sundry accruals, recognized in accordance with and required by IAS 37, provide for obligations thatexist at the legal or economical level, whose settlement will probably result in an outflow of resourcesembodying economic benefits, and whose amount can be determined reliably. Discounting was waivedfor lack of materiality. The contract-related accruals refer to flat-rate and specific warranties, follow-upcosts, and penalties, while the personnel-related accruals substantially provide for accrued vacationand leave, profit shares and Workers Compensation Insurance premiums. The remaining sundryaccruals refer to liabilities accrued for invoices not yet received, for annual closing and audit costs,Taifun AG’s IPO costs of kE223, and litigation risks. A letter of release was obtained for certainlitigation risks.

F-52

(5.7) Future payables under l/t construction contracts12-31-2000 E0.00

12-31-1999 E475,695.74

The line reflects the losses from work in process at December 31, 1999, accounted for according to thePoC method (IAS 11).

(5.8) Due to Babcock Borsig Group companies12-31-2000 E74,451,697.00

12-31-1999 E33,117,424.40

12-31-2000 12-31-1999kE kE

Borsig Energy GmbH 82.8 90.5

Babcock Borsig AG 72,528.8 23,033.2

BDAG Balcke-Durr Aktiengesellschaft 43.0 281.2

Flender AG 0 3,271.8

Babcock Giesserei GmbH 593.1 1,899.4

Loher AG 0 1,972.6

Omnical GmbH 771.5 1,748.1

Babcock Versicherungs Vermittlungs GmbH 7.7 725.5

Other 424.8 95.1

74,451.7 33,117.4

The accounts due to Babcock Borsig Group companies substantially reflect the debit balance of fundsmade available by Babcock Borsig AG through the intercompany clearing account. As of December 31,2000, the clearing account debit balance came to kE72,528.8 (up from kE23,033.2 at December 31,1999).

(5.9) Contingent liabilitiesNo contingent liabilities existed in the periods under review.

(5.10) Other Financial Obligations12-31-2000 2,535,661.06

12-31-1999 2,665,293.13

Breakdown of the other financial obligations:

Maturity1 year 1-5 years Total

kE kE kE

Obligations under leasesas of 12-31-2000 1,400.9 1,134.7 2,535.6

as of 12-31-1999 1,087.5 1,577.8 2,665.3

F-53

(6) Comments on the income statement(6.1) Net sales

First Quarter for Fiscal Year 2000/2001 E63,003,701.96First Quarter for Fiscal Year 1999/2000 E28,045,088.78

For the breakdown and analysis of net sales by geographical markets (regions), reference is made to thesegment report.

Contrary to the separate HGB-based financial statements, net sales also include revenues from PoCaccounting under IAS 11, cf. Note (5.3).

(6.2) Other operating incomeFirst Quarter for Fiscal Year 2000/2001 E526,210.68

First Quarter for Fiscal Year 1999/2000 E309,607.35

The other operating income was substantially derived from costs billed, exchange rate differences,gains from fixed-asset disposal, release of accruals, and insurance benefits/indemnities.

(6.3) Cost of materialsFirst Quarter for Fiscal Year 2000/2001 E50,766,390.26

First Quarter for Fiscal Year 1999/2000 E35,008,164.91

Breakdown:

First Quarterfor Fiscal

Year 2000/2001

First Quarterfor Fiscal

Year 1999/2000

E E

Cost of raw materials and supplies 40,328,659.31 28,979,812.15

Cost of services purchased 10,437,730.95 6,028,352.76

50,766,390.26 35,008,164.91

The cost of raw materials and supplies was mainly incurred for components, operating stores, andenergy. The cost of services purchased resulted from outsourced freights, changes in contract-relatedaccruals, commissions, outsourced services for contract handling, and outside labor.

(6.4) Personnel expensesFirst Quarter for Fiscal Year 2000/2001 E5,695,246.38

First Quarter for Fiscal Year 1999/2000 E4,006,674.22

First Quarterfor Fiscal

Year 2000/2001

First Quarterfor Fiscal

Year 1999/2000

E E

Wages and salaries 4,943,532.65 3,276,731.22

Social security taxes, pension expense and related employee benefits 751,713.73 729,943.00

5,695,246.38 4,006,674.22

The quarterly headcount in the pro forma group averaged 610 in First Quarter for Fiscal Year 2000/2001 (up from 389 in First Quarter for Fiscal Year 1999/2000). As of 12-31-2000, the workforcecomprised 634 employees (up from 440 at 12-31-1999).

F-54

(6.5) Other operating expensesFirst Quarter for Fiscal Year 2000/2001 E9,516,745.69

First Quarter for Fiscal Year 1999/2000 E4,995,913.87

The other operating expenses mainly resulted from IPO expenses, costs allocated, foreign-exchangelosses, pro forma expenses of Taifun AG—cf. Note (1)—, legal, consultancy and audit fees, insurance,dues and subscriptions, as well as other operating, administrative and selling expenses.

(6.6) Net financial resultFirst Quarter for Fiscal Year 2000/2001 (E920,000.11)

First Quarter for Fiscal Year 1999/2000 (E180,471.06)

First Quarterfor Fiscal

Year 2000/2001

First Quarterfor Fiscal

Year 1999/2000

E E

Other interest and similar income 34,118.79 34,790.26

Interest and similar expenses (954,118.90) (215,261.32)

(920,000.11) (180,471.06)

Interest expense basically covers that charged for intercompany clearing liabilities.

(6.7) Income taxesFirst Quarter for Fiscal Year 2000/2001 E575,705.40

First Quarter for Fiscal Year 1999/2000 (E458,255.65)

The income taxes line substantially accounts for the current taxes of Nordex Energy GmbH, NPVPlanung und Vertrieb GmbH and Sudwind Energy GmbH as well as for the (net) tax effects produced inconnection with the adjustment of group fee apportionment and cost allocations, cf. Note (1). Deferredtax assets and liabilities were recognized for the restatement to IAS of the separate HGB-basedquarterly accounts and for tax loss carryovers. For enhanced comparability, imputed and deferred taxeswere calculated by using future tax rates that apply as from the fiscal year 2000/01. When computingthe deferred taxes, a rate of 25% as stated in the statutory German Corporate Tax Reform 2001, plus5.5% thereon as solidarity tax was used. Determination of deferred municipal trade taxes waspredicated on the applicable municipal factors.

The tax expense corresponds to the amount anticipated to be incurred since the lower tax ratesspecified in the Corporate Tax Reform Act 2001 may for non-calendar years not be applied before fiscal2001/02.

Breakdown of income taxes:

First Quarterfor Fiscal

Year 2000/2001

First Quarterfor Fiscal

Year 1999/2000E E

Profit/(loss) from ordinary operations 1,004,895.96 (1,174,249.21)

Non-income tax (expenses)/refund (8,918.17) (4,176.16)

Earnings before taxes (EBT) 995,977.79 (1,178,425.37)

Current tax expenses of the period (687,763.33) (454,617.22)

Imputed tax (burden)/relief on net adjustment for group fee apportionment and P&Ltransfer 442,006.88 122,150.09

Deferred tax (burden)/relief due to restatement to IAS (657,531.10) 790,722.78

Deferred tax assets for tax loss carryovers 327,582.15 0.00

Income tax credit/(expenses) as per income statement (575,705.40) 458,255.65

Total actual burden from current, imputed and deferred taxes in the quarter approx. 58% approx. 38%

F-55

(7) Comments on the cash flow statementThe cash flow statement for First Quarter for Fiscal Year 2000/2001 shows the changes in the flow offunds during the period under review. In accordance with IAS 7, a distinction is made between the cashflows from (i.e. the net cash used in or provided by) operating, investing and financing activities.

The cash and cash equivalents as shown in the cash flow statement comprises cash on hand and inbank. Current liabilities due to banks were deducted. Included in cash and cash equivalents were,moreover, debit and credit balances of the intercompany clearing account provided by Babcock BorsigAG for intragroup cash management purposes since such funds represent cash equivalents under theterms of IAS 7.

The indirect approach was adopted to determine the cash flow from operating activities. The changesin balance sheet lines ensue from the difference of the closing balances as of December 31, 2000,versus September 30, 2000. The cash flow from investing activities breaks down into cash outflows forexpenditures for intangible assets, property, plant and equipment and financial assets, as well as intocash inflows from fixed-asset disposal. The cash flow from financing activities was provided by cashinflows from capital stock increases of Taifun AG, as well as by the effects of the pro forma capitalconsolidation in Q4/2000 on the pro forma net earnings as of December 31, 2000, cf. Notes (1) and (3).

On balance, the change in cash and cash equivalents in First Quarter for Fiscal Year 2000/2001 was adecrease by kE7,049.7 (versus a decrease of E25,087.2 in First Quarter for Fiscal Year 1999/2000),mainly attributable to the (on balance) utilization of funds from the aforesaid intercompany clearingaccount.

(8) Details of related-party transactionsAt the legal and organizational levels, the Taifun Group was in the quarter under review part of BorsigEnergy GmbH, Oberhausen, and included in the group of BDAG Balcke-Durr AG, Oberhausen. First-tierparent is Babcock Borsig AG, Oberhausen. In the quarter under review, a controlling stake in allsubsidiaries included in the pro forma consolidated interim statements as of December 31, 2000, washeld by Taifun AG, which, in turn, was held as of December 31, 2000, by Borsig Energy GmbH (80.49 %)and Nordvest A/S, Give, Denmark (19.51%). Transactions of the Taifun Group with the remainingBabcock Borsig Group companies substantially involved the aforementioned intercompany clearing [onbalance, funds were utilized, cf. note (7)] as well as trade business.

(9) Details of the boards of Taifun AG, OberhausenSupervisory Board members appointed:

– Dr.-Ing. Hans Fechner, Dusseldorf– Dipl.-Okonom Ludger Kramer, Kempen– Dr. Siegfried Michelfelder, Gummersbach

Taifun AG’s Executive Board members as of December 31, 2000:

– Dr.-Ing. Dietmar Kestner, Essen– Dipl.-Wirtsch.-Ing. Rudolf Schulz, Hamburg (as from December 21, 2000)– Carsten Risvig Pedersen, Brande, Denmark (as from December 21, 2000)

(10) Segment reportThe Taifun Group’s business activities encompass the development, production and marketing of windturbines. Apart from development and production, upstream project development services arerendered, the appropriate rights acquired, and the infrastructures created in order to install windturbines on suitable sites and locations. Such activities require to be depicted in the primary segmentreport since the major risks and rewards originate therefrom, in contrast to the various geographicalsales markets of Taifun AG, which form the secondary segment.

F-56

Primary segment reportThe Wind Energy operations cannot be further subdivided into reasonable segments with discrete risksand returns, as required by IAS 14. Therefore, the primary segment report according to IAS 14 dealswith the Taifun Group’s sole business segment, allocating to this segment long-term income andexpenses in order to portray the Group’s performance. The report that follows includes, besides netsales, the change in inventories of work in process (goods/services), work and material capitalized andother income earned from operating activities. In addition, the interest income and interest expensewere fully included in segment income/expense since within the Taifun Group these items are notattributable to financing activities, which is in accordance with IAS 14 and, by analogy, IAS 7—cf. Note(7). Major expenses allocated to the segment include the cost of materials, personnel expenses,amortization/depreciation, and other operations-related expenses, whereas any nonrecurring ornonperiodic items, below-the-line factors, tax expenses and tax income were not allocated to thesegment.

Major assets and liabilities not allocated to the segment include tax accruals and tax debts, as well asdeferred taxes.

Wind Energy Unallocated Taifun Group

First Quarterfor Fiscal

Year 2000/2001

First Quarterfor Fiscal

Year 1999/2000

First Quarterfor Fiscal

Year 2000/2001

First Quarterfor Fiscal

Year 1999/2000

First Quarterfor Fiscal

Year 2000/2001

First Quarterfor Fiscal

Year 1999/2000

kE kE kE kE kE kE

SEGMENT REVENUE 69,450.44 43,477.94 69,450.44 43,477.94SEGMENT RESULT 1,246.06 (1,279.01) 1,246.06 (1,279.01)thereof amortization/depreciation

of fixed assets’’ 1,751.92 530.93EXTRAORDINARY FACTORS (241.17) 104.76 (241.17) 104.76Income taxes 575.71 (458.26) 575.71 (458.26)Other taxes 8.90 4.18 8.90 4.18

QUARTERLY NET INCOME/(LOSS) 420.28 (720.17)

SEGMENT ASSETS 168,973.89 104,794.78 168,973.89 104,794.78thereof capital expenditures for

fixed assets’’ 22,978.89 1,122.47Deferred taxes 873.56 130.24 873.56 130.24

OPERATING ASSETS 169,847.45 104,925.02

SEGMENT LIABILITIES 125,406.87 89,395.87 125,406.87 89,395.87Equity 37,134.41 12,147.95 37,134.41 12,147.95Tax accruals 3,866.81 1,323.51 3,866.81 1,323.51Pension accruals 148.76 0.00 148.76 0.00Deferred tax liabilities 3,290.60 2,057.68 3,290.60 2,057.68

OPERATING CAPITAL 169,847.45 104,925.02

Secondary segment reportIn the 3-month period ended December 31, 2000, sales revenues of kE40,903 were generated inGermany and kE22,101 abroad.

F-57

(11) Earnings per shareFirst Quarter

for FiscalYear 2000/2001

First Quarterfor Fiscal

Year 1999/2000E E

Capital stock = no. of shares of Taifun AG at 12-31-00 34,050,000.00 34,050,000.00Group net income/(loss) for the 3-month period 420,272.39 (720,169.72)

EpS: earnings per E1 of Taifun AG’s capital stock 0.01 (0.02)

For determining the earnings per share while ensuring comparability, the number of bearer shares ofstock held in Taifun AG as group parent as of December 31, 2000, by Borsig Energy GmbH, Oberhausen,and Nordvest A/S, Denmark, was used as basis for First Quarter for Fiscal Year 2000/2001 and FirstQuarter for Fiscal Year 1999/2000.

Oberhausen, February 26, 2001

sgd. Dr.-Ing. sgd. Dipl.-Wirtsch.-Ing. sgd.Dietmar Kestner Rudolf Schulz Carsten Risvig Pedersen

(Executive Board member) (Executive Board member) (Executive Board member)

F-58

F-59

Combined fixed asset analysis of the pro forma groupas of December 31, 1999

(statistical figures)

Gross values Amortization/depreciation/write-down

Balance at1.10.1999pro forma

Additionspro forma

Book transferspro forma

Disposalspro forma

Balance at31.12.1999

pro forma

Balance at1.10.1999pro forma

Additionpro forma

Book transferspro forma

Disposalspro forma

Balance at31.12.1999

pro forma

Balance at31.12.1999

pro forma

Net valuesBalance at

30.09.1999pro forma

E E E E E E E E E E E E

Intangible assetsConcessions, franchises, industrial property and similar

rights to assets as well as licences thereto 3,236,545.01 277,143.47 0.00 0.00 3,513,688.48 1,054,187.73 169,595.59 0.00 0.00 1,223,783.32 2,289,905.16 2,182,357.28

Prepayments on intangibles 579,284.00 0.00 –15,338.76 0.00 563,945.24 0.00 0.00 0.00 0.00 0.00 563,945.24 579,284.00

3,815,829.01 277,143.47 –15,338.76 0.00 4,077,633.72 1,054,187.73 169,595.59 0.00 0.00 1,223,783.32 2,853,850.40 2,761,641.28

Property, plant and equipmentLand and buildings 1,053,994.51 35,790.43 15,338.76 1,918.75 1,103,204.95 235,038.04 11,483.23 0.00 238.83 246,282.44 856,922.51 818,956.47

Production, plant and machinery 5,740.101.38 2,682.63 0.00 70,217.83 5,672,566.18 1,818,255.64 148,556.09 0.00 16,216.43 1,950,595.30 3,721,970.88 3,921,845.74

Other plant, factory and office equipment 3,198,859.80 378,021.78 0.00 1,638.96 3,575,242.62 767,127.38 201,290.96 0.00 1,590.11 966,828.23 2,608,414.39 2,431,732.42

Prepayment on property, plant and equipment andconstruction in progress 2,114,063.80 428,834.22 0.00 0.00 2,542,898.02 0.00 0.00 0.00 0.00 0.00 2,542,898.02 2,114,063.80

12,107,019.49 845,329.06 15,338.76 73,775.54 12,893,911.77 2,820,421.06 361,330.28 0.0 18,045.37 3,163,705.97 9,730,205.80 9,286,598.43

Financial assetsShares in unconsolidated Group Companies 233,761.11 0.00 0.00 30,677,51 203,083.60 0.00 0.00 0.00 0.00 0.00 203,083.60 233,761.11

Investments 540,044.38 0.00 0.00 0.00 540,044.38 0.00 0.00 0.00 0.00 0.00 540,044.38 540,044.38

773,805.49 0.00 0.00 30,677.51 743,127.98 0.00 0.00 0.00 0.00 0.00 743,127.98 773,805.49

16,696,653.99 1,122,472.53 0.00 104,453.05 17,714,673.47 3,874,608.79 530,925.87 0.00 18,045.37 4,387,489.29 13,327,184.18 12,822,045.20

Land value assets added and immediately written off within

the fiscal year are deemed to have been disposed of in the

same year.

F-60 Combined fixed asset analysis of the pro forma groupas at December 31, 2000

Gross value Amortization/depreciation/write-down Net values

Balance at1.10.2000pro forma

Additionspro forma

Investmentgrant received

in fiscal1999/2000pro forma

Booktransfers

pro formaDisposals

pro forma

Balance at31.12.2000

pro forma

Balance at1.10.2000pro forma

Disposalspro forma

Reduction ininvestmentgrant/book

transfersDisposals

pro forma

Balance at31.12.2000

pro forma

Balance at31.12.2000

pro forma

Balance at30.09.2000

pro foram

E E E E E E E E E E E E E

Intangible assetsConcessions, franchises, industrial

property and similar rights aswell as licences thereto 6,942,814.21 1,190,690.41 0.00 0.00 0.00 8,133,504.62 2,388,531.80 1,169,565.18 0.00 0.00 3,558,096.98 4,575,407.64 4,554,282.41

Pro forma goodwill 0.00 20,047,901.67 0.00 0.00 0.00 20,047,901.67 0.00 0.00 0.00 0.00 0.00 20,047,901.67 0.00

Prepayments or intangibles 1,270,960.32 230,638.38 0.00 0.00 0.00 1,501,598.70 0.00 0.00 0.00 0.00 0.00 1,501,598.70 1,270,960.32

8,213,774.53 21,469,230.46 0.00 0.00 0.00 29,683,004.99 2,388,531.80 1,169,565.18 0.00 0.00 3,558,096.98 26,124,908.01 5,825,242.73

Property, plant and equipmentLand and buildings 3,438,111.55 141,303.24 0.00 0.00 826,878.10 2,752,536.69 379,452.76 47,056.53 0.00 24,133.09 402,376.20 2,350,160.49 3,058,658.79

Production, plant and machinery 4,588,981.52 160,038.47 0.00 0.00 21,378.91 4,727,641.08 1,070,280.75 160,518.24 0.00 4,819.51 1,225,979.48 3,501,661.60 3,518,700.77

Other plant, factory and officeequipment 5,042,011.54 1,017,017.12 0.00 19,585.93 77,336.55 6,001,278.04 1,643,659.50 374,781.05 18,142.46 24,945.67 2,011,637.34 3,989,640.70 3,398,352.04

Prepayment on property, plantand equipment andconstruction in progress 4,662,885.52 191,301.74 0.00 -1,089.05 0.00 4,853,098.21 0.00 0.00 0.00 0.00 0.00 4,853,098.21 4,662,885.52

17,731,990.13 1,509,660.57 0.00 18,496.88 925,593.56 18,334,554.02 3,093,393.01 582,355.82 18,142.46 53,898.27 3,639,993.02 14,694,561.00 14,638,597.12

Financial assetsShares in unconsolidated Group

companies 222,330.78 0.00 0.00 0.00 0.00 222,330.78 0.00 0.00 0.00 0.00 0.00 222,330.78 222,330.78

Investments 760,784.92 0.00 0.00 0.00 0.00 760,784.92 0.00 0.00 0.00 0.00 0.00 760,784.92 760,784.92

983,115.70 0.00 0.00 0.00 0.00 983,115.70 0.00 0.00 0.00 0.00 0.00 983,115.70 983,115.70

26,928,880.36 22,978,891.03 0.00 18,496.88 925,593.56 49,000,674.71 5,481,924.81 1,751,921.00 18,142.46 53,898.27 7,198,090.00 41,802,584.71 21,446,955.55

Low value assets added and immediately written-off within the fiscal

year are deemed to have been disposed of in the same year.

INDEPENDENT AUDITOR’S CERTIFICATE OF REVIEW

The operations of the Taifun (now Nordex) Group were in the past conducted partly within legallyindependent entities, partly in unincorporated divisions of certain group companies of Borsig EnergyGmbH, Oberhausen, and included in the group accounts of BDAG Balcke-Durr AG, Ratingen. Taifun AG(today’s Nordex AG) prepared pro forma consolidated interim statements for the 3-month period endedDecember 31, 2000 (‘‘First Quarter for Fiscal Year 2000/2001’’), which include the entities now owned byNordex AG (formerly Taifun AG). The accounting and other transactions are explained in greater detailin the notes to the pro forma consolidated interim statements of Taifun AG.

In the quarter under review, the pro forma consolidated interim statements of Taifun AG as ofDecember 31, 2000, included apart from Nordex Automation GmbH, Oberhausen (formerly BabcockProzessautomation GmbH, Wind Energy division), also NPV Planung und Vertrieb GmbH, Bad Essen(formerly Nordex Planungs- und Vertriebsgesellschaft mbH), Sudwind Energy GmbH, Oberhausen(formerly Sudwind Borsig Energy GmbH), Nordex Rotor GmbH, Rostock (formerly Borsig RotortechnikGmbH), and Nordex Energy GmbH, Rerik (formerly Nordex GmbH).

Previously, the operations of Babcock Prozessautomation GmbH, Oberhausen (‘‘BPA’’), comprised thetwo divisions (business segments) of Power Plants and Wind Energy. As of October 1, 2000, PowerPlants was spun off and BPA with the remaining Wind Energy division contributed as of December 14,2000 (date of Commercial Register entry) to Taifun AG, a company organized on August 25, 2000.Babcock Prozessautomation GmbH with its remaining, Wind Energy, division was renamed NordexAutomation GmbH, Oberhausen, as of November 20, 2000.

Subsidiaries of Nordex Energy GmbH, Rerik, were not included in the consolidation group since theirimpact on the Taifun Group’s net assets, financial position and results of operations was insignificant.Another investee of Nordex Energy GmbH, Rerik, was stated at amortized cost according to IAS as anyinfluence on the investee’s business and financial policies could be safely ruled out.

The interim (quarterly) accounts of companies included in the pro forma consolidated interimstatements as of December 31, 2000, were prepared in accordance with the accounting regulations ofthe German Commercial Code. In line with our engagement, we reviewed the interim accounts of suchconsolidated subsidiaries for the 3-month period ended December 31, 2000. Our review includedassessing such quarterly accounts by obtaining information and audit evidence through inquiries andanalytical audit procedures. Our review did not cover the contents of the consolidated subsidiaries’accounting systems. For preparing the pro forma consolidated interim statements, the separatequarterly accounts for the 3-month period ended December 31, 2000, were substantially restated toconform with IAS in accordance with groupwide uniform accounting principles. The companies wereconsolidated in the pro forma consolidated interim statements as of December 31, 2000, in accordancewith IASC rules mainly as follows and as described in greater detail in the notes thereto:

The IAS require that initial capital consolidation be made as of the date of acquisition, which is definedas the date at which control over net assets and business operations of the companies included in theconsolidation group actually passes to Taifun AG (now Nordex AG) as transferee. These prerequisiteswere met in early 2001 only. Since Taifun AG was required to account for the shares in said subsidiariesalready as of December 31, 2000, capital consolidation was effected pro forma and pro forma goodwilldisclosed in order to present an as true as possible view of the net assets at December 31, 2000. For thetime being, potential hidden reserves and burdens did not enter into consideration. Since, when theindividual subsidiaries were transferred and contributed to Taifun AG, this nonmonetary transactionconstituted merely a restructuring process within the Babcock Borsig Group, the investment bookvalues carried in Taifun AG’s balance sheet underlay pro forma capital consolidation. No amortization,primarily of a potential goodwill, due to the pro forma capital consolidation was charged to income forreasons of comparability with the (combined) pro forma consolidated financial statements. TheCompany is presently testing the components of the resultant difference (net equity under cost) forfuture accounting treatment. Provided that no different allocation or offset in comparison with the

F-61

procedure described for the preparation of the pro forma consolidated interim statements would enterinto consideration, the results of operations in the future IAS-based consolidated accounts to beprepared by Nordex AG might according to the values at January 1, 2001, be on this basis burdenedwith a maximum annual goodwill amortization of (netted) kE1,337. Such goodwill would amount tokE20,048 and, assuming a 15-year period of benefit, be amortized over this range. Alternatively,discounting the allocation of hidden reserves and after offset against reserves, the initially resultinggoodwill would amount to approx. kE5,113 and the corresponding goodwill amortization to aroundkE358.

Intercompany balances (receivables, payables, income, expenses, gains, losses) and intercompanyprofits were eliminated according to IAS in the pro forma consolidated interim statements.

With a view to ensuring optimum comparability of the pro forma consolidated interim statements as ofDecember 31, 2000, with the future actual situation in the Nordex Group, the group fees apportionedand posted in the quarter under review by Babcock Borsig Group companies were eliminated from netincome and replaced by imputed future pro forma personnel and administrative expenses of NordexAG, with due regard to the ensuing imputed tax effects. In the profit appropriation account belowquarterly net income, such adjustments were reversed to develop pro forma net earnings in order toavoid any fictitious changes in pro forma group equity. Moreover, the proposed direct-control and/orprofit and loss transfer agreements to be signed by and between the consolidated subsidiaries andNordex AG underlay the pro forma consolidated interim statements as of December 31, 2000, as didtheir anticipated tax implications and effects.

In accordance with our engagement, we reviewed the IAS-based pro forma consolidated interimstatements for the 3-month period ended December 31, 2000, comprising Taifun AG’s pro formaconsolidated balance sheet, pro forma consolidated income statement, pro forma consolidatedstatement of cash flows, pro forma statement of changes in shareholders’ equity, and the pro formanotes thereto. The preparation of the quarterly accounts in accordance with IAS is the responsibility ofthe Company’s legal representatives. Our responsibility is, based on our review, to issue a certificatethereon.

We reviewed the pro forma consolidated interim statements as of December 31, 2000, in accordancewith the standards generally accepted in Germany for the review of financial statements as establishedby Institut der Wirtschaftsprufer in Deutschland e.V. (IDW).

Said standards require that we plan and perform the review to obtain moderate assurance aboutwhether anything has come to our attention that causes us to believe that the pro forma consolidatedinterim statements have not been prepared, in all material respects, in accordance with the appliedaccounting principles. A review consists principally of inquiries of company personnel and analyticalprocedures and, therefore, is substantially less in scope than a statutory audit, the objective of which isthe expression of an opinion regarding the financial statements taken as a whole. Accordingly, and inline with our engagement, we cannot and do not express such an opinion.

Based on our review, we certify that, except for entry timing differences in the clearing accounts ofBabcock Borsig AG, nothing has come to our attention that causes us to believe that the pro formaconsolidated interim statements for the 3-month period ended December 31, 2000, do not present atrue and fair view of the net assets, financial position and results of operations or have not beenprepared, in all material respects, in accordance with the applied accounting principles.

F-62

F-63

Owing to the accounting system having been converted to SAP R/3 in the like-for-like quarter 1999,the financial data prepared by the Company for First Quarter for Fiscal Year 1999/2000 is based onstatistical surveys by the Company. We did not review such financial data and disclosures as ofDecember 31, 1999.

Cologne, February 27, 2001

BDO Deutsche WarentreuhandAktiengesellschaft

Wirtschaftsprufungsgesellschaft

(Siebert)Wirtschaftsprufer

(Dr. Scheur)Wirtschaftsprufer

F-64

MANAGEMENT REPORTFOR THE FISCAL YEAR

ENDED SEPTEMBER 30, 2000

Business trend and situation of the CompanyNORDEX continues its astounding uptrend. The soaring growth rates of order inflow and sales inabsolute terms are well comparable with previous years. Sales jumped by 52% from fiscal 1998/99 toDM 438 million, and incoming orders surged 33% to DM 552 million. As in the years before, theCompany came a good deal closer to the achievement of its prime strategic goal of acquiring ordersand generating sales not only in the strong German market but also and increasingly in the majormarkets of the world. The share of non-German sales (DM 134 million) was pushed up from 20% to31% in the fiscal year 1999/2000. For the first time, the volume of orders received from abroadaccounted for more than 50%.

Earnings before taxes leaped 84% to DM 13.8 million.

In comparison to the calendar year 1999, the German wind energy market experienced a cleardowntrend early in the year, mainly due to political uncertainties. Nonetheless, the newly installedoutput capacity estimated at 1,200 MW will still be a world record. Contrary to 1997 and 1998,NORDEX unfortunately lost market shares in Germany in 1999 and 2000, primarily since the newlydeveloped 2.5-MW turbine had reached industrialization level at fiscal year-end only and sincepresently wind turbines with a minimum rotor diameter of 70 m are in demand. For strategic reasons,however, NORDEX currently does not offer wind turbines with 70-m rotors because this segment iscovered by its same-tier affiliate, Sudwind Borsig Energy GmbH.

As stated, the somewhat depressed German business was outcompensated by successfulinternationalization. In the calendar year 1999, NORDEX had a 7.8% share in the world market.

It will be possible to raise this world market share to just under 10%. In the megawatt-turbinesegment, NORDEX has so far retained its world leadership with a market share of 20%+.

In the period, 148 N43/600kW turbines were installed and 152 sold. This relatively small wind turbine(600 kW rated output and 43 m rotor diameter) thus experiences an encouraging renaissance. The N50/800kW turbine, of which 22 were installed and 35 sold, showed a remarkable success, especially inDenmark, and was well received by the market. In the megawatt, 160 N60/N62/1.300kW turbines wereinstalled and sold. NORDEX benefits from the fact that it is one of the few manufacturers that installmegawatt turbines not only in Germany but worldwide, such as in Finland, United States, Spain,Portugal, Denmark, Latvia, and shortly even in China.

The new production facility in Rostock, Germany, started in January 2000 to produce wind turbines.Several major supplier plants, particularly the sister companies BPA and Borsig Rotortechnik GmbH, aremeantime located in the direct neighborhood of the production shop, which has resulted in initialsavings. Apart from the Give, Denmark, production facility, the joint venture in Xian, China, also startedup production, assembling and successfully delivering the first wind turbines in the year under review.The preparations for setting up a further production site have commenced in Spain.

The Company’s headcount grew from 338 at 9-30-1999 to 438 as of September 30, 2000.

Information on significant risks inherent in future developmentWorth mentioning for risk reporting purposes are quality problems experienced with one blade supplierin several N60 turbines. Currently, a repair and replacement program is in progress to be completed byend-January. Another supplier has meanwhile been contracted. Most of the additional blade repairexpenses are borne by insurers and, therefore, no long-term impact on the Company’s profitability isexpected from this situation.

F-65

Research and developmentCertification of the N50/800kW turbines has substantially been completed, series production started inearly 2000. In order to tap the market for variable-speed, adjustable-pitch wind turbines, work on anN50p (variable-speed/pitch) turbine began on the basis of the N50/stall and a prototype installed mid-August. Prototype testing will start in the high-wind seasons of fall and winter, and first results shouldbe available in the spring of 2001.

The N43 turbine can presently be regarded as the most sturdy and flexible NORDEX product; even atlocations of extreme climatic conditions with temperatures varying between +40ºC and -30ºC such asthe Egyptian Desert or Inner Mongolia, the N43 presents good uptimes and satisfies the warrantyrequirements of the international market (uptime and characteristic performance curve).

In January 2000, the N80/2500kW prototype was installed as scheduled. Extensive trials and tests havesince been conducted with this variable-speed, adjustable-pitch, 2,500-kW rated output turbine withwhose development NORDEX broke new ground. A lack of wind delayed testing and thus also selectivemarketing of this product. Therefore, a second, identical prototype will by year-end be installed on thetest wind farm of Wilhelmshaven where wind conditions are more favorable.

The NORDEX Control, developed by the Company as from the summer of 1999, has so far been installedin more than 160 wind turbines.

Significant subsequent eventsNo significant reportable events occurred subsequent to the balance sheet date.

Head office relocationNORDEX will close down its Rerik location and move with all its and NPV’s corporate functions(Finance, Sales, Purchasing, R&D, Project Management, Management) to a new, central location inNorderstedt near Hamburg (State of Schleswig-Holstein). Customer Service along with the RemotePlant Control Center will move to the Rostock Wind Turbine Competence Center.

The Company expects Hamburg to provide a far better human resources potential for administrativeand executive staff, improved traffic links and a wide variety of operational synergies from theconcentration of all decision-making functions at one site.

Besides the existing branches in Denmark, Spain, China (sales office in Beijing, a limited company forcustomer service in Shanghai, a joint venture in Xian), and Turkey, the following new operations wereset up:

– on 12-27-1999 an independent US company, NORDEX USA Inc., near Dallas, Texas

– on 10-26-1999 a branch in Cairo, NORDEX GmbH Egypt Branch, to handle two Egyptianmegaorders

– on 8-7-2000 an independent company in Athens, NORDEX Hellas L.L.C., to handle a major Greekcontract

NORDEX is still seeking joint venturers for establishing a company in Turkey.

Future development of the CompanyFor the new fiscal year, NORDEX GmbH expects business volume to grow significantly. By restructuringand decentralizing the German sales organization, the Company plans to increase market shares andimprove profit contributions, as well as to further develop the non-German sales network enabling usto reach a share of 40% to 50% of total sales.

Rerik, November 23, 2000

sgd. Dr. Thomas Tschiesche sgd. Theo Becker sgd. Carsten Pedersen

F-66

ANNUAL FINANCIAL STATEMENTS FOR THE FISCAL YEARENDED SEPTEMBER 30, 2000

BALANCE SHEET

Assets

9-30-2000 9-30-1999

DM ‘000 DM ‘000

Fixed assets

Intangible assets 3,678 1,922

Tangible assets 11,435 10,235

Financial assets 1,923 1,513

17,036

Current assets

Inventories 265,641 225,376

less

prepayments received (198,263) (170,765)

67,378

Receivables and sundry current assets 129,608 52,472

Cash and cash equivalents 2,003 681

198,989

Prepaid expenses and deferred charges 2,511 105

218,536 121,539

Equity & liabilities

9-30-2000 9-30-1999

DM ‘000 DM ‘000

Equity

Share capital 104 104

Additional paid-in capital 11,827 11,827

Profit/(loss) carryover 2,973 (2,816)

Net income 9,155 5,789

24,059

Accruals 32,544 12,730

Liabilities 161,932 93,904

Deferred income 1 1

218,536 121,539

F-67

ANNUAL FINANCIAL STATEMENTS FOR THE FISCAL YEARENDED SEPTEMBER 30, 2000

INCOME STATEMENT

1999/2000 1998/1999

DM ‘000 DM ‘000

Net sales 436,816 287,626

Increase in inventories of work in process 39,971 131,915

Total operating performance 476,787 419,541

Other operating income 3,236 2,571

Cost of materials (383,324) (362,075)

Personnel expenses (29,888) (19,241)

Amortization of intangible and depreciation of tangible assets (3,793) (2,817)

Other operating expenses (45,827) (30,901)

Net interest result (3,340) 354

Result from ordinary operations 13,851 7,432

Income taxes (4,647) (1,699)

Other taxes (49) 56

Net income 9,155 5,789

F-68

ANNUAL ACCOUNTS FOR THE FISCAL YEARENDED SEPTEMBER 30, 2000

NOTES TO THE FINANCIAL STATEMENTS

(I) GENERALThe annual financial statements of NORDEX AG for the fiscal year ended September 30, 2000, havebeen prepared according to HGB and GmbHG provisions.

In the balance sheet and income statement, certain captions have been summarized for enhancedtransparency of presentation but are detailed further down in these Notes.

The income statement has been presented in the total-cost format.

In derogation of the prior-year practice, the other (non-income) taxes are shown after the result fromordinary operations.

(II) ACCOUNTING AND VALUATION PRINCIPLESIntangible assets are valued at cost less straight-line amortization.

Tangible assets are valued at (purchase or production) cost, less straight-line depreciation. Theproduction cost of internally manufactured assets includes besides direct costs also proratedoverheads.

For plant and equipment purchased in the first half-year, the full annual rate of depreciation is appliedwhile for additions in the second 6-month period, half the annual rate is used.

Grants received are offset against the cost of the office building and wind turbine in Rerik.

So-called low-value assets (i.e., at net cost of DM 800 each or less) are fully written off pursuant to Art.6(2) German Income Tax Act (‘‘EStG’’).

Financial assets are stated at cost.

Current assets are shown at the lower of cost or market.

Inventories are stated at the lower of (purchase or production) cost or market. Production cost includesdirect materials, direct labor, as well as any production overheads subject to capitalization under taxregulations. Work in process is stated at net realizable value to allow for any anticipated losses.

The deduction of prepayments received from inventories is openly disclosed.

The receivables and sundry current assets are stated at face or par value. Specific bad-debt allowancesaccount for identifiable individual risks, while a general allowance for doubtful accounts provides forthe standard collection risk.

The other accruals provide for all foreseeable risks and uncertain obligations and are determinedaccording to principles in line with sound business judgment.

Liabilities are stated at the repayment or settlement amount.

Currency translationForeign-currency credit balances are translated at the closing rate. For the translation of foreign-currency receivables, the historical rate or any lower current rate as of balance sheet date has beenused.

F-69

(III) COMMENTS ON THE BALANCE SHEET

(1) Fixed assetsThe movement and development of the various fixed assets are shown in the fixed-asset analysis.

(2) InventoriesBreakdown of inventories:

9-30-2000 9-30-1999

DM ‘000 DM ‘000

Raw materials and supplies 49,647 56,307

Work in process 199,956 159,984

Prepayments made 16,038 9,085

265,641 225,376

Less prepayment received (198,263) (170,765)

67,378 54,611

(3) Receivables and sundry current assetsRemaining

term of1 year or less

Remainingterm above

1 yearBalance at

9-30-2000Balance at

9-30-1999

DM ‘000 DM ‘000 DM ‘000 DM ‘000

Trade receivables 101,036 0 101,036 32,897

Intercompany receivables 24,318 0 24,318 17,945

thereof due from shareholders (0) (0) (0) (0)

Receivables under investor/investee relations 17 0 17 0

Sundry current assets 4,237 0 4,237 1,630

129,608 0 129,608 52,472

Trade receivables also include accounts due from non-German customers and receivables denominatedin foreign currencies.

The sundry current assets chiefly comprise loans and insurance claims receivable.

(4) Cash & cash equivalentsThis caption covers cash on hand and in bank.

(5) Accruals9-30-2000 9-30-1999

DM ‘000 DM ‘000

Tax accruals 6,218 1,699

Other accruals 26,326 11,031

32,544 12,730

The other accruals mainly provide for accrued contract-related warranties as well as accrued payrollcosts.

F-70

(6) LiabilitiesRemaining

term1 year or less

Balance at9-30-2000

Balance at9-30-1999

DM ‘000 DM ‘000 DM ‘000

Trade payables 66,932 66,932 49,279

Intercompany payables 84,558 84,558 38,690

thereof due to shareholders (0) (0) (0)

Sundry liabilities 10,442 10,442 5,935

thereof for taxes (8,295) (8,295) (3,512)

thereof for social security (461) (461) (408)

161,932 161,932 93,904

The intercompany payables mainly refer to liabilities from intragroup finance transactions.

The sundry liabilities substantially comprise a VAT debt payable to the tax office, as well as the residualSeptember 2000 payroll, and social security taxes.

(7) Contingent liabilities and other financial obligationsReportable contingent liabilities under the terms of Art. 268(7) HGB in conjunction with Art. 251 HGBdid not exist at balance sheet date.

The other financial obligations as of balance sheet date total DM 3.969 million under leases.

(IV) COMMENTS ON THE INCOME STATEMENT

(1) Net sales1999/2000 1998/99

DM ‘000 DM ‘000

Germany:

Revenues from the sale of wind turbines 287,689 231,304

Service, maintenance 1,980 2,042

Power supply 1,218 838

Other sales revenues 2,822 0

293,709 234,184

Abroad:

Revenues from the sale of wind turbines 110,853 51,445

Service, maintenance 2,286 95

Other sales revenues 573 917

Power supply 18 0

Cash discounts granted (36) (1)

113,694 52,456

Intercompany transfers: 29,413 986

436,816 287,626

(2) Cost of materials1999/2000 1998/99

DM ‘000 DM ‘000

Cost of raw materials and supplies 322,954 305,801

Cost of services purchased 60,370 56,274

383,324 362,075

F-71

(3) Personnel expenses1999/2000 1998/99

DM ‘000 DM ‘000

Wages and salaries 26,353 17,224

Social security taxes 3,535 2,017

29,888 19,241

(4) Net interest result1999/2000 1998/99

DM ‘000 DM ‘000

Other interest and similar income 1,032 1,941

– thereof from group companies DM 0.762 million (down from DM 1.752 million)

Interest and similar expenses (4,372) (1,587)

– thereof to group companies DM 2.689 million (up from DM 0.112 million)

(3,340) 354

(5) Other operating expensesThe other operating expenses include general business and administrative expenses not disclosableseparately, as well as selling expenses.

(6) Write-down in prior periodsDue to the write-down charged in previous years at a total DM 0.851 million and the ensuing favorableimpact on taxable income in future periods, we expect the annual tax burden to rise in the years ahead.

(V) ADDITIONAL DISCLOSURES

HeadcountBreakdown of the Company’s average workforce:

1999/2000 1998/99

White-collar employees 155 108

Blue-collar employees 214 155

369 263

As of September 30, 2000, the Company had 405 employees (up from 319).

Corporate boardsManagement Board members in fiscal 1999/2000:

Dipl.-Ing. Dr. Thomas Tschiesche, Oberhausen,

Carsten Pedersen, Give, Denmark, and

Dipl.-Ing. Theo Becker (as from March 1, 2000), Essen.

The Management Board’s total compensation in fiscal 1999/2000 totaled DM 0.385 million.

F-72

Shareholdings

Interest held Equity

Latest netincome/

(net loss)in % in LCU ‘000 in LCU ‘000

Shares in group companiesNORDEX Iberica Borsig Energy S.A., Barcelona, Spain 100 Pts 10,000 Pts 912

NORDEX Hellas E.P.E., Athens, Greece 100 Dr 6,000 —1

NORDEX Omnical Energy Services (Shanghai) Co. Ltd.,Shanghai, PR China 100 US$ 200 Yuan (399)

NORDEX USA Inc., United States 100 US$ 1 —1

InvesteeXian NORDEX Wind Turbine Co. Ltd., Xian, PR China 40 US$ 2,100 Yuan 0

1 Latest figures were not yet available.

Group affiliationNORDEX GmbH is a group company of Babcock Borsig AG, Oberhausen, Germany. The Company’sannual accounts are included in the consolidated accounts of Babcock Borsig AG, Oberhausen, and ofBDAG Balcke-Durr AG, Ratingen. The consolidated accounts of Babcock Borsig AG will be filed with theLocal Court of Oberhausen.

Rerik, November 23, 2000

sgd. Dr. Thomas Tschiesche sgd. Carsten Pedersensgd. Theo Becker

F-73

Fixed-asset analysis

Cost(carryover) Additions

Investmentgrant

received in1999/2000

Booktransfers Disposals

Accumul.amortiz./

depreciation/write-down

Bookvalue at

9-30-2000

Amortizationand

depreciationin fiscal year

DM ’000 DM ’000 DM ’000 DM ’000 DM ’000 DM ’000 DM ’000 DM ’000

Intangible assets

Concessions, franchises,industrial-propertyand similar rights andassets 1,804 294 87 611 85 1,344 1,193 444

Prepayments onintangibles 1,103 1,993 0 (611) 0 0 2,485 0

2,907 2,287 87 0 85 1,344 3,678 444

Tangible assets

Land, equivalents titles,and buildings(including on leasedland)

Developed land andequivalent titles 108 0 0 0 0 0 108 0

Commercial buildings 1,885 22 0 0 20 538 1,349 90

Other buildings 0 398 709 4,860 1,620 68 2,861 73

1,993 420 709 4,860 1,640 606 4,318 163

Production plant andequipment 7,337 774 0 0 5,936 1,148 1,027 1,059

Other plant, factory andoffice equipment 5,315 4,405 537 74 1,016 2,616 5,625 2,127

Prepayments ontangibles, constructionin progress 594 4,805 0 (4,934) 0 0 465 0

15,239 10,404 1,246 0 8,592 4,370 11,435 3,349

Financial assets

Shares in groupcompanies 457 38 0 0 60 0 435 0

Investments 1,056 432 0 0 0 0 1,488 0

1,513 470 0 0 60 0 1,923 0

19,659 13,161 1,333 0 8,737 5,714 17,036 3,793

F-74

AUDITOR’S OPINION

We audited the annual accounts (including the accounting system) and management report preparedby NORDEX GmbH, Rerik, for the full fiscal year ended September 30, 2000. The accounting andpreparation of the annual accounts and management report in accordance with German CommercialCode regulations are the responsibility of the Company’s Management Board. Our responsibility is,based on our audit, to express an opinion on the annual accounts (including the accounting system)and management report.

We conducted our annual audit in accordance with the provisions of Art. 317 HGB and with due regardto generally accepted standards on the audit of financial statements as established by IDW, theInstitute of Sworn Public Auditors in Germany. Those standards require that we plan and perform theaudit to obtain reasonable assurance that any misstatement or fraud which has a material impact onthe view of the net assets, financial position and results of operations as presented by the annualaccounts in accordance with generally accepted accounting principles and by the management reportis identified. When planning the audit procedures, knowledge and understanding of the Company’sbusiness, its economic and legal environment as well as sources of potential errors are given dueconsideration. An audit includes examining, largely on a test basis, the internal control system’seffectiveness and the evidence supporting the amounts and disclosures in the accounting, annualaccounts, and management report. An audit also includes assessing the accounting principles used,and significant estimates made, by the Company’s Management Board, as well as evaluating the overallpresentation of the annual accounts and management report. We believe that our audit provides areasonable basis for our opinion.

Our audit did not result in any objections or exceptions.

It is our opinion that the annual accounts, with due regard to accounting principles generally acceptedin Germany, present fairly, in all material respects, the Company’s net assets, financial position andresults of operations. The management report gives a true and fair view of the Company’s overallposition and the risks inherent in its future development.

Cologne, November 24, 2000

BDO Deutsche WarentreuhandAktiengesellschaft

Wirtschaftsprufungsgesellschaft

(Dr. Scheur)Wirtschaftsprufer

(Schmoller)Wirtschaftsprufer

F-75

[This page is intentionally left blank]

Recent Developments and Outlook

During the first quarter of the fiscal year 2000/2001, which started on October 1, 2000, Nordex AG tookup its activity as a holding company, having consolidated its five subsidiaries through its principalshareholders, Borsig Energy GmbH and Nordwerk A/S.

In the first quarter of the current fiscal year Nordex AG, in addition to the cost of establishing thebusiness operations, incurred expenses primarily for the restatement of the Group quarterly accountsaccording to IAS (EUR 68 thousand), communications consultancy in preparation for the Offering (EUR30 thousand) as well as recruitment expenses (EUR 26 thousand). Further, in relation to the plannedOffering and the related expenses, reserves of EUR 223 thousand were established in the IAS Pro FormaConsolidated Interim Financial Statement as of December 31, 2000.

The Nordex Group was able to conclude contracts for the supply of 113 wind turbines in the firstquarter of the current fiscal year. During the same period, 46 wind turbines and through the end ofFebruary 2001 another 52 wind turbines were installed. The total operating performance of the NordexGroup during the first quarter of fiscal year 2000/2001 was EUR 69 million. In the first quarter of thefiscal year 2000/2001 costs of EUR 50.8 million for materials, EUR 5.7 million for personnel and EUR 9.5million for other operating expenses were incurred. The number of employees rose to 634 at December31, 2000, of which 458 (72%) were employed by Nordex Energy GmbH.

For the rest of the fiscal year 2000/2001 the Nordex Group expects that the sales of the 1.5 megawatt-Plant S-70 in Germany will continue to be strong and that first ventures elsewhere in Europe with thistype could be realized. The Company has noted a strong market interest for the new N-80 with 2.5megawatts both in Germany and abroad. The main focus for the foreign market remain the well-established N-43, N-50, N-60 and N-62. In addition to a core market which is continuing to be busy,especially in Germany and Denmark, the Nordex Group is expecting to realize a number of large scaleprojects abroad, and, in February 2001, signed a contract for the supply of a 20 megawatt windfarm inCanada and in March 2001 a contract for the supply of a 40 megawatt windfarm in the United States.

The positive business expectations are based on the development of the in-house rotor production,which has so far preceded in accordance with plan, with the industrial wing production scheduled to beoperational by the end of the fiscal year, and the continuing development and increased use ofNORDEX Control with its advantages as compared to the steering concepts used by competitors in thepast. At the same time the administrative areas of the Nordex Group are being, where so required,continuously expanded.

The Nordex Group further plans to develop its sales activities in what it considers to be major growthmarkets – United States, Spain as well as in China – but also in France and the U.K. The Companyexpects that the focusing of its management will lead to a further strengthening of the market positionthere. The same also applies to the consolidation of the procurement and storage at the productionlocation in Rostock resulting from the new group structure.

Oberhausen, March 2001 Nordex AG

A-1

[This page is intentionally left blank]

Glossary

Alternative energy sources Those sources of energy which renew themselves constantly andare practically inexhaustible: solar energy, biomass, d windenergy, ambient heat, etc. Contrast with d conventional energysources.

Asynchronous generator The rotation speed of the rotor of an asynchronous generator isdifferent to the d grid frequency (50 Hz in Europe Hertz). Due toits construction it is very robust and does not require muchmaintenance. The double-fed asynchronous generator has severaltechnical advantages. Due to the additional costs the decision touse a double-fed asynchronous generator is a balancing ofeconomic and technical considerations. Double-fed asynchrouousgenerators have been used for several years in conventional powerplants which means that it is possible to rely on operational know-how.

Average annual wind speed The average wind speed over a year, measured in d m/s.

Blade pitch adjustment Turning the rotor blades of a d pitch-regulated turbine aroundtheir longitudinal axis. In the case of a pitch-regulated windturbine, the turbine’s electronic controls constantly measures thepower output. When the power output is too high, the controllersends a command to the blade pitch mechanism whichimmediately pitches (turns) the rotor blades slightly out of thewind. Conversely, the blades are turned back into the windwhenever the wind drops again. The rotor blades thus have to beable to turn around their longitudinal axis (to pitch). During normaloperation, the blades pitch a fraction of a degree at a time whilethe rotor is continuing to turn.

Designing a pitch-regulated wind turbine requires sophisticatedengineering to make sure that the rotor blades pitch exactly theamount required. On a pitch-regulated wind turbine, theelectronics control will pitch the blades every time the windspeed changes, which ensures that the rotor blades are always atthe optimum angle in order to maximise output across all windconditions.

Certification Wind turbines are certified pursuant to certain regulations. Thisensures the correct planning and safety of operation of the windturbines. Germanische Lloyd (GL), based in Hamburg, is theauthoritative body for wind turbine certification in Germany.

Constant-speed wind turbine Turbine which can operate at only one or ^ in worst cases two fixedrotation speeds. While technically far simpler, these turbines do notpermit optimal use of d wind energy (see d variable-speed windturbine).

Conventional energy sources All d fossil fuels as well as nuclear power and hydroelectric power.

Cut-out speed The wind speed at which the d wind turbine is shut down forsafety reasons (as a rule around 25 meters per second d m/s).

G-1

Drive train The mechanical component of the turbine which transmits themotion of the rotor to the generator. The drive train consists of therotor shaft, gear, coupling and the generator armature.

EEG Abbreviation for ‘‘Erneuerbare Energien Gesetz’’ (RenewableEnergies Act). For the Federal Republic of Germany the EEGsuperseded the ‘‘Stromeinspeisungsgesez’’ (Act on SupplyingElectricity from Renewable Energies into the Public Grid). TheEEG has been in force since April 1, 2000.

Engineering Technical calculations and construction works

Fossil fuels Energy reserves formed millions of years ago by the decompositionof plants and animals in a vacuum, under high temperatures andpressure. These fuels include oil, gas, lignite and hard coal.

Gear The gear lies between the slow-moving d rotor shaft and the fast-moving generator shaft. The gear causes the generator shaft toturn approximately 70 times faster than the rotor shaft. This isessential as the generator must turn at a much greater speed thanthe rotor. All of the rotor’s output is transferred to the generatorvia the gear.

Generator The generator transforms the kinetic energy of the rotor intoelectrical energy. Generators for wind turbines differ fromgenerators for conventional power plants. One reason is that thegenerator is connected to a power source (the rotor) with a variableoutput of kinetic energy. Normally an asynchronous generator isused as electrical generator. (d asynchronous generator).

Generator slip The slip is the difference between the rotation speed of thegenerator armature and the grid frequency in the stator of thegenerator, it occurs only in asynchronous generators and allowsthe simple operation of the turbine at various rotor rotation speeds(see d rotation range, d asynchronous generator and dinverter).

Grid frequency The rate of oscillation of an electricity grid: 50 Hz in Europe, 60 Hzin the US.

Inverter An electronic device which regulates the energy produced by thed asynchronous generator and feeds it into the grid. An inverter isrequired in variable-speed turbines or those not directly connectedto the grid. The speed of the rotor’s rotation changes depending onthe wind conditions, so the inverter adjusts the energy from thegenerator to the grid frequency, allowing the turbine to operate atvariable speeds.

Kilowatt (kW) 1,000 watts; a watt is a unit of measure for electrical power.

Kilowatt hours Unit for energy which is fed into a grid.

Life expectancy The period of time during which a turbine is operational. Lifeexpectancy depends on the quality of the turbine itself and on localclimatic conditions such as the level of turbulence at the site.

m/s Meters per second. A unit for measuring wind speed.

G-2

Medium voltage A type of voltage. The grid distinguishes between high voltage(greater than 30kV) for long-range transmission, medium voltage(up to 30kV) for local grids and low voltage (up to 1 kV) for normalend-users. Wind turbines are normally connected to the medium-voltage grid via a transformer.

Megawatt (MW) Unit for measuring the performance of a wind turbine. 1MW=1,000kilowatts or 1,000,000 watts.

Megawatt turbine A turbine with a nominal output of one megawatt or more.

Multipole generator A generator with several poles which raises the generatedfrequency at low rotor speeds. This can mean that a complicatedd gear between rotor and generator may not be needed.

Nacelle The nacelle contains the most important components of the windturbine the d drive train as well as the electronic and electricalcomponents. The maintenance staff can access the nacelle fromthe mast. The rotor is located at the front of the nacelle andconsists of the rotor blades and the rotor hub.

Nominal output The ultimate permanent output level of a wind turbine or rather itsgenerator. If a wind turbine has a nominal output of 1,300kW, itmeans that it produces 1,300kW per hour if it is operating atnominal level. The nominal output of a wind turbine, however, doesnot give an indication as to the level of energy it actually produces,since a wind turbine operates only for a few hours per year at itsnominal level. In order to assess how much energy a wind turbineactually produces it is necessary to know the wind conditions onthe individual site. An expertise on wind conditions is the best wayto assess this.

Nominal rotation speed Rotation speed of the rotor/generator required for nominal output.

Offshore wind turbine A turbine constructed at sea.

Onshore wind turbine A turbine constructed at land.

Operations control system A system automatically controlling a turbine’s operation.

OptiSlip OptiSlip (optional slip) is a special control system for dasynchronous generators to match the rotation speed of therotor to the grid frequency which works on the basis of anincreased generator slip. The system is much simpler in technicalterms than normal asynchronous technology.

Output Output is energy per unit of time measured in Watts. Output ismeasured at any specific time, while energy is measured over aperiod of time (d nominal output.)

Pitch bearing The component which attaches the turbine d nacelle to the tower,allowing it rotate about the tower. A turbine’s tower is anchored inthe ground, and as it must be possible for the rotor, generator, etc.to be turned into the wind, these are mounted on the pitch bearingwhich allows rotary movement.

Pitch-regulated wind turbine A specific type of wind turbines which ensures a steady rotorrotation speed by using a d blade pitch adjustment. The turbine’selectronics sensor constantly monitors the power output of the

G-3

turbine. When the power output is too high, the controller sends acommand to the blade pitch mechanism which immediately pitches(turns) the d rotor blades slightly d out of the wind. Conversely,the blades are turned back into the wind whenever the wind dropsagain. It must therefore be possible to turn the rotor blades aroundtheir longitudinal axis. On a pitch-regulated wind turbine, thecontroller will pitch the blades every time the wind changes; thisensures that the rotor blades are always at the optimum angle inorder to maximise output. Due to the complex technology involved,pitch-regulated turbines require greater investment than stalltechnology.

‘‘Plug and play’’ assembly IT term meaning the assembly of a device or machine fromcomponents without the need for engineering.

Power curve A turbine’s power curve shows the relationship between electricpower output and wind speed.

Power regulation Principles which govern the operation of a wind turbine, e.g.defining the cut-in speed, the speed at which electricity isproduced or the speed at which it is turned out of the wind.

Renewable energy sources see d alternative energy sources

Retail fund A standardized form of asset management by an investmentcompany. In contrast to individual portfolio management, theinvestor has no influence on management and investmentstrategy. The corporation is only bound to observe legalregulations and its self-imposed investment guidelines.

Rotation range The difference, given as a percentage, between the cut-out speedand the cut-in speed.

Rotor area The area swept out by the rotor during operation. The larger therotor diameter, the greater the swept area and therefore theoutput.

Rotor blades The rotating wings of a turbine which are driven directly by thewind.

Rotor hub The part of the wind turbine to which the rotating rotor blades areattached. The hub is situated in the middle of the rotor andconnects this to the generator armature via the shaft and in somecases a gear.

Rotor shaft A machine component which transmits the rotor’s motion to a gearor to the generator armature.

Shaft A machine component which transmits the rotor’s motion to afixed gear, which is in turn connected to the generator armature.Also called rotor shaft.

Stalling A physical situation which stops the rotor’s motion. Stalling occurswhen the angle of the rotor blade to the directions of the wind istoo acute. The lift force on the rotor increases with the angle of theblade to the direction of the wind up to a certain point, at whichturbulence occurs on the surface facing away from the wind. Thisturbulence causes the rotor to slow or stop.

G-4

Stall-regulated wind turbine Stall-regulated wind turbines have d rotor blades bolted onto thed hub at a fixed angle. The geometry of the rotor blade profile hasbeen aerodynamically designed to ensure that when the windspeed becomes too high, it creates turbulence on the side of therotor blade which is not facing the wind. This d stalling preventsthe lifting of the rotor blade from acting on the rotor.

The basic advantage of stall regulation is that there is no need formoving parts in the rotor itself, or a complex control system. Onthe other hand, stall regulation represents a very complexaerodynamic system which also presents many challenges withregard to the structural dynamics of the whole turbine, e.g.avoiding stall-induced vibrations. Stall regulation is more simplethan pitch regulation and is therefore cheaper. Approximately twothirds of the wind turbines currently being installed worldwide arestall-regulated.

Supply management The Company’s organization and administration of supply andinventory management for turbine components.

Turn out of the wind Turning the turbine so that the rotor blades are no longerperpendicular to the wind direction. This is mainly used formaintenance work.

Variable-speed wind turbine Variable speed turbines can be operated with variable rotor speeds.This allows a better adjustment to the wind speed and increasedexploitation of the kinetic energy of the wind (d asynchronousgenerator and d inverter).

Volt (V) Unit of electric potential. 1,000 V = 1 kV

Voltage peaks Voltage peaks occur when the rotation speed of a turbine is toohigh. At nominal rotation speed and nominal output, the generatorproduces the nominal voltage. If the rotation speed is too high,voltage peaks occur which can lead to faults.

Wind energy The energy converted from the kinetic energy of the air.

Wind farm Several wind turbines in the same place. This, in particularsimplifies service.

Wind regime A classification of locations according to strength of wind.A location where a certain wind strength is predominant willbelong to the corresponding wind regime.

G-5

[This page is intentionally left blank]

On the basis of the above

Company Report

52,050,000 bearer shares- with a stated value of E1.00 per share -

Nos. 00000001- 52,050,000

each carrying full dividend rights from the beginning of fiscal year 2000/2001 i.e. from October 1,

2000

composed of

18,000,000 placed bearer shares- with a stated value of E1.00 per share -

from the capital increase against cash contributionsresolved by the Company’s Ordinary General Meeting on February 21, 2001

and

13,300,000 placed bearer shares- with a stated value of E1.00 per share -from the holdings of Selling Shareholders

- German Securities Identification Number (WKN) 587 357 -

and

20,750,000 bearer shares subject to lock-up- with a stated value of E1.00 per share -from the holdings of Selling Shareholders

of which up to

4,700,000 bearer shares- with a stated value of E1.00 per share -

from the holdings of Selling Shareholders is made available to Dresdner Bank Aktiengesellschaft asa loan

in respect of the Over-allotment Option granted to Dresdner Bank Aktiengesellschaft,which will for this purpose be released under a freely tradeable securities identification number

and

400,000 bearer shares- with a stated value of E1.00 per share -

from the holdings of a Selling Shareholder made available to Dresdner Bank Aktiengesellschaft andWestdeutsche Landesbank Girozentrale as a loan

in their capacity as designated sponsors,which will for this purpose be released under a freely tradeable securities identification number

- German Securities Identification Number (WKN) 621058 -

and up to

3,400,000 bearer shares- with a stated value of E1.00 per share -

in respect of subscription rights for bearer sharesfrom the contingent capital increase of up to E3,400,000.00 resolved by the Company’s OrdinaryGeneral Meeting on February 21, 2001 each carrying full dividend entitlement as from the fiscal

year in which the rights are exercised

of

Nordex Aktiengesellschaft, Oberhausen

were admitted to the Geregelter Markt and to trading on theNeuer Markt

of the Frankfurt Stock Exchange

Frankfurt am Main, Dusseldorf, Munich, March 30, 2001

Dresdner BankAktiengesellschaft Westdeutsche Landesbank Girozentrale

BHF-BANKAktiengesellschaft

COMMERZBANKAktiengesellschaft

Bayerische Hypo- und VereinsbankAktiengesellschaft

[This page is intentionally left blank]

SUMMARY OF CERTAIN DIFFERENCESAMONG GERMAN (HGB), UNITED STATES (US GAAP)AND INTERNATIONAL (IAS) ACCOUNTING PRINCIPLES

Certain selected financial data of the Nordex Group contained in this Offering Memorandum wereprepared in accordance with German Commercial Code provisions reflecting German principles ofadequate and orderly accounting. German Commercial Code provisions differ in some respects fromthe Generally Accepted Accounting Principles in the United States (‘‘US GAAP’’) and from those in theproposals made by the International Accounting Standards Committee (the ‘‘IASC’’) to harmoniseinternational presentation of accounts in the form of International Accounting Standards (‘‘IAS’’).

Below is a summary of some essential differences among the German provisions, US GAAP and IAS.This summary does not explain all of the differences that are of importance for preparing annualfinancial statements. The following explanation also does not describe all of the differences that canaffect the presentation of the assets, financial position and earnings situation of the Nordex Group.

Fundamental Differences

HGB accounting, US GAAP accounting and IAS accounting pursue fundamentally different accountinggoals.

While accounting according to the German Commercial Code gives special emphasis to the principle ofprudence and protection of creditors, US GAAP and IAS accounting give priority to providingshareholders with information relevant to decisions. Therefore, the comparability of annual financialstatements — both over different years as well as of different companies — and income determinationby period are given more emphasis under US GAAP and IAS than under HGB.

In addition, under German law, financial statements prepared in accordance with the Commercial Codealso form the basis for the tax balance sheet and, therefore, tax considerations influence considerablythe preparation of the annual financial statement. Companies therefore use somewhat conservativevaluation methods, to some extent, in their financial statements.

Giving priority to the principles of conveying information relevant for decisions and comparability ofannual financial statements instead of to the principle of prudence under US GAAP and IAS results, incertain situations, to cases in which unrealised results are shown. This applies to transactions in foreigncurrencies, to long-term custom orders and to showing marketable securities in the balance sheet.

Long-term custom orders are shown in the balance sheet under certain conditions according to thepercentage-of-completion method. This method recognizes sales and also profits from a long-termorder corresponding to the progress of the order, whereas HGB allows a realisation of results for orderscarried out over several years only after the full completion of the order.

With marketable securities being held only for the short to medium-term — in contrast to theaccounting treatment under HGB — a market valuation is prescribed by both IAS and US GAAP in whichthe unrealised profit from securities held for a short period is considered as fully affecting net incomein the profit and loss statement. For securities held medium-term, market changes under US GAAPhave a neutral effect on shareholders’ equity, whereas IAS allows the choice of either treating thesechanges in value as having an effect on results or to treat them neutrally.

Goodwill

According to the provisions of the German Commercial Code, for an affiliated group’s financialstatement, the differential amount between the purchase price of a company and the current marketvalue of the acquired net assets (goodwill) can be set off with reserves (with a neutral effect on results)or carried as an asset on the balance sheet and depreciated during its expected useful life, as a rule 5 to15 years, with an effect on the financial statements According to German Accounting Standard No. 4(DRS 4), ‘‘Acquisition of Companies in Consolidated Statements’’, issued by the German Accounting

B-1

Standards Board (‘‘DRS’’), the charging of the company’s value to the group’s own equity in a mannerthat does not affect income is, however, not permissible. DRS has, inter alia, responsibility fordeveloping recommendations regarding the application of the basic principles of consolidatedaccounting.

According to currently applicable US GAAP, goodwill must be carried as an asset on the balance sheetand depreciated over the expected useful life, with 40 years being the maximum.

According to IAS, goodwill also must be shown as an asset on the balance sheet with subsequentdepreciation over the expected useful life. As a rule, the depreciable life is a maximum of 20 years;longer depreciable lives are possible in justified exceptional cases.

Tangible Assets

German companies frequently orient themselves in assessing depreciation for tangible assets(buildings, technical equipment, tools, furniture and fixtures) on the useful life customary for theircompany as laid down by the tax administration.

According to US GAAP and IAS, tangible assets are depreciated on a straight-line basis over theirexpected useful life. This difference in depreciation policy can result in companies that prepare theirbalance sheet in accordance with the German Commercial Code basically showing a lower book valuefor tangible assets than companies that prepare their balance sheets in accordance with US GAAP orIAS. Tax-motivated special depreciation as well as tax-motivated reserves in ‘‘reserves for specialdepreciation’’ are prohibited under international principles for rendering accounts.

According to IAS, a tangible asset can also be assessed with its ‘‘new valuation amount’’, whichcorresponds to its adjusted value (fair value) at the time of the new valuation, less subsequentcumulative normal depreciation. Increases in value are basically credited to a special valuation reservewith no effect on the balance sheet. A rise in value will be displayed as earnings to the extent that anearlier new valuation gave rise to an expense-related depreciation.

Reserves

The German Commercial Code provisions require the creation of reserves for uncertain obligations aswell as for threatened losses from pending and unsettled business transactions. The level of reserves ismeasured according to the expenditure expected by a prudent and reasonable businessman. Reservesfor threatened losses from pending business transactions include all internal expenditures, includingindirect marketing and administrative expenses. Reserves for uncertain obligations towards thirdparties are recorded as soon as a legal obligation towards a third party has arisen or at least has beencaused in an economic sense.

Reserves may also be formed in German financial statements under HGB for expenditures that areexactly outlined and assigned to a financial year or to an earlier financial year and that, on the key datefor the financial statement, are probable or certain, but their amount or the time they will occur isindefinite.

According to US GAAP and IAS, reserves for uncertain obligations are expressed not only when it isprobable that the assets will diminish or an obligation has arisen, but also when the least loss can beestimated reliably. Future losses that cannot be estimated and costs and risks do not fit therequirements for the formation of reserves according to US GAAP and IAS. Application of GermanCommercial Code provisions can — especially because of the strong influence of tax-relatedconsiderations — lead to higher reserves than are possible under US GAAP and IAS. In the case of areduction of reserves in later periods, however, this effect would be reversed.

Long-term reserves for removal of waste rock or rubble or for the disposal of environmental waste,which under HGB accumulate over the period of the accompanying installations, are, under IAS,already accounted for at the time of the acquisition of the installation in the amount of the presentvalue of the estimated completion. These future expenditures count as acquisition costs of theinstallation in the same amount as the reserves amount. The period expenditure from this results from

B-2

the accrued interest of the present value and from the higher depreciation as compared to treatmentunder HGB. US GAAP has rules for such circumstances only in cases of environmental damage forwhich future elimination has been proscribed.

Pension Reserves

Under HGB, pension reserves are basically carried as liabilities on the balance sheet in the amount ofthe tax partial value which is determined on the basis of actuarial principles (expectancy-coveringprocedure). In evaluating the reserve, the current salary and pension level as well as an interest rate of6% is to be considered.

According to US GAAP and IAS, determining the pension reserves is done according to the expectancy-present value procedure, taking into account long-term trend assumptions concerning future salaryand pension developments as well as the current (US GAAP) or long-term (IAS) capital-market interestrate on the valuation key date.

Under IAS the expectancy-covering procedure is also permissible.

B-3

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of the material U.S. federal income tax consequences of the acquisition,ownership and disposition of Offered Shares by a U.S. Holder (as defined below). This summary dealsonly with initial purchasers of Offered Shares that are U.S. Holders and that will hold the OfferedShares as capital assets. The discussion does not cover all aspects of U.S. federal income taxation thatmay be relevant to, or the actual tax effect that any of the matters described herein will have on, theacquisition, ownership or disposition of Offered Shares by particular investors, and does not addressstate, local, foreign or other tax laws. In particular, this summary does not address tax considerationsapplicable to investors that own (directly or indirectly) 10% or more of the voting shares of theCompany, nor does this summary discuss all of the tax considerations that may be relevant to certaintypes of investors subject to special treatment under the U.S. federal income tax laws (such as banks,insurance companies, investors liable for the alternative minimum tax, individual retirement accountsand other tax-deferred accounts, tax-exempt organisations, dealers in securities or currencies, investorsthat will hold the Offered Shares as part of straddles, hedging transactions or conversion transactionsfor U.S. federal income tax purposes or investors whose functional currency is not the U.S. dollar).

As used herein, the term ‘‘U.S. Holder’’ means a beneficial owner of Offered Shares that is (i) a citizen orresident of the United States for U.S. federal income tax purposes, (ii) a corporation, or other entitytreated as a corporation, created or organised under the laws of the United States or any State thereof,(iii) an estate the income of which is subject to U.S. federal income tax without regard to its source or(iv) a trust if a court within the United States is able to exercise primary supervision over theadministration of the trust and one or more U.S. persons have the authority to control all substantialdecisions of the trust.

The Company believes and the summary assumes that the Company is not a passive foreign investmentcompany (a ‘‘PFIC’’) for U.S. federal income tax purposes. The Company’s possible status as a PFIC mustbe determined annually and therefore may be subject to change. If the Company were to be a PFIC inany year materially adverse tax consequences could result for U.S. Holders.

The summary is based on the tax laws of the United States, including the Internal Revenue Code of1986, as amended, its legislative history, existing and proposed regulations thereunder, publishedrulings and court decisions, as well as on the income tax treaty between the United States andGermany (the ‘‘Treaty’’), all as currently in effect and all subject to change at any time, possibly withretroactive effect.

THE SUMMARY OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FORGENERAL INFORMATION ONLY. ALL PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWNTAX ADVISERS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING THEOFFERED SHARES, INCLUDING THEIR ELIGIBILITY FOR THE BENEFITS OF THE TREATY, THEAPPLICABILITY AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND POSSIBLECHANGES IN TAX LAW.

Dividends

General. Distributions paid by the Company out of current or accumulated earnings and profits (asdetermined for U.S. federal income tax purposes), before reduction for any German withholding taxpaid by the Company with respect thereto, will generally be taxable to a U.S. Holder as foreign sourceordinary dividend income, and will not be eligible for the dividends received deduction allowed tocorporations. Distributions in excess of current and accumulated earnings and profits will be treated asa non-taxable return of capital to the extent of the U.S. Holder’s basis in the Offered Shares andthereafter as capital gain.

Foreign Currency Dividends. Dividends paid in euro will be included in income in a U.S. dollar amountcalculated by reference to the exchange rate in effect on the day the dividends are received by the U.S.Holder, regardless of whether the euro are converted into U.S. dollars. If dividends received in euro areconverted into U.S. dollars on the day they are received, the U.S. Holder generally will not be required to

B-4

recognise foreign currency gain or loss in respect of the dividend income. If the euro are convertedafter the date on which they are received, any gain or loss that a U.S. Holder recognises on theconversion will be U.S. source ordinary income or loss.

Effect of German Withholding Taxes. As discussed in ‘‘Taxation’’, under current law payments ofdividends by the Company to foreign investors are subject to German withholding taxes including asolidarity surcharge that is levied on the amount of tax withheld. The rate of withholding tax applicableto U.S. Holders that are eligible for benefits under the Treaty is reduced to a maximum of 15%. Asdiscussed under ‘‘Taxation,’’ U.S. Holders eligible for benefits under the Treaty can apply for a refund ofany taxes withheld in excess of this amount. For U.S. federal income tax purposes, U.S. Holders will betreated as having received the amount of German taxes withheld by the Company, and as then havingpaid over the withheld taxes to the German taxing authorities. As a result of this rule, the amount ofdividend income included in gross income for U.S. federal income tax purposes by a U.S. Holder withrespect to a payment of dividends may be greater than the amount of cash actually received (orreceivable) by the U.S. Holder from the Company with respect to the payment.

Under the current German tax regime (see ‘‘Taxation—Taxation of Dividends—Shareholders not Subjectto Unlimited Tax Liability’’), a U.S. Holder may claim an additional refund equal to 5% of the dividendpaid. For United States federal income tax purposes, the additional refund is treated as an additionaldividend equal to 5.88% of the amount of the dividend actually paid. The withholding tax deemed tohave been paid is equal to 15% of the sum of the dividend paid to the U.S. Holder and the 5.88%additional dividend. After September 30, 2002, Germany will not pay a tax credit to shareholders.Therefore, U.S. Holders will not be able to claim the additional tax refund equal to 5% of the dividendpaid and will not be required to include the additional dividend equal to 5.88% of the amount of thedividend actually paid in their income.

Subject to certain limitations, a U.S. Holder will generally be entitled to a credit against its U.S. federalincome tax liability, or a deduction in computing its U.S. federal taxable income, for German incometaxes withheld by the Company. U.S. Holders that are eligible for benefits under the Treaty will not beentitled to a foreign tax credit for the amount of any German taxes withheld in excess of the 15%maximum rate, and with respect to which the holder can obtain a refund from the German taxingauthorities. For purposes of the foreign tax credit limitation, foreign source income is classified intoone of several ‘‘baskets’’, and the credit for foreign taxes on income in any basket is limited to U.S.federal income tax allocable to that income. Dividends paid by the Company generally will constituteforeign source income in the ‘‘passive income’’ basket or, in the case of certain holders, the ‘‘financialservices income’’ basket. In certain circumstances, a U.S. Holder may be unable to claim foreign taxcredits (and may instead be allowed deductions) for foreign taxes imposed on a dividend if the U.S.Holder (i) has not held the Offered Shares for at least 16 days in the 30-day period beginning 15 daysbefore the ex dividend date, or (ii) holds the Offered Shares in arrangements in which the U.S. Holder’sexpected profit, after non-U.S. taxes, is insubstantial. U.S. Holders that are accrual basis taxpayers musttranslate German taxes into U.S. dollars at a rate equal to the average exchange rate for the taxableyear in which the taxes accrue, while all U.S. Holders must translate taxable dividend income into U.S.dollars at the spot rate on the date received. This difference in exchange rates may reduce the U.S.dollar value of the credits for German taxes relative to the U.S. Holder’s U.S. federal income tax liabilityattributable to a dividend. Prospective purchasers should consult their tax advisers concerning theforeign tax credit implications of the payment of German taxes.

Sale or other Disposition

Upon a sale or other disposition of Offered Shares, a U.S. Holder generally will recognise capital gain orloss for U.S. federal income tax purposes equal to the difference, if any, between the amount realisedon the sale or other disposition and the U.S. Holder’s adjusted tax basis in the Offered Shares. Thiscapital gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period in theOffered Shares exceeds one year. Any gain or loss will generally be U.S. source, except that losses willbe treated as foreign source to the extent the U.S. Holder received dividends that were includible in thefinancial services income basket during the 24-month period prior to the sale.

B-5

A U.S. Holder that receives euro upon sale or other disposition of the ordinary shares will realise anamount equal to the U.S. dollar value of the euro upon the date of sale (or, in the case of cash basisand electing accrual basis taxpayers, the settlement date). A U.S. Holder will have a tax basis in the euroreceived equal to the U.S. dollar amount of the euro received. Any gain or loss realised by a U.S. Holderon a subsequent conversion of euro will be U.S. source ordinary income or loss.

Passive Foreign Investment Company Considerations

A foreign corporation will be a PFIC in any taxable year in which, after taking into account the incomeand assets of the corporation and certain subsidiaries pursuant to the applicable ‘‘look-through rules,’’either (i) at least 75% of its gross income is ‘‘passive income’’ or (ii) at least 50% of the average value ofits assets is attributable to assets which produce passive income or are held for the production ofpassive income. The Company does not believe that it should be treated as a PFIC for U.S. federalincome tax purposes but the Company’s possible status as a PFIC must be determined annually andtherefore may be subject to change. This determination will depend in part on whether the Companycontinues to earn substantial amounts of operating income, as well as on the market valuation of theCompany’s assets and the Company’s spending schedule for its cash balances and the proceeds of theOffer. If the Company were a PFIC, U.S. Holders of Shares would be required (i) to pay a special U.S.addition to tax on certain distributions and gains on sale and (ii) to pay tax on any gain from the sale ofShares at ordinary income (rather than capital gains) rates in addition to paying the special addition totax on this gain. Prospective purchasers should consult their tax advisers regarding the potentialapplication of the PFIC regime.

Backup Withholding and Information Reporting

Dividends and other proceeds with respect to Offered Shares paid by a U.S. paying agent or other U.S.intermediary will be reported to the IRS and to the U.S. Holder as may be required under applicableregulations. Backup withholding at a rate of 31% may apply to these payments if the U.S. Holder failsto provide an accurate taxpayer identification number or certification of exempt status or fails to reportall interest and dividends required to be shown on its U.S. federal income tax returns. Certain U.S.Holders (including, among others, corporations) are not subject to backup withholding.

B-6

UNDERWRITING AND SALE

Dresdner Kleinwort Wasserstein and WestLB Panmure are the Joint Lead Managers for the Offering;Dresdner Kleinwort Wasserstein is the Sole Bookrunner and BHF–BANK, COMMERZBANK SECURITIESand HypoVereinsbank are the Co-Managers (together the ‘‘Managers’’).

Pursuant to the Underwriting Agreement, the Managers will agree, severally but not jointly, tounderwrite, at the Offer Price of E9 per Offered Share, up to the number of Offered Shares set forthopposite their names in the table below. Subject to certain conditions, Nordex has agreed to issue18,000,000 Offered Shares (the ‘‘New Shares’’) and the Selling Shareholders have agreed to sell13,300,000 Offered Shares (together with the Option Shares, the ‘‘Sale Shares’’) in the Offering. The NewShares will be subscribed for, and the Sale Shares will be purchased, by Dresdner Kleinwort Wassersteinfor the account of all Managers. Furthermore, the Selling Shareholders have agreed, subject to certainconditions, to sell up to an additional 4,700,000 Offered Shares (the ‘‘Option Shares’’) pursuant to theOver-Allotment Option (see ‘‘The Offering — Over-allotment Option’’). Pursuant to the terms of theUnderwriting Agreement, the Managers will subscribe for and purchase up to the total number ofOffered Shares listed below.

Manager Number of Offered Shares

Dresdner Bank Aktiengesellschaft q

Westdeutsche Landesbank Girozentrale q

BHF-BANK Aktiengesellschaft q

COMMERZBANK Aktiengesellschaft q

Bayerische Hypo-und Vereinsbank Aktiengesellschaft q

Total 36,000,000

The Offer Price per Offered Share will be determined jointly by the Joint Lead Managers, the SellingShareholders and Nordex on the basis of the results of the book-building process (see ‘‘The Offering’’).

The Company and the Selling Shareholders will pay to the Managers a commission of 4% of the OfferPrice for each Offered Share, other than the Option Shares, in respect of which the Selling Shareholderswill pay to the Managers a commission of 2.4375% of the Offer Price for each Option Share and anyOffered Shares placed on a preferential basis with employees of the Nordex Group, members of theManagement Board of the Company, managing directors of the Company’s subsidiaries and businesspartners, in respect of which the Company and the Selling Shareholders will pay to the Managers acommission of 1.3125% of the Offer Price per Offered Share. The Company and the SellingShareholders will also pay to the Managers, in their sole discretion, a success fee of up to 0.25% of theOffer Price for each Offered Share. In addition, the Company and the Selling Shareholders have agreedto reimburse the Managers in respect of certain of their expenses in connection with the Offering. TheUnderwriting Agreement entitles the Managers to be released and discharged from their respectiveobligations thereunder in certain circumstances prior to payment to the Selling Shareholders. Nordexand the Selling Shareholders have agreed to indemnify the Managers against certain liabilities inconnection with the Offering, including liabilities under United States federal securities laws. TheCompany and the existing shareholders of Nordex have agreed to certain restrictions on the sale,announcement of sale or transfer of bearer shares of Nordex (see ‘‘The Offering — Lock-UpAgreement’’).

The Managers propose to offer the Offered Shares to non-U.S. persons outside the United States inoffshore transactions in reliance on Regulation S and in accordance with applicable law, and theManagers, through their respective U.S. affiliates, propose to offer the Offered Shares to qualifiedinstitutional buyers in the United States pursuant to, and in reliance upon, Rule 144A. Each Managerhas agreed that, except as permitted under the Underwriting Agreement, it will not offer, sell or deliverthe Offered Shares within the United States. Terms used in this paragraph have the meanings given tothem by Regulation S. Transfer of the Offered Shares will be restricted as described under ‘‘Notice toInvestors’’.

B-7

No action has been or will be taken in any jurisdiction by the Managers that would permit a publicoffering of the Offered Shares or possession or distribution of this Offering Memorandum or any otheroffering of publicity material relating to the Offered Shares in any country or jurisdiction where actionfor that purpose is required. Each Manager has agreed to comply with all applicable laws andregulations in each jurisdiction in which it acquires, offers, sells or delivers Offered Shares or has in itspossession or distributes this Offering Memorandum or any such other material. Nordex and the SellingShareholders will have no responsibility for, and each Manager has agreed to obtain any consent,approval or permission required by it for, the acquisition, offer, sale or delivery by it of Offered Sharesunder the laws and regulations in force in any jurisdiction, to which it is subject or in or from which itmakes any acquisition, offer, sale or delivery. No Manager is authorized to make any representation oruse any information in connection with the issue and sale of the Offered Shares other than ascontained in this Offering Memorandum or any amendment or supplement to it.

United StatesEach Manager agrees and acknowledges that the Offered Shares have not been, and will not beregistered under the Securities Act or under the securities laws of any State of the United States andmay not be offered or sold within the United States, except pursuant to an exemption from, or in atransaction not subject to, the registration requirements of the Securities Act. Each Manager agreesand represents that: (i) it has not offered or sold, and will not offer or sell, any Offered Shares withinthe United States except to those who it reasonably believes to be QIBs (as defined in Rule 144A); (ii)neither it nor any person acting on its behalf has made or will make offers or sales of the OfferedShares in the United States by means of any form of general solicitation or general advertising (withinthe meaning of Regulation D) in the United States; and (iii) it has not entered and will not enter intoany contractual arrangement with any distributor (as that term is defined by Regulation S) with respectto the distribution of the Offered Shares, except with its affiliates or with the prior written consent ofNordex.

United KingdomEach of the Managers agrees and represents that: (i) it has not offered or sold and will not offer or sellany Offered Shares to persons in the United Kingdom except to persons whose ordinary activitiesinvolve them in acquiring, holding, managing or disposing of investments (as principal or agent) for thepurpose of their business or otherwise in circumstances that do not constitute an offer to the public inthe United Kingdom for the purposes of the Public Offers of Securities Regulations 1995; (ii) it hascomplied and will comply with all applicable provisions of the Financial Services Act of 1986 withrespect to anything done by it in relation to the Offered Shares in, from or otherwise involving theUnited Kingdom; and (iii) it has only issued or passed on, and will only issue or pass on, in the UnitedKingdom any document received by it in connection with the issuance of the Offered Shares to aperson who is of a kind described in Article 11(3) of the Financial Services Act 1986 (InvestmentAdvertisements) (Exemptions) Order 1996 or is a person to whom such document may otherwiselawfully be issued or passed on.

JapanEach Manager has agreed not to offer or sell, or procure any offers or sales of Offered Shares in Japanwithout the prior written consent of the Joint Lead Managers.

B-8