EX-99.2 4 exhibit992manner.htm UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF OTTO MANNER HOLDING AG Exhibit 99.2 Manner
Page 1


                                                      Exhibit 99.2







OTTO MÄNNER HOLDING AG

Bahlingen a.K.















Reviewed Consolidated Financial Statements,
including a German GAAP to US GAAP reconciliation
note

for the six-month period ended
30 June 2013






















Page 2


CONTENTS

REVIEW REPORT

LIST OF APPENDICES


CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2013                    Appendix 1

CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE PERIOD 1 JANUARY 2013 TO 30 JUNE 2013                    Appendix 2

CONSOLIDATED CASH FLOW STATEMENT
AS AT 30 JUNE 2013                                    Appendix 3

STATEMENT OF SHAREHOLDERS’ EQUITY
FOR THE PERIOD 1 JANUARY 2013 TO 30 JUNE 2013                    Appendix 4

NOTES ON THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS AT 30 JUNE 2013                                    Appendix 5

RECONCILIATION FROM GERMAN GAAP TO US GAAP                    Appendix 6

GENERAL ENGAGEMENT TERMS                            Appendix 7













Page 3



INDEPENDENT ACCOUNTANTS' REVIEW REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
OTTO MÄNNER HOLDING AG, BAHLINGEN a. K., GERMANY

We have reviewed the accompanying consolidated balance sheet of Otto Männer Holding AG, Bahlingen a. K., Germany as of June 30, 2013, and the related consolidated statement of profit and loss, stockholders’ equity, cash flows prepared under accounting principles generally accepted in Germany, including a reconciliation to accounting principles generally accepted in the United States of America for net income for the six-month period ended June 30, 2013 and stockholders’ equity as of June 30, 2013 (collectively, the “reconciliations”) that has been included as an appendix to the accompanying consolidated financial statements, in accordance with the Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to issue a report on these consolidated financial statements based on our review.

We conducted our interim review in accordance with the Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. These Standards require that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Based on our interim review, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements are not presented fairly, in all material respects in accordance with (i) accounting principles generally accepted in Germany and (ii) accounting principles generally accepted in the United States of America for the reconciliations.

The accompanying consolidated financial statements have been reissued with the reconciliations in adherence with SEC reporting requirements related to the anticipated sale of the Company’s subsidiaries to Barnes Group, Inc., a U.S. publicly-traded company

Freiburg, 28 October 2013


 
Bansbach Schübel Brösztl & Partner GmbH
 
Wirtschaftsprüfungsgesellschaft
Steuerberatungsgesellschaft
 





Schell
Wirtschaftsprüfer
(German Public Auditor)





Eichin
Wirtschaftsprüferin
(German Public Auditor)


        




Page 4


 
 
 
 
 
 
 
 
 
Appendix 1
CONSOLIDATED BALANCE SHEET AS AT 30 June 2013
OF OTTO MÄNNER HOLDING AG, BAHLINGEN A. K.
 
 
 
 
 
 
 
 
 
 
A S S E T S
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
31 Dec. 2012
 

 
 
 
EUR
 
KEUR
 
 
 
 
 
 
 
 
 
 
A.
FIXED ASSETS
 
 
 
 
 
 
I.
Intangible Assets
 
 
 
 
 
 
 
1.
Industrial property rights acquired against payment
 
 
 
 
 
 
 
 
and similar rights and values as well as licences
 
 
 
 
 
 
 
 
to such rights and values
584,115.26

 
 
 
675

 
 
2.
Advance payments
21,700.00

 
 
 
20

 

 

 
 
605,815.26

 
 
695

 
 
 
 
 
 
 
 
 
 
 
II.
Tangible Assets
 
 
 
 
 
 
 
1.
Property, rights equivalent to real property
 
 
 
 
 
 
 
 
and buildings including buildings on
 
 
 
 
 
 
 
 
third-party land
24,934,147.20

 
 
 
25,380

 

2.
Plant and machinery
8,813,664.76

 
 
 
7,743

 
 
3.
Other fixed assets and office equipment
1,453,392.89

 
 
 
1,511

 

4.
Advance payments and assets under construction
1,490,925.81

 
 
 
931

 

 

 
 
36,692,130.66

 
 
35,565

 
 
 
 
 
 
 
37,297,945.92

 
36,260

 
 
 
 
 
 
 
 
 
 
B.
CURRENT ASSETS
 
 
 
 
 
 
I.
Inventories
 
 
 
 
 
 
 
1.
Raw, auxiliary and operating materials
2,286,914.22

 
 
 
1,826

 
 
2.
Work in progress
7,760,880.40

 
 
 
7,558

 

3.
Finished goods and merchandise
2,281,195.54

 
 
 
1,622

 
 
 
 
 
 
12,328,990.16

 
 
11,006

 
II.
Receivables and other
 
 
 
 
 
 
 
assets
 
 
 
 
 
 
 
 
1.
Trade receivables
15,075,931.98

 
 
 
12,615

 

2.
Other assets
1,263,060.75

 
 
 
688

 
 
 
 
 
 
16,338,992.73

 
 
13,303

 

 

 
 
 
 
 
 
 
III.
Cash in hand and at credit institutions
 
 
 
 
 
 

and cheques
 
45,827,921.29

 
 
37,126

 

 

 
 
 
74,495,904.18

 
61,435

 
 
 
 
 
 
 
 
 
 
C.
PREPAID EXPENSES
 
 
659,094.14

 
983

 
 
 
 
 
 
 
 
 
 
D.
SURPLUS FROM OFFSETTING
 
 
 
 
 
 
 
 
 
 
 
 
6,788.88

 
68

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
112,459,733.12

 
98,746




Page 5


L I A B I L I T I E S
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
31 Dec. 2012
 
 
 
 
 
 
EUR
 
 
KEUR
 
 
 
 
 
 
 
 
 
 
A.
EQUITY
 
 
 
 
 
 
 
 
I.
Subscribed capital
 
10,000,000.00

 
 
10,000

 
II.
Retained earnings
 
 
 
 
 
 
 
1.
Legal reserve
1,000,000.00

 
 
 
1,000

 
 
2.
Other retained earnings
38,769,009.06

 
 
 
38,769

 
 
 
 
 
 
39,769,009.06

 
 
39,769

 
 
 
 
 
 
 
 
 
 
 
III.
Consolidated net profit
 
33,216,582.47

 
 
25,330

 
IV.
Currency translation difference
 
2,897,054.29

 
 
3,166

 
 
 
 
 
 
 
85,882,645.82

 
78,265

 
 
 
 
 
 
 
 
 
 
B.
PROVISIONS
 
 
 
 
 
 
1.
Provisions for taxation
 
2,596,156.60

 
 
2,149

 
2.
Other provisions
 
5,730,986.40

 
 
5,466

 
 
 
 
 
 
 
8,327,143.00

 
7,615

 
 
 
 
 
 
 
 
 
 
C.
LIABILITIES
 
 
 
 
 
 
1.
Amounts owed to credit institutions
 
2,878,968.63

 
 
3,329

 
2.
Advance payments received on orders
 
11,392,398.47

 
 
6,944

 
3.
Trade payables
 
2,893,389.07

 
 
1,898

 
4.
Other liabilities
 
886,552.56

 
 
460

 
 
 
thereof from taxes:
 
 
 
 
 
 
 
 
EUR 232.591,20 Previous year: KEUR 270
 
 
18,051,308.73

 
12,631

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
D.
DEFERRED TAX LIABILITIES
 
 
198,635.57

 
235

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
112,459,733.12

 
98,746


















Page 6



 
 
 
 
 
 
 
Appendix 2
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE PERIOD FROM 1 JANUARY 2013 TO 30 JUNE 2013
OF OTTO MÄNNER HOLDING AG, BAHLINGEN A. K.
 
 
 
 
 
 
 
 
1 January
 
 
 
 
 
 
 
to
 
 
 
 
 
 
 
June 30, 2012
 
 
 
 
EUR
 
KEUR
 
 
 
 
 
 
 
 
1.
Sales
 
43,880,421.20

 
 
39,714

 
 
 
 
 
 
 
 
2.
Change in stock
 
 
 
 
 
of finished goods and work in progress
318,818.22

 
 
(313
)
 
 
 
 
 
 
 
 
3.
Other operating income
826,177.37

 
 
983

 
 
of which from currency translation:
 
 
 
 
 
 
EUR 118.827,61 previous year: KEUR 431
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
45,025,416.79

 
40,384

 
 
 
 
 
 
 
 
4.
Material costs
 
 
 
 
 
a)
Costs for raw, auxiliary and
 
 
 
 
 
 
operating materials and for purchased goods
9,320,904.98

 
 
7,787

 
b)
Costs for purchased services
3,083,385.52

 
 
1,921

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.
Personnel costs
 
 
 
 
 
a)
Wages and salaries
11,972,403.52

 
 
11,483

 
b)
Social insurance contributions and contributions for
 
 
 
 
 
 
old-age pensions and for support
2,067,358.58

 
 
2,034

 
 
 
of which for pension provision:
 
 
 
 
 
 
 
EUR 65.721,00 previous year: KEUR 135
 
 
 
 
 
 
 
 
 
 
 
 
6.
Depreciation and amortization
1,549,086.34

 
 
1,318

 
 
 
 
 
 
 
 
7.
Other operating expenses
6,429,251.05

 
 
6,684

 
 
of which from currency translation:
 
 
 
 
 
 
EUR 136.664,03 previous year: KEUR 423
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(34,422,389.99
)
 
(31,227
)
 
 
 
 
 
 
 
 
8.
Other interest and similar income
133,646.61

 
 
142

 
 
 
 
 
 
 
 
9.
Interest and similar expenses
23,408.29

 
 
47

 
 
 
 
 
 
 
 
 
 
 
 
 
110,238.32

 
95

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10.
Profit or loss from normal business activity
 
10,713,265.12

 
9,252

 
 
 
 
 
 
 
 

Page 7


11.
Tax on income and profit
2,714,028.38

 
 
3,051

 
 
 
 
 
 
 
 
12.
Other taxes
112,714.38

 
 
149

 
 
 
 
 
 
 
 
 
 
 
 
 
(2,826,742.76
)
 
(3,200
)
 
 
 
 
 
 
 
 
13.
Consolidated balance sheet profit
 
7,886,522.36

 
6,052

 
 
 
 
 
 
 
 
14.
Profit carried forward from previous year
25,330,060.11

 
 
29,168

 
 
 
 
 
 
 
 
15.
Allocations to other revenue reserves
—

 
 
(5,603
)
 
 
 
 
 
 
 
 
 
 
 
 
 
25,330,060.11

 
23,565

 
 
 
 
 
 
 
 
16.
Consolidated balance sheet profit
 
33,216,582.47

 
29,617











































Page 8



 
 
 
 
 
 
Appendix 3
CONSOLIDATED CASH FLOW STATEMENT
AS AT 30 JUNE 2013
OF OTTO MÄNNER HOLDING AG, BAHLINGEN A. K.
 
 
 
 
 
 
 
 
 
The following cash flow statement divides the cash flows of the financial year into cash flows from operating, investing and financing activities whereby the total flow of funds from these three areas corresponds to the change in cash and cash equivalents which is defined as the difference between liquid funds and bank liabilities repayable at any time.
 
 
 
 
 
 
 
The presentation of the cash flow statement is in accordance with the recommendations of the German Standardisiation Board according to DRS 2/cash flow statement. of the German Standardisiation Board according to DRS 2/cash flow statement.
 
 
 
 
 
 
 
 
 
 
1 Jan to
 
1 Jan to
 
 
 
 
June 30, 2013
 
June 30, 2012
 
 
 
 
KEUR
 
KEUR
 
 
 
 
 
 
 
 
Consolidated result for the year
 
7,887

 
6,052

 
Write-downs on fixed assets - property, plant and
 
 
 
 
equipment
 
 
1,549

 
1,318

 
 
 
 
 
 
 
 
Cash flow for the year according to DVFA/SG
 
9,436

 
7,370

 
Profit from the disposal of fixed assets
 
 
 
 
 
 
 
 
(43
)
 
(125
)
 
Increase/decrease in short-term provisions
 
708

 
1,160

 
Increase in inventories and trade receivables
 
 
 
 
 
as well as other assets which are not attributable to
 
 
 
 
investing and financing activities
 
(4,116
)
 
(534
)
 
Increase in trade payables,
 
 
 
 
 
as well as other liabilities
 
 
 
 
 
which are not attributable to investing and financing activities
5,818

 
2,809

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Flow from operating activities (1)
 
11,803

 
10,680

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Jan to
 
1 Jan to
 
 
 
 
June 30, 2013
 
June 30, 2012
 
 
 
 
KEUR
 
KEUR
 
 
 
 
 
 
 
 
Proceeds from disposals of tangible fixed assets -
 
 
 
 
property, plant
 
46

 
283

 
Payments for investments in
 
 
 
 
 
plant, property and equipment
 
(2,658
)
 
(2,062
)
 
Payments for investments in intangible fixed assets
 
 
 
 

Page 9


 
 
 
(49
)
 
(123
)
 
 
 
 
 
 
 
 
Cash Flow from investing activities (2)
 
(2,661
)
 
(1,902
)
 
 
 
 
 
 
 
 
Payments for the redemption of loans
 
 
 
 
 
and credit facilities
 
 
(450
)
 
(437
)
 
 
 
 
 
 
 
 
Cash Flow from financing activities (3)
 
(450
)
 
(437
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2013
 
June 30, 2012
 
 
 
 
KEUR
 
KEUR
 
 
 
 
 
 
 
 
Net change in cash and
 
 
 
 
 
cash equivalents (1) + (2) + (3)
 
8,692

 
8,341

 
Exchange rate movements and valuation changes
 
 
 
 
in cash and cash receivables
 
 
10

 
165

 
Cash and cash receivables at the beginning of the period
37,126

 
32,649

 
 
 
 
 
 
 
 
Cash and cash receivables at the end of the period
45,828

 
41,155

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Composition of cash and cash receivables
 
 
 
 
 
 
 
 
June 30, 2013
 
June 30, 2012
 
 
 
 
KEUR
 
KEUR
 
 
 
 
 
 
 
 
Liquid funds
 
45,828

 
41,155

 
 
 
 
 
 
 
 
Cash and cash receivables at the end of the period
45,828

 
41,155

 





















Page 10


 
 
 
 
 
 
 
 
 
 
Appendix 4
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2013
OF OTTO MÄNNER HOLDING AG, BAHLINGEN A.K.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Parent company
 
Group equity
 
 
 
 
 
 
Subscribed capital
Consolidated retained earnings
Adjusted item for currency conversion
 
 
 
 
 
 
 
EUR
EUR
EUR
 
EUR
 
 
 
 
 
 
 
 
 
 
 
 
Status as at 31.12.2012
 
10,000,000.00

65,099,069.17

3,165,945.02

 
78,265,014.19

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other changes
 
—

—

(268,890.73
)
 
(268,890.73
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated net income
—

7,886,522.36

—

 
7,886,522.36

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Status as at 30.06.2013
 
10,000,000.00

72,985,591.53

2,897,054.29

 
85,882,645.82

 
 
 
 
 
 
 
 
 
 
 
































Page 11


Appendix 5
Otto Männer Holding AG, Bahlingen a.K.

Notes to the consolidated interim financial statements
as at 30 June 2013


1.     General remarks

These half-yearly consolidated financial statements were prepared in accordance with Sec. 290 et seq. HGB [“Handelsgesetzbuch”: German Commercial Code]. The half-yearly consolidated financial statements are presented in EUR.

The income statement was prepared using the nature of expense method.

The closing date of all of the entities included in the half-yearly consolidated financial statements is 30 June 2013. The period ended 31 December 2012 is included as the comparative period. Additionally, a reconciling note from German-GAAP to US-GAAP is added.


2.     Basis of consolidation

Apart from Otto Männer Holding AG,(the "parent company"), the half-yearly consolidated financial statements include three entities with registered offices in Germany and four entities with registered offices abroad, all of which are consolidated in accordance with the full consolidation principles.

The following companies are consolidated in accordance with equity share.

Name
Registered
office
Share in equiy
 
 
 
Otto Männer Holding AG
Bahlingen a.K.
100
%
 
 
 
Otto Männer GmbH
Bahlingen a.K.
100
%
 
 
 
Otto Männer Innovation GmbH
Bahlingen a.K.
100
%
 
 
 
Otto Männer Immobilien GmbH
Bahlingen a.K.
 
Shareholder: Otto Männer Innovation GmbH
 
100
%
 
 
 
Manner USA, Inc.
Norcross, GA (USA)
100
%
 
 
 
Otto Männer Präzisionsformenbau AG
Au (Switzerland)
100
%
 
 
 
Manner Hong Kong Ltd.
Hong Kong
100
%
 
 
 
männer Japan Ltd.
Mito, Japan
100
%



3.     Consolidation principles, consolidation methods

Equity consolidation for all subsidiaries is performed using the book value method by offsetting the carrying amounts of the shares against the proportionate equity of the subsidiary as of the corresponding date of incorporation. All differences from equity consolidation stem from exchange differences and are reported in the item “Equity differences from currency translation”.


Page 12


Intercompany receivables and liabilities as well as expenses and income are eliminated. Any offsetting differences stem from exchange differences.

Any intercompany profits from intercompany transactions were eliminated.

Deferred taxes originating from consolidation entries affecting income were recognized based on a tax rate of 27%.


4.     Accounting and valuation principles

The assets and liabilities in the half-yearly consolidated financial statements are reported pursuant to the provisions of Sec. 290 et seq. HGB. The accounting and valuation methods are unchanged from the prior year.

The valuation methods applied in the parent company’s interims financial statements are decisive for the valuation of the assets and liabilities taken into the consolidated financial statements. If the accounting principles of the companies included in the consolidated financial statements differ substantially from the accounting and valuation principles of the parent company, the parent company performs an accounting and valuation correction by means of the transitional stage of a German commercial code balance sheet II [“Handelsbilanz II”]

Fixed assets are valued at acquisition or production cost less depreciation and amortization. Amortization of intangible assets is based on useful lives of three to five years, depreciation of buildings is based on useful lives ranging between 25 and 50 years and other moveable assets are depreciated over useful lives from 2 to 15 years.

If ownership over leased movable assets is assumed at the end of the lease term, any residual value capitalized is depreciated over a period of three years using the straight-line method.

Raw materials, consumables and supplies as well as merchandise are carried at the lower of acquisition cost or market. Adequate write-downs are recognized for slow-moving goods.

Finished goods and work in process are valued at production cost on the basis of individual product costings. In addition to the direct cost of materials and direct labor, production costs include production and material overhead costs. General and administrative expenses were capitalized.


In all cases, valuation is based on net realizable value, i.e., the estimated cost to complete are deducted from the expected sales price and an additional allowance is set up for items for which estimated costs to complete the product exceed the replacement cost. Adequate allowances provide for all identifiable inventory valuation risks resulting from slow-moving stock, reduced salability and lower replacement costs.

Receivables and other assets are stated at their nominal value. Appropriate specific bad debt allowances were recognized to account for default risks related to trade payables. The general credit risk is adequately considered with the general bad debt allowance.

Prepaid expenses comprise payments made prior to the balance sheet date that relate to expenses that will be incurred after the balance sheet date.

Provisions for pensions are valued according to actuarial principles using an interest rate of 4.94%. Expected salary increases were taken into account at 2%. The calculation was based on the modified “Teilwertverfahren” (a method comparable to the entry age normal method) using the mortality tables of Prof. Dr. Klaus Heubeck.

The assets, which serve exclusively to fulfill the pension obligations and which are protected against claims asserted by all other creditors (employer’s pension liability insurance), were offset at their fair value against the pension provisions.

Tax provisions and other provisions were recognized in the amount of expected utilization and account for all identifiable risks, uncertain liabilities, potential losses from pending transactions and warranties without legal obligation. They are valued at the settlement amount. Necessary cost increases are taken into account. Provisions with a residual term of more than one year are discounted at the market interest rate of the last seven fiscal years for their respective residual term.


Page 13


Liabilities are recorded at the settlement amount. For liabilities whose settlement amount exceeds the amount paid out, the debt discount is reported under prepaid expenses.

Receivables, bank balances and liabilities denominated in foreign currency due within one year are translated at the mean spot rate on the balance sheet date. If the residual term is less than one year, they are valued at the historical rate or the lower (foreign currency receivables) or higher (foreign currency liabilities) closing rate.

Deferred taxes were calculated on all temporary differences between the tax base of the assets and liabilities and their book values in the consolidated financial statements. There were no tax loss carryforwards and tax credits as of 30 June 2013. Deferred taxes were valued using company-specific tax rates and tax legislation enacted or substantively enacted as of the balance sheet date and expected to apply when the timing differences reverse. The tax rates ranged between 16.5% and 40.0%. Deferred taxes are reported on a net basis. The net assets resulting in the separate financial statements of consolidated entities are not capitalized.

 
5.     Currency translation

All assets and liabilities in the financial statements of the foreign entities outside the eurozone included in the consolidated financial statements are translated to the reporting currency at the official mean rate (between the buying and selling rates) as of the balance sheet date. The items of the income statement are translated at the average exchange rates in the first half of the year and equity at historical rates. Translation differences in the income statement are reported directly in equity in the item “Equity differences from currency translation” below revenue reserves.

Differences from the translation of opening balances at closing rates as well as deviations from the translation of movements during the current year at mean rates are reported in a separate column of the consolidated statement of changes in fixed assets.


6.     Notes to the consolidated balance sheet

Fixed assets

The development of individual fixed asset items in the first half of 2013 is shown in the “Consolidated statement of changes in fixed assets” attached to these consolidated financial statements.

Receivables and other assets

Receivables with a remaining term of more than one year amounted to EUR 7k as of the balance sheet date (31.12.2012: EUR 68k). We refer to our comments on pension provisions.

Deferred taxes

Deferred tax assets of EUR 807k (31.12.2012: EUR 571k) were recognized on temporary differences affecting income between the amounts in the tax accounts and the book values in the consolidated balance sheet. Of this amount, EUR 163k (31.12.2012: EUR 390k) is attributable to differences between the amounts in the tax accounts and the book values in the statutory balance sheet prepared in accordance with uniform group principles (HB II - reporting package), which for the most part stem from temporary differences with respect to inventories, pension provisions and other provisions. An amount of EUR 204k (31.12.2012: EUR 181k) is attributable to deferred taxes on consolidation entries affecting income.

In addition, deferred tax liabilities of EUR 756k (31.12.2012: EUR 555k) were determined on differences between the amounts in the tax accounts and the book values in the reporting package. These mainly result from temporary differences in property, plant and equipment and inventories as a result of differences in book values and methods for recognizing amortization, depreciation and write-downs.

Exercising an accounting option, net assets in the separate financial statements amounting to EUR 476k (31.12.2012: EUR 251k) were not capitalized. Net liabilities amounting to EUR 403k (31.12.2012: EUR 416k) were recognized. Net liabilities are offset against the deferred taxes from consolidation entries.




Page 14


Equity

The issued capital of Otto Männer Holding AG, Bahlingen a.K., is valued at EUR 10,000,000, divided into 10,000,000 ordinary shares with a nominal value of EUR 1.00 per share. The ordinary shares are registered shares.

With regard to the development of the Group’s equity, we refer to the consolidated statement of changes in equity as of 30 June 2013 presented in Appendix 4.


Offsetting assets against liabilities in accordance with § 246 Subs. 2 of the German Commercial Code [HGB]

Assets and liabilities from pension obligations were offset in the balance sheet in accordance with § 246 Subs. 2 of the German Commercial Code [HGB].

Pension commitments are secured by employer’s liability insurance. The claims from the employer’s liability insurance serve exclusively to fulfill the pension commitments and are protected against claims asserted by other creditors. They were offset against the pension provisions. The fair value of the employer’s liability insurance, which was calculated using actuarial methods, came to EUR 1,409k as of the balance sheet date; the settlement amount of the pension commitment stands at EUR 1,402k. The difference of EUR 7k is included in other assets. The acquisition cost of the employer’s liability insurance claims amounted to EUR 1,178k.

Other provisions

Other provisions mainly concern personnel, warranty risks and customer bonuses.

Liabilities

 
 
Due in
Due in
Due in
 
Total
less than
one year
two to five
 years
more than five years
 
EUR k
EUR k
EUR k
EUR k
 
 
 
 
 
Liabilities to banks
2,879

884

1,995

—

(31.12.2012:)
(3,329
)
(884
)
(2,445
)
—

 
 
 
 
 
Prepayments received on account of orders
11,392

11,392

—

—

(31.12.2012:)
(6,944
)
(6,944
)
—

—

 
 
 
 
 
Trade payables
2,893

2,893

—

—

(31.12.2012:)
(1,899
)
(1,899
)
—

—

 
 
 
 
 
Other liabilities
887

887

—

—

(31.12.2012:)
(460
)
(460
)
—

—


Trade payables pertaining to the delivery of raw materials, consumables and supplies are subject to the customary retention of title.

Liabilities to banks are secured by a land charge on the Company’s grounds (EUR 2,472k) and mortgages (EUR 414k).

Guarantees (performance guarantees) from Commerzbank AG of EUR 2,981k (31.12.2012: EUR 555k) were drawn for prepayments received. No collateral had to be pledged to obtain the guarantee facility.


7.     Notes to the consolidated income statement


Page 15


Revenue
Consolidated revenue is detailed as follows:

 
30 Jun 2013
 
30 Jun 2012
 
EUR k
 
EUR k
 
 
 
 
Germany
12,253
 
13,014
Other EU countries
15,652
 
14,558
Rest of world
15,975
 
12,142
 
 
 
 
 
43,880
 
39,714


Other operating income and expenses

Other operating income contains income relating to other periods of EUR 351k (half year 2012: EUR 695k). This mainly stems from the reversal of provisions and specific bad debt allowances of EUR 189k (half year 2012: EUR 230k), from exchange rate gains EUR 119k (half year 2012: EUR 431k) and from the disposal of items of fixed assets EUR 43k (half year 2012: EUR 134k).
Other operating expenses include expenses relating to other periods of EUR 158k (half year 2012: EUR 432k), mainly attributable to exchange rate losses.

Employees

 
 
 
 
 
30 Jun 2013
 
30 Jun 2012
 
 
 
 
Management board
1
 
1
Wage earners
215
 
208
Salaried employees
130
 
127
Trainees
35
 
31
 
 
 
 
 
381
 
367


8.     Additional notes to the consolidated cash flow statement
Cash and cash equivalents solely contain the cash and bank balances reported in the balance sheet. With respect to further analyses we refer to the disclosures in the group management report.


9.     Other notes
Other financial obligations
Other financial obligations contain long term rental obligations of EUR 3,625k and lease obligations of EUR 10,277k for a total of EUR 13,902k.


10.    Audit fees

The total fees charged by the group auditor pursuant to Sec. 314 (1) No. 9 HGB are EUR 31k for other services for the first half year 2013.


11.     Management of Otto Männer Holding AG and disclosure of total remuneration

Management board


Page 16


Mr. Hans-Peter Männer, Dipl.-Ing. (FH) was appointed to the management board in the reporting year. He has sole signing authority without restriction to represent the Company in legal transactions as a self-contracting agent or as an agent of a third party. In accordance with Sec. 286 (4) HGB, the Company has elected not to disclose total management board remuneration.

Supervisory board
The following persons were members of the supervisory board in the reporting year:

•
Otto Männer, business man, Bahlingen a.K., chairman
•Karl-Heinz Niggemann, lawyer, Rottweil, deputy chairman
•Dr. Bertram Layer, public auditor, tax advisor, Stuttgart, deputy chairman

The remuneration of the supervisory board amounted to EUR 6,000 in the reporting year.

12.     Subsequent Events

On October 31, 2013, the Company was sold to Barnes Group, Inc. ("Barnes Group").  Pursuant to the terms of the Share Purchase Agreement dated September 30, 2013, Barnes Group acquired all the shares of capital stock of the the Company for an aggregate purchase price of EUR 281,200k which was paid through a combination of EUR 253,726k in cash and 1,032,493 shares of the Company's common stock (valued at €27,500 pursuant to the Share Purchase Agreement). 


Bahlingen, 23 October 2013



……………………………………………
Hans-Peter Männer
Management board































Page 17


DEVELOPMENT OF FIXED ASSETS
OF OTTO MÄNNER HOLDING AG, BAHLINGEN A.K.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition/production costs
Book values
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Currency
 
 
 
 
 
Currency
 
 
 
 
 
 
 
 
 
1/1/2013
differences
Additions
Transfers
Disposals
30/6/2013
1/1/2013
differences
Additions
Disposals
30/6/2013
30/6/2013
31/12/2012
 
 
 
 
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
I.
Intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.
Licenses, industrial property rights acquired against
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
payment and similar rights and values as well as
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
licenses to such rights and values
4,246,359

(1,707
)
48,851

—

1,571

4,291,932

3,571,446

(1,547
)
137,918

—

3,707,817

584,115

674,912

 
2.
Advance payments
20,500

—

1,200

—

—

21,700

—

—

—

—

—

21,700

20,500

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,266,859

(1,707
)
50,051

—

1,571

4,313,632

3,571,446

(1,547
)
137,918

—

3,707,817

605,815

695,412

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
II.
Tangible assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.
Property, rights equivalent to real property
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
and buildings including buildings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
on third-party land
33,282,550

(113,156
)
73,884

—

—

33,243,278

7,902,010

(35,212
)
442,333

—

8,309,131

24,934,147

25,380,540

 
2.
Plant and machinery
34,621,646

(152,801
)
1,049,459

800,349

36,350

36,282,303

26,878,213

(146,419
)
773,192

36,348

27,468,638

8,813,665

7,743,432

 
3.
Other fixed assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
and office equipment
6,990,165

(35,342
)
155,383

—

23,765

7,086,441

5,479,148

(21,361
)
195,644

20,383

5,633,048

1,453,393

1,511,017

 
4.
Advance payments and assets under construction
930,501

(17,516
)
1,378,290

(800,349
)
—

1,490,926

—

—

—

—

—

1,490,926

930,501

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
75,824,862

(318,815
)
2,657,017

—

60,115

78,102,948

40,259,371

(202,992
)
1,411,169

56,731

41,410,817

36,692,131

35,565,491

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
80,091,721

(320,522
)
2,707,067

—

61,686

82,416,580

43,830,818

(204,539
)
1,549,086

56,731

45,118,634

37,297,946

36,260,903



Page 18


Appendix 6
Reconciliation from German GAAP to US GAAP (30/06/13)
The consolidated statements of Otto Männer Holding AG are prepared in accordance with German GAAP. The following table is a reconciliation of differences relating to the Profit and Loss account and Shareholders’ Equity reported according to German GAAP and US GAAP.
Reconciliation of profit or loss statement (P&L) for the year and reconciliation of shareholders’ equity (equity)
All amounts in EUR k
 
Notes
 
30/06/2013
 
31/12/2012
 
 
P&L
Equity
 
P&L
Equity
 
 
 
 
 
 
 
 
 
Results and shareholders’ equity under German GAAP:

Profit for the year
Shareholders’ equity
 



 
7,887

85,883

 
16,765

78,265

 
 
 
 
 
 
 
 
 
US GAAP reporting adjustments:
 
 
 
 
 
 
 
 
Opening adjustment
 
(a)
 
 
(1,742
)
 
 
(2,309
)
Leasing
 
(b)
 
(169
)
(169
)
 
(164
)
(164
)
Allowance for doubtful accounts
 
(c)
 
21

21

 
18

18

Pensions 1
 
(d)
 
(131
)
(131
)
 
(301
)
(301
)
Revenue recognition
Inventory allowance
 
(e)
(f)
 
697
441

697
441

 
1,246
-22

1,246
-22

Income taxes
 
(g)
 
(233
)
(233
)
 
(210
)
(210
)
 
 
 
 
 
 
 
 
 
Results under US GAAP
 
 
 
8,513

84,767

 
17,332

76,523

Explanation of notes:
(a)
Opening adjustment to shareholders’ equity
The line item opening adjustments represents the accumulative effect on retained earnings as of 1 January 2013. In order to properly present the shareholders’ equity reported under US GAAP adjustments to opening retained earnings are required. The adjustments made are identical to those that are represented below.
(b)
Leasing - Capital leases
Otto Männer Holding AG entered into several lease agreements for machinery and equipment which according to German GAAP were classified as operating leases. For US GAAP purposes however, some of these agreements are to be classified as capital leases. The net income effect (yearly expense for operating lease vs. interest expense and depreciation) are represented in the table above.
(c)
Allowance for doubtful accounts
According to German GAAP a lump sum general allowance on the basis of 1% is allowed to be accounted for. For US GAAP purposes however, the allowance for doubtful accounts is based on historical experience. Therefore, the lump sum allowance has been reversed in the table above.
1 US GAAP adjustments include the German plan which is not subject to the acquisition by BGI.

Page 19



(d)
Pensions - Defined benefit plans
The pension related reserves under German GAAP need to be restated in order to comply with ASC 715-30. According to German GAAP, the Otto Männer group entered into one defined benefit plan in Switzerland while the remaining three German plans are classified as defined contribution plans. However, two of the defined contribution plans are to be classified as defined benefit plans for US GAAP purposes. The impact on equity and the income statement reflects the different treatment of the plans under German GAAP. For defined benefit plans the values are based on actuary reports.

(e)
Revenue recognition - Bill and hold transactions
The company enters into bill and hold transactions for specific high precision molds. According to German GAAP revenue can already be recognized as soon as the contract is signed. For US GAAP purposes however, revenue recognition criteria are not yet fulfilled. Revenue is recognized at a later point of time and therefore the adjustment represents a timing difference in recognizing the revenue.

(f)
Inventory provision
Under German GAAP an additional provision was set up for items for which costs estimated to complete the product exceed the replacement cost. Such provision is not allowed under US GAAP since the costs not yet incurred are not allowed to be recognized considering the matching principle.

(g)
Income taxes - Impact on US GAAP adjustments
This adjustment reflects the impact on the Company’s provision for income taxes which the US GAAP adjustments described above have on the income statement and on Shareholders’ equity.




























Page 20


Appendix 7

Page 21