Page 1

ANNUAL REPORT

NEM Holding B.V.

The power of 2009


Contents Introduction 3

Mission

6

Company profile

7

Countries in which NEM Holding is active

8

Management

9

Report and recommendations of the Supervisory Board

10

Report of the Board of Management

Financial Statements 2009 2

22

Consolidated balance sheet

23

Consolidated profit and loss account

24

Consolidated cash flow statement

28

Accounting policies

34 Notes to the consolidated balance sheet 37 Notes to the consolidated profit and loss account 38 Company balance sheet 39 Company profit and loss account 40

Notes to the company balance sheet

Other Information 44 Statutory rules concerning result appropriation 44

Proposed result appropriation for the financial year 2009

45 Auditor’s report 46 Five years in figures 50 Addresses 54 Colophon


Mission NEM Holding intends to be internationally recognised as the preferred partner for custom-made solutions and services in the field of industrial-, utility- and heat recovery steam generators and related equipment. In order to achieve this goal, we need to discern ourselves from our competitors by continuously developing custommade products, solutions and services which are unique or indispensable to our clients due to our know-how. Our innovative products, solutions and services are aimed at generating reliable energy in the most efficient manner, thereby taking into account our responsibility towards the environment and towards future generations.

3


4

NEM ANNUAL REPORT 2009

The Power of Steam


5

INTRODUCTION


Company profile On 3 July 2003 H.T.P. Investments B.V. (HTP) – a Dutch

Concentrated Solar Power

private equity investor – acquired 100% of the shares in

NEM supplies equipment for various types of solar

NEM B.V. (NEM). On 30 September of the same year,

­power plants including Integrated Solar Combined Cycle

HTP transferred all NEM shares to NEM Holding B.V.

(ISCC). Other examples of NEM CSP systems are CSP

(NEM Holding).

steam cycle technology, back up (firm output) equipment and booster super heaters.

NEM, established in 1929, is a leading, global engineering company in the field of steam related equipment.

Diverters and Dampers

Since the 1960s, NEM supplies custom-made solutions

NEM Power-Systems, located in Reckling-

with regard to industrial, utility and heat recovery steam

hausen, Germany, is world leader in

generators for power generation and industrial appli-

the design and supply of exhaust gas

cations throughout the world. NEM’s Heat Recovery

systems, diverters and tight shut-off/

Steam Generators make up the largest portion of the

control dampers for large boiler plants,

company’s activities. The firm’s driving forces are its

Flue Gas Desulfurisation (FGD) plants,

distinctive know-how and continuous technological inno-

Selective Catalytic Reduction (SCR)

vation, with an eye for new applications such as steam

plants and process industries.

generation for enhanced oil recovery and solar power applications.

Special Products Our business unit in Leiden, provides specialist

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NEM ANNUAL REPORT 2009

During 2008 NEM Holding B.V. acquired NEM Energy

products and services to operators of boilers worldwide

Services B.V. (NES), while in 2009 Standard Fasel B.V.

by using the know-how and resources available in both

and Powerspex Instrumentation B.V. were acquired by

NEM and NES.

NEM Holding through NES. Both NES and Standard Fasel were already part of the HTP group of companies.

Production facility Egypt NEM together with Al Hashemiah has built and commis-

NEM Holding’s head office is located in Leiden, the

sioned a production facility in the Free zone in Alexan-

­Netherlands. The company consists of a number of busi-

dria, Egypt in order to manufacture piping spools. The

ness units, all of them specialised in a range of specific

facility is operational since October 2009.

products. Our product range can be divided as follows:

Services Heat Recovery Steam Generators

NEM Energy Services B.V consists of amongst others,

NEM’s core activity is the engineering and delivery of

Standard Fasel B.V., NEM Standard Fasel Manufac­turing

various types of Heat Recovery Steam Generators

B.V., Powerspex Instrumentation B.V., NEM Standard

(HRSGs). Our business unit in Leiden supplies large

Fasel Tools 4 Rent B.V. and Energy Staff Resources &

HRSGs while our business unit in Hendrik Ido Ambacht

Recruitment B.V. The group of companies offers (re)

specialises in modular type HRSGs. This type of steam

design, construction, maintenance, overhaul and modifi-

generator uses the hot exhaust gasses produced by gas

cation services to flue gas – and water pipe boilers and

turbines to generate steam. This so-called combined auxiliaries. The clients are amongst others all major cycle process improves the plant’s efficiency by approxi-

Dutch power plants, oil refineries and waste incinerating

mately fifty percent.

plants. The legacy of this group comes from almost all large Dutch boiler manufacturers such as Stork, Royal

Industrial and Utility Boilers

Schelde and Standard Fasel Lentjes. NES is market lea-

Our business unit in Hengelo offers tailor-made solu­

der in the Netherlands and has also operations abroad.

tions for fossil fired steam generators for industrial and

The company has its own manufacturing facilities and

utility applications. We also supply process heat reco-

state-of-the-art tooling & equipment warehouse.

very boilers as well as steam generators for enhanced oil recovery.

Waste-to-Energy As a niche activity, NEM maintains state-of-the-art designs for Waste-to-Energy Steam Generators for incineration of municipal waste and industrial or refinery waste gas to produce steam for power production.


Countries in which NEM is active

7


Management Board of Management G.J. Van Dijk (1960) Chief Executive Officer

J.J.J. Mulder (1964) Chief Financial Officer

Starting his career at Shell Internationale Petroleum

Jan Mulder joined NEM on 1 January 2008 and was

Maatschappij N.V., The Hague, Gerard Van Dijk sub­

­appointed Managing Director and Chief Financial Offi-

sequently joined NEM in 1994. After a number of years

cer for NEM on 1 April 2008. On 1 January 2009 he

active in project management at Leiden, the Nether-

was appointed Managing Director and Chief Financial

lands and as Branch Manager for NEM in Taiwan, he

Officer of NEM Holding. From 1985, he mainly worked

was appointed General Manager for the Business Unit,

in various companies in the dredging industry of which

NEM Industrial & Utility Boilers in 2001. He was appoin-

for the last eight years as Business Unit Controller with

ted Managing Director and Chief Executive Officer for

Royal Boskalis Westminster N.V. During this period he

NEM on 1 September 2006. On 1 January 2009 he was

was respon­sible for the regions Africa, ­Eastern Europe,

­appointed Managing Director and Chief Executive Officer

Indian Subcontinent and the Middle East as well as the

of NEM Holding. Gerard Van Dijk graduated in 1988 with

Offshore Division.

a Master's in Mechanical Engineering at the University of Eindhoven.

J.H.N.M. Hendrikx (1949) Director Services Hans Hendrikx joined NES on 1 May 2005 and was

W. de Blauw (1953) Chief Operational Officer

­appointed Managing Director and Chief Executive Offi­cer

Willem de Blauw was appointed Managing Director and

for NES on 1 October 2005. On 1 January 2009 he was

Chief Operational Officer for NEM on 1 June 2006. On ­appointed Managing Director and Director Services of 8

NEM ANNUAL REPORT 2009

1 January 2009 he was appointed Managing Director and

NEM Holding. From 1994 he mostly worked as project

Chief Operational Officer of NEM Holding. He has more

manager for NEM on several international and national

than 30 years ­working experience, including 17 years

boiler projects, whilst in the period from 2004 to 2008

with the boiler department of Royal Schelde Group N.V.

he was involved in the restructuring of Standard Fasel

The last four years before joining NEM Willem de Blauw

B.V. and the integration of NES and Standard Fasel B.V.

worked for Fluor Corporation at the Operations & Maintenance business unit as Director Business Development in ­Europe, Middle East and Africa.

Supervisory Board W.P. de Pundert (1957) Chairman

K. Meertens (1957)

Appointed on 17 December 2009

Appointed on 17 December 2009

Nationality: Dutch

Nationality: Dutch

Former position: Chairman of the Board of Management

Former positions: Managing Director J.P. Morgan

of Agrostar N.V.

1997-2008, Partner McKinsey & Company 1986-1996

Other positions: Various board and executive functions

Other positions: Various board and executive functions


Report and recommendations of the Supervisory Board We hereby present the Annual Report 2009 for NEM Holding B.V. as compiled by the Board of Management in accordance with Article 23 of the Articles of Association and adopted by the Supervisory Board of NEM Holding B.V.

Financial Statements The financial statements have been audited and approved by Deloitte Accountants B.V. We refer to page 45 for the Auditor’s report.

Recommendations The Supervisory Board recommends that: • The shareholders approve the financial statements as presented • The Board of Management be discharged from its operational and statutory responsibilities and the Supervisory Board be discharged from its supervisory responsibilities for the financial year 2009 in accordance with Article 27 paragraph 2 of the Articles of Association • The profit for the financial year of € 11.2 million is to be transferred to other reserves. ANNUAL REPORT 2009 NEM

Appointment of the Supervisory Board On 17 December 2009 Mr. W.P. de Pundert and Mr. K. Meertens were appointed by the shareholders as Supervisory Board members. The position of a third member of the Supervisory Board is still vacant. Mr. W.P. de Pundert is appointed as Chairman of the Supervisory Board.

Activities of the Supervisory Board One formal meeting took place on 17 December 2009. During this meeting the strategy of NEM Holding B.V., the position of its competitors, budgets, projects and progress of the results were discussed. In addition a few informal meetings took place between individual members of the Supervisory Board and the Board of Management. These meetings were held both at the office of NEM Holding B.V. in Leiden and at the locations of the operating business units.

Appreciation for Board of Management and Employees The Supervisory Board wishes to express their appreciation to the Board of Management for the latter’s successful efforts to manage the company under challenging market circumstances. The Board furthermore thanks the Works Council and employees for their loyal attitude towards the company. Leiden, 8 April 2010 The Supervisory Board W.P. de Pundert, Chairman K. Meertens

9


Report of the Board of Management

10

NEM ANNUAL REPORT 2009

Summary

NEM USA Corp. Activities in the Middle East were also

NEM Holding was able to achieve good results and main-

expanded during the same year.

tain a strong order backlog in 2009, despite the global recession which undoubtedly had an impact on the busi-

In the course of 2009, H.T.P. sold the activities of

ness of NEM Holding. Revenues amounted to € 369.2

Standard ­Fasel B.V. to NES. With this acquisition, all

million, 10% lower than the € 409.6 million realised

New Build and Service Activities are now part of NEM

in 2008. The year’s order intake of € 242.2 million

Holding. In addition NES acquired Powerspex instrumen-

decreased with 53% compared with € 520.8 million in

tation B.V., NEM furthermore opened a new production

2008. The decrease of the order intake is reflected in

facility in Egypt in order to be less dependent on the

the order book as per 31 December 2009 which amoun-

manufacturing capacity and quality of third parties.

ted to € 342.7 million, compared with € 480.1 million as per 31 December 2008.

Market Developments Since its change of course in 2006, it has been NEM’s

The lower revenue achieved during the year had a direct

aim to become the preferred partner for custom-made

impact on the operational results which amounted to solutions in our field and to distinguish ourselves by € 12.2 million compared with € 18.9 million in 2008.

­offering superior added-value to our clients. Thanks to

Our net result decreased to € 11.2 million compared

this strategy, NEM has been able to maintain a reason-

with the € 15.8 million in 2008. Although the results are

able order intake and a healthy backlog in comparison

lower than those of 2008, as can be seen in the 5-year

with many of NEM’s competitors or even companies

comparison, they are substantially higher than during

­outside our branch, in spite of the economic downturn.

the period 2005-2007.

For instance, in March 2009 NEM received the order for the ‘Moerdijk’ project in the Netherlands. In April 2009,

In December 2008, NEM and NES successfully com-

the month of NEM’s 80th anniversary, NEM secured the

bined forces by bringing the two companies together

‘Enecogen’ project, also in the Netherlands, thanks to

under NEM Holding. This step has significantly increased

the combined forces of NEM and NES. Orders were also

opportunities for both companies with regard to the

received for Sasol (South Africa) and Porto (Portugal).

­development of new projects, services and products. In addition, in line with our strategic plan, we have esta­

Unfortunately, many of the conclusions drawn in NEM’s

blished a new subsidiary and business unit in the USA,

strategic plan still apply today. In previous years (2005-


2007) nearly all indicators for global economic growth showed an upward trend. Following the credit crisis which started in the United States in 2008, many economies (particularly those in the West) have been facing a severe slow-down or even a recession. Analysts argue about whether recovery of the global economy is going to be “V”, “W” or “L” shaped. Large banks and financial institutions have suffered ­severe losses and at present many of them including investors are still uncertain as to whether or not the worst is over. Power companies are still delaying billions of dollars of investment plans because depressed global markets are making it hard for them to raise the necessary financing. An unprecedented change in behaviour has been the intervention of governments worldwide in support of their countries’ respective economies by injecting billions of euros. No doubt these measures have had a positive influence on the global economy but the question remains whether this has been sufficient to create a sustainable growth. Also, the trend that governments of Western nations and people in general are becoming increasingly aware of the scarcity of fossil fuels and of the dependence on or even vulnerability to gas and oil supplies from countries such as Russia and Middle Eastern countries is unaltered. In June 2008, the price of oil reached $147 per barrel and the exchange rate of the euro against the dollar reached $1.57. In December 2008, the oil price dropped to below $50 per barrel and car sales worldwide plummeted. As expected, the oil price level increased to approximately $70 per barrel by the end of 2009 (exchange rate $1.47) owing to the limited availability of oil (and gas). In the long term, we expect the oil price to creep up slowly ­because of a scarcity of hydrocarbons but it is uncertain to what level. Although opinions still differ as to what exactly is causing climate change and whether this is mainly due to human interference with nature or not, climate change itself is globally recognised as a fact. Governments the world over have introduced measures to reduce the production of CO2. These include more stringent requirements on emissions, the levying of carbon tax and the sale of carbon credits. Energy companies are investigating the possibilities of reducing CO2 emissions by increasing plant efficiency, application of renewable energy and CO2 capturing and storage. Unfortunately, until now the price of energy is

ANNUAL REPORT 2009 NEM 11


12

NEM ANNUAL REPORT 2009

still too low to allow many of these installations to become economically viable without heavy subsidies. Governments are reluctant to increase the price per KWh or per unit of fuel, particularly in view of adverse economic developments. This problem is slowly being recognised and governments (such as in the Netherlands) are taking steps to increase the price per KWh. The two factors mentioned above, namely vulnerability to oil and gas supplies and the pressure to reduce CO2 emissions have forced governments in the West to consider the generation of electricity by using alternative sources of energy such as coal, nuclear and renewables such as wind and solar. The growth of Gross Domestic Product in those countries where NEM is active needs to be supported by a reliable source of electric power. Until now, coal and nuclear power are still not widely accepted as suitable energy sources, for example for political and environmental reasons. Since renewable energy sources are still not employed sufficiently to support the global need for electricity, natural gas appears to be the most logic alternative. On the one hand, this explains the sudden increase in the demand for Combined Cycle Power Plants in 2008. On the other hand, many of NEM’s competitors have burdened themselves with high risk-low margin projects in the years following the slowdown in the HRSG market in 2002-2004. They are now suffering the consequences. 2008 saw a surge in the order intake for HRSGs. This led to a workload that was too much to handle for some companies. As a result, some of them ran into financial difficulties despite the excellent market conditions in 2008, a situation that was aggravated by the slow market in 2009.


13


Financial Developments The highlights are: • Revenue E 369.2 million (-10%) • Order intake E 242.2 million (-53%) • Order book E 342.7 million (-29%)

107.0

• Operating result of E 12.2 million (E 18.9 million in 2008) • Net result of E 11.2 million (E 15.8 million in 2008)

148.9

Revenues Revenues for the financial year 2009 were E 369.2 million,

113.3

compared with E 409.5 million in 2008. Contrary to previous years, revenue was mainly realised inside Europe and in particular the Netherlands, through large HRSG projects and Services. Other European countries in which projects were executed were Portugal, Belgium and Spain. Outside

Revenues by geographical region (x € 1 million)

Europe projects were mainly executed in Egypt, Oman, Thailand and South Africa. The level of activities and revenue in Europe and the Netherlands is expected to remain high during 2010.

Revenues (x € 1 million) by geographical region 14

NEM ANNUAL REPORT 2009

The Netherlands Europe Outside Europe

Revenues (x € 1 million) by activities Heat Recovery Steam Generators Diverters and Dampers Services

2009

2008

2007

2006

2005

148.9 107.0 113.3 369.2

101.0 113.6 194.9 409.5

22.6 56.3 112.6 191.5

26.3 42.0 138.5 206.8

47.2 32.6 53.1 132.9

2009

2008

2007

2006

2005

286.6 23.6 59.0 369.2

305.0 39.9 64.6 409.5

165.5 26.0 - 191.5

183.2 23.6 - 206.8

94.2 12.1 26.6 132.9

Order intake The order intake for the financial year 2009 decreased in comparison with 2008. The total order intake was E 242.2 million compared with E 520.8 million for 2008. The order intake was spread widely in terms of activity, with the large HRSGs as main product. Geographically, the order

23.6

intake was achieved mainly in Europe. The large HRSG orders received for Moerdijk and EnecoGen (the Netherlands)

59.0

and the Modular HRSG orders for Sasol (South Africa), Porto (Portugal), and Vasilikos (Cyprus), as well as a large number of service contracts contributed to the order intake for 2009.

Order book As a result of the lower order intake in 2009, the order

286.6

book as at 31 December 2009 decreased to E 342.7 million compared with E 480.1 million as at 31 December 2008. The quality of the order book is good and a large part of the order book will be executed during the financial years 2010 and 2011. The order book is expected to increase further with the award of some major projects at the start of 2010.

Revenues by activities (x € 1 million)


Revenues (x € 1 million)

Operational & Net Result

500

Both operational and net results show a decrease compared to 2008. As a result of an increase in cost of work, a

400

substantial cost overrun on a specific project as well as an

300

increase in the indirect overhead costs, the operational ­result decreased significantly during 2009 to an amount of

200

E 12.2 million, compared with E 18.9 million in 2008. The

100 0

net interest income received contributed substantially to

133

207

192

410

369

2005

2006

2007

2008

2009

our net result in 2009. This amounted to E 11.2 million compared with E 15.8 million in 2008.

Banking facilities A group of financial institutions including ABN AMRO Bank NV, ING Bank NV, Rabobank Nederland and Euler Hermes

Order intake (x € 1 million)

Interborg NV (part of Allianz Group) increased its guarantee

600

facilities for NEM ending 2008. The total of these facilities

500

is at the required level in relation to our current level of

400

business and anticipated further growth. NES has its own

300

credit facility and a bank guarantee facility. The interest

banking facilities with Rabobank Nederland, consisting of a

200

rates payable are at normal market conditions.

100

Investments

0

ANNUAL REPORT 2009 NEM 15

245

173

370

521

242

2005

2006

2007

2008

2009

Acquisitions and investments in excess of an established amount require prior approval by the shareholders and, in certain circumstances, by the banks. During 2009 we invested both in tangible and intangible fixed assets. Total investments in tangible fixed assets for 2009 amounted to E 4.9 million (E 4.3 million in 2008). The main part of our

Order book (x € 1 million)

investment involved the newly-established production faci­

500

lity in Egypt. Other investments were made mainly in plant and office equipment, machinery and automation. Total in-

400

vestment in intangible fixed assets amounted to E 1.7 mln.

300

The intangible fixed asset investment is the goodwill paid

200

for the purchase of Powerspex Instrumentation B.V. Further-

100

more, Standard Fasel B.V. was acquired from Worldwide

0

221

179

349

480

343

2005

2006

2007

2008

2009

Energy Services B.V., a group company of HTP Investments B.V. The funding for these ­acquisitions was and will be generated internally. In 2010, we expect the level of investment to decrease compared with 2009. Investments will consist of regular

Net result (x € 1 million)

­replacement investments, as well as major investments

18

in ICT infrastructure and programs to support the NEM ­Holding business model.

15 12

Cash Position

9

As at year end, the net cash position was E 124.8 million.

6

continued to focus on further strengthening of our working

(E 88.9 million at 31 December 2008). During 2009 we capital position. In most cases, contractual payment condi-

3 0

3.3

3.1

0.5

15.8

11.2

2005

2006

2007

2008

2009

tions are in line with the project expenditure, generating positive cash flows from projects. This is reflected in the increase of our cash position during 2009.


Personnel and Organisation

professionalism are the key factors for the successful

Our people are the basis of our success. The products

execution of our projects. In 2010, NEM will continue to

supplied by NEM must be state-of-the-art and reliable.

invest in people.

The organisation therefore needs employees who are able to translate innovative ideas into tailor-made pro-

Research and Development

ducts. Effective management, inspiring leadership and a

In order to offer highly customised solutions to complex

fair reward system, is essential in enabling the growth in

energy problems, NEM has to constantly improve their

number and quality of employees and our business.

product range and develop new technologies/products

Based on the company business plan and strategy a HR

and applications.

policy was developed that contributes to company goals and employee needs. The plan outlines five key goals,

The Research & Development Department therefore

honesty and clarity, quantity and quality, the right reward

­investigates the energy conversion market for demand

for the right work, balance and market orientation.

for new technologies and products in close cooperation with the Marketing Department. It defines and carries

In 2008, we started to develop a compensation and

out projects to further develop these new technologies

classification system that provides fair and equitable

and products. Furthermore, it gives guidance and sup-

­salaries. This system will become effective in 2010 and

port to the regular NEM organisation to implement these

will also form the base for a performance management

results in the projects containing the new technologies

system. This will better support us in leadership develop-

or products.

ment and in recruiting and retaining the employees we 16

NEM ANNUAL REPORT 2009

need. Furthermore, in 2010 the existing employee bene-

The Research & Development Department works with

fits programs needs to be tuned to one program for NES.

a dedicated team to stimulate interaction with the Engineering Department. The current main focus of the

Employees (FTE’s) by activities Steam Generators Service and After Sales Diverters and Dampers Total

31.12.2009 31.12.2008 375 301 46 722

322 226 50 598

department is the development of equipment and systems for solar thermal power plants and fast-starting HRSGs. NES has developed a number of technologies. These solution-driven developments are established largely in

The goals that were defined for the NEM growth scenario

close cooperation with clients. The technologies deve­

changed as a result of market developments. One of

loped are at the disposal of the complete client base. A

HR’s main goals continued to be to attract highly qualified

well-known product is the Tetratube, a NOx reduction pro-

personnel. Although the market situation changed, there

cess for waste incineration boilers.

is still a shortage in the labour market which makes it difficult to recruit these mainly technically-skilled person-

Supply Management

nel. The new approach to the labour market, employer

In cooperation with key suppliers NEM reserved manu-

branding, is bearing fruit. We developed a special internet

facturing capacity in advance of projects being awarded.

site for jobseekers and a recruitment ad campaign has

NEM succeeded in delivering goods and materials within

been launched. NEM Holding has been success­ful in ac-

the requirements to the various projects. Further frame

commodating personnel from Powerspex Instrumentation

agreements were signed during the year thereby crea-

B.V. and Standard Fasel B.V. through NES.

ting the basis for long-term cooperation. In 2010, we will be able to secure manufacturing of all our components.

NEM wants to offer a good perspective to all its employees. This is why NEM’s personnel policy offers opportu-

To maintain our competitiveness we have a firm base of

nities to employees for personal development, benefits

reliable suppliers and full attention is also given to sour-

and an informal organisational culture. The very low out-

cing, qualifying and developing new suppliers for the

flow of personnel indicates the company’s success in

next generation of power projects.

that respect. The manufacturing facility in Egypt was set up in order to Discussions with employee representatives from the

meet the guaranteed quality and capacity requirements

Works Council have been interactive and constructive.

for our worldwide projects. It is operational and has been producing piping materials among other things since

We are convinced that the combined know-how and

­October 2009.

­experience of our staff, their integrity, dedication and

Supply-related quality procedures have been updated in


order to establish an equal basis of NEM’s integral qua-

result in property damage, accidents, or impact on per-

lity system. We have succeeded in improving and increa-

sonal health. NEM Business Units possess ISO, ASME

sing staffing to a level that meets current and future

and/or SCC (HSE) accreditation among others. NEM

challenging targets in a rapidly changing supply chain

Energy Services will apply for the ASME S&R (construc-

environment.

tion and repair) certificate in 2010.

In order to service our clients with the timely delivery of

Risk Management

state-of-the-art products and services at an optimum

NEM Holding faces the same risks as any company ac-

price, NES has developed a network of reliable high tive in this branch of industry. Various types of risks have quality suppliers who understand the service industry. been identified and NEM actively endeavours to control Timely supply of high-alloy pressure parts is safeguar-

and eliminate them in order to achieve a more reliable

ded with our own production facilities in the North of the

product from a technical and financial point of view. In

Netherlands. Supplier performance is carefully and con-

order to do so NEM Holding recognises the following

stantly monitored.

risks.

IT & Facility Management

Pre-contractual Risks

In 2009, the ICT Department made considerable chan-

NEM Holding has a policy whereby major tenders are re-

ges in order to implement the requested innovative func-

viewed and approved by means of tender board mee-

tionality for the organisation. A new ICT architecture led

tings. The aim of the meetings is to identify and mitigate

to a new network between the Dutch subsidiaries. This

potential risks before a contract is awarded. A tighter

started the centralisation and it will be essential to

tender authorisation procedure has also been esta­

achieve the desired level of service. The new network

blished. This categorises anticipated currency, price, cre-

will ­enable NEM to work on the same project simulta­

dit and cash-flow risks, on which basis counter-measures

neously in several locations while simultaneously redu-

are established before a contract is signed. The aim of

cing IT complexity. ICT started a full-scale inventory of all

this is to create a reliable state-of-the-art product for our

of its applications with the goal of streamlining the total

clients in line with the mission statement of NEM Hol-

number of applications with no loss in functionality.

ding. This states that we endeavour to discern ourselves

Functional Application Management will be key to a more

by developing custom-made products, solutions and ser-

efficient production quality and to facilitating the goal of

vices that are unique or indispensable to our clients

reducing production time for NEM products.

thanks to our know-how. This aims to generate reliable energy in the most efficient manner, taking into account

NES implemented a new ERP system in 2009, offering

our responsibility in respect of the environment and fu-

flexible and accessible information, especially for project

ture generations.

management and control.

Operational Risks In 2010, a project documentation system and a RFID

Operational risks are mainly determined by the scale

system for tracking and tracing tools and equipment will

and complexity of a project, its location, the principal,

be implemented. We will make a start on ICT Architec-

the contractors and the financial and contractual terms

ture to further align ICT services with business require-

and conditions. It is the policy of NEM Holding to control

ments, initially concentrating on the handling of innova-

and ­limit these risks as far as possible. Project executi-

tive ICT projects.

on measures have been taken to minimise project risks.

Quality, Safety and Environment

Operational risks mainly involve engineering, thermal ­design, supply and construction.

The ongoing improvement of our quality, safety, health and environmental systems is an important part of our

Financial Risks

company policy. On the basis of this policy, our integra-

In addition to the operational risks, NEM Holding is also

ted control systems handle quality, health, safety and

exposed to financial risks during project execution. The

environmental aspects in an integrated approach. This

main risks are political developments, foreign exchange

approach enables our highly-qualified staff to deliver

exposures, supplier insolvency risk and non-payment

high-quality products in a professional manner. Safety

risks by main clients. In order to mitigate these risks,

and environment are also of major importance to achie-

NEM Holding follows strict rules in respect of political

ve total quality by complying with governmental and

and payment risks. With the exception of first-class

other safety and environmental regulations and by stri-

­creditworthy clients, in principle all payment risks are

ving to eliminate any foreseeable hazards which could

covered by ­either credit insurance, letters of credit, ad-

ANNUAL REPORT 2009 NEM 17


vance payments and parent company guarantees. As a

work, passion, company pride and involvement are key

large part of our contract income is in euros, no financial

assets of the people of NEM Holding. In the Badjaran

hedge instruments are required. For the non-euro expen-

project, we expect to embed these characteristics even

ses, NEM Holding tries to secure contract income in the

deeper and stimulate cross-business unit cooperation.

same currency. NEM Holding therefore frequently has 18

NEM ANNUAL REPORT 2009

multicurrency contracts to cover its euro and non-euro

The project is subsidised significantly by the Dutch

expenses. When they arise, open positions in non-euro

NCDO, the National Committee for International Coope-

currency are fully hedged by means of forward contracts.

ration and Sustainable Development. Meanwhile, financial donations by and enthusiasm of other companies

In respect of its suppliers, NEM Holding evaluates and

and individuals have amounted to such extent that the

monitors the financial position of each of its major sup-

foundation may start similar projects for other villages in

pliers. NEM Holding has set various criteria to rate its

the coming years. It is NEM Holding’s wish to remain a

suppliers before contracts are signed. This is done in

partner of these laudable initiatives, thus staying true to

close cooperation between our Treasury and Supply De-

its aim to enable the generation of energy in a way that

partments. We only enter into contracts with qualifying

makes this world a better place to live in.

suppliers. This approach has delivered a reliable supplier base that the group can build on.

Corporate Social Responsibility

Outlook Estimates for future order intake have become extremely difficult based on the market developments described

NEM Holding’s corporate vision is ‘Enabling the genera-

above. In 2008-2009 the predictions of the GDP deve-

tion of energy in a way that makes this world a better

lopment per country had to be adjusted downward

place to live in, for present and for future generations.’

­almost every month. By the end of 2009 for instance,

Consistent with our values and sense of social respon­

just as global economy seemed to be improving, it be-

sibility, the foundation “Water for Gambia” was founded

came clear that Dubai was on the brink of bankruptcy. In

in 2009. Its aim is to provide the Gambian village of

Europe, Greece, Spain and Italy are in dire straits at the

Badjaran with clean drinking water by installing a solar-

beginning of 2010 and the impact on the euro is as yet

driven water ­purification installation. Central to the

unclear.

founda­tion’s philosophy is the commitment of the local people themselves. Each of them has given his or her

Currently, the total installed electric generating capacity

vote for the project. They carry out the installation while

worldwide is approximately 4300 GW. The expected

the foundation provides them with the means and orga-

growth in the requirement for electric generating capaci-

nisational skills. Along the way, it is expected that mo-

ty (based on macro economic data) for the coming years

dest economical opportunities will rise for Badjaran’s

is mainly caused by growth in China, India and to a les-

inhabitants.

ser extent, the Middle East. This expected growth in the

Besides providing the foundation with the necessary

requirement for electricity does not necessarily coincide

­financial support, NEM Holding wishes to involve its own

with actual demand since the latter can also be influen-

people and make use of their organisational experience.

ced by short-term ‘psychological’ effects such as redu-

By using our internal communication tools optimally, we

ced consumer confidence, nervous financial institutions

­expect our people to respond enthusiastically. Team-

etc.


Another important factor in the estimation of NEM Holding’s ­order intake for 2010 is the fact that by the end of 2009, NEM Holding was very well positioned for at least five very high potential CCPP projects. These will all be awarded in the first and second quarter of 2010. Two of these are for Siemens and are located in the Netherlands. The other three are for EPC contractors in Southern Europe and the projects are located in Europe and the Middle East. When these projects are indeed secured, this will mean an excellent start of the new-year and result in a solid backlog, especially against the background of difficult times. NES faces a slow market in the Benelux in 2010 with increasing competition. However, the group has oppor­ tunities in the global after-sales NEM market and synergies with NEM in the field of new boiler projects will be explored and exploited. Expectations for services in 2010 are therefore mildly optimistic. Given the uncertain global economic developments, it is hard to give accurate predictions for order intake in 2010. However, based on the orders in hand and the expected short-term order intake, we feel confident that in 2010 our revenues as well as our results will be in line with those realised in 2009. Leiden, 8 April 2010 The Board of Management G.J. Van Dijk W. de Blauw J.J.J. Mulder J.N.H.M. Hendrikx

ANNUAL REPORT 2009 NEM 19


Ø 1.391.980 KM

20

NEM ANNUAL REPORT 2009

The Power of the Sun

Ø 12.756 KM

EARTH

SUN


21

FINANCIAL STATEMENTS 2009


Consolidated balance sheet (before appropriation of the result, in thousands of euros)

Comparative figures are adjusted for the acquisition of Standard Fasel B.V. 31 December 2009

31 December 2008

NOTES

FIXED ASSETS Intangible fixed assets

(1)

Tangible fixed assets

(2)

2,630 7,093

1,200 3,521 9,723

4,721

CURRENT ASSETS Inventories Receivables

(3)

Cash

(4)

TOTAL

1,704

1,684

78,796 124,797

97,856 88,891 205,297

188,431

215,020

193,152

22

GROUP EQUITY

(5)

40,869

37,115

PROVISIONS

(6)

9,635

4,713

CURRENT LIABILITIES TOTAL

(7)

164,516

151,324

215,020

193,152


Consolidated profit and loss account (in thousands of euros)

Comparative figures are adjusted for the acquisition of Standard Fasel B.V. 1 January 2009

1 Januar y 2008

31 December 2009

31 December 2008

369,228

409,587

NOTES

REVENUES

(1)

OPERATING EXPENSES Cost of raw materials and consumables Subcontracted work and other external charges

89,560

104,414

191,747

222,427

Wages and salaries

(2)

41,781

36,701

Social securities and pension contributions

(3)

8,897

8,095

1,277

999

270 23,493

100 17,933

Depreciation of tangible fixed assets Amortisation of goodwill Other operating expenses

(4)

OPERATING RESULT

– 357,025

– 390,669

12,203

18,918

FINANCIAL INCOME AND EXPENSE 3,237

Intrest income Intrest income group companies Intrest expenses Intrest expenses group companies

RESULT BEFORE TAXATION Taxation

NET RESULT

(5)

2,918

-

30

– 223 – 144

– 146 – 364

23

2,870

2,438

15,073

21,356

– 3,819

– 5,526

11,254

15,830


Consolidated cash flow statement (in thousands of euros)

Comparative figures are adjusted for the acquisition of Standard Fasel B.V. 1 January 2009

1 Januar y 2008

31 December 2009

31 December 2008

12,203

18,918

Amortisation/depreciation

1,547

1,099

Movement in provisions

4,922

1,456

OPERATING RESULT Adjusted for:

Movement in working capital: Stocks Work in progress Receivables Current liabilities

– 925 45,919

19,060 – 22,113

– 50,050 56,148

Movement in working capital

40,053

51,092

CASH FLOW FROM ORDINARY ACTIVITIES

58,725

72,565

Interest received Interest paid 24

– 20 43,126

Taxation

3,237

2,948

– 223 – 3,819

– 146 – 5,526

CASH FLOW FROM OPERATING ACTIVITIES

– 805

– 2,724

57,920

69,841

Investments in intangible fixed assets

– 1,700

– 1,300

Investments in tangible fixed assets

– 4,859 10

– 4,266 989

Disposals of tangible fixed assets

CASH FLOW FROM INVESTMENT ACTIVITIES

– 6,549

– 4,577

-

– 3,903

– 144

– 364

Dividend paid

– 7,500

-

Group company loan

– 7,821 -

- – 10,000

Movement in equity Interest paid group companies

Shareholders’ loan

CASH FLOW FROM FINANCING ACTIVITIES MOVEMENTS IN LIQUIDITY

– 15,465

– 14,267

35,906

50,997

Net cash position at 1 Januar y

88,891 124,797

37,894 88,891

35,906

50,997

Net cash position at 31 December

MOVEMENTS IN LIQUIDITY


25


26

NEM ANNUAL REPORT 2009

The Power of Innovation


27

ACCOUNTING POLICIES & NOTES


Accounting Policies Activities

Acquisitions 2009

The activities of NEM Holding B.V., having its legal seat

NEM Energy Services B.V. acquired 100% of the shares

and is located Kanaalpark 159, Leiden, the Netherlands

in Standard Fasel B.V. from Worldwide Energy Services

and its group companies primarily consist of the engi-

B.V. (100% group company of H.T.P. Investments B.V.) as

neering and delivery of various types of Heat Recovery

per 31 December 2009 retrospectively as per 1 January

Steam Generators (HRSG’s) and the assembling, servi-

2009. Standard Fasel B.V. has utility boiler maintenance

cing, engineering and repairing of energy boilers of public

activities and sells shell type boiler solutions.

and industrial power stations and waste incineration plants.

Standard Fasel has been consolidated with the following amounts (in thousands of euros):

Group structure NEM Holding B.V. in Leiden is the head of a group of legal

entities. The ultimate parent company is H.T.P. Invest-

Assets Liabilities Total Operating Income Net profit

ments B.V., statutory seat at Goes, the Netherlands. A summary of the information required by articles 2:379 and 414 of the Netherlands Civil Code is given below:

2009

2008

10,478 2,657 19,736 2,435

7,414 2,029 16,757 1,467

NEM B.V., Leiden, the Netherlands, 100% • NEM GmbH, Oberhausen, Germany, 100%

The acquisition has been disclosed in accordance with

• HRSG Systems (Malaysia) Sdn.Bhd., Kuala Lumpur,

the “pooling of interest” method. The consolidated com-

Malaysia, 100% 28

NEM ANNUAL REPORT 2009

• Gulf Steam Generators L.L.C., Dubai, United Arab

parative figures of NEM Holding B.V. of 2008 have been adjusted as if the company was a subsidiairy in 2008.

Emirates, 100 % • NEM USA Corp., Greenville, South Carolina, USA, 100% • NEM-Al Hashemiah L.L.C., Alexandria Public Free Zone, Egypt, 80%

Furthermore NEM Energy Services B.V. acquired 100% of the shares in Powerspex Instrumentation B.V. as per 1 January 2009. The acquisition has been disclosed ­according to the purchase method. The company has mainly utility boiler related electrical and instrumentation

NEM Energy Services B.V., Hengelo, the Netherlands,

activities.

100% • NEM Standard Fasel Manufacturing B.V., Hengelo, the Netherlands, 100%

During the financial year 2009 NEM Energy Services B.V. established NEM Standard Fasel Tools 4 Rent B.V. as per

• Standard Fasel B.V., Utrecht, the Netherlands, 100%

24 July 2009 and Energy Staff, Resourcing & Recruiting

• NEM Standard Fasel Tools 4 Rent B.V., Hengelo,

B.V. as per 24 September 2009. Aforementioned com­

the Netherlands, 100% • Powerspex Instrumentation B.V., Hengelo, the Netherlands, 100% • Energy Staff, Resourcing & Recruiting B.V., Utrecht,

panies have activities in the field of renting tools, accomplishment of toolmaintenance operations as well as the recruitment and selection of personnel on behalf of clients, temporary employment and send on secondment.

the Netherlands, 100% • Sustainable Energy Operations B.V., Hengelo,

NEM B.V. established NEM USA Corp. as per 6 June

the Netherlands, 100% (dormant company)

2009. A corporation duly organised under the laws of

• NEM Schelde Services B.V., Breda, the Netherlands, 100% (dormant company) • Standard Fasel Technical Services B.V., Utrecht,

the State of Delaware. The nature of principal business consists of service and sales of steam generating equipment, boilers and solar power systems.

the Netherlands, 100% (dormant company) • SFL Boiler Installations Sdn Bhd, Malaysia, 100% (dormant company) • NEM Energy Services Pte Ltd., Singapore, 100% has been liquidated in 2009.

Furthermore, NEM B.V. established together with Al Hashemiah Contracting Company (a joint stock company) as per 25 March 2009 NEM-Al Hashemiah L.L.C. in the Free Zone of Alexandria, Egypt. NEM B.V. legally holds an 80% participation in NEM-­

Non consolidated companies:

Al Hashemiah L.L.C. However, it has been formally

• Tetratube B.V., Hengelo, the Netherlands, 50%

agreed that NEM B.V. holds 100% of the economic risks and rewards. Therefore, all risks and rewards will be recognised in the financial statements of NEM B.V. respec-


tively NEM Holding B.V. The purpose of the company is

Valuation of assets and liabilities and determination of

the fabrication of boilers and parts for electrical power

the result takes place under the historical cost conven-

plants and metal structures, maintenance and the provi-

tion. Unless presented otherwise as the relevant prin­

sion of technical services associated.

ciple for the specific balance sheet item, assets and ­liabilities are presented at face value.

Related parties

Income and expenses are accounted for on a accrual

In addition to the companies referred to under the finan-

basis. Profit is only included when realised on the ba-

cial fixed assets, the following companies are related to

lance sheet date. Losses originating before the end of

the legal entity:

the financial year are taken into account if they have

• H.T.P. Investments B.V., Goes, the Netherlands

become known before preparation of the financial state-

• Worldwide Energy Services B.V., Goes,

ments.

the Netherlands

Changes in accounting principles No significant transactions were entered into with rela-

Due to changes in “de Richtlijnen voor de Jaarverslag-

ted parties other than mentioned in the notes to the

geving” 221 Work in progress on construction contracts,

balance sheet.

the presentation of the work in progress on construction contracts has been adjusted, as explained in more de-

Consolidation principles

tail in the principles for the valuation of work in progress

Financial information relating to group companies and

on construction contracts. As from financial year 2009,

other legal entities which are controlled by NEM Holding

work in progress on construction contracts is presented

B.V or where central management is conducted has

as a separate item in the balance sheet. This change in

been consolidated in the financial statements of NEM

accounting policy does not affect equity and result. The

Holding B.V. The consolidated financial statements have

comparative figures have been adjusted as well.

been prepared in accordance with the accounting prin­ ciples of NEM Holding B.V.

Financial instruments Financial instruments are both primary instruments,

The financial information relating to NEM Holding B.V. is

such as receivables and payables, and financial deriva-

presented in the consolidated financial statements. Ac-

tives. For the principles of primary financial instruments,

cordingly, in accordance with article 2:402 of the Nether-

reference is made to the treatment per balance sheet

lands Civil Code, the company financial statements only

item. For financial derivatives reference is made to the

contain an abridged profit and loss account.

paragraph foreign currencies.

Financial information relating to the group companies

Translation of foreign currency

and the other legal entities and companies included in

Assets and liabilities denominated in foreign currencies

the consolidation is fully included in the consolidated

are translated in euro’s at the exchange rates prevailing

­financial statements, eliminating the intercompany rela-

at the balance sheet date. Transactions in foreign cur-

tionships and transactions.

rency during the financial year are recognised in the financial statements at the exchange rates prevailing at the

The results of newly acquired group companies and the

transaction date. The exchange differences resulting

other legal entities and companies included in the con-

from the translation as of balance sheet date, taking

solidation are consolidated from the acquisition date. At

into account possible hedge transactions, are recorded

that date the assets, provisions and liabilities are mea-

in the profit and loss account.

sured at fair values. Goodwill paid is capitalised, to which amortisation is charged based on the estimated

NEM Holding B.V. and its subsidiairies, in the normal

useful life. The results of participations sold during the

course of the business, enters into foreign currency hed-

year are recognised until the moment of disposal.

ges to reduce its exposure to market risks from chan-

General accounting principles for the preparation of the consolidated financial statements

ging currency rates. As at year-end the total foreign currency exposure is recognised at the rate as at balance sheet date. Exchange differences resulting from the translation of assets and liabilities of foreign currency denominated

The consolidated financial statements are prepared in

subsidiaries into euro’s at year-end rates of exchange

accordance with chapter 9 Book 2 of the Netherlands

are taken directly to reserves.

Civil Code.

ANNUAL REPORT 2009 NEM 29


Principles of valuation of assets and liabilities Intangible fixed assets Goodwill is calculated as the difference of cost and the net asset value of the entity acquired. Goodwill is capitalised and was amortised on a straight-line basis over the estimated useful economic life. Permanent decreases in value as at balance sheet date are taken into account.

Tangible fixed assets Tangible fixed assets are stated at purchase price less accumulated depreciation. Depreciation is based upon the expected economic life of the assets, applying the straight-line method.

Financial fixed assets Group companies in which NEM Holding B.V. holds more than 50% of the voting capital or in which NEM Holding B.V. has a decisive influence on managerial and financial policy are valued according to the equity method. Recei30

NEM ANNUAL REPORT 2009

vables on and loans to group companies and other receivables are stated at face value less any necessary provisions. Participations with a negative equity are valued at nil. If the company fully or partly guarantees the liabilities of the participation concerned a provision is formed, primarily comprising the receivables from this participation. The remainder is recognised under provisions, for the amount of the share in the losses incurred by the participation, or for the amount of payments the company is expected to make on behalf of these participations.

Inventories Stocks of raw materials and consumables are valued at historical cost less a provision deemed necessary for obsolescence.

Work in progress Work in progress is stated at direct costs less a provision for anticipated losses during production in the period up to completion. The invoiced instalments are deducted from the direct costs. The result recognised according to the percentage of completion method is added. A negative balance arises if the invoiced instalments ­exceed the cost incurred plus profits recognised on the works concerned. In case of situations involving claims, which are in the nature of the business, valuations are based on management’s best estimate.

Receivables Receivables are stated at face value less a provision where necessary. These provisions are determined by individual assessment of the receivables.


31


Provisions Provisions are set up in respect of actual or specific risks and commitments existing at balance sheet date, of which the size is uncertain but can be estimated using a reliable method. The other provisions are recognised at face ­value. For tax liabilities not yet payable due to differences between the valuation principles in the annual report and the valuation for tax purposes of the appropriate balance sheet items, a provision for deferred tax liabilities has been taken into account in the annual report amounting to the total of these differences multiplied by the current rate of taxation. These provisions are decreased by the tax receivables not yet demandable due to losses settled, as far it is probable that the future profits will be sufficient for settlement. The provisions for warranties concerns possible liabilities related to projects completed or supplies made. ­Additions to these provisions are basically related to cost of work. Exceptional costs incurred under warranties are charged to this provision. Other long-term employee benefits are those benefits that are part of the remuneration package, such as gratification and have a long-term character. The net liability for these employee benefits is the amount of the future remuneration that employees have earned in exchange for their services in the current and prior reporting pe­ riods. The calculation of the obligation can be compared with that of defined benefit plans. The provision is cal­ culated in accordance with the discounted cash flow ­method.

Pensions NEM Holding B.V. and its subsidiairies have various pension plans. These plans are financed through contribu­ tions to insurance companies and industry pension funds. NEM Holding B.V. and its subsidiairies only have defined contributions plans. Obligations for contribu­ tions to defined contribution plans are recognised as an expense in the profit and loss account as incurred. NEM Holding B.V. participates in the “Metalektro” industry wide pension scheme. Since NEM Holding B.V. and its subsidiairies have no obligation to additional funding in case of under funding, other than higher contributions in the future, it has been accounted for as a defined contribution plan. The industry fund has a coverage ratio of 100% as at 31 December 2009 (31 December 2008: 90%).


Principles for the determination of results

Cash flows in foreign currencies are translated at an 足estimated average rate. Exchange rate differences concerning finances are shown separately in the cash flow

Revenue recognition

statement.

NEM Holding B.V. and its subsidiairies heat recovery systems are generally manufactured based on long term

Corporate income taxes, issuance of share capital, inte-

contracts. Income on significant contracts extending

rest received and paid on operating activities and divi-

足beyond one year is recorded using the percentage of

dends received are presented under the cash flow from

completion method of accounting in the ratio that cost

operating activities. Interest paid on financing activities

incurred bears to estimated total cost at completion.

and dividends paid are presented under the cash flow from financing activities.

Changes in job performance and estimated profitability, including those arising from contract penalty revisions

The cost of group companies acquired is presented un-

and final contract settlements, may result in revisions to

der the cash flow from investment activities, so far as

costs and income and are recognised in the period in

payment has been made with cash and cash equiva-

which the revisions are determined. If the current con-

lents. The cash and cash equivalents of the group com-

tract estimate indicates a loss, a provision is made for

panies acquired are deducted from the purchase cost.

the anticipated loss. Transactions that do not result in exchange of cash and Small contracts are recognised using the completed

cash equivalents, such as financial leases, are not pre-

contract method. This method is used because the typi-

sented in the cash flow statement. The payment of lease

cal contract is completed in several months and the

terms on account of the financial lease contract is con-

足financial position and results of operations do not vary

sidered as an expenditure of financing activities as far

significantly from those, which would result from use of

as it concerns redemptions and as an expenditure of

the percentage of completion method. A contract is con-

operational activities as far as it concerns interest.

sidered complete when all costs have been incurred and the service or installation is performing according to specification and has been accepted by the customer.

Operating expenses Operating expenses comprise direct cost associated with the recognised revenues.

Taxation Corporate income tax is calculated at the applicable rate on the result for the financial year, taking into account permanent differences between profit calculated ac足 cording to the financial statements and profit calculated for tax purposes, and with which deferred tax assets (if applicable) are only valued in so far as their realisation is likely. As of the year 2009 NEM Holding B.V. is the head of the tax unity for all Dutch companies.

Principles for preparation of the cash flow statement The cash flow statement is prepared according to the indirect method. The funds in the cash flow statement consist of cash and cash equivalents. Cash equivalents can be considered as highly liquid investments.

ANNUAL REPORT 2009 NEM 33


Notes to the consolidated balance sheet (in thousands of euros)

Comparative figures are adjusted for the acquisition of Standard Fasel B.V. (1)

INTANGIBLE FIXED ASSETS

2009 Total

2008 Total

2,874 – 1,674

2,874 – 1,574

1,200

1,300

1,700 – 270

- – 100

1,430

– 100

4,574 – 1,944

2,874 – 1,674

2,630

1,200

Position as at 1 January Purchase Price Accumulated depreciation Book value

Movements in book value Investments Amorisation

Position as at 31 December Purchase Price Accumulated depreciation Book value

Goodwill relates to the acquisition of the service activities of Stork N.V. in the Netherlands in 2001 and 2002. Investments with regard to the financial year 2009 relates to the acquisition of Powerspex Instrumentation B.V. Amortisation is calculated at the following annual rates: Service activities of Stork N.V. 5% Powerspex Instrumentation B.V. 10%

34

(2)

TANGIBLE FIXED ASSETS

Land

Plant,

Other

and buildings

machiner y equipment

operating assets

2009 Total

2008 Total

Accumulated depreciation

483 – 12

4,604 – 3,262

9,165 – 7,457

14,252 – 10,731

10,977 – 9,734

Book value

471

1,342

1,708

3,521

1,243

Position as at 1 January Purchase Price

Movements in book value -

-

121

121

1,360

2,523

314

1,901

4,738

2,906

- – 29

- – 440

– 10 – 808

– 10 – 1,277

– 989 – 999

2,494

– 126

1,204

3,572

2,278

Accumulated depreciation

3,006 – 41

2,443 – 1,227

9,830 – 6,918

15,279 – 8,186

14,252 – 10,731

Book value

2,965

1,216

2,912

7,093

3,521

New consolidations Investments Disposals Depreciation Total movements

Postion as at 31 December Purchase Price

Depreciation is calculated at the following annual rates: Land and buildings 0 - 2,5% Plant, machinery and equipment 10 - 20% Other operating assets 20 - 33%


(3)

RECEIVABLES

31-12-2009

31-12-2008

66,999 8

82,973 -

Taxation

7,686

4,821

Prepayments and accruals

3,110 993

6,313 3,749

78,796

97,856

Trade receivables ( less provisions for doubtful debts ) Group companies

Other receivables

In general the receivables are due within one year. The total of the tax losses carried for ward amounts to € 43.0 million and can be compensated with profits until December 2011. A deferred tax asset of € 0.5 million is valued as per 31 December 2009 and is included in taxation receivables.

(4)

CASH Deposits Cash and bank balances

31-12-2009 45,756 79,041

31-12-2008 58,575 30,316

124,797

88,891

The outstanding deposits will mature on an average of 0,5 months after balance sheet date. An amount of approximately € 58.5 million (2008: € 40.9 million) is not at NEM’s free disposal. Cash collaterals have been deposited with ABN-AMRO Bank N.V., ING Bank N.V. and Rabobank (the Netherlands) in order to achieve bank guarantees for third parties and for ward contracts.

(5)

GROUP EQUITY Reference is made to the note to shareholders’ equity in the (company) financial statements. The 2008 comparative figures of the consolidated financial statements are adjusted for the acquisition of Standard Fasel B.V. according to the "pooling of interest" method. Therefore equity 2008 in the consolidated balance sheet increases with € 2,435 compared with the companies annual report of 2008.

(6)

PROVISIONS

Deferred

Deferred

taxation provision

Warranty provision

gratification provision

Other provisions

Total

-

2,452

805

-

3,257

Position as at 1 January 2008 Movements in book value Acquisition groupcompany

-

160

-

61

221

Addition

-

1,352

103

250

1,705

Withdrawal Release

- -

– 397 -

– 33 -

- – 40

– 430 – 40

Position as at 31 December 2008

-

3,567

875

271

4,713

4,335

1,297

229

-

5,861

- -

– 898 -

– 20 -

- – 21

– 918 – 21

4,335

3,966

1,084

250

9,635

Movements in book value Addition Withdrawal Release

Position as at 31 December 2009 Provisions have a predominantly long-term character.

Other provisions relate to a provision for pollution as well as a provision for major overhaul with regard to the Scheemda premises. The provision is in line with the cost estimated by experts.

35


(7)

CURRENT LIABILITIES

31-12-2009

31-12-2008

94,080 46,231

50,954 68,923

Group companies

7,208

12,784

Liabilities to bank

-

2,494

Work in progress Trade creditors

Taxation

3,800

1,244

Wage tax and social insurance contributions

1,941

1,854

575 10,681

986 12,085

164,516

151,324

31-12-2009

31-12-2008

851,709 – 945,789

651,095 – 702,049

– 94,080

– 50,954

28,461 – 122,541

34,863 – 85,817

– 94,080

– 50,954

Accrued costs on completed contracts Other amounts owed

Work in progress can be specified as follows: Cost of work including estimated margins recognised and provisions for anticipated losses Billings to date

Cost and estimated earnings in excess of billings 36

Billings in excess of costs and estimated earnings

In general current liabilities are due within one year. NEM Energy Services B.V. has creditfacilities with Rabobank. A € 4.0 million credit line and a € 4.5 million creditfacility for bank guarantees. The assets are pledged to the bank, a mortgage on the Scheemda premises of € 1.5 million has been granted. A minimum debt to equity ratio of 35% is required, the interest on money borrowed is Euribor + 1.8%. NEM Holding B.V. provides security for a guarantee facility of NEM B.V. up to a maximum of € 25 million. NEM Holding B.V. provides the banks of NEM B.V. a capital maintenance declaration and a no withdrawal certificate. Furthermore NEM Holding B.V. is severally responsible for the credit facilities of NEM B.V.

Contingent liabilities Guarantees, callable on demand, issued to third parties amount to € 161.1 million at 31 December 2009 (2008: € 149.8 million). The total contractual commitments in respect of lease and rental contracts amount to € 21.1 million (2008: € 13.8 million). The relevant commitment in 2010 amounts to € 4.9 million and the aggregate commitment in respect of the years 2011-2014 amounts to € 12.1 million with a commitment of € 4.1 million extending beyond 2014. NEM Holding B.V. and its subsidiairies are involved in various claims and legal actions arising in the ordinary course of the business. Where deemed necessary, provisions have been made.


Notes to the consolidated profit and loss account (in thousands of euros) Comparative figures are adjusted for the acquisition of Standard Fasel B.V. (1)

REVENUES Revenues by geographical region (in millions of euros) The Netherlands Europe Outside Europe

2009

2008

148.9 107.0 113.3

101.0 113.6 194.9

369.2

409.5

286.6

305.0

23.6 59.0

39.9 64.6

369.2

409.5

2009

2008

631 47 1

526 44 -

679

570

2009

2008

345 47 287

302 44 224

679

570

Revenues by activities (in millions of euros) Heat Recover y Steam Generators Diverters and Dampers Ser vice and After Sales

(2)

WAGES AND SALARIES Average number of personnel (FTE’s) by geographical region The Netherlands Europe Outside Europe

Average number of employees (FTE’s) by activities Heat Recovery Steam Generators Diverters and Dampers Ser vice and After Sales

Remuneration The remuneration paid in 2009 to the members of the Board of Management amounts to € 1,379 (2008: € 1,213) No remuneration has been paid to the members of the Super visor y Board.

(3)

SOCIAL SECURITIES AND PENSION CONTRIBUTIONS Social securities Pension contributions

(4)

2009

2008

4,153 4,744

3,777 4,318

8,897

8,095

OTHER OPERATING EXPENSES In accordance with Part 9 of Book 2 of the Netherlands Civil Code ( art.2.382a ) the auditor’s cost Deloitte Accountants B.V. amount to € 258 (2008: € 225).

(5)

TAXATION Taxation relates to taxation payable on results achieved in the Netherlands and other countries. The amount of tax payable has been calculated on the basis of corporate tax rates prevailing at the balance sheet date, taking into account any non deductable expenses. The tax position in the profit and loss account deviates from the average tax rates, which is mainly caused by a somewhat higher tax burden in Germany.

37


Company balance sheet

(before appropriation of the result, in thousands of euros)

31 December 2009

31 December 2008

NOTES

FIXED ASSETS Financial fixed assets

(1)

51,515

44,771 51,515

44,771

CURRENT ASSETS Receivables

(2)

Cash

4,013 579

TOTAL

SHAREHOLDERS’ EQUITY

51 16 4,592

67

56,107

44,838

(3)

Issued and paid up capital Other reserves Net result

40

40

29,575 11,254

25,147 14,363 40,869

39,550

38

CURRENT LIABILITIES TOTAL

(4)

15,238

5,288

56,107

44,838


Company profit and loss account (in thousands of euros)

1 January 2009

1 Januar y 2008

31 December 2009

31 December 2008

Other income and expense after taxation

11,679 – 425

14,394 – 31

NET RESULT

11,254

14,363

Share in result of participations after taxation

39


Notes to the company balance sheet (in thousands of euros)

GENERAL ACCOUNTING PRINCIPLES FOR THE PREPARATION OF THE FINANCIAL STATEMENTS The company financial statements have been prepared in accordance with Title 9, Book 2 of the Netherlands Civil code. For the general principles for the preparation of the financial statements, the principles for valuation of assets and liabilities and determination of the results, reference is made to the notes to the consolidated financial statements, if not presented otherwise here after.

NOTES TO THE SPECIFIC ITEMS OF THE BALANCE SHEET (1)

FINANCIAL FIXED ASSETS

31-12-2009

31-12-2008

51,515

44,771

2009 Total

2008 Total

44,771 -

24,514 5,863

Share in results

11,679

14,394

Effect pooling of interest method Standard Fasel B.V.

– 2,435

-

Share premium reserve Dividend received

5,000 – 7,500

- -

Book value as at 31 December

51,515

44,771

31-12-2009

31-12-2008

4,013

51

Interest in group companies

Movements in interests held are as follows:

Book value as at 1 January New acquisitions

40

(2)

RECEIVABLES Taxation In general receivables are due within one year.


(3)

SHAREHOLDERS’ EQUITY

Position as at 31 December 2007

Issued and paid up capital

Other reser ves

Net result

Shareholders’ equity

40

24,591

556

25,187

- -

556 -

– 556 14,363

14,363

40

25,147

14,363

39,550

-

– 2,435

-

– 2,435

40

22,712

14,363

37,115

Movements Appropriation net result 2007 Net result 2008

Position as at 31 December 2008 Comparative figures adjustment for the acquisition of Standard Fasel B.V.

Position as at 1 January 2009 Movements Appropriation net result 2008

-

14,363

– 14,363

-

Distribution dividend 2008

- -

– 7,500 -

11,254

– 7,500 11,254

40

29,575

11,254

40,869

Net result 2009

Position as at 31 December 2009

On 31 December 2009 the Company’s authorised share capital, was made up of 40.000 ordinary shares, with a nominal value of € 1 each. No shares have been issued during the financial year.

(4)

CURRENT LIABILITIES Trade creditors Group companies Other amounts owed

31-12-2009

31-12-2008

8 15,202 28

5,288 -

15,238

5,288

In general current liabilities are due within one year.

CONTINGENT LIABILITIES The parent company is part of a fiscal unity for corporate income tax and V.A.T. purposes and for that reason it is jointly and severally liable for the tax liabilities of the whole fiscal unity.

SIGNING OF THE FINANCIAL STATEMENTS Leiden, 8 April 2010

The Board of Management

The Supervisory Board

G.J. Van Dijk

W.P. de Pundert, Chairman

W. de Blauw

K. Meertens

J.J.J. Mulder J.H.N.M. Hendrikx

41


42

NEM ANNUAL REPORT 2009

The Power of People


43

OTHER INFORMATION


Other Information Auditor’s report Reference is made to the auditor’s report as included

Proposed result appropriation for the financial year 2009

hereinafter.

Statutory rules concerning result appropriation

The Board of Management and the Supervisory Board propose to transfer the profit for the financial year 2009 of E 11.2 million to other reserves. This proposal has not been reflected in the Balance

In accordance with Article 25 of the Articles of Asso­

Sheet as at 31 December 2009 but is reflected in the

ciation the result for the year is placed at the disposal of

equity as net result for the year at the disposal of the

the general meeting of shareholders.

shareholders.


To: Annual General Meeting of Shareholders of NEM Holding B.V.

Opinion

Auditor’s report

fair view of the financial position of NEM Holding B.V. as

Report on the financial statements We have audited the accompanying financial statements

In our opinion, the financial statements give a true and at 31 December 2009, and of its result for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code.

consolidated and company balance sheet as at 31 De-

Report on other legal and regulatory requirements

cember 2009, the consolidated and company profit and

Pursuant to the legal requirement under 2:393 sub 5

loss ­account for the year then ended and the notes.

part f of the Netherlands Civil Code, we report, to the

2009 of NEM Holding B.V. Leiden, which comprise the

extent of our competence, that the Report of the Board

Management’s responsibility

of Management is consistent with the financial state-

Management is responsible for the preparation and fair

ments as required by 2:391 sub 4 of the Netherlands

presentation of the financial statements and for the

Civil Code.

­preparation of the Report of the Board of Management, both in accordance with Part 9 of Book 2 of the Nether-

Leiden, 8 April 2010

lands Civil Code. This responsibility includes: designing, implementing and maintaining internal control relevant

Deloitte Accountants B.V.

to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying ­appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with Dutch law. This law requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ­financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the ­effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

J. van der Steen ANNUAL REPORT 2009 NEM 45


Five years in figures (in millions of euros)

2009

2008

The Netherlands

148.9

Europe

107.0 113.3

2007

2006

2005

101.0

22.6

26.3

47.2

113.6 194.9

56.3 112.6

42.0 138.5

32.6 53.1

369.2

409.5

191.5

206.8

132.9

286.6

305.0

165.5

183.2

94.2

23.6 59.0

39.9 64.6

26.0 -

23.6 -

12.1 26.6

369.2

409.5

191.5

206.8

132.9

12.7 1.5

16.9 1.1

0.8 0.3

4.1 1.0

5.7 2.4

11.2 11.2

15.8 8.3

0.5 0.5

3.1 3.1

3.3 3.3

-

7.5

-

-

-

40.8

37.1

25.1

24.6

22.0

679

570

342

318

438

3.0

3.8

0.3

1.5

2.5

30.3

62.8

2.3

13.9

17.9

34.2

67.1

3.2

18.6

30.5

REVENUES BY GEOGRAPHICAL REGION:

Outside Europe

REVENUES BY ACTIVITIES: Heat Recover y Steam Generators Diverters and Dampers Service and After Sales

Cash Flow Depreciation Net result 46

Reser ves Dividend

Shareholders’ equity

Average number of employees

RATIOS Net result as % of revenues Net result as % of shareholders’ equity as per beginning of the year Cash flow as % of shareholders’ equity as per beginning of the year

Above-mentioned consolidated five years in figures contain the following companies: 2009: NEM Holding, NEM, NES, Standard Fasel 2008: NEM Holding, NEM, NES, Standard Fasel 2007: NEM Holding, NEM 2006: NEM Holding, NEM 2005: NEM Holding, NEM, NES The figures for 2006 with regard to the profit and loss account contains 15 months.


CONSOLIDATED BALANCE SHEET

2009

2008

Intangible fixed assets

2,630

1,200

-

-

3,125

Tangible fixed assets Financial fixed assets

7,093 -

3,521 -

1,243 -

911 -

1,493 -

Total fixed assets

9,723

4,721

1,243

911

4,618

1,704

1,684

759

724

673

-

-

-

18,180

-

Cash

78,796 124,797

97,856 88,891

47,806 37,894

32,180 29,797

44,225 34,697

Current assets

205,297

188,431

86,459

80,881

79,595

TOTAL

215,020

193,152

87,702

81,792

84,213

40

40

40

40

40

Net result

29,575 11,254

21,245 15,830

24,591 556

21,536 3,055

18,621 3,343

Equity

40,869

37,115

25,187

24,631

22,004

9,635

4,713

3,257

6,344

10,625

-

-

-

-

4,000

WORK IN PROGRESS

94,080

50,954

5,035

-

8,478

CURRENT LIABILITIES

70,436

100,370

54,223

50,817

39,106

215,020

193,152

87,702

81,792

84,213

2007

2006

2005

FIXED ASSETS

CURRENT ASSETS Stocks Work in progress Receivables

SHAREHOLDERS’ EQUITY Issued and paid-up capital Other reserves

PROVISIONS LONG-TERM DEBT

TOTAL

47

MOVEMENTS IN TANGIBLE FIXED ASSETS Net investments Depreciation

4,859

4,266

588

– 128

480

– 1,277

– 999

– 256

– 454

– 1,591

1.2

1.2

1.5

1.6

1.7

4.2

7.9

20.3

27.0

4.8

RATIOS Current assets/current liabilities (including work in progress) Equity/fixed assets Equity/long-term liabilities (including provisions) Equity/balance sheet total

4.2

7.9

7.7

3.9

1.5

19.0

19.2

28.7

30.1

26.1


48

NEM ANNUAL REPORT 2009

The Power of Combined Energy


49

ADDRESSES


Addresses NEM Holding B.V.

NEM-Al Hashemiah L.L.C.

Kanaalpark 159, 2321 JW Leiden

Alexandria Public Free Zone

P.O. Box 162, 2300 AD Leiden

Street 2/6, Block number 310

The Netherlands

Egypt

Telephone +31 71 579 2444

Telephone +2 016 552 3915

Fax +31 71 579 2792

HRSG Systems (Malaysia) Sdn.Bhd. NEM B.V.

C/O Level 18, The Gardens North Tower

Kanaalpark 159, 2321 JW Leiden

Mid Valley City, Lingkaran Syed Putra

P.O.Box 162, 2300 AD Leiden

Kuala Lumpur Poskod: 59200

The Netherlands

Malaysia

Telephone +31 71 579 2444 Fax +31 71 579 2792

NEM Energy Services B.V. Head office:

NEM GmbH (p/o NEM B.V.)

Demmersweg 21, 7556 BN Hengelo

Kanaalpark 159, 2321 JW Leiden

P.O. Box 845, 7550 AV Hengelo

P.O.Box 162, 2300 AD Leiden

The Netherlands

The Netherlands

Telephone +31 74 851 5555

Telephone +31 71 579 2444

Fax +31 74 851 5556

Fax +31 71 579 2792 Branch office: 50

NEM ANNUAL REPORT 2009

NEM Industrial & Utility Boilers

Scottweg 29 A, 4462 GS Goes

Demmersweg 140

P.O. Box 142, 4460 AC Goes

7556 BN Hengelo

The Netherlands

The Netherlands

Telephone +31 11 323 5600

Telephone +31 74 851 5888

Fax +31 11 323 5601

Fax +31 74 851 5889 Branch office:

NEM Modular Heat Systems

Mandenmakerstraat 130, 3194 DG Hoogvliet

Antoniuslaan 1

The Netherlands

3341 GA Hendrik-Ido-Ambacht

Telephone +31 10 416 5464

The Netherlands

Fax +31 10 838 0453

Telephone +31 78 684 1020 Fax +31 78 684 1022

Standard Fasel B.V. Head office:

NEM Power-Systems

Krommewetering 13, 3543 AP Utrecht

Sibylla-Merian-Strasse 3

P.O. Box 2435, 3500 GK Utrecht

45665 Recklinghausen

The Netherlands

Germany

Telephone +31 30 244 9211

Telephone +49 2361 98690

Fax +31 30 244 2596

Fax +49 2361 98294 Branch office:

Gulf Steam Generators L.L.C.

Seelenstraat 1a, 6004 RL Weert

Dubai Union House

The Netherlands

Port Saeed Road

Telephone + 31 49 552 6195

P.O. Box 43659, Dubai

Fax +31 49 552 6251

United Arab Emirates Branch office:

NEM USA Corp

Mandenmakersstraat 130, 3194 DG Hoogvliet

404 Parker Ivey Drive

The Netherlands

Greenville, SC 29607

Telephone +31 10 416 5464

United States of America

Fax +31 10 838 0453

Telephone +1 864 908 3800 Fax +1 864 254 9700


NEM Standard Fasel Manufacturing B.V. Haven N.Z. 8, 9679 TC Scheemda The Netherlands Telephone +31 59 759 1521 Fax +31 59 759 1862

NEM Standard Fasel Tools 4 Rent B.V. Alfred Marshallstraat 5, 7559 SE Hengelo The Netherlands Telephone +31 74 851 5397 Fax +31 74 851 5398

Energy Staff, Resourcing & Recruiting B.V. Krommewetering 13, 3543 AP Utrecht The Netherlands Telephone +31 30 244 9261 Fax +31 30 244 9260

ANNUAL REPORT 2009 NEM 51


52

NEM ANNUAL REPORT 2009

The Power of Dutch Design


53


54

NEM ANNUAL REPORT 2009

Colophon Editors

Jan Kooijman, Finance

Saskia Hageman, Communications

Jeroen Overduin, Communications

Design and prepress

Zabriski | communicatie | design (zabriski.nl)

Photography

NEM B.V.

Paul Honcoop

Print

Van de Ridder Druk & Print, Nijkerk


ANNUAL REPORT 2009 NEM 55


NEM jaarverslag 2009  

NEM jaarverslag 2009

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