Annual Report 2015 - Renk...Hapag-Lloyd AG Dipl.-Ing. (FH) Frank Hoffmann*) Augsburg Head of Vehicle...

Annual Report

RENK Aktiengesellschaft

2015

Innovative Power Transmission

RENK – a company of the MAN Group

At a glance

RENK Group

€ million

2015 2014 Change in %

Order intake 483 666 (27.5)

Sales revenue 487 480 +1.5

Order backlog1) 812 827 (1.8)

Headcount 2,198 2,196 +0.1

Change in € million

Operating profit 68 72 (4)

Profit before tax 64 72 (8)

Profit after tax 42 49 (7)

Earnings per share in € 6.14 7.17 –

Dividend distribution per share in € 2.20 2.20 –

Operating return on sales in % 14.0 15.0 –

Capital expenditures2) 41 38 +3

Depreciation and amortization on noncurrent assets 21 17 +4

Internally financed R&D expenditures 8 8 –

Cash flows from operating activities 101 35 +66

Cash flows from current investing activities (41) (38) (3)

Net cash flow 60 (3) +63

Cash and cash equivalents1) 197 150 +47

Total equity1) 360 327 +33

1) As of December 31, 2015, as against December 31, 2014.

2) For property, plant and equipment and intangible assets

Financial reporting dates at www.renk.eu

3RENK Group Annual Report 2015 3

Contents

04 Supervisory Board

05 Executive Board

06 Report of the Supervisory Board

12 Corporate Governance

18 RENK stock

20 Management Report of RENK Group

for the fiscal year January 1 to December

31, 2015

21 Business activities and management

of RENK Group

21 Business focus

23 Internal management system and value

management

26 Business performance and economic

situation of the RENK Group

26 Economic enviroment

26 Summary by the Executive Board

27 Forecast variance analysis

29 Results of operations

35 Income statement

37 Financial position of the RENK Group

37 Principles and objectives of financial

management

37 Cash flow – Development of cash and

cash equivalents and term deposits

38 Net assets

41 Capital information/disclosures in ac-

cordance with section 315(4) HGB

43 Research and development

45 Capital expenditures, environmental

management

49 Employees

55 The segments

70 Report on risks and opportunities

80 Remuneration report for fiscal

year 2015

89 Forecast

93 RENK Consolidated Financial

Statements

for the fiscal year January 1 to

December 31, 2015

94 Consolidated Income Statement

94 Reconciliation to Total Comprehen-

sive Income for the Period

95 Consolidated Statement of Financial

Position

96 Consolidated Statement of Changes in

Equity

97 Consolidated Statement of Cash Flows

99 Notes to Consolidated Financial

Statements

99 Principles of Financial Reporting

115 Notes to the Consolidate Income State-

ment

121 Notes to the Consolidated Statement of

Financial Position

134 Other Disclosures

157 Events after the end of the reporting

period

158 Members of the Supervisory Board and

the Executive Board including their

mandates

163 Responsibility Statement

164 Audit Report for the consolidated

financial statements of RENK AG

167 Six-year Overview

4

The Supervisory Board

Dr. Ingrun-Ulla Bartölke Wolfsburg

Chairwoman of the Supervisory Board

Head of Group Accounting and External

Reporting at Volkswagen Aktiengesellschaft

Roberto Armellini*) Augsburg

Deputy Chairman of the Supervisory Board

Labor union secretary

Michael Behrendt Hamburg

Chairman of the Supervisory Board of

Hapag-Lloyd AG

Dipl.-Ing. (FH) Frank Hoffmann*) Augsburg

Head of Vehicle Transmissions at RENK AG,

Augsburg

Dr.-Ing. Hans-O. Jeske Wesel

Member of the Executive Board of MAN

Diesel & Turbo SE

Dipl.-Ing. (FH) Rainer Handschuh*) Augsburg

Chairman of the Group Works Council of

RENK AG

Chairman of the Works Council of RENK AG,

Augsburg plant and RENK Test System

GmbH

Dr. Georg Pachta-Reyhofen Niederpöcking

Former Chief Executive Officer of MAN SE

Herbert Surmann*) Rheine

Industrial mechanic

Walter Vogt*) Eltville

Labor union secretary at IG Metall Executive

Board, Frankfurt/M.

Ingo Weidner*) Ronnenberg

Mechanical engineer

As of March 3, 2016 *) Elected by employees.

RENK Group Annual Report 2015 5

Executive Board

<< BILD einfügen Vorstand >>

Dipl.-Kfm. (Univ.) Christian Hammel

Munich

Administration and Production

Dipl.-Ing. (FH) Florian Hofbauer

Landsberg

Spokesperson

Engineering and Sales

6

Report of the Supervisory Board

Ladies and Gentlemen,

In fiscal year 2015, the Supervisory Board dealt with the situation and development of the company

in depth and on an ongoing basis. It regularly and comprehensively performed its duties in accord-

ance with the law, the Articles of Association and its Rules of Procedure. We advised the Executive

Board on its management of the company and monitored its activities.

The Executive Board informed the Supervisory Board regularly and promptly by detailed written

and oral reports about business performance, relevant business events and the development of the

results of operations, net assets and financial position. In addition, the reporting to the Supervisory

Board comprised corporate planning including developments deviating from it and their causes, the

strategic focus of the company, the risk position and the content and structure of the risk manage-

ment system. In the context of its monitoring duties, the Supervisory Board assured itself that the

Executive Board has installed an effective compliance system for the RENK Group and was informed

of activities undertaken in this field.

The Supervisory Board was involved in an advisory capacity in all questions and decisions of materi-

al importance to the company. Furthermore, I consulted with the members of the Executive Board

in regular discussions outside the Supervisory Board meetings on matters and issues relevant to the

company, including business development and strategic projects.

The Supervisory Board held four meetings in fiscal year 2015; the average attendance rate was 93.6%.

In one instance the Supervisory Board adopted a resolution in writing.

In fiscal year 2015, no members of the Supervisory Board participated in only half or less than half of

the meetings of the Supervisory Board and the committees to which they belong.

Work of the committees The Supervisory Board has formed three joint committees, each consisting of two shareholder rep-

resentatives and two employee representatives: the Audit Committee, the Executive Personnel

Committee and the Mediation Committee in accordance with section 27(3) of the Mitbes-

timmungsgesetz (MitbestG – German Codetermination Act). There is also the Nomination Commit-

tee that consists exclusively of shareholders.

The Audit Committee met four times in fiscal year 2015. It dealt in depth with issues of accounting

and the annual financial statements of RENK AG, the consolidated financial statements, the man-

agement reports, the dependent company report and the audit reports of the auditor. In addition,

the Audit Committee discussed with the Executive Board the half-yearly report and the interim

reports for the first and third quarters of 2015 prior to their publication.

Other issues handled by the Audit Committee were the audit engagement for the audit of the annu-

al and consolidated financial statements for 2015 and the focus areas of the audit.

Moreover, the Audit Committee dealt with the monitoring of the accounting process, the effective-

ness of the internal control system and the internal risk management system. The Audit Committee

also discussed the internal audit system and compliance issues, and was reported to by the Chief


Compliance Officer of RENK AG. Furthermore, the Audit Committee conducted the routine sched-

uled review of the efficiency of its work.

The Executive Personnel Committee met three times in the year under review. In particular, its duty

was to prepare Supervisory Board resolutions on Executive Board remuneration and the personnel

changes in the Executive Board.

The Mediation Committee did not have to be convened in fiscal year 2015. The Nomination Commit-

tee met once in the year under review.

Issues in the Supervisory Board Regular topics of discussion in the Supervisory Board included among other things the business

performance of the RENK Group and strategic issues. Furthermore, the work of the committees was

reported on at all meetings of the Supervisory Board.

On March 5, 2015 the Supervisory Board dealt mainly with the 2014 annual financial statements

including the dependent company report. Further topics of this meeting included the coordination

of the agenda and proposed resolutions for the 2015 Annual General Meeting.

There was another meeting of the Supervisory Board before the Annual General Meeting on

June 18, 2015. The main subjects at this meeting were the personnel changes in the Executive Board

(see “Personnel changes in Supervisory Board and the Executive Board”) and Executive Board remu-

neration (for details please see the remuneration report for fiscal year 2015).

At its meeting on October 2, 2015 the Supervisory Board dealt in particular with the reports of the

Executive Board on business performance in fiscal year 2015 and the strategy of the RENK Group.

The main issues at the Supervisory Board meeting on December 11, 2015 were the implementation of

the German Corporate Governance Code and the renewal of the Declaration of Conformity as well as

the strategy of the RENK Group.

Corporate governance and the Declaration of Conformity The application of the German Corporate Governance Code in the RENK Group was the subject of

the Supervisory Board meeting on December 11, 2015. Following this meeting the Supervisory Board

and the Executive Board issued the annual declaration on the recommendations of the Code in ac-

cordance with section 161 of the Aktiengesetz (AktG – German Stock Corporation Act). This Declara-

tion of Conformity has been published on RENK AG’s website.

There were no reports of conflicts of interest among members of the Supervisory Board within the

meaning of item 5.5 of the German Corporate Governance Code in the year under review.

Further information on corporate governance at RENK can be found in our corporate governance

report.

Audit of the 2015 annual and consolidated financial statements and the dependent company report The annual financial statements and Management Report of RENK AG, and the consolidated finan-

cial statements and the Group Management Report, for the fiscal year from January 1 until Decem-

ber 31, 2015 were audited by the auditor elected by the Annual General Meeting on June 18, 2015,

PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Munich. Each was

8

issued with an unqualified audit opinion. The areas of emphasis of the audit were decided by the

Supervisory Board as the regularity of deferred sales revenue from the Power Engineering business

and regularity of the elimination of intragroup debt balances. The auditor also assessed the internal

control system and the risk management system, concluding that the Executive Board has taken the

measures required in accordance with section 91(2) AktG to ensure early detection of any risks that

could jeopardize the survival of the company.

In accordance with section 312 AktG, the Executive Board prepared a report on relations with affili-

ated companies (dependent company report) for fiscal year 2015. The auditor examined the de-

pendent company report and issued the following opinion:

“Based on our audit and assessment, which we have carried out in accordance with professional

standards, we hereby confirm that

1. the factual statements made in the report are correct,

2. the company’s compensation with respect to the transactions listed in the report was not inap-

propriately high.”

The Supervisory Board endorsed the results of the audit of the dependent company report per-

formed by the auditor.

The members of the Audit Committee and the Supervisory Board members received the annual

financial statement documents including the dependent company report and the audit reports of

the auditor in time for the meetings of those bodies on March 3, 2016. The auditor reported in detail

at both meetings on the main results of his audits and was available to provide additional infor-

mation.

Taking into account the audit reports of the auditor, the conversation with him and its own findings,

the Audit Committee prepared the documents for our own audit of the consolidated financial

statements, the annual financial statements of RENK AG, the management reports for the RENK AG

and the RENK Group and the dependent company report, and reported on them at the Supervisory

Board meeting on March 3, 2016. It then recommended that we approve the annual financial state-

ments.

In the knowledge of and taking into account the report of the Audit Committee and the auditor’s

report, and in talks and discussions with him, we subjected the documents to a detailed examina-

tion. The final audit of the annual financial statements of RENK AG, the consolidated financial

statements and the management reports did not give rise to any objections. We came to the conclu-

sion that they are correct and that the assessments of the Executive Board on the situation of the

company and the Group as presented in the management reports are consistent with the assess-

ments of the Supervisory Board. At our meeting on March 3, 2016 we therefore endorsed the results

of the audit by the auditor and approved the annual financial statements and the consolidated fi-

nancial statements prepared by the Executive Board. The annual financial statements were thereby

adopted.

We examined the proposal for the appropriation of profits by the Executive Board, taking into ac-

count the interests of the company and its shareholders in particular, and endorsed the proposal.


According to the final results of our audit, there are no objections to the declaration by the Execu-

tive Board at the end of the dependent company report.

Personnel changes in the Supervisory Board and the Executive Board Effective November 30, 2015 Prof. Neumann resigned his office as a member of the Supervisory

Board of the company – at the same time as his scheduled departure from the Executive Board of

Volkswagen AG.

Prof. Neubauer resigned his office as a member of the Supervisory Board of the company with effect

from February 15, 2016.

On July 31, 2015, Mr. Ulrich Sauter left the company after serving on the Executive Board for around

20 years. The Supervisory Board appointed Mr. Christian Hammel as his successor as a member of

the Executive Board and Arbeitsdirektor (Executive Board member responsible for employee rela-

tions) effective August 1, 2015.

Our thanks We would like to thank Prof. Neumann and Prof Neubauer for their commitment to the good of our

company.

We would like to take this opportunity to express our special thanks to Mr. Sauter for his outstand-

ing work at RENK AG and for his great service to the company. Having worked for the company for

approximately 20 years, Mr. Sauter has played an enormous part in the extremely successful devel-

opment of our company.

We would like to thank the members of the Executive Board and the employees of the RENK Group

for their hard work and dedication. We thank the employee representatives for their objective and

constructive cooperation in the interests of our company.

On behalf of the Supervisory Board

Augsburg, March 3, 2016

Dr. Ingrun-Ulla Bartölke


10

<< Platzhalter Bild: Doppelseite: Bild RENK Messestand Hannover Messe 2015>>

RENK’s Hannover Fair stand 2015

11RENK Group Annual Report 2015

<< Platzhalter Bild: Doppelseite: Bild RENK Messestand Hannover Messe 2015>>

12

Corporate Governance

At RENK, the management and control of the

company are geared towards ensuring sustain-

able value added and an appropriate result in

accordance with the principles of the social

market economy.

Corporate governance is defined by the appli-

cable laws, in particular company law, the Arti-

cles of Association and internal regulations, and

by national and international standards of good

and responsible management. The German

Corporate Governance Code (Code) provides

conduct recommendations and suggestions for

the corporate governance as applied in the

RENK Group in line with acknowledged stand-

ards.

Corporate governance at RENK*) The Executive Board and the Supervisory Board

of RENK have dealt extensively with the corpo-

rate governance system and compliance with

the recommendations and suggestions of the

Code. They are aware that good and transparent

corporate governance, consistent with both

national and international standards, is essen-

tial for the responsible and long-term man-

agement of a company.

Declaration of conformity On December 11, 2015 the Executive Board and

the Supervisory Board issued the declaration of

compliance reproduced below in accordance

with section 161 of the Aktiengesetz (AktG –

German Stock Corporation Act):

*) Also “Corporate Governance Report” of the Executive Board and the Supervisory Board in accordance with item 3.10 of the German Corporate Governance Code as amended May 5, 2015.

„The Executive Board and Supervisory

Board of RENK Aktiengesellschaft de-

clare that effective immediately, the

company complies with the recommen-

dations of the Government Commission

on the German Corporate Governance

Code in the version of May 5, 2015 (as

published by the Federal Ministry of Jus-

tice in the official section of the Bundes-

anzeiger (German Federal Gazette) of

June 12, 2015) with the exception of Sec-

tion 5.4.1, Paras. 5 – 7 (disclosure of elec-

tion recommendations).

With regard to the recommendation in

Section 5.4.1, Paras. 5 – 7 in the Code on

the disclosure of certain circumstances

in election recommendations of the Su-

pervisory Board to the Annual General

Meeting, the requirements of the Code

are indeterminate and not clearly dis-

tinguished. Therefore, by way of precau-

tion, departure from the Code is de-

clared. Nonetheless, the Supervisory

Board will attempt to meet the require-

ments of Section 5.4.1 Paras. 5 – 7 of the

Code.

The Executive Board and Supervisory

Board of RENK Aktiengesellschaft fur-

ther declare that the company complied

with the recommendations of the Gov-

ernment Commission on the German

Corporate Governance Code in the ver-

sion of June 24, 2014 (as published by

the Federal Ministry of Justice in the of-

ficial section of the Bundesanzeiger of

September 30, 2014) during the period

of December 2014 to June 12, 2015 with

the execution of Section 5.4.1, Paras 4 – 6

(disclosure of election recommenda-

tions, in the version of the Code dated

May 5, 2015; Section 5.4.1 Paras. 5 – 7).

The reasons for the exceptions are stat-

ed above.


From June 12, 2015 until the submission

of this Declaration of Conformity, the

company complied with the recom-

mendations of the Government Com-

mission on the German Corporate Gov-

ernance Code in the version of May 5,

2015 (as published by the Federal Minis-

try of Justice in the official section of the

Bundesanzeiger of June 12, 2015) with

the exception of Section 5.4.1, Para. 2

(length of membership in the Superviso-

ry Board) and Section 5.4.1, Paras 5 – 7

(disclosure of election recommendation).

The reasons for the departures from Sec-

tion 5.4.1 Paras. 5 – 7 are stated above.

The new recommendation in Section

5.4.1, Para. 2, which took effect from June

12, 2015, regarding the goal of the Super-

visory Board to define and observe a

limit on the length of membership in

the Supervisory Board, has been com-

plied with on y since a relevant discus-

sion and resolution by the Supervisory

Board on December 11, 2015.“

Annual General Meeting The Annual General Meeting is the forum for

shareholders of RENK AG to exercise their vot-

ing rights, to obtain information, and to engage

in a dialog with the Executive Board and the

Supervisory Board.

RENK AG’s Annual General Meeting is orga-

nized and held with the goal of providing all

shareholders with information quickly, com-

prehensively and effectively both before and

during the Annual General Meeting. The invita-

tion to the Annual General Meeting is pub-

lished in the Bundesanzeiger (the Federal Ga-

zette) and is made accessible to shareholders

and all other interest parties on RENK’s website,

together with all reports and submissions for

the Annual General Meeting.

To make it easier for shareholders to exercise

their rights in person and to facilitate voting

representatives, in addition to the option of

authorizing a bank, shareholder associations or

other persons, there is the possibility of author-

izing a RENK employee as a voting representa-

tive.

Cooperation between the Executive Board and the Supervisory Board In accordance with German stock corporation

law, RENK AG has implemented a dual man-

agement structure with its Executive Board and

Supervisory Board. Both governing bodies work

together closely for the good of the company

and strive to sustainably increase the value of

the company for the shareholders.

The Executive Board performs management

and operational functions on its own responsi-

bility, the Supervisory Board performs monitor-

ing and consulting functions. Both the Execu-

tive Board and the Supervisory Board work on

the basis of the applicable legal regulations and

their respective Rules of Procedure. The Execu-

tive Board informs the Supervisory Board

promptly and comprehensively on strategy,

planning, business development and the risk

position. Transactions and measures that re-

quire the approval of the Supervisory Board are

presented to it in time. The Executive Board

also informs the Chairman of the Supervisory

Board immediately of extraordinary events.

The Executive Board The Executive Board is the management body

of RENK AG and has two members as of De-

cember 31, 2015. The members of the Executive

Board conduct all the company’s business with

joint responsibility. The Executive Board is

appointed by the Supervisory Board. The Exec-

utive Board’s work is governed by its Rules of

Procedure.

The Executive Board determines the business

objectives for the entire RENK Group. It ensures

compliance with legal provisions, official regu-

lations and internal company policies. The

Executive Board also ensures open and trans-

parent corporate communications. The risk

management system assists the Executive

Board in recognizing business and financial

risks and taking appropriate measures to re-

duce risks.

14

In accordance with the specifications of the

German Stock Corporation Act and item 4.3.4 of

the Code, Executive Board members can per-

form sideline activities, including supervisory

board mandates outside the RENK Group, only

with the prior consent of the Supervisory Board.

The Executive Board members are further re-

quired to disclose conflicts of interest to the

Supervisory Board and the other members of

the Executive Board without delay. Executive

Board members did not report any conflicts of

interest in the year under review. In addition,

companies of the RENK Group did not perform

any transactions with members of the Execu-

tive Board or their related parties in the year

under review.

In accordance with the decision made by the

Supervisory Board on an age limit for members

of the Executive Board, appointments for

members of the Executive Board should gener-

ally end one year after they reach the age of 65.

This age limit will increase in line with the de-

velopment of the standard retirement age for

the statutory pension system and the Supervi-

sory Board reserves the right to make excep-

tions in individual cases.

In accordance with section 76(4) AktG, on Ju-

ly 27, 2015 the Executive Board set targets for

the share of women in the first and second

management levels below the Executive Board

of 0% and 12.8% respectively to be met by

June 30, 2017.

The Supervisory Board The Supervisory Board is the monitoring and

consulting body of RENK AG.

Since the Annual General Meeting of

April 24, 2013 in accordance with section 96(1)

alt. 1 and section 101(1) AktG in conjunction

with section 1(1) and section 7(1) sentence 1 no. 1

of the Mitbestimmungsgesetz (MitbestG – Ger-

man Codetermination Act), the Supervisory

Board consists of twelve members. Six of these

are shareholder representatives elected by the

Annual General Meeting and six are employee

representatives elected in line with the German

Codetermination Act.

For information on the composition of the

Supervisory Board and the Supervisory Board

committees formed plus further details of the

changes occurred in the year under review,

please see the report of the Supervisory Board

and the notes to the consolidated financial

statements.

The Supervisory Board of RENK AG updated the

goals for its composition at its meeting on

December 11, 2015. This serves the implementa-

tion of two changes in item 5.4.1 of the Code:

Firstly, given the statutory provisions that the

supervisory board of a listed company must be

at least 30% women and 30% men in the future,

the stipulation that women should be taken

into account appropriately when setting targets

has been dropped. Secondly, a standard limit

for time as a member of the Supervisory Board

must now be implemented.

Following its resolution on December 11, 2015,

and in light of the purpose of the company, its

size and the share of its international activities,

the Supervisory Board of RENK AG is endeavor-

ing to achieve a composition for the Superviso-

ry Board that takes the following elements into

account:

• at least one seat on the Supervisory Board for

persons who especially embody the criterion

of internationality;

• at least one Supervisory Board member elect-

ed by the shareholders who have no potential

conflicts of interest and are independent

within the meaning of item 5.4.2 of the Code;

• generally no persons should be considered

for election who have reached the age of 70

by the time of the election or who have al-

ready been a member of the Supervisory

Board of the company for more than 20 year.

All these criteria are met or are considered.

Supervisory Board members did not report any

conflicts of interest in the year under review.


The mandates of Supervisory Board members

in bodies of other companies are shown in the

notes to the consolidated financial statements.

Remuneration system of the Executive Board and the Supervisory Board For details of the remuneration system for the

Executive Board and the Supervisory Board,

please see the remuneration report in the man-

agement report.

Compliance In fiscal year 2015 RENK systematically imple-

mented and continued to develop the compli-

ance program covering the combating of cor-

ruption, antitrust law, data privacy and money

laundering.

RENK has established compliance as an integral

part of its corporate culture. The compliance

management system is coordinated, taught and

constantly refined by the compliance officer on

the basis of the MAN SE compliance program.

He reports directly to the RENK AG Executive

Board and functionally to the Audit Committee

of the Supervisory Board.

The compliance officer is assisted by a deputy

and one other employee in the area of review-

ing business partners. The Rheine and Hanover

plants also have “compliance champions”, i.e.

managers who are not full-time compliance

employees but who have assumed special re-

sponsibility for the issue of compliance.

Furthermore, the compliance officer can use

the resources of MAN’s corporate compliance

office. In particular, training and information

materials and e-learning courses are managed

from here. Policies are adapted to RENK’s struc-

ture and business model.

The compliance organization and the introduc-

tion of new compliance measures were closely

coordinated with the Executive Board and plant

management teams on the basis of identified

risks. The Risk and Compliance Board, which

meets quarterly, is informed of the progress in

measures and coordinates the next steps.

The global protection of personal data is en-

sured by an external data protection officer,

based on a data privacy policy that applies to

the entire RENK Group.

In implementing the findings of the compli-

ance risk assessment, a clear tone from the top

in terms of integrity, emanating from the Exec-

utive Board, managers and the compliance

officer, was ensured.

Ethical principles of conduct and compliance

requirements have been stipulated for RENK in

its Code of Conduct.

In addition to the Code of Conduct for Employ-

ees, RENK has issued a Code of Conduct for

Suppliers & Business Partners that defines cer-

tain minimum ethical standards that RENK’s

suppliers and business partners must agree to

comply with.

The integrity of sales support business partners

is checked as a mandatory requirement and

they are subject to an approval process.

In the reporting period there was a review

workshop as part of a compliance certification

process by Ernst & Young. This examined the

design, adequacy and effectiveness of the RENK

compliance management system in the “anti-

corruption” area. This workshop was completed

without any objections.

The compliance officer gave presentations on

the compliance organization, compliance pro-

cesses and compliance tools at RENK and com-

municated the Executive Board’s expectations

of employees in terms of compliance at events

for various employee groups.

The compliance officer and the compliance

help desk, which can be used by all employees

for matters concerning compliance, received 31

inquiries in the reporting period. These were

answered by the compliance officer and docu-

mented.

16

Transparency On the website www.renk.eu under the “Inves-

tor Relations”, the RENK Group publishes a

financial diary with all the important dates for

shareholders. Furthermore, this website also

provides all other important information that

can be accessed by shareholders and interested

members of the public, thereby allowing the

simultaneous and comprehensive communica-

tion of relevant information. This includes

annual reports and half-yearly reports, press

releases and invitations to and agendas for the

Annual General Meetings including the other

documentation that must be published in con-

nection with the Annual General Meeting.

Furthermore, such information that must be

disclosed immediately in accordance with capi-

tal market disclosure obligations is also pub-

lished on the www.renk.eu homepage under

“Investor Relations”. In particular, examples of

such information are:

• In accordance with section 15a of the Wertpa-

pierhandelsgesetz (WpHG – German Securi-

ties Trading Act) persons with management

duties and certain related parties must report

to the issuer and the Bundesanstalt für Fi-

nanzdienstleistungsaufsicht (BaFin – German

Federal Financial Supervisory Authority) on

the purchase and sale of RENK shares and fi-

nancial instruments that reference RENK

shares. As of May 19, 2015, one member of the

Executive Board reported the sale of 500 or-

dinary shares. According to the notifications

received, the direct and indirect holdings of

shares or derivatives referencing shares by

Executive Board and Supervisory Board

members have not exceeded the threshold of

1% of the shares outstanding, either in any

individual case or in total.

• In accordance with section 15 WpHG, German

issuers of financial instruments are required

to disclose inside information that directly

relate to them without delay.

• In accordance with section 26 WpHG, German

issuers must immediately publish notifica-

tions that they receive of shares of voting

rights in the company being exceeded or fall-

en below.

Accounting and audit of the financial statements The annual consolidated financial statements

of the RENK Group are prepared by the Execu-

tive Board based on the International Financial

Reporting Standards (IFRS), as adopted in the

European Union, and the single-entity financial

statements of RENK AG in accordance with the

German Commercial Code (HGB) and the Ger-

man Stock Corporation Act (AktG). The consoli-

dated financial statements of the RENK Group

are audited by the auditor and the Supervisory

Board.

In line with the recommendation in item 7.1.2

sentence 2 of the Code, the half-yearly report is

discussed at RENK by the Executive Board with

the Audit Committee prior to its publication.

The publication deadlines for the consolidated

financial statements and the half-yearly report

stipulated in item 7.1.2 sentence 4 of the Code

are complied with.

The Audit Committee of the Supervisory Board

proposes an auditor to be elected for the com-

pany to the Supervisory Board. The Annual

General Meeting appointed Pricewaterhouse-

Coopers AG Wirtschaftsprüfungsgesellschaft as

the auditor for fiscal year 2015 on June 18, 2015.

The auditor provided the Supervisory Board

with a statement regarding its independence,

which serves as proof of the auditor’s inde-

pendence. In addition to granting the audit

mandate and agreeing the fee, the Supervisory

Board arranged the immediate reporting by the

auditor to the Supervisory Board in the event of

findings or events of material importance in

the performance of the audit of the financial

statements and of the discovery of inaccuracies

in the declaration of conformity issued in ac-

cordance with section 161 AktG.


<< Patzhalter Bild Enzelseite zu Stirnradge-

triebe >>

18

RENK Stock

Stock market environment 2015

The volatility of the international stock markets

continued in 2015. While prices reached new

record highs in the first half of the year, this

was followed by a slump in the second half.

Overall, the international stock indices were up

significantly in the 2015 trading year.

The announcement of further monetary easing

by the European Central Bank led to significant

growth rates at the European stock markets in

particular. In addition, the low level of interest

rates, the weak euro against the dollar and the

economic recovery in the euro area all positive-

ly influenced the stock markets.

By contrast, there were several factors causing

prices to fall in the second half of the year: the

stock market crash and the economic slowdown

in China caused global growth concerns. In

addition, the negative news from the automo-

tive industry and the prospect of a rate hike in

the US upset capital market participants. The

Greek debt dispute and geopolitical crises such

as Russia and Syria also caused prices to decline

at times.

Regardless of this, the index for Europe’s most

important securities, the Euro Stoxx, climbed

by around 10% over 2015 as a whole. The Ger-

man benchmark index, the DAX, was also up by

10% in the year under review and closed the

year at 10,743 points.

Performance of RENK shares

The positive performance of RENK’s shares in

the previous year was confirmed in 2015. Start-

ing at EUR 83.65 at the end of 2014, the share

price climbed significantly to more than

EUR 105.00 by the end of 2015, up by EUR 21.35

or 25.52% on the figure for the previous year.

Taking into account the dividend distribution,

this meant a total return for RENK shareholders

of 28.3% in 2015.

Looking at share price performance over a peri-

od of five years (not including dividends), the

average increase in value from 2011 to 2015 was

8.5%.

The Executive Board and the Supervisory Board

will be proposing the distribution of a dividend

unchanged year-on-year of EUR 2.20 for fiscal

2015 at this year’s Annual General Meeting. This

corresponds to a dividend yield based on the

closing price for 2015 of 2.1%.


Key performance indicators for RENK shares

2015 2014

Earnings per share € 6.14 7.17

Cash dividend per share € 2.20 2.20

Market capitalisation1) € million 735 586

Closing price2) € 105.00 83.65

Annual high2) € 106.00 92.90

Annual low2) € 80.01 74.64

Price-earnings ratio 17.05 11.67

Dividend yield on shares3) % 2.1 2.6

Total return on shares4) % 28.3 2.6

Number of shares outstanding 6,800,097 6,800,097

1) Based on 7 million shares

2) Daily closing price at Frankfurt stock exchange

3) Cash dividend based on closing price for the year

4) On reinvestment of cash dividend at end of month following Annual General Meeting

20

Management Report of the RENK Group for the Fiscal Year from January 1 to December 31, 2015

Order intake and operating profit remain at a high level

• Order intake € 483 million (previous year: € 666 million)

• Sales revenue € 487 million (previous year: € 480 million)

• Headcount 2,198 (previous year: 2,196)

• Operating profit € 68 million (previous year: € 72 million)

• Operating return on sales 14.0% (previous year: 15.0%)

• Earnings per share € 6.14 (previous year: € 7.17)

• Net cash flow € 60 million (previous year: € –3 million)

• Proposed dividend: distribution of € 2.20 per share (previous year: € 2.20)

Outlook 2016

• Order intake at similar level

• Sales revenue slightly higher than previous year

• Slight decline in operating profit

• Operating return on sales still in double digits


Business activities and management of the RENK Group

Business focus

RENK AG The origins of RENK AG date back to 1873 when

Johann Julius Renk founded a small workshop

for the mechanical production of gear wheels in

Augsburg Lechviertel. In 1879 the young firm

moved to the Göggingen neighborhood, which

is still the Group’s headquarter today. The com-

pany was transformed into a stock corporation

as early as 1897; since 1923 RENK has been a part

of what is now the MAN Group.

Today, RENK is a key provider of premium pul-

sion technology for a wide range of applica-

tions. It has a global outlook and major produc-

tion locations in Augsburg, Rheine and Hanover.

Overview of divisions The Special Gear Units business comprises

large-gear production at RENK AG’s Augsburg

site and RENK-MAAG GmbH, Winterthur, Swit-

zerland. The product range extends from sta-

tionary gear units for a variety of industrial

applications, including the cement industry, to

turbo gear units of up to 140 MW transmission

capacity to complex gear units for fast craft

and naval applications with up to 85 MW

transmission ratings.

The Vehicle Transmissions business is a lead-

ing manufacturer of fully automatic transmis-

sions for medium-weight and heavy tracked

vehicles, and also offer a broad range of power-

ful test rigs for a variety of industries.

RENK’s automatic power-shift transmissions

are suitable for rear or front installation with all

modern diesel engines. Electronically con-

trolled and monitored, the units are built at the

Augsburg site.

Vehicle Transmissions business also includes

the French subsidiary RENK France S.A.S., Saint

Ouen l’Aumône, which currently mainly per-

forms maintenance services for French army

tracked vehicle transmissions.

RENK’s test rig activities are also assigned to

Vehicle Transmissions. RENK Test System

GmbH (RTS) in Augsburg and its US sales com-

pany RENK Systems Corporation, Camby (IN),

USA, design and produce customized test rigs

for development, production and quality assur-

ance for vehicles, aviation, railway vehicle com-

ponents, tracked vehicles and wind turbines.

The Standard Gear Units business includes

large-gear production at RENK AG’s Rheine site.

It specializes in marine gear units for merchant

ships, ferries, LNG/LPG tankers, supply vessels

and special ships. It also manufactures gear

units for turbine plants and couplings for in-

dustrial applications. The site is also been cen-

ter for RENK’s offshore wind turbine activities.

The Slide Bearings business at RENK AG’s Han-

over site and the American sales company

RENK Corporation, Duncan (SC), USA, supply

hydrodynamic, lubricated slide bearings. These

are used for electric motors, generators, pumps,

blowers, water turbines, conveyors and marine

applications. RENK has been a leading provider

for standard series for years.

22

Intensive cooperation in the Group Combining the individual strengths and prod-

uct expertise of the individual divisions means

the potential for synergies that can be lever-

aged by the divisions working together. In addi-

tion, selective product allocation allows the

optimization of large-gear unit production and

assembly capacity.

Honing the competitive edge RENK’s competitive capability is built on main-

taining its technological leadership in individu-

al application areas, its global presence in its

relevant markets and excellent service quality

tailored to the needs of our international cus-

tomers.


Internal management system and value management

Internal management process in the RENK Group The RENK Group is incorporated in the internal

management process of the Volkswagen Group.

The starting point for the internal management

of the RENK Group is medium-term planning,

which is produced once per year and forms the

core of operational planning for a period of five

years.

When planning the company’s future, the indi-

vidual planning components are determined

on the basis of the timescale involved. The co-

ordinated results of the upstream planning

processes are used as the basis for the medium-

term financial planning. This comprises the

upfront investments needed for alternative

products and the implementation of strategic

options, the financial planning of the income

statement, cash flow and balance sheet plan-

ning, profitability and liquidity.

The first year of the medium-term planning

period is then fixed and a budget prepared for

the individual months.

During the year, the budget is reviewed each

month to establish the degree to which the

targets have been met. Target/actual compari-

sons, prior-year comparisons, variance analyses

and, if necessary, action plans to ensure targets

are met are used in this process. For the current

fiscal year, detailed revolving monthly forecasts

are prepared for the coming three months and

the full year. This is done taking into account

the current risks and opportunities. The focus

of internal management during a year is there-

fore on adapting ongoing operations to internal

and external circumstances. At the same time,

the current forecast serves as a basis for the

medium-term and budget planning that fol-

lows it.

Key performance indicators in the RENK Group The most important financial performance

indicators in the RENK Group are sales revenue,

operating profit and operating return on sales.

The operating return on sales is the ratio of the

operating profit generated to sales revenue. The

most important non-financial performance

indicator is order intake.

Target returns In accordance with the objectives of the MAN

Group, RENK is striving for an operating return

on sales of 9.0% within a range of +/– 2 per-

centage points throughout a business cycle in

its Power Engineering business area. In 2015 the

operating return on sales was 14.0% after 15.0%

in the previous year.

24

Operating return on sales in %

*) Owing to the change in the financial reporting of the Volkswagen Group, from fiscal year 2014 operating profit as a percentage of sales revenue is reported as the operating return on sales. To ensure comparability, the operating return on sales was also calculated for fiscal year 2013.

2014

Operating return on sales (in %)

15.0

2013 13.5

2015 14.0

*

*) Owing to the change in the financial reporting of the Volkswagen Group, from fiscal year 2014

operating profit as a percentage of sales revenue is reported as the operating return on sales.

To ensure comparability, the operating return on sales was also calculated for fiscal year 2013.


<<Platzhalter Bild einfügen>>

Employees joining together the planetary stage and the ring gear of a 5-MW wind energy gear unit

26

Business performance and economic situation of the RENK Group

Economic environment At 2.5% in fiscal year 2015, the growth rate for

the world economy was down slightly by 0.2%.

Despite the expansionary monetary policy of

many central banks, inflation remained at a low

level. In the industrialized nations the econo-

mic situation improved slightly overall, while

the pace of growth eased during fiscal year 2015

in many emerging economies. The compara-

tively low energy and commodity prices slowed

the economy of the individual exporting coun-

tries dependent on this.

In Western Europe the recovery process contin-

ued, the countries in the north of Europe most-

ly saw solid economic growth and the situation

in Southern Europe stabilized in most countries.

While Central Europe was still on track for posi-

tive growth, there was a recessive development

in Eastern Europe, in particular as a result of

the Russia-Ukraine conflict and declining ener-

gy prices.

The US economy lost some momentum during

the year after a robust start. After Brazil had

achieved only modest growth in the previous

year, the country slid into recession in 2015.

Although the Chinese economy did not match

the growth rates of the past, it was still at a high

level by international standards. The Indian

economy continued its positive trend and its

growth was similar to last year.

The German economy benefited from positive

consumer sentiment and the stable situation

on the labor market in 2015. According to the

German industry association VDMA, sales reve-

nue in global mechanical engineering grew by

just 1% in real terms in 2015 – largely on ac-

count of the dramatic slowdown in growth in

China, now the number one mechanical engi-

neering country. Mechanical and plant engi-

neering in Germany is expected to have

achieved a real increase in sales of 2% in the

year under review according to preliminary

VDMA calculations.

Summary by the Executive Board In 2015 developments on the markets relevant

to RENK were again characterized by significant

fluctuations, but overall the movements re-

mained close to the ranges predicted at the

beginning of the year and adjusted slightly

during the course of the year. It is an aspect of

RENK’s business model that, especially in terms

of major projects, the timing and structure

either cannot be planned exactly or can only be

planned with difficulty. The specific nature of

customer-oriented individual production also

means that there are risks as well as opportuni-

ties in relation to the anticipated parameters.

The management of RENK can therefore posi-

tively note that while the order intake and sales

revenue of the RENK Group were in line with

expectations in fiscal year 2015, operating prof-

it and the operating return on sales performed

better than originally forecast.

The tables below provide an overview of the

individual figures forecast for the year under

review 2015 and their attainment. For detailed

information on the development of key per-

formance indicators, please see the sections

“Results of operations” and “The segments”.


Forecast variance analysis for the RENK Group Results 2014 Targets 2015 Adjustment of targets

for 2015 during year Results 2015

Order intake € 666 million Significantly lower than previous year, close to € 500 million

– € 483 million

Sales revenue € 480 million Slight increase as against 2014 – € 487 million

Operating profit € 72 million Around € 60 million Significantly more than € 60 million

€ 68 million

Operating return on sales (%)

15% Double-digit, but lower than 2014 – 14%

Forecast variance analysis for Special Gear Units segment Results 2014 Targets 2015 Adjustment of targets


Order intake € 144 million Moderate increase – € 187 million

Sales revenue € 179 million Slight decline – € 157 million

Operating profit € 26.5 million Down significantly – € 16 million


14.9% Down significantly – 9.9%

Forecast variance analysis for Vehicle Transmissions segment Results

2014 Targets 2015 Adjustment of targets


Order intake € 330 million Significantly less than previous year – € 111 million

Sales revenue € 115 million Tangible increase – € 150 million

Operating profit € 15.7 million Tangible increase – € 24 million


13.7% Virtually constant Slight improvement 15.7%

Forecast variance analysis for Standard Gear Units segment Results

2014 Targets 2015 Adjustment of targets


Order intake € 98 million Slight increase Notably higher than previous year’s level

€ 99 million

Sales revenue € 91 million Not higher than previous year’s level – € 92 million

Operating profit € 13 million Significantly less than previous year’s level – € 10 million


14.6% Significantly less than previous year’s level – 10.5%

28

Forecast variance analysis for Sliding Bearings Results 2014 Targets 2015 Adjustment of targets


Order intake € 100 million Equal to previous year’s level – € 102 million

Sales revenue € 102 million Equal to previous year’s level – € 94 million

Operating profit € 16.9 million Slight improvement – € 18 million


16.6% Slight improvement – 19.2%


Results of operations

Order intake of e 483 million After the historic high for order intake in the

previous year (€ 666 million), new orders fell

significantly short of this record in 2015 as

expected. The largest single order in the history

of RENK was received in 2014 at more than

€ 200 million for the new British tracked vehi-

cle platform, and test systems also had the

highest order intake in the company’s history

to date. Given the ranges necessitated by

RENK’s business model, order intake in the

RENK Group was close to the forecast figure of

€ 500 million in fiscal year 2015 at

€ 483 million. Special Gear Units business per-

formed better than expected, though Standard

Gear Units business did not quite meet expec-

tations.

Order intake in € million

2011

2012

2013

Order intake in € million

456306

150

525349

176

Total Foreign Domestic

504308

196

2014666

529137

2015483

302181

30

Sales revenue approximately level with previous year In fiscal year 2015 sales revenue for RENK

Group amounting to € 487 million (previous

year € 480 million) this was slightly higher

than in 2014, and therefore approximately in

line with original planning, which was for a

slight increase as against the previous year. The

minor excesses and shortfalls in sales revenue

in the individual business units compared to

the respective planning largely canceled each

other out. Deliveries in Slide Bearings business

were slightly below projections, the Standard

Gear Units slightly outperformed its forecast.

Sales revenue in € million

2011

2012

2014

Sales revenue in € million

389243

146

476311

165


480327

153

2015487

340147

2013485

317168

2011

2012

2013

Auftragseingang in Mio €

456306

150

525349

176

Gesamt Ausland Inland

504308

196

2014666

529137

2015483

301181


Order backlog again higher than € 800 million After RENK received new orders in 2015 nearly

at the level of the sales revenue in the same

fiscal year, the Group again had an order back-

log in excess of the € 800 million threshold as

of the end of 2015. As of December 31, 2015, the

order backlog amounted to € 812 million after

€ 827 million in the previous year. In Vehicle

Transmissions business the order backlog de-

clined in line with expectations on account of

increased deliveries of new transmissions, while

there was an appreciable increase in Special

Gear Units. The two other units Standard Gear

Units and Slide Bearings each saw slight growth.

Order backlog in € million

2011

2012

2014

Order backlog in € million

586302

284

634338

296


827532

295

2015812

515297

2013648

325323

32

Operating profit again at a high level in 2015 In fiscal year 2015 RENK AG generated an oper-

ating profit of € 68 million as against

€ 72 million in the previous year. In particular,

this decline in profit reflected the more diffi-

cult situation on a number of sales markets

important to RENK. Despite this, the figure

achieved of € 68 million is at the upper end of

the forecast range, which was already increased

to well above € 60 million over the course of

the year.

The result for fiscal year 2015 also included the

non-recurring factor of the reorganization of

the supplier relationship with a key customer

in the offshore wind power sector. Firstly, the

payment of originally agreed purchase com-

mitments led to income of € 9 million; this was

assigned to the two business units involved,

Special Gear Units and Standard Gear Units.

Secondly, this gave rise to an impairment loss

on a test rig specifically built for this order of

€ 3 million. By contrast, the comparative figure

for the previous year had included the extraor-

dinary expenses for the disposal of the former

supplier subsidiary ADMOS.

Based on its sales revenue, the RENK Group therefore reported an operating return on sales for fiscal year 2015 of 14.0% (previous year: 15.0%). The earnings improvements in Vehicle Transmissions and Slide Bearings only partially offset the reduced earnings in Special Gear Units and Standard Gear Units.

Operating profit in € million

53

66

2011

2012

2014

Operating profit in € million

72

2013 66

2011

2012

2013


456306

150

525349

176


504308

196

2014666

529137

2015483

301181

2015 68


<< Platzhalter Doppelseite Bild einfügen >>

COPE® cement mill gear unit with 9-megawatt rating undergoing its initial trial run

34

<< Platzhalter Doppelseite Bild einfügen >>

Installing a gearwheel weighing several tons into a marine gear housing


Income statement1)

2015 2014

€ million in % € million in %

Sales revenue 487 100.0 480 100.0

Cost of sales (377) (77.5) (362) (74.4)

Gross profit 109 22.5 118 24.6

Other operating income 18 3.8 13 2.7

Distribution expenses (34) (7.0) (32) (6.7)

Administrative expenses (20) (4.0) (18) (3.7)

Other operating expenses (6) (1.2) (9) (1.8)

Operating profit 68 14.0 72 14.8

Financial result (4) (0.9) 0 0.0

Profit before tax 64 13.1 72 14.8

Income tax expense (22) (4.5) (23) (4.9)

Profit after tax 42 8.6 49 10.2

Earnings per share in € 6.14 – 7.17 –

Dividend distribution per share in € 2.20 – 2.20 –

1) Minor differences in totals or percentages in the statements and tables below may occur as a result of the commercial rounding of

amounts in the thousands of euro.

The gross margin decreased from 24.6% in the

previous year to 22.5% in fiscal year 2015. This

was due, among other things, to changes in the

product composition of the orders billed. There

were only minor structural changes in distribu-

tion and administrative expenses. The increase

in other operating income resulted from the

settlement of an originally agreed purchase

commitment from the offshore wind power

sector, which was offset by significantly lower

income from the reversal of provisions com-

pared to the previous year. The decrease in

other operating expenses is primarily due to

the cost of the deconsolidation of the former

supplier subsidiary ADMOS amounting to

€ – 4 million in the previous year.

At € 22 million in the year under review, tax

expenses were slightly below the previous

year’s figure of € 23 million. The tax rate

climbed from 32.4% in the previous year to 34.5%

in 2015. This results from the respective income

tax rates for the domestic and foreign Group

companies and from prior period and deferred

taxes. The profit after tax therefore declined

from € 49 million in the previous year to

€ 42 million in fiscal year 2015. Earnings per

share were therefore down from € 7.17 to € 6.14.

34

Income statement1)

2015 2014

€ million in % € million in %

Sales revenue 487 100.0 480 100.0

Cost of sales (377) (77.5) (362) (75.4)

Gross profit 109 22.5 118 24.6

Other operating income 18 3.8 13 2.7

Distribution expenses (34) (7.0) (32) (6.7)

Administrative expenses (20) (4.0) (18) (3.7)

Other operating expenses (6) (1.2) (9) (1.8)

Operating profit 68 14.0 72 15.0

Financial result (4) (0.9) 0 0.0

Profit before tax 64 13.1 72 15.0

Income tax expense (22) (4.5) (23) (4.9)

Profit after tax 42 8.6 49 10.2

Earnings per share in € 6.14 – 7.17 –

Dividend distribution per share in € 2.20 – 2.20 –

1) Minor differences in totals or percentages in the statements and tables below may occur as a result of the commercial rounding of

amounts in the thousands of euro.

The gross margin decreased from 24.6% in the

previous year to 22.5% in fiscal year 2015. This

was due, among other things, to changes in the

product composition of the orders billed. There

were only minor structural changes in distribu-

tion and administrative expenses. The increase

in other operating income resulted from the

settlement of an originally agreed purchase

commitment from the offshore wind power

sector, which was offset by significantly lower

income from the reversal of provisions com-

pared to the previous year. The decrease in

other operating expenses is primarily due to

the cost of the deconsolidation of the former

supplier subsidiary ADMOS amounting to


At € 22 million in the year under review, tax

expenses were slightly below the previous

year’s figure of € 23 million. The tax rate

climbed from 32.4% in the previous year to 34.5%

in 2015. This results from the respective income

tax rates for the domestic and foreign Group

companies and from prior period and deferred

taxes. The profit after tax therefore declined

from € 49 million in the previous year to

€ 42 million in fiscal year 2015. Earnings per

share were therefore down from € 7.17 to € 6.14.

36

<< Platzhalter Bild einfügen >>

Coordinate measuring machine with integrated rotary table for high-precision measurement of gear housing

components


Financial position of the RENK Group

Principles and objectives of financial management As in previous years, the financial management

of the RENK Group was performed centrally by

MAN SE.

The aim of central financial management is to

ensure sufficient liquidity at all times, to limit

financial risks and thereby to enhance enter-

prise value.

This comprises safeguarding liquidity resources

for operating activities, investment and target-

ed growth in addition to the hedging of cur-

rency risks. Liquidity is managed by the MAN

Group’s central cash management system,

which includes RENK AG and its consolidated

subsidiaries.

Cash flow – development of cash and cash equivalents and term deposits

€ million

2015 2014

Cash and cash equivalents at beginning of period 70 167

Cash flows from operating activities 101 35

Cash flows from current investing activities (41) (38)

Net cash flow 60 (3)

Change in deposits 0 (80)

Cash flows from investing activities (41) (118)

Cash flows from financing activities (15) (14)

Net change in cash and cash equivalents 47 (97)

Cash and cash equivalents at end of period 117 70

RENK generated cash flows from operating

activities of € 101 million in fiscal year 2015

after € 35 million in the previous year. The in-

crease predominantly resulted from the chang-

es in working capital. While the effects of inven-

tories and receivables roughly offset each other,

there was a significant increase in prepayments

received in particular, which had been in de-

cline in the previous year. In particular this was

due to increases from major orders in Vehicle

Transmissions business.

As expected, there was a significant increase in

the necessary capital expenditure as part of our

longer-term investment program again in 2015,

above all at the Augsburg site; € 41 million in

total was invested in property, plant and

equipment and intangible assets after

€ 38 million in the previous year. Further de-

tails can be found in the section “Capital ex-

penditures, environmental management”.

RENK generated a net cash flow from this of

€ 60 million in fiscal year 2015 after


As in previous years, cash flows from financing

activities primarily included the dividends paid.

On account of the increased dividend for fiscal

year 2014, the cash outflow climbed from

€ 14 million in 2014 to € 15 million in 2015.

Cash and cash equivalents for 2015 therefore

rose from € 70 million at the beginning of the

year to € 117 million at year-end. The total of

cash and cash equivalents and deposits was up

accordingly from € 150 million to € 197 million.

38

Net assets

€ million

Dec. 31, 2015 Dec. 31, 2014

Property, plant and equipment and intangible assets 195 175

Other investments and financial investments 5 5

Inventories 171 179

Trade receivables 82 67

Other current and noncurrent assets 85 86

Taxes 10 7

Cash and cash equivalents 117 70

Assets 665 589

Equity 360 327

Pensions 16 25

Other provisions 57 50

Prepayments received 154 110

Trade payables 37 38

Other current and noncurrent liabilities 33 31

Taxes 8 7

Equity and liabilities 665 589

In line with the long-term investment policy of

RENK of ensuring the future viability of the

Group with targeted measures to renew, ex-

pand and modernize its facilities and infra-

structure, a total of € 41 million was invested in

fiscal year 2015. Property, plant and equipment

and intangible assets therefore increased from

€ 175 million as of the start of 2015 to

€ 195 million as of the end of the year.

As projects were processed over the course of

2015, inventories declined from € 179 million to

€ 171 million and receivables rose from

€ 67 million to € 82 million.

As in the previous year, the other current and

noncurrent assets include the deposit at MAN

SE of € 80 million. The rise in cash and cash

equivalents of € 47 million to € 117 million cor-

responds to the inflow of prepayments received,

predominantly for Vehicle Transmission busi-

ness.

The equity of the RENK Group rose from

€ 327 million over the course of fiscal year 2015

to € 360 million. However, given the signifi-

cantly higher total assets, the equity ratio de-

clined slightly year-on-year from 55.6% to 54.2%

as of the end of 2015 – still a figure that repre-

sents a very solid financial structure.

Provisions for pension obligations decreased from € 25 million to € 16 million during the year, due in part to further allocations to pen-sion assets. As a result of the major orders re-ceived, the level of prepayments received climbed from € 110 million as of the start of 2015 to € 154 million as of the end of the year.


Dividend distribution unchanged The goal of RENK’s dividends policy is still to

allow shareholders to participate appropriately

in the company’s success on the one hand,

while ensuring RENK’s future viability by in-

creasing its equity on the other. RENK AG has

reported net income for fiscal year 2015 in ac-

cordance with the German Commercial Code of

€ 34.2 million (previous year: € 44.0 million).

The Executive Board transferred € 17.1 million

of this (previous year: € 22.0 million) to re-

tained earnings. Including retained profits

brought forward, the net retained profits there-

fore amount to € 17.9 million (previous year:

€ 55.7 million). Based on the resolution of the

Annual General Meeting at June 18, 2015

€ 40.0 million (previous year: nil) were trans-

ferred from the net retained profits to the re-

tained earnings. The Executive Board and the

Supervisory Board propose to the Annual Gen-

eral Meeting the distribution of a dividend for

fiscal year 2015 unchanged as against the previ-

ous year of € 2.20 per share. Measured against

the closing price of RENK shares as of Decem-

ber 31, 2015, of € 105, this corresponds to a divi-

dend yield of 2.1% (previous year: 2.6%).

40

<<Platzhalter: Bild einfügen>>


Capital information/disclosures in accordance with section 315(4) HGB1)

The disclosures on individual matters in ac-

cordance with section 289(4) and section 315(4)

Handelsgesetzbuch (HGB – German Commer-

cial Code) are as follows.

Clause 1: Composition of subscribed capital The share capital of RENK AG of € 17.9 million is

divided into 7 million no-par value bearer

shares. There are no other classes of shares.

Clause 2: Restrictions on voting rights or the transfer of shares Each share grants one vote; there are neither

restrictions on voting rights nor restrictions

concerning the transfer of shares.

Clause 3: Direct or indirect shareholdings of more than 10% of the capital In the fiscal year MAN SE, Munich, held 76% in

the subscribed capital of RENK AG. Through

their investment in MAN SE, Truck & Bus

GmbH, Wolfsburg, its parent company

Volkswagen Aktiengesellschaft, Wolfsburg, and

Porsche Automobil Holding SE, Stuttgart, and

their controlling shareholders also indirectly

held 76% in the subscribed capital of RENK.

RENK AG was not advised of, nor is it aware of,

any other direct or indirect shareholdings in

the capital of the company exceeding 10% of

the voting rights or the relevant reporting

thresholds of the Wertpapierhandelsgesetz

(WpHG – German Securities Trading Act).

Clause 4: Bearers of shares with special rights grant-ing control. There are no special rights granting control.

Clause 5: Control of voting rights for employee shareholdings in capital There is no control of voting rights.

Clause 6: Statutory provisions and regulations in the Articles of Association on the appointment and dismissal of members of the Executive Board and amendments to the Articles of Association The appointment and dismissal of the Execu-

tive Board are regulated by section 84 of the

Aktiengesetz (AktG – German Stock Corporation

Act). Members of the Executive Board are there-

fore appointed by the Supervisory Board for a

maximum of five years. In accordance with

Article 5 of the Articles of Association, the Ex-

ecutive Board of RENK AG consists of at least

two persons. The number of members is de-

termined by the Supervisory Board.

In accordance with section 179(2) AktG,

amendments to the Articles of Association can

be resolved by the Annual General Meeting

with a three-quarter majority of the capital

represented.

Clause 7: Powers of the Executive Board to issue or redeem shares The authorization of the Executive Board to

buy back own shares ended on November 8,

2007. 199,903 own shares or 2.86% of the total

number of shares had been bought back by this

date.

1) Please also see note 20 of the consolidated financial statements for the required capital disclosures.

42

The Executive Board is authorized, with the

approval of the Supervisory Board, to dispose of

or acquire own shares in a manner other than

on the stock market or by way of offer to all

shareholders with shareholders’ preemptive

rights disapplied,

• if the own shares acquired are sold at a price

not significantly less than the market price

of the shares of the company,

and/or

• if this is done as consideration in the con-

text of a business combination or to acquire

companies or equity investments in com-

panies.

The Executive Board is also authorized, with the

approval of the Supervisory Board, to withdraw

own shares without this requiring an additional

resolution by the Annual General Meeting.

These authorizations were not exercised in the

year under review. There is no authorized capi-

tal for the issue of new shares.

Clause 8: Material arrangements in the event of a change of control following a takeover bid There are no such arrangements.

Clause 9: Compensation agreements with members of the Executive Board or employees in the event of a takeover bid There are no change-of-control regulations

either for members of the Executive Board of

RENK AG or its employees.

Closing statement by the Executive Board on the dependent company report in accordance with section 312 AktG In accordance with section 312 of the Aktien-

gesetz (AktG – German Stock Corporation Act),

the Executive Board of RENK AG has prepared a

dependent company report. It lists all the

transactions with affiliates of the MAN Group

in fiscal year 2015. The closing statement by the

Executive Board on this report ends as follows:

“The Executive Board hereby declares that,

according to the circumstances known to it at

the time that each transaction was performed,

our company received appropriate considera-

tion for each transaction.”


Research and development

Constant changes and innovation in business

and society, technological progress and advanc-

ing globalization mean that companies are

always facing new challenges. Accepting and

shaping these is the basis for being able to con-

tinue to compete successfully on the market

moving ahead.

Research and development place a prominent

role in this. Most of the products in RENK’s

range have long lifecycles, hence our innova-

tion management focuses on progress that

benefits customers in addition to the targeted

development of new products. Furthermore,

the company cooperates with various universi-

ties and research institutes.

In fiscal year 2015 RENK AG invested € 8 million

(previous year: € 8 million) of its own funds in

the development of new products and the en-

hancement of existing ones. RENK therefore

also continued its long-term strategy of taking

the demand for technologically advanced con-

cepts and the growing need for integrated ser-

vice packages into account through targeted

development services in 2015.

As in previous years, development activities in

2015 for high-performance marine gear units in

Special Gear Units again mainly focused on the

optimization and advancement of the

CODELAG technology with which gas turbines

and electric motors can be variably combined

as the main drives. In addition, the AED® (Ad-

vanced Electric Drive) developed by RENK was

made ready and the first orders have already

been received. This technology is being devel-

oped continuously in order to tap further ap-

plication areas in the maritime sector.

In the stationary gear units business area, the

newly developed drive concept for vertical mill

drives for cement COPE® (COmpact Planetary

Electric Drive) was presented to the public at a

customer day. The first use of a COPE® gear unit

will take place in the most powerful cement

plant to date with the world’s largest grinding

mill for raw meal. In addition, work was also

done on the development of conventional ce-

ment mill gear units and individual turbo gear

unit series.

The development work of recent years in Vehi-

cle Transmissions resulted in the completely

new, future-proof transmission electronics

reaching production readiness in 2015. The first

deliveries to customers were already made

during the year. In addition, the product

maintenance of existing transmission series

continued.

As an equipment manufacturer, the develop-

ment activities of RENK’s test rig business cen-

ter on the alignment with the respective specif-

ic customer requirements. Parallel to to-order

development, work also concentrated on the

advancement of the hardware and software

concept for RDDS (RENK Dynamic Data System)

test rig automation and the ongoing optimiza-

tion in the area of chassis dynamometers.

R&D activities for marine gear units in Stand-

ard Gear Units business emphasized the devel-

opment and implementation of full gear unit

requirements for the world’s biggest dredger –

from pump to cutting head gear units. The

main area for other maritime, stationary and

offshore wind turbine gear unit series was the

improvement of design and technical proper-

ties.

Development activities in Slide Bearings busi-

ness focused on coating technology in 2015. In

conventional sliding materials, efforts were

mainly directed towards cutting back on re-

sources while at the same time optimizing

costs; in alternative sliding materials the team

worked intensively on qualifying RENK slide

bearings for use under demanding operating

parameters.

44


Preparations for an AED® test run under full-load conditions


Capital expenditures, environmental management

The RENK Group invested a total of € 41 million

in property, plant and equipment and intangi-

ble assets in fiscal year 2015 (previous year:

€ 38 million). RENK’s long-term capital ex-

penditure policy is geared towards the ex-

pected requirements of the markets for its

products and services. The main considerations

are still flexibility, speed and technological

leadership in the implementation of customer-

specific requirements, without losing sight of

maintaining or optimizing competitive cost

structures.

In line with the longer-term investment strate-

gy, the Augsburg site was again the priority in

RENK’s investing activities in 2015. In Special

Gear Units, the partial completion of the new

multipurpose hall for assembly and the test bay

was at the heart of activities. Large parts of the

assembly facilities and the paint shop com-

menced operations in 2015. Work on the test

bay facilities for large and turbo gear units also

progressed rapidly, with the result that trial

operation and the subsequent transition to full

operations are expected in the opening months

of 2016. Various production-related depart-

ments will also relocate to the office space in

the multipurpose hall in the coming months.

Investing activities in Vehicle Transmissions

continued the medium-term strategy launched

in previous years as well. The goal is to set up

production so as to enable the parallel manu-

facture and repair of various gear unit series at

low cost and with small unit numbers. The

chronological prioritization of the individual

investment measures was adjusted in line with

the current demand situation – also on account

of the major order placed in the previous year.

The major system for the production of new

housings went live in fiscal year 2015 with the

associated measurement equipment. Also, the

machinery setup was completed with further

machining centers and grinding machines and

some production equipment was moved into a

newly created hall. The short and medium-term

capacity utilization situation necessitated that

the planned installation of non-model-specific

hybrid load test stands be brought forward; two

test rigs already entered production at the end

of 2015. In addition to various infrastructure

projects, a new contemporary canteen was built

in Augsburg and is open to employees, follow-

ing acceptance and trial operation, from Janu-

ary 2016.

As in the previous year, investment activity in

Standard Gear Units business in Rheine concen-

trated on targeted optimization and exten-

sion/replacement of mechanical equipment,

testing and measurement equipment and the

logistical and physical infrastructure.

At the Hanover Slide Bearings site, after the

new construction work in previous years, the

necessary extension went ahead with a land

purchase and the subsequent building of the

required parking spaces. In addition, a number

of measures to improve the production infra-

structure and workplace conditions were im-

plemented or initiated.

RENK France also took the first major steps

towards adapting the building’s infrastructure

to current requirements and legal specifica-

tions.

Environmental issues are a top priority at

RENK’s production sites. The environmental

management system (DIN EN ISO 14001) of

RENK AG and RTS GmbH at the Augsburg site

introduced in 2012 was successfully recertified

in 2015. The environmental management sys-

tems at RENK AG’s Hanover site and RENK-

MAAG GmbH in Winterthur are also certified to

ISO 14001.

RENK AG’s second environmental program is

now running at the Augsburg site. It defines the

goals and measures for protecting the envi-

ronment for 2015 to 2018. With this program,

the company is committed to implementing

46

further voluntary protective measures in the

different environmental fields that go beyond

the extent required by law.

For example, the technology used in the new

system for manufacturing housings that went

live in the year under review makes it possible

to reduce the energy used production per part

by approximately 40%.

Furthermore, the new multifunctional test bays

currently being built in Special Gear Units

business area use an electromotive brake to

convert the kinetic energy of moving masses

into electrical energy with high efficiency and

feed this back into the grid (recuperation).

At its Hanover site, RENK has changed the en-

tire lighting system in the production hall from

high-energy, high-maintenance mercury-vapor

lamps to long-lasting LED lighting. The LED

lighting is dimmable and is actively controlled.

This ensures optimal and economical indoor

lighting at any time of the day. A new cogenera-

tion plant was installed modularly in late 2015.

This cogeneration plant with a thermal priority

circuit will cover 70% of the heat requirements

of the Hanover plant while generating 20% of

its required electric power. These measures

entail significant advantages in terms of energy

efficiency, carbon footprint and energy costs.

Capital expenditures and depreciation in € million

13

24

14

28

2011

2012

2014

Capital expenditures and depreciation, amortization and impairment losses in € million

Depreciation, amortization and impairment losses Capital expenditures

17

38

201521

41

201316

30

2011

2012

2013


456306

150

525349

176


504308

196

2014666

529137

2015483

301181



Assembling a large gear unit in the new multi-functional shop at the Augsburg plant

48


In 2015, 133 apprentices and dual-course students completed their vocational training within the RENK Group.


Employees

The RENK Group employed 2,198 people as of

December 31, 2015 (previous year: 2,196). It also

had 39 subcontracted employees (previous year:

48). The number of employees in Germany was

2,031 (previous year: 2,022), at the foreign com-

panies this figure was 167 (previous year: 174).

Company pension plan A central component of the company pension

plan in place is the MAN Profit-Sharing and

Pension Plan (MPP). In addition to employer

contributions, employees have the option of

voluntary deferred compensation as part of

their personal pension provision. Such contri-

butions are free from tax and social security

contributions up to the statutory contribution

assessment ceiling. The company supports this

voluntary deferred compensation with addi-

tional top-ups.

Employee participation in business success The great commitment by employees was again

rewarded in fiscal year 2015 by allowing them

to participate directly in the company’s success.

This profit-sharing is based on the stipulated

profitability targets.

Promotion of occupational health management As a result of the statutory retirement age be-

ing raised to 67, occupational health manage-

ment has become an even higher priority at

RENK. Integration management has therefore

been introduced at all sites. This is an inde-

pendent team of representatives on behalf of

the employer, the Works Council and the repre-

sentative body for severely disabled employees

(integration team) searching for opportunities

to assist employees who have been absent for

prolonged periods due to illness. The goal is

that sickness and disability are avoided as far as

possible or overcome as quickly as possible. The

integration team has a duty of confidentiality

in its duties and works closely with the respec-

tive works physicians, safety engineers and

external partners such as the integration office.

In some cases it has been possible here to offer

employees with serious health problems alter-

native jobs where they are fully capable despite

their limitations.

There are also other actions, partially supported

by company health insurance, to increase em-

ployee awareness about health-conscious be-

havior. Thus, advice on workplace ergonomics

is provided regularly. Employees are also of-

fered free back training programs. Furthermore,

the possibilities offered by the company extend

to health weeks in the works restaurant, colon

cancer awareness, vaccination consulting and

skin screening. Occupational health manage-

ment is an important part of operational HR

work to keep employees fit for future challeng-

es as well.

Strengthening management culture The high motivation of RENK employees must

be preserved and expanded. The quality of

management performance plays a central role

in this. For this reason, the top managers of all

sites have taken on this issue on behalf of the

Executive Board and developed new manage-

ment guiding principles. The management

principles this covers are intended to focus

managers even more on their daily manage-

ment activities while giving them the oppor-

tunity to reflect. Moderated workshops were

held at all levels to inform and raise awareness

among managers. This gave managers the

chance to actively engage with the guiding

principles and to see how they specifically re-

late to their own management work. The guid-

ing principles now have to become even more

established in the company and actively prac-

ticed as an example to employees.

Employee vocational training and qualification The activities in the areas of vocational training

and qualification were stepped up further in

2015 as well.

50

The success of the vocational training concept

at RENK has again been highlighted by numer-

ous awards at all sites. At the end of 2015 a total

of 133 vocational trainees (previous year: 143)

were being trained either directly at RENK’s

individual divisions or by RENK indirectly at

the MAN vocational training center in Augs-

burg. Of RENK AG’s 121 vocational trainees (pre-

vious year: 129), the Augsburg plant accounted

for 68 (previous year: 70), Rheine for 41 (previ-

ous year: 48) and Hanover 12 (previous year: 11).

There were also six vocational training places at

RTS, five at RENK-MAAG and one at RENK

France. 19 of the 133 vocational trainees are

doing combined studies of either mechanical

engineering or mechatronics at a university

parallel to their vocational training.

The now firmly established annual qualifica-

tion interviews keep employees actively in-

volved in their own development and allow a

reasonable assessment of training needs. As

already stated above, the main issue in training

was the subject of leadership. In 2015 this cen-

tered around operational managers (foremen).

A program consisting of four modules was

carried out for these employees, most of whom

have many years of management experience.

The objective was to identify the changing chal-

lenges in their role as operational managers

and to actively develop strategies for success.

The participants were able to test the success

strategies in private practical examples and

apply effective management methods in prac-

tice.

The technicians who make a key contribution to

the company’s success with their global service

operations were also a focus of activities. First

an employee survey was carried out on techni-

cians’ expectations and satisfaction. This

helped to gage the attractiveness of the compa-

ny as an employer specifically in the area of

assembly. Deficits identified in the survey were

addressed and solutions were sought and found

together with the technicians in moderated

workshops. Initial measures to facilitate the

work of our technicians on site with customers

are already being implemented.

In addition to the established management

programs and occasional coaching activities,

there was extensive professional training and

foreign language classes. Given the increasing

internationalization, there was also more train-

ing on intercultural skills for different cultural

groups. Compliance awareness and training for

employees is still offered extensively as part of

induction events for new employees, manage-

ment programs and classroom training.

The company’s success is not least due to em-

ployees’ strong sense of identification with and

loyalty to it, which is reflected in a very low

level of staff turnover. The company’s excellent

reputation on the regional and industry labor

market, and the good contact it constantly

maintains with universities, ensures that de-

manding technical and management positions

can be filled quickly with outstanding candi-

dates.

Our thanks to the employees and their repre-sentatives We would like to thank all our employees for

their dedication and the successes achieved as a

result. Our thanks also go to the employee rep-

resentatives on the Supervisory Board, the

members of the Works Council and the Eco-

nomic Committee for continuing the open and

constructive cooperation of past years.

We will fondly remember the members of staff

and former employees who passed away in the

period under review.



Assembling a thrust bearing for a megayacht

52

<< Platzhalter Doppelseite Bild "Schneidkopf" einfügen>>

Assembling a spur gear unit for the world’s biggest cutter head suction dredger


<< Platzhalter Doppelseite Bild "Schneidkopf einfügen>>

54


Air-mounted measuring machine for testing and documenting high-precision gearing on gearwheels of up to

3,500 mm diameter


The segments

The segment tables below show order intake

and sales revenue for the individual segments

and intersegment transactions.

Special Gear Units (Augsburg plant/RENK-MAAG)

€ million

2015 2014 Change*

Order intake 186 144 43

Sales revenue 157 179 (22)


Operating return on sales (%)* 9.9 14.9 (5.0)

* Calculated in € thousand

General economic conditions As in previous years, the Special Gear Units

business has again faced very different general

conditions in its respective target markets over

the course in 2015.

The marine gear units business area also oper-

ated in a market environment largely character-

ized by the procurement activities of govern-

ment contractors for marine and coast guard

naval units in 2015. These demand technologi-

cally highly sophisticated gear sets in many

cases designed to run on a single drive source

or a combination of multiple ones depending

on their deployment. The market volume for

such high-end gear solutions has expanded

massively in recent years as a result of the

growing need to replace fleet vehicles, some of

which obsolete, in a number of navies. In addi-

tion to the needs of the public sector, there is

also demand for this technology from the small

market segment of megayachts, as they also

have similar high standards of performance,

flexibility, noiselessness and smooth running.

By contrast, the situation on the markets in

which the stationary gear units business area

operates was again completely different in the

year under review. Again in 2015, the conditions

here have not noticeably changed for the better.

The low price of oil left many projects, especial-

ly offshore or deep seas ones, economically

unviable. In addition to these immediate ef-

fects, falling oil revenues in oil-producing coun-

tries caused a slowdown in investment in infra-

structure projects. In addition, lower prices for

industrial commodities such as copper, chro-

mium, zinc and nickel led to a standstill on

major projects to extract, transport and mill

these substances. The low price of oil gave rise

to a minor positive development only in the

plastics manufacturing industry. The market

for cement gear units is a key area of activity

for this business area. The widely differing

prices from region to region for the locally

traded product cement require a regionally

differentiated sales policy. As in previous years,

all sub-markets for industrial gears were subject

to intensive competitive pressure that height-

ened further for certain applications in the year

under review. RENK is responding to this with a

variety of measures to improve processes and

enhance efficiency.

The economic conditions for the Swiss compa-

ny RENK-MAAG have also not improved in the

year under review. On account of the low steel

prices, the Chinese steel industry is hardly in-

vesting in expansion any more – which is hav-

ing a corresponding effect on demand for turbo

gear units. However, there are new sales oppor-

tunities for RENK-MAAG arising from the ten-

56

dency towards energy efficiency enhancement at existing steel plants.

There is also potential in after sales business,

for both industrial and marine gear units. Per-

formance is being somewhat hampered by the

rise in the Swiss franc exchange rate since it was

unpegged by the Swiss National Bank at the

beginning of 2015.

Business development At € 186 million, order intake in Special Gear

Units in 2015 was significantly higher than the

previous year’s level of € 144 million. This was

mainly due to the renewed increase in demand

for complex marine gear unit solutions; this

segment was able to post its highest order in-

take to date. In addition to follow-up orders

under the longer-term procurement programs

of various coastguards and navies, from the

United States or Turkey, for example, orders

were also received for individual projects –

partly as packages for multiple ship sets. Of

particular note is an extensive program of the

Italian Navy. In 2015 the first order was also

received for the new RENK AED® drive module

for use in a megayacht.

There was an overall increase in orders for sta-

tionary gear units as well. Growth in orders for

gear units for the plastics processing industry

and cement mills offset declines for turbo gear

units. Further orders were placed with RENK for

the newly developed alternative vertical cement

mill drive concept COPE®.

In line with the development and composition

of order intake in the year under review and the

previous year, sales revenue in Special Gear

Units business decreased to € 157 million in

2015 after € 179 million in 2014. While the de-

cline for maritime gear units is primarily due to

billing factors, the difficult market situation

was reflected in the drop in sales revenue for

stationary gear units especially. Key sales reve-

nue drivers in 2015 were the deliveries for the

procurement programs of the US, Italian, Brit-

ish and Indian navies or coast guards and the

deliveries of ship sets for several megayachts.

Result The decline in sales revenue, a changed sales

revenue mix and the losses at RENK-MAAG led

to a significant decline in the operating profit

for Special Gear Units to € 15 million after

€ 27 million in the previous year. The result for

the year under review includes Special Gear

Units’ share of the payment received for the

purchase commitment. The operating return

on sales for fiscal year 2015 was therefore 9.9%

(previous year: 14.9%).

Outlook The market for technically sophisticated gear

units for use in navy and coast guard ships is

expected to remain at a similar level in 2016.

On the one hand, follow-up orders are antici-

pated from longer term procurement programs

from various countries, while on the other, new

procurement projects are coming up, including

in North America and Europe.

No substantial change for the better is expected

in the market environment for industrial gear

units. Continuing strong competition is still

expected in all key product segments, and thus

high price pressure is also expected as a result.

A turnaround in turbomachinery (turbo gear

units) is not foreseeable in 2016. There are pro-

spects on the small market of special gear units

for the plastics processing industry. We also

foresee opportunities in the highly competitive

market for cement mill gear units, in both con-

ventional gear unit concepts and for COPE®

gear units established on the market in 2015.

RENK-MAAG will continue to pursue the diver-

sification strategy it has embarked on in terms

of product portfolio and target markets, and

will implement various cost optimization

measures.

58

<< Platzhalter Bild Fahrzeuggetriebe einfügen >>

Motor vehicle transmission test rig for acceptance procedures under full-load conditions


Vehicle Transmissions (Augsburg plant/RENK France/RTS/RENK Systems)

€ million

2015 2014 Change*

Order intake 111 330 (219)

Sales revenue 150 115 35

Operating profit 24 16 8

Operating return on sales (%)* 15.7 13.7 2.0


General economic conditions The part of the world market for medium-

weight and heavy tracked vehicles accessible to

RENK as a transmission manufacturer is still

characterized by a small number of long-term

procurement programs, frequently with small

volumes and hence low annual shipments. This

basic orientation of the market remained un-

changed in 2015 as well. It is still RENK’s prima-

ry goal to be involved in most of these global

procurement programs (while safeguarding its

technology leadership). We still have good pro-

spects for receiving new series orders, though it

is difficult to estimate when they will go ahead.

In addition to a variety of political and fiscal

reasons that can affect decisions in possible

customer countries, a restrictively handled

export approval policy can also negatively in-

fluence RENK’s business prospects in the medi-

um term. Furthermore, we are increasingly

facing new competitors that are often specifi-

cally set up and aided by their respective na-

tional administrations.

Rising competitive pressure as a result of the

market entry of new providers and budget re-

strictions among public sector contractors are

causing difficulty for after sales as well. As a

quality-oriented Original Equipment Manufac-

turer (OEM), RENK is also standing by its estab-

lished high technical standards for mainte-

nance.

As in previous years, RENK France’s activities

focused on the maintenance and repair of gear

models manufactured for the French army in

the past. These long-term trade relationships

are thus relatively stable.

The positive development in the economic

conditions for the test rig market in the second

half of 2014 continued in 2015. In the segment

relevant to RTS of technologically sophisticated

test rigs, several large projects have been

awarded with a regional emphasis in Europe;

more projects are looming.

Business development As expected, order intake in Vehicle Transmis-

sions remained well behind the record level of

the previous year in 2015; among other things,

2014 had included the largest single order in

the history of RENK for the new British tracked

vehicle platform.

Order intake in Vehicle Transmissions business

in Augsburg related primarily to after sales,

including extensive orders for spare parts and

upgrades. RENK France posted an order intake

in line with the previous year’s figure.

As expected, RENK’s test rig business also failed

to match the high order intake of the previous

year in 2015. However, RTS will deliver two sys-

tems for the planned world’s most powerful

test center for large bearings. In addition, large

orders were received from the vehicle and rail

sectors.

In total, Vehicle Transmissions reported an

order intake of € 111 million in 2015. Orders

were therefore down on the record level for

2014 by € 219 million. However, the previous

year’s figure had included record highs in both

Vehicle Transmissions in Augsburg and from

RENK’s test rig activities.

60

At € 150 million, sales revenue in Vehicle

Transmissions in 2015 significantly outper-

formed the previous year’s level (€ 115 million).

This was mainly as a result of the rise in deliver-

ies of new transmissions. In addition to the

German PUMA program, these related in par-

ticular to the transmission types HSWL 354,

HSWL 284C and RK 325. RENK’s test rig sales

revenues also exceeded the comparative figure

for the previous year. These resulted from al-

most the entire product portfolio, with a focus

on applications for the wind power, automotive,

rail and aerospace industries.

Result In particular, the rise in sales revenue in Vehicle

Transmissions contributed to the significant

increase in operating profit from € 16 million in

the previous year to € 24 million in the year

under review. This corresponds to an operating

return on sales for fiscal year 2015 of 15.7% in

2015 (previous year: 13.7%).

Outlook The market for tracked vehicle transmissions

will be similar to how it was in 2015 for the

foreseeable future. The major procurement

projects of individual countries will continue to

be of key importance. The associated specific

conditions, such as demands for local content,

knowledge transfer, etc. and the effects of often

irrelevant political considerations from various

directions will crucially influence both the

scope, procurement procedures and timing of

projects. This makes it very difficult for RENK to

produce meaningful, period-based planning,

even if there are a number of potential projects

on the horizon.

RENK France is expecting stable service busi-

ness. With the global political situation remain-

ing difficult, a more significant business expan-

sion outside France is currently not foreseeable.

The market prospects for RENK’s test rig activi-

ties remain promising in 2016.


At € 150 million, sales revenue in Vehicle

Transmissions in 2015 significantly outper-

formed the previous year’s level (€ 115 million).

This was mainly as a result of the rise in deliver-

ies of new transmissions. In addition to the

German PUMA program, these related in par-

ticular to the transmission types HSWL 354,

HSWL 284C and RK 325. RENK’s test rig sales

revenues also exceeded the comparative figure

for the previous year. These resulted from al-

most the entire product portfolio, with a focus

on applications for the wind power, automotive,

rail and aerospace industries.

Result In particular, the rise in sales revenue in Vehicle

Transmissions contributed to the significant

increase in operating profit from € 16 million in

the previous year to € 24 million in the year

under review. This corresponds to an operating

return on sales for fiscal year 2015 of 15.7% in

2014 (previous year: 13.7%).

Outlook The market for tracked vehicle transmissions

will be similar to how it was in 2015 for the

foreseeable future. The major procurement

projects of individual countries will continue to

be of key importance. The associated specific

conditions, such as demands for local content,

knowledge transfer, etc. and the effects of often

irrelevant political considerations from various

directions will crucially influence both the

scope, procurement procedures and timing of

projects. This makes it very difficult for RENK to

produce meaningful, period-based planning,

even if there are a number of potential projects

on the horizon.

RENK France is expecting stable service busi-

ness. With the global political situation remain-

ing difficult, a more significant business expan-

sion outside France is currently not foreseeable.

The market prospects for RENK’s test rig activi-

ties remain promising in 2016.


Platzhalter Bild "Prüfstand Hubschrauber" einfügen

Helicopter gear test rig for counter rotating and classic designs

62

<< Platzhalter Bild "Antriebshohlwelle einfügen>>

Hollow input drive shaft assemblies for a 5-MW wind energy gear unit


Standard Gear Units (Rheine plant)

€ million

2015 2014 Change*


Sales revenue 92 91 1


Operating return on sales (%)* 10.5 14.6 (4.1)


General economic conditions As in previous years, the situation on the mar-

kets relevant to Standard Gear Units business

was still strained in 2015; some areas even

showed a marked deterioration. The market for

commercial ship projects remained mired at a

low level. As in previous years, there was pri-

marily movement in the energy sector, both for

natural gas transportation with LNG tankers

and for offshore applications. However, the new

construction projects for larger LNG tankers are

now designed almost exclusively with two-

stroke dual-fuel engines; unlike the previously

dominant drive concepts these require no gear

units – the potential market volume for Stand-

ard Gear Units business is declining accordingly.

The market situation for turbo gear units from

Rheine worsened again considerably in 2015.

Customer suffered drastic slumps in volume of

more than 50% in some cases. The few projects

implemented, e.g. for steam turbine plants or

in process business, were fiercely competitive

and it was only possible to win an order by

making substantial price concessions. With the

low price of oil both now and for the foreseea-

ble future, planned investments have been and

are being postponed further or abandoned

altogether. The couplings market also relevant

to RENK, as in the previous year, was far below

the level of previous years. The main target

market for couplings, plant engineering, also

suffered from considerable underutilization, in

turn leading to rising price pressure and the

search for cheaper alternative providers, e.g. in

the Asian region.

As in preceding years, the market for offshore

wind power plants in Germany in 2015 was

characterized by uncertainty regarding finance,

infrastructure connectivity and subsidization

policies; few projects made it to the contract

award phase. In Asia, Japan is still the driving

force in terms of the development and plan-

ning of offshore wind turbines.

Business development The developments described on the individual

markets were also seen in the order intake for

Standard Gear Units. The significant decline in

maritime gear units and couplings, and the

further drop in orders for turbo gear units, were

only offset by a major order for offshore wind

turbine gear units. In total, Standard Gear Units

business therefore received orders of

€ 99 million in 2015 after € 98 million in the

previous year.

Sales revenue was also slightly higher than the

previous year’s level in 2015 at € 92 million

(€ 91 million). Here the rise in billing for mari-

time gear units compensated the declines in

other areas (turbo gear units, couplings and

wind turbine gear units).

64

Result The tense market situation was again reflected

in a significant decline in operating profit for

Standard Gear Units in 2015; € 10 million in

2015 marks a decrease of almost € 4 million

compared to 2014. The result for 2015 includes

the proportionate share of the payment re-

ceived for the purchase commitment and the

impairment loss on the test rig. Thus, the oper-

ating return on sales for fiscal year 2015 was

10.5% after 14.6% in 2014.

Outlook The prospects for the sub-markets relevant to

Standard Gear Units business do not give any

reason to expect a change for the better in fis-

cal year 2016. The business area of maritme

gear units for LNG tankers so very important to

this business area in previous years will con-

tract significantly; firstly due to the general

development in the oil and gas industry and

secondly on account of the growing preference

for two-stroke engine designs with no gear

units. However, opportunities may arise for

special purpose vessels.

The outlook for turbo gear unit products also

remains gloomy. The difficult situation in 2015

will continue; for standard applications there

will be further declines in volumes that it may

only be possible to partially offset with solu-

tions for special applications.

Similarly, we anticipate little potential for re-

covery on the couplings market. Here, too, only

some of the reduced volume in standard appli-

cations will be compensated for by switching to

special purpose solutions.

No specific projects for our gear unit solutions

on the offshore wind turbine gear unit market

with a pending foreseeable horizon can cur-

rently be identified in Germany. However, or-

ders could arise in the Far East.


<< Platzhalter Bild "Zahnflanschen" einfügen>>

Tooth-flank grinding on an output drive unit with a diameter of 4 meters

66

<< Platzhalter Bild "Standardlager" einfügen>>

Assembling a standard E-type bearing


Sliding Bearings (Hanover plant/RENK Corporation)

€ million

2015 2014 Change*


Sales revenue 94 102 (8)

Operating profit 18 17 1

Operating return on sales (%)* 19.2 16.6 2.6


General economic conditions As a typical component supplier for mechanical

and plant engineering as well as ship and ma-

rine technology, the Slide Bearings business was

also unable to escape the economic conditions

of its individual customer industries in 2015.

Among RENK’s European customers, their high

dependence on exports coupled with the weak-

er than expected performance in the euro area

and the uncertainties due to various political

and economic crises led to significant setbacks.

In Brazil the situation worsened significantly

once again in 2015, in the United States the

announced economic recovery also has not yet

reached RENK customers. On the contrary, the

fall in prices for oil and gas triggered a massive

collapse in investment activities in this sector.

Once a growth engine, China did not have its

usual impact in 2015, and the extensive infra-

structure projects in India previously an-

nounced only trickled through.

In particular, the sharp decline in investments

in the oil industry in 2015 also hit sophisticated

applications for the exploration, extraction,

transportation and refining of the raw material.

In addition, the decline in prices for other

commodities led to reduced demand for new

systems and spare parts for equipment, for

example, in mining sites; worldwide a higher

number of mining sites was even completely

closed in 2015. In Germany, the exit from lignite

fired-generation and the promotion of renewa-

ble energies driven by environmental policy

contributed to investment restraint among the

operators of conventional power plants.

Business development Slide Bearings business received orders of

€ 102 million in fiscal year 2015, an increase of

€ 2 million compared to the figure for the pre-

vious year (€ 100 million). At the Hanover site,

the decline in standard e-bearings was more

than offset by the growth in project-related

other horizontal bearings and related compo-

nents. In standard e-bearings, demand for

smaller bearings for electric motors was down

in particular, while in project business there

were higher orders for POD-bearings and other

ship and hydrobearings. Brisk project activity

was similarly observed in vertical bearings

applications, through these projects were not

yet implemented in the year under review.

The US sales company RENK Corporation like-

wise posted a small increase in orders, though

expectations for an expansion of business with

standardized bearings for turbo generators

went unfulfilled.

Sales revenue in Slide Bearings decreased to

€ 94 million in fiscal year 2015 after

€ 102 million in the previous year. This was

mainly due to declines in standard e-bearings,

which affected both RENK AG in Hanover and

the RENK Corporation.

Result In fiscal year 2015 Slide Bearings business gen-

erated an operating profit of € 18 million as

against € 17 million in the previous year. It

should be noted that the previous year includ-

ed the effect of the deconsolidation of the for-

mer subsidiary ADMOS of € –4 million. Slide

Bearings reported an operating return on sales

of 19.2% (previous year: 16.6%) for 2015.

68

Outlook In spite of the problems in the US and China,

positive stimulus is most likely to emerge from

these markets, mainly for energy generation

applications in the field of electrical engineer-

ing. As a result of fracking in the US, energy

generation there is focused on gas turbine

powered generators and, in particular, on the

expansion of renewable energy from primarily

wind and solar power. There are similar devel-

opments in renewable energy in Europe. Thus,

the operation of conventional power plants is

increasingly becoming unprofitable, with the

result that operators are no longer investing in

renewal or upgrades given the lack of profitabil-

ity.

The internationalization that has been ad-

vanced in recent years in the form of RENK’s

own distribution centers allows significantly

faster delivery readiness with their own local

component stocks. Thus, the prerequisites are

in place to further expand spare parts business

in addition to business with new bearings.


<< Platzhalter Bild “Motorflanschlager”

einfügen>>

Drilling the lower section of a bearing housing for a motor flange bearing SM53

70

Report on risks and opportunities*)

Company-wide risk management system Doing business means constantly being ex-

posed to risk. RENK defines risk as the threat

that events, decisions or actions will prevent us

from achieving defined goals or successfully

pursuing certain strategies. In order to leverage

market opportunities we consciously take risks

if we can thereby expect an appropriate contri-

bution to enterprise value. Risks that threaten

the company’s continued existence should not

be taken or, if they are unavoidable, must be

minimized with appropriate measures. This

requires an effective risk management system

tailored to the needs of business activities and

that provides the necessary information early

on to guide the company.

Risk management at RENK is incorporated into

the risk management system of the MAN

Group. It is an integral part of corporate man-

agement and business processes and is com-

posed of the core elements of corporate plan-

ning, including a review process during the year,

risk and opportunities management (“risk

management”), the internal control system and

the compliance system.

One of the goals of corporate planning is to

guarantee that risks and opportunities are

identified and assessed early on so that suitable

measures can be taken. Risk management is set

up at all levels to provide current and relevant

information on the development of material

risks and opportunities and on the effective-

ness of the measures taken at an early stage.

The internal control system focuses on the

close monitoring and controlling of risks, in

particular with regard to the effectiveness of

business processes, the reliability of financial

reporting and compliance with legislation and

regulations.

The RENK compliance system assists in ensur-

ing compliance with all laws applicable to the

company, internal guidelines and codes of con-

duct. It places special emphasis on the issues of

combating corruption, antitrust law, data pri-

vacy, preventing money laundering and com-

bating terrorism. Details of this can be found

under “Compliance system”.

Organization of risk management and the inter-nal control system Overall responsibility for setting up and main-

taining an appropriate and targeted system for

the early identification of risks lies with the

RENK Executive Board. On its own responsibil-

ity, RENK’s Executive Board has organized risk

management and the internal control system

to an extent and in a form in line with the re-

quirements and circumstances specific to RENK.

The industrial governance management con-

cept calls for local decision-making processes

for operations in the RENK Group. The man-

agement is responsible for ensuring that in

addition to the RENK AG, by far the most im-

portant company, the other RENK companies

are included in the risk management and inter-

nal control system to the necessary extent. The

Group-wide policy for risk and opportunities

management and the internal control system

provides the framework for a Group-wide con-

cept of risk management and the internal con-

trol system, and contains regulations for struc-

tural organization, processes and reporting.

*) Including the report according to section 289(5) Handelsgesetzbuch (HGB – German Commercial Code)


The structural organization for risk manage-

ment and the internal control system is based

on the RENK management hierarchy. Roles and

bodies have been set up with defined responsi-

bilities for risks and their monitoring. There are

coordinators for risk management and the

internal control system to ensure that the pro-

cesses defined in the Group policy are imple-

mented. They also play a part in the ongoing

development and improvement of the risk

management system. RENK has set up an inter-

disciplinary Risk and Compliance Board that

acts as a central controlling and monitoring

body for risk management, the internal control

system and compliance.

In the course of discussions by the Risk and

Compliance Board, the risk situation is assessed

and measures for managing risk and remedying

control weaknesses are resolved.

The risk management control process The standard risk management control process

comprises the phases of identification, analysis,

assessment, controlling, monitoring and com-

munication. Risks and opportunities are classi-

fied as either short-term, i.e. up to one year, or

long-term, i.e. up to five years. Risks are as-

sessed according to their probability of occur-

rence and the extent of possible loss on a gross

and net basis, whereby the net assessment

includes any measures to mitigate risk. Qualita-

tive analyses are also possible. The planned

operating profit of the respective organization-

al unit is taken as the basis for assessing the

materiality of such a net analysis. Within their

areas of responsibility, risk officers define and

implement risk-minimizing measures in addi-

tion to monitoring their effectiveness. Using

uniformly defined risk areas, any risk clusters

can be identified early on and actively handled.

The Risk and Compliance Board assesses the

current risk situation by discussing and com-

paring risks and opportunities, resolving

measures and monitoring their effectiveness.

Discussions focus on the causes of risk and

measures. The risk and opportunities situation,

and the measures taken to manage and amelio-

rate this situation, are reported to the Execu-

tive Board. Furthermore, the Supervisory Board

receives regular reports on the risk position and

any significant weaknesses of the internal con-

trol system.

Moreover, risk management and the internal

control system are subject to constant further

development in to take into account changes in

conditions and to further increase their benefit

at every level of the company.

Accounting-related risk management system and internal control system Generally, risk management and the internal

control system comprise the accounting-

related processes and all risks and controls with

regard to financial reporting. This applies to all

aspects that can significantly affect the consol-

idated financial statements. Risk management

assesses identified risks in terms of their influ-

ence on the consolidated financial statements

and takes corresponding measures to manage

and control risk.

The internal controls are intended to limit risks

of material misstatements in financial report-

ing, risks of non-compliance with regulatory

standards or due to fraud, and minimize opera-

tional and business risks (such as asset risks

resulting from unauthorized operational deci-

sions or obligations entered into). Accounting

controls have to provide reasonable assurance

that the Group’s financial reporting process is

in accordance with IFRSs, the German Commer-

cial Code and other accounting-related rules

and laws, and that it is reliable.

As has the MAN Group, RENK has structured

and documented the internal control system in

place in accordance with the recommendations

of the Committee of Sponsoring Organizations

of the Treadway Commission (COSO) in order to

systematically assess the effectiveness of inter-

nal controls. The documentation covers all

standard business processes, including process-

es relevant to the preparation of financial re-

porting with the necessary controls. It also

comprises controls for business-specific risks.

72

The scope of the documentation is determined

by the companies that are material to the con-

solidated financial statements or whose quali-

tative characteristics imply greater exposure to

risk. It is reviewed annually based on defined

criteria.

Key elements of risk management and control

in financial reporting are the clear allocation of

responsibilities and controls in the preparation

of financial statements, transparent rules

thanks to policies on accounting and the prepa-

ration of financial statements, appropriate

regulations governing access to the IT systems

relevant to financial reporting and the clear

assignment of responsibilities when using

third-party specialists. The dual control princi-

ple and the separation of functions are also key

principles in the financial reporting process

that are implemented in the internal controls

at RENK.

The effectiveness of accounting-related internal

controls must be assessed at least once per year,

primarily in the process of preparing the finan-

cial reporting. Identified weaknesses in controls

and agreed measures are included in the quar-

terly reports to the Risk and Compliance Board.

In addition, Corporate Audit at MAN SE, acting

on behalf of the RENK Executive Board as an

independent internal auditor, assesses the reg-

ularity, the security and the management and

monitoring processes for accounting-related

internal controls. The auditor also provides an

assessment of the accounting-related processes

as part of its auditing activities.

The control environment and cross-process

controls, as a framework for a functional and

operational internal control system, are docu-

mented centrally at division level and assessed

once annually in terms of their appropriateness

and functionality.

The control system is regularly checked for

completeness, suitability and effectiveness to

ensure that the rules for reducing procedural

and organizational risks are complied with at all

levels.

Opportunities and risks RENK classifies the material opportunities and

risks at the RENK Group that can have a signifi-

cant impact on the net assets, financial position

and results of operations on the basis of the

five risk areas of market, products, processes,

employees and finance.

Market On its relevant markets, RENK anticipates op-

portunities for profitable growth in the medi-

um- to long-term in many areas. The funda-

mental global economic trends – such as

continued growth, an increased international

division of labor and the resulting rise in global

transport routes and volumes, growing demand

for energy and the necessary innovation due to

evolving global climate policy – will continue.

As part of its strategic focus, RENK is continu-

ously working to realize these market opportu-

nities.

In our opinion, risks to a continuation of world

economic growth mainly lie in structural defi-

cits that could endanger the development of

many industrial nations and individual emerg-

ing economies. In the southern euro area, the

situation of some financial institutions, whose

stability and resilience to crisis are still not

assured, is acting against a sustainable econom-

ic recovery. The consistently high private and

public debt in many places is also hampering

growth prospects and can lead to negative mar-

ket reactions. Growth declines in key countries

and regions often directly affect the global

economy and therefore constitute a central risk.

The economic development of some emerging

economies is inhibited mainly by a dependence

on capital imports and socio-political tension.

Furthermore, risks are arising from corruption,

flawed government structures and the absence

of rule of law.

Geopolitical tensions and conflicts are another

major risk factor for the development of indi-

vidual economies and regions. As a result of

rising global economic interrelations, even local

developments can harm the world economy.

For example, an escalation of the conflicts in


Eastern Europe, the Middle East or Africa can

trigger disruptions on the global energy and

commodity markets and exacerbate migration

trends. The same is true of armed hostilities,

terrorist activities or the spread of infectious

disease, which can lead to sudden and unex-

pected market reactions.

Overall, we rate the probability of a global re-

cession as low. Given these risk factors, how-

ever, a decline in global economic growth or a

phase of below-average growth rates cannot be

ruled out. As a company that operates in the

capital goods industry, RENK is also subject to

fluctuations in the investment climate. Even

small changes in growth or growth expecta-

tions can result in significant changes in de-

mand for capital goods in the relevant markets

of the RENK Group, cancellations of orders

already booked or the reorganization of longer-

term business relationships with key customers.

RENK’s methods of countering these considera-

ble risks include flexible production concepts

and cost flexibility through subcon-tracted

employees, working time accounts, short-time

work and, if necessary, contractual compensa-

tion arrangements.

The overall economic environment can also

mean opportunities for RENK, if actual devel-

opment deviates positively from forecasts.

In addition, there are risks that protectionist

efforts, minimum requirements in terms of the

share of local production in individual coun-

tries or changing competitive conditions on the

sales markets of the RENK Group adversely

affect the planned growth. The markets for

products in the military environment are also

subject to further risks on account of their

dependence on political decision-making, cash-

strapped public sectors in many countries, and

possibly demands for local content and tech-

nology transfer. Furthermore, on many markets

RENK faces substantial competitive and price

pressure that can lead to a deterioration of the

profit margins it can achieve.

Changes in legislation, affecting taxes or cus-

toms, or to other provisions in individual coun-

tries can likewise entail risks to RENK. RENK

constantly monitors and assesses its economic,

political, legal, and social environments in or-

der to take into account the resulting risks and

opportunities in a timely manner when making

business decisions.

Further information on the current develop-

ments in connection with the economic situa-

tion and the repercussions of this can be found

in the sections entitled “Economic environ-

ment”, “Outlook” and in the comments on the

individual segments under “The segments”.

Products As a provider of premium technology, RENK’s

mission is to develop high-quality technologi-

cally and economically advanced products and

launch them on the market, which opens up

opportunities for RENK in a wide range of mar-

ket segments. Abandoning such a mission

would constitute an irresponsible risk to the

Group’s market position. Still, introducing new

products entails design and market risks. RENK

counters these with meticulous strategic plan-

ning that analyzes developments in its market-

place and business environment. Ensuring that

RENK products are of a consistently high quali-

ty is an essential prerequisite for tapping fur-

ther global market potential.

Products that have already been introduced on

the market are subject to risks in terms of the

product quality expected by customers. Poor

quality can lead to warranty and guarantee

costs and, in the long term, to losses of market

share or lower profit margins. In extreme cases,

product liability claims and damages are possi-

ble. Suppliers and the components they pro-

vide must undergo a strict approval procedure

to ensure that high quality standards are main-

tained. Once production has begun, established

in-process quality assurance measures ensure

that manufacturing defects are identified and

fixed in good time. Later, when the products are

in use, any defects that arise are recorded, ana-

lyzed and fixed.

74

RENK’s international presence with a variety of

products and services leads to the diversifica-

tion of its economic base. This counteracts the

risks of dependence on major customers or on

individual products and markets. However, this

also entails risks of patent infringements and

the unauthorized disclosure of company-

specific expertise. We therefore monitor our

sales markets and protect our expertise with

legal action where necessary.

Long-term customer contracts harbor addition-

al risk potential: changes in the political or

business environment within a market can lead

to additional expenses in the handling of major

projects. Whenever agreements with customers

include warranties or guarantee obligations,

there is the risk of illegitimate claims. This risk

is managed by formulating contracts with the

utmost care.

Processes RENK sees the continuous optimization of

business processes in Development, Purchasing,

Production, Sales and Administration as an

ongoing challenge to increase the efficiency of

these processes and also to counteract the sig-

nificant cost risks in these areas. For example,

suppliers are monitored preventively and con-

tinuously to detect significant risks of delays in

delivery or loss of suppliers at an early stage

and thus to mitigate their impact. RENK also

decisively and systematically improves the

underlying processes with regard to the opti-

mized commitment of current assets.

Risks can arise in handling major projects that

may only be recognized in the course of the

project. These can include problems in contract

design, the miscalculation of orders, changes in

economic and technical conditions, flaws in

project management or inadequate perfor-

mance by subcontractors. The RENK Group

minimizes these risks with comprehensive

project management and order controlling.

Major projects are submitted to the Executive

Board of RENK AG for approval and, upwards of

a certain size, also sent to the Controlling and

Finance departments of MAN SE and the Execu-

tive Board of MAN SE for their appraisal. Orders

already approved and ongoing that deviate

significantly from their planned development

are logged as critical orders in a special report-

ing system and regularly presented to the Ex-

ecutive Board.

In connection with its global business activities

RENK can also be confronted with legal dis-

putes and proceedings. In such cases, RENK

examines the respective legal situation – possi-

bly with the assistance of outside counsel – to

avert unwarranted claims or to enforce its own

claims.

Business processes at RENK AG are closely sup-

ported and in some cases even made possible

by IT. This leads to efficiency gains but also

harbors risk. Parts of its infrastructure can mal-

function as a result of accidents, disasters,

technical disruption or Internet attacks, there-

by impairing or completely shutting down

business processes. Moreover, there are the

risks of unauthorized access, theft and the de-

struction or misuse of business data and in-

formation. The resulting financial damage and

loss of reputation can affect individual compa-

nies or even the Group as a whole. To safeguard

the availability, authenticity, integrity and con-

fidentiality of data and information, and to

minimize identified and potential risks, RENK

uses state-of-the-art hardware and software

technologies and effective IT organization and

security mechanisms. This is evidenced by the

use of contemporary standards such as ITIL (IT

Infrastructure Library), the operation of a con-

stantly evolving, IT-related, internal control

system, internationally recognized ISO 27001/2

certification by the German Federal Office for

Information Security (BSI) and other special

certificates for the operation of sensitive IT

infrastructures and business processes for

German and international customers.


The internal control system plays a key role in

all business processes, including the accounting

process, as it is designed to ensure day-to-day

compliance with the relevant regulations and

to reduce unavoidable risks. It makes a vital

contribution to protecting RENK’s assets.

Employees A significant factor in RENK’s success is the

highly qualified specialists and managers who

set new technological benchmarks with RENK

products and effectively and efficiently manage

its business. Opportunities lie in the skills,

international outlook and innovation of the

employees who develop continuously im-

proved and forward-looking products, services

and processes. Risks lie in being unable to staff

key positions in good time and in line with

future requirements. Thanks to a wide array of

HR marketing activities, RENK has succeeded in

ensuring loyalty to the company among excel-

lently qualified specialists and managers.

An intentional or grossly negligent violation of

the law or regulations by employees or manag-

ers would be a material risk to RENK. RENK

counters this risk with a variety of measures as

part of its compliance system. In particular,

these include the Code of Conduct, compliance

policies and training, the compliance help desk,

the Speak Up! whistleblower portal and regular

compliance risk assessments and audits. For

more information, please refer to the section

“Compliance system”.

Finance As an international player, the RENK Group is

exposed to significant market price, liquidity

and credit risks. RENK addresses these risks,

which can also represent opportunities due to

market fluctuations, as part of its Group-wide

financial risk management.

The term market price risk also covers currency,

interest rate and commodity price risks. RENK’s

international business transactions involve

cash flows in several different currencies. If

RENK companies conduct transactions in a

currency other than their functional currency,

they are exposed to a currency risk, which can

affect both the prices for goods and services

and profit margins. RENK therefore largely

hedges its currency risks from orders, receiva-

bles and liabilities and, in part, those from

planned sales. The inclusion of subsidiaries

from countries outside the euro area in the

consolidated financial statements gives rise to

risks affecting profit or loss due to currency

translation. RENK does not hedge these transla-

tion risks with derivative financial instruments.

The hedging activities of the RENK Group and

its operating companies are handled centrally

by MAN SE as a counterparty. Substantial quan-

tities of commodities are needed for the manu-

facture of products. Commodity market price

trends or escalator clauses in contracts with

suppliers expose RENK to commodity price

risks that cannot always be passed on to cus-

tomers and that therefore erode profit margins.

Such risks are counteracted with long-term

supply agreements and escalator clauses in

contracts with customers.

Liquidity risk describes the risk that the RENK

Group is unable to adequately meet its finan-

cial obligations. Inflows and outflows of cash

are monitored and managed at all times to

safeguard liquidity. Moreover, cash flow trends

are monitored in the context of detailed finan-

cial planning. The company’s inclusion in the

central cash management of the MAN Group

ensures the availability of the necessary funds.

The operating activities of the RENK Group

expose it to credit risk. This includes the risk

that a partner does not meet its contractual

obligations on account of its own economic

situation or the political environment, thereby

causing a financial loss to RENK. These sover-

eign and counterparty risks are reduced by the

careful selection of deals and partners, suitable

contract and payment terms and guarantees

and letters of credit.

If there are indications of impairment on an

equity investment carried at cost, RENK is ex-

posed to the risk of an impairment loss in net

profit or loss.

76

The derivative hedges for currency, interest rate

and commodity risks – to the extent that they

are used at RENK – are components of econom-

ic hedges whose effectiveness is regularly

checked. In currency risk management hedges

are accounted for as cash flow hedges or, in

exceptional cases, as fair value hedges. Further

information on the management of market

price, liquidity and credit risks can be found in

the notes to the consolidated financial state-

ments, note (29).

To reduce the inherent financial risks and, out-

side Germany, on account of legal regulations,

the defined benefit obligations of the RENK

Group are largely covered pension assets kept

separate from working capital. For details of

pensions please see the notes to the consolidat-

ed financial statements, note (21).

Assessment of the risk and opportunities situa-tion of the Group by the Executive Board As in previous years, the market risks continue

to outweigh the other risk areas, though the

aggregate risk position has not changed signifi-

cantly. The opportunities identified can only

partly counteract the risks. It should be noted

that the realization of market opportunities is

already included in sophisticated internal

planning. Based on the quantified individual

risks reported in the Risk and Compliance Board,

the Executive Board is satisfied that there are

no significant risks in the respective organiza-

tional units that, individually or collectively, are

not covered by the budgeted operating profit.

This also applies to risks for which a higher

gross loss was calculated, but for which risk-

mitigating measures were taken or a low prob-

ability of occurrence was assumed.

Regarding the individual risk areas, the Execu-

tive Board anticipates the most significant

short-term risks in the market risk area. In par-

ticular, this concerns the uncertainties and the

strong competitive pressure in many markets

relevant to RENK, i.e. in business areas of Spe-

cial Gear Units, Standard Gear Units and Slide

Bearings, and in test rigs. In the area of product-

related risks, the focus is on potential technical

risks and warranty claims based on customer-

specific use of RENK products. The quantified

short-term risks in the processes and employ-

ees risk areas are of lesser importance.

On the basis of the risk management system

established in the MAN Group and introduced

at RENK, the Executive Board has again found

that no risks are discernible at the current time

that could lead to a lasting and substantial

impairment of the net assets, financial position

and results of operations of the RENK Group.

The risk management system implemented and

the related organizational measures thus allow

the Executive Board to learn of risks in a timely

manner and to initiate adequate measures.

Given the partially uncertain development, the

focus of activities in 2016 will continue to be on

the management of market risks.

Compliance system In fiscal year 2015 RENK systematically imple-

mented and continued to develop the compli-

ance program covering the combating of cor-

ruption, antitrust law, data privacy and money

laundering.

RENK has established compliance as an integral

part of its corporate culture. The compliance

management system is coordinated, taught and

constantly refined by the compliance officer on

the basis of the MAN compliance program. He

reports directly to the RENK AG Executive

Board and functionally to the Audit Committee

of the Supervisory Board.

The compliance officer is assisted by a deputy

and one other employee in the area of review-

ing business partners. The Rheine and Hanover

plants also have “compliance champions”, i.e.

managers who are not full-time compliance

employees but who have assumed special re-

sponsibility for the issue of compliance.

Furthermore, the compliance officer can use

the resources of MAN’s corporate compliance

office. In particular, training and information

materials and e-learning courses are managed


from here. Policies are adapted to RENK’s struc-

ture and business model.

The compliance organization and the introduc-

tion of new compliance measures were closely

coordinated with the Executive Board and plant

management teams on the basis of identified

risks. The Risk and Compliance Board, which

meets quarterly, is informed of the progress in

measures and coordinates the next steps.

The global protection of personal data is en-

sured by an external data protection officer,

based on a data privacy policy that applies to

the entire RENK Group.

In implementing the findings of the compli-

ance risk assessment, a clear tone from the top

in terms of integrity, emanating from the Exec-

utive Board, managers and the compliance

officer, was ensured.

Ethical principles of conduct and compliance

requirements for RENK are established in the

Code of Conduct.

In addition to the Code of Conduct for Employ-

ees, RENK has issued a Code of Conduct for

Suppliers and Business Partners that defines

certain minimum ethical standards that RENK’s

suppliers and business partners must agree to

comply with.

The integrity of sales support business partners

is checked as a mandatory requirement and

they are subject to an approval process.

In the reporting period there was a review

workshop as part of a compliance certification

process by Ernst & Young. This examined the

design, adequacy and effectiveness of the RENK

compliance management system in the “anti-

corruption” area. This workshop was completed

without any objections.

The compliance officer gave presentations on

the compliance organization, compliance pro-

cesses and compliance tools at RENK and com-

municated the Executive Board’s expectations

of employees in terms of compliance at events

for various employee groups.

The compliance officer and the compliance

help desk, which can be used by all employees

for matters concerning compliance, received 31

inquiries in the reporting period. These were

answered by the compliance officer and docu-

mented.

78

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80

Remuneration report for fiscal year 2015

Remuneration of members of the Executive Board In accordance with the statutory rules, the total

remuneration of individual Executive Board

members is set by the full Supervisory Board.

The subject matter is prepared by the Supervi-

sory Board’s Executive Personnel Committee. At

the proposal of the Committee, the structure of

the remuneration system for the Executive

Board is also discussed by the full Supervisory

Board and – in accordance with the recommen-

dation of the German Corporate Governance

Code (GCGC, item 4.2.2) – regularly reviewed

and revised as necessary.

The objective and purpose of this is to establish

appropriate remuneration. In particular, the

criteria for this are the duties of the respective

member of the Executive Board, his personal

performance, the economic situation, the suc-

cess and the future prospects of RENK and the

MAN Group and the question of what is usual

for remuneration, taking into account the peer

group and remuneration structure otherwise in

place at RENK.

The Supervisory Board resolved to continue the

long-term remuneration component as decided

in the previous year in fiscal year 2015. Fur-

thermore, it was resolved that the average of

the “delta to the cost of capital” ratio of the

current and the preceding fiscal year is com-

pared against the target corridor stipulated in

advance by the Supervisory Board.

Remuneration structure and components Remuneration for members of the Executive

Board consists of a salary and benefits in kind

not related to performance, pension contribu-

tions and performance-based components. The

performance-based, variable remuneration

consists of components linked to business suc-

cess and long-term incentive components.

(a) Fixed remuneration The fixed remuneration is paid as a monthly

salary. There are also benefits in kind, including

in particular the provision of a company car

and the payment of insurance premiums. The

fixed remuneration is regularly reviewed and

revised as appropriate to take into account the

general pay trend and the responsibilities of

the respective Executive Board member.

(b) Variable remuneration The variable remuneration geared towards

business success (bonus) is based on two equal-

ly weighted performance components:

Performance component 1 Performance component 1 is the MAN Group’s

delta to the cost of capital, defined as the dif-

ference between return on capital employed

(ROCE) and the weighted average cost of capital

(WACC).

The ROCE is operating profit as a ratio of annual

average capital employed. Capital employed

consists of the equity, pensions and similar

obligations and financial liabilities of the MAN

Group, less securities, cash and cash equiva-

lents and loans to Group companies. Operating

profit is still calculated based on the definition

used in the MAN Group in 2013 and 2014. The

ROCE for 2015 was 5.1% (previous year: 5.8%).

The weighted average cost of capital (WACC) is

the forecast minimum return for investors for

the capital provided and the investment risk

taken. The cost of capital is used as the basis for

determining requirements for the return on

capital employed. A cost of capital of 10.0 %

was again applied in fiscal year 2015.

The delta to the cost of capital for 2015 was

–4.9% (2014: –4.2%).


For fiscal year 2015, the average delta to the cost

of capital for the current year and preceding

fiscal year is compared against the target corri-

dor stipulated in advance by the Supervisory

Board. The current and subsequent fiscal year

were used to find an average delta to the cost of

capital for fiscal year 2014.

Failing to reach the lower edge of the target

corridor equates to 0% of the target met. Reach-

ing the upper edge of the target corridor means

200% of the target met, the highest level possi-

ble. The degree to which the target has been

met between the upper and lower edges of the

corridor is calculated on a straight-line basis.

At 100% target met, 0.5 annual fixed salaries

are paid; at 200% target met the maximum

possible bonus for this performance compo-

nent of 1.0 annual fixed salaries are paid.

The target corridor currently in place for the

delta to the cost of capital is from –5% to +5%.

The target met between these points runs on a

straight-line basis from 0% to 200%. According-

ly, a delta of 5.0% or more results in the pay-

ment of 1.0 annual fixed salaries and an ROCE

equal to the cost of capital gives rise to the

payment of 0.5 annual fixed salaries.

Performance component 2 As the second performance component, RENK

AG’s return on sales (ROS) for the respective

fiscal year is compared against the target de-

fined in advance. The target met is calculated as

described for performance component 1.

The current ROS target corridor ranges from 7%

to 11%. The target met between these points

runs on a straight-line basis from 0% to 200%.

Accordingly, a return on sales of 11% results in

the payment of 1.0 annual fixed salaries and a

return on sales of 9% gives rise to the payment

of 0.5 annual fixed salaries. If the target is met

by more than 200%, payment is extrapolated

on a straight-line basis, provided that the total

maximum bonus possible has not been

achieved.

The total bonus consisting of both components

is capped at double the annual fixed remunera-

tion and is only paid out if the MAN Group

achieves a return on sales (ROS) of more than

2%.

Additional information on the bonus for fiscal year 2014 Performance component 1 for fiscal year 2014

was based on an average for the fiscal year in

question and the respective subsequent fiscal

year. The calculation of this component using

the actual figures for 2014 and 2015 now availa-

ble did not give rise to any subsequent adjust-

ment of this component.

82

Results for fiscal year 2015

In 2015 the targets and targets met for the bonus were as follows:

Performance component 100% target 200% value Actual value2015

Target met Bonus

1* (ROCE-WACC) 0% 5% (4.90)% 9%

0.05 annual fixed salaries

2 Return on Sales 9.00% 11.00% 14.40% 370%

1.85 annualfixed salaries

* This component is based on an average for the fiscal year in question and the respective preceding fiscal year.

(c) Long-term remuneration component The long-term remuneration component is

based on the MAN Group’s delta to the cost of

capital (see also description of performance

component 1). The result of this component is

paid as a cash bonus.

The average delta to the cost of capital for the

current year and past two fiscal years is com-

pared against the target corridor stipulated by

the Supervisory Board in advance.

Failing to reach the lower edge of the target

corridor equates to 0% of the target met. Reach-

ing the upper edge of the target corridor means

a target attainment level of 200%. The degree

to which the target has been met between the

upper and lower edges of the corridor is calcu-

lated on a straight-line basis.

At 100% target met, 0.5 annual fixed salaries

are paid; at 200% target met the maximum

possible bonus for this performance compo-

nent of 1.0 annual fixed salaries are paid.

The target corridor currently in place for the

delta to the cost of capital is from 0% to +20%.

The target met between these points runs on a

straight-line basis from 0% to 200%. According-

ly, a delta of 20% or more results in the pay-

ment of 1.0 annual fixed salaries and a value of

10% gives rise to the payment of 0.5 annual

fixed salaries.

(d) Company pension plan Pension benefits for members of the Executive

Board comprise old age, disability and survivors’

benefits. Entitlements to such benefits are ac-

cumulated under a defined contribution, fund-

based system, the Capital Account Plan. Each

year RENK AG pays a contribution of 20% of

eligible pay, which is the total of the contractu-

ally agreed fixed and variable remuneration.

Additional contributions through gross de-

ferred compensation are possible. The contri-

butions paid and interest on them are accumu-

lated in individual capital accounts. The

performance of capital account is directly

linked to the capital market and defined by a

basket of indices and other suitable parameters.

Investment risks are gradually reduced with

increasing age (lifecycle concept). On retire-

ment, the credit in the capital account, or at

least the total contributions paid, can be paid

out in a lump sum, in installments or converted

into an annuity. In the event of disability or

death, the balance accumulated, or at least

capital in the amount of four times the fixed

annual remuneration, is paid out.

Special employment contract regulations In the event of a member of the Executive

Board’s appointment ending early without

cause and at the instigation of the company, on

the basis of a regulation in effect since 2010 the

member in question receives the fixed remu-

neration, the bonus, insurance premium allow-

ances and pension plan contributions until the

regular end of his term of office, or for a maxi-

mum of two years. Any income from other


activities will be offset; the reference base for

calculating the amount of contributions to the

pension system will then be reduced according-

ly. The calculation of the bonus paid to the

member of the Executive Board as a severance

payment after his departure is based on the

past fiscal year and the projected bonus for the

current fiscal year.

In the event of a member of the Executive

Board’s appointment ending at his own instiga-

tion – which is possible giving notice of 18

months without stating grounds – he will re-

ceive his pay only until the end of his notice

period. There are no special regulations for a

change of control.

Remuneration of members of the Executive Board in 2015 The total remuneration of active members of

the Executive Board for their activities in fiscal

year 2015 amounted to € 1,359 thousand plus

€ 175 thousand for pensions (previous year:

€ 1,323 thousand plus € 178 thousand for pen-

sions). Individual details broken down by fixed,

performance-based and long-term incentive

components can be found in the table shown

under note (30) of the notes to the consolidated

financial statements and the tables below.

The individual remuneration of members of

the Executive Board is reported in this remu-

neration report on the basis of the uniform

sample tables recommended in the GCGC as

published on September 30, 2014. A key feature

of these sample tables is the separate reporting

of benefits granted and amounts actually paid.

Under the benefits granted, the targets (pay-

ment on 100% target met) and the minimum

and maximum values possible are shown for

the variable remuneration components (per-

formance components 1 and 2 and long-term

remuneration component).

Benefits granted

€ thousand Florian Hofbauer

Chief Executive Officer

Sales and Technology

2015 2014 Minimum Maximum

Fixed remuneration 230 230 230 230

Additional benefits 25 27 25 25

Total 255 257 255 255

Short-term variable remuneration

(Performance component 2)1) 115 115 0 230

Long-term variable remuneration

Performance component 1 (2 years)1) 115 115 0 230

Long-term remuneration component (3 years) 115 115 0 230

Total 345 345 0 690

Pension cost 95 91 95 95

Total remuneration 695 693 350 1,040

84

€ thousand Christian Hammel

Production and Administration

since August 1, 2015


Fixed remuneration 92 – 92 92

Additional benefits 16 – 16 16

Total 108 – 108 108


(Performance component 2)1) 46 – 0 92


Performance component 1 (2 years)1) 46 – 0 92

Long-term remuneration component (3 years) 46 – 0 92

Total 138 – 0 276

Pension cost 18 – 18 18

Total remuneration 264 – 126 402

€ thousand Ulrich Sauter


to July 31, 2015


Fixed remuneration 128 220 128 128

Additional benefits 15 26 15 15

Total 143 246 143 143


(Performance component 2)1) 64 110 0 128


Performance component 1 (2 years)1) 64 110 0 128

Long-term remuneration component (3 years) 64 110 0 128

Total 192 330 0 384

Pension cost 53 87 53 53

Total remuneration 388 663 196 580

1) If the maximum for performance component 1 or 2 is not met, this can be compensated for by higher achievement of the respective

other component. The overall maximum is the total of the two individual maximums shown.


Payment

€ thousand Florian Hofbauer

Chief Executive Officer

Sales and Technology

2015 2014

Fixed remuneration 230 230

Additional benefits 25 27

Total 255 257


(Performance component 2) 426 443


Performance component 1 (2 years) 10 17

Long-term remuneration component (3 years) 0 0

Other (subsequent adjustment for bonus, special agreements) 0 (42)

Total 436 418

Pension cost 95 91

Total remuneration 786 766

€ thousand Christian Hammel


since August 1, 2015

2015 2014

Fixed remuneration 92 –

Additional benefits 16 –

Total 108 –


(Performance component 2) 170 –


Performance component 1 (2 years) 4 –

Long-term remuneration component (3 years) 0 –

Other (subsequent adjustment for bonus, special agreements) 0 –

Total 174 –

Pension cost 18 –

Total remuneration 300 –

86

€ thousand Ulrich Sauter


to July 31, 2015

2015 2014

Fixed remuneration 128 220

Additional benefits 15 26

Total 143 246


(Performance component 2) 237 424


Performance component 1 (2 years) 6 16

Long-term remuneration component (3 years) 0 0

Other (subsequent adjustment for bonus, special agreements) 0 (40)

Total 243 400

Pension cost 53 87

Total remuneration 439 733

Remuneration of members of the Supervisory Board The structure and amount of the remuneration

of the Supervisory Board are determined by the

Annual General Meeting and regulated in Arti-

cle 12 of the Articles of Association. They take

into account the duties and responsibilities of

the members of the Supervisory Board.

The annual remuneration consists of the fol-

lowing components:

• Fixed remuneration of € 10,000.

• Additional remuneration for the chair and

deputy chair of the Supervisory Board, and

for the chair and members of a committee,

with the exception of the Mediation Commit-

tee. The chair of the Supervisory Board is

granted double the fixed remuneration, the

deputy chair and the chair of a committee

one and a half times this amount, a commit-

tee member 1.25 times the amount. If mem-

bers perform several functions, remuneration

is based on the function with the highest re-

muneration entitlement.

Supervisory Board members’ expenses are also

reimbursed.

Remuneration of members of the Supervisory Board in 2015 The total remuneration payable to members of

the Supervisory Board for 2015 amounts to

€ 100,000 (previous year: € 97,000). An indi-

vidual breakdown of the remuneration of the

members of the Supervisory Board who served

on the Supervisory Board in 2015 can be found

under note (31) in the notes to the consolidated

financial statements.

Events after the end of the reporting period There were no special events after Decem-

ber 31, 2015, with a material effect on the net

assets, financial position and results of opera-

tions.


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Inspection of a wheel/wheel shaft assembly for an LNG tanker gear unit

88

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Gearwheel being set up for turning


Forecast

The expected development of the RENK Group and the general conditions for its business activities are described below. Risks and oppor-tunities that could cause a departure from the projected developments are shown in the re-port on risks and opportunities. The assump-tions are based on the current assessments of external institutions, including economic re-search institutes, banks and multinational or-ganizations.

The global economy is set to grow slightly more than in the previous year in 2016. With the economy picking up, most industrialized coun-tries are expected to see somewhat moderate expansion rates overall. A number of emerging economies should also grow as they did in the previous year, albeit with muted momentum. The highest increases are expected in the emerging economies of Asia. RENK projects that global economic growth will continue in the years 2017 to 2020.

In Western Europe the economic recovery should persist in 2016 as well. Solving structur-al problems continues to be a major challenge in this context. Rising growth rates are assumed for Central Europe.

The robust economic development in the Unit-ed States is set to persist in 2016 with a higher year-on-year growth rate. Brazil will presuma-bly experience negative growth again in 2016, mainly on account of its low domestic demand.

Economic growth in China is expected to re-main at a high level in 2016, but to continue to lose momentum compared to previous years. The economic situation in Japan is likely to improve only slightly. Stable growth with rela-tively high increases is expected for India.

The German economy will presumably keep on growing in 2016 and achieve slightly higher rates than in the year under review. The stable situation on the labor market should persist.

According to the German Engineering Associa-tion (VDMA), global mechanical engineering will develop with only slow momentum again

in 2016. It is forecasting a real increase in sales revenue of just 1% The VDMA expects to see a stagnation of real production in German me-chanical and plant engineering, with growth in individual regions or industries offsetting de-clines in others. Demand from many develop-ing and emerging economies is set to progress only slowly. However, exports to India could be on the rise. Positive stimulus is expected from the US.

The management of the RENK Group is fore-

casting that order intake in fiscal year 2016 will be on par with 2015. As in the past, this assumes that anticipated major projects in Vehicle Transmissions and Special Gear Units are im-plemented and that the order situation for slide bearings remains roughly stable. RENK’s sales revenue should grow slightly in 2016 compared to the previous year.

The unfavorable developments in a number of key markets and the tense competitive situa-tion in various product areas will mean a slight decline in operating profit in 2016. The operat-ing return on sales will therefore again be in the double digits, but it will not match the figure for 2015.

Safeguarding RENK’s market position – despite increasing competitive pressure – requires efficient processes that, qualitatively and quan-titatively, meet market and customer require-ments, e.g. for shorter order lead times and extended testing and documentation. The nec-essary preconditions for this are sufficient capacity and corresponding expertise. In addi-tion to continuous employee training, system-atically maintaining the longer-term invest-ment program is therefore a key foundation for future success.

Equally important for ensuring ongoing com-petitive capability is ensuring technology lead-ership in gear units and slide bearings. Devel-opment activities at RENK are therefore an important strategic priority in order to pre-serve its technological advantage in the future.

90

The prospects for RENK’s individual divisions in the coming fiscal year are as follows.

As in the previous year, the order intake in Special Gear Units in 2016 will largely consist

of orders for sophisticated marine gear unit solutions. An increase is possible in stationary gear units despite the lingering market difficul-ties. Overall, RENK is forecasting a tangible rise in order intake in 2016 as against the previous year for Special Gear Units business, with corre-sponding increases in sales revenue and operat-ing profit. The operating return on sales will thus be around the same level as in the previ-ous year.

A slight decrease in orders compared to 2015 is expected in Vehicle Transmissions business in

2016. There are still opportunities for individu-al projects in new transmissions and after sales. The environmental conditions that arise from, among other things, the demand for local con-tent, the transfer of expertise and offset, etc., hinder precise planning in terms of the timing and scope of project implementation. Sales revenue in Vehicle Transmissions will also de-cline slightly in 2016 owing to several series projects coming to an end. The change in prod-

uct mix and the sales revenue downturn will lead to an appreciable reduction in operating profit and the operating return on sales.

The difficult general conditions on many target markets and the structural changes in the de-mand mean that a significant decline in orders is expected for Standard Gear Units business

in 2016. Based on the current order backlog, however, sales revenue should be slightly high-er than the previous year’s level. This is also true of operating profit and the operating re-turn on sales.

The development in the customer industries for standard electrical bearings and the market position achieved set Slide Bearings business

the difficult task of securing the level to date. The foundations for this are the long-term strategy of keeping delivery times as short as possible with corresponding scheduling and local presence, and expanding support and consulting competency. In total, Slide Bearings business is forecasting order intake and sales revenue similar to the previous year in fiscal year 2016. However, the operating profit and the operating return on sales will fall slightly short of the previous year’s figures.


The forward-looking statements and infor-

mation described above are based on our cur-

rent expectations and assumptions, and they

therefore entail a series of risks and uncertain-

ties. A variety of factors, many of them outside

our control, can influence our business activi-

ties and their outcome. These factors can result

in the actual performance of RENK AG deviat-

ing significantly from the forward-looking

statements.

Augsburg, February 15, 2016


The Executive Board

Florian Hofbauer Christian Hammel

92

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RENK AG, Augsburg RENK Consolidated Financial Statements for the Fiscal Year from January 1 to December 31, 2015

94 Consolidated Income Statement

94 Reconciliation to Total Comprehensive Income for the Period

95 Consolidated Statement of Financial Position

96 Consolidated Statement of Changes in Equity

97 Consolidated Statement of Cash Flows

99 Notes to the Consolidated Financial Statements

99 Principles of Financial Reporting

115 Notes to the Consolidated Income Statement

121 Notes to the Consolidated Financial Position

134 Other Disclosures

157 Events after end of the reporting period

158 Members of the Supervisory Board and the Management Board and their

mandates

163 Responsibility Statement

94

Consolidated Income Statement

€ thousand

Note 2015 2014

Sales revenue [6] 486,684 480,313

Cost of sales – 377,368 – 362,213

Gross profit 109,316 118,100

Other operating income [7] 18,310 12,873

Distribution expenses – 34,158 – 32,177

General administrative expenses – 19,688 – 17,732

Other operating expenses [8] – 5,769 – 8,783

Operating profit 68,011 72,281

Finance costs [9] – 1,206 – 467

Other financial result [9] – 3,063 313

Financial result – 4,269 – 154

Profit before taxes 63,742 72,127

Income tax expense [10] – 21,960 – 23,362

Profit after tax (share of RENK shareholders) 41,782 48,764

Earnings per share in € (basic and diluted) [11] 6.14 7.17

Reconciliation to Total Comprehensive Income for the Period

€ thousand

2015 2014

Profit after tax 41,782 48,764

Items not reclassified to profit or loss

Remeasurement of pension plans1) 4,680 – 13,666

Deferred taxes1) – 1,308 4,248

3,372 – 9,418

Items reclassified to profit or loss in the future

Currency translation differences1) 2) 2,755 1,325

Change in fair values of derivatives2) – 173 – 3,259

Deferred taxes 54 1,020

2,636 – 914

Other comprehensive income for the period 6,008 – 10,332

Total comprehensive income 47,790 38,432

Other comprehensive income for the period as of Dec. 31 – 15,900 – 21,908

1) No deferred taxes relate to currency translation differences. 2) Please see note (29) “Derivative financial instruments and hedging strategies” for information on the reclassification

of recognized gains and losses to the income statement.


Consolidated Statement of Financial Position

Assets

€ thousand

Note Dec. 31, 2015 Dec. 31, 2014

Intangible assets [14] 1,479 3,429

Property, plant and equipment [15] 193,579 171,358

Other and financial investments 4,534 4,534

Deferred tax assets [10] 7,267 5,683

Other noncurrent assets and receivables [18] 33 12

Noncurrent assets 206,892 185,016

Inventories [16] 171,218 178,727

Trade receivables [17] 81,584 67,041

Current income tax receivables 3,143 1,747

Other current assets and receivables [18] 84,704 86,337

Cash and cash equivalents [19] 117,061 70,396

Current assets 457,710 404,247

664,602 589,263

Equity and liabilities

€ thousand

Note Dec. 31, 2015 Dec. 31, 2014

Subscribed capital 17,920 17,920

Capital reserves 10,669 10,669

Retained earnings 347,521 320,700

Accumulated other comprehensive income – 15,900 – 21,908

Equity [20] 360,210 327,381

Pension provisions [21] 16,042 24,831

Deferred tax liabilities [10] 1,730 1,469

Other noncurrent provisions [22] 6,288 6,050

Other noncurrent liabilities [25] 370 1,394

Noncurrent liabilities and provisions 24,430 33,743

Effective income tax provisions 4,290 4,790

Trade payables [23] 36,767 38,177

Prepayments received [24] 154,306 110,483

Current income tax payables 1,620 874

Other current provisions [22] 50,405 44,398

Other current liabilities [25] 32,574 29,416

Current liabilities and provisions 279,962 228,139

664,602 589,263

96

Consolidated Statement of Changes in Equity

€ thousand

Subscribed capital

Capital reserves

Retained earnings

Other comprehens

ive income for the period

Total

As of Dec. 31, 2013 17,920 10,669 285,492 – 11,590 302,491

Profit after tax – – 48,764 – 48,764

Other comprehensive income for the period – – – – 10,332 – 10,332

Total comprehensive income – – 48,764 – 10,332 38,432

Dividends paid – – – 13,600 – – 13,600

Other changes – – 44 14 58

As of Dec. 31, 2014 17,920 10,669 320,700 – 21,908 327,381

Profit after tax – – 41,782 – 41,782

Other comprehensive income for the period – – – 6,008 6,008

Total comprehensive income – – 41,782 6,008 47,790

Dividends paid – – – 14,960 – – 14,960

As of Dec. 31, 2015 17,920 10,669 347,522 – 15,900 360,211

For further information see note (20)


Consolidated Statement of Cash Flows

€ thousand

Note 2015 2014

Cash and cash equivalents at beginning of period 70,396 166,573

Profit before taxes 63,742 72,127

Income taxes paid – 25,715 – 31,189

Depreciation, amortization and impairment losses on intangible assets and property, plant and equipment [14.15] 21,365 17,444

Change in pension obligations – 4,216 1,969

Gains/losses from asset disposals 182 236

Other non-cash expenses and income1) 401 6,229

Change in inventories 9,347 – 22,262

Change in receivables – 13,754 18,204

Change in liabilities and prepayments received 44,354 – 24,749

Change in other provisions 5,574 – 2,740

Cash flows from operating activities2) 101,280 35,269

Payments to acquire property, plant and equipment and intangible assets [14.15] – 41,241 – 38,296

Disposal of subsidiaries less cash and cash equivalents 0 – 8

Proceeds from asset disposals 375 85

Cash inflow from deposits 80,000 0

Cash outflow from deposits – 80,000 – 80,000

Cash flows from investing activities – 40,866 – 118,219

Dividends paid [20] – 14,960 – 13,600

Change in other financial liabilities 0 – 63

Cash flows from financing activities – 14,960 – 13,663

Effect of exchange rate changes on cash and cash equivalents 1,211 436

Change in cash and cash equivalents 46,665 – 96,177

Cash and cash equivalents at end of period [19] 117,061 70,396

1) The other non-cash expenses and income in the previous year essentially include expenses from deconsolidation of € 4,242 thousand from the sale of shares in ADMOS (see note (3) (o) on prior-year information).

2) The cash flows from operating activities include interest income of € 244 thousand (previous year: € 674 thousand), interest expenses of € 71 thousand (previous year: € 88 thousand) and income from other and financial investments of € 1,360 thousand (previous year: € 1,117 thousand).


Notes to the Consolidated Financial Statements

Principles of Financial Reporting

(1) General principles

RENK Aktiengesellschaft (hereinafter: RENK AG) is a listed corporation domiciled at

Gögginger Strasse 73, Augsburg, Germany. The RENK Group develops, produces and

distributes high-quality drive technology worldwide. Its divisions are Vehicle Trans-

missions, Slide Bearings, Special Gear Units and Standard Gear Units. As a 76% subsid-

iary of MAN SE, Munich, RENK AG is included in the consolidated financial statements

of MAN SE. In turn, MAN SE is a subsidiary of Volkswagen Truck & Bus GmbH, Braun-

schweig (formerly Truck & Bus GmbH, Wolfsburg), a wholly owned, direct subsidiary of

Volkswagen Aktiengesellschaft, Wolfsburg. Volkswagen Truck & Bus GmbH holds

74.35% of the capital in MAN SE. MAN SE and thus RENK AG as well are included in the

consolidated financial statements of Volkswagen Aktiengesellschaft, which are pub-

lished in Bundesanzeiger (the Federal Gazette).

These consolidated financial statements of RENK AG for the fiscal year from January 1

to December 31, 2015 were prepared in line with section 315a(1) of the Handelsgesetz-

buch (HGB – German Commercial Code) in accordance with the International Financial

Reporting Standards (IFRS) of the International Accounting Standards Board (IASB), as

applicable in the European Union as per Regulation (EC) No. 1606/2002 of the Europe-

an Parliament and of the Council. They were prepared on February 15, 2016 and appro-

ved for submission to the Supervisory Board by way of resolution of the Executive

Board.

The consolidated financial statements have been prepared in euro, the reporting cur-

rency. Unless otherwise stated, all figures are in thousands of euro (EUR thousand).

Minor differences in totals or percentages can occur as a result of the commercial

rounding of amounts.

(2) Consolidation and measurement of equity investments

(a) Equity investments The equity investments of RENK AG include subsidiaries, other equity investments

and financial investments. All material domestic and foreign subsidiaries that RENK

AG controls directly or indirectly are included in the consolidated financial state-

ments. Control exists when RENK AG directly or indirectly has power over the poten-

tial subsidiary on the basis of voting or other rights, is exposed to positive and nega-

tive variable returns and can affect the amount of the variable returns.

Other equity investments include interests in non-consolidated affiliated companies

and financial investments.

100

(b) Basis of consolidation

Companies included In addition to RENK AG, the consolidated financial statements include the wholly

owned subsidiaries RENK France S.A.S., Saint-Ouen-l’Aumône, France, RENK Corpora-

tion, Duncan (SC), USA, RENK Test System GmbH, Augsburg, RENK-MAAG GmbH, Win-

terthur, Switzerland, and RENK Systems Corporation, Camby (IN), USA.

The subsidiaries and financial investments not included in the consolidated financial

statements are insignificant overall to the net assets, financial position and results of

operations of the RENK Group. These are recognized in the consolidated financial

statements at their respective cost, taking into account any impairment losses re-

quired.

Please see note (34) for a full list of shareholdings of the RENK Group.

Expenses, income, receivables and liabilities between consolidated companies, in-

tragroup profits from intragroup deliveries of inventories and noncurrent assets are

eliminated. Deferred taxes are recognized on temporary differences in profit or loss

arising on consolidation.

Business combinations Business combinations are accounted for using the acquisition method. On initial

consolidation, the identifiable assets, liabilities and contingent liabilities of the ac-

quiree are carried at their fair value. Any positive difference between the cost of the

acquiree and the pro rata remeasured equity that remains thereafter is assigned to the

respective division of the RENK Group as a cash-generating unit and recognized sepa-

rated as goodwill. The division, including its assigned goodwill, is tested for impair-

ment at least once a year, and is written down to its lower recoverable amount if nec-

essary. In the event of the disposal of a subsidiary, the attributable goodwill is taken

into account in determining the result of the disposal. The costs associated with the

acquisition (incidental costs of acquisition) that do not serve the procurement of equi-

ty are not added to the purchase price and are instead expensed immediately.

(c) Other equity investments Equity investments for which a quoted market price or a reliably determinable fair

value is available are measured at that value. Financial investments in equity instru-

ments that are allocated to the available-for-sale category, but for which there is no

quoted price on an active market and whose fair value cannot be reliably determined,

are excluded from measurement at fair value. These equity investments are measured

at cost. If there are indications of impairment on an equity investment carried at cost,

an impairment test is performed and any impairment loss is recognized in profit or

loss.


(d) Currency translation Transactions in foreign currencies are translated using the relevant exchange rates at

the time of the transaction. In subsequent periods, monetary assets and liabilities are

measured at the middle rate at the end of the reporting period; exchange rate differ-

ences are recognized in profit or loss. Non-monetary items that are measured in terms

of historical cost in a foreign currency are translated using the exchange rate at the

date of the transaction.

The financial statements of companies from countries outside the euro area are trans-

lated using the functional currency concept. The functional currency is determined by

the primary economic environment, it is the respective local currency of the compa-

nies consolidated.

The financial statements are translated using the modified current rate method, ac-

cording to which items in the statement of financial position – except equity – are

translated using the rate at the end of the reporting period, while income statement

items are translated using weighted average exchange rates. Except for other compre-

hensive income, equity is translated at historic rates. The resulting translation differ-

ences are recognized in other comprehensive income until the disposal of the subsidi-

ary and reported as a separate item in equity.

Middle rate Average rate Dec. 31, 2015 Dec. 31, 2014 20151) 20141)

US dollar 1.08870 1.21410 1.08772 1.32884 Swiss franc 1.08350 1.20240 1.08268 1.21463 Pound sterling 0.73395 0.77890 0.72595 0.80643 Chinese yuan 7.06080 7.53580 7.01935 8.18825 Japanese yen 131.07000 145.23000 132.35773 140.377

1) Weighted average price.

(3) Accounting principles

With the exception of certain items such as financial instruments and provisions for

pensions and similar obligations, the consolidated financial statements are prepared

on the basis of cost. The consolidated financial statements are based on the financial

statements of RENK AG and its consolidated subsidiaries, which are prepared using the

same Group-wide accounting policies as the Volkswagen and MAN Groups.

(a) Revenue recognition Sales revenue is recognized at the date on which the products or goods are delivered or

services rendered and risk has been transferred to the customer. The amount of sales

revenue must be reliably determinable and the recoverability of receivable must be

assumed. Discounts, customer bonuses and rebates reduce sales revenue.

For customer-specific construction contracts, sales revenue is recognized in line with

the percentage of completion method, for details please see the information on con-

struction contracts in note (h).

102

(b) Operating expenses Operating expenses are recognized when the service is utilized; expenses for advertis-

ing and sales promotion and other sales-related expenses are recognized at the time

they are incurred. The cost of sales consists of costs of the products and merchandise

sold. In addition to the direct material and manufacturing costs, production costs also

comprise production-related overheads, including depreciation of production equip-

ment.

Warranty provisions are recognized when the products are sold. Expenses for research

are immediately recognized in profit or loss. Interest and other borrowing costs are

recognized as expenses in the period in which they arise, with the exception of bor-

rowing costs that are capitalized as part of the cost of qualifying assets. A qualifying

asset is an asset that necessarily takes a period of at least a year to get ready for its

intended use or sale.

(c) Intangible assets Individually acquired intangible assets are carried at cost. Intangible assets acquired in

a business combination are measured at fair value at the acquisition date.

If the intangible assets have a finite useful life they are amortized on a straight-line

basis over their period of use. The amortization period for software is predominantly

three years. Licenses and similar rights are amortized over their contractual terms of

use. If the useful life cannot be determined there is no amortization. Instead, the in-

tangible assets are tested for impairment at least once a year and impairment losses

are recognized if necessary. Neither goodwill nor other intangible assets with an indef-

inite useful life were capitalized as of December 31, 2015.

Expenses for the development of new products or series are capitalized when the new

products or series are technically and economically feasible, are scheduled for internal

use or for sale, the expenses can be measured reliably, and sufficient resources to

complete the development project are available. Development costs that do not meet

these criteria and all research costs are recognized immediately in profit or loss. The

capitalized development costs are amortized on a straight-line basis from the date of

launch, typically over five to seven years. While a development project is still in pro-

gress, the amounts capitalized to date are tested for impairment at least annually. No

such development costs were capitalized as of the end of the 2015 and 2014 reporting

periods.

(d) Property, plant and equipment Property, plant and equipment are basically measured at historic cost less deprecia-

tion and impairment losses. Investment grants are deducted from cost. The cost of

internally generated assets includes directly attributable production costs, pro rata

production overheads and borrowing costs attributable to the production period.

Where property, plant and equipment consist of material identifiable components

with different useful lives, these components are recognized and depreciated sepa-

rately. Borrowing costs are not included in cost for the 2015 and 2014 fiscal years.

Expenses for maintenance and repairs are recognized in profit or loss, unless they

must be capitalized.


Property, plant and equipment are depreciated on a straight-line basis over their ex-

pected useful life. The useful lives of property, plant and equipment are reviewed at

the end of each reporting period and adjusted if necessary. Depreciation is essentially

based on the following useful lives:

In years

Buildings 10 to 50

Improvements 5 to 33

Technical equipment and machinery 3 to 33

Other equipment, operating and office equipment 3 to 25

(e) Leases Leases for property, plant and equipment (investment leases) must be classified as

either a finance lease or an operating lease. If companies of the RENK Group substan-

tially bear the risks and rewards of the use of the leased asset as the lessee, the lease is

treated as a finance lease. All other leases in which the companies of the RENK Group

are lessees are treated as operating leases; the lease payments are recognized as an

expense. There were no leases that would qualify as finance leases in the RENK Group

as of either December 31, 2014 or December 31, 2015.

(f) Impairment If there are indications that the carrying amounts of intangible assets, property, plant

and equipment or other equity investments carried at cost and financial investments

may be impaired, an impairment test is performed. For intangible assets with indefi-

nite useful lives, capitalized development costs and goodwill are tested for impair-

ment at least annually. In the RENK Group there were no such items in the statement

of financial position subject to an annual impairment test as of the end of the 2015

and 2014 reporting periods.

The recoverable amount of the asset in question is calculated to determine the extent

of a possible impairment loss. The recoverable amount is the higher of the fair value

less costs to sell and value in use. The value in use is the present value of the expected

cash flows. An interest rate before taxes that reflects the market conditions is used as

the discount rate. If a recoverable amount cannot be determined for an individual

asset, the recoverable amount of the smallest identifiable cash-generating unit to

which the asset in question can be assigned is determined. If the recoverable amount

of an asset is lower than its carrying amount, an impairment loss on the asset is im-

mediately recognized in profit or loss.

If an asset or cash-generating unit on which an impairment loss was recognized later

has a higher recoverable amount, an impairment loss is reversed up to no higher than

the amortized cost that would have resulted without the impairment. The impairment

loss is reversed in profit or loss and is recognized in other operating income. The re-

versal of impairment losses on goodwill is not permitted. There was no recognized

goodwill in the RENK Group as of the end of the 2015 or 2014 reporting periods.

104

(g) Inventories Inventories are measured at the lower of cost or net realizable value. Cost includes

directly attributable production costs and pro rata fixed and variable production

overheads. The allocated overheads are mostly determined on the basis of normal

capacity utilization. Distribution expenses, general and administrative expenses and

borrowing costs are not capitalized. Raw materials and merchandise are measured at

weighted average cost.

(h) Construction contracts Construction contracts are accounted for using the percentage of completion method.

Under this method pro rata sale revenue and the cost of sales are reported in accord-

ance with progress achieved by the end of the reporting period. This is based on the

contract sales revenue agreed with the customer and the expected contract costs. The

percentage of completion is calculated as the share of the costs incurred by the end of

the reporting period in the total forecast contract costs (cost to cost method). If the

result of a construction contract cannot be reliably determined, revenue is recognized

only in the amount of the order costs incurred (zero profit method). Under the per-

centage of completion method, the parts of the contract for which sales revenue has

been received are recognized net of prepayments received under trade receivables in

the statement of financial position.

Expected losses from construction contracts are immediately recognized in full as an

expense by writing down capitalized assets and recognizing provisions.

(i) Primary financial instruments Primary financial instruments include, in particular, customer receivables, loans, oth-

er equity investments, financial investments, securities, cash and cash equivalents,

financial liabilities and trade payables. Regular way purchases and sales of primary

financial instruments are recognized as of the settlement date. Primary financial in-

struments are carried at fair value on initial recognition. Fair value on initial meas-

urement is generally the transaction price, i.e. the consideration given or received.

After initial measurement primary financial instruments are measured at either fair

value or at amortized cost, depending on the category to which they belong.

The amortized cost of a financial asset or financial liability is the amount

• at which the financial asset or financial liability was measured on initial recognition,

• less any repayments and

• any write-downs for impairment or uncollectibility and

• plus or minus the cumulative distribution of any difference between the original

amount and the amount repayable on maturity (premium, discount), which is

amortized using the effective interest method over the term of the financial asset or

financial liability.

Loans and receivables that are not held for trading are recognized at amortized cost

less impairment losses. In the RENK Group this category mainly includes receivables

from customers, other receivables, loans and cash and cash equivalents. Non-interest-

bearing and low-interest-bearing receivables with a remaining term of more than

twelve months are discounted by discounting the future cash flows at the market rate.


The risk of default of financial assets in the loans and receivables category is taken into

account by recognizing specific valuation allowances and portfolio-based allowances.

Specifically, significant individual receivables are checked for objective evidence of

individual impairment. A potential impairment is assumed if certain circumstances

exist, such as late payments over a certain period, the initiation of enforcement

measures, imminent insolvency or overindebtedness, application for or opening of

insolvency proceedings or failure of restructuring measures. If an individual impair-

ment is determined, specific valuation allowances are recognized in the amount of the

losses already incurred applying uniform Group standards.

To calculate portfolio-based allowances, insignificant loans and significant individual

receivables without evidence of impairment are grouped into homogeneous portfoli-

os. As long as there is still uncertainty as to which receivable is impaired, average his-

torical probabilities of default are used for the respective portfolio.

Bad debt allowances on receivables are usually recognized in a separate allowance

account. They are reversed at the same time as the corresponding impaired receivable.

Financial instruments that are held neither to maturity nor for speculative purposes

and that do not belong to any other category are classified as available-for-sale finan-

cial assets. Available-for-sale financial assets are measured at fair value. In the RENK

Group this category mainly includes securities, other equity investments and financial

investments. The difference between the cost and the fair value is recognized in accu-

mulated other comprehensive income after taking into account deferred taxes. Avail-

able-for-sale financial assets are impaired when there is objective evidence of perma-

nent impairment. If the fair value is, for example, permanently or significantly below

the carrying amount, the impairment loss is recognized in profit or loss.

For securities the fair value is usually a market price. Other equity investments and

financial investments are also classified as available-for-sale financial assets. If these

have no listed market price and the fair value cannot be reliably determined with rea-

sonable effort, they are measured at cost. Available-for-sale financial assets are written

down when there is objective evidence of permanent impairment. The impairment

loss is recognized in profit or loss.

Financial investments held to maturity are measured at amortized cost. However,

neither this category nor the fair value option is generally used at RENK.

Subsidiaries that are not consolidated for reasons of materiality do not fall within the

scope of IAS 39. Starting in fiscal year 2015, the corresponding values will therefore be

removed from the data in accordance with IFRS 7. Furthermore, a separate class for

hedge derivative financial instruments has been added to tables in accordance with

IFRS 7. The corresponding tables and figures for the previous year were adjusted ac-

cordingly.

With the exception of derivative financial instruments, financial liabilities are subse-

quently measured at amortized cost.

106

Financial assets and liabilities are reported at their gross value. They are offset only

when this is legally enforceable for the RENK Group at the current time and it actually

intends to offset them.

RENK uses the central financial management of the MAN Group. Under a cash pooling

process, the balances of the RENK accounts included are closed out by MAN SE, usually

daily, and thus transformed into receivables from/liabilities to MAN SE. As part of its

central financial management, MAN SE manages and guarantees the MAN Group’s

liquidity and credit supply with corresponding transactions on the international fi-

nancial markets. Given their cash-like nature, RENK reports the receivables from fi-

nancial transactions with MAN SE as cash and cash equivalents. They result essentially

from central cash pooling and from highly liquid investments of a temporary nature

at MAN SE. By contrast, deposits made with MAN SE of an investment nature are re-

ported as other assets. Analogously, liabilities resulting from the central financial

management of the MAN Group are reported as financial liabilities.

(j) Derivative financial instruments The MAN Group uses derivative financial instruments to hedge foreign currency, in-

terest rate and other price risks that can arise mainly from operating activities. The

most important derivative financial instruments for the RENK Group are currency

forwards and options.

Derivative financial instruments are measured at fair value on initial recognition and

at the end of each subsequent reporting period. Derivative financial instruments are

recognized on the trade date.

The fair value for listed derivatives is their positive or negative market value, possibly

taking the counterparty risk into account. If no quoted market prices are available, fair

values are calculated based on the conditions at the end of the reporting period, such

as interest rates or exchange rates, and using recognized models, such as discounted

cash flow models or option pricing models.

The recognition of gains and losses from measurement at fair value is dependent on

the derivative’s classification.

Derivative financial instruments that do not meet the criteria of IAS 39 with regard to

hedge accounting are assigned to assets or liabilities held for trading and are meas-

ured at fair value through profit or loss. If no market value is available, the fair value is

calculated using appropriate measurement methods, such as discounted cash flow

methods.

A requirement for the application of hedge accounting is that a clear relationship is

documented between the hedged item and the hedging instrument and that its effec-

tiveness has been demonstrated. If these criteria are met, the hedge is designated and

documented as either a cash flow or fair value hedge from this time.

In a fair value hedge, the recognized assets and liabilities or unrecognized firm com-

mitments are hedged against fluctuations in fair value. In a fair value hedge, the

changes in the fair value of the derivative financial instrument and its hedged item are


recognized in profit or loss. In a perfect hedge, the changes in value recognized in

profit or loss of the derivative financial instrument and the hedged item offset each

other almost entirely.

In a cash flow hedge, the recognized assets and liabilities, unrecognized firm com-

mitments and highly probable forecast transactions are hedged against the risk of

fluctuating cash flows. The effective portion of the change in the fair value of the de-

rivative financial instrument in a cash flow hedge is recognized in accumulated other

comprehensive income after the deduction of deferred taxes. Once the hedged item is

recognized in profit or loss, the pro rata equity is reclassified to other operating in-

come or expenses. The ineffective portion of the change in fair value is immediately

recognized in profit or loss. When the hedging instrument expires or is sold, terminat-

ed, or exercised, or the hedge no longer exists but the proposed transaction is still

expected to occur, the unrealized gains/losses accrued from this hedging instrument

to date remain in equity and, in accordance with the above, are recognized in profit or

loss when the hedged item is recognized in the income statement. If the originally

hedged transaction is no longer expected to occur, the cumulative unrealized gains

and losses reported within equity until then are also recognized in profit or loss.

Please see note (29) for information on the hedging strategy of the RENK Group and

the volumes at the end of the reporting period.

(k) Income taxes Provisions for taxes include current income tax liabilities. Deferred taxes are reported

in separate items of the statement of financial position and the income statement.

Provisions for potential tax risks are recognized based on the best possible estimate.

The likely amount of the tax arrears payment is used as a basis for recognized income

tax items.

Deferred tax assets and liabilities are recognized for temporary differences between

the financial reporting and the tax basis, for temporary differences in profit or loss

arising on consolidation and for tax credits and tax loss carryforwards. Deferred taxes

are measured at the prevailing tax rate at the end of the reporting period or the tax

rate highly likely to be used.

Deferred tax assets are recognized only to the extent that taxable profit will be availa-

ble for the utilization of the deductible temporary differences. Valuation allowances

are recognized for deferred tax assets whose realization is not expected in the foresee-

able future. Deferred tax assets for tax loss carryforwards are usually measured based

on future taxable income for a planning period of five fiscal years.

Deferred tax assets are offset against deferred tax liabilities if they relate to the same

taxation authority and to the extent that their maturities match.

Changes in deferred taxes in the statement of financial position lead to deferred tax

expense or income. If the change in deferred taxes results from items recognized di-

rectly in equity, the change in deferred taxes is also recognized directly in equity.

108

(l) Pensions and similar obligations Pension obligations from defined benefit plans are calculated using the projected unit

credit method. The future benefit obligations are measured on the basis of the bene-

fits accrued pro rata by the end of the reporting period and discounted to present

value. Their measurement reflects assumptions about the future development of

certain parameters that affect the future level of benefits.

Pension provisions are reduced by the fair value of the plan assets held to cover the

pension obligations. Please see note (21) for details on measurement. If plan assets

exceed obligations, the excess is recognized in other assets only if it will result in a

refund from the plan or a reduction of future contributions.

The service cost, which represents the benefits of active employees accumulated in

accordance with the benefit plan in the fiscal year, is reported in functional expenses.

Net interest income and expenses are calculated by multiplying the net asset or net

liability by the discount rate and are included in finance costs.

Remeasurements of the net asset or net liability include actuarial gains and losses

arising from differences between the actuarial assumptions used and the actual

trends, changes in actuarial assumptions and the return on plan assets, not including

amounts included in net interest income or expenses. Remeasurements are recog-

nized net of deferred taxes in equity.

Payments for defined contribution plans are recognized in functional expenses.

(m) Other provisions Other provisions are recognized for all identifiable risks and uncertain obligations

resulting from past events that will probably lead to a future outflow of resources and

whose amount can be reliably estimated. They are measured at the best estimate of

the expenditure required to settle the obligation. The provision is carried at its net

present value where the time value of money is material. The discount rate is based on

market interest rates. A reimbursement of third parties anticipated in connection with

a provision is recognized as a separate asset if its realization is as good as certain. Pro-

visions are regularly reviewed and adjusted as further information develops or cir-

cumstances change. If a change in an estimate results in a reduction of the obligation,

the provision is reversed accordingly and the income is recognized in other operating

income.

Provisions for warranties are recognized at the time of sale of the products concerned

or the performance of the relevant service. Their measurement is based primarily on

historical experience. Individual provisions are also recognized for known losses. Pro-

visions for restructuring measures are recognized when the Group has produced a

detailed formal restructuring plan and has notified the parties concerned. Provisions

for outstanding costs and other commitments are measured on the basis of services

yet to be performed, usually in the amount of the production costs expected to be

incurred. Provisions for anticipated losses from onerous contracts are recognized

when the expected benefit resulting from the contract is less than the unavoidable

costs to fulfill the contract.


(n) Presentation of the financial statements The presentation in the statement of financial position distinguishes between current

and noncurrent assets and liabilities. Assets and liabilities are classified as current if

they are due within one year or within a longer operating cycle. Deferred tax assets

and liabilities and assets and provisions from defined benefit pension plans are shown

as noncurrent items. The consolidated income statement has been prepared using the

cost of sales method.

(o) Prior-year information Subsidiaries that are not consolidated for reasons of materiality do not fall within the

scope of IAS 39. Starting in fiscal year 2015, the corresponding values will therefore be

removed from the data in accordance with IFRS 7. Furthermore, a separate class for

hedge derivative financial instruments has been added to tables in accordance with

IFRS 7. The corresponding tables and figures for the previous year were adjusted.

On May 21, 2014 RENK AG sold its entire equity investment in ADMOS-Gleitlager Pro-

duktions- und Vertriebsgesellschaft mbH, Berlin. This investment had been assigned

to the Slide Bearings segment. The transaction resulted in expenses from deconsolida-

tion of € 4,242 thousand in the previous year. The transaction result was reported in

other operating expenses. Material statement of financial position items disposed of

were intangible assets and property, plant and equipment (€ 2,398 thousand), invento-

ries (€ 1,818 thousand) and financial liabilities (€ 2,183 thousand). The cash and cash

equivalents of € 8 thousand disposed of as a result of the sale were reported under

cash flows from investing activities in the statement of cash flows.

(p) Estimates and judgments When preparing consolidated financial statements, to a certain extent assumptions

and estimates are made that affect the amount and reporting of the recognized assets

and liabilities, income and expenses and information on contingent assets and liabili-

ties in the reporting period. The estimates were made on the basis of past experience

and other relevant factors, including the assumption of going concern. All estimates

and assumptions are made to the best of knowledge and belief to provide a true and

fair view of the net assets, financial position and results of operations of the Group.

Any uncertainty is adequately reflected in valuations, though future events can still

differ from these estimates. Estimates and judgments are reviewed on an ongoing

basis.

The assumptions made regarding the following matters as of the end of the reporting

period are of particular significance:

The goodwill impairment test performed at least once a year requires, among other

things, a forecast of future cash flows and their discounting. Such cash flows are based

on forecasts that are in turn based on the business and financial planning approved by

the management. Other material assumptions relate to the weighted average cost of

capital and tax rates. There was no recognized goodwill in the RENK Group as of the

end of the 2015 or 2014 reporting periods. If intangible assets, property, plant and

equipment, other equity investments carried at cost and financial investments are

tested for impairment, the recoverable amount of the assets is also incorporated into

110

management estimates. Any reversals of impairment losses in subsequent periods

also require significant judgment and estimates by management.

Estimates of the useful life of depreciable assets are based on past experience. If, in the

context of the review of useful life, a change is made in estimates, the remaining use-

ful life is adjusted and any impairment loss is recognized.

Individual construction contracts are accounted for using the percentage of comple-

tion method. This method places considerable importance on accurate estimates of

the percentage of completion. Depending on which method is used to determine the

percentage of completion, significant estimates include contract revenue, total con-

tract costs, the remaining costs to completion, contract risks and other assessments.

The management of the operating units is continuously reviewing the estimates for

such construction contracts and adjusts them as necessary.

Determining impairment of financial assets requires estimates of the level and proba-

bility of occurrence of future events. As far as possible, estimates are derived from

past experience.

Pensions and similar obligations are measured using actuarial methods. These are

based mainly on assumptions relating to discount rates, salary and pension trends and

mortality. These actuarial assumptions can differ significantly from actual develop-

ments due to changes in market and economic conditions and therefore lead to a sub-

stantial change in pensions and similar obligations.

As the Group operates in several countries, it is subject to different tax laws. The ex-

pected current income taxes and the deferred tax assets and liabilities must be calcu-

lated for each taxable entity. This requires, among other things, assumptions about

the interpretation of complex tax regulations and the ability to generate sufficient

taxable income within the respective tax type and jurisdiction. If these assumptions

differ from the actual outcome of such tax uncertainties, this can affect tax expenses

and deferred taxes. The best estimate of the expected tax payment is used for recog-

nized uncertain income tax positions.

Depending on the matter at hand, the measurement of other provisions and similar

obligations is complex at times and entails estimates to a considerable extent. The

assumptions made by management with respect to the timing and amount of utiliza-

tion are based, among other things, on historical data, available technical data, esti-

mates of cost trends and potential warranty claims, discount rates and possible recov-

erable amounts. Litigation and other legal proceedings simultaneously give rise to

complex legal issues and are subject to many difficulties and uncertainties. A provi-

sion is recognized for this if it is likely that, in connection with these proceedings, a

liability has been incurred that will probably lead to an outflow of resources and its

amount can be reliably estimated. Assessing whether a present obligation as of the

end of the reporting period is as a result of a past event, whether a future outflow is

likely and whether the obligation can be estimated reliably requires considerable

judgment and significant estimates by management. Future events and developments

as well as changes in estimates and assumptions can lead to an amended assessment

at a future date. Additional expenses that may have a material effect on the net assets,


financial position and results of operations of RENK thus cannot be completely ruled

out. Changes in contractual or actual circumstances are monitored and assessed as

regards the potential impact on the amount and reporting of the recognized assets

and liabilities, income and expenses and information on contingent assets and liabili-

ties in the reporting period. Developments in these general conditions that deviate

from assumptions and are beyond management control can cause amounts to differ

from the original estimates.

(4) Statement of cash flows

In the statement of cash flows, cash flows are divided into cash flows from operating

activities, cash flows from investing activities, and cash flows from financing activities.

The effects of changes in the basis of consolidation and exchange rates are eliminated

in the respective positions. The effect of exchange rate changes on cash and cash

equivalents is reported separately. Cash flows from operating activities are calculated

using the indirect method.

Non-cash operating expenses and gains/losses from asset disposals are eliminated in

cash flows from operating activities.

Besides additions to property, plant and equipment, cash flows from investing activi-

ties also include deposits of an investment nature in intangible assets and equity in-

vestments. Proceeds from these items are offset against each other. Proceeds from the

disposal of subsidiaries are shown net of their cash and cash equivalents as of the date

of disposal.

Cash flows from financing activities consist of the following cash transactions: divi-

dend payments, proceeds from and payments for securities, the borrowing and re-

payment of financial liabilities.

The cash and cash equivalents shown in the statement of cash flows correspond to the

“Cash and cash equivalents” item in the statement of financial position. Cash and cash

equivalents include bank balances, highly liquid investments of a temporary nature

that are subject to only minor risks of fluctuations in value and the receivables under

the MAN Group’s internal cash pooling.

(5) New and revised accounting pronouncements and methods

(a) Provisions adopted for the first time RENK has implemented all accounting standards endorsed by the EU and effective for

financial periods from January 1, 2015.

Various regulations have become effective since January 1, 2015 as part of the 2013

improvement of International Financial Reporting Standards (Annual Improvement

Project 2013). These include amendments to IFRS 1, IFRS 3, IFRS 13 and IAS 40 and have

no material impact on the net assets, financial position and results of operations of

the RENK Group.

112

Furthermore, IFRIC 21 has been effective since January 1, 2015. IFRIC 21 regulates ac-

counting for public levies not covered by IAS 12 “Income Taxes”. In particular, it clari-

fies the circumstances for the recognition of a duty to pay a levy in the financial

statements. This interpretation also has no material effect on the net assets, financial

position and results of operations of the RENK Group.

The other accounting standards effective for the first time in fiscal year 2015 have no

material effect on the presentation of the net assets, financial position and results of

operations in the RENK consolidated financial statements.

(b) New and revised IFRSs not adopted RENK did not adopt the following accounting standards that have been adopted by the

IASB but that are not yet effective for the fiscal year in the 2015 consolidated financial

statements.


Standard/Interpretation Published by IASB

Effective date1) Endorsed by EU

Anticipated impact

IFRS 9 Financial Instruments July 24, 2014 Jan. 1, 2018 No Change in recognition of fair value changes previously classified as available-for-sale financial instruments. General increase in loan loss provisions due to expected loss model compared to incurred loss model. Extension of hedge accounting designation options. Simplified effectiveness testing and additional disclosures.

IFRS 10 and IAS 28

Consolidated Financial Statements and Investments in Associates and Joint Ventures: Sales or contributions of assets between an investor and its associate/joint venture

September 11, 2014

Postponed2) No None

IFRS 10,IFRS 12 and IAS 28

Consolidated Financial Statements and Investments in Associates and Joint Ventures: Consolidation exceptions for investment entities

December 18, 2014

Jan. 1, 2016 No None

IFRS 11 Joint Arrangements: Accounting for Acquisitions of interests in Other Entities

May 6, 2014 Jan. 1, 2016 Yes None

IFRS 14 Regulatory Deferral Accounts

January 30, 2014 Jan. 1, 20166) No None

IFRS 15 Sales revenue from customer contracts

May 28, 2014 Jan. 1, 20183) No No material impact on revenue recognition. Additional disclosures.

IFRS 16 Leases January 13, 2016 Jan. 1, 2019 No No classification as a finance or operating lease for lessees, instead the basic recognition of all leases in the form of a right of use and lease obligation on its statement of financial position. No material changes in lessor accounting compared to IAS 17. Additional disclosures.

114

Standard/Interpretation Published by IASB

Effective date1) Endorsed by EU

Anticipated impact

IAS 1 Presentation of Financial Statements

December 18, 2014

Jan. 1, 2016 Yes No material impact

IAS 7 Statements of Cash Flows: Disclosures in notes

January 29, 2016 Jan. 1, 2017 No Preparation of a reconciliation statement for liabilities from financing activities, disclosures on liquidity restrictions

IAS 12 Income Taxes: Recognition of deferred tax assets for unrealized losses

January 19, 2016 Jan. 1, 2017 No No material impact

IAS 16 and IAS 38

Clarification of acceptable methods of depreciation and amortization

May 12, 2014 Jan. 1, 2016 Yes No material impact

IAS 16 and IAS 41

Agriculture: Bearer Plants

June 30, 2014 Jan. 1, 2016 Yes None

IAS 19 Employee Benefits: Defined benefit plans: employee contributions

November 21, 2013


IAS 27 Separate Financial Statements: Equity method

August 12, 2014 Jan. 1, 2016 Yes None

International Financial Reporting Standards improvements 20124)

December 12, 2013


International Financial Reporting Standards improvements 20145)

September 25, 2014


1) Initial adoption mandatory for the RENK Group. 2) The IASB resolved on December 15, 2015 to postpone the date of initial adoption indefinitely. 3) Postponed until January 1, 2018 (IASB resolution of September 11, 2015). 4) Minor amendments to a variety of IFRSs (IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16/38, IAS 24). 5) Minor amendments to a variety of IFRSs (IFRS 5, IFRS 7, IAS 19, IAS 34). 6) The EU Commission resolved on October 30, 2015 not to endorse IFRS 14 in EU law. The RENK Group is therefore

under no obligation to adopt it.


Notes to the Consolidated Income Statement

(6) Sales revenue

€ thousand

2015 2014

Germany 147,341 153,133

Other EU countries 102,296 95,819

Other European countries 21,786 13,743

Asia 156,726 156,937

Americas 53,259 53,388

Africa 2,729 4,213

Australia and Oceania 2,547 3,080

486,684 480,313

Sales revenue from construction contracts amounts to € 25,162 thousand (previous

year: € 23,999 thousand).

(7) Other operating income

€ thousand

2015 2014

Claims for damages 9,138 0

Income from reversal of provisions 3,955 9,472

Income from currency translation differences and derivatives 3,302 1,548

Income from the derecognition of liabilities 1,099 784

Income from reversal of bad debt allowances on receivables and receivables written off 146 426

Income from penalties 31 177

Income from asset disposals 201 75

Other income 438 391

18,310 12,873

The income from damages includes € 8,900 thousand from the payment of agreed

purchase commitments for wind turbine gear units from the reorganization of the

supplier relationship with a customer in the offshore wind power sector.

Gains from exchange rate changes between the origination and payment date of re-

ceivables and liabilities in foreign currency, and price gains from measurement at the

closing date, are essentially included in income from currency translation differences.

116

(8) Other operating expenses

€ thousand

2015 2014

Expenses from currency translation differences and derivatives 2,423 2,067

Surety and bank fees 809 927

Bad debt allowances on receivables and other assets and write-off of bad debts 464 367

Losses on asset disposals 383 311

Allocated costs 379 445

Addition to other provisions 355 217

Other deconsolidation expenses 0 4,242

Other expenses 956 207

5,769 8,783

Other operating expenses comprise the expenses not allocated to functional expens-

es, in particular the cost of sales.

The changes in the expense from derivatives essentially result from changes in US

dollar exchange rates between the transaction rate and the rate at the realization date.

Other expenses from deconsolidation in the previous year related entirely to the sale

of the 100% interest in ADMOS-Gleitlager Produktions- und Vertriebsgesellschaft

mbH, Berlin. Please see the comments in note ((2) (o) Prior-year information).

(9) Finance costs and other financial result

€ thousand

2015 2014

Interest cost on provisions and liabilities 576 322

Interest expense 630 145

Finance costs 1,206 467

The effect of changes in the discount rate for liabilities and other provisions resulted

in an expense of € 69 thousand in fiscal year 2015 (previous year: € 118 thousand) and

is also included in finance costs.

€ thousand

2015 2014

Income from equity investments 1,360 1,117

Other interest and similar income 292 674

Income and expenses from measurement effects and write-downs of financial instruments – 4,662 416

Expenses from the fair value measurement of derivatives – 53 – 1,894

Other financial result – 3,063 313


€ 160 thousand (previous year: € 375 thousand) of interest income results from finan-

cial transactions with MAN SE. Exchange rate hedges invoiced in the reporting period

and the valuation of balances noted in foreign currencies resulted in expenses of

€ 5,035 thousand, which played a key role in the development of other financial result.

(10) Income taxes

€ thousand

2015 2014

Current taxes

Germany 22,723 20,910

Outside Germany 1,856 2,371

Deferred taxes

Germany – 1,649 483

Outside Germany – 970 – 402

21,960 23,362

The tax expense forecast for fiscal year 2015 results from applying the domestic tax

rate of 31.17% still in effect for the 2015 assessment period to the profit before tax. As

in the previous year, this tax rate takes into account German municipal trade tax of

15.34%, German corporate income tax of 15.0% and the solidarity surcharge of 5.5% of

corporate income tax.

Reconciliation of forecast to current income taxes:

€ thousand

2015 % 2014 %

Profit before taxes 63,742 100 72,127 100

Forecast tax expense 19,868 31.2 22,482 31.2

Difference due to changes in tax rates 359 0.6 71 0.1

Tax-exempt income – 681 – 1.1 – 446 – 0.6

Non-deductible expenses 313 0.5 1,699 2.4

Taxes for previous years and other 2,101 3.3 – 444 – 0.6

Current tax expense 21,960 34.5 23,362 32.4

The current tax expense includes a prior-period income tax expense of € 2,096 thou-

sand (previous year: € 152 thousand).

118

Deferred taxes are attributable to the following items:

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Deferred tax assets

Intangible assets 47 52

Property, plant and equipment – –

Other equity investments and financial investments 4 4

Inventories 4,605 8,702

Receivables and other assets 31 12

Pensions and similar obligations 22,014 12,053

Liabilities and other provisions 1,771 1,706

Loss carryforwards 66 344

Impairment losses on deferred tax assets – –

Gross amount 28,538 22,873

of which noncurrent 22,131 12,453

Offset – 22,424 – 18,222

Consolidation 1,153 1,032

Statement of financial position 7,267 5,683

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Deferred tax liabilities

Intangible assets 3 430

Property, plant and equipment 9,448 8,855

Inventories 40 336

Receivables and other assets 10,184 923

Pensions and similar obligations – –

Liabilities and other provisions 4,377 8,966

Gross amount 24,052 19,510

of which noncurrent 9,452 9,285

Offset – 22,424 – 18,222

Consolidation 102 181

Statement of financial position 1,730 1,469

In connection with investments in subsidiaries there are temporary differences for

which no deferred taxes were recognized in the amount of € 351 thousand (previous

year: € 231 thousand).


(11) Earnings per share

2015 2014

Profit after tax in € thousand 41,782 48,764

Weighted average shares outstanding (in thousands) 6,800 6,800

Earnings per share in € 6.14 7.17

In accordance with IAS 33, earnings per share are calculated from the consolidated

profit after tax and the average number of shares outstanding in the year. There were

no financial instruments as of either December 31, 2015 or December 31, 2014 that

would dilute earnings per share.

(12) Other income statement disclosures

The cost of materials is as follows:

€ thousand

2015 2014

Cost of raw materials, consumables and supplies, and of purchased merchandise 159,070 143,112

Cost of purchased services 17,438 22,083

176,508 165,195

The cost of sales includes research and development costs of € 8,485 thousand (previ-

ous year: € 8,356 thousand).

Staff costs break down as follows:

€ thousand

2015 2014

Wages and salaries 139,659 130,674

Social security and post-employment expenses 29,806 27,557

169,465 158,231

RENK employed 2,087 people (previous year: 2,112) on average over the year. Of these,

1,232 (previous year: 1,262) worked directly and 856 (previous year: 850) indirectly in

production. There were 33 employees in the non-active phase of early retirement (pre-

vious year: 43). On average, 121 people (previous year: 129) were in vocational training.

120

Depreciation, amortization and impairment of noncurrent assets are as follows:

€ thousand

2015 2014

For intangible assets 3,051 2,397

For property plant and equipment 18,315 15,046

21,366 17,443

Lease expenses amount to:

€ thousand

2015 2014

Minimum lease payments from operating leases 1,168 168

1,168 168

(13) Total remuneration for work by the auditor

In the year under review the Supervisory Board proposed PricewaterhouseCoopers

Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Munich, (PwC) as the auditor; the

Annual General Meeting endorsed this proposal on June 18, 2015.

The table below shows the fees charged for the work of the auditor PwC and the com-

panies of the international PwC network in fiscal year 2015 and fiscal year 2014:

€ thousand

2015 2014

Audit Fee 195 193

Tax advisory services 2 2

Other services 62 11

Auditor remuneration 259 206

The fees charged for work by the auditor PwC and its affiliated German companies in

fiscal year 2015 totaled € 231 thousand (previous year: € 173 thousand). € 169 thousand

(previous year: € 162 thousand) of this related to the audit of the financial statements

and € 62 thousand (previous year: € 11 thousand) to other services.


Notes to the Consolidated Statement of Financial Position

(14) Intangible assets

€ thousand

Licenses, software and similar rights

Other intangible

assets

Total

Gross carrying amount on Jan. 1, 2014 12,153 6,788 18,941

Cumulative depreciation/amortization and impairment losses – 9,288 – 3,609 – 12,897

As of Jan. 1, 2014 2,865 3,179 6,044

Additions 45 – 45

Change in consolidated group – 79 – 1,612 – 1,691

Reclassifications 82 – 82

Disposals – 37 – – 37

Depreciation/amortization – 959 – 523 – 1,482

Impairment losses – – 915 – 915

Cumulative depreciation/amortization on disposals 37 – 37

Change in consolidated group 79 628 707

Currency adjustment 30 40 70

As of Dec. 31, 2014 2,063 797 2,860

Gross carrying amount on Jan. 1, 2015 12,834 5,286 18,120


As of Jan. 1, 2015 2,632 797 3,429

Additions 851 – 851

Reclassifications 15 – 15

Disposals – 23 – – 23

Depreciation/amortization – 1,132 – 384 – 1,516

Impairment losses – 1,030 – 505 – 1,535

Cumulative depreciation/amortization on disposals 23 0 23

Currency adjustment 143 92 235

As of Dec. 31, 2015 1,479 0 1,479

Gross carrying amount on Dec. 31, 2015 14,188 5,865 20,053


Amortization of intangible assets is included in the functional expenses, in the cost of

sales in particular.

At RENK-MAAG impairment losses of € 1,030 thousand on brand names and

€ 505 thousand on the customer base were recognized in the year under review. This

was necessary as there was no longer a positive value in use on account of the lack of

future cash flows. Impairment losses of € 915 thousand were recognized at RENK-

MAAG in the previous year.

122

(15) Property, plant and equipment

€ thousand

Land and buildings

Technical equipment

and machinery

Other equipment,

operating and office

equipment

Prepayments and assets

under construction

Total

Gross carrying amount on Jan. 1, 2014 82,008 168,756 47,485 16,268 314,517

Cumulative depreciation/ amortization and impairment losses – 36,886 – 91,180 – 36,375 – – 164,441

As of Jan. 1, 2014 45,122 77,576 11,110 16,268 150,076

Additions 1,191 4,205 2,978 29,307 37,681

Change in consolidated group – 108 – 5,109 – 716 – – 5,933

Reclassifications 888 7,615 418 – 9,002 – 81

Disposals – 680 – 8,237 – 4,208 – – 13,125

Depreciation/amortization – 2,074 – 9,733 – 3,239 – – 15,046

Cumulative depreciation/amortization on disposals 483 8,265 4,055 0 12,803

Change in consolidated group 30 4,003 486 0 4,519

Currency adjustment 133 199 23 109 464

As of Dec. 31, 2014 44,985 78,784 10,907 36,682 171,358

Gross carrying amount on Jan. 1, 2015 83,542 172,169 46,521 36,682 338,914

Cumulative depreciation/ amortization and impairment losses – 38,557 – 93,385 – 35,614 - – 167,556

As of Jan. 1, 2015 44,985 78,784 10,907 36,682 171,358

Additions 6,322 12,002 2,935 19,130 40,389

Reclassifications 13,054 11,469 572 – 25,110 – 15

Disposals – 653 – 2,470 – 282 – 3 – 3,408

Depreciation/amortization – 2,064 – 9,957 – 2,852 – – 14,873

Impairment losses – – 3,440 – 2 – – 3,442

Cumulative depreciation/amortization on disposals 531 2,054 265 – 2,850

Currency adjustment 119 355 47 199 720

As of Dec. 31, 2015 62,294 88,797 11,590 30,898 193,579

Gross carrying amount on Dec. 31, 2015 102,471 194,356 49,868 30,898 377,593

Cumulative depreciation/ amortization and impairment losses – 40,177 – 105,559 – 38,278 – – 184,014


Depreciation on property, plant and equipment is included in the functional expens-

es, in the cost of sales in particular.

In the year under review impairment losses of € 3,438 thousand were recognized on

technical equipment and machinery for the devaluation of a custom-built wind power

test rig as the result of the restructuring of supplier relationships with a major cus-

tomer in the offshore wind power sector (see also note (7) “Other operating income”).

The recoverable amount, which equals the value in use, amounted to € 1.,428 thousand

as of the date of the test for impairment. The impairment test was conducted by using

a market discount rate.

(16) Inventories

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Raw materials, consumables and supplies 27,027 28,113

Finished goods and work in progress 141,559 148,723

Prepayments for inventories 2,632 1,891

171,218 178,727

Consumption of inventories of € 307 million (previous year: € 295 million) was recog-

nized in the cost of sales in the reporting period.

Impairment losses on inventories of € 3,210 thousand (previous year: € 2,449 thou-

sand) were recognized in fiscal year 2015.

(17) Trade receivables

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Customer receivables 71,271 56,628

Receivables from affiliated companies 8,024 617

PoC receivables 2,289 1,796

81,584 67,041

In line with the operating cycle, all trade receivables are reported as current.

PoC receivables are calculated as follows:

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Production costs and pro rata receivables from costumer-specific construction contracts 120,503 104,778

Used prepayments received – 118,214 – 102,982

2,289 1,796

124

Specific valuation allowances on trade receivables developed as follows:

€ thousand

2015 2014

As of Jan. 1 262 192

Addition 64 73

Utilisation 0 – 1

Reversal – 130 – 5

Currency translation differences 13 3

As of Dec. 31 209 262

In fiscal year 2015 there were specific valuation allowances on receivables with a gross

carrying amount of € 208 thousand (previous year: € 260 thousand).

Portfolio-based allowances on trade receivables developed as follows:

€ thousand

2015 2014

As of Jan. 1 537 670

Addition 163 105

Utilisation 0 – 18

Reversal – 37 – 223

Change in consolidated group 0 – 1

Currency translation differences 6 4

As of Dec. 31 669 537

(18) Other noncurrent and current assets and receivables

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Receivables from deposits 80,000 80,000

Other tax assets 2,942 4,617

Prepaid expenses 347 523

Derivative financial instruments 115 206

Miscellaneous other assets 1,333 1,003

84,737 86,349

Receivables from deposits of € 80 million relate to liquid investments at MAN SE of an

investment character with a term of up to twelve months.


Other assets break down as follows according to maturity:

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Other noncurrent assets and receivables 33 12

Other current assets and receivables 84,704 86,337

84,737 86,349

Derivative financial instruments are carried at fair value. They are used mostly to

hedge currency risks on customer orders and other foreign exchange positions.

(19) Cash and cash equivalents

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Bank balances, cheques, cash in hand 152 474

Receivables from financial transactions with MAN SE 116,909 69,922

117,061 70,396

Receivables from financial transactions with MAN SE result essentially from the cen-

tral cash pooling of the MAN Group and from highly liquid investments at MAN SE.

These investments are of a temporary nature and are subject to only insignificant risks

of fluctuations in value.

(20) Equity

The share capital of RENK AG of € 17,920,000 is divided into 7 million no-par value

shares with equal rights. All shares are fully paid up. In the fiscal year MAN SE, Mu-

nich, held 76% in the subscribed capital of RENK AG.

A total of 199,903 treasury shares or 2.86% of the share capital (share of capital:

€ 512 thousand) were held by the company on December 31, 2015. The capital reserves

relate exclusively to share premiums in the context of capital increases by RENK AG.

The accumulated other comprehensive income predominantly results from the meas-

urement of pension provisions at fair value.

In accordance with the provisions of the German Stock Corporation Act, the net re-

tained profits of the Group parent RENK AG are available for distributions. The net

retained profits of RENK AG amount to € 17,870 thousand as of December 31, 2015. The

Executive Board and the Supervisory Board propose to the Annual General Meeting on

April 29, 2016 the distribution of a dividend for fiscal year 2015 unchanged as against

the previous year of € 2.20 per share. With 7,000,000 no-par value shares less the

treasury shares without dividend rights in accordance with section 71b of the

Aktiengesetz (AktG – German Stock Corporation Act) (199,903 shares), this corresponds

to an amount of € 14,960,213.40. Shareholders’ entitlement to the dividend arises only

with the resolution by the Annual General Meeting.

126

The most important goals of capital management at RENK are sustainably increasing

enterprise value and safeguarding the liquidity and creditworthiness of the Group.

Factors contributing to this are the reduction of the cost of capital, the improvement

of cash flows from financing activities, the optimization of the capital structure and

effective risk management.

RENK AG is not subject to any capital requirements on the basis of its Articles of Asso-

ciation.

(21) Pensions and similar obligations

The RENK Group grants its employees retirement benefits in accordance with the

country-specific circumstances in the form of defined benefit or defined contribution

pension plans.

In defined contribution plans, contributions are paid to state or private pension funds

on the basis of legal or contractual regulations. There are no further payment obliga-

tions other than the payment of contributions.

The expenses for pensions amounted to € 16,256 thousand (previous year:

€ 14,518 thousand). These are included in the respective functional costs. The net in-

terest expense from additions to pension provisions is reported in finance costs.

Current contributions are recognized as an expense in the respective year; in 2015

they amounted to a total of € 10,806 thousand (previous year: € 10,436 thousand) in

the RENK Group. € 10,334 thousand (previous year: € 10,004 thousand) of this was

paid in Germany for the statutory pension system.

The following amounts were recognized in the statement of financial position for

defined benefit pension plans:

€ thousand

2015 2014

Present value of externally financed obligations 142,930 140,055

Plan assets at fair value – 127,274 – 115,553

Funding status on December 31 15,656 24,502

Present value of unfunded obligations 386 329

Carrying amount 16,042 24,831

of which pension provisions 16,042 24,831


(a) Pension plans in Germany As one of the essential elements of its remuneration policy, the RENK Group provides

its domestic employees with benefits under a modern and attractive occupational

pension system for the time after their active working life. This provides reliable addi-

tional income on retirement and risk protection for disability and death.

Under the current pension plans, the active employees receive employer contributions

linked to their remuneration and, in addition, also have the option of personal provi-

sion through deferred compensation (paid for by the employer for employees subject

to collective bargaining agreements). When actively working, employees accrue pen-

sion capital from employer- and employee-financed contributions and returns from

investment on the capital market. On retirement this pension capital is paid out as a

lump sum or in installments, or in certain cases can be converted into an annuity.

Employees’ investment risks are gradually reduced with increasing age (lifecycle con-

cept). The performance of the pension capital is directly linked to the capital market

and is determined by a basket of indices and other suitable parameters. As required by

law, at least the total contributions paid for the employee will be paid out on retire-

ment.

Former employees, pensioners or employees who have left the plan with vested bene-

fits have pension commitments from closed pension funds, which are predominantly

geared towards providing lifetime annuity payments. These commitments entail the

usual longevity and inflation risks, which are regularly monitored and evaluated.

The domestic pension assets of the RENK Group are managed by the MAN Pension

Trust e.V. and MAN Pensionsfonds AG. These assets are irrevocably unavailable to the

Group companies and may be used exclusively to fund current pension payments or

for employee claims in the event of insolvency. The proper management and use of

trust assets is monitored by independent trustees. MAN Pensionsfonds AG is also

subject to the supervision of the Bundesanstalt für Finanzdienstleistungsaufsicht

(BaFin - Federal Financial Supervisory Authority).

The pension assets are invested by professional investment managers according to

investment guidelines set by an Investment Committee. The strategic allocation of

plan assets is based on asset liability management studies conducted at regular inter-

vals. The assets attributable to the current pension schemes are invested with the

objective of covering the performance risk resulting from the return parameters of

the lifecycle concept.

(b) Pension plans outside Germany In Switzerland, the defined benefit pension claims and the actuarial reserves are man-

aged in an industry-wide company pension institution. Employees accrue pension

capital with this institution, which is then converted into a lifelong pension under the

conditions prevailing at the time. The pension institution is managed conservatively

based on government regulations. If the claims are no longer covered by capital due to

negative market developments, restructuring contributions can be levied from the

affiliated employers and their employees.

Obligatory post-employment benefits are paid in France.

128

(c) Funding status The calculation of the present value of defined benefit pension obligations is based on

the following assumptions:

in %

Germany Outside Germany1)

2015 2014 2015 2014

Discount rate as of Dec. 31 2.70 2.30 0.95 1.70

Salary trend 3.40 3.30 0.52 1.20

Pension increase 1.70 1.80 0.00 0.00

Fluctuation rate 4.44 4.55 6.60 6.92

1) Weighted average rates

The Heubeck 2005 G mortality tables adapted to empirical MAN-specific data were

used as the biometric data in Germany; the BVG 2010 GT mortality tables were used in

Switzerland.

Discount rates are based on the yields on corporate bonds with high credit ratings,

with a maturity and currency matching the respective obligations. Pension and pay

trends either correspond to contractual adjustments or are based on those found in

the general regulations applicable. Pay trends comprise expected wage and salary

increases that also take into account increases resulting from career development.

The present value of defined benefit obligations developed as follows:

€ thousand

2015 2014

Defined benefit obligation on January 1 140,384 119,479

Current service cost1) 4,801 3,468

Interest expense 3,083 4,032

Actuarial gains (-)/losses (+) due to changes in demographic assumptions – 1,174 0

Actuarial gains (-)/losses (+) due to changes in financial assumptions – 2,333 16,182

Actuarial gains (-)/losses (+) due to experience adjustments – 165 33

Employee contributions to funds 1,405 1,245

Pension payments from company assets – 1,848 – 1,590

Pension payments from fund – 3,731 – 2,918

Other changes 163 – 19

Currency differences from plans abroad 2,731 472

Defined benefit obligation on December 31 143,316 140,384

1) Of which past service cost of € 0 thousand (previous year: € –678 thousand).


Changes in the main actuarial assumptions would have had the following effects on

defined benefit obligations:

Dec. 31, 2015 Dec. 31, 2014

Defined benefit obligation if € thousand % € thousand %

Discount rate +0.5 percentage points 135,998 – 5.1 132,752 – 5.4

– 0.5 percentage points 151,550 5.7 148,990 6.1

Salary trend +0.5 percentage points 143,683 0.3 140,738 0.3

– 0.5 percentage points 142,994 – 0.2 140,070 – 0.2

Pension increase +0.5 percentage points 149,392 4.2 146,293 4.2

– 0.5 percentage points 137,760 – 3.9 135,474 – 3.5

Longevity + 1 year 146,163 2.0 143,239 2.0

The sensitivity analyses shown each take into account the change in one assumption

with the other assumptions unchanged from the original calculation, i.e. possible

correlation effects between the individual assumptions are not taken into account.

To analyze the sensitivity of the defined benefit obligation to a change in the assumed

life expectancy the age of beneficiaries was reduced by one year as part of a compara-

tive calculation.

The weighted average term to maturity (Macaulay duration) of the defined benefit

pension obligations is 11 years (previous year: 11 years).

The defined benefit obligation is divided among the members of the plan as follows:

€ thousand

2015 2014

Active members 80,542 77,459

Former members 4,576 5,090

Beneficiaries 58,198 57,835

Defined benefit obligation 143,316 140,384

The maturity profile of the payments for the defined benefit obligation is shown be-

low by breaking down the present value of the obligation by the maturity of the un-

derlying payments:

€ thousand

2015 2014

Payment due

Within one year 6,025 6,224

Between one and five years 24,312 24,312

More than five years 112,979 109,848

Defined benefit obligation 143,316 140,384

130

The development of plan assets is shown by the table below:

€ thousand

2015 2014

Plan assets on January 1 115,553 110,286

Interest income from plan assets – in amount of interest rate 2,576 3,828

Return on plan assets not recognized in interest income 1,117 2,540

Employer contributions to funds 8,456 801

Employee contributions to funds 625 550

Pension payments from fund – 3,731 – 2,918

Other changes 163 13

Currency differences from plans abroad 2,515 453

Plan assets on December 31 127,274 115,553

The investment of plan assets resulted in income of € 3,693 thousand (previous year:

€ 6,368 thousand), € 3,970 thousand (previous year: € 5,728 thousand) of which related

to Germany and € –277 thousand (previous year: € 640 thousand) of which to other

countries.

In the next fiscal year, employer contributions to plan assets are expected to amount

to € 3,892 thousand (amount stated in previous year: € 3,165 thousand).

The increase in employer contributions to the fund as against the previous year is

essentially due to a further allocation to pension assets of € 7 million.


The plan assets are invested in the following categories:

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Quoted price on an

active market

No quoted price on an

active market

Total Quoted price on an

active market

No quoted price on an

active market

Total

Cash and cash equivalents 5,079 – 5,079 4,307 – 4,307

Equity instruments 5,814 – 5,814 3,813 – 3,813

Debt instruments 10,730 – 10,730 10,010 – 10,010

Direct investments in real estate – 5,719 5,719 – 5,147 5,147

Equity funds 24,309 – 24,309 24,181 – 24,181

Pension funds 42,224 – 42,224 36,494 – 36,494

Real estate funds 2,339 – 2,339 1,466 – 1,466

Other funds – 1,457 1,457 – 1,860 1,860

Other 1,184 28,419 29,603 919 27,356 28,275

Plan assets at fair value 91,679 35,595 127,274 81,190 34,363 115,553

The plan assets are 30% (previous year: 34%) invested in domestic assets, 56% (previ-

ous year: 52%) in other European assets and 14% (previous year: 14%) in assets from

other regions.

(d) Expenses for pension obligations The following amounts were recognized in the income statement:

€ thousand

2015 2014

Current service cost1) 4,801 3,468

Net interest expense (+)/income (-) 507 204

5,308 3,672

1) Of which past service cost of € 0 thousand (previous year: € –678 thousand).

132

(22) Other noncurrent and current provisions

€ thousand

As of Jan. 1, 2015

Utilization Addition Reversal Interest cost

Currency translation difference

Other

As of Dec. 31,

2015

Warranties 34,634 – 2,922 8,257 – 2,511 – 91 37,549

Outstanding costs 5,127 – 1,310 4,299 – 1,210 – 6 6,912

Obligations to employees 4,938 – 1,602 1,635 – 6 61 33 5,059

Miscellaneous other provisions 5,749 – 700 2,043 – 228 – 309 7,173

50,448 – 6,534 16,234 – 3,955 61 439 56,693

Other provisions break down as follows according to maturity:

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Noncurrent current Noncurrent current

Warranties 1,488 36,061 1,614 33,020

Outstanding costs – 6,912 – 5,127

Obligations to employees 3,877 1,182 3,752 1,186

Miscellaneous other provisions 923 6,250 684 5,065

6,288 50,405 6,050 44,398

Provisions for warranties relate to legal and contractual warranty obligations and to

goodwill towards customers. The timing of the utilization of provisions for warranties

is dependent on the occurrence of the warranty claim and can extend over the entire

warranty and goodwill period. Provisions for outstanding costs were recognized for

outstanding services for invoiced customer contracts, contract components and obli-

gations under maintenance and service agreements.

Obligations to employees relate in particular to partial retirement and anniversaries.

Miscellaneous other provisions relate essentially to provisions for anticipated losses

from onerous contracts and penalties.

(23) Trade payables

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Trade payables 36,767 38,177

Trade payables are reported under current liabilities and provisions. There are trade

payables to affiliated companies of € 720 thousand (previous year: € 326 thousand).


(24) Prepayments received

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Prepayments received 154,306 110,483

Prepayments received are reported under current liabilities and provisions. This in-

cludes € 1,480 thousand (previous year: € 357 thousand) from affiliated companies.

Prepayments received but not yet used of € 10,833 thousand (previous year:

€ 2,743 thousand) relate to construction contracts.

(25) Other noncurrent and current liabilities

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Employee-related liabilities 27,980 23,933

Derivative financial instruments 3,008 3,753

Social security liabilities 940 1,153

Liabilities from other taxes 340 638

Deferred income 1 569

Miscellaneous other liabilities 676 764

32,945 30,810

Employee-related liabilities include essentially wages, salaries and social security con-

tributions not yet paid at the end of the reporting period, deferred vacation not yet

taken, and annual bonuses.

The liability derivative financial instruments included in other liabilities were mostly

used to hedge currency risks in customer contracts. They were thus offset by opposing

effects in the statement of financial position items for the hedged items.

Other liabilities break down as follows according to maturity:

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Other noncurrent liabilities 370 1,394

Other current liabilities 32,575 29,416

32,945 30,810

134

Other Disclosures

(26) Contingent liabilities

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Obligations from guarantees – 274

– 274

With regard to the liabilities of RENK subsidiaries from their business relationship

with MAN SE, RENK AG has issued MAN SE a perpetual payment guarantee.

Contingent liabilities are usually measured in the amount of the maximum claims on

RENK. Any rights of recourse are not deducted.

(27) Other financial obligations

Other financial obligations comprise rental and lease agreements. These are essential-

ly vehicle leases. The maturities of future rental and lease payments under operating

leases until the end of their minimum term are as follows:

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Operating lease

Due within one year 924 159

Due between one and five years 6,024 75

6,948 234

The purchase commitment for the acquisition of property, plant and equipment was

€ 6,092 thousand (previous year: € 7,409 thousand) as of the end of the reporting

period. The financial obligations to third parties under investment projects initiated

were within normal limits.


(28) Additional information on financial instruments

This section contains additional information on the significance of financial instru-

ments and on individual items of the statement of financial position and the income

statement that relate to financial instruments.

Financial instruments are classified as follows:

• financial instruments at fair value,

• financial instruments at amortized cost,

• hedging derivative financial instruments and

• financial instruments not covered by IFRS 7.

In particular, financial instruments not covered by IFRS 7 include investments ac-

counted for using the equity method. Furthermore, subsidiaries, associates and joint

ventures not consolidated for reasons of materiality do not constitute financial in-

struments in accordance with IAS 39. From fiscal year 2015 the corresponding values

are classified as “not covered by IFRS 7”. The corresponding tables and figures for the

previous year were adjusted accordingly.

Under IFRS 7 hedge derivative financial instruments are classified separately. The cor-

responding tables and figures for the previous year were adjusted accordingly.

The following table shows the reconciliation of statement of financial position items

to the classes of financial instruments, broken down by carrying amounts and fair

values of financial instruments, and the allocation of statement of financial position

items to the measurement categories.

136

€ thousand

At fair value

in Other Comprehen-

sive Income1)

in profit or loss2)

At amortized cost3) Hedging derivative financial

instruments

Not covered by IFRS

7

Statement of financial

position item as of

Dec. 31, 2015

Carrying amount

Carrying amount

Carrying amount

Fair value

Carrying amount

Carrying amount

Noncurrent assets

Other and financial investments 774 – – – – 3,760 4,534

Other financial assets – – 8 8 22 – 30

Current assets

Trade receivables – 81,584 81,584 – – 81,584

Current assets 69 81,048 81,048 24 – 81,141

Cash and cash equivalents – – 117,061 117,061 117,061

Noncurrent liabilities

Other financial liabilities – 120 – – 124 – 244

Current liabilities

Trade payables – – 36,767 36,767 – – 36,767

Other financial liabilities – 1,450 429 429 1,314 – 3,193

1) Corresponds to the measurement category “Available for sale financial assets” under IAS 39. 2) Corresponds to the measurement category “Financial instruments measured at fair value through profit or loss”

under IAS 39. 3) Comprises other and financial investments classified as available for sale for which the fair value cannot be reliably

determined due to the lack of an active market and that are measured at cost, and the measurement categories “loans and receivables” and “financial liabilities at amortized cost”.


The following table shows the carrying amounts, the measurement categories by class,

the fair values and the fair value hierarchy under IFRS 7 as of December 31, 2014 1):

€ thousand

At fair value

in Other Comprehen-

sive Income1)

in profit or loss2)

At amortized cost3) Hedging derivative financial

instruments

Not covered

by IFRS 7

Statement of financial

position item as ofDec. 31,

2014

Carrying amount

Carrying amount

Carrying amount

Fair value

Carrying amount

Carrying amount

Noncurrent assets

Other and financial investments4) 774 – – – – 3,760 4,534

Other financial assets5) – – 9 9 – – 9

Current assets

Trade receivables – – 67,041 67,041 – – 67,041

Current assets – 206 80,868 80,868 – – 81,074

Cash and cash equivalents – – 70,396 70,396 – – 70,396


Other financial liabilities – 42 – – 1,200 – 1,242

Current liabilities

Trade payables – – 38,177 38,177 – – 38,177

Other financial liabilities5) – 1,225 249 249 1,286 – 2,760

1) Corresponds to the measurement category “Available for sale financial assets” under IAS 39. 2) Corresponds to the measurement category “Financial instruments measured at fair value through profit or loss”

under IAS 39. 3) Comprises other and financial investments classified as available for sale for which the fair value cannot be reliably

determined due to the lack of an active market and that are measured at cost, and the measurement categories “loans and receivables” and “financial liabilities at amortized cost”.

4) The figures for the previous year were adjusted Subsidiaries that are not consolidated for reasons of materiality are classified as “not covered by IFRS 7”, see also “Accounting principles”.

5) The figures for the previous year were adjusted Hedge derivative financial instruments are reported in a separate category, see also “Accounting principles”

138

The cumulative carrying amounts of financial instruments, broken down by IAS 39

measurement category are as follows:

€ thousand

Dec. 31, 2015 Dec. 31, 2014

Measurement category in accordance with IAS 39

Assets Equity and

liabilities

Assets Equity and

liabilities

Available-for-sale financial assets1) 774 – 774 –

Financial instruments measured at fair value through profit or loss 91 1,570 206 1,267

Loans and receivables 279,701 – 218,314 –

Financial liabilities at amortized cost – 37,196 – 38,426

1) The figures for the previous year were adjusted. Subsidiaries that are not consolidated for reasons of materiality do not fall within the scope of IAS 39, see also “Accounting principles”.

The fair values were calculated based on the market conditions at the end of the re-

porting period and the measurement methods described below. They are the prices at

which one party would assume the rights or obligations from these financial instru-

ments from an independent third party. There were no significant changes since the

previous year in the measurement methods applied.

Cash and cash equivalents, trade receivables, other financial assets, trade payables and

other financial liabilities predominantly have a short remaining term. Their carrying

amounts as of the end of the reporting period therefore approximately match their

fair value. Furthermore, appropriate impairment losses are recognized on trade re-

ceivables when there is objective evidence.

Available-for-sale financial assets include equity shares of € 774 thousand (previous

year: € 774 thousand), which are measured at cost. These are securities and shares in

unlisted companies for which the measurement by discounting of forecast cash flows

has been dispensed with given the lack of reliably determinable cash flows. The shares

of unlisted companies relate to companies for which there are no quoted market val-

ues as there is no active market for these shares. There is currently no intention to sell

these shares.

The future cash flows for derivative financial instruments without option compo-

nents, particularly currency forwards, are calculated using forward curves. The fair

value of these instruments is the total of the discounted cash flows. The options on

currency pairs are measured on the basis of standard option pricing models, i.e. gen-

eralized Black-Scholes formulas.


The following table shows the financial assets and liabilities at fair value by level, as

described in the following subsection:

€ thousand

Dec. 31, 2015 Level 1 Level 2 Level 3

Noncurrent assets

Other and investments 774 – 774

Other financial assets 22 – 22 –

Current assets



Other financial liabilities 120 – 120 –

Current liabilities

Other financial liabilities 1,450 – 1,450 –

€ thousand

Dec. 31, 20141) Level 1 Level 2 Level 3

Noncurrent assets

Other and investments 774 – – 774

Current assets




Current liabilities


1) The figures for the previous year were adjusted. Derivative financial instruments form a separate class, and their fair values, by level, are shown in the table below, see also “Accounting principles”.

140

The following table provides an overview of the derivative financial instruments in

hedge accounting by level, as described in the following subsection:

€ thousand


Noncurrent assets


Current assets




Current liabilities


€ thousand




Current liabilities


1) The prior-year figures were adjusted in line with the provisions of IFRS 7 to improve comparability.

The following table provides an overview of the fair value of the financial assets and

liabilities at amortized cost by level:

€ thousand


Noncurrent assets


Current assets

Trade receivables 81,584 – 81,584 –

Other financial assets 81,048 – 81,048 –

Cash and cash equivalents 117,061 117,061 – –

Current liabilities

Trade payables 36,767 – 36,767 –



€ thousand


Noncurrent assets


Current assets

Trade receivables 67,041 – 67,041 –

Other financial assets 80,868 – 80,868 –

Cash and cash equivalents 70,396 70,396 – –

Current liabilities

Trade payables 38,177 – 38,177 –


1) The prior-year figures were adjusted in line with the provisions of IFRS 7 to improve comparability.

Fair value hierarchy: The classification and reporting of the fair values of financial instruments are based

on a fair value hierarchy that reflects the significance of the inputs used for measure-

ment and breaks down as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Input factors other than quoted prices included within level 1 that are observ-

able for an asset or liability either directly (as a price) or indirectly (derived

from prices). The fair values of level 2 financial instruments are calculated

based on the conditions at the end of the reporting period, such as interest

rates or exchange rates, and using recognized models, such as discounted

cash flow models or option pricing models.

Level 3: Input data used for the measurement of the asset or liability not based on

observable market data (unobservable inputs). For level 3 receivables the fair

value is determined taking into account individual loss expectations that are

based mainly on assumptions by the company regarding the counterparty’s

credit.

In the fiscal years 2015 and 2014 there were no reclassifications between levels 1 and 2

and no reclassifications into or out of level 3.

The interest income and expenses generated in connection with financial assets and

financial liabilities are as follows:

€ thousand

2015 2014

Interest income 244 674

Interest expense – 80 – 112

Interest income on impaired financial assets is of secondary importance due to the

usually short time before the expected payment.

The following tables contain information on the offsetting effects on the consolidated

statement of financial position and the financial impact of offsetting in the case of

142

instruments which are subject to a legally enforceable master offsetting agreement or

similar agreement.

Amounts not offset in the statement of financial position

€ thousand Gross amount of recognized

financial assets

Gross amount of recognized

financial liabilities offset

in the statement of

financial position

Net amount of financial

assets reported in the

statement of financial position

Financial Instruments

Collateral received

Net amount on Dec. 31, 2015

Derivative financial instruments 115 – 115 – 115 0 0



financial assets


financial liabilities offset

in the statement of

financial position

Net amount of financial

assets reported in the



Collateral received


Derivative financial instruments 206 – 206 – 206 0 0



financial liabilities


financial assets offset in the


Net amount of financial liabilities

reported in the statement of

financial position


Collateral provided


Derivative financial instruments 3,008 – 3,008 – 115 0 2,893




financial liabilities


financial assets offset in the


Net amount of financial liabilities

reported in the statement of

financial position


Collateral provided


Derivative financial instruments 3,753 – 3,753 – 206 0 3,547

The “Financial instruments” column shows the amounts that are the subject of a mas-

ter offsetting agreement, but that cannot be offset because the conditions have not

been met. Offsetting can occur only in the case of certain future events, such as the

insolvency of one of the parties. The columns “Collateral received” and “Collateral pro-

vided” show the amounts of cash collateral or collateral in the form of financial in-

struments received/pledged in relation to the total amount of assets and liabilities.

The net gains and losses from financial instruments are shown in the table below:

€ thousand

2015 2014

Loans and receivables – 3,528 1,116

Available-for-sale financial assets1) 736 571

Financial assets and liabilities at fair value through profit or loss – 53 – 1,894

Financial liabilities at cost – 1,320 – 876

Net gain (+)/net loss (–) – 4,165 – 1,083

1) The previous year was adjusted.

Net gains and losses from loans and receivables essentially contain changes in valua-

tion allowances, income from incoming payments, currency translation and reversal

of impairment losses.

The net gains or losses from available-for-sale financial assets comprise the net in-

come from other and financial investments.

The net gains or losses from financial assets and liabilities measured at fair value

through profit or loss includes changes in the fair value of derivative financial instru-

ments not used in hedge accounting.

The net gains or losses from financial liabilities at cost result mainly from currency

translation.

144

(29) Derivative financial instruments and hedging strategies

On account of its business activities and international orientation, the assets, liabili-

ties and planned transactions of the MAN Group are subject to market, credit, and

liquidity risks. There is a Group-wide risk management system to identify, quantify,

and mitigate these risks. RENK is integrated into this risk management system and

uses the instruments thus available.

(a) Risk management of the MAN Group The companies of the MAN Group hedge their currency and interest risks at market

conditions via the central Group Treasury of MAN SE. This uses primary and predomi-

nantly derivative financial instruments. In countries where exchange control regula-

tions or regulatory provisions do not allow MAN SE to hedge its risks, foreign currency

interest and money market transactions are entered into by MAN SE in the name and

on behalf of the respective Group company. Derivative financial instruments are re-

cognized on the trade date.

The risk positions of the Group are hedged externally with banks within predeter-

mined risk limits by Group Treasury. Hedging is carried out with due regard for banks’

risk management requirements and is subject to stringent monitoring, which is guar-

anteed in particular by the strict separation of functions in trading, settlement and

control.

Liquidity management and investment in the MAN Group is centralized under Group-

wide cash management. When investing cash and cash equivalents, financial institu-

tions and investment vehicles are carefully selected and diversified with a limit sys-

tem. The limits and their utilization are reviewed regularly. The majority of cash and

cash equivalents are held in cash deposits at banks with an investment grade rating.

The Executive Board and the Supervisory Board of MAN SE are regularly informed

about the market price risks of the MAN Group. Compliance with policies is monitored

by the internal audit function.

(b) Currency risk at RENK For each RENK company there is a currency risk if it performs transactions and incurs

future cash flows in a currency other than its functional currency. To reduce the effect

of exchange rate fluctuations, the RENK companies continuously quantify the ex-

change risk and hedge all material risks by using currency forwards and options.

In the RENK Group all firm customer contracts, its own orders, receivables and liabili-

ties in foreign currency are hedged. Currencies with a high correlation to the euro,

such as the Danish krone, and equity investments or equity-type loans in foreign cur-

rencies are hedged only in individual cases. In addition, there is hedging for planned

sales revenue in foreign currency from series production business within defined

hedging ranges and, occasionally, for customer projects whose materialization is high-

ly probable. The Executive Board of RENK is regularly informed of the currency posi-

tions of the RENK Group.


As of the end of the reporting period, RENK’s foreign exchange exposure is primarily

from transactions in USD, CHF, JPY, and CNY. Thanks to the hedges in place for these

currencies, RENK was not exposed to any significant risks.

These hedges are accounted for as cash flow hedges.

In connection with cash flow hedges, total unrealized gains and losses of

€ 707 thousand (previous year: € –3,504 thousand) were recognized in equity for the

measurement of derivatives (before tax). Over the course of the fiscal year realized

gains and losses of € –881 thousand (previous year: € 245 thousand) were taken from

equity to profit or loss for the period.

The maximum remaining term of cash flow hedges for future transactions is 30

months as of the end of fiscal year 2015 The occurrence of and therefore recognition in

profit or loss for the period are expected for 17.4% of hedged future transactions in the

first quarter of 2016. A further 47.1% of the planned transactions are expected to go

ahead by the end of 2016.

In a sensitivity analysis, the primary and derivative financial instruments in place at

the end of the reporting period were measured in a hypothetical scenario. The effects

of a 10% appreciation/depreciation of a currency per currency pair as of December 31,

2015 and December 31, 2014 are as follows:

€ thousand

Dec. 31, 2015

Equity Net profit/loss for the period

Currency pair +10% – 10% +10% – 10%

Euro/US dollar 2,734 – 2,734 516 – 516

Euro/Swiss franc – – 1,048 – 1,048

Euro/Chinese yuan – – 213 – 213

Euro/Pound sterling – – – 98 98

Euro/Japanese yen – – 233 – 233

Swiss franc/US dollar – – 19 – 19

€ thousand

Dec. 31, 2014

Equity Net profit/loss for the period

Currency pair +10% – 10% +10% – 10%

Euro/US dollar 3,541 – 3,541 2,213 – 2,213

Euro/Swiss franc – – 664 – 664

Euro/Chinese yuan – – 161 – 161

Euro/Pound sterling – – – 101 101

Euro/Japanese yen – – 319 – 319

Swiss franc/US dollar – – 45 – 45

146

(c) Commodity price risk at RENK RENK is exposed to the risk of changes in commodity prices and their availability, i.e.

commodity procurement risk, both in connection with the procurement of the means

of production but also in the procurement of energy (electricity, gas, oil, etc.).

As far as possible, this risk is countered by fixed price agreements with suppliers. Ow-

ing to the variety of commodities used and the resulting quantities, each compara-

tively small, the hedging of prices using corresponding instruments on the financial

markets is not a substantial alternative for RENK. RENK had no commodity derivatives

in fiscal year 2015.

There were no significant risk clusters in the past fiscal year.

(d) Credit risk at RENK On account of its operating activities, RENK is exposed to credit risk, i.e. the risk that a

counterparty does not meet its contractual obligations and thus causes a financial

loss. Credit risks include direct counterparty risk and the risk of a deterioration in

credit quality.

The maximum credit risk is reflected by the carrying amounts of financial assets re-

ported in the statement of financial position, see note (29). Credit risks are minimized,

and risk provisions calculated, mainly with the following measures:

Sovereign and counterparty risks arising from business operations are continuously

assessed locally. Security levels and forms are determined based on this. Outstanding

debts are also continuously monitored locally. If default risks arise, allowances are

recognized. Credit risk is limited by various, sometimes country-specific, forms of

security. Letters of credit, credit insurance, guarantees, warranties, retention of title

and customer prepayments are used. In project business, the risk of default is mini-

mized by prepayments and by obtaining collateral.

RENK recognizes appropriate risk provisions for credit risks in connection with its

business operations. This entails the ongoing monitoring of all receivables. Allowances

are recognized if there is objective evidence of default or other contractual anomalies.

Significant individual receivables and receivables whose collectibility are in doubt are

assessed on an individual basis. Taking into account country-specific risks and any

collateral received, other receivables are placed into groups of similar contracts and

impairment requirements are subsequently determined.

There were no significant clusters in terms of credit risk in the RENK Group in the past

fiscal year.


Maturities of financial assets not impaired:

€ thousand

2015 2014

Up to 30 days past due 14,411 5,647

31– 90 days 3,561 6,184

90– 180 days 2,912 1,469

181– 360 days 2,758 615

> 1 year 523 1,316

Assets, past due, not impaired 24,165 15,231

Assets, not past due, not impaired 139,145 135,110

Carrying amounts of financial assets not impaired 163,310 150,341

To cover the credit risk of these receivables and of receivables not past due, impair-

ment losses are recognized at group level based on historical experience.

Regarding the receivables and other financial assets that are neither impaired nor past

due, there are no indications of a default in payment as of the end of the reporting

period.

In line with the nature of RENK’s inclusion in the central financial management of the

MAN Group agreed with MAN SE, a significant portion of RENK’s financial assets is

concentrated on a single partner, MAN SE. This portion is therefore subject in princi-

ple to the same risks that MAN SE as a whole is exposed. These risks are limited by the

risk management mechanisms installed at MAN SE.

(e) Liquidity risk at RENK Liquidity risk describes the risk that the RENK Group is unable to adequately meet its

payment obligations or can raise liquidity only at a higher price.

RENK is included in the liquidity management system of the MAN Group. To limit this

risk, inflows and outflows of cash and maturities are monitored and managed at all

times. Financing requirements are covered by both operating cash flow and external

financing. There were therefore no significant risk clusters in the past fiscal year.

Cash management for the operating units is essentially central as part of cash pooling.

The cash and cash equivalents of the Group companies and MAN SE are merged daily.

Thus, liquidity surpluses and requirements can be managed as necessary. For external

financing, the opportunities on the financial markets are tracked continuously to

ensure financial flexibility and to limit refinancing risks.

In certain countries (such as Brazil and China), the Group can control local cash and

cash equivalents internationally only in compliance with the applicable foreign ex-

change. Other than this there are no significant restrictions.

Cash and cash equivalents are essentially used to finance working capital and short-

term obligations. Management is informed regularly about cash inflows and outflows.

148

The cash flows at RENK are dominated by the maturities arising from business opera-

tions. These are predominantly of a short-term nature. Cash clearing takes place

through the inclusion in the central financial management of the MAN Group.

The following table shows how the cash flows of liabilities, derivative financial instru-

ments and contingent liabilities affect RENK’s liquidity situation:

Maturities1)

€ thousand

Dec. 31, 2015 Dec. 31, 2014

2016 2017 to 2020

> 2020 2015 2016 to 2019

> 2019

Cash outflows from primary financial liabilities 37,196 0 0 38,426 0 0

of which trade payables 36,767 0 0 38,177 0 0

of which other financial liabilities 429 0 0 249 0 0

Cash outflows from liability derivative financial instruments and gross fulfillment2) – 25,416 – 7,943 0 – 28,184 – 12,570 0

Associated cash inflows 22,507 2,181 0 25,610 11,193 0

Potential cash outflows from contingent liabilities3) 0 0 0 274 0 0

of which for guarantee obligations 0 0 0 274 0 0

1) The procedure for calculating the amounts was as follows: - If the maturity date is not fixed, the liability is assigned to the earliest maturity date. - Interest payments for floating rate interest are taken into account in line with the conditions as of the end of the

reporting period. - It is assumed that the cash outflows will not occur earlier than shown.

2) In accordance with the requirements of IFRS 7, only undiscounted cash flows of the contractual interest and principal payments are shown.

3) There are guarantee obligations for guarantees under trade obligations. The maximum possible cash outflows are shown. The amounts are assumed to be due in the first year.

(f) Breakdown of hedging instruments by type of hedge The table below shows the fair values of hedging instruments. These essentially relate

to currency forwards.

€ thousand

Dec. 31, 2015 Dec. 31, 2014

with a positive market value

with a negative market value

with a positive market value

with a negative market value

Cash Flow Hedge 46 1,438 – 2,486

46 1,438 0 2,486


(30) Remuneration of the Executive Board

The remuneration of the members of the Executive Board of RENK Aktiengesellschaft

consists of fixed remuneration and variable remuneration (see remuneration report).

Furthermore, members of the Executive Board receive a pension commitment.

The tables below show the individual remuneration for the active members of the

Executive Board for 2015 (2014).

€ thousand Florian Hofbauer Ulrich Sauter Christian Hammel

until July 31, 2015 from August 1, 2015

2015 2014 2015 2014 2015 2014

Fixed remuneration1) 255 257 143 246 108 –

Variable remuneration 436 418 243 400 174 –

Pension cost 95 91 53 87 27 –

Total 786 766 439 733 309 0

Present value of pension obligation 1,865 1,680 2,171 2,018 112 –

1) Including additional benefits.

€ thousand Total Executive Board

2015 2014

Fixed remuneration1) 506 503

Variable remuneration 853 818

Pension cost 175 178

Total 1,534 1,499

Present value of pension obligation 4,148 3,698

1) Including additional benefits.

In fiscal year 2015 there was no subsequent adjustment of the bonus in variable remu-

neration. The variable remuneration in fiscal year 2014 includes a subsequent adjust-

ment of € –82 thousand on the bonus for fiscal year 2013 based on the figures for 2014.

The reported pension cost exclusively comprises the service cost incurred in the re-

spective fiscal year.

The pension benefits for former members of the Executive Board of the company and

their surviving dependents amounted to € 259 thousand (€ 316 thousand). Total pro-

visions of € 5,854 thousand were recognized for pension obligations to former mem-

bers of the Executive Board and their surviving dependents (previous year:

€ 3,437 thousand).

After resigning from the Executive Board Mr. Sauter winded up several affairs until his

contract of employment terminated as of December 31, 2015 for what he received his

so far remuneration. For these services the following amounts were proportionately

remunerated: Fixed remuneration including additional benefits € 102 thousand, vari-

able remuneration € 177 thousand and pension cost € 38 thousand.

150

Information on the members of the Executive Board, including their memberships of

other statutory supervisory boards and similar executive bodies, can be found under

note (38).

(31) The Supervisory Board

The remuneration of the members of the Supervisory Board is regulated in the Arti-

cles of Association. They provide for fixed remuneration of € 10,000. The chair of the

Supervisory Board receives double the fixed remuneration, the deputy chair and the

chair of a committee one and a half times this amount, a committee member 1.25

times the amount. There is no separate remuneration for the chair or members of the

Mediation Committee. If members perform several functions, remuneration is based

on the function with the highest remuneration entitlement.

Any expenses arising are also reimbursed.

Remuneration of the Supervisory Board in 2015 in €

Name Membership period Total 2015

Dr. Ingrun-Ulla Bartölke Full year –

Roberto Armellini* Full year 15,000

Michael Behrendt Full year 15,000

Rainer Handschuh* Full year 12,500

Frank Hoffmann Full year –

Dr.-Ing. Hans O. Jeske Full year 10,000

Prof. Dr.-Ing. Werner Neubauer Full year –

Prof. Dr. rer. pol. Horst Neumann Until Nov. 30 –

Dr. Georg Pachta-Reyhofen Full year 12,500

Herbert Surmann* Full year 12,500

Walter Vogt* Full year 12,500

Ingo Weidner* Full year 10,000

Total 2015 100,000

Total 2014 97,000

* These employee representatives have declared that they pay their Supervisory Board remuneration to the Hans Böckler Foundation in accordance with German Trade Union Confederation policy.

The employee representatives on the Supervisory Board also employed at RENK addi-

tionally receive their standard pay as employees. Information on the members of the

Supervisory Board, including their memberships of other statutory supervisory

boards and similar executive bodies, can be found under note (38).


(32) German Corporate Governance Code

On December 11, 2015 the Executive Board and the Supervisory Board issued the decla-

ration of compliance reproduced below in accordance with section 161 of the Aktien-

gesetz (AktG – German Stock Corporation Act):

„The Executive Board and Supervisory Board of RENK Aktiengesellschaft declare

that effective immediately, the company complies with the recommendations of

the Government Commission on the German Corporate Governance Code in the

version of May 5, 2015 (as published by the Federal Ministry of Justice in the offi-

cial section of the Bundesanzeiger (German Federal Gazette) of June 12, 2015) with

the exception of Section 5.4.1, Paras. 5 – 7 (disclosure of election recommendations).

With regard to the recommendation in Section 5.4.1, Paras. 5 – 7 in the Code on the

disclosure of certain circumstances in election recommendations of the Superviso-

ry Board to the Annual General Meeting, the requirements of the Code are inde-

terminate and not clearly distinguished. Therefore, by way of precaution, depar-

ture from the Code is declared. Nonetheless, the Supervisory Board will attempt to

meet the requirements of Section 5.4.1 Paras. 5 – 7 of the Code.

The Executive Board and Supervisory Board of RENK Aktiengesellschaft further de-

clare that the company complied with the recommendations of the Government

Commission on the German Corporate Governance Code in the version of June 24,

2014 (as published by the Federal Ministry of Justice in the official section of the

Bundesanzeiger of September 30, 2014) during the period of December 2014 to

June 12, 2015 with the execution of Section 5.4.1, Paras 4 – 6 (disclosure of election

recommendations, in the version of the Code dated May 5, 2015; Section 5.4.1 Paras.

5 – 7). The reasons for the exceptions are stated above.

From June 12, 2015 until the submission of this Declaration of Conformity, the

company complied with the recommendations of the Government Commission on

the German Corporate Governance Code in the version of May 5, 2015 (as published

by the Federal Ministry of Justice in the official section of the Bundesanzeiger of

June 12, 2015) with the exception of Section 5.4.1, Para. 2 (length of membership in

the Supervisory Board) and Section 5.4.1, Paras 5 – 7 (disclosure of election recom-

mendation). The reasons for the departures from Section 5.4.1 Paras. 5 – 7 are stated

above. The new recommendation in Section 5.4.1, Para. 2, which took effect from

June 12, 2015, regarding the goal of the Supervisory Board to define and observe a

limit on the length of membership in the Supervisory Board, has been complied

with on y since a relevant discussion and resolution by the Supervisory Board on

December 11, 2015.“

152

(33) Segment reporting

The activities of the RENK Group are still divided into the reportable segments Special

Gear Units, Vehicle Transmissions, Standard Gear Units and Slide Bearings. The man-

agement of each of these segments reports directly to the Executive Board of RENK AG

in its function as the responsible chief operating decision maker.

The Special Gear Units segment comprises large-gear production at RENK AG’s Augs-

burg site and RENK-MAAG GmbH, Winterthur, Switzerland. The product range extends

from stationary gear units for a variety of industrial applications, to turbo gear units,

to complex gear units for fast craft and naval applications.

The Vehicle Transmissions segment is a leading manufacturer of fully automatic

transmissions for medium-weight and heavy tracked vehicles, and also offer a broad

range of powerful test rigs for a variety of industries. It comprises the corresponding

activities at RENK AG’s Augsburg site, the French subsidiary RENK France S.A.S., Saint

Ouen l’Aumône, RENK Test System GmbH (RTS) in Augsburg and its US sales company

RENK Systems Corporation, Camby (IN), USA.

Segment information by segment

€ thousand

Special Gear Units

2015 2014

Order intake from third parties 178,275 142,439

Order intake from other segments 8,203 1,384

Total order intake 186,478 143,823

Sales revenue with third parties 153,593 177,175

Sales revenue with other segments 3,286 1,335

Total sales revenue 156,879 178,510

Orderbacklog Dec. 31 207,315 180,139

Operating profit 15,485 26,545

Capital expenditures 19,173 22,247

Depreciation and amortization1)2) 8,012 6,014

Operating return on sales 9.9% 14.9%

1) Depreciation and amortization includes impairment losses of € 915 thousand in the Special Gear Units segment in 2014.

2) Depreciation and amortization includes impairment losses of € 1,538 thousand in the Special Gear Units segment, € 4,390 thousand in the Standard Gear Units segment and € 122 thousand in the Slide Bearings segment in 2015.

.


The Standard Gear Units segment includes large-gear production at RENK AG’s Rheine

site. It specializes in marine gear units for merchant shipping, offshore wind turbine

gear units, LNG/LPG tankers and special ships. It also manufactures gear units for

turbine plants and couplings for industrial applications.

The Slide Bearings segment at RENK AG’s Hanover site and the American sales com-

pany RENK Corporation, Duncan (SC), USA, supply hydrodynamic, lubricated slide

bearings. These are used for electric motors, generators, pumps, blowers, water tur-

bines, conveyors and marine applications.

The financial performance indicators for segments are sales revenue, operating profit

and operating return on sales. The operating return on sales is the ratio of the operat-

ing profit generated to sales revenue. The non-financial performance indicator is order

intake. Segment information is determined applying the same accounting policies as

those used in the preparation of the consolidated financial statements. Transactions

between segments are performed on an arm’s length basis.

Vehicle Transmissions Standard Gear Units Slide Bearings Consolidation/change Group

2015 2014 2015 2014 2015 2014 2015 2014 2015 2014

110,854 329,896 96,065 94,839 97,713 98,443 – – 482,907 665,617

111 192 3,291 3,059 3,878 1,100 – 15,483 – 5,735 – –

110,965 330,088 99,356 97,898 101,591 99,543 – 15,483 – 5,735 482,907 665,617

149,988 114,551 90,038 88,563 93,062 100,024 – – 486,681 480,313

111 192 2,015 2,421 1,103 1,900 – 6,516 – 5,848 – –

150,099 114,743 92,053 90,984 94,165 101,924 – 6,516 – 5,848 486,681 480,313

481,808 531,389 96,133 90,628 37,298 29,455 – 11,010 – 4,404 811,544 827,207

23,628 15,698 9,698 13,323 18,044 16,880 1,156 – 165 68,011 72,281

18,587 11,523 1,854 1,256 1,627 3,270 – – 41,241 38,296

3,685 4,559 8,311 4,237 2,492 2,492 – 1,135 142 21,365 17,444

15.7% 13.7% 10.5% 14.6% 19.2% 16.6% – – 14.0% 15.0%

154

Segment information by region

€ thousand

Germany Rest of Europe

Other regions

Total

2015

Sales revenue 147,341 124,081 215,261 486,683

Payments to acquire property, plant and equipment and intangible assets 37,323 3,635 283 41,241

2014

Sales revenue 153,133 109,562 217,618 480,313

Payments to acquire property, plant and equipment and intangible assets 35,967 655 1,674 38,296

(34) List of shareholdings of RENK AG as of December 31, 2015

Name and registered office of the company Share of capital in %

National currency

(NC)

Exchange rate

(EUR/NC)

Equity (1,000 NC)

Net result (1,000 NC)

RENK France S.A.S., Saint-Ouen-l’Aumône, France 100 EUR 1 18,072 1,809

RENK Corporation, Duncan, South Carolina, USA 100 USD 1.0877 11,323 1,623

RENK Test System GmbH, Augsburg 100 EUR 1 7,300 2,252

RENK Systems Corporation, Camby, Indiana, USA 100 USD 1.0887 835 – 87

RENK Transmisyon Sanayi A.S., Istanbul, Turkey1) 55 TRY 2.8320 3,261 401

RENK UAE LLC, Abu Dhabi, United Arab Emirates1) 49 AED 4.4573 21,690 6,849

COFICAL RENK MANCAIS DO BRASIL LTDA, Guaramirim, Brazil 98 BRL 3.2207 21,254 3,969

RENK-MAAG GmbH, Winterthur, Switzerland 100 CHF 1.0835 15,690 1,787

RENK Shanghai Service and Commercial Co., Ltd. Shanghai, China1) 100 CNY 7.5358 2,801 – 1,838

RENK (UK) Ltd., London, UK (inactive) 100 n/a n/a n/a n/a

1) As of December 31, 2014


(35) Equity investments in RENK AG

The share of the voting rights held by MAN SE in RENK AG is 76%.

In accordance with section 21(1) of the Wertpapierhandelsgesetz (WpHG – German

Securities Trading Act), Volkswagen Truck & Bus GmbH, Braunschweig, formerly Truck

& Bus GmbH, Wolfsburg, informed RENK AG on April 18, 2013 that its share of the

voting rights exceeded the threshold of 75% on April 16, 2013 and amounted to 78.86%

(5,519,903 of 7,000,000 total voting rights in RENK AG) on that day. All of the above

5,519,903 voting rights were attributed to Volkswagen Truck & Bus GmbH in accord-

ance with section 22(1) sentence 1 no. 1 WpHG through MAN SE. In accordance with

section 1(1) sentence 1 WpHG, Volkswagen Aktiengesellschaft, informed RENK AG on

November 14, 2011 that Volkswagen Aktiengesellschaft’s share of the voting rights

exceeded the threshold of 75% on November 9, 2011 and amounted to 78.86%

(5,519,903 of 7,000,000 total voting rights in RENK AG) on that day. All of the above

5,519,903 voting rights were attributed to Volkswagen Aktiengesellschaft in accordance

with section 22(1) sentence 1 no. 1 WpHG through MAN SE and – since the transfer of

the shares held by Volkswagen Aktiengesellschaft in MAN SE to Volkswagen Truck &

Bus GmbH on April 16, 2013 – also through Volkswagen Truck & Bus GmbH. Further-

more, Porsche Automobil Holding SE and its controlling shareholders informed

RENK AG in accordance with section 21(1) WpHG that the equity investment of

Volkswagen AG and Truck & Bus GmbH are also attributed to Porsche Automobil

Holding SE and its controlling shareholders.

The difference between the above equity holding of MAN SE of 76% and the above

equity holdings of Volkswagen Truck & Bus GmbH and Volkswagen Aktiengesellschaft

of 78.86% is due to the fact that the latter include 199,903 (2.86%) voting rights that

are held directly by RENK AG as treasury shares.

RENK AG was not advised of, nor is it aware of, any other direct or indirect sharehold-

ings in the capital of the company exceeding 10% of the voting rights or the relevant

reporting thresholds of the German Securities Trading Act.

(36) Related party disclosures

Related parties as defined by IAS 24 are natural persons and companies that can be

influenced by RENK AG, that can significantly influence RENK AG or that are influ-

enced by another related party of RENK AG.

Given its shareholding of 76% in RENK AG, MAN SE is its parent company and there-

fore a related party of RENK. This also applies to the subsidiaries of MAN SE and the

related parties of MAN SE itself. In particular, these include Volkswagen Truck & Bus

GmbH, Volkswagen Aktiengesellschaft and Porsche Automobil Holding SE with all its

affiliated companies.

Exchanges of goods and services between RENK and its related parties are conducted

as at arm’s length.

156

Essentially the following types of transactions are performed with companies of the

MAN Group:

• Deliveries of goods to MAN companies, in particular gear units and bearings for

ships and turbines, plus test rigs and related services.

• Sourcing from MAN companies, mainly primary materials for gear unit production

such as cast components.

• Other services and reciprocal services, such as debit and credit interest from inter-

company payment transactions with MAN SE, and cost reimbursements for other

services.

The exchange of services with companies of the Volkswagen and Porsche Groups relate

to individual projects to supply test rigs and related services. RENK purchases services,

e.g. in the context of vehicle leases.

The table below shows the extent of relationships between RENK and MAN SE:

€ thousand

2015 2014

Services rendered (income) 157 373

Services received (expense) 530 1,196

Receivables (Dec. 31) 197,151 150,158

Liabilities (Dec. 31) 3,252 3,537

MAN SE provided RENK companies with direct and indirect guarantees of € 1,833

thousand and derivative hedges with a nominal value of € 44,089 thousand as of De-

cember 31, 2015. There are receivables of € 196,737 thousand (previous year: € 149,952

thousand) from cash management with MAN SE and other MAN companies as of

December 31, 2015.

The table below shows the extent of relationships with other companies of the MAN

Group, Volkswagen and the Porsche Group:

€ thousand

2015 2014

Services rendered (income) 21,544 25,993

Services received (expense) 4,106 2,646

Receivables (Dec. 31) 6,451 5,828

Liabilities (Dec. 31) 2,094 562

Other related parties are the subsidiaries and other equity investments of the

RENK Group that are not included in the consolidated financial statements. The ex-

change of services essentially comprises the supply of parts and the performance of

services at market rates.


The following table shows the extent of services:

€ thousand

2015 2014

Services rendered (income) 6,042 7,146

Services received (expense) 1,011 648

Receivables (Dec. 31) 1,573 2,788

Liabilities (Dec. 31) 107 115

Trade receivables from and trade payables to affiliated companies are reported under

notes (17) and (23). There are financial obligations to affiliated companies under oper-

ating leases of € 172 thousand (previous year: € 188 thousand).

Outstanding items in connection with related parties are not collateralized, nor had

valuation allowances been recognized as of the end of the reporting period.

Related parties of RENK also include persons who can influence or be influenced by

RENK AG, such as the members of the Executive Board and Supervisory Board of

RENK AG, the members of the Executive Board and Supervisory Board of MAN SE, the

members of management and the Supervisory Board of Volkswagen Truck & Bus

GmbH and the members of the Executive Board and Supervisory Board of

Volkswagen AG.

Please see notes (30) and (31) for disclosures required in accordance with IAS 24 on

management remuneration for key positions.

(37) Events after the end of the reporting period

There were no special events after December 31, 2015 with a material effect on the net

assets, financial position and results of operations.

158

Members of the Supervisory Board and the Management Board and their mandates

(38) Supervisory Board

Dr. Ingrun-Ulla Bartölke Wolfsburg


Head of Group Accounting and External Reporting at Volkswagen Aktiengesellschaft

Audit Committee Skoda Auto a.s., Czech Republic4)

Roberto Armellini*) Augsburg

Deputy Chairman of the Supervisory Board

Secretary of the Trade Union Confederation

VALEO Schalter und Sensoren GmbH (Deputy Chairman)1)

VALEO Wischersysteme GmbH1)

AGCO Fendt GmbH1)

Michael Behrendt Hamburg

Chairman of the Supervisory Board of Hapag-Lloyd AG

Barmenia Allgemeine Versicherungs-AG (Deputy Chairman)1)

Barmenia Krankenversicherung a. G. (Deputy Chairman)1)

Barmenia Lebensversicherung a. G. (Deputy Chairman)1)

Esso Deutschland GmbH1)

ExxonMobil C. E. Holding GmbH1)

Hamburgische Staatsoper GmbH1)

Hapag-Lloyd AG (Chairman)1)

MAN Diesel & Turbo SE1)

MAN SE1)

MAN Truck & Bus AG1)


Dipl.-Ing. (FH) Rainer Handschuh*)

Augsburg

Chairman of the Group Works Council of RENK AG

Chairman of the Works Council of RENK AG, Augsburg plant and

RENK Test System GmbH

Dipl.-Ing. (FH) Frank Hoffmann*) Augsburg

Head of Vehicle Transmissions at RENK AG, Augsburg

Dr.-Ing. Hans-O. Jeske Wesel

Member of the Executive Board of MAN Diesel & Turbo SE

RWTÜV GmbH3)

MAN Diesel Shanghai Co., Ltd., China4)

MAN Diesel & Turbo Middle East LLC, Dubai, UAE4)

Prof. Dr.-Ing. Werner Neubauer**) Wolfsburg


Wolfsburg AG1)

Volkswagen Sachsen GmbH2)

SITECH Sp. z o.o, Poland4)

Volkswagen Automatic Transmission (Tianjin) Company Ltd., China4)

Prof. Dr. rer. pol. Horst Neumann Wolfsburg

Member of the Supervisory Board until November 30, 2015

Former Member of the Management Board at Volkswagen Aktiengesellschaft

AUDI AG2)

Dr. Ing. h.c. F. Porsche AG2)

Volkswagen Financial Services AG (Deputy Chairman)2)

Porsche Holding Stuttgart GmbH4)

Volkswagen (China) Investment Company Ltd., China4)

Volkswagen Group of America, Inc., USA4)

Volkswagen Immobilien GmbH (Chairman)4)

160

Dr. Georg Pachta-Reyhofen Niederpöcking


MAN Diesel & Turbo SE (Chairman)2)

Herbert Surmann*) Rheine

Chairman of the Works Council RENK AG, Rheine plant

Walter Vogt*) Eltville

Labor union secretary at IG Metall Executive Board, Frankfurt/Main

IBM Deutschland GmbH1)

Baugenossenschaft Darmstadt eG1)

Ingo Weidner*) Hannover

Mechanical engineer

As of December 31, 2015 or, if earlier, date of resignation.

*) Elected by employees **) Resigned from his Supervisory Board office taking of effect on February 15, 2016. 1) Membership of statutory Supervisory Boards in Germany. 2) Membership of statutory Supervisory Boards in Germany (Group Mandates). 3) Comparable appointments in domestic or foreign countries supervisory board committees. 4) Comparable appointments in domestic or foreign countries supervisory board committees

(Group Mandates).


(39) Vorstand

Dipl.-Ing. (FH) Florian Hofbauer Landsberg

Spokesperson

Engineering and Sales

Ulrich Sauter Wertingen


Until July 31, 2015

Dipl.-Kfm. (Univ.) Christian Hammel Munich


Since August 1, 2015

162

(40) Committees of the Supervisory Board

Members of the Committee for Management Board Personnel Dr. Ingrun-Ulla Bartölke (Chairwoman)

Roberto Armellini (Deputy Chairman)

Dipl.-Ing. (FH) Rainer Handschuh

Dr. Georg Pachta-Reyhofen

Members of the Nomination Committee Dr. Ingrun-Ulla Bartölke


Members of the Mediation Committee Dr. Ingrun-Ulla Bartölke (Chairwoman)

Roberto Armellini (Deputy Chairman)

Dipl.-Ing. (FH) Rainer Handschuh


Members of the Audit Committee Michael Behrendt (Chairman)

Walter Vogt (Deputy Chairman)

Dr. Ingrun-Ulla Bartölke

Herbert Surmann


Renk Aktiengesellschaft

Management Board



Responsibility Statement

To the best of our knowledge and in accordance with the applicable accounting princi-

ples, the consolidated financial statements give a true and fair view of the net assets,

financial position and results of operations of the Group, and the management report

of the Group includes a fair review of the development and performance of the busi-

ness and the position of the Group, together with a description of the principal oppor-

tunities and risks associated with the expected development of the Group.




164

Audit Report for the consolidated financial statements of RENK AG

Auditor’s Report We have audited the consolidated financial statements prepared by the Renk Aktien-

gesellschaft, comprising the consolidated income statement, the reconciliation to

total comprehensive income for the period, the consolidated statement of financial

position, consolidated statement of changes in equity, consolidated statement of cash

flow and the notes to the consolidated financial statements, together with the group

management report for the business year from January 1 to December 31, 2015. The

preparation of the consolidated financial statements and the group management

report in accordance with the IFRSs, as adopted by the EU, and the additional require-

ments of German commercial law pursuant to § (Article) 315a Abs. (paragraph) 1 HGB

("Handelsgesetzbuch": German Commercial Code) and supplementary provisions of

the articles of incorporation is the responsibility of the parent Company's Board of

Managing Directors. Our responsibility is to express an opinion on the consolidated

financial statements and on the group management report based on our audit.

We conducted our audit of the consolidated financial statements in accordance with

§ 317 HGB and German generally accepted standards for the audit of financial state-

ments promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors

in Germany) (IDW). Those standards require that we plan and perform the audit such

that misstatements materially affecting the presentation of the net assets, financial

position and results of operations in the consolidated financial statements in accord-

ance with the applicable financial reporting framework and in the group management

report are detected with reasonable assurance. Knowledge of the business activities

and the economic and legal environment of the Group and expectations as to possible

misstatements are taken into account in the determination of audit procedures. The

effectiveness of the accounting-related internal control system and the evidence sup-

porting the disclosures in the consolidated financial statements and the group man-

agement report are examined primarily on a test basis within the framework of the

audit. The audit includes assessing the annual financial statements of those entities

included in consolidation, the determination of the entities to be included in consoli-

dation, the accounting and consolidation principles used and significant estimates

made by the Company´s Board of Managing Directors as well as evaluating the overall

presentation of the consolidated financial statements and the group management

report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.


In our opinion based on the findings of our audit the consolidated financial state-

ments comply with the IFRSs as adopted by the EU and the additional requirements of

German commercial law pursuant to § 315a Abs. 1 HGB and supplementary provisions

of the articles of incorporation and give a true and fair view of the net assets, financial

position and results of operations of the Group in accordance with these require-

ments. The group management report is consistent with the consolidated financial

statements and as a whole provides a suitable view of the Group's position and suita-

bly presents the opportunities and risks of future development.

Munich, February 15, 2016

PricewaterhouseCoopers

Aktiengesellschaft

Wirtschaftsprüfungsgesellschaft

Petra Justenhoven ppa. Holger Graßnick

Wirtschaftsprüferin Wirtschaftsprüfer

(German Public Auditor) (German Public Auditor)

166

LEERSEITE EINFÜGEN


Six-years Overview € million

2010 2011 20121) 20132) 2014 2015

Order intake 525 456 525 504 666 483

Germany 262 150 176 196 137 181

Outside Germany 263 306 349 308 529 301

Sales revenue 403 389 476 485 480 487

Germany 120 146 165 168 153 147

Outside Germany 283 243 311 317 327 339

Orderbacklog Dec. 31 522 586 634 648 827 812

Germany 282 284 296 323 295 297

Outside Germany 240 302 338 325 532 515

Employees Dec. 31

Headcount - – – 2,306 2,196 2,198

Core workforce employees3) on Dec. 31 1,814 1,944 2,167 2,186 2,072 2,094

Subcontracted employees 68 69 78 42 48 39

Average number of core workforce employees 1,823 1,883 2,098 2,199 2,112 2,087

Capital expenditures and financing

Payments to acquire property, plant and equipment and intangible assets 23 24 28 27 38 41

Depreciation of property, plant and equipment, amortization of intangible assets and impairment 13 13 14 16 17 21

Cash flows from operating activities 81 40 66 85 35 101

Net cash flow (free cash flow until 2013) 58 16 35 56 – 3 60

Key performance indicators (%)

Operating return on sales – – – 13.5 15.0 14.0

Equity ratio 51.7 48.6 48.1 52.1 55.6 54.2

Key performance indicators for RENK shares

Earnings per share as per IAS 33 (in €) 5.54 5.58 6.74 6.39 7.17 6.14

Dividend per share (in €) 1.80 1.80 2.00 2.00 2.20 2.20

Price-earnings ratio 12.63 10.95 10.80 13.07 11.66 17.05

Balance Sheet

Noncurrent assets 150 156 184 163 185 207

Inventories 110 145 164 157 179 171

Other current assets 74 89 81 94 155 170

Cash and cash equivalents 85 96 125 167 70 117

Equity 217 236 266 303 327 360

Pensions 14 23 30 9 25 16

Other noncurrent liabilities and provisions 35 26 31 10 9 8

Prepayments received 46 83 100 133 110 154

Other current liabilities and provisions 107 118 127 126 118 127

Total assets/total capital 419 486 554 581 589 665

Income Statement

Sales revenue 403 389 476 485 480 487

Cost of sales – 303 – 286 – 356 – 377 – 362 – 377

Gross profit 100 103 120 108 118 109

Other expenses and income – 48 – 50 – 54 – 43 – 46 – 42

Operating profit (EBIT) 52 53 66 66 72 68

Net interest income 0 1 0 0 0 – 4

Profit before taxes 52 54 66 66 72 64

Income tax expense – 14 – 16 – 20 – 23 – 23 – 22

Profit after tax 38 38 46 43 49 42

1) Adjusted in 2013 due to the retroactive amendment to IAS 19 (2011). 2) Adjusted of individual prior-year figures due to transition to the financial reporting of the Volkswagen Group. 3) The core workforce comprises employees who directly or indirectly work in production.


FAHNE EINFÜGEN


Products and Services

Vehicle transmissions Fully automatic shift, reverse and steering transmissions with brake systems and final

drives for tracked vehicles of medium and large weight classes.

Industrial gears Gear units for cement plants, spur and planetary gear units for turbomachinery, in

particular for the petrochemical industry and for power plants, high-performance gear

units for the plastics industry, gear units for wind turbines.

Marine gear units Gear units for merchant vessels, ferries, cruise liners and naval craft with diesel engine

and/or turbine drive and electric drive, marine reversing gear units, reduction and

control gear units for ship generator systems.

Slide bearings Standard and special horizontal and vertical slide bearings for electrical machinery,

blowers, compressors, pumps, turbines and general mechanical engineering, slide

bearings for transmissions, marine shaft bearings and thrust bearings.

Couplings Curved-tooth couplings for industrial applications of all kinds, for ship and marine

engineering, for rail vehicles, steel multi-disc clutches for slow- and high-speed indus-

trial systems, diaphragm couplings for high-speed machinery, safety couplings, tor-

sionally flexible couplings.

Test systems Test rigs for development and quality assurance for the automotive industry, the avia-

tion industry and railway engineering.


Products and Services

Vehicle transmissions Fully automatic shift, reverse and steering transmissions with brake systems and final

drives for tracked vehicles of medium and large weight classes.

Industrial gears Gear units for cement plants, spur and planetary gear units for turbomachinery, in

particular for the petrochemical industry and for power plants, high-performance gear

units for the plastics industry, gear units for wind turbines.

Marine gear units Gear units for merchant vessels, ferries, cruise liners and naval craft with diesel engine

and/or turbine drive and electric drive, marine reversing gear units, reduction and

control gear units for ship generator systems.

Slide bearings Standard and special horizontal and vertical slide bearings for electrical machinery,

blowers, compressors, pumps, turbines and general mechanical engineering, slide

bearings for transmissions, marine shaft bearings and thrust bearings.

Couplings Curved-tooth couplings for industrial applications of all kinds, for ship and marine

engineering, for rail vehicles, steel multi-disc clutches for slow- and high-speed indus-

trial systems, diaphragm couplings for high-speed machinery, safety couplings, tor-

sionally flexible couplings.

Test systems Test rigs for development and quality assurance for the automotive industry, the avia-

tion industry and railway engineering.

172

Created with FIRE.sys

www.firesys.de

Produced with FIRE.sys

www.firesys.de


Gögginger Str. 7386159 Augsburg, GermanyPhone +49 821 5700-0Fax +49 821 5700-460

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A company of the MAN Group

Annual Report 2015 - Renk...Hapag-Lloyd AG Dipl.-Ing. (FH) Frank Hoffmann*) Augsburg Head of Vehicle...

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Transcript of Annual Report 2015 - Renk...Hapag-Lloyd AG Dipl.-Ing. (FH) Frank Hoffmann*) Augsburg Head of Vehicle...