E_mg_GB_03_vorne-29_3_04

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MANAGEMENT REPORT
PRELIMINARY COMMENT
Limited comparability; change in fiscal year
2003 saw the initiation of a comprehensive restructuring program in the mg Group based on the
strategic refocus decided in October. This incurred substantial one-off charges. Because of these
measures and the alignment of mg’s fiscal year with the calendar year in the previous year, the
company’s net assets, financial position and results of operations can only be compared to a very
limited extent with those of prior years.
After mg’s fiscal year was aligned with the calendar year at December 31, 2002, the 2003 fiscal year
now corresponds to the period from January 1 through December 31, 2003. For this reason, the
2003 fiscal year should technically be compared to the short 2002 fiscal year. In order to present the
mg Group’s financial results on a like-for-like basis, however, the management report contains the
figures for the last full fiscal year of 2001/2002 (October 1, 2001 to September 30, 2002) as a basis
for comparison. In other words, the comparative figures for the prior year mentioned in the management
report – described as the ‘corresponding’ or ‘comparative’ prior-year period – always relate
to the full 2001/2002 fiscal year. In the case of reporting-date-related figures – such as those shown
in the balance sheet – however, the figures at December 31, 2003 are largely compared with the
corresponding figures at December 31, 2002.
Discontinued operations
Having conducted a comprehensive review of the organization, mg’s Executive Board decided in
2003 to concentrate the company’s activities in the future on specialty mechanical engineering
– especially process engineering and components – and plant engineering. In the wake of this review,
preparations were made to sell mg’s Chemicals division, along with Dynamit Nobel and solvadis.
In accordance with SFAS 144, however, only the subgroup solvadis, the Boiler Plant strategic business
unit, and some of the non-core activities of GEA and Dynamit Nobel have not been reported as
‘continued operations’ for 2003. Consequently, these businesses are shown separately as ‘discontinued
operations’ in the statements of income for 2003 and for the short 2002 fiscal year. Dynamit Nobel
is still included under ‘continued operations’ in the consolidated financial statements at December 31,
2003. In line with the fundamental principles of the ‘Holzmüller’ ruling by Germany’s Federal Court
of Justice, the Executive Board of mg technologies ag will seek the Annual Shareholders’ Meeting’s
approval to sell Dynamit Nobel. Consequently, as of the balance sheet date Dynamit Nobel cannot be
reported under ‘discontinued operations’ in accordance with SFAS 144.