Business Report 2005 - Interseroh

2005 BUSINESS REPORT
INTERSEROH AG – Stollwerckstraße 9a – 51149 Cologne – Tel.: +49(2203)9147-0 – Fax: +49(2203)9147-1394
eMail: info@interseroh.de – internet: www.interseroh.de
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INTERSEROH is a leading European supplier of organisational solutions for materials
management.
With the help of around 1,100 waste disposal partners, INTERSEROH collects raw materials,
has them recycled and then returns them to the production cycle.
INTERSEROH generated a raw material volume of about 5.2 million tons in 2005, making it one
of the biggest suppliers of secondary raw materials in Europe.
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KEY GROUP FIGURES
Group
2005 * 2004 2003 2002 2001
Consolidated turnover in million euros
• Services and raw materials 248.7 229.7 226.2 235.6 211.1
• Steel and metal recycling 698.2 810.5 510.5 418.6 158.4
946.9 1,040.2 736.7 654.2 369.5
Earnings before taxes in million euros 29.9 44.7 19.0 20.4 24.6
Net income in million euros 19.0 29.6 8.9 11.4 14.1
Total assets in million euros 317.7 311.5 253.9 249.7 258.3
Equity ratio (1) in % 37.3 34.4 31.0 31.3 29.0
Return on equity (2) in % 16.0 27.6 11.3 14.4 18.7
Total return on capital (3) in % 10.7 16.0 8.7 9.7 10.6
Workforce (average) 1,301 1,254 1,285 1,360 893
Number of shares 9,840,000 9,840,000 9,840,000 9,840,000 9,840,000
Dividend per share in euros 0.86 0.86 0.86 0.86 0.86
(1) Equity according to balance sheet x 100/total assets
(2) Earnings after tax according to income statement x 100/equity according to balance sheet
(3) Earnings before interest and taxes according to income statement x 100/total assets
* 2001–2003 Financial statements according to HGB; 2004–2005 Financial statements according to IFRS
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THE MANAGEMENT BOARD
Johannes-Jürgen Albus
has been Chairman of the Management Board since April 2006 and Chief Financial Officer since April
2003. Following various management positions in Germany and abroad, the graduate in business
administration was appointed to the management board of GAH Anlagentechnik AG in 1997, initially
as chief financial officer and later as chairman from mid-2000 on.
Christian Rubach
is responsible for the field of steel and metal recycling and has been a member of the Management
Board since August 2000. From 1995 to July 2000 the qualified economist was managing director of
Krupp Hoesch-Rohstoff und Recycling GmbH (from 1998: Hansa Recycling GmbH).
Roland Stroese
has been responsible for sales and services since October 2005. Prior to joining INTERSEROH the
graduate business economist worked for REWE Großverbraucher Service in Cologne and was
managing director of various associated companies at Coca Cola, Essen, before moving to the
Cologne-based confectionery manufacturers Intersnack as sales director and member of the board of
directors.
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CONTENTS
Key Figures 3
The Management Board 4
Letter from the Management Board 6
Report of the Supervisory Board 8
Management Report A. Framework Conditions 10
1. General Economic Development 10
2. New Laws from Brussels and Berlin 10
B. Business Development 12
1. Consolidated Turnover 12
2. Services 13
3. Raw Materials Trading 15
4. Steel and Metal Recycling 16
5. Investments 17
6. Financing Measures 18
7. Human Resources and Social Security 18
8. Environmental Protection 19
9. Marketing and Advertising 19
10. Public Relations 20
11. Investor Relations 20
12. Dividend Yield 21
13. Corporate Governance 21
14. Major Transactions in the Financial Year 22
15. Total Return on Capital Employed as
Management Instrument 23
C. Presentation and Explanation of the Earnings and Financial
Position and Key Consolidated Ratios 24
1. Earnings Position 24
2. Financial Position 25
3. Key Consolidated Ratios 27
D. Other Information 28
1. Transaction of Special Importance After the Close
of the Financial Year 28
2. Risk Management 28
3. Foreseeable Development, Possible Chances and
Potential Risks 30
4. Research and Development 31
5. Branch Offices 32
Financial Statements Consolidated Balance Sheet 33
Consolidated Income Statement 34
Consolidated Notes 35
Explanation of the Principles and Methods Applied
for the Consolidated Financial Statements 35
Notes on the Income Statement 41
Notes on the Balance Sheet 45
Other Notes and Information 58
Separate Notes and Information According to § 315 a
of the German Commercial Code 72
Consolidated Equity Capital Statement 75
Consolidated Cash Flow Statement 77
List of Major Shareholdings 78
Imprint 79
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LETTER FROM THE MANAGEMENT BOARD
Dear Shareholders,
Your company, INTERSEROH AG, was founded 15 years ago. The German Packaging Ordinance
also came into effect 15 years ago. Both these dates in 1991 are inextricably linked with each other: in
order to organise the return and recycling of used packaging, new business concepts capable of
mastering this challenge across the whole of Germany had to be found. Concepts like that of
INTERSEROH.
The solution involved nothing less than organising a complex logistical structure beginning
with the collection of secondary raw materials – tin, paper, cardboard, pasteboard, plastic, glass and
wood – and ending in their return to the production cycle.
The much-regulated markets in which INTERSEROH moves have changed immensely since
1991. New markets have been added, partly due to growing demand and new production methods
and partly due to liberalisation. The international demand for raw materials and the ability to serve this
demand are moving more and more to the fore of these markets.
Herein lie, on the one hand, numerous opportunities for ongoing positive development in
INTERSEROH’s fields of business – while on the other, we must remain vigilant of the permanent risk
of volatile raw material prices and their growing influence on the services sector at all times.
On top of this, the various market levels of the INTERSEROH supply chain are increasingly
becoming characterised by internationalisation of the closed loop economy and concentration – be it in
the waste disposal sector or the structure of the clientele of our raw materials.
INTERSEROH has also changed in the last 15 years. Apart from many new services, the steel
and metal recycling segment has developed into an essential component of the INTERSEROH Group,
contributing a substantial share to the group’s overall results.
How, against this background, did the economic environment and our segments develop in
2005? Although the German economy was again marked by restrained development last year, the
services sector did grow satisfactorily. Whereas the volumes of raw materials registered with
INTERSEROH for recycling grew, the services sector experienced considerable losses in the recycling
of transport packaging and declines in the overall volume of secondary raw materials marketed.
Following an exceptional year in 2004 due to volatility and record prices, the scrap steel sector
was marked more by weak demand and lower prices in 2005.
In spite of the relatively difficult environment for both segments, we are satisfied with the result
of the overall group in fiscal 2005.
The coming years will see stronger competition in some of our main fields of business and
therefore also a further decline in our profit margins. At the same time, however, we intend to use the
chances open to us to enter liberalised markets, to grow there and also to develop new fields of
business at home and abroad.
Regardless of whether we are talking about the recycling of packaging, reuse of old products
or trade with secondary raw materials – we can only create value if through excellent organisation and
careful quality management we produce high-quality raw materials and market them worldwide.
Because in contrast to mineral resources, these modern sources of raw materials require less
technology and more organisation and coordination of services to tap.
With its activities, INTERSEROH closes economic material cycles for the lasting benefit of
trade and industry, business, waste disposal companies, consumers, and thus also the environment –
directly from end to start.
That these raw materials can find a new beginning not only in the production of classical
economic goods, but also in art is shown by various works by the Cologne-based artist Joachim
Röderer that illustrate this annual report. All these sculptures have been made from recycled metals.
Why not take some time off while reading this report to view the closed loop economy from another
angle?
The success of INTERSEROH can be attributed to the competence, commitment and
determination of all its employees. For that I would like to thank them all in the name of the
INTERSEROH Management Board. They will continue to be the motor for the dynamic development
of the company in the future as well.
We thank you, our shareholders, for your loyalty and interest, and our customers and business
partners for their confidence in us. You may rest assured we will face the challenges before us with
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undiminished resolve and work with all our might to implement our ambitious aims for the ongoing
success of INTERSEROH.
Yours sincerely,
Johannes-Jürgen Albus
Chairman of the Management Board
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REPORT OF THE SUPERVISORY BOARD
In the year under review the Supervisory Board discharged all the duties incumbent upon it according
to law and the company’s bylaws, advised the Management Board on the management of the
company and supervised its conduct of business. The Supervisory Board was directly involved in all
important decisions.
The Management Board informed the Supervisory Board in detail, due time, comprehensively
and in full accordance with legal requirements about the course of business, the financial position of
the company and the strategy and plans of the company in a total of four ordinary and one
extraordinary meeting. The deliberations of the Supervisory Board were based on regular,
comprehensive and timely written and oral reports by the Management Board, especially regarding
business policy, corporate planning, the financial position of the group including the strategic further
development of the group and its sites as well as the profitability of the company and the course of
business. The Chairman of the Supervisory Board maintained constant contact with the Management
Board and was informed of all significant developments and pending decisions. Decisions of
fundamental importance were submitted to the Supervisory Board for approval. This approval was
also granted after review and assessment of the particular matter in hand. The Supervisory Board
supervised the conduct of business by the Management Board and advised it in same in keeping with
the duties placed upon it by law and the company’s bylaws on the basis of the Management Board’s
reports. In its supervision of the conduct of business the Supervisory Board examined especially its
legality, compliance with regulations, expedience and profitability. The Supervisory Board not only
reviewed the activities already initiated by the Management Board, but also discussed business
decisions and planning calculations for the future intensively with the Management Board on the basis
of its reports and the concrete business documents of each particular case.
All the members of the Supervisory Board regularly attended the meetings of the Supervisory
Board that took place in the time of their membership.
Main Aspects
The meetings focused primarily on the strategic alignment of the INTERSEROH Group. The
Supervisory Board concerned itself with the new fields of business, particularly the Dual System
INTERSEROH, as well as with the voluntary offer extended to the shareholders of INTERSEROH AG
by the firm Isabell Finance Vermögensverwaltungs GmbH. A major subject of discussion was the
development of a joint position with the Management Board, and especially in the financial year under
review its preparation by selecting a financial consultant to compile a fairness opinion, and the
question of its fundamental attitude to the offer, also with regards to the strategic development of the
company. Another recurring item on the agenda of every ordinary meeting of the Supervisory Board
was the report by the Chief Financial Officer, who reported on the development in turnover and
income in the group and segments, on current developments on the raw material markets and on
other relevant business data. The Supervisory Board also conducted a self-evaluation of its work.
Committees
In keeping with the recommendations of the German Corporate Governance Code on the formation of
committees, the Supervisory Board set up a Chairman’s Committee, an Audit Committee and a
Personnel Committee. The Chairman’s Committee has a total of four members and met 10 times. It
was mainly occupied with the offer extended by Isabell Finance Vermögensverwaltungs GmbH and
preparation of the Supervisory Board’s position towards this offer. The committee member Dr. Axel
Schweitzer did not take part in the meetings of the Chairman's Committee concerning this offer in
order to avert any conflict of interests.
The Audit Committee is made up of three members of the Supervisory Board. The committee
met three times in the year under review. Its activities were directed at questions concerning the
annual financial statements, stipulation of the main points of focus for the audit, further development of
risk management, investor protection and insider regulations.
The Personnel Committee consists of the Chairman of the Supervisory Board, his two
deputies and a further member of the Supervisory Board. Its work focuses on remuneration and other
personnel matters concerning the Management Board.
The committees report on their work regularly in the next meetings of the full Supervisory
Board.
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Corporate Governance
The Supervisory Board regards the German Corporate Governance Code drafted by a government
commission as an important step towards improving management practice and corporate control. The
Supervisory Board pronounced INTERSEROH AG’s compliance for the year 2005 together with the
Management Board on 8 December 2005. This declaration is published on the company’s website.
Further information on the subject of corporate governance is to be found in section B.13 of the
management report.
In keeping with the principles of good corporate governance and to avoid conflicts of interest,
the Supervisory Board members Dr. Axel Schweitzer, Dr. Eric Schweitzer, Mr. Friedrich Merz and Dr.
Wolfgang Bosch did not participate in meetings and resolutions concerning the offer extended to all
the shareholders of INTERSEROH AG by Isabell Finance Vermögensverwaltungs GmbH. Dr. Axel
Schweitzer and Dr. Eric Schweitzer have an indirect interest in Isabell Finance Vermögensverwaltungs
GmbH. Mr. Friedrich Merz and Dr. Wolfgang Bosch are lawyers and partners in law firms that have
advised Isabell Finance Vermögensverwaltungs GmbH. Further information on how the conflict of
interests was dealt with in the Supervisory Board in connection with the acquisition offer by Isabell
Finance Vermögensverwaltungs GmbH can be found in the joint statement by the Management Board
and Supervisory Board pursuant to Article 27, Par. 1 of the Securities Acquisition Act on this
acquisition offer dated 17 January 2006. The statement is published at www.interseroh.de in the
category Investor Relations, Acquisition Offer.
Financial Statements
The 2005 general shareholders’ meeting elected to appoint the company KPMG Deutsche Treuhand-
Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Berlin and Frankfurt am Main, as
auditors. KPMG audited the accounting, the annual financial statements and the management report
of INTERSEROH AG as well as the consolidated financial statements and consolidated management
report. The auditor issued an unqualified auditor's opinion for all.
The closing records and reports of KPMG were presented to the Supervisory Board for
inspection in due time. The auditor took part in both the relevant meeting of the Audit Committee and
the balance sheet meeting of the Supervisory Board. He reported on the main results of his audit,
explained the situation with regards to the assets, financial position and earnings of the company and
group and answered the questions of the Supervisory Board.
Based on its own examination of the annual financial statements, the consolidated financial
statements, the management report and the consolidated management report, the Supervisory Board
endorsed the results of the audit by the external auditor. They gave no cause for objection. The
Supervisory Board endorsed the annual financial statements and consolidated financial statements, by
way of which the annual financial statements of INTERSEROH AG were adopted.
The Supervisory Board approves the distribution of retained earnings proposed by the
Management Board.
Changes
There were personnel changes to the Management Board of the company in the period under review.
Mr. Michael Mevissen left the Management Board of INTERSEROH AG on 30 June 2005 and Mr.
Roland Stroese was appointed to the Management Board of INTERSEROH AG with effect on 8
October 2005.
There were also changes to the Supervisory Board. Mr. Norbert Rethmann, Dr. Walter Aden,
Mr. Gotthard Graß, Mr. Christian Jeschonek, Mr. Andreas Seibert and Mr. Jürgen Tönsmeier all left
the Supervisory Board in the course of 2005.
New members of the Supervisory Board are Dr. Wolfgang Bosch and Messrs. Joachim
Edmund Hunold and Friedrich Merz. Dr. Axel Schweitzer was elected new chairman in the
Supervisory Board meeting on 31 March 2005. Messrs. Friedrich Carl Janssen and Hans-Jörg Vetter
were elected his deputies. Dr. Eric Schweitzer resigned as Vice Chairman of the Supervisory Board.
The Supervisory Board would like to thank the members who have left for their valuable work
and constructive support of the company and Management Board. The Supervisory Board would also
like to thank the Management Board and all staff for their work in the year under review.
Cologne, March 2006
Dr. Axel Schweitzer
Chairman of the Supervisory Board
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MANAGEMENT REPORT
OF THE INTERSEROH GROUP FOR FISCAL 2005
The INTERSEROH Group is one of the leading service providers and raw material companies in
Europe. It organises recycling processes and supplies the paper, steel, plastics and derived timber
product industries as well as biomass power stations with more than five million tons of secondary raw
materials a year. The business activities of the group are divided into two segments – services and
raw materials trading as well as steel and metal recycling.
A. FRAMEWORK CONDITIONS
1. General Economic Development:
Export World Champion with Weak Consumption
The upswing in the Germany economy in 2005 was moderate and borne as in the previous year by
rising exports. Investment in equipment and machinery also grew.
Following a strong start to the year under review, the economy stagnated in the second
quarter, before regaining some speed in the third and fourth quarters. Although the high oil price
slowed the economy less strongly than many feared, it did dampen private consumption. The ongoing
reticence of private households even led to a slight drop in spending in the first half of the year. In
contrast, the monetary assets of Germans rose to a record high of four trillion euros. The rise in the
propensity to save is a result of the fear of not having sufficient income in old age and of becoming
unemployed.
The situation on the German labour market did not improve last year. The decline in registered
unemployment was mainly the result of “one-euro jobs” and more critical examination of the
entitlement of recipients to unemployment benefits.
Experts expect the moderate economic upturn to continue this financial year, again driven
primarily by exports. The development in many growth markets such as Russia and trade with the
candidate states of Eastern Europe remain positive for the German export economy. Growth in
investments in equipment and machinery will boost domestic demand slightly. The reasons for this are
the positive sales expectations on the export markets and a continuation in favourable financing
conditions. Private consumption is also expected to stimulate growth. The reason: spending brought
forward to 2006 due to the planned increase in value added tax of three percentage points in 2007.
Economists fear that even relatively small disruptions from outside could throw the German economy
back to a state close to stagnation. If energy prices were to rise strongly, this would represent a
danger for the world economy.
In spite of slack consumption and increased competition, the development in INTERSEROH’s
services business was satisfactory. The volumes of packaging registered with ISD INTERSEROH
Dienstleistungs GmbH grew as a result of an expansion in sales activities and introduction of new
services. However, we had to accept significant losses in net income in the extension of contracts
from 2006 in transport packaging recycling. The development in INTERSEROH’s services business in
2005 is described in section B.2.
We were able to keep the quantities of paper marketed by INTERSEROH at the previous
year’s level at largely stable prices. The volumes of plastic traded were increased significantly with
price increases of around 20 percent. The quantities of old wood marketed rose slightly over 2004.
The Technical Instructions for Domestic Waste (TASi), which came into effect on 1 June 2005,
influenced the prices for materials suitable solely for thermal utilisation. Further details on the situation
on the raw material markets are to be found in section B.3.
The quantities of scrap steel marketed fell well below the previous year’s level. Many
European steelworks reduced their production in the first half of 2005 to help prop up steel prices. The
demand for steel was weak and stocks still well-filled. The prices for scrap steel dropped continuously
from November 2004 to June 2005, but then rose in July and August. Thereafter the prices fell again
slightly until the end of 2005. The prices for non-ferrous metals dropped slightly to the middle of the
year, but then rose again from July. INTERSEROH was able to increase the quantity of old metals it
marketed. The development in the steel and metal recycling segment is described in section B.4.
2. New Laws from Brussels and Berlin
INTERSEROH is subject to numerous legal requirements from Brussels and Berlin in the execution of
its business activities. There were several important new developments and changes in the past
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financial year and years before whose influences INTERSEROH integrated into its business strategy
early on.
Packaging Ordinance
Pursuant to the Packaging Ordinance, a deposit has been charged on certain disposable drink
packages since 1 January 2003. According to the amendment to this ordinance that came into effect
on 28 May 2005, the so-called stand-alone solutions set up by the large discount stores must be
eliminated by May 2006. Practically this means that whoever sells, for example, disposable PET
packaging must also take back disposable PET packaging regardless of whether it was bought at his
store or not. INTERSEROH has set up a countrywide collection system and offers its customers,
depending on their needs, a full range of necessary service modules, beginning with transportation
and extending through counting, clearing and inter-clearing up to recycling.
The amendment also clarified the future of compostable packaging: it is largely exempt from
the normal take-back and recycling obligations until 31 December 2012.
The fourth amendment to the Packaging Ordinance came into force on 7 January 2006. It
makes the disposal of sales packaging through self-disposal systems more transparent. The obligation
imposed on manufacturers and distributors to “set up suitable collection and recycling structures” is an
important step to ending virtual systems, which INTERSEROH categorically rejects. INTERSEROH
has used corresponding collection points since the start of its self-disposal solutions. It also calls for a
definition and monitoring of guaranteed quality in self-disposal systems by way of a quality seal and
strict action against abuse of the systems by copycats.
The essential legal basis for the establishment of alternative dual systems in Germany was
created in 2001: the EU Commission ruled that collection containers and other collection and sorting
equipment for household sales packaging must be open to competitors of Duales System Deutschland
AG (DSD). DSD was also prohibited from exclusivity agreements with disposal companies.
Section B.2 describes the activities of INTERSEROH regarding disposable deposit drink
packs, the return of sales packaging and compostable packaging.
Electrical and Electronic Equipment Act
Manufacturers have been obligated to take back old electrical and electronic equipment as of 24
March 2006. The manufacturers and importers of electrical and electronic equipment had to register
with the Stiftung Elektro-Altgeräte-Register (EAR) by 23 November 2005 if they wanted to sell their
equipment on the market in the future. Consumers are now obligated to hand over their old equipment
to their municipalities for separate collection. The manufacturers and importers are responsible for the
logistics, sorting, dismantling and recycling of the old equipment. They can assign these
responsibilities to a third party – such as INTERSEROH.
INTERSEROH’s activities in this field are described in section B.2.
Technical Instructions for Domestic Waste (TASi)
The TASi, which came into force on 1 June 2005, and the resultant ban on dumping untreated,
biodegradable domestic waste have firstly raised the requirements for the processing of the shredder
light fraction at INTERSEROH’s scrap yards. Secondly, the volume of old wood designated for thermal
utilisation has increased in some regions of Germany.
The development in INTERSEROH’s business activities in the old wood market in 2005 is
described in section B.3. INTERSEROH’s activities in the steel and metal recycling segment are
described in section B.4.
Old Auto Act
The Old Auto Act, which took effect on 1 July 2002, gives the last owners of cars and light commercial
vehicles the right to give back these vehicles to the manufacturer or importer free of charge. However,
the related obligation to take back these vehicles is practically meaningless since a large part of the
vehicles deregistered in Germany are exported. There are two main factors for this development: the
large demand in the new EU member states of Eastern Europe for very old used vehicles on the one
hand, and the for Germany negative distortion of competition due to unharmonised dumping
legislation in Europe on the other. For example, it is attractive for a Dutch steel recycling company to
buy up old car bodies in Germany because it is still possible for him to dump the shredder light fraction
inexpensively in the Netherlands, whereas the German TASi (see above) prohibits this.
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B. BUSINESS DEVELOPMENT
1. Satisfied with Turnover and Earnings
In spite of a sluggish economy and declining demand for scrap steel, INTERSEROH posted
satisfactory figures in fiscal 2005. The consolidated group turnover amounted to EUR 946.91 million
(previous year: EUR 1,040.15 million). The EBT amounted to EUR 29.85 million (previous year: EUR
44.73 million) and the EBIT to EUR 32.73 million (previous year: EUR 49.06 million).
The steel and metal recycling segment once again contributed the largest share to
consolidated turnover, accounting for EUR 698.16 million (previous year: EUR 810.49 million). Its
share of consolidated turnover: 73.73 percent. The EBT amounted to EUR 11.88 million (previous
year: EUR 25.00 million) and the EBIT to EUR 16.01 million (previous year: EUR 29.93 million).
The consolidated turnover in the services and raw materials trading segment rose from EUR
229.66 million to EUR 248.75 million, accounting for a share of turnover of 26.27 percent. The EBT
amounted to EUR 20.92 million (previous year: EUR 27.81 million) and the EBIT to EUR 19.93 million
(previous year: EUR 27.37 million).
The net income of the group for the year amounted to EUR 18.97 million (previous year: EUR
29.6 million).
The consolidated financial statements were prepared in the year under review according to the
International Financial Reporting Standards (IFRS) for the first time. The comparative figures for the
previous year were also calculated according to IFRS.
Development in turnover in
the INTERSEROH Group in million euros
Turnover Change relative to
previous year
2000 394.7 39.2%
2001 369.5 -6.4%
2002 654.2 77.0%
2003 736.7 12.6%
2004 1,040.2 41.2%
2005 946.9 -9.0%
Development in turnover
in services and raw materials trading in million euros
Turnover Change relative to
previous year
2000 269.2 44.2%
2001 211.1 -21.6%
2002 235.6 11.6%
2003 226.2 -4.0%
2004 229.7 1.5%
2005 248.7 8.3%
Development in turnover
in steel and metal recycling in million euros
Turnover Change relative to
previous year
2000 125.5 29.5%
2001 158.4 26.2%
2002 418.6 164.3%
2003 510.5 22.0%
2004 810.5 58.8%
2005 698.2 -13.9%
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2. Business in Services Expanded; Packaging Volume Up
INTERSEROH’s service business developed satisfactorily overall.
Transport Packaging
INTERSEROH organises and coordinates the recycling of transport packaging for its industrial
contracting partners, including collection, transport, sorting and recycling. The volume of transport
packaging registered for recycling was increased. The reasons for this are the acquisition of new
customers in the traditional sectors and services that have been especially developed and
successfully marketed in the last few years for new customer groups, such as the sport and fitness
industry, the pet industry, the toy industry as well as the manufacturers of products for babies and
children. The turnovers were maintained at a steady level in spite of increased competition and
ongoing economic problems in some industries for which INTERSEROH has performed these
services for years. However, we had to accept significant losses in net income in the extension of
contracts from 2006 due to the strong competition in the services sector.
Commercial Sales Packaging
The INTERSEROH self-disposal solution can be used wherever empty sales packaging accrues in the
commercial sector. It is a cost-effective and legally safe solution for the collection and recycling of
sales packaging subject to quotas. All members of the INTERSEROH self-disposal community receive
all legally required documentation verifying their packaging has been recycled in conformity with
regulations. The mass flow verification documentation required in this regard is certified by an
independent, publicly appointed expert in accordance with the criteria of the State Working Group for
Waste Management (LAGA) and deposited with the German Chamber of Commerce and Industry
(DIHK). The INTERSEROH self-disposal community is based on a system in which packaging material
is collected from corresponding (branch-specific) collection points. These materials are sorted and
recycled in certified plants in accordance with official specifications. The INTERSEROH self-disposal
system for the collection and recycling of commercial sales packaging again enjoyed increasing
popularity in the year under review, both in traditional industries and among new customer groups –
for example from the food industry – for which INTERSEROH has developed and successfully
marketed customised solutions in the last few years.
Household Sales Packaging
Rulings allowing the Dual System INTERSEROH for the collection of household sales packaging were
passed in the year under review by the relevant environment ministries in Saarland, Berlin, North
Rhine-Westphalia, Lower Saxony, Bremen, Schleswig-Holstein and Saxony-Anhalt. Together with the
permits already granted in Hamburg and Bavaria in 2004, the Dual System INTERSEROH reached 61
percent of the German population as of 31 December 2005. All applications still outstanding were
submitted by the end of 2005. The new INTERSEROH service has met with a great deal of interest
from the distributors of sales packaging. The first contracts were still signed in 2005. Strong
competition is exerting pressure on profit margins especially in this sector.
Recycling Management
The field of recycling management underwent stable development with moderate growth. In this field
we conclude full-service contracts for nationwide or regional services with commercial and food
companies, petroleum companies, leisure parks, hospitals and railway stations. INTERSEROH
organises the recycling of all their waste and prepares the data on volumes and costs on a sitespecific
basis. Within the framework of this service INTERSEROH has assumed logistical and
recycling services for the stand-alone solutions in the retail sector since introduction of the mandatory
deposit system, for example the collection of disposable PET packaging and the associated
documentation.
Deposits on Disposable Drink Packaging
INTERSEROH has taken over the Westpfand deposit system, i.e. Westpfand Clearing GmbH and
Deutsche Pfand-Konzept GmbH, completely. Following complete acquisition, the deposit system now
operates as “INTERSEROH Pfand-System GmbH” and is a subsidiary of ISD INTERSEROH
Dienstleistungs GmbH. As a provider of a full range of services, INTERSEROH wants to offer all the
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modules needed to cover the services necessary following the abolition of the so-called stand-alone
solutions as from May 2006.
Old Electrical and Electronic Equipment
Based on its experience in organising the collection and recycling of waste products for companies
from various industries, INTERSEROH has developed services for the collection and recycling of old
electrical and electronic equipment and regularly invited manufacturers to information events through
to February 2005. The participants had the opportunity to discuss topics with renowned speakers from
politics, industry and trade. INTERSEROH also presented its comprehensive package of solutions for
the take-back and disposal of old equipment, which may be used as needed by the customers:
documentation, logistics, processing and marketing. With its individualised advice, INTERSEROH has
demonstrated its competence in all questions concerning the recycling of old electrical and electronic
equipment and has convinced a number of manufacturers of such equipment to register their
equipment with INTERSEROH. The “INTERSEROH Guarantee Model for Old Electrical and Electronic
Equipment” is the first independent guarantee model for the take-back and recycling of old electrical
and electronic equipment to be approved by the Stiftung Elektro-Altgeräte-Register (EAR). The system
offers manufacturers and importers from all branches of the electrical and electronics industry an
uncomplicated solution whereby to fulfil their legal obligations and ensure the take-back and disposal
of their equipment far into the future as well. INTERSEROH assumes the statutorily required
trusteeship, thus providing guarantee and full-service in disposal and recycling by one and the same
company.
With its proven recycling of transport packaging, self-disposal system, Dual System
INTERSEROH and services for product recycling, INTERSEROH offers a complete portfolio of
services for manufacturers, importers and traders subject to legal waste disposal obligations.
Niche Businesses and Low-Volume Logistics
The Repasack System for the return and recycling of used kraft paper bags registered declines in
licensed volumes compared to the previous year due to the sluggish domestic economy. The licensed
volumes of ISD INTERSEROH Dienstleistungs GmbH for kraft paper bags also fell.
The school and kindergarten project “Meike – der Sammeldrache” of the ISD branch office
“Grüne Umwelt-Box” continued its success in 2005 as well. The number of participating schools
amounts to more than 11,300 (previous year: 10,000) and kindergartens to more than 2,800 (previous
year: 3,000). The number of sponsoring partners rose to above 5,000 (previous year: 3,300).
The amendment to the Packaging Ordinance of 28 May 2005 removed the obstacles to the
introduction of compostable packaging on to the market in Germany. Until 31 December 2012 the
manufacturers and distributors of this innovative form of packaging merely need to show that “as much
of the packaging as possible is passed on for utilisation”. Experts now expect strong growth in this
form of packaging in Germany as well. Growth of 30 to 50 percent has been recorded in neighbouring
European countries in the past two years. The manufacturers and users of compostable packaging
established an advisory board at INTERSEROH at the end of August to help in the further
development and implementation of a utilisation system. Several large German supermarket chains
have been selling fruit and vegetables in compostable packaging since the summer of 2005. Contracts
have been signed between the users and INTERSEROH for the qualified support of the market launch
and communication on utilisation.
14

3. Raw Materials Trading Under One Roof
Due to the changes on the market, primarily the strong growth in the demand for raw materials
internationally and increasing tendencies for concentration on the recycler side, INTERSEROH is
orientating itself more and more with its traditional competencies on trading in raw materials. The
coordination and management of group-wide trading activities in wastepaper, old wood and plastics,
excluding steel and metal, have therefore been united under the umbrella of ISR INTERSEROH
Rohstoffe GmbH since 1 July 2005.
The situation on the raw material markets is as follows:
Wastepaper
The development of new production capacities in Southeast Asia and ongoing high demand in
Germany resulted in stable wastepaper prices overall. In detail: the prices for wastepaper in Germany
rose strongly from February to May 2005, dropped in the summer months of June and July and then
moved sideways from August to November. They dropped again in December. Wastepaper prices in
Southeast Asia developed similarly, albeit at a level well above German prices due to the
establishment of new production capacities there. In France the paper prices tended to be relatively
weak because of the intense competition in the country.
In spite of increased competition for free wastepaper volumes, the tonnage marketed by ISR
rose to 504,300 tons (previous year: 446,650 tons).
The French subsidiary INTERSEROH CDI S.A.S. was renamed to INTERSEROH France
S.A.S. Its situation improved further thanks to the restructuring measures carried out in fiscal 2004. In
spite of the intense competition, especially for higher-quality old printer paper volumes, INTERSEROH
France was able to protect its market shares and even expand them in some regions. This enabled
the successful acquisition of new big customers. INTERSEROH France erected a new site in
Strasbourg. The total tonnage traded amounted to close on 507,000 tons (previous year: 560,000
tons). The decline in tonnage can be attributed mainly to the sale of the Pierrefitte site.
INTERSEROH has given up its paper activities in Belgium. Padec S.A. was closed down and
s.a. Emile Sanglier was sold. A part of the business activities of Padec S.A. were transferred to
INTERSEROH France. The changes made to management and sales did not produce the lasting
earnings power wanted.
INTERSEROH is the market leader in the collection and recycling of used kraft paper bags.
Repasack GmbH managed to keep the tonnage of used kraft paper bags marketed at the previous
year’s level. ISD INTERSEROH Dienstleistungs GmbH enjoyed the same development.
Old and Residual Wood
Following a slight decline in the purchase prices for old wood, partly also attributable to the weather,
prices rose again significantly after 1 June 2005. The selling prices for old wood for thermal utilisation
dropped. The reason for this development is the prohibition on dumping of untreated organic materials
contained in the TASi. There were only minor adjustments in the prices for grades suitable for material
recycling.
INTERSEROH managed to increase both its trading volumes and the volumes accrued at its
wood sites slightly in the year under review compared to 2004. The trade in old wood and other types
of biomass was expanded to Denmark and Poland.
Due to the continued growth in the importance of old wood, INTERSEROH made several
important investments in 2005.
The processing capacity at the INTERSEROH wood site in Bückeburg was raised
considerably with a new preliminary fragmentising plant. INTERSEROH also expanded the wood site
NRW to supply the biomass-fuelled combined heating and power station in Lünen. Supplies to the
power station are due to start in the second quarter of 2006. A rail logistics system for old wood with
wagon sets between France and Germany was installed.
Plastics
Rising prices with a plus of 20 percent overall characterised the past financial year. Prices slumped at
the end of the year. We were able to increase the volumes of plastic marketed significantly and
consolidate our position on the market. International trading activities were expanded.
15

The domestic economy did not have any serious effects on the volumes of EPS (polystyrene)
marketed. They were kept at the previous year’s level. The prices for this raw material developed like
those for plastic. Increased expenditure on transport due to toll payments was offset completely.
INTERSEROH Kunststoffaufbereitung GmbH in Aschersleben has fulfilled the expectations
placed in it and is on a growth course. It manufactures and then markets regranulates from EPS.
Aschersleben is located at the intersection of the important industrial regions of Halle/Leipzig,
Magdeburg, Bitterfeld and Berlin and therefore offers substantial logistical advantages.
4. Steel and Metal Recycling: Declining Crude Steel Production Reduces Volumes
The year 2005 was again characterised by extreme volatility in scrap steel prices. Following true
booms in prices to October 2004, the decline in scrap steel prices continued from the end of 2004 to
June 2005. Many European steelworks cut back their production in order to prop up steel prices. The
demand for steel weakened, stocks were still well-filled. This decline in demand coincided with still
relatively high scrap steel supply, especially from Russia and the Ukraine. Scrap steel prices rose in
July and August. In the months thereafter they dropped slightly to the end of 2005.
The reduction in the demand for scrap steel also diminished the tonnage marketed by
INTERSEROH. Due to the declines in prices, activities in direct sale business, where margins are
comparatively weak, were reduced in favour of warehouse business, where margins are higher. Direct
sale business where margins were too low were given up completely.
Due to the strong demand for also older used vehicles and the lack of harmonisation in
dumping legislation in Europe (see also section 1. B), the number of car bodies in Germany dropped.
Nevertheless, INTERSEROH’s processing capacities are largely being used to the full. The sites were
modernised with extensive investments in shredder technology to meet the requirements of the
Technical Instructions for Domestic Waste. For example, INTERSEROH Jade-Stahl in Wilhelmshaven
and INTERSEROH MAB Rostock invested in a new non-ferrous metal and shredder light fraction
separation plant respectively. A new fine dust filter plant was installed at INTERSEROH Evert Heeren
in Leer.
The tonnage of non-ferrous metals was increased.
In keeping with the concentration tendencies on the buyer side, the INTERSEROH Group
expanded its market position and therefore competitiveness in the steel and metal recycling segment
further.
The company “Franz Jungnickel” in Marktredwitz / Bavaria was bought in an asset deal. Apart
from steel and metal scrap, it also recycles paper and plastics. It has been merged into INTERSEROH
Franken Rohstoff GmbH, Sennfeld.
The activities of the company “Serog H. Suhrbier GmbH” in Bous / Saarland were also bought
in an asset deal. It will operate in future under the name of INTERSEROH Serog GmbH.
The two acquisitions have further improved INTERSEROH’s coverage for the collection and
processing of these materials. INTERSEROH is now ranked second among German scrap
processors.
On 1 July 2005 INTERSEROH also acquired a 70-percent interest in RHS Rohstoff Handel
GmbH in Stuttgart. This has strengthened activities in the trading of non-ferrous metals even further.
These three acquisitions brought a total of almost 150,000 annual tons of steel and metal
scrap into the group.
The subsidiary INTERSEROH Hetzel GmbH began moving from Heidelberg to the harbour in
Mannheim towards the end of the year under review. The move should be complete in autumn 2006.
Hetzel will then operate one of the most modern recycling plants in Germany.
Due to the strong demand in Eastern Europe for old cars and relocation of labour-intensive
production to these countries, the amount of scrap steel being generated there is also rising. It is
therefore INTERSEROH’s strategy to increase its presence in these countries. Our associated
company in Szczecin in Poland, TOM, increased its presence with four additional sites. With 10 sites,
TOM is now the market leader in Western Poland. A new company was established in St. Petersburg,
Russia, at the end of 2005.
16

Secondary raw materials 2004/2005 including steel and
metal recycling
2004 2005
Total volume in t Total volume in t
Wastepaper 1,119,400 1,104,900
Old wood 635,400 649,700
Plastics 106,100 123,900
Kraft paper bags 14,800 15,800
Scrap metal 109,400 134,600
Scrap steel 3,650,700 3,127,600
Composites 49,600 27,900
Other secondary raw materials 16,700 14,100
5. Investments Up
The current investments for the financial year totalled EUR 28.07 million (previous year: EUR 13.64
million), consisting mostly of accruals to property, plants and equipment at EUR 21.91 million
(previous year: EUR 12.29 million), especially land and buildings at EUR 4.34 million, technical
equipment and machinery at EUR 4.95 million and other facilities, fittings and equipment at EUR 4.66
million. Advances to suppliers and investments in construction amounted to EUR 7.97 million,
primarily for alterations to various sites and the construction of large mechanical plants.
The accruals to intangible assets totalled EUR 3.84 million, mainly for the costs of EUR 1.57
million incurred by the closing date for software that is to be introduced group-wide and goodwill of
EUR 1.55 million.
The accruals to at-equity participations of EUR 0.2 million resulted from the transformation of a
shareholder’s loan to equity.
Investments in the field of long-term financial assets mounted to EUR 2.12 million in the year
under review. Contained in this amount are EUR 0.95 million as the share of a group company not yet
consolidated as of 31 December 2005. Also included are accruals in the field of long-term loans to
affiliated and associated companies not yet consolidated and to external third parties totalling EUR
1.01 million.
The services and raw materials segment accounted for EUR 14.19 million of the current
investments. The investments in intangible assets of EUR 1.94 million went primarily on the
implementation of new software, for which advances of EUR 1.36 million were paid in 2005. A total of
EUR 10.44 million was invested in fixed assets. The accruals in the field of fixed assets fell mainly on
advances to suppliers and investments in construction of EUR 5.47 million, of which EUR 4.89 million
were spent on alterations to a site belonging to INTERSEROH Holzkontor NRW and on technical
equipment and machinery as well as other facilities, fittings and equipment at EUR 3.08 million and
EUR 1.84 million respectively.
The accruals in the field of long-term financial assets of EUR 1.80 million comprised mainly
the purchase of the shares of a subsidiary company not consolidated in 2005 (EUR 0.95 million), longterm
loans to unconsolidated affiliated companies (EUR 0.40 million) and long-term loans to external
third parties (EUR 0.38 million).
The steel and metal recycling segment accounted for EUR 13.88 million. The accruals in
intangible assets of EUR 1.81 million comprised mainly goodwill of EUR 1.47 million resulting from the
acquisition of three metal recycling plants and the costs of EUR 0.21 million for the implementation of
new software. A total of EUR 11.47 million was invested in property, plants and equipment, EUR 4.29
million of which in land and buildings, EUR 1.86 million in technical equipment and machinery as well
as EUR 2.82 million in other facilities, fittings and equipment. The advances to suppliers and
investments in construction totalling EUR 2.50 million were spent primarily on two scrap cutters and a
recycling plant.
The accruals in the field of long-term financial assets of EUR 0.40 million comprised mainly
long-term loans to associated companies at EUR 0.23 million.
17

6. Financing Measures: Net Debt Reduced
The overwhelming majority of current payment transactions and current account balances for major
domestic INTERSEROH companies are concentrated in three banks operating throughout Europe.
The relevant accounts are included in a cash pooling arrangement. The former Hansa companies
have a separate cash pooling arrangement with the same banks as with INTERSEROH AG. The
security for the cash pooling credit line is provided by INTERSEROH AG.
Bank liabilities dropped in the year under review by EUR 8.26 million to EUR 33.85 million and
liquid funds from EUR 31.23 million to EUR 29.48 million. The net debt of the group to banks therefore
dropped by EUR 6.51 million.
With equity of EUR 118.44 million, the group’s equity ratio is 37.28 percent. This capitalisation
represents a very solid foundation for the further development of INTERSEROH. Future investments
will be financed – as far as possible – from own funds.
7. Human Resources and Social Security: Qualification Measures Improved
Workforce Grows
The average size of the group’s workforce over the year amounted to 1,301 (previous year: 1,254).
The services and raw materials trading segment employed an average staff of 593 (previous
year: 572). The number of employees was 400 (previous year: 370) and the number of industrial
workers 193 (previous year: 202).
An average of 707 people were employed in the steel and metal recycling segment in the
financial year (previous year: 682), comprising 246 employees (previous year: 246) and 461 industrial
workers (previous year: 436).
Carefully Tailored Qualification Measures
INTERSEROH introduced a new personnel development concept in the year under review. The
concept is based on a model, with whose help necessary skills are defined and existing skills
identified. In this connection INTERSEROH also subjected its evaluation system to a thorough review.
This was followed by the development of further education and training plans. The purpose of these
plans is to support the individual development of senior and junior management personnel so that
existing and future tasks can be solved even more competently than in the past. The qualification
programs of the individual subsidiaries of the INTERSEROH Group have been adapted accordingly.
INTERSEROH again offered IT and other specialised seminars as well as interdisciplinary
training course on subjects such as personality development and behavioural training in 2005. Internal
job vacancies are advertised throughout the group. With this policy INTERSEROH offers an additional
opportunity for the further development of its employees.
New Employee Performance System Developed
To help improve the personal performance of INTERSEROH employees, interviews are held with
employees in the fourth quarter of every year to agree individual objectives for the following year with
the employees. In a pilot project the group developed a simplified performance system that is now
available to all group companies.
Clear Information for Newcomers
To give new employees a quick idea of the overall group and its growth, INTERSEROH has
developed a group information system, which presents the activities of the individual subsidiary
companies clearly and efficiently. Its purpose is to promote transparency and inter-company
cooperation. Due to the growing fields of business, the group information system is not a static
instrument, but is updated regularly.
Company Pension Scheme Supported
Analysis of one’s own personal income and life situation is an important building block in the search
for suitable retirement pension possibilities. The INTERSEROH Group has made arrangements so
that its employees can have such an analysis performed by qualified consultants. INTERSEROH
supports the selected insurance products with an employer contribution of 10 percent. Around 20
percent of the workforce have already made use of this opportunity.
18

INTERSEROH Wins Top Job Third Time Running
ISD INTERSEROH Dienstleistungs GmbH took part in the project Top Job for the third time. This
competition looks for the best employers in Germany once a year. INTERSEROH was counted among
these employers for the third time in succession.
Social Commitment Continued
During the First Cologne Volunteer Day in September 2003 INTERSEROH committed itself to a
lifelong partnership with a Cologne orphanage, which involves regular participation by INTERSEROH
employees and was continued in the year under review. INTERSEROH again also supported the
activities of the association Diagnose Leukämie e.V., which works to promote the healing of children
suffering from leukaemia.
8. Environmental Protection is an Integral Part of Our Business
The term “closed loop economy” conveys a concrete promise for sustainable use of natural resources
in production and consumption and has become a guiding principle. Sustainability is an integral
component of INTERSEROH’s philosophy. By closing recycling loops, the group generates streams of
raw materials to supply industry. In this way INTERSEROH makes a valuable contribution to the
creation and development of demand for recycled raw materials and thus to the protection of natural
resources. For INTERSEROH, therefore, environmental protection is not a side issue, but the object of
its business activities.
Like all companies, INTERSEROH is subject to international, national and regional
environmental laws, ordinances and guidelines. To ensure compliance, the group’s operations are
continually inspection by certification companies because almost all INTERSEROH plants are certified
as specialist waste disposal companies and 95 percent already have a certified quality management
system in place.
To meet the requirements of the Old Auto Ordinance and Technical Instructions for Domestic
Waste and its implicit ban on dumping of untreated organic wastes, numerous plants have been
installed at the group’s scrap yards for further separation of the so-called shredder light fraction (e.g.
plastics, foamed materials, rubber). As a result of this, even greater proportions of old cars are
returned to the material cycle – protecting scarce raw material resources and minimising the amount
of waste that has to be disposed of.
9. Marketing and Advertising: New Marketing Campaign Launched
INTERSEROH launched a selective marketing campaign to support the sales activities for the Dual
System INTERSEROH (DSI). Advertisements were placed in various publications, whose target
readership are potential DSI customers, since late summer 2005. At the centre of the campaign, which
was supported by multi-stage mailing campaigns and the work of a call centre, stood the world’s
largest food and beverage fair “anuga” in Cologne. INTERSEROH also participated in the anuga from
8 to 12 October 2005 with its own exhibition booth, which also covered the INTERSEROH deposit
system and INTERSEROH self-disposal system. In this way a few hundred promising talks with
representatives from the target group in the food industry were held.
INTERSEROH also exhibited at other important trade fairs in 2005. At the Paperworld in
Frankfurt in January INTERSEROH presented not only the traditional service of recycling of transport
packaging, but also the modus operandi for the collection of empty ink and toner cartridges and its
know-how in all questions concerning the recycling of old electrical and electronic equipment. At the
Interpack in Düsseldorf in April INTERSEROH demonstrated its services for the recycling of
packaging. Also in April, INTERSEROH was present with a large exhibit at the International Trade Fair
for Water, Sewage, Refuse, Recycling (IFAT), one of the leading environment fairs worldwide.
Numerous talks were held with private and municipal waste management companies at this industry
meeting. In addition to these trade fairs, INTERSEROH was also present at important branch fairs of
its individual business segments.
The third, and for the time being last, INTERSEROH information event on implementation of
the European WEEE directive and German law on old electrical and electronic equipment took place
on 28 February 2005. The conference focussed on concretisation of the future recycling of old
equipment as a result of the law in Germany, implementation of the directive in the other member
states of the European Union and the resultant organisational possibilities. INTERSEROH also
presented its organisational solutions especially for the national sector.
19

INTERSEROH also launched the fourth generation of its group website at the address
www.interseroh.de in the past financial year. The complete redesign has made the website clearer
and more user-friendly. The websites of the group and subsidiary companies were adapted to the
corporate design.
The information brochures and flyers for existing and potential customers were updated and
new flyers produced in German and English due to the expansion in services offered by the group.
10. Public Relations: Resonance in the Media Grows Further
INTERSEROH held four large press conferences in the year under review. In addition to the press
conference on its annual financial statements and its autumn press conference, INTERSEROH also
presented itself and its new services to media representatives at the IFAT in Munich in April and its
new marketing campaign for the Dual System INTERSEROH in September.
Contacts to general-interest and trade media were intensified through visits to editorial offices
and individual talks. They were followed by interviews and guest commentaries in the print media,
radio and television. INTERSEROH also regularly issued press releases to provide up-to-date
information on all important business activities. The press releases were published simultaneously on
the Internet at the INTERSEROH website. INTERSEROH was mentioned in numerous articles and
programs throughout the year. The regionalisation of public relations introduced in 2005 because of
the approximately 70 INTERSEROH sites broadened the company’s presence in the media.
INTERSEROH again distributed its newsletter FaxFacts to its partners in 2005. The newsletter
focuses on developments in environmental policy and related INTERSEROH services. Four issues of
the customer magazine CIRCLE were published, each with a circulation of at least 17,000 copies.
11. Investor Relations: Interest in INTERSEROH Share Grows Further
The INTERSEROH AG stock was again viewed by the financial community as an attractive alternative
in the year under review. Investor relations work was intensified accordingly. The INTERSEROH
Management Board and IR officer held numerous one-to-one talks with analysts and institutional and
potential investors from Germany, Austria, Great Britain, France and the USA in the company’s
headquarters. Investor conferences and numerous road shows with the Management Board in
Frankfurt, Munich and Zurich met with great interest. INTERSEROH is now regularly observed and
analysed by various German financial analysts.
In 2005 private investors also increasingly made use of the possibility of approaching the IR
officer directly with their questions.
In November INTERSEROH participated in the Cologne Stock Forum organised by the
German investor protection association Schutzvereinigung für Wertpaperbesitz e.V. (DSW) and
Cologne-based Börsenverein e.V. In this event German and international public stock corporations
give private investors an opportunity to inform themselves from sources otherwise open only to
institutional investors and analysts. INTERSEROH AG invited the private shareholders known to it to
this event.
INTERSEROH authorised a new designated sponsor with effect from 1 May 2005.
All the items on the agenda for the ordinary general shareholders’ meeting in June 2005 were
adopted with a large majority. The ordinary general shareholders’ meeting for 2006 will be held in
Cologne on 22 June.
The press conference convened to present the annual financial statements reported on the
economic development of the INTERSEROH Group. INTERSEROH informed the public about the
economic development of the company in the individual quarters of the year in press releases.
Analysts, institutional and private investors also received this information in the form of shareholder
letters. The information was also published simultaneously on the Internet at the INTERSEROH
website.
In the course of the website facelift the category “Investor Relations” was revised completely
and expanded to include further information.
On 25 November 2005 the Management Board of INTERSEROH AG was notified that the
company Praetorium 61. VV GmbH had decided to offer to buy the ordinary bearer shares of
INTERSEROH Aktiengesellschaft zur Verwertung von Sekundärrohstoffen without par value from the
shareholders of INTERSEROH Aktiengesellschaft zur Verwertung von Sekundärrohstoffen in a public
takeover bid against payment of a purchase price of EUR 26.60 per ordinary share. Praetorium 61. VV
GmbH, in future Isabell Finance Vermögensverwaltungs GmbH, is a company in the ALBA Group.
20

Praetorium 61. VV GmbH currently holds 25.75 percent of the shares in INTERSEROH
Aktiengesellschaft zur Verwertung von Sekundärrohstoffen.
Security type: Domestic share, bearer share
Quoted: Regulated markets in Frankfurt, Düsseldorf and XETRA trading; regulated unofficial markets
in Stuttgart, Munich, Hamburg and Berlin-Bremen
Financial year: 31.12.
Notifiable shareholders: Praetorium 61. VV GmbH (25.75%)
Float: 74.25%
Par value: EUR 2.60
Shares: 9.84 million
Bloomberg code: ITS.ETR
Reuters code: INSG.de
ISIN: DE0006209901
German securities identification number: 620990
PRICE AND TURNOVER STATISTICS
IN EUROS
XETRA
FRANKFURT
Highest variable price 29.32 31.00
Lowest variable price 17.10 16.60
Spread 52.64 % 60.50 %
Opening price 1 st day of trading 17.10 17.25
Closing price 27.60 27.41
Performance 61.40 % 58.90 %
12. Dividend Yield 3.14 Percent
Based on INTERSEROH AG’s retained earnings of EUR 8,462,400, the Management Board is able to
propose a dividend of EUR 0.86 per individual share certificate for the past financial year to the
Supervisory Board and general shareholders’ meeting (previous year: EUR 0.86). Related to the
closing price of EUR 27.41 at the Frankfurt Stock Exchange at the end of December 2005, the
dividend yield amounted to 3.14 percent.
13. INTERSEROH Identifies with Corporate Governance
Good corporate governance comprises all the principles for responsible and best-possible
management practice and corporate control by generally accepted values. It pursues the object of
communicating reliability, securing the confidence of shareholders, business partners, staff and
general public and influencing the intrinsic value of the company positively over the long term by way
of exemplary conduct.
Shareholder rights, the quality of the Supervisory Board and the guarantee of reasonable
transparency are all important components of a value-orientated corporate philosophy. In addition to
them and the complete internal organisational structure, including the company’s risk management,
the German Corporate Governance Code (DCGK) was adopted on 26 February 2002, with whose
recommendations and ideas the Management Board and Supervisory Board overwhelmingly identify.
The aims of keeping the company in good shape, to which the Supervisory Board and
Management Board of INTERSEROH AG are committed, were pursued vigorously by the boards in
the past. They are codified to a large part in applicable laws, the company’s bylaws and in the rules of
procedure of the INTERSEROH Group.
Within the INTERSEROH Group, only INTERSEROH AG writes a governance report. There is
no such obligation for other companies in the group. INTERSEROH AG has not set up any own
corporate governance principles.
Shareholders and the General Shareholders’ Meeting
For INTERSEROH, guaranteeing shareholder rights and holding a shareholders’ meeting that is
orientated towards the shareholders, with the possibility of permanent voting by proxy, as an annual
21

forum for direct contact with the Management Board and Supervisory Board are enduring components
of business management.
Due to a lack of interest, broadcasting of the general shareholders’ meeting via the Internet is
currently not planned.
Management Board and Supervisory Board
The Management Board and Supervisory Board continuously work together closely for the well-being
of INTERSEROH. The full Supervisory Board, the Chairman’s Committee, the Personnel Committee
and the Audit Committee meet regularly or when required. Regarding the frequency of meetings,
reference is made to the Report of the Supervisory Board. The Audit Committee is chaired by neither
the Chairman of the Supervisory Board nor a former member of the Management Board of the
company. The Supervisory Board also deliberates when necessary without the Management Board.
Following the voluntary public takeover bid by Isabell Finance Vermögensverwaltung GmbH
on 5 January 2006, the Management Board did not convene an extraordinary general shareholders’
meeting for discussion or resolution on legal measures. According to the joint statement of the
Management Board and Supervisory Board on 17 January 2006 pursuant to § 27 of the German
Securities Acquisition and Takeover Act, there is no additional need for information or resolutions by
the general shareholders’ meeting.
INTERSEROH AG does not use stock option programmes or similar securities-orientated
incentive systems. The variable compensation of the Management Board does not contain stock
options or comparable arrangements.
Transparency, Submission of Accounts and Auditing
In addition to the possibility of direct contact with the company at any time, INTERSEROH also
continually publishes information on important developments in the group on the Internet at the
address www.interseroh.de.
A portrait of the company as well as its annual reports, quarterly reports and information on
certain services are also available there in English.
The annual financial statements are prepared both in accordance with the German
Commercial Code and the consolidated financial statements also in accordance with the International
Financial Reporting Standards (IFRS). The external audit including priority audits are conducted by
KPMG Deutsche Treuhand-Gesellschaft Wirtschaftsprüfungsgesellschaft in Cologne.
The shares in the company and related financial instruments owned by the members of the
Management and Supervisory Boards are listed in the annex. According to this list, the Supervisory
Board Chairman Dr. Axel Schweitzer and the Supervisory Board member Dr. Eric Schweitzer together
hold a voting share of 25.75 percent in INTERSEROH AG. The voting rights are attributable to both
gentlemen according to § 22, Par. 1, No. 1 Securities Trading Act.
Deviations
Where the group deviated or deviates from the recommendations of the DCGK in isolated cases, this
is stated in the declarations of compliance by the Management Board and Supervisory Board of
INTERSEROH AG. They can be called up on the Internet at http://www.interseroh.de/Investor-
Relations.
14. Major Transactions in the Financial Year
Apart from the business development in the services and raw materials trading and steel and metal
recycling segments already described, the following transactions in the year under review must also
be mentioned.
Acquisition of Companies
ISD INTERSEROH Dienstleistungs GmbH acquired the companies DPK Deutsche Pfandkonzept,
Cologne, and Westpfand Clearing GmbH, Cologne, completely with economic effect from 1 January
2005. DPK was merged into Westpfand. The company operates as INTERSEROH Pfand-System
GmbH, Cologne.
INTERSEROH RSH Recycling-Stahl-Handel acquired INTERSEROH RSH Sweden, Göteborg
/ Sweden, effective from 30 November 2005.
Sale of Companies
INTERSEROH France S.A.S., Paris / France, sold SUD Papier International S.A., Mello / France, with
effect from 22 December 2005.
22

Formation of New Companies
Formation and registration of INTERSEROH d.o.o., Croatia, was completed on 4 May 2005.
Assignment
ISD INTERSEROH Dienstleistungs GmbH transferred its operations in paper and plastic raw materials
trading to ISR INTERSEROH Rohstoffe GmbH, Cologne, with legal effect from 1 January 2005 and
operational effect from 1 July 2005.
Renaming of Companies
The French company INTERSEROH CDI S.A.S. has been operating under the name of
INTERSEROH France S.A.S. since 1 September 2005.
Management Board
Michael Mevissen, responsible for the services and raw materials trading segment, left the
Management Board of INTERSEROH AG on 30 June 2005. He was succeeded by Roland Stroese on
8 October 2005.
Conversion to SAP
In order to standardise the financial accounting and controlling software used in the group and to
simplify reporting, the complete financial accounting and cost accounting including fixed asset
accounting in the subsidiaries of the INTERSEROH Group are being converted to SAP successively
beginning with the current financial year. This process will prospectively be completed in October
2006. The higher level of automation in reporting will enable better and sooner compliance with the
stricter requirements resulting from the change to application of the International Financial Reporting
Standards (IFRS). The related effects will be cost savings, higher efficiency and better quality.
15. Total Return on Capital Employed as Management Instrument
The Management Board of INTERSEROH AG stipulates the strategy for the corporate divisions and
group subsidiaries and manages their business. The management system aims at a reasonable return
on capital employed. This applies to both equity and debt capital. To meet this goal, the main
management parameter for group companies is the total return on capital employed. This is defined in
the group as the ratio of EBIT to total capital.
In addition to this, the discounted cash flow method is used to valuate investments, both in
financial and fixed assets. The future payments surpluses are discounted with the help of the weighted
capital costs on the valuation date. Together with a required minimum return and a minimum
amortisation period, the cash values achieved by every single investment should secure and expand
the total return on capital employed of the group.
Due to the volatility of raw material prices, the return on sales often named in other groups is
not a telling parameter for the INTERSEROH Group as a total entity.
23

C. PRESENTATION AND EXPLANATION OF THE EARNINGS AND FINANCIAL POSITION AND
KEY CONSOLIDATED RATIOS
1. Earnings Position
EUR
million %
2005 2004 Change
EUR
million %
EUR
million
Turnover 946.91 101.8 1,040.15 98.1 -93.24
Increase/Decrease in inventories -17.09 -1.8 20.68 1.9 -37.77
Total performance 929.82 100.0 1,060.83 100.0 -131.01
Cost of materials -763.45 -82.1 -876.31 -82.6 112.86
Gross profit 166.36 17.9 184.52 17.4 -18.16
Other operating income 5.55 0.6 3.95 0.4 1.60
Operating income 171.91 18.5 188.47 17.8 -16.55
Personnel expenses -64.82 -7.0 -64.66 -6.1 -0.15
Scheduled depreciation -11.49 -1.2 -11.79 -1.1 0.30
Operating and administrative expenses -41.35 -4.4 -41.65 -3.9 0.30
Selling expenses -27.52 -3.0 -23.79 -2.2 -3.73
Non profit related taxes -1.27 -0.1 -1.51 -0.1 0.24
-146.45 -15.8 -143.41 -13.5 -3.04
Operating result 25.46 2.7 45.06 4.2 -19.59
Investment result 0.97 0.1 2.56 0.2 -1.58
Interest result -2.88 -0.3 -4.33 -0.4 1.45
Other financial result 0.09 0.0 0.10 0.0 -0.01
Result from ordinary operations 23.64 2.5 43.38 4.1 -19.73
Extraordinary depreciation -1.18 -0.36 -0.82
Results relating to other periods 7.39 1.72 5.67
Earnings before taxes 29.85 44.73 -14.89
Taxes on income -10.88 -15.13 4.25
Consolidated net income 18.97 29.60 -10.63
Profit/Loss for other shareholders -0.52 -0.21 -0.31
Consolidated unappropriated net
income 18.44 29.39 -10.95
Turnover dropped by 8.9 percentage points (EUR 93.24 million) in the past financial year. The main
reason for this decline in turnover is the drop in raw material volumes in the steel and metal recycling
segment compared to the previous year.
The selling expenses rose by 15.7 percentage points (EUR 3.73 million) compared to the
previous year. The main reason for this was increased expenditure on transport and storage as well
as on advertising.
The results relating to other periods rose compared to the previous year primarily due to
increased use of provisions and use of value adjustments on receivables.
The taxes on income dropped by an absolute sum of EUR 4.25 million due to the lower net
group result compared to the previous year. The tax rate rose by 2.6 percent to 36.4 percent.
24

2. Financial Position
31.12.2005 31.12.2004 Change
Assets EUR million % EUR million % EUR million
⋅ Intangible assets 23.99 7.5 21.33 6.9 2.66
⋅ Property, plants and equipment 60.23 19.0 52.71 16.9 7.52
⋅ Holdings valued at equity 6.64 2.1 6.43 2.1 0.21
⋅ Financial assets 4.23 1.3 4.80 1.5 -0.57
⋅ Other receivables 0.44 0.1 0.16 0.1 0.28
⋅ Deferred tax claims 5.79 1.8 9.05 2.9 -3.26
Long-term assets 101.31 31.9 94.48 30.3 6.83
⋅ Inventories 37.97 11.9 42.47 13.6 -4.50
⋅ Trade accounts receivable 126.91 39.9 132.13 42.4 -5.23
⋅ Financial assets 1.95 0.6 0.27 0.1 1.68
⋅ Other receivables 10.11 3.2 8.20 2.6 1.91
⋅ Current income tax claims 10.01 3.2 2.66 0.9 7.35
⋅ Liquid assets 29.48 9.3 31.23 10.0 -1.75
Short-term assets 216.43 68.1 216.97 69.7 -0.54
317.74 100.0 311.45 100.0 6.29
31.12.2005 31.12.2004 Change
Passiva EUR million % EUR million % EUR million
⋅ Subscribed capital 25.58 8.1 25.58 8.2 0.00
⋅ Reserves 91.08 28.7 80.97 26.0 10.11
⋅ Share of equity attributable to the
shareholders of INTERSEROH AG 116.66 36.7 106.55 34.2 10.11
⋅ Minority interests 1.78 0.6 0.54 0.2 1.24
Shareholders’ equity 118.44 37.3 107.09 34.4 11.35
⋅ Provisions for pensions 20.12 6.3 20.20 6.5 -0.08
⋅ Other long-term provisions 3.43 1.1 5.46 1.8 -2.03
⋅ Deferred tax liabilities 2.87 0.9 3.66 1.2 -0.79
⋅ Financial liabilities 17.32 5.5 32.73 10.5 -15.41
⋅ Other long-term liabilities 0.76 0.2 2.61 0.8 -1.85
Long-term debt 44.49 14.0 64.66 20.8 -20.17
⋅ Provisions 3.74 1.2 3.71 1.2 0.03
⋅ Current income tax liabilities 4.64 1.5 6.70 2.2 -2.06
⋅ Financial liabilities 27.72 8.7 15.43 5.0 12.29
⋅ Trade accounts payable 97.74 30.8 91.00 29.2 6.74
⋅ Other short-term liabilities 20.97 6.6 22.86 7.3 -1.89
Short-term debt 154.80 48.7 139.70 44.9 15.10
317.74 100.0 311.45 100.0 6.29
The total assets of the group rose by EUR 6.29 million (2.0 percent) to EUR 317.74 million in 2005.
The long-term assets grew by EUR 6.83 million mainly due to the high investments in fixed
assets (EUR 21.91 million).
The changes in short-term assets of EUR 0.54 million can be attributed to two opposing
effects. Whereas inventories and trade accounts receivable in particular fell by EUR 4.5 million and
EUR 5.23 million respectively – primarily due to a drop in turnover in the steel and metal recycling
segment – income tax claims rose by EUR 7.35 million.
The equity ratio in the group improved by 2.9 percentage points from 34.4 percent in 2004 to
37.3 percent in 2005.
The changes in debt capital can be attributed mainly to changes in the field of long and shortterm
financial liabilities. While long-term financial liabilities fell by EUR 15.41 million, short-term
financial liabilities rose by EUR 12.29 million. The changes in long and short-term financial liabilities
25

esult from the restructuring from long-term bank loans to short-term loans and the resultant
repayments and new short-term bank loans.
The trade accounts payable rose by 7.4 percentage points (EUR 6.74 million) compared to
the previous year, mainly due to the increase in liabilities from contracts in the services and raw
materials trading segment.
26

3. Key Consolidated Ratios in %
Balance Sheet Ratios Definition
2005 2004
- Intensity of property, plants Property, plants and equipment according to balance
and equipment
sheet x 100/total assets 19.0 16.9
- Inventory turnover Turnover according to income statement/inventories
according to balance sheet 24.9 24.5
- Turnover of accounts Turnover according to income statement/trade
receivable
accounts receivable according to balance sheet 7.5 7.9
- Equity ratio Shareholders’ equity according to balance sheet x
100/total assets 37.3 34.4
Earnings Ratios Definition
- Return on sales Earnings before interest and taxes according to
income statement x 100/turnover according to income
statement 3.6 4.8
- Return on equity Earnings after tax according to income statement x
100/equity according to balance sheet 16.0 27.6
- Return on capital employed Earnings before interest and taxes according to
income statement x 100/total assets 10.7 16.0
- Return on investment (ROI) Operating result according to earnings position x
100/(assets less financial assets) 8.3 15.0
- Intensity of materials Cost of materials according to income statement x
100/total operating performance according to income
statement 82.1 82.6
- Intensity of personnel Personnel expenses according to income statement x
100/total operating performance according to income
statement 7.0 6.1
- Financial result ratio (Investment, interest and other financial result)
according to income statement x 100/earnings before
taxes according to income statement -6.1 -3.8
27

D. OTHER INFORMATION
1. Transactions of Special Importance After the Close of the Financial Year
On 5 January 2006 the company Isabell Finance Vermögensverwaltungs GmbH (formerly Praetorium
61. VV GmbH) submitted a voluntary public takeover bid to the shareholders of INTERSEROH AG. All
the information necessary according to law was published immediately on the website of
INTERSEROH AG.
2. Risk Management System Updated
INTERSEROH’s risk strategy calls for avoiding, hedging or insuring specific risks. These risks are
operational risks resulting from day-to-day business. The goal is not to avoid all potential risks, but to
establish room for manoeuvre to enable conscious risk-taking based on comprehensive knowledge of
the risks involved and the overall context of the risks.
Further development of the risk management system in order to provide necessary and
successful support to the segments of the INTERSEROH Group was again the goal and responsibility
of group management and the segment directors in fiscal 2005.
Risks and Opportunities from the Market Environment
The dynamic development in raw material markets worldwide with highly volatile prices in 2004
continued as expected in fiscal 2005. Price fluctuations in Germany are still driven to a large extent by
developments in key markets such as the USA and Asia. This high volatility is one of the chief risks in
the complete raw materials segment as well as in the steel and metal recycling segment. The
developments in the Chinese economy and steel industry also play an important role. Chinese
demand and the raw material markets are expected to continue their expansion. Foreign demand,
therefore, continues to be the major driving force behind raw material prices.
The high level of prices in the steel sector underwent adjustments in 2005, to which
INTERSEROH responded with a conservative inventory and sales policy. Although fluctuations in
earnings could not be ruled out as a result, they could be kept at a level corresponding to plan.
Paper prices hovered around almost the same level as the year before. Remedial measures
by some processors, who were affected by empty order books, only had an influence on contract
volumes. The prices for plastic rose again in 2005, before dropping towards the end of the year. The
purchase prices for old wood remained on average at the previous year’s level and were influenced by
the volumes on offer. The volume of old wood available is adequate to meet the needs of the biomass
power stations according to market estimates.
Risks and Opportunities from the Group Environment
Regarding the risks from the original services business of the group, reference is made to the reports
on the individual segments and the section “Foreseeable Development, Possible Chances and
Potential Risks”.
Risk Management System
The risk management system extends to and integrates all operational units of the group, and includes
the following characterising elements:
• strategic planning at segment level;
• detailed short and medium-term planning at individual company level;
• monthly reporting of events and developments (financial, earnings and liquidity position) for all
group companies;
• centralised reporting on receivables based on structure and risk potential;
• assessment of price change risks (value-at-risk analysis) in all raw materials trading segments;
• timely hedging of exchange rate risks;
• IT coordination, management and standardisation;
• coordination of insurance;
• weekly status report on overall group liquidity as basis for short-term and strategic financial
management;
• bank ratings (non public);
• investment procedures and controlling;
• internal audits (assigned directly to the Chairman of the Management Board) with regular audit
reports on routine and extraordinary audits;
28

• organisational manual as binding guideline for all group units;
• rules of procedure with defined approval requirements;
• contract review;
• personnel recruitment and development;
• ongoing expert opinions on tax matters;
• purchase coordination;
• certification, quality, environmental and safety management based on certifiable criteria;
• complete end-of-year audits.
Individual hedging transactions are concluded for non-payment risks on current accounts, for
price change risks and for liquidity risks.
Trade credit insurance policies are generally taken out with the normal excesses from
international insurance companies for all debtors.
In the case of some non-ferrous metals a certain market price level is secured by hedging
negotiable items at suitable exchanges (e.g. London Metal Exchange) if a significant risk to the
planned margin could occur for the respective underlying transaction. Price change risks are also kept
low with a conservative inventory and valuation policy.
Group companies must hedge transactions in foreign exchange upwards of a value of EUR
25,000. Foreign currency items above this limit are sold to banks directly after concluding the
transaction. Adequate group liquidity is ensured at all times even under the payment flow fluctuations
that exist by way of short-term investments and needs-orientated facilities at INTERSEROH’s banking
partners.
The responsible segment representatives (management of the core areas), acting on behalf of
the expanded group of risk managers (the risk managers of the individual companies), must make
quarterly assessments of risks qualifying as “existential risks”. The assessments, which relate to the
core areas, must take information from day-to-day business and the overall context of the relevant
markets into account. In this way INTERSEROH ensures that all risks from the environment of each
operational unit can be assessed directly.
The principal risks are defined as follows:
1. Strategic risks – inadequate vision and strategy
2. Strategic risks – inadequate integration of strategic orientation into the management of individual
companies and communication
3. Strategic risks – inadequate customer orientation: trading and sales (particularly steel and metal
scrap)
4. Strategic risks – inadequate customer orientation: services
5. Risks from new acquisitions (projects/corporate acquisitions)
6. Risks from customer relations – dependence on customers
7. Risks from customer relations – dependence on suppliers
8. Investment and financing risks
These principal risks are all assigned glossaries (sub-risks), which the risk managers also use
for their assessments. Together with their assessment of the principle risks, the risk managers were
also asked to name and assess any new risks they have identified. No new risks were named.
The probability of occurrence of the standard individual risks in 2005 is seen as lower in five of
the eight risk categories compared to 2004 and only exceeds the “low” category slightly in one case
(previous year: three cases) (Risks from customer relations – dependence on suppliers).
The change results primarily from the improved estimation of the activities of INTERSEROH
France S.A.S. (formerly CDI), whose situation has improved following the restructuring measures that
were implemented.
The values for risk effect are seen slightly higher today by the risk managers .
The overall risk assessment remained unchanged in the moderate category. This estimation
has not changed fundamentally since 1999, and therefore there is again no reason for short-term
measures.
Risk Inventory at Segment Level
The risk inventory per segment was updated. The individual risks in the inventories were assigned
probabilities of occurrence, potential effects on the earnings situation estimated and appropriate
measures initiated.
29

From a group point of view, the analysis revealed the following risk issues:
• negative influences on earnings and market share in the services segment due to the ongoing
consolidation in the waste disposal branch with larger, more comprehensive groups of waste
disposal companies expected to form based on systems and raw materials;
• reduced margins due to the intensification in competition in the field of transport packaging
recycling;
• low-margin new business;
• short-term changes in relevant legal conditions in the field of packaging disposal and deposits on
disposable packaging as well as legal rulings (regulatory risks);
• high volatility in the prices for the fractions in which INTERSEROH trades;
• increased competition in the steel and metal recycling segment due to large mergers;
• developments in the steel-producing industry.
Although the remaining risks may indeed become significant for the individual segments or
units, they will not impact noticeably on the group as a whole. Risks that pose a fundamental danger
to INTERSEROH in a broader sense or which threaten the very existence of the company are not
apparent at the moment.
3. Foreseeable Development, Possible Chances and Potential Risks: New Fields of Business
Unfold Their Operational Impact
The estimation of the short to medium-term development of the INTERSEROH Group is based on
current expectations and assumptions regarding the effects of future events and economic conditions
on the operational companies.
Services
INTERSEROH has lost contracts with partners in two branches for which it has recycled transport
packaging for many years. This will result in a drop in registration fees and raw material revenues.
Due to growing competition, a significant drop in margins also had to be accepted on the extension of
contracts. According to expert opinion, private consumption will grow in 2006. INTERSEROH expects
the packaging volumes of its customers to remain stable.
INTERSEROH will continue to acquire further self-disposal service providers in the segment of
established disposal services and anticipates rising volumes and turnover in this regard.
INTERSEROH is also working steadily on the development of customised solutions for new customer
groups. INTERSEROH is confident it will be able to grow again in these segments. Potential risks lie in
the increased price competition in the field of INTERSEROH services, which could affect profits in this
segment. INTERSEROH expects a stable development in its recycling management segment with
moderate growth.
INTERSEROH sees growth opportunities in the current financial year and 2007 primarily in its
new fields of business. Most noteworthy in this regard is the Dual System INTERSEROH (DSI) for the
collection of domestic sales packaging. Following strong interest in this service among potential
customers already in the year under review and conclusion of the first contracts, INTERSEROH
expects a strong growth in customers as the number of rulings licensing the DSI in the individual
federal states increases. However, due to the intensity of competition, the margins in this field are
under pressure. A potential risk lies in the new calls for tender by Duales System Deutschland AG for
waste disposal services. The current contracts run to 31 December 2006. INTERSEROH is therefore
doing its utmost to obtain the outstanding rulings licensing it in the individual federal states by the time
the calls for tender start in mid 2006.
It is INTERSEROH’s aim to compensate the declines in earnings in the transport packaging
recycling sector in part by developing higher-turnover, albeit lower-margin DSI business.
The INTERSEROH deposit system is another growth field. With the elimination of the standalone
solutions of the large discount stores in May 2006, a completely new market will emerge.
INTERSEROH is in a position to offer all the modules necessary for the resultant services. In addition
to this, the take-back obligation of the manufacturers and importers of electrical and electronic
equipment has established a new service on the market. INTERSEROH also plans to generate
additional turnovers and earnings in this field.
The international activities will be expanded steadily especially in Eastern Europe. Operational
effects are expected in the current financial year.
30

Since the services segment will continue to be characterised by increasing competition in the
future as well, INTERSEROH will intensify its marketing activities further.
Raw Materials Trading
Potential risks exist in the volatility of raw material prices. INTERSEROH’s turnover should,
accordingly, also be evaluated on the basis of the level of these raw material prices.
The group-wide concentration of raw material activities on ISR INTERSEROH Rohstoffe
GmbH has enabled an even more efficient bundling of volumes vis-à-vis the concentration in demand
on the user side.
It is expected that the overheated market for plastics will continue to cool down in 2006, with
prices declining sharply. The volume of EPS (polystyrene) in 2006 will depend on the economic
situation.
INTERSEROH plans to expand its marketing activities to generate further volumes of plastic
and wastepaper. It also intends to acquire companies and/or joint ventures.
The influence on the market of the additional volumes of old wood for thermal utilisation will
probably continue in 2006 following the introduction of the TASi. INTERSEROH expects stable
demand from the thermal utilisation plants thanks to the commissioning of new biomass-fuelled
combined heating and power stations and higher availability of the plants that already exist. The
derived timber products industry in currently investing vigorously to enable substitution of residual and
forest wood with old wood in chip boards. This will result in additional demand for high-quality old
wood.
INTERSEROH plans to invest in the expansion of its wood sites in Wuppertal and Worms. To
improve regional coverage throughout Germany, it plans to buy new wood sites or expand existing
ones. Together with the volumes of old wood from abroad and utilisation possibilities in foreign
countries, INTERSEROH aims to expand its position as European trading platform in old wood.
Steel and Metal Recycling
INTERSEROH expects demand for scrap steel to remain stable in the current financial year. It sees
opportunities primarily in the expansion and modernisation of its sites to improve their efficiency and in
the expansion of international direct sales business. In addition to this, the group strategy aims to
establish a stronger presence in the Baltic states and other countries in Eastern Europe and to find
suitable sites there. Increased quantities of scrap steel are being generated in these countries due to
the relocation of labour-intensive production to them. The main risks lie in the high volatility of scrap
prices.
Risks are also seen in the ongoing concentration of the market and in the increased expansion
of capacities by competitors.
Since the legal regulations for environmental protection undergo continuous change, are becoming
increasingly stricter and further tightening will occur due to new EU directives, investments may
become necessary in the group in the future, the amount and time of which are difficult to predict.
4. Research and Development
Due to the fields of activity it is involved in, the INTERSEROH Group places a great deal of
importance on market research and working of the market. INTERSEROH does not engage in
research and development in the normal sense.
31

5. Branch Offices
The group has one branch office in the sense of the German Commercial Code. It is INTERSEROH-
Trading, a branch office in Frankfurt of INTERSEROH Hetzel GmbH in Heidelberg.
Cologne, February 2006
INTERSEROH Aktiengesellschaft zur Verwertung von Sekundärrohstoffen
The Management Board
Dr. Werner Kook Johannes-Jürgen Albus
Christian Rubach Roland Stroese
32

ANNUAL FINANCIAL STATEMENTS OF THE INTERSEROH GROUP FOR FISCAL 2005
Consolidated Balance Sheet
as of 31 December 2005
Assets Note 31.12.2005 31.12.2004
EUR EUR
Long-term assets
Intangible assets (12) 23,985,639.32 21,330,552.16
Property, plants and equipment (13) 60,230,724.70 52,709,473.67
Holdings valued at equity (14) 6,637,057.95 6,430,971.75
Financial assets (15) 4,228,227.76 4,800,649.13
Other receivables (19) 435,761.64 157,482.61
Deferred tax claims (16) 5,794,102.38 9,054,058.13
101,311,513.75 94,483,187.45
Short-term assets
Inventories (17) 37,968,808.34 42,472,215.45
Trade accounts receivable (18) 126,905,787.91 132,131,005.39
Financial assets (15) 1,954,516.24 273,820.10
Other receivables (19) 10,114,026.95 8,200,042.03
Current income tax claims (19) 10,011,019.46 2,664,026.46
Cash and cash equivalents (20) 29,475,494.96 31,228,983.53
216,429,653.86 216,970,092.96
317,741,167.61 311,453,280.41
Liabilities Note 31.12.2005 31.12.2005 31.12.2004 31.12.2004
EUR EUR EUR EUR
Equity
Share of equity attributable to the
shareholders of the parent
company
Subscribed capital (21) 25,584,000.00 25,584,000.00
Reserves (22) 91,081,294.62 116,665,294.62 80,965,301.57 106,549,301.57
Minority interests 1,778,721.67 537,878.46
118,444,016.29 107,087,180.03
Debt
Long-term debt
Provisions for pensions and similar
liabilities (23) 20,118,490.62 20,202,554.00
Other long-term provisions (24) 3,426,815.76 5,464,021.10
Deferred tax liabilities (16) 2,868,873.14 3,664,879.67
Financial liabilities (25) 17,317,018.64 32,725,324.04
Other liabilities (27) 761,641.46 44,492,839.62 2,612,172.13 64,668,950.94
Short-term debt
Provisions (24) 3,741,861.79 3,710,931.62
Current income tax liabilities (27) 4,638,332.67 6,701,169.61
Financial liabilities (25) 27,720,693.24 15,428,157.60
Trade accounts payable (26) 97,736,055.77 91,001,212.50
Other liabilities (27) 20,967,368.23 154,804,311.70 22,855,678.11 139,697,149.44
199,297,151.32 204,366,100.38
317,741,167.61 311,453,280.41
33

Consolidated Income Statement
for the Period from 1 January to 31 December 2005
Note 2005 2004
EUR EUR
1. Turnover (1) 946,908,637.21 1,040,152,766.97
2. Decrease (previous year: increase) in inventories of
finished goods and work in progress (2) -17,093,605.33 20,676,898.31
3. Other operating income (3) 17,426,827.30 12,450,600.97
4. Cost of materials (4) 763,453,319.29 876,310,319.05
5. Personnel expenses (5) 64,817,643.13 64,662,761.98
6. Depreciation on intangible assets and property, plants and
equipment (6) 12,280,256.74 11,794,868.38
7. Other operating expenses (7) 74,626,879.77 73,739,776.75
8. Result from investment in associated companies (8) 868,461.79 2,486,002.31
9. Financial earnings (8) 1,149,375.99 1,072,393.47
10. Financial expenses (8) 4,231,417.79 5,597,631.95
11. Earnings before taxes 29,850,180.24 44,733,303.92
12. Taxes on income and earnings (9) 10,882,370.11 15,134,418.34
13. Consolidated net income 18,967,810.13 29,598,885.58
14. Profit/Loss for other shareholders (10) -522,679.60 -211,137.64
15. Consolidated unappropriated net income 18,445,130.53 29,387,747.94
16. Basic earnings per share 1 (11) 1.87 2.99
1 There were no dilutive effects.
34

CONSOLIDATED NOTES FOR THE FINANCIAL YEAR 2005
Explanation of the Principles and Methods Applied for the Consolidated Financial Statements
I. General Information
The INTERSEROH Group is one of the leading service providers and raw material companies in
Europe. The business activities of the group can be divided into the segments of services and raw
materials trading as well as steel and metal recycling. As service provider INTERSEROH organises
recycling processes and as supplier supplies the paper, steel, plastics and derived timber product
industries as well as biomass power stations with more than five million tons of secondary raw
materials a year.
As a company listed on the stock exchange, INTERSEROH Aktiengesellschaft zur Verwertung
von Sekundärrohstoffen, Cologne, (hereinafter called “INTERSEROH AG” or “parent company”) must
according to Article 4 of the Regulation (EC) No. 1606/2002 of the European Parliament and of the
Council of 19 July 2002 on the application of international accounting standards (Official Journal of the
European Communities No. L 243, p. 1) prepare its consolidated financial statements for the financial
year 2005 according to the International Financial Reporting Standards (IFRS) adopted by the
European Union for the first time; the IFRS consolidated opening balance was prepared on 1 January
2004 (date of the changeover to IFRS according to IFRS 1, First-time Application of International
Financial Reporting Standards).
The consolidated financial statements have been prepared pursuant to § 315a German
Commercial Code (HGB) according to the regulations of the accounting rules valid on the closing date
in accordance with the International Financial Reporting Standards (IFRS) adopted by the EU and the
interpretations of the International Accounting Standards Board (IASB) in London. It complies with the
directives of the European Union on consolidated accounts (Directive 83/349/EEC) and comprises the
annual financial statements of INTERSEROH AG and its subsidiaries.
The previous year’s values for assets and liabilities were stated and valued in compliance with
IFRS 1 according to those IFRS that must be observed obligatorily on 31 December 2005, the date
the consolidated financial statements were prepared according to IFRS for the first time.
The resultant differences in the assets and liabilities to the book values in the HGB
consolidated balance sheet as of 31 December 2003 were included as equity without influence on net
income at the time of the changeover to IFRS.
The Consolidated Notes also contain the information required according to the German
Commercial Code (HGB).
II. Consolidated Companies
Apart from INTERSEROH AG, the consolidated financial statements as of the closing date also
include a total of 25 inland and three foreign subsidiaries by way of full consolidation. The fully
consolidated companies fulfil the requirement that INTERSEROH AG directly or indirectly holds the
majority of voting rights in them. Four companies left the group of consolidated companies in the
financial year. One French and one Belgian subsidiary were sold. The two Belgian companies were
deconsolidated due to their resultant insignificance. Two companies inactive in the previous year and
therefore not consolidated then were added to the group of consolidated companies. The business
field “raw materials trading” was transferred from ISD INTERSEROH Dienstleistungs GmbH, Cologne,
to one of these new companies, ISR INTERSEROH Rohstoffe GmbH, Cologne, with economic effect
on 1 January 2005. The other company acquired the business activities of SEROG-Sekundär-
Rohstoff-Gewinnung H. Suhrbier GmbH, Bous, with economic effect from 1 June 2005 and will in
future operate as INTERSEROH SEROG GmbH, Bous. Seventy percent of the shares in RHS
Rohstoff Handel GmbH, Stuttgart, were also acquired with economic effect from 1 July 2005. In
addition to this, an already fully consolidated subsidiary acquired the business operations of the sole
proprietorship Franz Jungnickel, Marktredwitz, in an asset deal. The effects of these acquisitions on
the financial, earnings and liquidity position and the payment flows of the group are not of significant
importance.
The consolidated financial statements of INTERSEROH AG include – as in the previous year
– five companies (four inland and one foreign company) at equity.
35

Forty-six companies, which – also together – are of subordinate significance to the financial,
earnings and liquidity position and the payment flows of the group, were not included in the
consolidated financial statements.
The consolidated companies included by way of full consolidation or at equity are indicated in
the list of shareholdings attached to these Notes. The list also indicates the subsidiaries that were not
included due to their subordinate importance insofar as their size or the interest held in them directly
or indirectly makes this seem appropriate.
Below is a summary of the change in the group of consolidated companies in the financial year.
Number of companies Fully
consolidated
Valued at
equity
Not included due to insignificance
Interest
>50%
Interest
>20%

Current cash in banks or bank liabilities are converted with the buying exchange rate on the
closing date and other foreign currency sums with the rate on the transaction date. Insofar as the
exchange rate on the closing date is lower for receivables or higher for liabilities, the foreign currency
value is shown converted with the rate on the closing date. Resultant currency conversion differences
are included in the group income statement with effect on net income.
The consolidated financial statements are prepared in euros. The sums are – with the
exception of the consolidated balance sheet and consolidated income statement – shown in million
euros rounded up to two decimal places. Rounding differences to the unrounded sums occurred in
individual cases.
The balance sheets and income statements of all foreign subsidiaries included in the
consolidated financial statements by way of full consolidation are also prepared in euros.
Only one associated company prepares its annual financial statements in Polish zloty. The
sums incorporated in the consolidated financial statements are converted pursuant to IAS 21 (The
Effects of Changes in Foreign Exchange Rates) to euros by the functional currency concept.
The following rates were used as a basis:
1 euro
Closing date rate Average rate
2005 2004 2005 2004
Poland PLN 3.86343 4.08518 4.02880 4.088305
The currency differences resulting from the conversion of the proportionate equity are shown in the
equity of the group without influence on net income.
V. Accounting and Valuation Methods
The annual financial statements of the fully consolidated companies have generally been prepared in
accordance with standardised accounting and valuation methods. The methods and valuation rules
applied by the parent company are also observed by the subsidiaries. There were generally no
changes to the accounting and valuation methods between the IFRS opening date (1 January 2004)
and either 31 December 2004 or 31 December 2005.
Unlike the consolidated financial statements as of 1 January 2004, some short-term liabilities
from contracts in the services segment have been shown gross since 31 December 2004, i.e.
including turnover tax. By the same token the associated receivables from deferrals and accruals have
also been shown gross since 31 December 2004.
To improve clarity, individual items in the income statement and balance sheet have been
grouped together. They are explained in the Notes. In accordance with IAS 1 (Presentation of
Financial Statements), the balance sheet distinguishes between long and short-term assets and
between long and short-term debts. Short-term assets and debts are assets and debts that are
realised or eliminated respectively within a year.
The consolidated financial statements were prepared on the basis of historical acquisition and
production costs except for the derivative financial instruments, which were valued at their fair value.
Intangible assets are generally valued at acquisition cost less scheduled depreciation over
their respective periods of use. With the exception of goodwill with unlimited periods of use, intangible
assets are depreciated linearly over a period of two to15 years. Extraordinary depreciations are
effected when this is deemed appropriate in the course of the impairment tests performed at least
annually. When the reasons for extraordinary depreciations disappear, corresponding appreciations
are – with the exception of goodwill – effected, which may not exceed the updated book values.
In accordance with the option codified in IFRS 1, the goodwill from acquisitions before 1
January 2004 is updated according to previous law. This means the scheduled and extraordinary
depreciations effected in earlier periods are kept and goodwill netted out with equity without influence
on net income is not subsequently capitalised.
Property, plants and equipment are valued at acquisition or production cost less
accumulated depreciation and scheduled depreciation in the financial year. Interest on debt capital is
not capitalised.
Rented or leased intangible assets and property, plants and equipment, which according
to the requirements of IAS 17 (Leases) must be deemed economically as fixed asset acquisitions with
long-term financing (finance-leasing), are stated in the balance sheet at the time of commencement of
37

the contract at the cash values of the minimum leasing payments taking one-off payments into
consideration or at the lower fair values. They are written off by scheduled depreciation over their
normal period of economic use. If later transfer of ownership of the leased object is uncertain, the term
of the leasing contract is used as basis insofar as it is shorter. The payment obligations resulting from
the future leasing instalments are stated as financial liabilities.
The obligations to return the property to its original condition are included in the acquisition or
production costs of the asset concerned at the amount of the discounted performance sum and written
off linearly as scheduled depreciation over the normal period of use of the asset. The expected
liabilities are shown as provisions.
The costs for the repair of property, plants and equipment are generally netted out with effect
on net income. They are only capitalised if the costs result in an addition or significant improvement to
the respective asset.
The immovable property, plants and equipment (buildings and structures) are depreciated
linearly over the expected period of economic use. This also applies to movable property, plants and
equipment. When determining the depreciation sums, significant residual values remaining at the end
of the normal period of use are taken into consideration.
The retirement of minor fixed assets in the financial year is assumed.
When selling or closing down property, plants and equipment, the profit or loss from the
difference between the sales proceeds and residual book value are stated under other operating
income or expenses as the case may be.
The scheduled depreciations are based on the following periods of use and depreciations rates
standardised throughout the group:
Period of use Depreciation rate
Years %
Land and buildings
Business and factory premises and other buildings 25-50 2.00-4.00
Outdoor installations 5-33 3.33-20.00
Technical equipment and machinery 4-33 3.33-25.00
Other facilities, fittings and equipment
Vehicles 6-9 11.11-20.00
Fittings, office machines and equipment 3-25 4.00-33.33
Minor assets (up to EUR 410) < 1 year 100.00
Extraordinary depreciations may be effected in the course of the impairment tests performed
at least once a year. When the reasons for extraordinary depreciations disappear, corresponding
appreciations are effected.
The holdings valued at equity are initially entered with their acquisition costs and updated by
the equity method. If in the course of initial consolidation of these holdings hidden reserves or liabilities
were uncovered, they are – if applicable, taking the depreciations by the criteria already named into
consideration – also contained in this balance sheet item.
According to IAS 39 (Financial Instruments: Recognition and Measurement), financial assets
must among others be differentiated between “keep to maturity” and “available for sale”. They are
stated at their fair value or, if a fair value on an active market is not available and the fair value cannot
be measured reliably, at their updated acquisition costs.
At INTERSEROH both the long-term and the short-term financial assets are classified as
“available for sale” and valued at updated acquisition costs because their fair values cannot be
measured reliably.
Interest-free and low-interest loans are reported in the balance sheet at cash value and the
other loans at updated acquisition costs.
The raw materials, supplies and merchandise reported under inventories according to IAS 2
(Inventories) are valued at the lower value of average acquisition or production costs and their net
sales value, i.e. the sales proceeds achievable in the normal course of business less the estimated
completion and sales costs (principle of loss-free valuation). Apart from the individual costs, the
production costs also include reasonable shares of the necessary fixed and variable material and
production overheads insofar as they were incurred in connection with the production process. Costs
for administration are taken into consideration insofar as they fall on the production section.
38

According to IAS 39 (Financial Instruments: Recognition and Measurement), trade accounts
receivable are classified as “loans and receivables” and stated at acquisition costs. Where there are
doubts about their complete realisability, the receivables from customers are stated at their lower
realisable amount. Apart from the necessary individual value adjustments, the recognisable risks from
the general credit risk is accounted for by forming lump-sum value adjustments.
The financial assets shown in other receivables that according to IAS 39 are classed as
“loans and receivables” are value at their updated acquisition costs.
The deferred tax claims and liabilities are calculated according to IAS 12 (Income Taxes).
Deferred taxes are calculated firstly from the differences in time between the valuations of assets and
debts in the commercial and tax balance sheet and from consolidation processes and secondly on
realisable loss carry-forwards. The tax rates expected in the individual countries at the time of
realisation are used as basis for calculation. These are fundamentally based on the legal regulations
valid or adopted on the closing date. The municipal trade tax rate expected for the parent company is
used for all the companies domiciled in Germany.
Deferred taxes from loss carry-forwards are only taken into consideration when it appears
adequately certain that the loss carry-forwards can indeed be used for tax purposes. The loss carryforwards
usable for tax purposes are calculated by calculating the total planned EBIT for the next
three years for every company. The taxes due on this total planned EBIT per company are then
determined using the consolidated municipal trade tax and corporation tax rates and taking the tax
loss compensation rules into consideration and compared with the municipal trade tax and corporation
tax carry-forwards of the respective company. Finally the deferred taxes from loss carry-forwards are
determined at individual company level taking single-entity relationships for tax purposes into
consideration.
In accordance with the criteria in IAS 37 (Provisions, Contingent Liabilities and Contingent
Assets), where applicable also in accordance with IAS 19 (Employee Benefits), provisions are formed
for uncertain liabilities when it appears probable in each case that performance of a current obligation
will result in a direct outflow of resources that contain future economic benefits and the value of this
obligation or performance sum can be determined reliably, also in the form of estimates. All known
uncertain liabilities and risks concerning the past financial year are taken into consideration in the
performance sum with the highest probability of occurrence. If the expected scope of obligation is
reduced by a changed estimation, the provisions are reduced proportionately and the earnings
entered as other operating income.
In the case of long-term provisions the share that will only flow out after more than one year
and for which a reliable estimation of the payment sums or times is possible is stated at the cash value
calculated by discounting at an interest rate commensurate with the market and term.
Generally all financial liabilities are stated in accordance with IAS 39 (Financial Instruments:
Recognition and Measurement) at their updated acquisition costs using the effective interest method.
Financial debts designated as underlying transaction within a fair value hedge are entered as liabilities
at their fair value. The fair values stated for the financial debts are determined on the basis of the
interest rates valid on the closing date for the corresponding remaining terms and repayment
structures. Financial liabilities from finance-leasing contracts are entered as liabilities at the cash value
of the future leasing instalments.
The trade accounts payable are stated at their updated acquisition costs.
The other liabilities are stated at their repayment value insofar as they do not concern
derivative financial instruments.
Derivative financial instruments are used exclusively to reduce risks. They are used within
the framework of the group’s respective foreign currency regulations.
All derivative financial instruments are reported in the balance sheet in accordance with IAS
39 (Financial Instruments: Recognition and Measurement) at acquisition cost on first valuation and at
fair value on subsequent valuations and shown as “other receivables” or “other liabilities”.
For valuation of derivative financial instruments, the fair value is calculated using approved
financial models. The respective fair values stated correspond to the sum at which an asset or debt
could be settled between knowledgeable business partners not linked to each other and willing to
enter into such a contract.
Profits and losses from derivative financial instruments that are used exclusively as qualified
hedging instruments within a fair value hedge are entered in the income statement with effect on net
income. Any changes to the results from the ineffectiveness of these financial instruments are entered
immediately in the income statement with effect on net income.
Turnovers are realised at the time of the passage of risk or rendering of the service taking the
taxes and reductions in revenue that have to be deducted into consideration.
39

Review of Value by Impairment Tests
The value of assets are reviewed in the INTERSEROH Group at least once a year at year end or more
often if special reasons for this become apparent at the level of the cash generating unit (CGU) in the
sense of IAS 36 (Impairment of Assets). Based on the economic interdependencies, INTERSEROH
has identified the two segments of “services and raw materials trading” and “steel and metal recycling”
as independent cash generating units.
In the segment steel and metal recycling scrap is bought unsorted in small quantities, sorted,
processed if necessary and then sold in large quantities. Fundamentally the segment is transparent
regarding realisable selling prices and market developments in general. Further, the segment’s trade
volumes overall are significant to the consumers, which has an additional positive effect on the
negotiating positions of the individual companies. The contributions of the segment therefore result on
the whole from internal transparency of information in the segment combined with market and
especially price advantages from the segment-wide consolidation of sales volumes. In so far and due
to collective management by the parent company, the individual companies cannot be seen as “largely
independent”, but rather all companies in this segment are classified as a CGU.
The companies in the segment services and raw materials trading render waste disposal
services. The secondary raw materials obtained in the course of these services are consolidated and
resold to large customers by the same unit or a sister unit within the framework of contracts. Since the
companies in this segment are also managed collectively and both buying and marketing as well as
the related contributions cannot be seen independently of the other companies, the companies in this
segment also form a CGU together.
In the impairment tests the residual book values of the individual cash generating units are
compared with their respective recoverable amounts as the higher value of net selling price and value
in use. The calculation of the value in use is based on the cash value of future payments forecast for
the next three years in the current individual plans of the INTERSEROH Group by business field and
site. The cash value of the future payments corresponds here to the average planned EBIT for the
following three years on the basis of an earning capacity factor of five.
The plans are based on the assumption that against the background of the new general
election and the related positive effect on consumption the economy will grow by up to 1.4 percent. It
was further presumed that the year 2006 will remain difficult due to the comparatively high
unemployment, the continued structural problems in Germany and restrained spending due to the
uncertain pension and labour market situations.
It is presumed consumption in the services segment will improve and therefore also the
economic situation of the industries concerned. The level of June 2005 was presumed as price basis.
A price basis at the level of June 2004 was used for the planning of the steel and metal
recycling segment.
The capital costs are considered at the average of equity and debt capital weighted by their
respective market values, with the equity capital costs corresponding to the yield expectations of
management for the business and the debt capital costs the current financing conditions of the
INTERSEROH Group.
If the recoverable amount of the cash generating unit calculated in this way is lower than its
book value, there is an impairment loss amounting to the difference. In the event of an impairment loss
the value of any goodwill in the cash generating unit concerned is first adjusted. Any residual amount
still remaining after this is distributed proportionately to the other assets of the respective cash
generating unit on the basis of the residual book values of every single asset on the closing date.
No indication of a need for value adjustments emerged in the course of the impairment tests..
Use of Assumptions and Estimates
Assumptions and estimates were made when preparing the consolidated financial statements that had
an effect on the reporting and amount of the assets, debts, earnings, expenses and contingent
liabilities. These assumptions and estimates relate on the whole to the definition of periods of
economic use, the valuation of provisions and the realisability of future tax relief used uniformly
throughout the group. The actual values can differ in each individual case from the assumptions and
estimates made.
Changes are made with effect on net income when better is known.
40

Notes on the Income Statement
The consolidated income statement is organised by types of expense (total cost procedure).
(1) Turnover
Due to the settlement system, turnover includes accrued and deferred revenues from current business
activity to the amount of EUR 4.45 million (previous year: EUR 3.83 million).
The development in turnover by fields of business and regions is shown in the segment
reports.
(2) Increase/Decrease in inventories of finished goods and work in progress
Inventories Inventory change
2005 2004 2005 2004
EUR million EUR million EUR million EUR million
Work in progress 7.42 10.35 -2.93 9.20
Finished goods 8.38 22.37 -13.99 11.16
-16.92 20.36
Other changes -0.17 0.32
(3) Other operating income
-17.09 20.68
2005 2004
EUR million EUR million
Earnings from the reduction of “provisions” and “accruals” 8.16 6.00
Earnings from the disposal of assets 0.99 1.25
Insurance compensation 1.04 1.01
Rental income 0.70 0.75
Offset remuneration in kind for employees 0.83 0.75
Earnings from the reduction of individual value adjustments 1.22 0.68
Earnings from deconsolidations 0.20 0.00
Other 4.29 2.01
17.42 12.45
(4) Cost of materials
2005 2004
EUR million EUR million
Purchased raw materials and merchandise, less cash discount 626.39 760.57
Waste disposal costs 92.37 72.96
Storage and freight costs 33.17 32.84
Energy costs 6.19 5.63
Other services purchased 5.33 4.31
763.45 876.31
The group’s cost of materials includes accrued and deferred expenses from purchased services to the
amount of EUR 2.61 million (previous year: EUR 1.12 million).
41

(5) Personnel expenses
2005 2004
EUR million EUR million
Wages and salaries 53.14 52.70
Social security contributions 11.13 11.34
Expenses for pensions and other benefits 0.55 0.62
64.82 64.66
(6) Depreciation on intangible assets and property, plants and equipment
2005 2004
EUR million EUR million
Scheduled depreciation 0.98 0.94
Intangible assets 10.51 10.85
Property, plants and equipment 11.49 11.79
Extraordinary depreciation
Property, plants and equipment 0.79 0.00
12.28 11.79
The extraordinary depreciations on property, plants and equipment concern reverse vending machines
that can no longer be used due to a change in standards (EUR 0.64 million) and tenant additions to a
building no longer used from spring 2006 (EUR 0.15 million).
(7) Other operating expenses
2005 2004
EUR million EUR million
Operating and administrative expenses
Maintenance costs 11.18 12.89
Rents and other room costs 6.18 7.80
Legal. consulting and annual report costs 5.44 5.28
Insurance policies 4.51 3.64
Leasing expenses 3.31 1.96
Telephone. postage. Internet 1.70 1.72
Other tax expenses 1.27 1.51
Other operating and administrative expenses 9.04 8.36
42.62 43.16
Selling expenses
Costs of goods delivery 16.70 14.47
Advertising and travelling expenses 6.08 5.80
Temporary personnel leasing 4.20 2.71
Other selling expenses 0.54 0.82
27.52 23.79
Accrued and deferred expenses
Value adjustments on receivables 1.95 2.01
Losses from disposal of assets 0.49 1.37
Transfers to provisions for restructuring 0.62 0.00
Other accrued and deferred expenses 1.42 3.42
4.49 6.79
74.63 73.74
42

(8) Result from investment in associated companies
2005 2004
EUR million EUR million
Result from holdings valued at equity 0.87 2.49
Financial earnings
Earnings from other holdings 0.10 0.07
Earnings from long-term loans 0.09 0.10
Other interest and similar earnings 0.96 0.90
1.15 1.07
Financial expenses
Depreciation on financial assets -0.39 -0.36
Interest on transfers to pension provisions -1.01 -1.03
Interest on leasing instalments from finance-leasing contracts -0.31 -0.29
Other -2.52 -3.92
-4.23 -5.60
-2.21 -2.04
The extraordinary depreciations on financial assets are made on the respective current value on the
closing date and concern interests in associated companies and other holdings not included in the
consolidated financial statements (previous year: EUR 0.18 million plus loans to third parties of EUR
0.18 million).
(9) Taxes on income and earnings
The taxes on income and earnings contain the taxes on income and earnings paid or due in the
individual countries and the deferred tax apportionments. The main German companies in the
INTERSEROH Group are subject to an average municipal trade tax rate of 18.37 percent of profit
before income tax. The corporation tax rate is 25 percent plus a solidarity surcharge on corporation tax
of 5.50 percent. The total tax rate is 39.90 percent. The deferred taxes on loss carry-forwards are
calculated taking the restrictions currently in force in Germany on the setting off of losses in
subsequent periods for tax purposes.
The calculation of deferred taxes is based on the expected tax rates in the individual countries
at the time of realisation. These are fundamentally based on the legal regulations valid or adopted on
the closing date.
The calculation of foreign income tax is based on the valid laws and regulations in the
individual countries. The income tax rates applied to foreign companies vary from 25 to 34 percent.
2005 2004
EUR million EUR million
Taxes paid or due
for the current year 8.76 11.46
for previous years -0.34 0.17
8.42 11.63
Deferred taxes
on temporary differences -0.44 3.20
on change loss carry-forwards 2.91 0.31
2.46 3.51
10.88 15.14
The share of actual tax expenditure falling on foreign subsidiaries amounts to EUR 0.06 million
(previous year: EUR 0.09 million).
No expenses or earnings arose from the change to the income tax rates used.
43

The actual expenditure on income tax can be derived from the expected tax expenditure for the past
consolidated financial year as follows:
2005 2005 2004 2004
EUR million EUR million EUR million EUR million
Earnings before taxes 29.85 44.73
Expected income tax expenditure
(39.90%) 11.91 17.85
Effects of lower national tax rates 0.07 -0.05
Deferred taxes on results of foreign
subsidiaries not considered 0.74 -0.54
Tax-free earnings by holdings, incl. result
from at-equity valuations -0.39 -1.02
Deviating use of loss carry-forwards for
tax purposes 0.19 -4.13
Change to non capitalised deferred taxes
on temporary differences of foreign
subsidiaries -1.03 3.01
Accrued and deferred tax expenses and
earnings -0.34 0.34
Non tax-deductible operating expenses 0.07 0.17
Other deviations -0.34 -1.03 -0.50 -2.72
Actual income tax expenditure 10.88 15.13
(10) Profit/Loss for other shareholders
The profit/loss for other shareholders of EUR 0.52 million (previous year: EUR 0.21million) concerns
exclusively profit shares (previous year: EUR 0.30 million profit shares and EUR 0.09 million loss
shares).
(11) Earnings per share
The earnings per share are calculated by subtracting the profit/loss for other shareholders from the
consolidated net income and then dividing the result by the number of shares issued. Dilutive effects
did not have to be taken into consideration in either the year under review or the previous year.
With a consolidated unappropriated net income of EUR 18.44 million (previous year: EUR
29.39 million) and an unchanged number of issued shares of 9,840,000, this results in an earnings per
share of EUR 1.87 (previous year: EUR 2.99).
44

Notes on the Balance Sheet
(12) Intangible assets
Goodwill
EUR million
Other
intangible
assets
EUR million
Total
EUR million
Acquisition/Production costs
As of 01.01.2004 18.90 4.58 23.48
Accruals from consolidation changes 0.41 0.00 0.41
Accruals 0.09 0.45 0.54
Retirements -0.03- 0.14 -0.17
Reorganisations 0.00 0.03 0.03
As of 31.12.2004 19.37 4.93 24.29
Value adjustments
As of 01.01.2004 0.00 2.23 2.23
Accruals, scheduled 0.00 0.79 0.79
Retirements 0.00 -0.06 -0.06
As of 31.12.2004 0.00 2.96 2.96
Book values
As of 01.01.2004 18.90 2.35 21.25
As of 31.12.2004 19.37 1.96 21.33
Acquisition/Production costs
As of 01.01.2005 19.37 4.92 24.29
Accruals 1.55 2.28 3.83
Retirements 0.00 -0.36 -0.36
As of 31.12.2005 20.92 6.84 27.76
Value adjustments
As of 01.01.2005 0.00 2.96 2.96
Accruals, scheduled 0.00 0.83 0.83
Retirements 0.00 -0.02 -0.02
As of 31.12.2005 0.00 3.77 3.77
Book values
As of 01.01.2005 19.37 1.96 21.33
As of 31.12.2005 20.92 3.07 23.99
The goodwill reported in the consolidated financial statements consists of residual book values of
goodwill from the initial consolidation of subsidiaries to the amount of EUR 15.49 million (previous
year: EUR 15.12 million) as well as the goodwill taken over from the individual financial statements to
the amount of EUR 5.42 million (previous year: EUR 4.25 million). A sum of EUR 0.90 million
(previous year: EUR 0.49 million) was spent in the year under review for the acquisition of companies
(share deal). This resulted in goodwill of EUR 0.30 million (previous year: EUR0.41 million). In addition
to this, goodwill to the amount of EUR 1.17 million (previous year: EUR 0.00) was generated in asset
deals, which can be attributed to the fact that the customer relations acquired cannot be entered in the
balance sheet as independent intangible asset. The remaining accruals in 2005 are based on
subsequent acquisition costs to the amount of EUR 0.08 million. All purchase prices were settled
exclusively by transfer of funds.
The other intangible assets contain intangible assets with a residual book value of EUR 0.55
million (previous year: EUR 0.64 million) that are to be capitalised in the course of finance-leasing
contracts. There were no accruals in this segment in fiscal 2005. The depreciations on these assets
amounted to EUR 0.09 million (previous year: EUR 0.09 million).
No extraordinary value adjustments had to be made in the financial year (e.g. due to
impairment tests). All depreciations on intangible assets are contained in the income statement item
“Depreciation on intangible assets and property, plants and equipment”.
Except for the leased assets, there are no restraints on ownership or disposal or acquisition
obligations regarding the intangible assets.
45

(13) Property, plants and equipment
Land and
buildings
EUR million
Technical
equipment
and
machinery
EUR million
Fittings and
equipment
EUR million
Advances to
suppliers,
investments in
construction
EUR million
Total
EUR million
Acquisition/Production
costs
As of 01.01.2004 61.74 82.54 50.28 0.22 194.77
Accruals from consolidation
changes 1.06 0.00 0.52 0.00 1.58
Accruals 1.43 4.90 4.37 1.59 12.29
Retirements -1.43 -5.31 -6.43 -0.09 -13.26
Reorganisations 1.17 0.06 0.05 -1.30 -0.02
As of 31.12.2004 63.97 82.18 48.79 0.42 195.36
Value adjustments
As of 01.01.2004 32.23 69.32 37.47 0.00 139.02
Accruals from consolidation
changes 0.01 0.00 0.28 0.00 0.29
Accruals, scheduled 2.06 4.47 4.47 0.00 11.01
Retirements -0.54 -3.06 -4.08 0.00 7.67
Reorganisations 0.00 0.01 -0.01 0.00 0.00
As of 31.12.2004 33.77 70.75 38.13 0.00 142.65
Book values
As of 01.01.2004 29.51 13.22 12.81 0.22 55.76
As of 31.12.2004 30.20 11.44 10.66 0.42 52.71
Acquisition/Production
costs
As of 01.01.2005 63.97 82.19 48.79 0.42 195.37
Accruals from consolidation
changes 0.00 0.00 0.04 0.00 0.04
Retirements from consolidation
changes -1.34 -1.03 -0.35 0.00 -2.72
Accruals 4.33 4.95 4.66 7.97 21.91
Retirements -0.21 -4.92 -3.79 -0.55 -9.47
Reorganisations -0.07 0.28 -0.13 -0.08 0.00
As of 31.12.2005 66.68 81.47 49.22 7.76 205.13
Value adjustments
As of 01.01.2005 33.76 70.74 38.13 0.00 142.63
Accruals from consolidation
changes 0.00 0.00 0.01 0.00 0.01
Retirements from consolidation
changes -0.65 -0.73 -0.31 0.00 -1.69
Accruals, scheduled 2.02 4.34 4.31 0.00 10.67
Accruals, extraordinary 0.15 0.41 0.00 0.23 0.79
Retirements -0.13 -4.12 -3.26 0.00 -7.51
Reorganisations -0.03 0.00 0.03 0.00 0.00
As of 31.12.2005 35.12 70.64 38.91 0.23 144.90
Book values
As of 01.01.2005 30.21 11.45 10.66 0.42 52.74
As of 31.12.2005 31.56 10.83 10.31 7.53 60.23
The property, plants and equipment contain assets to the amount of EUR 3.80 million (previous year:
EUR 4.92 million) whose underlying rental or leasing contracts are, due to the IFRS criteria applied, to
be characterised as finance-leasing contracts and therefore to be entered in the balance sheet of their
economic owner. Reference is made to note (25) regarding the corresponding liabilities.
These assets basically concern technical equipment and machinery as well as other facilities,
fittings and equipment with book values of EUR 0.65 million and EUR 3.10 million respectively
(previous year: EUR 1.23 million and EUR 3.63 million respectively).
46

The leased and capitalised assets in property, plants and equipment experienced accruals to
the amount of EUR 0.65 million (previous year: EUR 1.10 million) and depreciations to the amount of
EUR 1.27 million (previous year: EUR 1.15 million) in the year under review.
Extraordinary depreciations to the amount of EUR 0.79 million (previous year: EUR 0.00
million) were effected on property, plants and equipment in the past financial year. All depreciations on
property, plants and equipment are contained in the income statement item “Depreciation on
intangible assets and property, plants and equipment”.
The assets in property, plants and equipment, especially the land and buildings with a total
residual book value of EUR 6.40 million (previous year: EUR 6.70 million), serve as security for
liabilities, which were valued at a total of EUR 5.72 million (previous year: EUR 4.34 million) on the
closing date.
Except for the leased assets, there are no other restraints on ownership or disposal regarding
the property, plants and equipment. There are also no acquisition obligations.
(14) Holdings valued at equity
The following holdings are/were valued by the “at-equity method” in INTERSEROH’s consolidated
financial statements:
Country Interest Book value
2005 2004
31.12.2005
EUR
million
31.12.2004
EUR
million
TOM Sp. z o.o Poland 50.0 % 50.0 % 3.09 3.26
HR Hüttenwerkentsorgung GmbH Germany 50.0 % 50.0 % 0.48 0.33
Eisen- und Stein Horn KG Germany 50.0 % 50.0 % 1.88 1.78
Mineralmahlwerk Westerwald GmbH Germany 50.0 % 50.0 % 1.04 0.90
Jade-Entsorgung GmbH Germany 24.9 % 24.9 % 0.14 0.16
6.63 6.43
All associated companies belong to the segment steel and metal recycling.
The book values named contain hidden reserves in property, plants and equipment with residual book
values totalling EUR 0.40 million (previous year: EUR 0.42 million) uncovered in the course of the
initial consolidation of Eisen- und Stein Horn KG and Jade-Entsorgung GmbH.
Summary of the financial information on the holdings valued at equity on the closing date (related
respectively to 100%):
Total assets
EUR million
Equity
EUR million
Turnover
EUR million
Result for
the year
EUR million
2005
TOM Sp. z o.o 24.66 7.32 75.35 0.31
HR Hüttenwerkentsorgung GmbH 3.02 0.96 6.26 0.30
Eisen- und Stein Horn KG 11.51 3.27 10.95 0.77
Mineralmahlwerk Westerwald GmbH 8.65 2.09 13.61 0.34
Jade-Entsorgung GmbH*
2004
TOM Sp. z o.o 30.69 7.61 103.70 5.28
HR Hüttenwerkentsorgung GmbH 2.45 0.66 6.17 -0.30
Eisen- und Stein Horn KG 10.62 2.74 13.63 0.61
Mineralmahlwerk Westerwald GmbH 7.94 1.81 8.34 0.46
Jade-Entsorgung GmbH 2.20 1.31 8.69 0.67
*Annual financial statements not yet available
All numbers relate to the annual financial statements prepared according to the respective
national law. Where significant deviations from the accounting regulations according to IFRS were
47

established, the proportionate results and the respective equity were adjusted accordingly for the
purposes of consolidated accounting.
48

(15) Financial assets
2005
EUR million
2004
EUR million
Long-term
Interests in associated companies 1.40 1.26
Other holdings 0.31 0.74
Loans 2.51 2.78
Securities 0.01 0.01
4.23 4.80
Short-term
Receivables from factoring company 1.22 0.00
Loans 0.73 0.26
Financial derivatives 0.00 0.03
1.95 0.28
The interests in associated companies concern companies that are not included in the
consolidated financial statements in spite of the group holding an interest of more than 50 percent in
them due to their subordinate significance. The other holdings concern holdings in which the group
holds an equity or voting-right rate of less than 20 percent. Extraordinary depreciations totalling EUR
0.39 million (previous year: EUR 0.18 million) were effected for these groups of assets as a result of
impairment tests.
The list of shareholdings of the INTERSEROH Group are contained in the annex to these
Notes.
The long-term loans shown concern mainly loans to non-group companies as well as longterm
tied security payments. No extraordinary depreciations were made on loans and securities in the
group financial year 2005 (previous year: EUR 0.18 million).
The receivable from factoring concerns a short-term receivable from the sale of trade accounts
receivable to the factoring company. The underlying agreement is to be seen as a financing
transaction because not all risks in connection with the legally assigned receivables went over to the
factor. The corresponding repayment obligation is shown under the short-term financial liabilities.
After consideration of the extraordinary depreciations effected, the book values of all other
financial liabilities shown correspond to their current values on the closing date.
Regarding further information on the financial derivatives, reference is made to the notes (32)
and (33).
(16) Deferred tax claims and liabilities
The deferred taxes entered in the balance sheet can be assigned to the individual balance sheet items
by cause as follows:
Deferred taxes 2005 Deferred taxes 2004
Assets
EUR million
Liabilities
EUR million
Assets
EUR million
Liabilities
EUR million
Goodwill 2.93 0.99 3.33 0.77
Other intangible assets 0.00 0.23 0.00 0.26
Property, plants and equipment 0.40 1.78 0.54 2.03
Inventories 0.00 0.25 0.00 0.55
Provisions for pensions 1.90 0.00 1.86 0.00
Other provisions 1.71 0.74 1.29 0.17
Financial liabilities 1.69 0.00 1.82 0.00
Loss carry-forwards for tax purposes 0.56 0.00 3.47 0.00
Reserves
(from consolidation entries) 0.00 2.27 0.00 3.13
9.19 6.26 12.31 6.91
Balance -3.39 -3.39 -3.25 -3.25
5.80 2.87 9.06 3.66
49

Deferred tax liabilities are balanced against corresponding claims insofar as the same tax
subject and same fiscal authority are concerned.
All loss carry-forwards for tax purposes can be used for an unlimited period of time.
Deferred tax receivables due to temporary differences and existing loss carry-forwards for tax
purposes totalling EUR 1.89 million (previous year: EUR 2.65 million) were not capitalised. They
concern mainly foreign companies where realisation of the deferred tax claims can be seen as
uncertain today.
(17) Inventories
2005
EUR million
2004
EUR million
Raw materials and supplies 1.29 2.87
Work in progress 7.42 10.35
Finished goods 8.38 22.37
Merchandise 17.13 5.02
Advances to suppliers 3.75 1.87
37.97 42.47
Of the inventories shown on the closing date, EUR 9.10 million (previous year: EUR 9.53
million) were entered in the balance sheet at their net selling value.
The value adjustments on inventories amounted to EUR 1.37 million (previous year: EUR 1.55
million) in the financial year.
(18) Trade accounts receivable
2005
EUR million
2004
EUR million
Receivables from
Third parties 131.02 138.83
Less value adjustments -4.55 -6.93
Affiliated companies 0.41 0.09
Associated companies 0.01 0.14
Holdings 0.01 0.00
126.90 132.13
All trade accounts receivable shown are due within a year.
Receivables amounting to EUR 5.22 million (previous year: EUR 0.00 million) serve as
security for liabilities valued at a total of EUR 1.40 million (previous year: EUR 0.00 million) within the
framework of a global assignment. There are no other restraints on ownership and disposal regarding
the trade accounts receivable.
(19) Current income tax claims and other receivables
2005
EUR million
2004
EUR million
Tax reimbursement claims
⋅ Current income tax 10.01 2.66
⋅ Other 4.72 3.91
Security payments 1.11 1.15
Advances to suppliers 0.59 0.31
Creditors with debits 0.41 0.40
Receivables from insurance companies and other claims for compensation 0.42 0.12
Other 3.34 2.47
20.60 11.03
50

The amounts named contain the following sums that are only realisable at the end of a year:
2005
EUR million
2004
EUR million
Tax reimbursement claims
⋅ Other 0.00 0.01
Security payments 0.02 0.03
Receivables from insurance companies and other claims for compensation 0.03 0.00
Other 0.39 0.12
0.44 0.16
(20) Liquid assets
2005
EUR million
2004
EUR million
Cash in banks
⋅ Sight deposits and fixed deposits 29.13 30.98
Cash on hand 0.20 0.20
Cheques 0.15 0.05
29.48 31.23
This item corresponds to the financial resources fund in the flow-of-funds analysis and is not subject to
any restraints on ownership or disposal.
(21) Subscribed capital
The fully paid-in subscribed capital of INTERSEROH AG amounted to an unchanged EUR 25.58
million on the closing date. The capital stock is distributed among (also unchanged) 9,840,000
individual share certificates without par value with an arithmetic share of the capital stock of EUR 2.60
each.
A share entitles its holder to participate in the company’s annual general shareholders’
meeting and to receive the dividend declared by the general shareholders’ meeting.
According to the German Corporation Act, the distributable dividend is determined according
to the net income of the annual financial statements of INTERSEROH AG prepared in accordance
with the regulations of the German Commercial Code.
A dividend of EUR 0.86 was paid per share for fiscal 2004 (EUR 8.46 million in all). The
proposed dividend for fiscal 2005 is also EUR 0.86 per share (EUR 8.46 million in all). The amount of
the dividend for 2005 depends on approval by the shareholders at the general shareholders’ meeting
on 22 June 2006 and was not entered in the consolidated financial statements as liability.
(22) Reserves
2005
EUR million
2004
EUR million
Surplus capital 38.61 38.61
Adjustment items from currency conversion 0.12 -0.06
Difference from capital consolidation 1.18 1.18
Other retained earnings, incl. net income 51.17 41.23
91.08 80.96
The surplus capital generally contains the premium received on issuing shares. This reserve is subject
to certain restraints on disposal contained in the German Corporation Act.
The other retained earnings contain (as in the previous year) amounts totalling EUR 6.99
million from the new valuations or revaluations for preparation of the IFRS opening balance on 1
January 2004, see note (40).
51

The adjustment items from currency conversion concern the annual financial statements of the
associated company TOM Sp. z. o.o prepared in Polish zloty.
Regarding conversion of the equity per 1 January 2004 and 31 December 2004 as well as the
consolidated result for 2004 for first-time preparation of the consolidated financial statements
according to IFRS, reference is made to note (40).
(23) Provisions for pensions and similar liabilities
The pension provisions for the company pension scheme were valued actuarially according to
the projected unit credit method prescribed in IAS 19 (Employee Benefits). This method of valuating
the cash value of claims takes both the known pensions and acquired claims as of the closing date as
well as the future expected increases in salaries and pensions into consideration. Differences resulting
at the end of the year (so-called actuarial profits or losses) between scheduled pension liabilities
calculated in this way and the actual cash value of claims are only entered in the balance sheet if they
lie outside a range of 10 percent of the scope of liability. In this case the profits and losses are, if they
exceed the 10-percent corridor, distributed over the average remaining service periods of the entitled
employees and entered as earnings or expense. The share of interest on the allocations to provisions
contained in the pension expenses is shown as interest expense within the financial result. All other
provisions for pensions and similar liabilities are formed on the basis of expert actuarial opinions.
Individual companies in the INTERSEROH Group have in the past provided benefits to their
employees for the time after retirement in the form of contribution payments to private institutions and
retirement benefit schemes. The plan assets exist exclusively in the form of reinsurance. The results
of these commitments are consolidated company-wise in a “funded” plan. For all other commitments
for which no reinsurance exists, the results are shown in the category “unfunded” plan.
The promised payments by the company vary depending on the legal, tax and economic
circumstances of the respective country and are usually based on period of employment and the
remuneration of the employee. The promises comprise both those from pensions already running and
from claims to pensions to be paid in the future. The group’s company pension scheme is exclusively
performance-orientated. New employees are not given any promise of a company pension because all
the pension schemes, which are based on collective agreements between the company and its
workforce, are closed.
The obligations existing exclusively in Germany were calculated using the following parameters:
31.12.2005 31.12.2004
Interest rate for accounting purposes 4.25 % 4.50 %
Salary trend 2.50 % 3.00 %
Pension adjustment 1.75 % 1.50 %
Expected return from plan assets 6.00 % 6.00 %
The parameters for mortality, invalidity and marriage probability are based on the “Reference
Tables 2005 G” – respectively the “Reference Tables 1998” for 2004 – of Dr. Klaus Heubeck. The
earliest possible age for receiving retirement benefits from the statutory pension scheme according to
German law was used as retirement age.
The following age and sex-dependent fluctuation probabilities were applied:
31.12.2005 31.12.2004
Change rate per year Men Women Men Women
Age to
25 6.0 % 8.0 % 6.0 % 8.0 %
30 5.0 % 7.0 % 5.0 % 7.0 %
35 4.0 % 5.0 % 4.0 % 5.0 %
45 2.5 % 2.5 % 2.5 % 2.5 %
50 1.0 % 1.0 % 1.0 % 1.0 %
above 50 0.0 % 0.0 % 0.0 % 0.0 %
52

The net liabilities developed as follows:
Net liabilities
Funded plan
EUR million
Unfunded plan
EUR million
Total
EUR million
As of 01.01.2004
Periodic net costs from pension commitments
(fixed benefit plan)
0.08 21.27 21.35
Interest expenses
Expected profits from plan assets -0.06 0.00 -0.06
Current expenses for pension claims 0.07 0.15 0.23
Amortisation actuarial profits and losses 0.03 0.00 0.03
Employee contributions to plan assets -0.09 0.00 -0.09
Direct benefit payments by the company 0.00 -1.17 -1.17
Accruals/Retirements/Transfers 0.01 0.00 0.01
As of 31.12.2004 0.10 21.28 21.38
As of 01.01.2005 0.10 21.28 21.38
Periodic net costs from pension commitments
(fixed benefit plan)
Interest expenses 0.05 1.01 1.06
Expected profits from plan assets -0.06 0.00 -0.06
Current expenses for pension claims 0.08 0.17 0.26
Employer contributions to plan assets -0.11 0.00 -0.11
Direct benefit payments by the company 0.00 -1.23 -1.23
As of 31.12.2005 0.06 21.22 21.28
The accruals of the previous year concern the reversed contract of an employee who left the
company.
The cash value of claims has changed as follows:
Cash value of claims
0.05
Funded plan
EUR million
1.03
Unfunded plan
EUR million
1.08
Total
EUR million
As of 01.01.2004 1.01 21.27 22.28
Current expenses for pension benefits 0.07 0.15 0.23
Interest expenses 0.05 1.03 1.08
Actuarial profit/(loss) 0.08 1.66 1.73
Accruals/Retirements/Transfers -0.03 0.00 -0.03
Benefit payments (payments from plan assets and by the
company)
-0.02 -1.17 -1.19
As of 31.12.2004 1.16 22.93 24.09
As of 01.01.2005 1.16 22.93 24.09
Current expenses for pension benefits 0.08 0.17 0.26
Interest expenses 0.05 1.01 1.06
Actuarial loss 0.00 1.27 1.27
Benefit payments (payments from plan assets and by the
company) -0.02 -1.23 -1.25
As of 31.12.2005 1.27 24.15 25.42
The payments prospectively due in 2006 amount to EUR 1.23 million (previous year: EUR 1.17
million) and will be reported under short-term provisions.
53

The pension expenses reported in personnel expenses are made up as follows:
Funded plan
EUR million
Unfunded plan
EUR million
Total
EUR million
2004
Interest expenses 0.05 -0.06 1.08
Profits from plan assets -0.06 0.00 -0.06
Current expenses for pension claims 0.07 0.15 0.23
Amortisation actuarial profits and losses 0.03 0.00 0.03
Periodic net costs from pension commitments
⋅ Fixed benefit plan 0.10 1.18 1.28
2005
Interest expenses 0.05 1.01 1.06
Expected profits from plan assets -0.06 0.00 -0.06
Current expenses for pension claims 0.08 0.17 0.26
Periodic net costs from pension commitments
⋅ Fixed benefit plan 0.07 0.18 1.25
(24) Other provisions
As of
01.01.2005
EUR million
Change
cons. comp.
EUR million
Utilisation
EUR million
Reduction
EUR million
Transfer
EUR million
As of
31.12.2005
EUR million
Lawsuits 2.08 0.00 0.17 0.69 0.40 1.61
Obligation to
return property
to original
condition 1.41 0.00 0.42 0.02 0.32 1.28
Restructuring 1.04 0.00 0.79 0.00 0.62 0.87
Pending
transactions 0.68 0.00 0.00 0.18 0.00 0.51
Anniversary
obligations 0.43 0.00 0.00 0.00 0.08 0.51
Other 2.35 -0.21 0.37 1.70 1.09 1.18
8.00 -0.21 1.75 2.58 2.51 5.96
Of the amounts shown, the following are due within a year:
As of
31.12.2005
EUR million
As of
31.12.2004
EUR million
Lawsuits 1.36 1.16
Restructuring 0.87 1.04
Other 0.31 0.34
2.54 2.54
The short-term share of provisions for pensions (prospective pension payments in the coming
financial year) are reported in the balance sheet under short-term provisions at EUR 1.23 million
(previous year: EUR 1.17 million) so that the total amount of the balance sheet item “Provisions” in the
short-term debt amounts to EUR 3.74 million (previous year: EUR 3.71 million).
Provisions for current lawsuits are formed if their risks can be reasonably estimated. These
provisions are determined on the basis of notifications and cost estimates by the company’s own legal
department and lawyers appointed to represent the company and cover all the estimated fees and
legal expenses for these lawsuits and possible settlement costs.
The obligations to return property to its original condition correspond to the discounted
amount for restoration to original condition of rented or leased property at the end of the rent or lease
agreements. The expected expenditures are, insofar as they are not due in 2006 or further extensions
to the existing agreements are not agreed, due between 1 January 2007 and 31 December 2023. Due
54

to the passage of time, the discounted amount of the provisions rose by EUR 0.03 million (previous
year: EUR 0.04 million) as of 31 December 2005.
The provisions for restructuring contain expected expenditures in connection with planned
restructuring measures in one (previous year: two) foreign subsidiary.
(25) Financial liabilities
As of 31.12.2005
Total
EUR million
to 1 year
EUR million
With a remaining term of
> 1 year
to 5 years
EUR million
> 5 years
EUR million
Liabilities (to/from)
Banks 33.85 20.42 12.90 0.52
Finance-leasing 4.25 1.28 2.62 0.35
Bills and notes 2.03 2.03 0.00 0.00
Other 4.91 3.98 0.65 0.27
45.04 27.72 16.18 1.14
As of 31.12.2004
Total
EUR million
to 1 year
EUR million
With a remaining term of
> 1 year
to 5 years
EUR million
> 5 years
EUR million
Liabilities (to/from)
Banks 42.11 13.27 27.13 1.71
Finance-leasing 5.44 1.55 3.34 0.55
Bills and notes 0.35 0.35 0.00 0.00
Other 0.25 0.25 0.00 0.00
48.15 15.42 30.47 2.26
INTERSEROH generally does not provide security for liabilities to banks. Secured loans do exist in
exceptional cases. These loans, exclusively with fixed interest rate agreements, were valued on the
closing date at EUR 7.12 million (previous year: EUR 4.34 million), of which EUR 3.33 million
(previous year: EUR 3.96 million) are secured by liens. The interest rates for medium and long-term
liabilities lie between 3.20 percent and 6.00 percent. The durations of the main loans as far as their
sums are concerned expire between 15 March 2006 and 18 January 2009.
Liabilities from finance-leasing are entered as liabilities if the leased assets are entered in the
balance sheet under property, plants and equipment as economic property of the group (financeleasing).
They are reported at their cash values.
The leasing liabilities reported can be subdivided by maturity as follows:
Future min. lease instalment Interest share therein Repayment share therein
2005
EUR million
2004
EUR million
2005
EUR million
2004
EUR million
2005
EUR million
2004
EUR million
Within 1 year 1.42 1.62 0.14 0.07 1.28 1.55
Between 1
and 5 years 2.97 3.77 0.35 0.43 2.62 3.34
In more than 5
years 0.36 0.58 0.01 0.03 0.35 0.55
Finance-leasing contracts are usually concluded for a basic term of between four and six years. The
majority of the contracts provide for various short-term extensions and/or purchase options at the end
of the basic terms. One leasing contract, which must be seen by its form as finance-leasing, has a
term of 10 years, combined with an extension option for a further five years respectively if the contract
is not terminated. Insofar as these options are deemed favourable, the corresponding amounts were
incorporated in the calculation of the cash values. Accordingly, the liabilities from finance-leasing
contracts reported contain the purchase price payments of EUR 0.04 million (previous year: EUR 0.04
million) needed to exercise the favourable purchase options. The underlying interest rates of the
contracts vary depending on the market and time the contracts were concluded between 3.44 and
10.06 percent.
55

Of the other financial liabilities, EUR 0.20 million (previous year: EUR 0.25 million) were due
to affiliated companies.
The book values reported for all financial liabilities correspond to their current values.
(26) Trade accounts payable
To
2005
EUR million
2004
EUR million
Third parties 97.56 90.98
Affiliated companies 0.17 0.01
Holdings 0.01 0.01
97.74 91.00
All trade accounts payable are due within a year.
The liabilities to third parties contain liabilities from outstanding invoices based on services
already received but not yet invoiced at EUR 28.35 million (previous year: EUR 21.93 million) and
liabilities in connection with concluded contracts that basically concern repayment obligations to
manufacturers and waste disposal obligations at EUR 15.82 million (previous year: EUR 12.59
million).
(27) Current income tax liabilities and other liabilities
As of 31.12.2005
Total
EUR million
to 1 year
EUR million
With a remaining term of
> 1 year
to 5 years
EUR million
> 5 years
EUR million
Liabilities (to/from)
Current income taxes 4.64 4.64 0.00 0.00
Other taxes 1.46 1.46 0.00 0.00
Personnel 7.50 7.50 0.00 0.00
Advances received for orders
0.07 0.07 0.00 0.00
Other
12.70 11.94 0.76 0.00
26.37 25.61 0.76 0.00
As of 31.12.2004
Total
EUR million
to 1 year
EUR million
With a remaining term of
> 1 year
to 5 years
EUR million
> 5 years
EUR million
Liabilities (to/from)
Current income taxes 6.70 6.70 0.00 0.00
Other taxes 2.94 2.94 0.00 0.00
Personnel 9.15 8.99 0.16 0.00
Advances received for orders 0.79 0.79 0.00 0.00
Other 12.59 10.13 1.71 0.75
32.17 29.56 1.86 0.75
These liabilities are entered in the balance sheet at their updated acquisition costs if not stated
otherwise.
The current income tax liabilities contain almost exclusively domestic corporation and
municipal trade tax liabilities. The consolidated balance sheet as of 31 December 2005 additionally
contains foreign income tax liabilities totalling merely EUR 0.07 million (EUR 0.05 million for Sweden
and EUR 0.02 million for Austria; previous year: EUR 0.02 million for the Netherlands).
The liabilities from other taxes contain, in addition to the amounts for which the group
companies are tax debtors, also such taxes that are remitted for the account of third parties.
The personnel liabilities comprise mainly bonuses, holiday and overtime credit balances,
contributions to social security and employers’ liability insurance fund not yet to be remitted as well as
personnel costs.
56

Of the other liabilities, EUR 0.04 million (previous year: EUR 0.24 million) concern liabilities to
affiliated companies.
57

Other Notes and Information
(28) Notes on the cash flow statement
Pursuant to IAS 7 (Cash Flow Statement), the cash flow statement prepared by the indirect method
shows how the cash in the group changed in the course of the year under review as a result of the
inflow and outflow of funds.
The cash flow statement differentiates between cash flows from current business activity,
investment activity and financing activity. The cash balance comprises cheques, cash on hand and
cash in banks.
Apart from income tax payments, interest earnings and payments are also assigned to the
cash flow from current business activity because they in the first instance serve financing of current
business activity. The income from dividends is also contained in the cash flow from current business
activity. They mainly concern distributions by associated companies.
The consolidated result declined by EUR 10.63 million compared to the previous year. The
fact that the cash flow from current business nevertheless rose by EUR 14.67 million over the previous
year is mainly the result of the high commitment of funds in the net operating assets in the previous
year, especially the inventories and trade accounts receivable, which in turn can be attributed to the
exceptionally high price level at the turn of the year 2004/2005 compared to the turn of the year
2003/2004, especially in the steel and metal recycling segment.
The net cash flow after deduction of payments for interest and income tax developed
accordingly, although the increased income tax payments resulting from the high result of the previous
year and corresponding advance tax payments for the current year could only be partly compensated
for by the lower payments for interest resulting from considerable repayment activity.
The outflow of funds in the field of investment activity in the year under review was at EUR
20.98 million (previous year: EUR 6.10 million) three times higher than in the previous year. This was
due to extensive investments in the financial year, especially in property, plants and equipment. The
funds were used mainly for alterations to several sites and the construction of a wood processing
plant, a recycling plant and two large plants in the steel and metal sector. The amount of the
investment shown in the fixed assets as outflow of funds differs from the accruals shown in the
statement of fixed assets largely due to the non payment-effective accruals from finance-leasing.
The cash flow from financing activity shows an outflow of funds totalling EUR 16.60 million
(previous year: EUR 11.10 million) in the year under review. The outflows result – as in the previous
year – mainly from the payment of the dividends for the past financial year at EUR 8.46 million. In
addition to this, more on the balances of the financial liabilities were repaid than in the previous year,
namely EUR 8.60 million (previous year: EUR 2.59 million).
In spite of the high investment activity and repayments of financial liabilities, the year under
review only experienced a payment-effective reduction of funds of EUR 1.75 million (previous year:
increase by EUR 4.09 million). The named amounts could therefore be defrayed almost completely
from the current cash flow.
(29) Description of segments
The companies in the INTERSEROH Group are divided into two segments, with all the companies
engaged in steel and metal recycling belonging to the steel and metal recycling segment and all the
other companies to the services and raw materials trading segment. INTERSEROH AG belongs
completely to the services and raw materials trading segment.
58

The segments performed as follows in the past financial year according to IAS 14:
Turnover
Services and raw
materials trading
2005
EUR
million
2004
EUR
million
Steel and metal
recycling
2005
EUR
million
2004
EUR
million
Inter-segment
consolidations
2005
EUR
million
2004
EUR
million
2005
EUR
million
Group
2004
EUR
million
External
sales 248.75 229.66 698.16 810.49 0.00 0.00 946.91 1,040.15
Sales
between
the
segments 0.41 0.36 2.67 1.17 -3.08 -1.53 0.00 0.00
249.16 230.02 700.83 811.66 -3.08 -1.53 946.91 1,040.15
Services and raw
materials trading
2005
EUR
million
2004
EUR
million
Steel and metal
recycling
2005
EUR
million
2004
EUR
million
Inter-segment
consolidations Group
2005
EUR
million
2004
EUR
million
2005
EUR
million
2004
EUR
million
Segment result 19.87 27.25 16.13 30.17 -2.96 -8.09 33.04 49.33
including:
Inter-segment
income from
investments -2.96 -8.90 0.00 0.00 2.96 8.90 0.00 0.00
Adjusted segment
result 16.91 18.35 16.13 30.17 0.00 0.81 33.04 49.33
including:
Depreciations on
intangible assets
and property,
plants and
equipment
- Scheduled 5.05 5.89 6.44 6.72 0.00 -0.81 11.49 11.79
- Extraordinary
0.79 0.00 0.00 0.00 0.00 0.00 0.79 0.00
Result from
associated
companies 0.00 0.00 0.87 2.49 0.00 0.00 0.87 2.49
Result from other
holdings 0.01 0.00 0.10 0.07 0.00 0.00 0.10 0.07
Segment assets 117.10 101.67 177.93 189.52 0.72 3.47 295.75 294.66
including
Interests in
associated
companies 0.00 0.00 6.64 6.43 0.00 0.00 6.64 6.43
Investments in
long-term assets
(property, plants
and equipment
and intangible
assets) 12.38 7.15 13.28 5.59 0.08 0.09 25.75 12.83
Segment debts 79.82 70.18 79.14 85.17 -12.21 -9.50 146.75 145.85
Since all consolidated companies are assigned to the two segments described, the transfer of the
segment totals to the corresponding closing figures results exclusively from the inter-segment capital,
debt and income/expense consolidations indicated.
Extraordinary depreciations on property, plants and equipment of EUR 0.79 million are only
contained in the segment result for services and raw materials trading for 2005.
59

The following table shows the geographic make-up of the segments:
Services and raw materials
trading
2005
2004
EUR million EUR million
Steel and metal recycling
2005
EUR million
2004
EUR million
Germany
a) Turnover (external sales) 173.83 149.32 457.16 489.69
b) Assets 94.11 76.98 176.71 188.51
c) Investments in long-term assets
(property, plants and equipment and
intangible assets) 9.18 3.10 13.25 5.55
Rest of EU
a) Turnover (external sales) 66.12 69.19 201.96 257.50
b) Assets 22.99 24.69 1.22 1.01
c) Investments in long-term assets
(property, plants and equipment and
intangible assets) 3.20 4.05 0.03 0.04
Non-EU countries
a) Turnover (external sales) 8.80 11.15 39.04 63.30
b) Assets 0.00 0.00 0.00 0.00
c) Investments in long-term assets
(property, plants and equipment and
intangible assets) 0.00 0.00 0.00 0.00
The turnovers are allocated to the regions according to the customer’s seat, and the assets
and investments according to the location of the assets.
The transfer prices for internal group turnover are defined based on market conditions (“at
arm’s length” principle).
(30) Liability Relations
Contingent Liability from the Negotiation and Transfer of Bills and Notes
As of 31 December 2005 the group had contingent liabilities from the negotiation and transfer of bills
and notes amounting to EUR 0.39 million (previous year: EUR 0.00 million).
Contingent Liability from Joint and Several Liability for Guarantees and Cash Advances
INTERSEROH AG introduced a cash pooling system with account clearing procedure for domestic
subsidiaries in 1999. Under this system the balances of the integrated subsidiaries are credited or
charged to the clearing account of INTERSEROH AG daily. In the cash pooling system INTERSEROH
AG works together with WestLB AG, Cologne, as well as the associated state and savings banks,
Commerzbank AG, Cologne, and Dresdner Bank AG, Cologne.
The group has obligations totalling EUR 4.97 million (previous year: EUR 4.84 million) from
surety and guarantee agreements and provision of securities for non-group liabilities.
(31) Other financial obligations
Apart from the finance-leasing contracts already described as financial liabilities, the group also has
rental and leasing contracts (mainly property, office rooms and buildings as well as operating and
business equipment, e.g. vehicles and office machines), which by their economic content must be
classified as operate-leasing contracts. Rent and lease payments totalling EUR 9.45 million (previous
year: EUR 9.76 million) were made for these in 2005. The instalments from the operate-leasing
contracts existing on the closing date will fall due in subsequent years as follows:
60

2005
EUR million
2004
EUR million
Within 1 year 10.97 9.45
Between 1 and 5 years 11.67 11.00
In more than 5 years 6.12 7.78
28.76 28.23
(32) Management of financial risks
INTERSEROH’s risk strategy calls for avoiding, hedging or insuring specific risks. These risks are
operational risks resulting from day-to-day business. The goal is not to avoid all potential risks, but to
establish room for manoeuvre to enable conscious risk-taking based on comprehensive knowledge of
the risks involved and the overall context of the risks.
Further development of the system in order to provide necessary and successful support to
the segments of the INTERSEROH Group is also the goal and responsibility of group management
and the segment directors.
As components of the risk management system, the definition, identification, evaluation and
response to existing risks are routinely checked for completeness.
The system is expanded whenever the possibility of a loss is identified and the occurrence of a
major loss cannot be dismissed as entirely improbable. New elements have also been added to the
system in cases where the risk sensitivity and communication of employees could be improved with
the resultant benefits for stable business development.
The risk management system extends to and integrates all operational units of the group
and includes the following characterising elements among others:
• ensuring the necessary liquidity at all times
• assessment of price change risks (value-at-risk analysis) in all raw materials trading segments
• timely hedging of exchange rate risks
• organisational manual as guideline for all group units, among others for the risk fields of securing
receivables including political and economic national risks, exchange rates, insurance
• rules of procedure with defined approval requirements.
The liquidity needed in the group is secured by longer term, fixed-interest and bilateral loans
as well as lines of credit. A day-based inflow and outflow plan guarantees a permanent overview of the
need in the group.
Any need extending beyond the short-term liquidity available can be covered completely at all
times by rolling cash credit lines granted by the commercial banks for at least one year.
The change in the exchange rate of the euro against other currencies, especially the US
dollar, leads in international business relations not only to general risks but also special exchange rate
risks. Generally it should be attempted to leave these currency risks with the business partner, i.e. to
invoice in euros. Where this is not possible, the internal guideline must be observed.
Speculative transactions (volume and/or price obligations without concrete need) are not
permitted. This also includes contracts in foreign currency speculating on a gain in the exchange rate.
The foreign currency receivables and liabilities resulting from contracts must be hedged when
exceeding a volume of EUR 0.025 million. Hedging may be effected exclusively by way of foreign
exchange forward contracts (in the form of micro or macro hedging) or with existing currency stocks.
Options or similar business transactions are not permitted.
Micro hedging secures the risks of each individual item separately.
In macro hedging the net risk existing is first determined. To this end, existing hedge items
(receivables and liabilities in the same foreign currency – in so far as their amounts and periods
correspond) are eliminated. The open surplus remaining is then closed by an opposing hedge
transaction.
Stockpiling of foreign currencies is not permitted.
To avoid price change risks in transactions in the raw materials trading segment (value-atrisk
analysis), the trade is effected back-to-back, i.e. without risk.
In the INTERSEROH Group credit risks in the field of trade accounts receivable are generally
transferred to a third party in the form of trade credit insurance. There is an instruction in the group
that business exceeding the insured limit per debtor may not be transacted. This rule may only be
deviated from in justified individual cases and only after prior approval by management or the
management board. Compliance with the trade credit limits is monitored at regular intervals.
61

(33) Derivative financial instruments
All foreign currency receivables and liabilities in the INTERSEROH Group resulting from contracts are
hedged without exception (upwards of a volume of more than EUR 0.025 million). Generally hedging
for transactions in foreign currency is effected exclusively by forward exchange transactions. Only
banks of first-class financial standing are used. Hedging is used according to standardised guidelines,
subject to strict control and usually restricted to securing operational business.
In the forward exchange transaction a certain exchange rate is defined for a certain time in the
future at the time of the underlying transaction. This ensures that the maturity date is identical with the
payment date of the underlying receivable or liability and that no outstanding foreign currency or
forward dispositions arise.
They are valued at fair value. “Normal” purchases and sales of financial assets pursuant to
IAS 39 are entered in the balance sheet according to the accounting method on the day of
performance. The aim of the use of derivative financial instruments is mainly to rule out influences on
operational business by exchange rate changes.
As of the closing date the INTERSEROH Group had forward exchange transactions to secure
trade accounts invoiced in foreign currencies, each of which was based on a corresponding underlying
transaction with identical amount and period.
At a nominal amount of USD 1.87 million (corresponds to EUR 1.57 million), the derivative
financial instruments are reported under the short-term financial liabilities with their negative market
value of EUR 0.007 million (previous year: positive EUR 0.029 million under the short-term financial
assets).
There is no own market risk from the forward exchange transactions themselves because the
linked operational business results in a closed item, which ensures that liquidity is available in the
secured currency in the corresponding amount at the agreed date.
Profits and losses from the development of the market values of the fair value hedges are
taken into account directly in the income statement in that the results from the hedge and those from
the underlying transaction are incorporated with effect on net income.
A non-payment risk does not exist.
All the forward exchange transactions entered into to secure currency risks have (as in the
previous year) a remaining term of up to one year.
(34) Original financial instruments
The stock of original financial instruments can be seen in the balance sheet. The explanations on
them are given in the explanations of the respective balance sheet item.
(35) Information on closely related companies and persons
In the course of operational business the companies in the INTERSEROH Group obtain materials,
supplies and services from numerous business partners Europe-wide. Among them are companies in
which INTERSEROH holds an interest as well as companies that have connections with members of
the Supervisory Board of INTERSEROH AG. Business with these companies is transacted on the
same terms as with external third parties. The companies in the INTERSEROH Group were not
involved in any transactions of significance for the Management Board or companies or persons close
to the Management Board that were unusual in type or nature. The organisational guidelines stipulate
that in the case of unusual transactions with closely related persons or companies the prices agreed
must be reviewed by two independent auditors to ensure conformity with market prices.
Expenses and earnings with associated companies or subsidiaries not included in the
consolidated financial statements are only of minor significance for the evaluation of the financial,
earnings and liquidity position and the payment flows of the group.
Two members of the Supervisory Board indirectly held a shareholding of more than one
percent each of the shares issued by the company as of 31 December 2005 (cf. note (42)).
The shareholdings of all other members of the Supervisory Board and Management Board as
of 31 December 2005 were neither directly nor indirectly more than one percent of the shares issued
by the company. The total shareholding of all other members of the Supervisory Board and
Management Board also lay under one percent on the closing date.
62

(36) Management Board and Supervisory Board
Management Board
The Management Board comprised the following members in the year under review:
• Dr. Werner Kook (Chairman), Dinslaken
• Johannes-Jürgen Albus, Cologne
• Christian Rubach, Düsseldorf
• Roland Stroese, Cologne (from 8 October 2005)
• Michael Mevissen, Tönisvorst (to 30 June 2005)
The total compensation of the Management Board of INTERSEROH AG for its work amounted to EUR
1.47 million (previous year: EUR 1.48 million) in 2005. This sum contains a variable component of
EUR 0.48 million (previous year: EUR 0.41 million). A sum of EUR 0.11 million was paid to former
members of the Management Board and their dependents. A total of EUR 0.05 million was allocated
to provisions for pension commitments to former members of the Management Board and their
dependents.
The profession exercised by the members of the Management Board lies in managing and
representing the company.
Supervisory Board
The following persons belonged to the company’s Supervisory Board in the past financial year:
Supervisory Board
Member (Profession)
Dr. Axel Schweitzer,
Velten/Berlin
Chairman (since
31.03.2005)
(Member of the
Management Board of
ALBA AG)
Mr. Friedrich Carl
Janssen, Cologne
Vice Chairman (since
31.03.2005)
(Co-owner of Bankhaus
Sal. Oppenheim jr. & Cie.
KgaA, Business Graduate)
Member in Committees of
the Supervisory Board of
INTERSEROH AG
Personnel Committee
Personnel Committee
Audit Committee
Membership in Other
Statutory Supervisory
Boards
AXA Service AG, Cologne
Content Management AG,
Cologne
european transaction bank
AG, Frankfurt am Main
Gardeur AG,
Mönchengladbach
(Chairman)
Sal. Oppenheim
International S.A.,
Luxembourg
Bank Sal. Oppenheim
jr.&Cie. (Luxembourg)
S.A., Luxembourg
IV.Oppenheim AG,
Cologne
V. Oppenheim AG,
Cologne
Services Généraux de
Gestion S.A., Luxembourg
Membership in other
Controlling Boards in
Terms of § 125, Par. 1.5.3,
Corporation Act
63

Mr. Hans-Jörg Vetter,
Berlin
Vice Chairman (since
31.03.2005)
(Chairman of the
Management Board of
Bankgesellschaft Berlin
AG, Banker)
Dr. Eric Schweitzer,
Velten/Berlin
Vice Chairman (to
31.03.2005)
(Member of the
Management Board of
ALBA AG, President of the
IHK Berlin, Business
Graduate)
Mr. Bernd Aido, Lübeck
(Businessman)
Dr. jur. Jürgen R.
Neuhaus, Cologne
(Lawyer)
Dr. Wolfgang Bosch,
Neu-Anspach
(since 23.06.2005)
(Lawyer)
Personnel Committee Berlin-Hannoversche
Hypothekenbank AG,
Berlin/Hanover (Chairman)
Immobilien- u.
Baumanagement der
Bankgesellschaft Berlin
GmbH, Berlin (Chairman)
LPFV Finanzbeteiligungs-
u. Verwaltungs GmbH,
Berlin
(Chairman)
IBAG Immobilien u.-
Beteiligungen AG, Berlin
(Chairman)
Audit Committee Babcock Borsig AG in
liquidation, Oberhausen
(Supervisory Board
Member)
Personnel Committee
Audit Committee
Eisen- und Hüttenwerke
AG, Cologne (Supervisory
Board Member)
UNIPLAN International
GmbH & Co. KG, Kerpen
(Supervisory Board
Member)
Allweiler AG, Radolfzell
(Supervisory Board
Member)
DekaBank Deutsche
Girozentrale, Frankfurt am
Main (Board of Directors)
BEHALA Berliner Hafen-
und Lagerhausgesellschaft
mbH, Berlin
(Corporation under Public
Law)
Stiftung Pfefferwerk, Berlin
METRO CAPITAL BV,
Netherlands (retired on
01.07.2005)
64

Mr. Friedrich Merz,
Arnsberg
(since 23.06.2005)
(Law Firm Mayer Brown
Rowe & Maw LLP, Berlin /
Frankfurt, Lawyer)
Mr. Joachim Edmund
Hunold, Düsseldorf
(since 25.07.2005)
(Managing Partner of AIR
Berlin GmbH & Co.
Luftverkehrs KG)
Mr. Norbert Rethmann,
Selm
(to 24.02.2005)
(Businessman)
Dr. Walter Aden,
Dortmund
(to 23.06.2005)
(Honorary Principal
Managing Director of the
IHK Dortmund, Business
Graduate)
Mr. Gotthard Graß,
Frankfurt
(to 23.06.2005)
(Principal Managing
Director of the Federation
of the Electrotechnical and
Electronics Industries –
ZVEI -, Graduate
Engineer)
AXA Versicherung AG,
Cologne
Deutsche Börse AG,
Frankfurt am Main
Deutsche Rockwool
GmbH, Gladbeck
BVG Berliner
Verkehrsbetriebe, Berlin
(Corporation under Public
Law)
iFH Aktiengesellschaft,
Frankfurt am Main (to
31.12.2005)
Rethmann Beteiligungs
AG (Chairman)
RHENUS Verwaltungs AG
(Chairman)
Bischof + Klein GmbH &
Co. KG, Lengerich
(Advisory Board
Chairman)
TAROX Holding AG,
Lünen (Chairman)
DOC CONNEX AG,
Dortmund (Chairman)
BASF NV, Antwerp /
Belgium
(Member of the Board of
Directors, non-executive)
Stadler Rail AG, Bussnang
/ Switzerland (Member of
the Board of Directors,
non-executive)
Elektro-Altgeräte-Register
GbR-
Projektgesellschaft,Fürth
(Supervisory Board
Member)
ZVEI-Service GmbH,
Frankfurt
(Shareholder
Representative)
Stiftung “Elektro-Altgeräte-
Register”, Fürth (Member
of First Board)
65

Mr. Christian Jeschonek,
Cologne
(to 08.02.2005)
(Businessman)
Mr. Andreas Seibert,
Korschenbroich
(to 23.06.2005)
(Banker)
Mr. Jürgen Tönsmeier,
Porta Westfalica
(to 09.07.2005)
(Managing Director of Karl
Tönsmeier Entsorgungs
GmbH & Co. KG,
Businessman)
Trinkpack AG, Cologne
(Supervisory Board
Member)
Trinkpack AG,
Cologne
(Chairman)
GvoA mbH & Co.KG, Hille
Westsächsische
Entsorgungs- und
Verwertungsgesellschaft
mbH, Leipzig (Supervisory
Board Member)
Entsorgungsgesellschaft
Stollberg mbH, Stollberg
(Supervisory Board
Member)
Gesellschaft für
Abfallentsorgung Lippe
GmbH, Lemgo
The members of the Supervisory Board received a total compensation of EUR 0.11 million (previous
year: EUR 0.13 million) in the period from 1 January to 31 December 2005.
No loans to members of the Management Board or Supervisory Board existed as of 31 December
2005. No loans were redeemed in the year under review.
The share of all Supervisory Board members in the total holdings of INTERSEROH AG amounted to
25.75 percent as of the closing date on 31 December 2005.
(37) Workforce
The average number of employees is as follows:
2005 2004
Salaried employees 647 616
Industrial workers 654 638
1,301 1.254
Part-time workers were converted to full time.
(38) Fee for the auditors
The fee for the auditors in terms of § 319, Par. 1, Clause 1, 2 HGB reported as expense in the
financial year amounted to a total of EUR 0.62 million, of which EUR 0.46 million went on the audit,
EUR 0.09 million on tax consulting services and EUR 0.07 million on other services.
66

(39) Events after the closing date
No events that would be of importance to the assessment of the financial, earnings and liquidity
position and the payment flows of INTERSEROH AG occurred by 20 February 2006 (date of release
of the consolidated financial statements by the Management Board for handover to the Supervisory
Board).
(40) Explanations on change to IFRS
As mentioned in the introduction, these consolidated financial statements are the first “mandatory”
consolidated financial statements to be prepared according to IFRS. To determine the comparative
figures for the previous year, it was necessary to prepare an IFRS opening balance sheet as of 1
January 2004 on the basis of the consolidated financial statements as of 31 December 2003 prepared
according to HGB.
The following table and subsequent explanations describe the main effects of the change to
IFRS for the balance sheet items concerned both in the IFRS opening balance sheet as of 1 January
2004 and in the IFRS consolidated balance sheet for the previous year as of 31 December 2004 and
also for the items concerned in the consolidated income statement for 2004.
01.01.2004 31.12.2004
HGB Transition IFRS HGB Transition IFRS
EUR EUR EUR EUR EUR EUR
Note million million million million million million
Long-term assets
Intangible assets a. c 20.53 0.73 21.26 16.08 5.25 21.33
Goodwill a 18.90 0.00 18.90 14.76 4.61 19.37
Other intangible assets c 1.63 0.73 2.36 1.33 0.63 1.96
Property, plants and equipment b. c. d 50.12 5.63 55.75 46.44 6.27 52.71
Holdings valued at equity 4.65 0.00 4.65 6.43 0.00 6.43
Financial assets 587 0.00 5.87 4.80 0.00 4.80
Other receivables f. i 1.59 -1.39 0.20 2.18 -2.02 0.16
Deferred tax claims i 1.20 9.05 10.25 1.44 7.61 9.05
Short-term assets
Inventories
83.96 14.02 97.98 77.38 17.10 94.48
Trade accounts receivable e 29.00 0.00 29.00 41.07 1.40 42.47
Financial assets 105.19 0.22 105.41 132.20 -0.07 132.13
Other receivables 0.25 0.08 0.33 0.25 0.02 0.27
Current income tax claims f 7.89 -0.35 7.54 8.58 -0.38 8.20
Cash and cash equivalents 0.94 0.00 0.94 2.67 0.00 2.67
26.65 0.00 26.65 31.23 0.00 31.23
Total assets 169.92 -0.05 169.87 216.00 0.97 216.97
67

Equity
Share of equity attributable to
the shareholders of the parent
company
Subscribed capital 25.58 0.00 25.58 25.58 0.00 25.58
Reserves j 52.84 6.99 59.83 73.13 7.84 80.97
78.42 6.99 85.41 98.71 7.84 106.55
Minority interests 0.28 0.00 0.28 0.58 -0.04 0.54
78.70 6.99 85.69 99.29 7.80 107.09
Debts
Long-term debts
Provisions for pensions and
similar obligations F 17.14 3.02 20.16 16.47 3.73 20.20
Other long-term provisions d 1.57 1.71 3.28 4.41 1.05 5.46
Deferred tax liabilities i 0.00 1.36 1.36 0.00 3.66 3.66
Financial liabilities c 23.06 4.32 27.38 28.84 3.89 32.73
Other liabilities 1.93 -0.04 1.89 1.97 0.64 2.61
43.70 10.37 54.07 51.69 12.97 64.66
Short-term debts
Provisions d, f-i 55.63 -52.6 3.02 57.13 -53.42 3.71
Current income tax liabilities 1.12 0.00 1.12 6.70 0.00 6.70
Financial liabilities c 20.98 1.29 22.27 13.88 1.55 15.43
Trade accounts payable 42.58 31.73 74.31 56.49 34.51 91.00
Other liabilities 11.17 16.20 27.37 8.20 14.66 22.86
131.48 -3.39 128.09 142.40 -2.70 139.70
175.18 6.98 182.16 194.09 10.27 204.36
Total liabilities 253.88 13.97 267.85 293.38 18.07 311.45
a) According to IFRS 3, scheduled depreciation should not be effected on goodwill from company
mergers after 31 March 2004. Pursuant to IFRS 1 – IFRS 3 notwithstanding – the INTERSEROH
consolidated financial statements additionally do not update scheduled depreciations on goodwill from
earlier company mergers from 1 January 2004 on. Instead of the scheduled depreciations, impairment
tests are carried out at least once a year.
The elimination of the depreciations effected in 2004 according to HGB resulted in an increase
in the item of goodwill and a reduction in depreciations as of 31 December 2004 of EUR 4.61 million
each. Depreciations due to impairment tests did not have to be included. There were no changes to 1
January 2004.
b) The extraordinary depreciation effected on a business premises in the HGB financial statements for
2004 was eliminated in the IFRS financial statements for 2004 because the review of value in the
impairment test did not refer to the individual asset, but to the cash generating unit. According to the
underlying concept for this apportionment in the INTERSEROH Group, the value of the cash
generating unit in this case was retained and therefore no extraordinary depreciation had to be
effected on the property.
The fixed assets rose as a result by EUR 0.75 million as of 31 December 2004, while the
depreciations for 2004 dropped by the same amount. There was no change to 1 January 2004.
c) To assess leasing contracts, the tax leasing abatements are usually used in HGB consolidated
financial statements. The classification of leasing objects is regulated for IFRS by IAS 17. In financeleasing
contracts the lessor must report the leasing objects and leasing liabilities discounted over the
period of the contract in his balance sheet.
Accordingly, financial expenses in the form of depreciations and interest expenses must be
included in the income statement according to IFRS. The rent and lease payments shown in the HGB
financial statements under other operating expenses must be eliminated in the IFRS financial
statements in turn.
For the other intangible assets there were book value increases of EUR 0.73 million per 1
January 2004 and of EUR 0.64 million per 31 December 2004. Depreciations of EUR 0.09 million and
interest expenses of EUR 0.03 million were additionally included in the financial expenses.
68

The book values of property, plants and equipment rose by EUR 4.97 million per 1 January
2004 and by EUR 4.92 million per 31 December 2004. Additional depreciations and interest expenses
of EUR 1.15 million and EUR 0.29 million respectively were included in the financial expenses.
By entering the discounted leasing liabilities as liabilities, the financial liabilities on 1 January
2004 rose by EUR 5.61 million and on 31 December 2004 by EUR 5.43 million. Rent and lease
payments amounting to EUR 1.57 million were eliminated from the other operating expenses.
d) According to both HGB and IFRS, provisions must be formed for obligations to return rented or
leased property to its original condition if the obligation for a provision is adequately concretised.
Regarding the size of the provision, IFRS prescribes in contrast to HGB an allocation of the full
restoration costs taking the foreseeable point in time of restoration into consideration already when the
obligation is created. According to HGB, the transfer to the provision is effected pro rata over the
period of use of the asset.
The formation of such provisions – and if applicable also changes to them – is not – in contrast
to HGB accounting – entered with effect on net income directly on creation of the obligation, but
allocated to the assets concerned and written off like these by scheduled depreciation or as the result
of an impairment test. The provisions are discounted according to the term of the underlying contracts
and allocated proportionately every year up to the expected total obligation.
This resulted in additional provisions and short-term liabilities amounting to EUR 0.66 million
per 1 January 2004 and EUR 0.42 million per 31 December 2004. The property, plants and equipment
rose accordingly by EUR 0.66 million per 1 January 2004 and EUR 0.61 million per 31 December
2004. Depreciations of EUR 0.18 million and interest expenses of EUR 0.04 million were additionally
included in the financial expenses. Transfers of EUR 0.40 million to the HGB provisions were
eliminated in the other operating expenses.
e) According to HGB, the inventories were subjected to a lowest-value test also regarding lower
replacement costs. According to IFRS, valuation is effected exclusively on the basis of sales-market
orientated loss-free valuation.
The resultant effect increased the value of the inventories as of 31 December 2004 by EUR
1.40 million and reduced the cost of materials by the same amount. In addition to this, the inventory
changes in the income statement for 2004 were adjusted neutrally against the cost of materials (at
EUR 6.42 million). There were no effects as of 1 January 2004.
f) Provisions must be formed for pension commitments according to both German accounting rules
and IFRS. In the HGB financial statements the pension commitments are calculated at the amount of
the present actuarial value according to § 6a Income Tax Act. Deviations between the value rates
according to IFRS and HGB / Income Tax Act result especially from the different treatment of actuarial
profits and losses. In addition to this, the calculation of provisions for pensions according to IFRS is
effected in contrast to HGB on the basis of company-specific parameters and interest rates. According
to IFRS, calculation of the provisions for pensions by the German present actuarial value method is
not permitted. The provisions for pensions must be calculated by the projected unit credit method
taking future salary and pension increases into consideration.
The different calculation of provisions for pensions resulted in reductions in the other
receivables of EUR 0.87 million per 1 January 2004 and EUR 0.99 million per 31 December 2004
since the reinsurance shown there in the HGB consolidated financial statements is shown in the IFRS
consolidated financial statements as plan assets balanced against the liabilities from pension
commitments. Nevertheless the “net provisions for pensions” according to IFRS are higher than
according to HGB by EUR 3.51 million per 1 January 2004 and EUR 3.69 million per 31 December
2004.
The personnel expenses for 2004 according to IFRS are lower by EUR 0.85 million. On the
other hand, an additional EUR 1.03 million had to be included as interest expenses. The transfers to
reinsurance in the HGB consolidated financial statements of EUR 0.12 million were eliminated from
the other operating income in the IFRS consolidated financial statements.
g) Within the other provisions, the provisions for restructuring and other provisions for accrued
expenses led in addition to the obligation to return property to its original condition to an increase in
equity according to IFRS because the application of provisions for restructuring according to IFRS is
69

linked in contrast to HGB to very strict requirements and provisions for restructuring formed according
to HGB may not be applied under IFRS.
Overall the provisions dropped by EUR 4.11 million per 1 January 2004 and by EUR 2.98
million per 31 December 2004. In the income statement for 2004 other operating expenses of EUR
1.13 million and an increase in the (deferred) income tax expenditure by EUR 0.2 million resulted from
the adjustment of the corresponding provisions.
h) Further, some obligations that are to be shown as provisions according to HGB, e.g. provisions for
outstanding incoming invoices or vacation remuneration, must be shown as short-term liabilities
according to IFRS.
The corresponding neutral reorganisations led to a reduction in the long and short-term other
provisions by a total of EUR 49.87 million per 31 December 2004 (EUR 47.94 million per 1 January
2004) and an increase in trade accounts payable by EUR 34.51 million per 31 December 2004 (EUR
31.73 million per 1 January 2004) as well as the long and short-term other liabilities by a total of EUR
15.36 million per 31 December 2004 (EUR 16.21 million per 1 January 2004).
i) Deviations not resulting from the change to IFRS
Due to information acquired after preparation of the HGB consolidated balance sheet, the value rate
for a long-term receivable of EUR 0.94 million was already increased in the IFRS opening balance
sheet per 1 January 2004 by EUR 0.84 million to EUR 1.78 million and discounted to EUR 1.48 million
per 31 December 2004.
In addition to this – also as of 1 January 2004 – an individual value adjustment was formed in
full amount. In the IFRS consolidated financial statements for 2004 the increase in the receivable
(EUR 0.84 million from the other operating income) and the discounting (EUR 0.30 million from the
interest expense) were consequently eliminated. Instead a mark-up to the receivable of EUR 0.08
million to EUR 1.48 million was entered (against interest earnings), which has also been value-
adjusted in full (other operating expenses).
In the IFRS consolidated income statement it was also necessary to move receiving and
freight costs from the other operating expenses to cost of materials (total EUR 4.79 million). This did
not result in any effects on the balance sheet or the net income.
j) The above-mentioned changes increased the deferred tax claims to be shown – based on a tax rate
of 39.90 percent – as follows:
Note 31.12.2004 01.01.2004
EUR million EUR million
Goodwill a -0.77 0.00
Property, plants and equipment b -0.30 0.00
Finance-leasing c 0.08 0.10
Inventories d -0.55 0.00
Provisions for pensions e 1.86 1.74
Obligations to return property to original condition f -0.07 0.00
Other provisions g -0.13 -0.44
HGB options follows 1.82 3.72
Loss carry-forwards for tax purposes follows 3.47 3.78
5.40 8.89
The balance sheet as of 1 January 2004 shows deferred tax claims of EUR 10.25 million and
deferred tax liabilities of EUR 1.36 million. As of 31 December 2004 the deferred tax claims amounted
to EUR 9.06 million and the deferred tax liabilities to EUR 3.66 million.
The effect on the income statement for 2004 was an increase in income tax expenditure by
EUR 3.49 million.
Whereas an accounting option exists for active deferred taxes according to HGB, deferred
taxes are generally to be formed according to IFRS for all temporary (and quasi-permanent)
differences between the value rates of the tax balance sheet and the consolidated balance sheet.
The deferred taxes are calculated using a standardised group tax rate of 39.90 percent or
26.38 percent if the difference for municipal trade tax does not have to be considered.
70

In addition to this – and in contrast to HGB – deferred tax claims on expected future tax
reductions from the crediting of loss carry-forwards for tax purposes are capitalised according to IFRS
if it is adequately probable that the loss carry-forwards can be used in the future.
k) The effect of the above-mentioned conversions on the retained earnings are shown in the following
table:
Note 01.01.2004 31.12.2004
EUR million EUR million
Goodwill a 0.00 4.61
Property, plants and equipment b 0.00 0.75
Finance-leasing c 0.09 0.12
Inventories e 0.00 1.40
Provisions for pensions f -4.32 -4.68
Obligations to return property to original condition d 0.00 0.19
Other provisions g 4.11 2.98
Deferred taxes j 7.70 3.95
Other i -0.58 -1.48
6.99 7.84
These effects are to be allocated to:
Shareholders of the parent company 6.99 7.88
Minority interests 0.00 -0.04
6.99 7.84
l) The conversion of the income statement for 2004 to IFRS is shown in the following table:
Note HGB Transition IFRS
EUR million EUR million EUR million
Turnover 1,040.15 0.00 1,040.15
Increase in inventories of finished goods and
work in progress e 12.86 7.82 20.68
Other operating income f, i 13.75 -1.30 12.45
Cost of materials e, i -865.11 -11.21 -876.32
Personnel expenses f -65.51 0.85 -64.66
Depreciations a, b, c, d -15.73 3.94 -11.79
Other operating expenses c, d, g, i -79.17 5.43 -73.74
Other taxes -1.51 0.00 -1.51
Financial earnings i 3.49 0.07 3.56
Financial expenses c, d, f -4.54 -1.06 -5.60
Earnings before taxes 40.19 4.54 44.73
Taxes on income and earnings g, j -11.39 -3.74 -15.13
Consolidated net income 28.80 0.80 29.60
Profit/Loss for other shareholders -0.25 0.04 -0.21
Consolidated unappropriated net income 28.55 0.84 29.39
Earnings per share 2.90 0.09 2.99
71

Separate Notes and Information According to § 315 a of the German Commercial Code
(41) Corporate governance according to § 161 of the Corporation Act
The Management Board and Supervisory Board of INTERSEROH AG issued their annual declaration
on the recommendations of the “Government Commission German Corporate Governance Code” in
December 2005 and posted it on the company’s website (www.interseroh.de, Category Investor
Relations, Corporate Governance).
(42) Information according to the Securities Trading Act
Notices in accordance with the Securities Trading Act were published in the Bundesanzeiger (Federal
Gazette) as follows:
1. Sal. Oppenheim jr. & Cie. Kommanditgesellschaft auf Aktien, Unter Sachsenhausen 4, 50667
Cologne, gave notice to INTERSEROH Aktiengesellschaft zur Verwertung von Sekundärrohstoffen
(INTERSEROH AG) on 4 January 2005 in accordance with § 21 of the Securities Trading Act that its
share of the voting rights in INTERSEROH AG had dropped below the 10 percent threshold and the
five percent threshold on 29 December 2004. Sal. Oppenheim jr. & Cie. Kommanditgesellschaft auf
Aktien further gave notice that its share of the voting rights in INTERSEROH AG was now null percent.
2. RETHMANN AG & Co.(Selm, Germany) notified us in accordance with §§ 21, Par. 1, 22, Par. 1,
Clause 1, No. 1 of the Securities Trading Act as follows:
“We hereby give notice pursuant to §§ 21, Par. 1, 22, Par. 1, Clause 1, No. 2 of the Securities
Trading Act that the share of the voting rights of our subsidiary company RETHMANN
Unternehmensbeteiligungs GmbH, Werner Straße 95, 59379 Selm, in INTERSEROH AG zur
Verwertung von Sekundärrohstoffen, Cologne, remains above the 10 percent threshold on 23.02.2005
and that the share of the voting rights of our subsidiary company RETHMANN
Unternehmensbeteiligungs GmbH on 23.02.2005 remains at 14.9942 percent.
These voting rights are now attributable to us in full according to § 22, Par. 1, Clause 1, No. 2
of the Securities Trading Act.”
“We hereby give notice pursuant to § 21, Par. 1, Clause 1 of the Securities Trading Act that
the share of the voting rights of our subsidiary company RETHMANN Unternehmensbeteiligungs
GmbH, Werner Straße 95, 59379 Selm, in INTERSEROH AG zur Verwertung von
Sekundärrohstoffen, Cologne, dropped below the thresholds of 10 percent and five percent of the
voting rights on 15 March 2005. Its share of the voting rights has been null since 15.03.2005.
The share of the voting rights attributable to our company according to § 22, Par. 1, Clause 1,
No. 1 of the Securities Trading Act also dropped below the threshold of 10 percent and five percent of
the voting rights on 15.03.2005 and has been null since 15.03.2005.”
3. ALBA AG (Velten, Germany) issued us the following notice pursuant to § 21 of the Securities
Trading Act:
“We hereby give notice pursuant to § 21, Par. 1 of the Securities Trading Act that the share of
the voting rights of ALBA AG in INTERSEROH AG continues to exceed the thresholds of five percent,
10 percent and 25 percent on 16.03.2005.
ALBA AG is the acquiring legal entity of the merger with ALBA Beteiligungs GmbH effective
since 16.03.2005 and now directly holds a share of the voting rights in INTERSEROH AG of 25.75
percent.”
“We hereby give notice pursuant to § 21, Par. 1 of the Securities Trading Act that the share of
the voting rights of ALBA Beteiligungs GmbH, Germany, Velten near Berlin, in INTERSEROH AG
dropped below the thresholds of 25 percent, 10 percent and five percent on 16.03.2005.
ALBA Beteiligungs GmbH was merged into ALBA AG with effect from 16.03.2005 and now
holds no voting right shares in INTERSEROH AG.”
“We hereby give notice pursuant to § 21, Par. 1 of the Securities Trading Act that our share
of the voting rights in INTERSEROH AG zur Verwertung von Sekundärrohstoffen dropped below the
thresholds of 25 percent, 10 percent and five percent on 8 December 2005 and now amounts to null
percent.”
72

4. Praetorium 61. VV GmbH, Berlin, issued us the following notice pursuant to § 21 of the Securities
Trading Act:
“We, Praetorium 61. VV GmbH, whose renaming to Isabell Finance Vermögensverwaltung
GmbH has been decided but not yet entered in the Commercial Register, hereby give notice pursuant
to § 21, Par. 1 of the Securities Trading Act that our share of the voting rights in INTERSEROH
Aktiengesellschaft zur Verwertung von Sekundärrohstoffen exceeded the thresholds of five percent,
10 percent and 25 percent on 7 December 2005 and now amounts to 25.75 percent (voting rights from
2,534,229 ordinary shares).”
5. Inter-Sero Capitalpartners GmbH & Co. Verwaltungs KG, Berlin, issued us the following notice
pursuant to § 21 of the Securities Trading Act:
“We hereby give notice pursuant to § 21, Par. 1 of the Securities Trading Act that our share of
the voting rights in INTERSEROH Aktiengesellschaft zur Verwertung von Sekundärrohstoffen
exceeded the thresholds of five percent, 10 percent and 25 percent on 8 December 2005 and now
amounts to 25.75 percent (voting rights from 2,534,229 ordinary shares). All these voting rights are
attributable to us pursuant to § 22, Par. 1, No. 1 of the Securities Trading Act.”
6. Inter-Sero Capitalpartners GmbH, Berlin, issued us the following notice pursuant to § 21 of the
Securities Trading Act:
“We hereby give notice pursuant to § 21, Par. 1 of the Securities Trading Act that our share of
the voting rights in INTERSEROH Aktiengesellschaft zur Verwertung von Sekundärrohstoffen
exceeded the thresholds of five percent, 10 percent and 25 percent on 8 December 2005 and now
amounts to 25.75 percent (voting rights from 2,534,229 ordinary shares). All these voting rights are
attributable to us pursuant to § 22, Par. 1, No. 1 of the Securities Trading Act.”
7. Ko-Fi Koala Finance Vermögensverwaltungs GmbH, Berlin, issued us the following notice pursuant
to § 21 of the Securities Trading Act:
“We hereby give notice pursuant to § 21, Par. 1 of the Securities Trading Act that our share of
the voting rights in INTERSEROH Aktiengesellschaft zur Verwertung von Sekundärrohstoffen
exceeded the thresholds of five percent, 10 percent and 25 percent on 8 December 2005 and now
amounts to 25.75 percent (voting rights from 2,534,229 ordinary shares). All these voting rights are
attributable to us pursuant to § 22, Par. 1, No. 1 of the Securities Trading Act.”
8. Dr. Axel Schweitzer, Berlin, issued us the following notice pursuant to § 21 of the Securities Trading
Act:
“I hereby give notice pursuant to § 21, Par. 1 of the Securities Trading Act that my share of the
voting rights in INTERSEROH Aktiengesellschaft zur Verwertung von Sekundärrohstoffen exceeded
the thresholds of five percent, 10 percent and 25 percent on 8 December 2005 and now amounts to
25.75 percent (voting rights from 2,534,229 ordinary shares). All these voting rights are attributable to
me pursuant to § 22, Par. 1, No. 1 of the Securities Trading Act.”
9. Dr. Eric Schweitzer, Berlin, issued us the following notice pursuant to § 21 of the Securities Trading
Act:
“I hereby give notice pursuant to § 21, Par. 1 of the Securities Trading Act that my share of the
voting rights in INTERSEROH Aktiengesellschaft zur Verwertung von Sekundärrohstoffen exceeded
the thresholds of five percent, 10 percent and 25 percent on 8 December 2005 and now amounts to
25.75 percent (voting rights from 2,534,229 ordinary shares). All these voting rights are attributable to
me pursuant to § 22, Par. 1, No. 1 of the Securities Trading Act.”
10. Dr. Jörg Bonke, Münster, informed us pursuant to § 21, Par. 1, Clause 1 of the Securities Trading
Act that he:
“exceeded the thresholds of five percent and 10 percent of the voting rights in INTERSEROH
AG zur Verwertung von Sekundärrohstoffen, Cologne, on 23.02.2005. My share of the voting rights
amounts to 14.9942 percent.”
Dr. Jörg Bonke, Münster, then informed us pursuant to § 21, Par. 1, Clause 1 Securities
Trading Act that he
“dropped below the thresholds of 10 percent and five percent of the voting rights in
INTERSEROH AG zur Verwertung von Sekundärrohstoffen, Cologne, on 15 March 2005. My share of
the voting rights now amounts to null percent.”
73

(42) Exemption option rights according to §§ 264, Par. 3 and 264b of the Commercial Code
ISD INTERSEROH Dienstleistungs GmbH, Cologne, which is fully consolidated in the INTERSEROH
Group, has exercised its option for exemption from the duty to disclose annual financial statements
and a management report in accordance with the provisions applicable to corporations pursuant to §
264, Par. 3 of the Commercial Code. The shareholder resolution necessary to this end has been
submitted to the Commercial Register in Cologne.
The following fully consolidated partnership has exercised its option for exemption from the
duty to disclose annual financial statements and a management report in accordance with the
provisions applicable to corporations pursuant to § 264b of the Commercial Code:
• INTERSEROH Stahl- und Metallrecycling GmbH & Co. KG, Cologne
Cologne, 20 February 2006
INTERSEROH Aktiengesellschaft zur Verwertung von Sekundärrohstoffen
The Management Board
Dr. Werner Kook Johannes-Jürgen Albus
Christian Rubach Roland Stroese
74

Annex 1
Statement of Equity Changes
in the Period from 1 January 2004 to 31 December 2005
Note
Subscribed
capital
EUR
million
Parent company
Surplus
capital
EUR
million
Consolidate
d equity
EUR
million
Accumulated other
consolidated result
Adjustment
items from Other
foreign neutral
currency transaction
conversion
s
EUR
million
EUR
million
As of 01.01.2004 25.58 38.61 77.34 0.00 -56.12
Dividends paid (21) -8.46
Changes to group of
consolidated companies
Other changes 0.27
Consolidated net
income 29.39
Amounts directly
incorporated in equity (21) -0.06 0.00
Overall group result - - - - - - - - - - - - - - -
As of 31.12.2004 25.58 38.61 98.27 -0.06 -55.85
As of 01.01.2005 25.58 38.61 98.27 -0.06 -55.85
Dividends paid (21) -8.46
Changes to group of
consolidated companies -0.02
Other changes
Consolidated net
income 18.45
Amounts directly
incorporated in equity (21) 0.18 -0.03
Overall group result - - - - - - - - - - - - - - -
As of 31.12.2005 25.58 38.61 108.26 0.12 -55.90
75

As of 01.01.2004
Dividends paid
Changes to group of
consolidated companies
Other changes
Consolidated net
income
Amounts directly
incorporated in equity
Overall group result
As of 31.12.2004
As of 01.01.2005
Dividends paid
Changes to group of
consolidated companies
Other changes
Consolidated net
income
Amounts directly
incorporated in equity
Overall group result
As of 31.12.2005
Parent company
Minority interests Consolidated equity
Equity Minority capital
EUR million EUR million EUR million
85.41 0.28 85.69
-8.46 -0.04 -8.50
0.00 0.07 0.07
0.27 0.00 0.27
29.39 0.21 29.60
-0.06 0.02 -0.04
29.33 0.23 29.56
106.55 0.54 107.09
106.55 0.54 107.09
-8.46 -0.29 -8.75
-0.02 0.26 0.24
0.00 0.75 0.75
18.45 0.52 18.97
0.15 0.00 0.15
18.60 0.52 19.12
116.67 1.78 118.45
76

Annex 2
Consolidated Cash Flow Statement
2005 2004
EUR million EUR million
Consolidated net income/loss 18.97 29.60
+ Income tax expenditure 10.88 15.14
+/- Interest result 2.88 4.33
+/- Depreciations/Appreciations on long-term assets 12.53 10.10
+/- Increase/Decrease in long-term provisions -2.12 2.23
+/- Other income/expenses without effect on payments 0.00 0.29
+/- Changes to net operating assets 7.41 -25.81
Cash flow from current business 50.55 35.88
+ Payments from interest 0.93 0.82
- Disbursements for interest -2.48 -5.24
+ Payments from dividends 0.83 0.26
- Disbursements for income taxes -14.00 -9.94
Net cash flow from current business activity 35.83 21.78
+ Payments received from the disposal of long-term assets 6.21 8.04
- Disbursements for investments in consolidated companies
and other business units -4.71 -0.49
- Disbursements for investments in long-term assets (excl. finance-leasing) -22.48 -13.65
Cash flow from investment activity -20.98 -6.10
- Disbursements to shareholders -8.46 -8.46
- Disbursements to minority interests -0.29 -0.05
+ Payments from minority interests 0.75 0.00
+ Borrowings 6.02 18.03
- Disbursements for the redemption of financial liabilities -14.62 -20.62
Cash flow from financing activity -16.60 -11.10
Increase/Decrease in cash and cash equivalents with effect on payments -1.75 4.58
+ Cash and cash equivalents at start of period 31.23 26.65
Cash and cash equivalents at end of period 29.48 31.23
See note (28) for notes on the cash flow statement.
77

LIST OF MAJOR SHAREHOLDINGS
INTERSEROH AG held the following major direct or indirect holdings as of the closing date:
a) Fully consolidated companies
Registered office
(Group)
share %
ISD INTERSEROH Dienstleistungs GmbH Cologne 100
EVA Erfassen und Verwerten von Altstoffen GmbH Vienna/Austria 100
INTERSEROH Holzhandel GmbH Cologne 100
INTERSEROH Holzkontor Worms GmbH Worms 100
INTERSEROH Holzkontor Berlin GmbH Berlin 51
INTERSEROH Holzkontor NRW GmbH Cologne 51
INTERSEROH Holzkontor OWL GmbH Porta Westfalica 51
INTERSEROH Holzkontor Bückeberg GmbH
& Co. KG Bückeburg 75
Repasack Gesellschaft zur Verwertung gebrauchter
Papiersäcke mbH Wiesbaden 100
ISR INTERSEROH Rohstoffe GmbH Cologne 100
INTERSEROH France S.A.S. Pantin/France 100
INTERSEROH Hansa Recycling GmbH Dortmund 100
INTERSEROH ERC Eisenmetall Rohstoff Celler GmbH Dortmund 100
INTERSEROH Evert Heeren GmbH Leer 100
Groninger VOP Recycling B.V. Groningen/Netherlands 100
INTERSEROH Franken Rohstoff GmbH Sennfeld 100
INTERSEROH Hansa Rohstoffe GmbH Essen 100
INTERSEROH Hetzel GmbH Heidelberg 100
INTERSEROH Jade-Stahl GmbH Wilhelmshaven 100
INTERSEROH BW Rohstoff und Recycling GmbH Stuttgart 90
INTERSEROH Neckarschrott GmbH Horb 51
INTERSEROH SEROG GmbH(formerly IS dritte Vermögensver.
GmbH) Bous 100
RHS Rohstoffhandel GmbH Stuttgart 90
INTERSEROH Stahl- und Metallrecycling GmbH & Co. KG Cologne 100
INTERSEROH-Metallaufbereitung Rostock GmbH Rostock 100
INTERSEROH Nordmetall GmbH Lübeck 100
INTERSEROH RSH Recycling-Stahl-Handel GmbH Cologne 100
b) Included as associated companies (at equity)
Registered office
(Group)
share %
Eisen- und Stein-Gesellschaft mbH & Co. Siegen 50
HR Hüttenwerkentsorgung GmbH Mülheim a.d. Ruhr 50
Mineralmahlwerk Westerwald Horn GmbH& Co. KG Weitefeld 50
TOM Sp. z. o.o Szczecin/Poland 50
Jade-Entsorgung GmbH Rostock 24.9
c) Companies not included in the consolidated financial statements
INTERSEROH BELGIQUE S.A. Raeren/Belgium 100
PADEC S.A. Deerlijk/Belgium 100
INTERSEROH zbiranje in predelava odpadnih surovin d.o.o. Begunje/Slovenia 100
INTERSEROH Kunststoffaufbereitungs GmbH Aschersleben 74.4
ISP INTERSEROH Pfand-System GmbH Cologne 100
Loongin GmbH Cologne 50
Shanghai Huabao-Loogin Resources Recycling Co., Ltd. Shanghai/China 35
78

Published by:
INTERSEROH Aktiengesellschaft
for the Exploitation of Raw Materials (Cologne)
Contact
INTERSEROH AG
Stollwerckstrasse 9a
D-51149 Cologne
Public Relations Department
Tel.: +49 (0)2203 9147-1250
Fax: +49 (0)2203 9147-1406
E-mail: info@interseroh.de
Investor Relations
Tel.: +49 (0)2203 9147-1241
Fax: +49 (0)2203 9147-1406
E-mail: aktie@interseroh.de
www.interseroh.de
Imprint
79