LA CONFISCACIÓN DE JACARILLA POR JAIME II, 1296

Basis of presentation

The accompanying consolidated financial statements include GEA Group Aktiengesellschaft, Düsseldorf/ Germany, and its subsidiaries, which together make up GEA Group. GEA Group Aktiengesellschaft is a listed corporation. The consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRSs) and related Interpretations issued by the International Accounting Standards Board (IASB), as adopted by the EU in compliance with Regulation (EC) No. 1606/2002 of the European Parliament and the Council on the application of international accounting standards. The additional provisions of section 315a of the HGB were also complied with.

The accompanying consolidated financial statements have been prepared in euros (EUR). All amounts, including the prior-year figures, are presented in thousands of euros (EUR thousand), except for the segment information. All amounts have been rounded using standard rounding rules. Adding together individual amounts may therefore result in differences in the order of EUR 1 thousand in certain cases. To improve the clarity of presentation, various items in the consolidated balance sheet and income statement have been aggregated and are explained accordingly in the notes. Assets and liabilities are classified into current and non-current items. The income statement is prepared using the cost of sales method.

The cash flow statement is prepared using the indirect method for cash flow from operating activities and the direct method for cash flow from investing and financing activities.

The Executive Board of GEA Group Aktiengesellschaft approved these consolidated financial statements for publication on February 28, 2013.

Accounting pronouncements applied for the first time

The following accounting standards were applied by GEA Group for the first time in the year under review:

IAS 12 “Income Taxes” – amendment relating to the recovery of underlying assets – published by the IASB in December 2010

The amendment contains a new rule on the treatment of temporary differences in connection with the measurement of investment property pursuant to the fair value model in accordance with IAS 40 “Investment Property.” In general, temporary differences between the carrying amount and tax base of an asset or liability must be measured based on the tax consequences expected as a result of the planned use of the underlying asset or liability. In the future, deferred tax liabilities and deferred tax assets must be measured for investment property carried at fair value based on the tax consequences of a sale, unless the reporting entity can prove that recovery of the full carrying amount will be through use.

IFRS 7 “Financial Instruments: Disclosures” – enhanced disclosure requirements for transfers of financial assets – published by the IASB in December 2011

Under certain conditions, the transfer of rights under financial assets to a third party or the obligation to transfer payments from financial assets to a third party may lead to those assets being derecognized.

In such cases, the existing version of IFRS 7 did not impose any disclosure requirements. The amendment now requires extensive disclosures on any assets and liabilities retained or assumed in the course of the transaction. In addition, the disclosure requirements have been extended in relation to restrictions on use if the asset continues to be recognized in its entirety although the associated rights were transferred or the entity has entered into an obligation to transfer payments resulting from the asset. The accounting pronouncements required to be applied for the first time in the fiscal year did not have a material effect on the group’s net assets, financial position, and results of operations, or on the notes to the consolidated financial statements.

Accounting pronouncements not yet applied

The following accounting standards and interpretations, as well as amendments to existing standards and interpretations, were published but not yet required to be applied to the preparation of the IFRS consolidated financial statements as of December 31, 2012:

Improvements to IFRSs 2011 – amendments under the IASB’s annual improvement project – published by the IASB in May 2012

The IASB published Annual Improvements to IFRS 2009 – 2011 Cycle as part of its Annual Improvements process to make minor amendments to standards and interpretations.

This collection of improvements contains minor amendments to a total of five standards. Subject to their endorsement by the EU, which is still outstanding, all of the amendments will be required to be applied for the first time in fiscal years beginning on or after January 1, 2013; earlier application is permitted. No effects are expected from the application of these amendments.

IAS 1 “Presentation of Financial Statements” – published by the IASB in June 2011

Under the revised IAS 1, other comprehensive income must be broken down into profit or loss that will subsequently be recycled to profit or loss as income or expense or that will remain directly in equity. The option remains to present items of other comprehensive income before or after tax. However, if the before-tax presentation is selected, the tax must be split between items that will subsequently be reclassified to profit or loss and those that will remain in equity.

The amendments to IAS 1 are required to be applied for fiscal years beginning on or after July 1, 2012; earlier application is permitted.

IAS 19 “Employee Benefits” – published by the IASB in June 2011

The amended IAS 19 contains new requirements for the recognition of the effects of changes in actuarial assumptions. In future, actuarial gains and losses must be recognized directly in other comprehensive income and must therefore be taken directly to equity. Immediate or deferred recognition in the income statement under the corridor approach, which was previously permitted, is no longer allowed. Following the change in accounting policy last fiscal year, this amendment has no effect on GEA Group. In addition, the revised IAS 19 replaces the expected return on plan assets and the interest expense on the pension obligation by a single net interest component. If GEA Group had already applied the revised IAS 19 in fiscal 2012, interest expense would have increased by around EUR 1.4 million. Moreover, in future the past service cost must be recognized in full in the period in which the relevant changes to the plan are made. Furthermore, the revision to IAS 19 changes the requirements for recognizing termination benefits and extends the disclosure and explanation requirements to include, among other things, the presentation

of the main characteristics of the pension plans and potential funding risks. However, these changes are not expected to materially affect the financial statements of GEA Group.

The amendments to IAS 19 are required to be applied retrospectively for fiscal years beginning on or after January 1, 2013; earlier application is permitted.

IFRS 10 “Consolidated Financial Statements,” IFRS 11 “Joint Arrangements,” IFRS 12 “Disclosure of Interests in Other Entities,” consequential amendments to IAS 27 “Separate Financial Statements,” and IAS 28 “Investments in Associates” – revised standards on accounting for interests in other entities and the corresponding disclosures in the notes to the financial statements – published by the IASB in May 2011 IAS 27 “Separate Financial Statements”

Following publication of the new IFRS 10 (see below), the revised IAS 27 now only contains the requirements governing accounting for subsidiaries, joint ventures, and associated companies in separate financial statements prepared according to IFRSs.

IAS 28 “Investments in Associates“

The changes contained in IAS 28 arise from the publication of IFRS 10, IFRS 11, and IFRS 12 (see below). In addition, under the revised version of the standard, an investment in or portion of an associate or joint venture must be classified as held for sale if the criteria of IFRS 5 are met. Any remaining portion of the associate or joint venture must be accounted for using the equity method until the portion classified as held for sale has been disposed of.

IFRS 10 “Consolidated Financial Statements”

The new standard replaces the consolidation requirements of IAS 27 “Consolidated and Separate Financial Statements” and SIC-12 “Consolidation – Special Purpose Entities.” The new IFRS 10 affects the definition of the basis of consolidation. As currently required by IAS 27, consolidated financial statements must include those entities that are controlled by the parent. The definition of control in IFRS 10 differs from that used in IAS 27, where control is defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Under IFRS 10, control exists when an investing entity is exposed, or has rights, to variable returns from involvement with the investee on the one hand, and has the ability to affect those returns through its power over the investee on the other. The new concept of control applies to all entities, including special purpose entities. It can lead to differing assessments, especially in cases of potential voting rights, agency relationships, and in situations where substantial, but not majority, voting rights are held. The impact assessment of the new requirements on GEA Group’s basis of consolidation has still to be concluded. To date, no impact is expected, because GEA Group Aktiengesellschaft has constant control, directly or indirectly, of all voting rights in its consolidated entities.

IFRS 11 “Joint Arrangements”

The new standard supersedes IAS 31 “Interests in Joint Ventures” and SIC-13 “Jointly Controlled Entities – Nonmonetary Contributions by Venturers.” In contrast to IAS 31, accounting for joint arrangements under IFRS 11 depends not on the legal form of the arrangement but on the nature of the rights and duties arising under the arrangement. IFRS 11 makes a distinction between joint operations and joint ventures. Joint operations are joint arrangements in which the parties with joint control have rights to the assets and obligations for the liabilities relating to that arrangement. In line with this, they account for their shares of the respective assets, liabilities, income, and expenditure as they did previously. A joint venture exists when the parties with joint control have rights to the net assets of the arrangement. Joint ventures now have to be accounted for using the equity method. The previous option to account for joint ventures using proportionate consolidation has been removed. GEA Group does not expect the implementation of these new requirements to materially affect its financial reporting.

IFRS 12 “Disclosure of Interests in Other Entities”

The new standard revises the disclosure requirements for all types of interests in other entities, including joint arrangements, associates, structured entities, and off-balance sheet vehicles. The objective is to help users of financial statements to understand the nature of, and risks associated with, the entity’s interest in other entities, and the effects of these interests on its financial positions, financial performance, and cash flows.

The new IFRS 10, 11, and 12, and revised IAS 27 and IAS 28 standards are required to be applied for the first time retroactively in the first period of a fiscal year beginning on or after January 1, 2013. Earlier application is permitted. The new IFRS 10, 11, 12, and revised IAS 27 and IAS 28 standards must all be applied at the same time.

In the EU, the new IFRS 10, 11, and 12, and revised IAS 27 and IAS 28 standards are required to be applied for the first time for fiscal years beginning on or after January 1, 2014 – contrary to the date of initial application of the original standards.

In June 2012, the IASB published clarifications and revised transitional arrangements for the first-time application of the IFRS 10, 11, and 12 standards. Subject to endorsement by the EU, the amendments are required to be applied for fiscal years beginning on or after January 1, 2013.

IAS 32 “Financial Instruments: Presentation” and IFRS 7 “Financial Instruments: Disclosures” – offsetting financial assets and financial liabilities – published by the IASB in December 2011

The additions to IAS 32 specify in more detail the conditions under which financial assets and financial liabilities must be offset. In addition, they clarify which gross settlement systems may be considered equivalent to net settlement within the meaning of the standard. The relevant disclosure requirements in IFRS 7 were also modified in line with these clarifications.

The amendments to IAS 32 are required to be applied retroactively for fiscal years beginning on or after January 1, 2014; earlier application is permitted.

The amendments to IFRS 7 are required to be applied retroactively for fiscal years beginning on or after January 1, 2013.

IFRS 9 “Financial Instruments” – recognition and measurement of financial instruments – published by the IASB in November 2009

The accounting treatment of financial instruments set out in IFRS 9 will replace IAS 39.

In the future, there will only be two classification and measurement categories for financial assets: at amortized cost or at fair value. Financial assets at amortized cost comprise those financial assets that give rise solely to payments of principal and interest at specified dates and are also held within a business model for managing financial assets whose objective is to hold these financial assets and collect the associated contractual cash flows. All other financial assets are classified as at fair value. Under certain circumstances, a fair value option is available for financial assets falling under the first category, as at present.

Changes in financial assets belonging to the fair value category must generally be recognized in profit or loss. However, an election can be made to measure certain equity instruments at fair value through other comprehensive income; in this case, dividend income from these assets is recognized in profit or loss. The provisions governing financial liabilities have basically been taken over from IAS 39. The most important difference relates to the treatment of changes in value of financial liabilities measured at fair value. In future, the amount of the change relating to changes in own credit risk must be recognized in other comprehensive income, while the remaining amount of the change in fair value is recognized in profit or loss.

IFRS 9 “Financial Instruments” and IFRS 7 “Financial Instruments: Disclosures” – changes to the mandatory effective date and transition disclosures – published by the IASB in December 2011 The amendments no longer require restatement of prior-period figures upon initial application of IFRS 9. When an entity chooses to apply this exemption, additional disclosures are required according to IFRS 7 to allow for assessment of the effects of the first-time application of IFRS 9.

Subject to its endorsement by the EU, which is still outstanding, the date of initial application of IFRS 9 was delayed to fiscal years beginning on or after January 1, 2015; earlier application is permitted. IFRS 13 “Fair Value Measurement” – published by the IASB in May 2011

The new standard sets out the methodology for determining fair value and increases fair value disclosures. It means that a framework for measuring fair value is now contained in a single IFRS. The requirements do not apply to share-based payment transactions within the scope of IFRS 2 “Share-based Payment,” leasing transactions within the scope of IAS 17 “Leases,” or other measurements required by other standards that have some similarities to fair value but are not fair value, such as net realizable value in IAS 2 “Inventories,” or value in use in IAS 36 “Impairment of Assets.”

IFRS 13 will be required to be applied for the first time prospectively in fiscal years beginning on or after January 1, 2013. Earlier application is permitted.

IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine” – published by the IASB in October 2011

The interpretation governs the accounting for waste removal costs incurred during the production phase of surface mining activity. It clarifies the conditions under which an asset has to be recognized for stripping activities and how such an asset must be measured. IFRS 20 will be required to be applied for the first time in fiscal years beginning on or after January 1, 2013.

Unless otherwise stated, the new standards have been endorsed by the EU.

GEA Group is currently examining the effects of the revised accounting standards on the consolidated financial statements and will determine the date of initial application. At this point in time, GEA Group does not believe that application of the new or revised pronouncements will have a material effect on its consolidated financial statements.