Westag AG — Annual Report 2010

Apr 29, 2011

FINANCIAL REPORT 2010

WESTAG & GETALIT AG AT A GLANCE

	2010	2009	2008	2007	2006
Sales (in € '000)	216,626	201,411	226,185	225,277	196,798
Change over the previous year in percent	7.6 %	- 11.0 %	0.4 %	14.5 %	13.5 %
Export sales (in € '000)	42,802	39,246	55,361	56,776	46,044
Change over the previous year in percent	9.1 %	- 29.1 %	- 2.5 %	23.3 %	29.7 %
Export share	19.8 %	19.5 %	24.5 %	25.2 %	23.4 %
Investments (in € '000) 1)	9,375	9,793	20,090	14,688	10,659
Change over the previous year in percent	- 4.3 %	- 51.3 %	36.8 %	37.8 %	0.1 %
Depreciation (in € '000)	9,477	9,388	9,021	9,617	8,519
Change over the previous year in percent	0.9 %	4.1 %	- 6.2 %	12.9 %	4.3 %
Cost of materials ratio	49.0 %	47.3 %	51.4 %	52.5 %	49.5 %
Staff cost ratio	30.2 %	31.6 %	27.9 %	27.4 %	29.5 %
Number of employees as of December 31 2)	1,244	1,226	1,262	1,248	1,194
Change over the previous year in percent	1.5 %	- 2.9 %	1.1 %	4.5 %	0,8 %
EBITDA (in € '000)	24,151	23,899	23,911	25,538	21,669
Change over the previous year in percent	1.0 %	- 0.1 %	- 6.4 %	17.9 %	33.6 %
EBIT (in € '000)	14,674	14,511	14,890	15,921	13,150
Change over the previous year in percent	1.1 %	- 2.5 %	- 6.5 %	21.1 %	63.3 %
EBT (earnings before tax, in € '000)	15,060	14,930	15,322	16,605	13,486
Change over the previous year in percent	0.9 %	- 2.6 %	- 7.7 %	23.1 %	56.9 %
Net profi t (in € '000)	10,660	10,510	10,791	9,533	11,926
Change over the previous year in percent	1.4 %	- 2.6 %	13.2 %	- 20.1 %	128.2 %
Return on sales before taxes	7.0 %	7.4 %	6.8 %	7.4 %	6.9 %
ROCE	14.5 %	14.9 %	15.3 %	18.3 %	15.9 %
Operating cash fl ow (in € '000) 3)	16,529	19,977	20,639	17,173	12,282
Change over the previous year in percent	-17.3 %	- 3.2 %	20.2 %	39.8 %	- 19.2 %
Equity ratio	69.6 %	71.9 %	68.0 %	65.5 %	67.8 %
Return on equity	10.2 %	10.4 %	11.6 %	10.9 %	14.5 %
Number of shares 4)	5,720,000	5,720,000	5,720,000	5,720,000	5,720,000
Earnings per share (EPS, in €)	1.86	1.84	1.89	1.67	2.08
Change over the previous year in percent	1.1 %	- 2.6 %	13.2 %	- 19.7 %	128.6 %
Book value per share (in €)	18.21	17.60	16.20	15.22	14.38
Change over the previous year in percent	3.5 %	8.6 %	6.4 %	5.9 %	13.8 %
Dividend per ordinary share (in €) 5)	0.94	0.94	0.44	0.94	0.82
Change over the previous year in percent	0.0 %	113.6 %	- 53.2 %	14.6 %	70.8%
Dividend per preference share (in €) 5)	1.00	1.00	0.50	1.00	0.88
Change over the previous year in percent	0.0%	100.0 %	- 50.0 %	13.6 %	63.0%

1) Including intangible assets

2) Including trainees

3) Equivalent to operating cash fl ow excl. investments held as current assets

4) 50% ordinary shares and 50% preference shares each (2,860,000 shares each)

5) For 2010 subject to the resolution of the Annual General Meeting on July 26, 2011

CORPORATE STRUCTURE

Divisions	Plywood/Formwork	Doors/Frames
Products	Formwork panels Body building panels Industrial fl oors Stage fl oors Sandwich panels	Contract doors/frames Fire/smoke protection Acoustic door sets Burglar-resistant Interior doors/frames Lattice walls Special doors
Sales focus	Construction industry Commercial vehicles Plant engineering Stage and event industry	Timber trade merchants Builders' merchants DIY stores Builders' hardware Dry liners
Export focus	Europe	Europe/Middle East
Sales	€ 32.9 million	€ 103.7 million
Export share	26.8 %	12.7 %
Locations	Rheda-Wiedenbrück	Rheda-Wiedenbrück

Perfection on the construction site we have a high processing capacity for formwork panel customisation. Photo: ddp images/AP/Alik Keplicz

Trendy and multi-faceted doors and frames for the private and the contract sector

Laminates/Elements Central Services High pressure laminates (HPL) Human resources Kitchen worktops Purchasing Window sills Technical Services Interior construction products Marketing-Communikation Solid surface material Finance Polymer glass IT Logistics Cogeneration plant Timber trade merchants Internal Customers DIY stores Energy supplier Interior construction Furniture industry Architects Europe € 74.2 million € 5.9 million
28.1 %
Rheda-Wiedenbrück/Wadersloh Rheda-Wiedenbrück

Worktops give each kitchen its distinctive look - we have the right design for every taste

FINANCIAL CALENDAR*

March 24, 2011	Press Release
	Report on the results
	of the fi scal year 2010
March 29, 2011	Publication of Financial Report 2010
	(on the Internet)
April 7, 2011	Annual Financial Statements Press Conference
May 12, 2011	Report on the fi rst three months of 2011
July 26, 2011	Annual General Meeting
	in Rheda-Wiedenbrück
August 11, 2011	Interim report on the fi rst six months of 2011
August 30, 2011	Presentation of Westag & Getalit AG
	at the Small Cap Conference
	in Frankfurt/Main
November 14, 2011	Report on the fi rst nine months of 2011

* For updates refer to: www.westag-getalit.de/fi nanzkalender

Editorial Information

Published by: Westag & Getalit AG Hellweg 15 33378 Rheda-Wiedenbrück Germany Phone +49 5242 17-0 Fax +49 5242 17-75000

Edited by: Investor Relations ir@westag-getalit.de

Printed by: Werbedruck GmbH Horst Schreckhase Spangenberg Printed on heaven 42 (FSC-certifi ed for sustainable forest management)

ISSN 1610-6776

CONTENTS

2	Letter to Shareholders
5	Supervisory Board Report
10	The Company
10	Management Board
11	Westag & Getalit AG
12	Plywood/Formwork Division
16	Doors/Frames Division
20	Laminates/Elements Division
24	The Markets
28	Westag Share
30	Employees
32	Management Report
51	Financial Statements
52	Cash Flow Statement (IFRS)
53	Income Statement (IFRS)
54	Balance Sheet (IFRS)
56	Notes
61	Notes to the Income Statement
65	Notes to the Balance Sheet
76	Additional Notes to the Balance Sheet
82	Corporate Governance
84	Auditor's Report (IFRS)
86	Balance Sheet (HGB)
88	Profi t and Loss Account (HGB)
90	Auditor's Report (HGB)

LETTER TO SHAREHOLDERS

Bernhard Wenninger Spokesman of the Management Board

Dear Shareholder,

I would like to take this opportunity to inform you about a fi scal year that was marked by contrasts. The year 2010 saw a world economy that was dominated by the ongoing debt crisis on the one hand and by a real economic upswing in some parts of the world on the other hand.

Right at the beginning of the year, the euro-zone and the common currency came under pressure as Greece's fi nancing problems became publicly known. At the same time, many markets, especially in Asia, gained strength again, which had a stabilising effect on exportdependent Germany. As a result, Germany was able to isolate itself from the partly weak and partly disappointing economic developments in European neighbour countries and to return to the growth track.

Against this background, construction activity in Germany picked up. This is impressively refl ected in incoming orders in the building construction sector, which improved by 5.5% as compared to the previous year, according to the Federal Statistical Offi ce.

Westag & Getalit AG benefi ted from this positive trend and boosted its sales revenues by 7.6% in fi scal year 2010 to € 217 million. We are especially pleased about the fact that we were able to grow not only in the domestic market but also in the economically more diffi cult international markets. Equally pleasing was the fact that growth was reported by all three divisions.

Following a weather-related slump in the fi rst quarter, the Plywood/Formwork Division picked up as the year progressed and closed the year with a 3.4% increase in sales revenues. The Laminates/Elements Division even raised sales by 6.3%. The highest growth rate (10.8%) was once again reported by the Doors/Frames Division. At just under

€ 104 million, the Division's revenues passed the € 100 million mark for the fi rst time in the history of the company.

Earnings before income tax rose at a disproportionately lower rate than sales revenues. Stronger growth was prevented by an unprecedented increase in raw material prices. This unpleasant trend started in the second quarter of 2010 and continues unabated at this stage. The increase primarily affects the prices of wooden materials, which picked up not only because of more expensive base materials and higher demand but also due to a decline in capacity, which is attributable to works closures. Oil-based chemicals have also come under strong price pressure.

Against this background, it is all the more pleasing that we were able to improve our bottom line. Earnings before income tax climbed from € 14.9 million in the previous year to € 15.1 million in 2010. When assessing this result, it should be taken into account that Westag & Getalit AG - unlike many other companies - reported hardly any decline in earnings in the crisis year 2009. This means that our basis for comparison differs materially from that of other companies which are reporting strong growth based on dramatically lower prior year fi gures. Net profi t increased moderately in line with earnings before income tax and reached € 10.7 million, compared to an already very good € 10.5 million in the previous year.

Our modernisation process was continued with determination in the fi scal year 2010. At € 9.4 million, investments were more or less in line with depreciation and amortisation, as had been the case in the previous year. The single most important investment was a new frames processing line. Planned investments in 2011 will amount to approx. € 10 million. In both years, investments focus on productivity optimisation, capacity expansion to cope with bottlenecks as well as on plants for the production of new products.

Refl ecting the positive performance of our company and the brighter stock market situation, the Westag shares also showed a good performance. Our ordinary shares gained 14%, while the price of the preference shares picked up by as much as 18%. At the same time, the tradability of our shares has improved noticeably through the start of our continuous listing on the XETRA trading system.

Our dividend also remains very attractive. The Management Board and the Supervisory Board have decided to propose a constant dividend of € 0.94 for the ordinary shares and of € 1.00 for the preference shares to the Annual General Meeting. This is equivalent to a dividend yield of over 5% for both share types.

Our view of the current fi scal year 2011 is differentiated. We are confi dent that we will be able to continue our sales growth. Our company is excellently positioned to actively participate in the generally anticipated good economic trend in the domestic market. Demand in the formwork market is clearly picking up, the Doors/Frames Division presented a host of new products at the BAU show in January and the Laminates/Elements Division is expected to grow not least thanks to the introduction of digital direct printing.

The export situation is more diffi cult - and above all less predictable. While we have identifi ed the fi rst signs of a recovery in Eastern Europe, the international market as a whole continues to suffer from the grave construction and debt crisis, which began in 2008. Overall, we are nevertheless optimistic that we will be able to increase our sales revenues also outside Germany.

We are carefully optimistic about our earnings performance. The negative price trends described above have not eased at all; instead, commodity prices picked up even further at the turn of the year and more price increases may follow. Having exploited the existing potential for rationalisation, we are now trying to pass on these price increases in the market through our own sales prices. Unfortunately, this is happening with a certain delay, which will come to an end only when the rise in commodity prices subsides.

We are nevertheless confi dent that we will generate a good result again in 2011. Besides our attractive product range, this will be supported by our highly motivated workforce, whom I would like to thank for their work in 2010 on behalf the entire Management Board. My thanks also go to you, dear shareholders, for your confi dence and your loyalty. We would also like to thank the Supervisory Board for their constructive and trusting cooperation in what was a successful fi scal year.

Rheda-Wiedenbrück, March 24, 2011

Bernhard Wenninger Spokesman of the Management Board

Pedro Holzinger Chairman of the Supervisory Board

Dear Shareholder,

2010 saw a highly inconsistent development for Westag & Getalit AG during the course of the year. While the fi rst quarter was still marked by the economic downturn of the year 2009 and the harsh winter, demand for and sales of our products increased as the year progressed. As the world economy and, hence, demand for commodities picked up, our procurement prices rose at an unprecedented pace in the second half of the year. The situation was aggravated by works closures among our chipboard suppliers. Towards the end of the year, our efforts focused on the procurement situation and the necessary increases in our sales prices entailed by it. This will also be the case in 2011

In the past fi scal year, the Supervisory Board of Westag & Getalit AG performed the tasks imposed on it by law, the statutes and the German Corporate Governance Code. We regularly advised the Management Board on the management of the company and supervised its activities. We provided the Management Board with proposals and recommendations and discussed and reviewed its strategies and plans in detail. To ensure that we can do so competently, the Management Board informed us in a regular, timely and comprehensive manner about the economic situation of the company, the state of investment projects, corporate planning and strategies as well as relevant individual incidents and measures. For this purpose, the Management Board provided us with a monthly statement of income as well as a sales contribution margin analysis and a comprehensive written report prior to each Supervisory Board meeting with the exception of the meeting following the Annual General Meeting. These reports were discussed in detail at the Supervisory Board meetings. The Supervisory Board was involved at an early stage in all material decisions that were of fundamental importance for the company. Under the rules of procedure of the Management Board, certain measures and transactions additionally require the approval of the Supervisory Board. We also addressed possible risks as well as risk management issues. Deviations of the business performance from the plans were

explained to us in detail. The Chairman of the Supervisory Board was immediately informed of all important transactions and developments.

Meetings of the Supervisory Board

One Supervisory Board meeting was held per quarter. These were attended by the members of the Supervisory Board and the Management Board and one representative of the auditors. The Supervisory Board meetings were characterised by open, factual and trusting talks.

The Supervisory Board meeting on March 18, 2010 focused on the fi nancial statements for the year 2009, primarily on the increase of the dividend for 2009. We also addressed the competitive situation in the Laminate/Elements Division and the anticipated increase in the prices of formwork panels, which will have an impact on this division, in particular. In addition, we approved the extension of the authorisation of the Management Board to repurchase own shares.

At the Supervisory Board on May 27, 2010, we discussed the cost trend in the central division and the charging of costs to the individual divisions. We satisfi ed ourselves of the fact that costs declined over the past four years and welcomed the measures initiated to make the charging of costs to the individual divisions even more transparent and comprehensible. We also addressed the review of the structure of the Management Board compensation performed by the Appointments and Compensation Committee. We noted that the compensation structure is in accordance with legal requirements and is suffi ciently attractive to provide an incentive for sustainable good performance. Moreover, we discussed and adopted the agenda for the Annual General Meeting on August 24, 2010.

At the Supervisory Board meeting on August 24, 2010, which followed the Annual General Meeting, Mr Holzinger and Mr Pampel were re-elected Chairman and Vice Chairman, respectively, of the Supervisory Board. Mr Holzinger was also elected member of the Audit Committee. In addition, the Supervisory Board appointed Mr Sander as member of the management board for another three years until December 31, 2013. The auditors elected at the last Annual General Meeting were commissioned to audit the fi nancial statements for the year 2010. Finally, the Supervisory Board addressed the updated investment plan and approved the issue of preference shares to the company's employees.

At the Supervisory Board meeting on December 9, 2010, the earnings forecast and investment plan for the year 2011 were discussed in detail. We realised that the result of the year 2011 will largely depend on our ability to pass on the sometimes dramatic commodity price increases to our own sales prices. We approved the investment plan for 2011, which provides for investments in an amount of roughly € 10 million. We also adopted a new version of the Declaration of Conformity pursuant to section 161 of the German Stock Corporation Act (AktG). In this

context, we also discussed the targets for the future composition of the Supervisory Board. We endorsed the positive result of the effi ciency review of the Supervisory Board performed by the Audit Committee. Other topics included the planned restructuring and improvements in the Purchasing Department, the identifi cation of new suppliers for the Plywood/Formwork Division, the capacity bottlenecks in the transport sector and the conclusion of new contracts for the direct sale of the electricity produced from biomass in our cogeneration unit.

Work of the committees

The work of the Supervisory Board is supported by the three committees it has formed. Their task is to prepare resolutions for the Supervisory Board and topics to be addressed by the Supervisory Board. In individual cases, the Supervisory Board has transferred decision-making powers to the committees. With the exception of the Audit Committee, which is led by the Vice Chairman of the Supervisory Board, Klaus Pampel, the committees are led by the Chairman of the Supervisory Board.

The Audit Committee consists of Mr Heite, Mr Holzinger, Mr Jeffries and Mr Pampel. The committee met twice in the past fi scal year. It addressed the supervision of the annual audit, the fi nancial statements and the preparation of the election of the auditors, the supervision of the accounting process, the company-wide control and risk management system, the internal audit system, the Supervisory Board's effi ciency review, the segment report, the new Declaration of Conformity pursuant to section 161 of the German Stock Corporation Act (AktG) as well as the corporate governance declaration, which includes the Corporate Governance Report. The Audit Committee additionally held three telephone conferences, during which the quarterly reports were discussed.

The Appointments and Compensation Committee, which consists of Mr Heite, Mr Holzinger and Mr Pampel, met on May 27, 2010 to discuss the renewal of the Management Board contract of Mr Sander as well as the structure of the company's Management Board compensation. The Committee presented the results of its work at the Supervisory Board meeting on August 24, 2010.

The Nomination Committee met on May 27, 2010 and unanimously decided to recommend to the Supervisory Board to propose Mr Pedro Holzinger for re-election to the Supervisory Board at the Annual General Meeting on August 24, 2010 and to again nominate him as Chairman of the Supervisory Board.

Financial statements

Peters & Partner GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Hannover, who were elected auditors at the ordinary Annual General Meeting on August 24, 2010 and

commissioned by the Supervisory Board, audited the fi nancial statements for the fi scal year 2010 prepared by the Management Board to HGB and IFRS as well as the related Management Reports of Westag & Getalit AG. The Management Reports and the fi nancial statements to HGB were given an unqualifi ed audit certifi cate. The fi nancial statements to IFRS, which were voluntarily prepared by the Management Board, received a qualifi ed audit certifi cate, with the qualifi cation merely referring to the segment report. The fi nancial statements and the audit reports were made available to all members of the Supervisory Board by the auditors in good time prior to the annual accounts meeting of the Supervisory Board. They were discussed in detail at the Supervisory Board's annual accounts meeting on March 24, 2011, which was attended by a representative of the auditors. He reported on the main results of the audit as well as the audit of the company's internal control and risk management system, which led to no complaints. We have taken note of and approved the audit reports. We reviewed the fi nancial statements and the Management Reports. We reviewed the fi nancial statements and the Management Reports. We agree with the result of the auditors' audit based on our own fi ndings and endorse the fi nancial statements and the Management Reports prepared by the Management Board. The fi nancial statements have thus been approved. We also examined and accepted the Management Board's profi t appropriation proposal.

The Supervisory Board also reviewed the related party disclosures of the Management Board. This review and the review of the auditors' report led to no objections. The report of the auditors contains the following audit certifi cate:

"Based on our duly performed audit and assessment, we confi rm that the information provided in the report is accurate."

Due to the fi nal result of our audit, we raise no objections against the fi nal statement by the Management Board.

The Supervisory Board would like to thank the members of the Management Board, the employees and the members of the works council for their commitment and their successful work in the past fi scal year.

Rheda-Wiedenbrück, March 24, 2011

Pedro Holzinger Chairman of the Supervisory Board

Members of the Supervisory Board

Pedro Holzinger Businessman, Rheda-Wiedenbrück Chairman

Klaus Pampel Managing Director Hüttenes-Albertus Chemische Werke GmbH, Meerbusch Vice Chairman

Jürgen Heite Managing Director Thyssen'sche Handelsgesellschaft mbH, Meerbusch

Ronald Jeffries Businessman, London/Great Britain

Dietmar Lewe* Chairman of the works council, Rietberg

Reinhard Grewe* Skilled workman, Rheda-Wiedenbrück

* employee representative

9

Dr. Michael Paulitsch

Graduate forest manager (64) Director Plywood/Formwork Division Warendorf

Bernhard Wenninger

Graduate economist (45) Spokesman of the Management Board Central Division Gütersloh

Markus Sander

Graduate engineering manager (46) Director Laminates/Elements Division Herford

Wilhelm Beckers

Graduate process engineer (49) Director Doors/Frames Division Herzebrock-Clarholz

As a leading manufacturer of wooden and plastic products, Westag & Getalit AG looks back on more than 100 years of successful business activity and ongoing modernisation. At the company's locations in Rheda-Wiedenbrück and Wadersloh, over 1,200 employees are instrumental in manufacturing a wide range of high-quality products using state-of-the-art technologies and marketing them throughout the world. To ensure maximum customer satisfaction, our diverse products such as laminated plywood panels, doors and frames, kitchen worktops and solid surface materials leave our works only following thorough quality checks. In 2010, we generated sales revenues of € 217 million not least thanks to the great commitment shown by our highly motivated workforce.

Specialist expertise is key to marketing such a wide range of different products successfully. We have therefore divided our company into three divisions, namely Plywood/Formwork, Doors/Frames and Laminates/Elements. Each of the three Divisions has its own production department, its own sales organisation and its own development department to ensure smooth operations. Central and administrative functions such as purchasing, human resources management, technical services, IT, fi nance and marketing are pooled in our central division. This organisational structure ensures concentrated expertise in the administrative department and gives our product divisions the fl exibility and independence they need to operate successfully.

For ten years, our cogeneration unit has supplied electricity and heat from renewable biomass for our operations. Moreover, some 65 million kW of electricity are fed into the public grid each year.

We go with the times and constantly modernise our production plants to refl ect the state-of-the-art. In the past six years, we invested more than € 75 million in the development of our company. Our successful operations are refl ected in a very sound balance sheet, with a high equity ratio of 70% giving us the fl exibility we need to shape the future.

RELIABILITY AND DIVERSITY | OUR PLYWOOD/FORMWORK DEVISION

Since 1917, our Plywood/Formwork Division has produced high-quality special plywood panels, which have made it the pioneer in the development of modern formwork.

The excellent articles in our strong product portfolio are perfectly suited for numerous different uses and prove their worth in everyday use.

Our plywood panels are primarily used for concrete formwork and ensure a good surface quality, which is especially important for fair-face concrete. With the help of different core materials and coatings and ongoing technical development, we adjust the properties of the panels to the demands made on them. Moreover, we have the possibility to customise the panels to meet our customers' specifi c requirements. The especially large dimensions we supply are of great use for many properties. Our impressive processing capacity allows to supply customers' construction sites on a just-in-time basis.

Ideal applications for our plywood panels also include assembly platforms, exhibition booths, production halls, warehouses, sports facilities and stages. Thanks to their extremely high durability and load-bearing capacity as well as their conductivity and non-slip properties, our products are the perfect choice for all these applications. The heavy-duty support materials can be fi nished with diverse plastic coatings, which allow us to meet the most diverse customer requirements at any time.

Our products are also used successfully in the construction of road and rail vehicles. They are quickly installed as fl oors or walls and are characterised by a high-quality appearance and excellent technical properties.

When building the 148-metre "Tour Granite" tower in the Parisian "La Défense" business district, the SCF self-climbing formwork ensured high safety and permitted to add one storey each week

Where architects and clients make high demands on the quality of fair faced concrete, concrete samples are produced to visualise the results of the specifi ed process

From the architect's draft to custom formwork

When it comes to casting complex geometric in concrete, standardised all-purpose formwork is often not fl exible enough and uneconomical. In such cases a combination of system formwork and custom formwork is typically the best solution. Ever more frequently such combinations are supplemented by pre-cast concrete elements.

In contrast to the past, it is rare for such formwork to be constructed outdoors on the construction site nowadays. There are multiple reasons for performing this kind of work in specialist formwork shops staffed with qualifi ed employees and equipped with well maintained tools.

Before we supply our formwork boards to these shops, the architects have concretised their ideas of the shape and texture of the concrete surface and defi ned the desired groove and anchor pattern. Not infrequently, the client also has special ideas and requirements which need to be taken into account.

The architect and the builder make contact with our formwork sales team already during this initial planning phase. In many cases, the formwork is not selected immediately and the concrete formulation is yet to be determined. Where demanding appearance requirements have to be fulfi lled, tests have to be conducted using different formwork skins, separating agents and concrete formulations.

Once a particular formwork has been specifi ed, formwork drawings are produced and approved for each individual wall.

We then use our saws and CNC equipment to cut the required boards for the custom formwork. In order to enable effi cient work at the formwork shop, each board is individually numbered, its edges are protected and all boards are carefully packaged.

Our specialist advisors support the project and advise the architect, the formwork contractor and the builder. As such, they become important members of the custom formwork team and are instrumental in ensuring the success of the entire construction project.

The Company

THE PLYWOOD/FORMWORK DIVISION

Our Plywood/Formwork Division has grown into a leading central European supplier of large-sized boards for formwork and vehicle construction. We are a preferred supplier of standard and custom formwork to manufacturers of prefab concrete elements and in-situ concrete projects. Customers can choose from a large number of variants of our Betoplan, Magnoplan and Westaspan boards. We can meet the most diverse requirements in terms of the number of re-uses, the concrete texture and different sizes. For even greater versatility, special coatings are available to accommodate specifi c mortar formulations.

Large-sized single-piece fl oor boards of high stability and with anti-slip surfaces allow to construct special-purpose vehicles featuring extended service lives.

Market penetration is further improved through our increasing use of CNC processing machines for large-sized boards. The ability to supply ready-to-install boards is of fundamental importance when it comes to serving system formwork makers and meeting the diverse demands made in the industrial fl ooring sector.

VERSATILITY AND EXPERIENCE | OUR DOORS/FRAMES DIVISION

Decades of experience in combination with the constant search for innovative products characterise our Doors/Frames Division. Our dual aim is to offer products that can be marketed successfully in the commodity segment and to develop solutions that meet the highest demands made in the project market.

Our partners expect us to come up with solutions to all door-related problems. Besides new designs, technical door elements and accessories, this also includes many other factors that cannot always be expressed in fi gures. Customers appreciate these values and are pleased to adopt them as they expect them to be successful in the market.

The support we provide ranges from the development of a complete concept for exhibition rooms to proposals for the equipment of warehouses to optimise inventory turnover, the development of customer-specifi c marketing campaigns to the design of the ideal merchandise presentation. Our division offers numerous possibilities to provide customers with full support in their efforts to sell our products and services to their customers in an effi cient and profi t-oriented manner.

Technical expertise, combined with a diverse product range in a variety of different designs and colours, arranged with intelligent marketing concepts, offers our customers solutions and services for their problems. We are constantly on the lookout for innovative products and solutions to support our customers even more effectively. The success of our customers is our success. And this is something we are happy about.

The elegant material on the "Lineo" designer door can be used for multiple purposes and is a genuine eye-catcher

Gerd Habrich, Sales and Marketing Manager, Doors/Frames: "Needless to say, our business activity hinges on our success in the market and our profi t-oriented approach. But we aim to offer our customers not only products but also optimum services to help them grow their profi ts, knowing that this will

The patented EasyStop® magnetic door stopper is an intelligent alternative to conventional door stoppers

Little helpers – used to optimum effect

In the search for new business fi elds we constantly ask ourselves what our customers want to make their door elements even more attractive. Established products such as door fi ttings and door closers have been on the market for a long time and entire industries specialise in this area. But we are convinced that more can be done to add value to doors. This is why we continue to develop - sometimes in cooperation with partners ideas for "little helpers" that are designed to help end users solve as yet unresolved problems.

In the search for new business fi elds we constantly ask ourselves what our customers want to make their door elements even more attractive. Established products such as door fi ttings and door closers have been on the market for a long time and entire industries specialise in this area. But we are convinced that more can be done to add value to doors. This is why we continue to develop - sometimes in cooperation with partners - ideas for "little helpers" that are designed to help end users solve as yet unresolved problems.

These ideas have meanwhile resulted in innovative accessories, which are supplied to the markets through various distribution channels. Whether it's a retrofi ttable miniature upper door closer or a little plastic piece that effectively prevents the door from

slamming shut unintentionally - such accessories help save problems in the domestic environment.

We have also been able to develop solutions for public areas that are subject to offi cial standards or building law regulations. A compelling example is the EasyStop® magnetic door stopper.

In the contract sector, doors are exposed to different types of strain. Whenever a door hits the wall, for instance, damages are caused. This can only be prevented with the help of door stoppers which typically require fi xed installations that may form obstacles in busy environments and bear the risk of people tripping or injuring themselves.

Thanks to its sophisticated spring damper and its magnetic system, our EasyStop® is also suitable for escape and evacuation routes. Moreover, it is easy to retrofi t and can be combined with upper door closers.

This "little helper" is another example of our innovations in the accessories segment, which we aim to expand going forward. Intelligent little products that help solve everyday problems are sure to always fi nd a niche in our markets.

THE DOORS/FRAMES DIVISION

The market structures for doors and frames closely refl ect the user groups of these elements. We basically differentiate between private and public demand and between the requirements made by the residential and non-residential sectors.

The needs of the private residential sector in terms of doors and frames are mostly covered by specialist wood retailers, construction element traders, DIY stores as well as joiners and carpenters. The distribution structures outside Germany are less diverse for historical reasons. These German market players also supply door and frames for refurbishment projects which, according to market research institutes, are forecast to increase again in the coming years. Private residential construction is equally expected to rise slightly again, even though it will be doing so from a base which, as a result of the economic crisis, is expected to be much lower than even in the nineties.

Most housing associations and publicly owned housing portfolios source their doors and frames requirements from specialist wood retailers and construction element traders.

Demand from the non-residential sector is equally served by specialist wood retailers and construction element traders; in addition, interior fi nishing contractors and specialised door fi tters offer their services. For cost reasons these specialist companies frequently draw on sub-contractors where projects involving a large number of doors are concerned.

Our Doors/Frames Division has almost perfectly adapted to these specifi c requirements in recent years. Our customer-base includes companies in all segments, taking into account a certain amount of overlap between the demands coming from the individual market segments. For example, non-residential products meeting higher technical specifi cations are increasingly being used also in the private sphere.

Our extensive product variety, our multitude of decors and our extraordinary range of combinable features in technical doors underline our capability as a manufacturer of variants and our commitment to meeting all the requirements of the most varied market participants in Germany and abroad.

FUNCTION AND DESIGN | OUR LAMINATES/ELEMENTS DIVISION

Our Laminates/Elements Division has been successful in the markets for laminates and elements since 1956. These products are manufactured to stringent technical specifi cations in our two plants in the eastern Westphalian towns of Rheda-Wiedenbrück and Wadersloh. The multi-layered structures of our HPL (high pressure laminated) boards are made to withstand heavy use. We can manufacture these products both on stationary presses and on continuous presses with a pressure of 70 kg/cm2, resulting in excellent product properties.

We also use our modern production lines to manufacture numerous laminating products for our other Divisions. These include laminates for doors and frames as well as impregnated papers used in the products of our Plywood/Formwork Division. Having leveraged these synergies very successfully for many years, we can respond highly fl exibly to special customer needs also in terms of products made by our other Divisions.

Our Wadersloh plant produces not only such long proven GetaLit® elements as kitchen worktops and window sills but also our GetaCore® solid surface material. This highly versatile material is available both as boards and as elements for our customers. In addition, we offer a cut-to-size service for kitchen worktops. This custom service allows to realise highly individual shapes and applications. By responding to specifi c customer needs, we not only supply products but also practical solutions - all from a single source.

A digitally printed partition system affords monumental insights into Posthoorn church in Amsterdam (Netherlands). Photo: Hans Morren i.o.v. Espero

Torben Gebensleben, Product Manager: "Supported by our CutDesign software, our GetaLit® benefi t from the resulting planning certainty and the possibility to visualise their products."

Digital printing on acrylic glass and laminated chipboard expands our digital printing expertise

Digital direct printing – taking our expertise to the next level

For many years digital printing has been an important element in our business and a signifi cant sales contributor. Rising quantities of digitally printed HPL (high pressure laminated) boards and elements have been sold for many years.

Being the industry's pioneer in digitally printed HPL boards, we handle everything from image processing to printing and HPL pressing to the production of elements. As a result, we can offer the widest possible choice of products and the shortest turnaround times.

We are currently building on our lead by investing in direct digital printing. This process deposits UV ink on the printed surface, enabling to print directly into various materials such as wood, metal, glass and acrylic glass. The printed image is subsequently covered with a layer of protective UV clearcoat.

Only the latest generation of machines has allowed to tap the full potential of UV direct printing in terms of resolution and brilliance. Now it is possible to print high-quality images onto decorative products. As a result, our portfolio now includes two exciting printing processes delivering

brilliant results. Where boards are exposed to heavy-duty use, we recommend installation of our digitally printed HPL boards, e.g. as kitchen worktops. In contrast, our direct printing process is available where printing accuracy down to a millimetre is required or where materials are specifi ed to be installed without further processing.

Logical extensions and combinations of the two printing processes will form the next step. Our mission remains to offer complete solutions from a single source - Westag & Getalit AG, the recognised specialist.

The Company

THE LAMINATES/ELEMENTS DIVISION

As a premium supplier, we constantly demonstrate our strengths to our customers and prove our skills and expertise. Full availability also for batch sizes as small as "1", absolute compliance with agreed deadlines and extremely great product diversity are key competitive advantages and have been the basis for sustained success over many years.

These advantages are not equally important to all potential customers. We have therefore defi ned clear target groups who stand to gain a signifi cant competitive edge from our service. They include, on the one hand, the retail sector, which benefi ts from a wide range of services provided by our specialist sales team. Such services comprise professional product presentation at the point of sale, ongoing product innovations, sales promotions and training. Moreover, the retail sector is our link to the many processors, carpenters and joiners who need our products. We have maintained these relationships for many decades and are proud to be a respected and reliable partner to the retail sector.

On the other hand, there is a sales team for the DIY store sector, which also appreciates the various elements of the above-mentioned service portfolio. Moreover, we integrate the DIY store distribution activities of the Laminates/Elements Division with those of the Doors/Frames Division, so that the customer has a single contact for all products of Westag & Getalit AG.

In the past years, we launched the modern GetaCore® material, the new GetaStyle® products and many trends relating to the GetaLit® laminates. These developments are marketed to architects and specifi ers by a specialist sales team.

Other rules apply in the export sector. Every market has its own laws, which is why we have specialised our teams for the individual output markets. Accordingly, every customer has a contact who speaks their language and serves them competently.

As different as the customer service may be, it always follows a simple principle - our competent and likeable employees ensure that we not only build good products but also foster good customer relations.

CONSTANT CHANGE | OUR MARKETS

Within the timber products industry, a distinction is made between mass manufacturers and manufacturers of variants. The mass manufacturers include producers of chipboard, MDF and HDF boards, laminated particle boards and laminated fl oors.

These segments of the timber products industry are dominated by "mass thinking". High investment costs force these manufacturers, similar to chemicals manufacturers, to achieve the highest possible utilisation of their plants on a 24/7 basis. These manufacturers usually think in terms of cubic metres instead of square metres or pieces.

Quite naturally, it is virtually impossible for these manufacturers to fulfi l individual customer wishes. They offer a defi ned range of products from which customers must choose and ignore their customers' calls for something special.

This is where variant producers like our company come into play. While mass manufacturers are forced to produce and sell large amounts due to the investments made, we attach top priority to fulfi lling individual customer wishes. We are driven by the kind of demand generated by the market – even if the batch size is as low as "1".

Timely and reliable – serving our customers throughout Europe

Michael Hanhardt, Head of the Central Shipping Department: "Our effi cient logistics organisation is one have thus established ourselves as strong partners to our customers, for example in the DIY segment."

Kitchen worktops are packed at our Wadersloh plant

Westag & Getalit AG's position as a producer of variants

Unlike the mass manufacturers, our activities are exclusively guided by customers' demand - irrespective of the desired quantity.

To operate successfully in this segment of the market, a clear focus on customer requirements and market trends is indispensable.

The greater proximity to the fi nal customer inevitably entails a higher degree of fi nishing. This means that countless combinations of timber and plastic products are produced, not least by our company; the properties of timber and plastic ideally complement each other. Our company has subjected itself to this strategic product concept in all three divisions and is today among the leading manufacturers of composite timber/plastic products in Europe.

The above characteristics of our products lead to a huge diversity of product. A distinction is made primarily with regard to the following criteria:

• Technical properties
• Shapes
• Designs

• Surface textures

• Dimensions

• Other criteria (drillings and cuttings, accessories used, etc.)

Needless to say, the effi ciency of our production and logistics must be guaranteed at all times in spite of the large number of variants and the small batch sizes. This is all the more true where large customers or medium-size batches are concerned, because this is where we compete directly with the mass manufacturers.

To meet these requirements we had to ensure that our company is fully geared to these complex objectives and have since perfected them continuously. This includes the following elements:

• specialist and technically competent customer support
• identifi cation of new market opportunities and developments
• highly automated production with individually bar code-controlled machines
• integrated IT processes from quotation to order confi rmation and production to order picking and shipment

OUR MARKETS

Diverse distribution channels guarantee success in business

For many years we have met the challenge to solve our customers' problems. In doing so, we benefi t from the successful cooperation between our three divisions and the vertical integration of the company.

We use many different distribution channels to market our products. The skilled trades and some manufacturing companies are supplied via distributors, while larger industrial corporations are supplied directly. End users and some skilled tradesmen are reached via DIY stores. Kitchen studios - and hence end users - are served by AKP, in which we hold an equity interest. Distributors selling to the project sectors are supported by our communication targeted at architects.

The successful concentration on these market segments and the aggressive exploitation of new market niches have made each of our divisions a very strong player in its respective segment.

The Plywood/Formwork Division is the German market leader in system formwork panels. Its competitors come from Finland, Russia, Latvia and Romania.

The Doors/Frames Division specialises in plastic-faced doors and frames. In terms of market share, it is Germany's No. 2 in contract doors and the No. 3 in interior doors in general.

The Laminates/Elements Division focuses on the production of kitchen worktops. We are the German market leader in high-quality high-pressure laminate (HPL) kitchen worktops. In our special niche, the DIY store segment, we are the market leader for kitchen worktops in general.

The growing demand for cut-to-size composite timber/plastic products meeting high quality standards throughout Europe opens up great opportunities for our company, which we will continue to seize going forward.

INVESTOR RELATIONS

Focus on price movements on the markets

	2010	2009	2008	2007	2006
Total number of shares 1)	5,720,000	5,720,000	5,720,000	5,720,000	5,720,000
Net profi t per share (in €)	1.86	1.84	1.89	1.67	2.08
Book value per share (in €)	18.21	17.60	16.20	15.22	14.38
Ordinary share information
Number of ordinary shares 1)	2,860,000	2,860,000	2,860,000	2,860,000	2,860,000
Highest price (in €)	19.50	16.19	19.10	24.30	17.74
Lowest price (in €)	14.22	7.70	9.60	16.15	8.95
Year-end price (in €)	18.21	15.99	11.65	17.37	17.20
Dividend per share (in €) 2)	0.94	0.94	0.44	0.94	0.82
Dividend yield (in %) 3)	5.2	5.9	3.8	5.4	4.8
PER 3)	9.8	8.7	6.2	10.4	8.3
Preference share information
Number of preference shares 1)	2,860,000	2,860,000	2,860,000	2,860,000	2,860,000
Highest price (in €)	19.39	16.22	19.10	23.80	18.10
Lowest price (in €)	14.05	7.47	9.63	16.00	9.45
Year-end price (in €)	18.37	15.57	11.85	17.15	17.01
Dividend per share (in €) 2)	1.00	1.00	0.50	1.00	0.88
Dividend yield (in %) 3)	5.4	6.4	4.2	5.8	5.2
PER 3)	9.9	8.5	6.3	10.3	8.2

1) diluted and basic

2) for 2010 subject to the AGM resolution on July 26, 2011

3) based on year-end prices

The capital market in 2010

The capital markets performed well in 2010. While the markets were temporarily characterised by nervousness due to the debt problems of some European countries, this was more than offset by the positive performance of the German economy and the strong increase in demand, especially in Asia. Accordingly, Germany's DAX index showed a good performance and gained 17% in the course of the year. The Westag shares performed well, too. The price of the ordinary shares rose by 14% to € 18.21, while the preference shares gained 18% to € 18.37.

Investor relations activities

Investors' interest in our company remained strong in 2010. Especially the number and the quality of the one-on-one talks held after the well-attended company presentation to analysts and institutional investors at the Small Cap Conference in Frankfurt am Main showed that Westag & Getalit AG clearly remains in the focus of investors.

Start of continuous listing on XETRA trading system

In our opinion, the admission of our shares to continuous listing on the Xetra trading system of the Frankfurt Stock Exchange on October 12, 2010 is an especially effective measure to improve the trading situation of our shares. Our designated sponsor is equinet Bank AG, which ensures liquid trading of our shares at all times.

Dividend proposal

As in the previous year, the Management Board and the Supervisory Board of Westag & Getalit AG will propose a dividend of € 0.94 per ordinary share and of € 1.00 per preference share to the Annual General Meeting, which will be held at the A2-Forum in Rheda-Wiedenbrück on July 26, 2011. Based on the closing prices of December 29, 2010, this is equivalent to a dividend yield of 5.2% for the ordinary shares and of 5.4% for the preference shares.

Lively discussion at one of the many Westag training seminars

Westag & Getalit AG – an attractive employer

As a company that operates on a national and international scale, we can be successful only if we have competent and, above all, highly motivated employees. This is the most important precondition for survival in rapidly changing markets.

Functioning teams are key to mastering the everyday challenges. These teams ensure our success every time each individual assumes responsibility for the successful performance of the whole team group and the work of all employees is coordinated and managed through intelligent leadership.

Demographic trends will make it increasingly diffi cult to fi nd competent staff. It is therefore ever more important to be an attractive employer to both existing and potential employees. Fortunately we have a lot to offer that makes us stand out positively from many other companies.

We certainly benefi t from the fact that we - a listed joint stock company, many of whose shares are family-held - combine modern human resources management methods with responsible, long-term action. Mutual respect, clearly formulated objectives as well as result and dialogueoriented leadership are integral elements of the corporate philosophy of Westag & Getalit AG. We assume responsibility for

over 1,200 employees and are well aware of the duties this entails.

We challenge and support our employees at a professional and personal level with the help of individually designed further training programmes and are confi dent that systematic and effective vocational training and further education will not only support our growth but will also open up career options for our employees.

We create a working environment in which people communicate with each other and successful performance is rewarded. Feedback and proposals provided by our employees are considered in all decisionmaking processes both in the context of our day-to-day work and as part of our ideas management scheme.

This package is rounded off by fair working hour schemes and benefi ts granted by the employer - especially in the form of employee shares.

EMPLOYEES

Personnel information

Thanks to our fl exible working hour scheme for blue-collar workers, there was no need to introduce short time work in 2010. By contrast, white-collar workers in some areas of the company worked short time until April 30, 2010, which was ended as capacity utilisation improved markedly. As the hours worked by our blue-collar workers increased successively, we were even able to hire new staff.

Accordingly, the headcount increased from 1,226 at year-end 2009 by 18 to 1,244 at year-end 2010. 1,045 worked at our Rheda-Wiedenbrück plant, while 199 worked at Wadersloh. To cope with phases of extremely high capacity utilisation, we employed up to 90 temporary workers.

Blue-collar workers' wages were increased by 3% as of January 1, 2010, whereas white-collar workers received a one-time payment of € 360 instead of a percentage salary increase. In addition, employees received a bonus payment, which was agreed with the works council, as well as fi ve preference shares per full-time employee and three preference shares per part-time employee and apprentice/trainee. Thanks to investments made in the past and the good capacity utilisation, personnel expenses as a percentage of sales nevertheless declined from 31.6% to 30.2%.

High educational level

We attach great importance to training young people. Over the past years, we have steadily increased the number of professions and trades in which we provide vocational training and this was again the case in the past fi scal year, when we trained 63 young people in eleven different occupations. 18 trainees/apprentices successfully passed their fi nal exams in the fi scal year 2010.

MANAGEMENT REPORT

Business in 2010

Positive economic trend in Germany but European markets infl uenced by debt crisis

The start to the fi scal year 2010 was quite turbulent. The fi nancial problems of Greece, which had become apparent in late autumn 2009, had a clearly destabilising effect on the euro and the European economy. In addition, there were public fi nance problems in Portugal and Ireland as well as growing concern that larger countries such as Spain or Italy could be affected as well. The extent of the problem is refl ected in the huge volume, namely a triple digit billion euro amount, of the bail-out packages and stabilisation measures implemented by the European governments.

* Total sales revenues include revenues generated by the cogeneration unit, which are not shown as a separate column.

Against the background of strong exports, especially to Asia, the stability problems of the euro-zone hardly affected the German economy. Instead, the country saw a sustainable recovery, which was not least refl ected in the positive performance of the German stock index.

The construction industry experienced a particularly strong recovery, which is also mirrored in incoming orders in the construction sector as determined by the Federal Statistical Offi ce. The index for the building construction sector climbed by an impressive 5.5%, not least thanks to the federal government's second economic stimulus package.

Sales revenues of Westag & Getalit AG up by an impressive 7.6% in 2010

Westag & Getalit AG benefi ted from this upward trend. Following a weather-related weak start to the year 2010, sales revenues increased by 7.6% to € 216.6 million (2009: € 201.4 million). We are very pleased about the fact that all divisions reported higher sales revenues.

Export sales showed an even more positive trend and climbed by a disproportionate 9.1% to € 42.8 million (2009: € 39.2 million). This happened against the background of a very diffi cult situation in the European markets, where the crisis is certainly not over. In many of our neighbouring countries, the overcapacities installed during the boom in the housing and commercial construction sectors are now having a dampening effect on demand. The situation is being aggravated by the debt problems of governments and private households. This means that our success in the market is primarily attributable to our own strengths in terms of product range and marketing.

Plywood/Formwork

The Plywood/Formwork Division reported a moderate 3.4% increase in sales revenues to € 32.9 million (2009: € 31.8 million). Export sales rose by 14.3% to € 8.8 million in 2010 (2009: € 7.7 million). As a result, the export share climbed to 26.8% (2009: 24.2%).

Sales revenues up by 3.4%, export situation improved markedly

Strong sales growth of 10.8%; divisional revenues pass € 100 million mark for the fi rst time

The increase in sales is all the more pleasing as the division suffered very much from the harsh and snowy winter of 2009/2010. Accordingly, sales dropped sharply in the fi rst three months of the year. The division then benefi ted all the more from the recovery, which started in the second quarter of the fi scal year. In this context, the familiar strengths of our product range and our strong sales position in the market made themselves felt, in particular.

Doors/Frames

Based on a very good year 2009, the Doors/Frames Division boosted its sales revenues by another 10.8% to € 103.7 million in 2010. This was the fi rst time in the division's history that sales revenues passed the € 100 million mark (2009: € 93.6 million). Export sales increased at a clearly disproportionate rate of 18.5% to € 13.1 million. The export share climbed from 11.8% to 12.7%.

We owe these successes to the diverse product range of the Doors/Frames Division and our effective and effi cient logistics. Our special strength in the project-based export business also came to bear in 2010, when we were able to supply doors and frames to a large number of major construction projects in neighbouring European countries and overseas markets.

Laminates/Elements

Our Laminates/Elements Division increased its sales revenues by 6.3% to € 74.2 million in the fi scal year 2010 (2009: € 69.8 million) Export sales rose by a moderate 2.0% to € 20.9 million, compared to € 20.5 million in 2009. The export share declined from 29.3% to 28.1%.

Pleasant 6.3% increase in sales revenues in 2010

In Germany, the division benefi ted from its traditional strength in the retail/wholesale and DIY store sector. On the export side, we were able to consolidate our sales revenues in spite of the weakness of the European markets outside Germany. In this context, we benefi ted not least from our new sales offi ce in the UK.

Exports

As described above, the situation in our key markets in Europe is diffi cult, with construction activity at a level that cannot be compared with the German market. But the situation differs from market to market. Some markets are suffering not only from the weakness of the private sector but also from the necessary strict austerity measures taken by their governments. Other Western European markets such as the Benelux countries and France are performing much better, although a recovery is yet to materialise. On the upside, there are moderate signs of a recovery in Eastern Europe.

Different trends in export markets; sales up by 9.1%

Against this background, the marked increase in export sales by 9.1% to € 42.8 million is very pleasing, although base effects cannot be denied. As the growth in export sales was higher than the rise in domestic sales, the export share climbed somewhat from 19.5% in the previous year to 19.8%. A stronger increase was prevented by the positive trend in domestic business.

Employees

As of December 31, 2010, Westag & Getalit AG employed 1,244 people. This represents a moderate increase of 1.5% on the previous year's 1,226 headcount and is clearly below the growth in sales revenues and plant output. The number includes 63 trainees and apprentices, which represent over 5% of the total workforce as in the previous year.

Moderate increase in headcount to 1,244 people

Due to the fact that we achieved almost 8% sales growth with an only slightly larger workforce, personnel expenses as a percentage of sales declined by an impressive 1.4 percentage points to 30.2%. One of the reasons is the demand-related optimisation of the capacity utilisation of our plants. Another reason is the Westag working hour scheme introduced on January 1, 2009, which enables us to respond fl exibly to fl uctuations in demand. Moreover, the use of temporary workers allowed us to call in additional staff when they were actually needed. Depending on the degree of utilisation, we employ between 10 and 90 workers provided by external fi rms.

Earnings position

In the fi scal year 2010, Westag & Getalit AG generated earnings before income tax of € 15.1 million, compared to € 14.9 million in 2009, which represents a moderate increase of 0.9%. While the absolute amount of earnings in 2010 is good, the increase in earnings remained below the positive sales trend. This is primarily attributable to the sharp rise in commodity prices, which prevented higher earnings growth in 2010. In particular, the prices of wooden materials and oil-based chemicals increased signifi cantly. The fi rst upward tendencies became apparent in the second quarter of the fi scal year, with the upward trend accelerating markedly from the summer. As a consequence, we immediately began to pass

on the cost increases through our own sales prices. Such a step inevitably entails a certain delay, though. Accordingly, the cost of materials as a percentage of sales in our income statement climbed from 47.3% in 2009 to 49.0% in 2010.

By contrast, personnel expenses as a percentage of sales improved markedly to 30.2% (2009: 31.6%) due to better capacity utilisation at our plants as well as our sales and administrative departments. This shows that we were able to offset most of the increases in commodity prices.

Earnings before income tax rise slightly to € 15.1 million

At € 10.7 million, net profi t increased in line with earnings before income tax (2009: € 10.5 million). Earnings per share amounted to € 1.86 in the past fi scal year (2009: € 1.84).

Value added

Due to the sharp increase in total performance to € 218.3 million (2009: € 200.2 million), value added rose at a disproportionately lower rate to € 81.3 million (2009: € 78.5 million). This is primarily attributable to a sharp increase in the cost of materials, which means that a stronger increase was prevented by the same effects that prevented higher earnings growth.

Moderate increase in value added to € 81.3 million

The share of the value added that is attributable to the employees has increased markedly (from € 63.3 million in 2009 to € 66.0 million). In this context, the end of short-time working for white-collar employees on May 1, 2010 must be taken into account. It is gratifying to see that the positive business results once again permitted to carry forward profi t in an amount of € 5.4 million.

Net worth position

Total assets increased quite clearly to € 149.6 million as of December 31, 2010 (2009: € 139.9 million). On the assets side, the growth-related increase in inventory and receivables items played an important role. The growth in inventories is not least attributable to the deliberate replenishment of stocks with a view to benefi ting from the still relatively low prices of some raw materials in 2010.

Liquid funds increased moderately to € 20.2 million (2009: € 19.6 million) in spite of the distribution of a much higher dividend in August 2010 and major stock repurchases in the past fi scal year. By contrast, fi xed assets remained largely unchanged (€ 63.9 million compared to € 64.3 million in 2009).

On the liabilities side, equity capital rose by € 3.5 million to € 104.1 million in spite of the higher dividend payment in 2010 and the stock repurchases, which led to a decline by € 1.9 million as they were offset against equity pursuant to IFRS. As far as the company's debt capital is concerned, the reporting date-related increase in liabilities to suppliers by € 5.8 million played an important role.

Portfolio of own shares

As of December 31, 2010, Westag & Getalit AG held 284,807 own shares, all of which were preference shares. In the fi scal year 2010, 5,098 shares were sold to employees in the context of the employee share programme. Pursuant to a resolution adopted by the Annual General Meeting on August 24, 2010, the company is authorised to repurchase more own shares. In accordance with IFRS, the value of own shares is not shown in the asset items of the balance sheet.

Capital expenditure

Capital expenditure of € 9.4 million again almost in line with depreciation

At € 9.4 million, capital expenditure was more or less in line with depreciation (€ 9.5 million). Our modernisation activities again focused on the optimisation of our production structures.

The Doors/Frames Division invested in a new production line for the processing of frames. The division also built a new hall to satisfy the increased need for production and storage space resulting from the higher sales revenues.

The main investments in the Laminates/Elements Division included a digital printing press and the modernisation of the heat supply of our presses.

At a cross-divisional level, additional IT systems were purchased in response to demand for greater IT security.

Research and development

There is a growing number of potential uses for the special industrial fl oors produced by the Plywood/Formwork Division. At the same time, ever higher demands are made on the surface abrasion resistance and evenness of the boards. Thanks to the ongoing development of the support materials and surfaces, the board surfaces have been optimised with regard to both properties, thereby opening up new potential uses.

The Doors/Frames Division has developed doors and frames with a new modern design in cooperation with an external designer. In addition, various special doors with specifi c technical properties obtained offi cial approval in several European countries. Among them is a high-quality forensic door, which we believe to have great potential in forensic clinics as well as in other buildings requiring a combination of reliable escape protection and pleasant looks. We also added doors with heavy-duty PU edges to our product range, which are primarily used in schools and hospitals.

A large number of developments were pushed ahead by the Laminates/Elements Division in the past fi scal year. These include, in particular, the new direct digital printing process. While the previous digital printing procedure required several processes and a certain drying time to produce a printed laminate, the new process allows the printable material to be processed into the desired fi nal product in a single printing process. In addition, we have developed designs that differ from the previous designs primarily with regard to their texture. These include, in particular, the relatively coarse and large "Schiefer" texture or the "Seta" design, which is characterised by especially pleasant haptic properties as well as excellent service properties such as high scratch resistance and good abrasion resistance.

Environmental management

Our environmental responsibility is primarily refl ected in the sparing use of resources and energy but also in the limitation of emissions, the careful treatment of hazardous substances and the reduction of waste and exhaust gases. Accordingly, our production processes are environmentally optimised on an ongoing basis.

In the past fi scal year, we acquired two new energy-effi cient heat storage units for two presses used for the production of GetaLit®. The energy saved this way can be used to produce an additional 825 MWh of electricity. Moreover, the cooling water is not heated as strongly, which reduces the impact on the environment.

Energy effi ciency measures were also taken at our cogeneration unit in the past fi scal year. Thanks to the installation of two new heat exchangers, we will save about 1,000 MWh in thermal energy per year, which would otherwise remain unused. The energy saved is used by our turbine to generate additional electricity.

We also increase employees' awareness for the environment and support them in contributing to an environmentally friendly and safe working environment. Our employees in the boiler house worked on several projects that helped eliminate thermal losses and reduce electricity consumption. Another project that deserves mention originated in our Westag Ideas Management Scheme and gave employees the possibility to borrow the company's energy meters for a few days to measure their electricity consumption at home.

Relationships with affi liated companies

According to information supplied by Syntalit AG, Zug/Switzerland, and Gethalia Foundation, Vaduz/Liechtenstein, on December 18, 2006, the share of Syntalit AG in the voting capital of our company amounts to 75.5%. Pursuant to section 22 para. 1 sentence 1 No. 1 of the German Securities Trading Act, these voting shares count towards Gethalia Foundation.

With regard to our relationships with affi liated companies, we would like to point out that we did not conduct any legal transactions with Syntalit AG and Gethalia Foundation. The respective report required under section 312 of the German Stock Corporation Act (AktG) concludes with the following declaration: "Transactions which are subject to reporting requirements did not take place."

Associated companies

Since 2006, we have held a 49% interest in AKP Carat-Arbeitsplatten GmbH in Meiningen/ Thuringia, which specialises in cut-to-size worktops made from HPL, solid surface materials, quartz stone, natural stone, solid wood and glass. The company supplies showroom kitchens to kitchen studios, the kitchen industry and large furniture chains. In 2010, the company generated sales of € 12.0 million (2009: € 11.1 million). The company's net profi t for the year 2010 amounted to € 0.2 million (2009: € 0.3 million). A dividend totalling € 0.3 million was distributed from the previous year's profi t, in which we benefi ted in accordance with our share in the company.

Compensation of the Supervisory Board and the Management Board

The amount and the structure of the Management Board compensation are fi xed by the Supervisory Board in agreement with the individual Board members based on proposals made by the Appointments and Compensation Committee. The compensation of the members of the Management Board comprises fi xed and variable components. The fi xed components are based on the tasks of the respective Board member. The variable components for the Board members responsible for the production divisions depend, on the one hand, on the annual profi t of the respective division and, on the other hand, on the annual profi t of the company. The variable component for the Board member in charge of the central division is based exclusively on the annual profi t of the company. The company's annual profi t is its net profi t before corporate income taxes less any loss carried forward from the previous year and the amounts to be allocated to open reserves by law and the statutes.

In order to create incentives for a high annual profi t, the profi t shares increase disproportionately if certain profi t levels are exceeded. The percentage of total compensation accounted for by variable components varies with the realised annual profi t. The Supervisory Board has reserved the right to cap the variable compensation in response to extraordinary, unpredicted developments. The fi xed compensation component is paid out monthly on a pro-rata basis, while the variable component is paid out annually following the adoption of the fi nancial statements for the previous fi scal year.

In addition, the members of the Management Board receive non-monetary and other benefi ts, which primarily include the use of a company car.

The company has not concluded any agreements with the members of the Management Board about the granting of shares in the company, share options or similar forms of compensation.

The Supervisory Board has reviewed the Management Board compensation and its components and arrived at the conclusion that the compensation structure complies with legal requirements, is in line with the compensation paid by peer companies as well as with the compensation structure within the company and is suffi ciently attractive to incentivise good performance on a sustained basis.

The members of the Supervisory Board receive a fi xed annual compensation, which is payable after the end of the fi scal year and amounts to € 9,000 for each member; the Chairman receives twice this amount, while the Vice Chairman receives 1.5 times this amount. In addition, the expenses incurred by the Supervisory Board members in the performance of their tasks are reimbursed.

Corporate governance declaration

The corporate governance declaration to be issued pursuant to section § 289a of the German Commercial Code (HGB) can be found at www.westag-getalit.de/unternehmensfuehrung.

Risk Report

Success in business is inextricably linked to the exploitation of opportunities and the management of the related risks. Many risks can be eliminated with the help of an appropriate approach, others can be mitigated, with the help of insurance or other measures, to such an extent that they remain manageable.

Elements of the internal control and risk management system

Sustainable and successful corporate governance also includes the responsible management of risks. The tasks of our internal risk management and controlling system is to identify risks at an early stage, to assess them and to take appropriate counter-measures. Risks are assessed primarily with a view to the probability of occurrence and the amount of the potential damage. The measures taken depend on the type and amount of each risk.

Our main risk management tool is an SAP-based planning-oriented information system, which allows us to quickly identify deviations in all relevant key fi gures and to take countermeasures. On this basis, the full management team is involved in the process of avoiding and minimising risks.

The internal control system ensures that current processes including access and authorisation systems in the IT segment are monitored regularly and systematically, taking into account the principle of the separation of functions.

The Management Board regularly informs the Supervisory Board about existing risks and their trends. In the context of this trusting and constructive cooperation, the risks that are of major importance for the economic performance of Westag & Getalit AG are fi nally evaluated and the measures to be taken to manage them are agreed.

The relevant risks to which Westag & Getalit AG is exposed as well as the respective risk management measures are presented below. In this context, it is important to state that we cannot identify any risks that would jeopardise our company as a whole.

Economic risks

Due to its product and customer structure, Westag & Getalit AG is very much dependent on economic activity in the construction and kitchen furniture industries and the DIY store sector. Our fl exible working hour schemes enable us, however, to respond in an appropriate manner to short-term fl uctuations in sales and to signifi cantly reduce their impact on earnings. Moreover, we have a healthy fi nancial and liquidity structure and suffi cient reserves to cope with potential declines in economic activity in the above sectors.

Sales risks

Sales risks are of fundamental importance in our line of business. Due to the higher diversifi cation of our three Divisions, which partly operate in different markets, we are less exposed to trends in individual markets than our competitors. Nevertheless, economic trends, customer acceptance of our products and the appropriate pricing of our products play an important role.

To mitigate these risks, we constantly refi ne and optimise our product portfolio. On the other hand, we aim to offset economic and customer-related risks through diversifi cation. Moreover, the development of additional products and markets such as the expansion of the GetaCore® production in the Laminates/Elements Division will make it possible to offset declining sales in other areas.

Default risks

Default risks may arise whenever customers or other contractual partners do not fulfi l their contractual obligations at all or on time. The main reasons for this include a deterioration in liquidity and bankruptcies. We mitigate this risk with the help of a very effective internal receivables management system and by taking out adequate insurance against payment defaults. In individual cases, we have receivables protected by guarantees from banks or insurance companies.

Procurement risks

Procurement risks increased markedly in the course of the fi scal year due to growing demand for raw materials and a sector-specifi c particularity in the market for chipboard. We have to accept much longer delivery periods for some products, which have an adverse impact on our fl exibility and inventories. Most importantly, however, the price increases entailed by the growing demand are weighing on our bottom line. To mitigate the risk of insuffi cient supplies of raw materials in the required quality, we constantly review and expand our supplier network and continue to shift the focus of our procurement activities to international markets. Mitigating the risk of further price increases is more diffi cult, though. The possibility to exert direct infl uence is limited in view of global developments such as the rise in oil prices and the dominant market positions of some suppliers of certain commodities. Therefore, it is extremely important to identify imminent price rises quickly and to adapt our sales prices in a timely and appropriate manner.

Operational risks

The main operational challenge is to produce goods meeting the required quality standards with the best possible cost structure. In this context, it is our permanent task to examine

new product processes and to implement them if they are feasible. Our machines and equipment are kept up-to-date through regular maintenance, repairs and modernisations. In addition, we have taken out appropriate insurance cover against damage by natural forces and the breakdown of especially critical machines. These measures are supported by our quality management system, which has been certifi ed to DIN ISO 9001.

Information technology has constantly gained in importance in recent years. Maximum system availability and maximum security for our data are ensured by mirrored hardware for time-critical applications, redundant network components and a modern infrastructure. In addition, data losses are minimised by daily backups of our relevant data, while system downtimes are reduced through the deployment of a well-trained team.

Personnel risks

Well trained and highly motivated employees are the most importance resource for our company. Effective human resources management is therefore of major importance for our success. In the past years, we constantly expanded the range of internal further training offerings and established a High Potentials Group as a means of developing suitable management talent within our company. The fl exibilisation of the Christmas bonus on a voluntary basis in the form of a performance-linked bonus is an important motivational measure.

The above mentioned scheme as well as a whole series of other systems to variabilise wage and salary components have a clearly dampening effect in times of declining profi ts, because they automatically reduce the personnel expenses. In addition, the Westag "corridor" working time model permits to swiftly adjust working times at our factories to declining or fl uctuating capacity utilisation.

We also stepped up our external efforts to raise students' awareness of Westag & Getalit AG as an attractive employer, which was refl ected, for instance, in internships, diploma thesis and increased cooperation with universities and colleges. This shows that we are today responding to the future risk inherent in the demographic development, which will lead to a shortage of qualifi ed labour.

Financial and exchange risks

In view of our high equity ratio of 70%, we see no risks with regard to our creditworthiness. To mitigate the effects of exchange rate shifts outside the EU, we invoice almost exclusively in euros. However, currency shifts on the purchaser and seller side can still result in disadvantages for ourselves. On the purchasing side, this can lead to rising procurement costs incurred by the supplier. On the sales side, it can lead to our products becoming more expensive following conversion into local currency. This risk can only partly be mitigated through currency hedges.

Description of the internal control and risk management system pursuant to section 289 para. 5 of the German Commercial Code (HGB)

Our internal control and risk management system for the accounting process is guided by the aim of proper accounting and the compliance of our fi nancial statements and reports with applicable rules and regulations. Any amendments are implemented in a timely manner. The accounting process takes place via a standardised IT platform, a consistent chart of accounts and standardised machine-based accounting processes. The employees involved in the process have the required skills and experience. The systems used are protected against unauthorised access. Appropriate controls have been implemented for all accounting-relevant processes. Besides automatic controls of the IT systems, analytical tests and manual examinations of individual transactions are carried out. A clear organisational structure and appropriate control mechanisms as well as competent personnel and equipment ensure the effi ciency of the accounting process.

Report of the Management Board on the disclosures pursuant to section 289 para. 4 of the German Commercial Code (HGB)

The share capital of Westag & Getalit AG amounts to € 14,643,200. It is divided into 5,720,000 no-par bearer shares, of which 2,860,000 are ordinary shares and 2,860,000 are preference shares. Each share represents € 2.56 of the share capital. The rights and duties associated with the shares are governed by the German Stock Corporation Act. According to the company's statutes, preference shareholders receive a preferred dividend of € 0.12 per preference share out of the accumulated profi t. If the distributable accumulated profi t is not suffi cient to pay out a dividend of € 0.12 per preference share, the defi cit must be paid, without interest, out of the accumulated profi t generated during the subsequent years in such a way that the older defi cits are paid before the newer ones and the preferred amounts payable for the year out of the same year's profi t are paid subsequent to the repayment of all defi cits. Subsequent to the distribution of a dividend of € 0.12 per ordinary share, the preference shareholders receive an extra dividend, which may not be paid retroactively, of € 0.06. Both preference and ordinary shareholders participate in a further distribution in the proportion of their prorate shares in the capital stock. The company reserves the right to issue further preference shares which, with respect to a distribution of profi t or of company assets, are either of equal rank or take priority over the existing non-voting preference shares. The preference shares carry no voting rights, except for the cases provided for in sections 140 and 141 of the German Stock Corporation Act. In addition, the preference shares grant the rights that arise to each shareholder from the share.

The company held 284,807 preference shares on December 31, 2010. No membership rights arise to the company from these shares.

Syntalit AG, Zug, Switzerland, holds 2,159,300 voting ordinary shares in the company, which represent 75.5% of the voting rights. Gethalia Foundation c/o Prokurationsanstalt, Vaduz, Liechtenstein, is a shareholder of Syntalit AG, and the full 75.5% of the voting shares held by Syntalit AG in our company are attributable to Gethalia Foundation pursuant to section 22 para. 1 sentence 1 No. 1 of the German Securities Trading Act (WpHG).

The members of the Management Board of Westag & Getalit AG are appointed and dismissed in accordance with sections 84, 85. of the German Stock Corporation Act (AktG) and in conjunction with section 4 of the statues. Amendments to the company's statutes are subject to sections 133 and 179 of the German Stock Corporation Act.

On August 24, 2010, the Annual General Meeting authorised the Management Board to increase, by August 23, 2015 and with the Supervisory Board's approval, the capital stock once or several times, by way of issuing new bearer shares and/or non-voting preference shares by up to € 5,840,000 (approved capital I) in return for cash contributions or by up to € 1,460,000 (approved capital II) in return for cash or non-cash contributions. The authorisation also includes the right to issue further preference shares which, with respect to a distribution of profi t or of company assets, are of equal rank over the existing nonvoting preference shares.

The company was also authorised by the Annual General Meeting on August 24, 2010 to acquire, sell and possibly redeem ordinary and/or preference shares in the company in an amount of up to 10% of the share capital by August 23, 2015 pursuant to the provisions of section 71 para. 1 No. 8.

Circumstances that go beyond the above and must be disclosed pursuant to section 289 para. 4 of the German Commercial Code do not exist or are not known.

Forecast report

The economy

Based on available data, we expect the recovery in construction activity in Germany to continue in the next two years. Especially in the housing construction sector, there are signs that the long slack is coming to an end. The renovation segment, which has shown to have a stabilising effect in the past years, should also continue to grow, although the already stable level suggests that no sharp increases should be expected. With regard to the effects of the German government's second economic stimulus package, it is safe to assume, however, that these will gradually decline, as many measures will be completed in 2011.

We do not expect the situation in European markets outside Germany to improve markedly in the next two years. Construction activity in some Eastern European countries seems to be stabilising at least.

Outlook for Westag & Getalit AG

Against this background, we expect domestic sales revenues to grow. Our growth in foreign markets will depend on the specifi c situation and trends in each individual market, which may well differ from country to country. In view of what are still low market shares in individual markets, we are optimistic, however, that we will be able to grow even if the market as a whole does not.

Growing sales revenues projected for 2011

The crises in Japan and the Arab region include a factor of uncertainty, however. At this stage, it is impossible for us to say if and to what extent these crises may have an adverse impact on economic activity in our relevant markets.

Capital expenditure

In the next two years, capital expenditures will probably again be more or less in line with depreciation (of approx. € 10 million). The single most important investment is an edge processing line for the production of doors, which will enable signifi cant savings in the manufacture of our products.

Post balance sheet events

No events that require reporting occurred after the balance sheet date.

Earnings marked by continued upward pressure on commodity prices

Earnings

Our earnings performance in 2011 and 2012 will depend not only on our sales performance but, to a signifi cant degree, also on the trend in commodity prices. At this stage, it does not seem as if commodity prices, which have picked up at an accelerated pace since the second quarter of 2011, have found a stable basis at a higher level. Right on the contrary, the trend in 2011 remains unfavourable. It will therefore be our most important tasks in 2011 to pass these increased costs on to our customers in the form of higher sales prices. It remains to be seen if we will achieve this in full and whether a certain delay will occur. Our familiar strengths in terms of product range, selling power, the potential and performance of our team and cost-consciousness make us confi dent, however, that we will be able to generate good results also in 2011 and 2012.

Responsibility statement

To the best of our knowledge, the Management Report includes a fair review of the development and performance of the business and the position of Westag & Getalit AG, together with a description of the principal opportunities and risks associated with the expected development.

Rheda-Wiedenbrück, February 17, 2011 Westag & Getalit Aktiengesellschaft The Management Board

Wenninger Beckers Dr. Paulitsch Sander

Management Report

To our Shareholders

The Company

52	Cash Flow Statement (IFRS)
53	Income Statement (IFRS)
54	Balance Sheet (IFRS)
56	Notes
61	Notes to the Income Statement
65	Notes to the Balance Sheet
76	Additional Notes to the Balance Sheet
82	Corporate Governance
84	Auditors' Report (IFRS)
86	Balance Sheet (HGB)
88	Income Statement (HGB)
90	Auditor's Report (HGB)

CASH FLOW STATEMENT 2010 (ACCORDING TO IFRS)

	2010 in € ,000	2009 in € ,000
Operating result /EBIT	14,674	14,511
Income tax payments	- 6,259	- 1,922
Depreciation and amortisation	9,477	9,388
Result from asset retirements	- 68	- 162
Change in current assets (excl. securities)	- 9,056	4,601
Change in securities held as current assets	7,761	- 6,439
Cash fl ow from operating activities	16,529	19,977
Investment in tangible and intangible assets	- 9,376	- 9,792
Change in fi nancial assets	116	64
Income from asset retirements	204	231
Cash fl ow from investment activities	- 9,056	- 9,497
Interest income	295	182
Interest expenses	- 8	- 7
Acquisition/sale of own shares	- 1,895	119
Dividend payments	- 5,283	- 2,602
Cash fl ow from fi nancing activities	- 6,891	- 2,308
Change in cash and cash equivalents	582	8,172
Cash and cash equivalents as of January 1, 2010	19,594	11,422
Cash and cash equivalents as of December 31, 2010	20,176	19,594

The cash fl ow statement shows the origin and use of cash fl ows in the fi scal years 2010 and 2009. A distinction is made between cash fl ows from operating activities as well as from investment and fi nancing activities using the indirect method.

Cash and cash equivalents shown in the cash fl ow statement comprise all cash and cash equivalents recognised in the balance sheet.

INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2010 (ACCORDING TO IFRS)

	Notes	2010 in € ,000	2009 in € ,000
Sales	1	216,626	201,411
Changes in inventories of fi nished goods and work in progress	2	1,439	- 1,576
Other own work capitalised	3	264	348
Total performance		218,329	200,183
Other operating income	4	2,913	3,345
Cost of materials	5	- 106,919	- 94,686
Personnel expenses	6	- 65,980	- 63,324
Depreciation and amortisation of non-current assets	7	- 9,477	- 9,388
Other operating expenses	8	- 23,979	- 21,422
Other taxes	9	- 213	- 197
Operating result		14,674	14,511
Financial result	10	386	419
Earnings before income taxes		15,060	14,930
Taxes on income	11	- 4,400	- 4,420
Net profi t		10,660	10,510
Earnings per share (diluted and basic, in €)	12	1.86	1.84

BALANCE SHEET AS OF DECEMBER 31, 2010 (ACCORDING TO IFRS)

	Assets	Notes	31.12.2010 in € ,000	31.12.2009 in € ,000
	A. Non-current assets
I.	Intangible assets	13
	Software, licences and other industrial property rights		663	362
	II. Tangible assets	13
	Land and leasehold rights and buildings		22,871	22,938
	Technical equipment and machinery		28,576	29,279
	Other fi xtures and fi ttings, plant and offi ce equipment		10,457	9,245
	Advance payments and assets under construction		77	1,057
			61,981	62,519
	III. Financial assets	13
	Shares in associated companies		1,200	1,200
	Other loans		63	179
			1,263	1,379
			63,907	64,260
	B. Current assets
I.	Inventories	14
	Raw materials and supplies		16,631	14,458
	Work in progress		3,290	3,023
	Finished goods and merchandise		14,023	12,333
			33,944	29,814
	II. Receivables and other assets	14
	Trade receivables		27,253	22,181
	Receivables from companies in which an interest is held		28	20
	Other assets		1,354	1,110
	Income tax receivables		2,930	2,933
			31,565	26,244
	III. Cash and cash equivalents	14
	Cash at banks or on hand		20,176	19,594
			85,684	75,652
	Total assets		149,592	139,912

	Equity and liabilities	Notes	31.12.2010 in € ,000	31.12.2009 in € ,000
	A. Equity and reserves
I.	Subscribed share capital	15
	Ordinary shares		7,322	7,322
	Preference shares		7,322	7,322
			14,644	14,644
	II. Capital reserve	15	24,376	24,376
	III. Revenue reserves	15
	Legal reserve		596	596
	Other revenue reserves		53,715	48,415
			54,311	49,011
	IV. Accumulated profi t	15	10,817	12,635
			104,148	100,666
	B. Non-current liabilities	16
	Pension provisions		14,130	13,906
	Other non-current provisions		1,563	1,618
	Deferred tax liabilities		642	349
			16,335	15,873
	C. Current liabilities	17
	Trade payables		11,408	5,582
	Other current liabilities		16,957	15,243
	Current provisions		566	514
	Income tax liabilities		178	2,034
			29,109	23,373
	Total equity and liabilities		149.592	139.912

NOTES

General information

Westag & Getalit AG is a manufacturer of wood and plastics products based in Rheda-Wiedenbrück, Westphalia. The stock corporation has been entered in the Commercial Register of Gütersloh under number HRB 5565.

Westag & Getalit AG is listed in the Prime Standard of the Frankfurt Stock Exchange and the offi cial market of the Düsseldorf Stock Exchange.

The separate fi nancial statements of Westag & Getalit AG, Rheda-Wiedenbrück, were prepared to International Financial Reporting Standards (IFRS), such as they are applicable in the European Union (EU), as well as to the complementary provisions of section 324a para. 1 of the German Commercial Code (HGB). All IFRS issued by the International Accounting Standards Board (IASB) for the fi scal year were adopted by the European Commission for application in the EU. The separate fi nancial statements are therefore IFRS-compliant.

The fi scal year corresponds to the calendar year and ended on December 31, 2010. Westag & Getalit AG is not required to establish consolidated fi nancial statements.

IFRS 8 (Operating Segments), which became effective for this fi scal year, was not applied. The disclosure of the segment results under the management approach, also in separate fi nancial statements voluntarily prepared to IFRS, may cause material damage to the company, as sensitive information would be divulged to non-listed competitors who are not obliged to make such disclosures. To facilitate a comparison with prior years, the usual form of the segment report has been retained. No other effective standards, especially those applicable from January 1, 2011, were applied.

The expenditure type of presentation was applied to the income statement. In addition to the income statement, the balance sheet and the cash fl ow statement, a statement of changes in equity has been included. Moreover, the notes comprise a segment report in the usual form. In order to enhance their meaningfulness, individual items of the income statement as well as the balance sheet have been summarised and explained in the notes.

The following accounting and valuation principles were applied:

Realisation of earnings and expenses

Sales revenues and other operating income are recognised as soon as ownership or risk pass to the customer or at the time when a service is performed. Sales revenues are shown less cash discounts, discounts, price reductions and bonuses. Changes in inventories of work in progress still in the production process on the balance sheet date are reported at their pro-rata production costs.

Operating expenses are recognised with an impact on income at the time of the use of the respective product or service.

Guarantee expenses are included at the time of realisation of the respective sales revenues. Interest income and interest expenses are recognised on an accrual basis using the effective rate method.

Expenses and earnings are translated at the average market price of the period.

Non-current assets

Purchased intangible assets are capitalised at their acquisition costs in accordance with IAS 38. They are depreciated over their estimated useful economic lives of 3 to 8 years using the straight-line method.

Intangible assets as well as property, plant and equipment are written off for impairment if and when the "recoverable amount" of the asset has fallen below the carrying amount. The "recoverable amount" is the higher of the net realisable value and the present value of the anticipated cash fl ow from the asset.

Tangible assets

Tangible assets are recognised and measured at their acquisition or production costs less scheduled depreciation over their useful lives unless they are subject to non-scheduled depreciation. The straight-line method is used for depreciation over the useful lives. The useful life of factory, business, residential and other buildings is mostly 25 to 50 years, of technical equipment and machinery up to 15 years and of other fi xtures and fi ttings, plant and offi ce equipment 3 to 10 years.

In addition to the cost of materials, measured at cost, the production costs of self-constructed assets comprise production labour as well as pro-rata production overhead costs including depreciation. Financing costs are not recognised. Tangible assets were not remeasured.

Financial assets

Financial assets include shares in associated companies, as well as interest-bearing loans held to maturity. They are valued at their acquisition costs or at their lower fair values in accordance with IAS 39.

Current assets

Inventories

As a general rule, raw materials and supplies as well as merchandise are valued at their average acquisition costs. If, on the balance sheet date, exchange or market prices result in lower values, they are depreciated to their fair values.

Work in progress and fi nished goods are shown at their production costs. Production costs comprise all costs directly attributable to the production process as well as appropriate portions of the production-related overhead costs.

Financing costs are not included in the acquisition and production costs. Inventory risks resulting from the period of storage or reduced usability are taken into account by means of adequate depreciation. Lower values on the balance sheet date due to reduced proceeds on disposal are shown accordingly.

Receivables and other assets

Receivables and other assets are valued at their acquisition costs. Discernible risks are taken into account by means of adequate value adjustments. The general credit risk is taken into account by means of value adjustments based on past experience.

Existing receivables in foreign currencies are valued at the mean rate on the balance sheet date. Non-interest-bearing receivables including income tax claims from the corporate income tax benefi t with a remaining term of more than one year are discounted at a rate of 2.0% based on public-sector bonds with comparable remaining terms.

Cash and cash equivalents

Means of payment are shown at their depreciated acquisition costs. Foreign currency assets are valued at the mean rate on the balance sheet date.

Notes

Liabilities

Pension provisions

Pension provisions include obligations under a pension scheme for the company's employees. The provisions are calculated based on salary-independent monthly old-age and disability pension payments per full year of staff membership in the company. In addition, there are individual pension commitments. Provisions are set up for obligations under rights to future pension payments and current pension payments to active and former employees and their surviving dependants.

Provisions for pensions are valued using the projected unit credit method in accordance with IAS 19. This method takes into account not only the pensions and vested rights to future pension payments known on the balance sheet date but also careful estimates of future increases in pensions and salaries. The calculation is based on actuarial expert opinions relying on certain biometric assumptions.

The expected mortality and disability rates are based on the Prof. Dr. Klaus Heubeck 2005 (G) tables. The provisions were calculated on the basis of the new retirement ages stipulated by the German Pension Reform Act. In deviation from the above, the retirement age of some individual pension commitments is the completion of the 65th year of age. Actuarial profi ts or losses are only recognised with an impact on the operating result if they exceed 10% of the volume of obligations. The company's pension schemes have been closed; new employees are not entitled to company pensions.

Other provisions

Provisions in accordance with IAS 37 are set up to the extent that there are current obligations from past events to third parties which are likely to result in a future outfl ow of resources that can be reliably estimated.

Provisions for guarantee claims are set up on the basis of past or estimated future claims. Other provisions are also taken into account in accordance with IAS 37 for all discernible risks and uncertain obligations in the amount of their probable occurrence. The amounts shown are a best possible estimate of the funds required to meet the obligations existing on the balance sheet date.

Provisions for obligations which are unlikely to burden resources already in the following year are set up in an amount equalling the present value of the expected outfl ow of resources using a marketable discount rate at balance sheet date. The valuation of provisions is reviewed on each balance sheet date. A distinction between non-current provisions and current provisions is made in the balance sheet.

Deferred tax assets

Deferred tax assets are determined from temporary differences between the book values and the tax valuations of assets and liabilities in accordance with IAS 12. Deferred tax assets are based on a tax rate of 30%.

Liabilities

At their fi rst-time inclusion, liabilities are shown at their acquisition costs. In the following years, all liabilities are valued at their depreciated acquisition costs. All foreign currency liabilities are valued at the mean rate on the balance sheet date. Trade payables as well as other current liabilities are liabilities with a term of no more than twelve months.

Derivatives

In accordance with an internal directive, derivative fi nancial instruments are exclusively used in isolated cases to hedge interest rate and exchange rate risks on the basis of a hedging policy defi ned by the Management Board and agreed with the Supervisory Board. Pursuant to IAS 39, these fi nancial derivatives are initially recognised at the fair value, usually at cost, and subsequently measured at their fair value. If the fi nancial derivatives used are effective hedges in the context of a hedging relationship as defi ned by IAS 39, fl uctuations in the fair value have no impact on the result for the period during the term of the derivative.

Estimates and evaluations by the management

When preparing the fi nancial statements, it is necessary to make certain assumptions and estimates, which have an effect on the amount and the recognition of assets and liabilities, income and expenses and contingent liabilities in the reporting period. If the actual development deviates from the assumptions, the actual amounts may deviate from the originally expected estimates. The assets and liabilities in the fi nancial statements which are most strongly affected by this risk over a 12-month horizon are the provisions for guarantee claims. These provisions are based on historical values and future assumptions. All relevant post balance-sheet circumstances known at the time of the preparation of the fi nancial statements were taken into account.

NOTES TO THE INCOME STATEMENT

1. Sales A breakdown of sales revenues by geographic markets is shown below:

	2010 in € ,000	2009 in € ,000
Sales
Domestic	173,825	162,165
Abroad	42,801	39,246
Total	216,626	201,411

2.		2010	2009
Changes in inventories		in € ,000	in € ,000
of fi nished goods and work in progress	Increase/decrease in inventories of fi nished goods and work in progress	1,439	- 1,576
	Total	1,439	- 1,576

	2010 in € ,000	2009 in € ,000
Own work capitalised	264	348
Total	264	348

	2010 in € ,000	2009 in € ,000
Other operating income
Income unrelated to accounting period	1,051	1,160
Remuneration in company - cars	287	271
Employment subsidies	203	422
Insurance refund	103	430
Income from disposal of non-current assets	90	170
Other income	1,179	892
Total	2,913	3,345

2.

3.

Other own work capitalised

4.

Other operating income

5. Cost of materials

	2010 in € ,000	2009 in € ,000
Cost of materials
Raw materials and supplies	77,707	68,874
Merchandise	17,268	15,761
Energy costs and packaging material	10,274	8,722
Cost of services	1,670	1,329
Total	106,919	94,686

6.

Personnel expenses

	2010 in € ,000	2009 in € ,000
Personnel expenses
Wages and salaries	54,544	51,929
Social security contributions	9,424	9,072
Expenses for pension costs and other benefi ts	994	1,253
Other social expenditure	1,018	1,070
Total	65,980	63,324

On an annual average, Westag & Getalit AG's staffi ng levels were as follows:

	2010	2009
Number of staff (excl. trainees)
Employees	343	346
Industrial employees	824	829
Total	1,167	1,175

7.

Depreciation and amortisation of non-current assets

	2010 in € ,000	2009 in € ,000
Depreciation and amortisation of non-current assets
Intangible assets	166	145
Tangible assets	9,311	9,243
Total	9,477	9,388

8. Other operating expenses

	2010 in € ,000	2009 in € ,000
Other operating expenses
Freight out	9,543	8,663
External cost of repair and maintenance	4,017	3,588
External production labour and overhead	2,694	1,707
Advertising and trade fair expenses	1,444	1,535
Insurance, contributions and fees	1,122	1,257
Consulting fees including IT consulting	1,198	1,023
Travel and mileage allowance	621	576
Postage, offi ce supplies and telephone	553	557
Car cost	498	427
Other personnel expenses	380	412
Commissions	123	167
Other expenditure	1,786	1,510
Total	23,979	21,422

9. Other taxes

	2010 in € ,000	2009 in € ,000
Other taxes	213	197
Total	213	197

Other taxes mainly comprise real property tax and vehicle license tax.

10. Financial result

	2010 in € ,000	2009 in € ,000
Financial result
Interest income	252	340
Income from long-term fi nancial investments	9	19
Income from the investment in AKP Carat Arbeitsplatten GmbH	133	67
Interest expenses	- 8	- 7
Total	386	419

11. Taxes on income

	2010 in € ,000	%1)	2009 in € ,000	%1)
Taxes on income
Expected tax expenditure	4,518	30.0	4,479	30.0
Reversal of tax provisions	- 131	- 0.9	- 23	- 0.2
Other tax effects	13	0.1	- 36	- 0.2
Total	4,400	29.2	4,420	29.6
1) of earnings before income taxes in an amount of	15,060		14,930

The above tax rates were estimated on the basis of the applicable tax rates. A corporate income tax rate of 15% plus a solidarity surcharge of 5.5% was assumed. Trade tax is based on local assessment rates of 403% for each Wiedenbrück and Wadersloh.

Tax expenses are comprised as follows:

	2010 in € ,000	2009 in € ,000
Actual tax expenses	4,107	4,298
Deferred taxes resulting from the creation and reversal of temporary differences:
Provisions for pensions	21	- 34
Non-current provisions for personnel	40	1
Special item with an equity portion	- 53	- 66
Value adjustment of fi xed assets	285	221
Total	4,400	4,420

Deferred taxes were calculated on the basis of a tax rate of 30%.

12. Earnings per share

	2010	2009
Earnings per share
Net profi t in €	10,660,298,22	10,510,446,32
Ordinary shares entitled to dividend	2,860,000	2,860,000
Preference shares entitled to dividend	2,575,193	2,700,110
Dividend per ordinary share in €	0.94	0.94
Dividend per preference share in €	1.00	1.00
Earnings per share in €	1.86	1.84

NOTES TO THE BALANCE SHEET

13. Non-current assets

The breakdown of the non-current asset items summarised in the balance sheet and their development throughout fi scal 2010 have been recorded in the respective notes to the balance sheet.

Tangible assets are encumbered with land charges in an amount of € 6,800 thousand. No actual drawing existed on December 31, 2010.

As of the balance sheet date, the Westag & Getalit AG held 49% of the shares in AKP Carat-Arbeitsplatten GmbH (AKP), Meiningen, which is an associated company. AKP has a nominal capital of € 65 thousand (2009: € 65 thousand). The company's equity amounted to € 2,115 thousand as of December 31, 2010 (2009: € 2,222 thousand). A net profi t of € 164 thousand (2009: € 309 thousand) was generated in 2010.

DEVELOPMENT OF NON-CURRENT ASSETS

in € ,000	Intangible assets	Tangible assets
	Software, licenses and other industrial property rights	Land and leasehold rights and buildings	Technical equipment and machinery	Other fi xtures and fi ttings, plant and offi ce equipment
Acquisition/ manufacturing cost
Jan 1, 2009	1,547	54,594	97,421	67,658
Additions	128	204	5,815	2,453
Disposals	0	4	1,040	547
Reclassifi cations	0	280	4,460	1,173
December 31, 2009	1,675	55,074	106,656	70,737
Additions	466	1,304	3,288	4,207
Disposals	1	136	936	883
Reclassifi cations	0	2	772	316
December 31, 2010	2,140	56,244	109,780	74,377
Accumulated depreciation
Jan. 1, 2009	1,168	30,802	73,670	58,813
Additions	145	1,334	4,747	3,162
Releases	0	0	1,040	483
December 31, 2009	1,313	32,136	77,377	61,492
Additions	166	1,312	4,763	3,236
Releases	2	75	936	808
December 31, 2010	1,477	33,373	81,204	63,920
Book values
December 31, 2009	362	22,938	29,279	9,245
December 31, 2010	663	22,871	28,576	10,457

		Financial assets
Advance payments and assets under construction	Tangible assets Total	Shares in associated companies	Other loans	Total	Non-current assets Total
5,778	225,451	1,200	243	1,443	228,441
1,192	9,664	0	0	0	9,792
0	1,591	0	64	64	1,655
- 5,913	0	0	0	0	0
1,057	233,524	1,200	179	1,379	236,578
110	8,909	0	0	0	9,375
0	1,955	0	116	116	2,072
- 1,090	0	0	0	0	0
77	240,478	1,200	63	1,263	243,881
0	163,285	0	0	0	164,453
0	9,243	0	0	0	9,388
0	1,523	0	0	0	1,523
0	171,005	0	0	0	172,318
0	9,311	0	0	0	9,477
0	1,819	0	0	0	1,821
0	178,497	0	0	0	179,974
1,057	62,519	1,200	179	1,379	64,260
77	61,981	1,200	63	1,263	63,907

14. Current assets 14.1 Inventories

	2010 in € ,000	2009 in € ,000
Inventories
Raw materials and supplies	16,631	14,458
Work in progress	3,290	3,023
Finished goods and merchandise	14,023	12,333
Total	33,944	29,814

In the fi scal year, inventories were written down and recognised in profi t/loss in an amount of € 298 thousand (previous year: € 142 thousand) in accordance with IAS 2.34. No impairments made in earlier years were revalued to historical cost in the fi scal year. No inventories were transferred as security by Westag & Getalit AG.

14.2 Receivables and other assets

	2010 in € ,000	2009 in € ,000
Receivables and other assets
Trade receivables	27,253	22,181
Receivables from associated companies	28	20
Other assets	1,354	1,110
Income tax receivables	2,930	2,933
Total	31,565	26,244

Receivables from associated companies result from the business relationships with AKP Carat-Arbeitsplatten GmbH and its subsidiary, WAV Carat-Arbeitsplatten GmbH. Westag has a direct and indirect infl uence on these companies. In fi scal 2010, goods in an amount of € 1,623 thousand (2009: € 1,293 thousand) were supplied to these companies and goods in an amount of € 49 thousand (2009: € 0 thousand) were sourced from these companies.

	2010 in € ,000	2009
Trade receivable
Book value	27,253	22,181
thereof not impaired as of the balance sheet date and due for less than 30 days	2,724	1,675
more than 30 days and less than 60 days	431	183
more than 60 days	721	518

The products shipped and services rendered by the company are subject to retention of ownership. Moreover, default risks are taken into account through impairments in an amount of € 1,323 thousand (2009: € 1,148 thousand).

The table below shows the development of the impairments:

	2010 in € ,000	2009 in € ,000
Impairments
As of Jan. 1	1,148	1,293
Addition	262	116
Use/Reversal	- 87	- 261
As of Dec. 31	1,323	1,148

The table below shows the development of the credit defaults:

	2010 in € ,000	2009 in € ,000
Credit defaults
Preliminary loss of receivables outstanding, net	71	219
Refund under credit insurance	- 10	- 97
Defi nite loss of receivables outstanding	61	122

Income tax receivables include claims under corporate income tax benefi ts in an amount of € 2,634 thousand (2009: € 2,933 thousand). These claims are discounted at a rate of 2.0% (2009: 2.5%) and paid out in equal instalments of € 399 thousand over a period of 10 years starting 2008. The corporate income tax benefi t has a carrying amount of € 2,794 thousand (2009: € 3,193 thousand).

2010 in € ,000		2009 in € ,000
Cash and cash equivalents
Current account balances	5,076	2,492
Time deposit account balances	15,100	17,102
Total	20,176	19,594

Bank guarantees in an amount of € 284 thousand (previous year: € 115 thousand) have been obtained until March 31, 2014 as insolvency coverage for partial retirement working time credits. No other securities or bank deposits were pledged or assigned in the year under review as well as the previous fi scal year.

14.3 Cash and cash equivalents 15. Equity 15.1 Subscribed share capital

	2010 in € ,000	2009 in € ,000
Subscribed share capital
Ordinary shares	7,322	7,322
Preference shares	7,322	7,322
Total	14,644	14,644

Bearer shares

Number of share certifi cates	Number of in dividual share certifi cates	Amount in € ,000
Ordinary shares
12,250	2,450,000	6,272
14,000	280,000	717
13,000	130,000	333
	2,860,000	7,322
Preference shares
286,000	2,860,000	7,322
Total number and amount of ordinary and preference shares	5,720,000	14,644

The aim of our capital management efforts is to generate an appropriate return on equity employed on the basis of the existing good equity ratio. In accordance with the provisions of the German Stock Corporation Act (AktG) and the statutes, net profi ts generated are allocated to reserves or distributed to the shareholders in the form of a dividend.

Changes in equity are shown in the enclosed statement of changes in equity on page 81.

All of the company's shares are registered for trade and offi cially quoted at the Düsseldorf and Frankfurt stock exchanges. The ordinary shares are full voting shares, while the preference shares are non-voting. Preference shareholders receive a preferred dividend of € 0.12 per preference share out of the accumulated profi t. If the distributable accumulated profi t is not suffi cient to pay out a dividend of € 0.12 per preference share, the defi cit must be paid, without interest, out of the accumulated profi t generated during the subsequent years in such a way that the older defi cits are paid before the newer ones and the preferred amounts payable for the year out of the same year's profi t are paid subsequent to the repayment of all defi cits. Subsequent to the distribution of a dividend of € 0.12 per ordinary share, the preference shareholders receive an extra dividend, which may not be paid retroactively, of € 0.06. Both preference and ordinary shareholders participate in a

Notes

further distribution in the proportion of their prorate shares in the capital stock. The company reserves the right to issue further preference shares which, with respect to a distribution of profi t or of company assets, are of equal rank over the existing non-voting preference shares.

On August 24, 2010, the Annual General Meeting authorised the Management Board to increase, by August 23, 2015 and with the Supervisory Board's approval, the capital stock once or several times, by way of issuing new bearer shares and/or non-voting preference shares by up to € 5,840,000 (approved capital I) in return for cash contributions or by € 1,460,000 (approved capital II). This authorisation also includes the entitlement to issue preference shares which, with respect to a distribution of profi t or of company assets, are equal in rank with the existing non-voting preference shares.

We also state the following with regard to the capital and the statutes: Syntalit AG, Zug, Switzerland, holds 2,159,300 voting ordinary shares in the company, which represent 75.5 % of the voting rights. Gethalia Foundation c/o Prokurationsanstalt, Vaduz, Liechtenstein, is a shareholder of Syntalit AG, and the full 75.5 % of the voting shares held by Syntalit AG in our company are attributable to Gethalia Foundation pursuant to section 22 para. 1 sentence 1 No. 1 of the German Securities Trading Act (WpHG). No other direct or indirect shareholdings that exceed 10 % of the voting rights were reported to the company or are known to the Management Board.

Shares with special rights that grant controlling powers do not exist. To the company's knowledge, employees only hold preference shares in the company.

The members of the company's Management Board are appointed and dismissed by the Supervisory Board in accordance with section 84 of the German Stock Corporation Act (AktG).

Pursuant to section 179 of the German Stock Corporation Act (AktG), amendments to the statutes require a majority of at least three quarters of the share capital represented at the Annual General Meeting. The statutes do not include any provisions that deviate from this clause.

According to a resolution passed by the Annual General Meeting of August 24, 2010, the Management Board is authorised to repurchase own shares.

No agreements exist which come under the condition of a change of control due to a takeover bid. Compensation agreements have not been concluded with the members of the Management Board or employees in the event of a takeover bid.

15.2 Capital reserve

	2010 in € ,000	2009 in € ,000
Capital reserve	24,376	24,376
Total	24,376	24,376

The capital reserve mainly consists of the premiums of earlier capital increases.

15.3 Revenue reserves

	2010 in € ,000	2009 in € ,000
Revenue reserves
Legal reserves	596	596
Other revenue reserves	53,715	48,415
Total	54,311	49,011

Revenue reserves contain the past results of Westag & Getalit AG to the extent they have not been distributed. They also include negative changes in equity with no impact on profi t or loss, which result from the adoption of IFRS.

In fi scal 2010, € 5,300 thousand (2009: € 5,100 thousand) were allocated to the revenue reserves in accordance with section 58 (2) of the German Stock Corporation Act (AktG). The own shares (284,807 shares; 2009: 159,890 shares) in an amount of € 3,408 thousand (2009: € 1,513 thousand) held on the balance sheet date were netted with the accumulated profi t without any impact on the operating result.

	2010 in € ,000	2009 in € ,000
Development of the balance sheet item
As of Jan 1	13,906	13,671
Current expenditure as detailed below	965	955
Current pension payments	- 741	- 720
As of Dec. 31	14,130	13,906
Changes in the value of the benefi t obligations
Value of the benefi t obligations Jan. 1	13,580	12,831
Service cost	224	210
Interest expenses	713	717
Actuarial losses	806	542
Benefi ts paid	- 741	- 720
Expected value of the benefi t obligations on the balance sheet date	14,582	13,580
Past service cost not yet recognised	- 28	- 55
Actuarial losses not included in the balance sheet	- 424	381
As of Dec. 31	14,130	13,906

16. Non-current liabilities 16.1 Pension provisions

The income statement of fi scal 2010 includes the following expenses for pension obligations as personnel expenses:

	2010 in € ,000	2009 in € ,000
Current service cost	224	210
Interest expenses	713	717
Amortised actuarial losses	28	28
Total	965	955

The amount of provisions is calculated using actuarial methods based on the following assumptions:

	2010 in %	2009 in %
Discount factor	5.15	5.20
Rate of pension progression	2.00	2.00
Average turnover	0.40	0.40

The table below shows the changes in provisions over the past years:

	2010 in € ,000	2009 in € ,000	2008 in € ,000	2007 in € ,000	2006
Expected present value of pension obligations as at the balance sheet date	14,582	13,580	12,831	13,412	15,525
Expectation-related adjustment of the present value	314	112	133	100	- 225

16.2 Other non-current provisions

in € ,000	Provisions for personnel	Other provisions	Non-current provisions Total
As of Jan. 1, 2009	957	837	1,794
Use	262	514	776
Reversal	0	0	0
Addition	151	449	600
As of Dec. 31, 2009	846	772	1,618
As of Jan. 01, 2010	846	772	1,618
Use	149	702	851
Reversal	0	0	0
Addition	18	778	796
As of Dec. 31, 2010	715	848	1,563

Non-current provisions include amounts for guarantees, partial retirement and anniversary benefi ts totalling € 919 thousand (2009: € 813 thousand), which are likely to be met within 12 months from the balance sheet date and are non-interest-bearing.

16.3 Deferred tax liabilities

	2010 in € ,000	2009 in € ,000
Deferred tax liabilities
Fixed assets	1,217	932
Provisions	- 928	- 989
Special item with an equity portion	353	406
Total	642	349

Based on a tax rate of 30%, deferred tax liabilities totalled € 642 thousand (2009: € 349 thousand) on December 31, 2010.

17.
Current liabilities
17.1
Trade payables

	2010 in € ,000	2009 in € ,000
Trade payables	11,408	5,582
Total	11,408	5,582

All trade payables are current liabilities, which are subject to the usual retention of ownership of the suppliers. Trade payables are due within one year and non-interest-bearing.

17.2 Other current liabilities

	2010 in € ,000	2009 in € ,000
Other current liabilities
Bonuses due to customers	7,311	5,899
Liabilities to employees	5,729	5,485
Income tax on wages and salaries	1,273	1,221
Value-added tax	307	1,408
Advance payments received	293	227
Debtors classed as creditors	216	92
Environmental protection measures (short-term)	157	157
Others	1,671	754
Total	16,957	15,243

Other current liabilities are due within one year and non-interest-bearing.

17.3 Current provisions

	in € ,000
As of Jan. 1, 2009	558
Use	343
Reversal	0
Addition	299
As of Dec. 31, 2009	514
As of Jan. 1, 2010	514
Use	468
Reversal	0
Addition	520
As of Dec. 31, 2010	566

The provision was established for the temporary use of guarantee obligations.

17.4 Income tax liabilities

	2010 in € ,000	2009 in € ,000
Income tax	178	2,034
Total	178	2,034

ADDITIONAL NOTES TO THE BALANCE SHEET

18. Other information 18.1 Additional disclosures on fi nancial instruments

As at the balance sheet date, Westag & Getalit AG exclusively held original fi nancial instruments. On the assets side, they relate to receivables and primarily comprise other non-current loans, receivables and other assets as well as liquid funds and are recognised at amortised cost. On the liabilities side, fi nancial instruments relate to liabilities measured at amortised cost. The original fi nancial instruments held by the company are stated in the balance sheet; the amount of the fi nancial assets is equivalent to the maximum default risk.

For the disclosures required pursuant to IFRS 7.33 (b) on risk management of fi nancial instruments, please refer to the information provided in the Management Report.

For information on the changes in valuation allowances and maturities, please refer to the explanations provided under the balance sheet item "Receivables and other assets".

	2010 Carrying amount in € ,000	Fair value in € ,000	2009 Carrying amount in € ,000	Fair value in € ,000
Assets
Other loans	63	63	179	179
Receivables and assets	28,635	28,635	23,311	23,311
Liquid funds	20,176	20,176	19,594	19,594
Liabilities
Trade liabilities	11,408	11,408	5,581	5,581
Other current liabilities	16,957	16,957	15,243	15,243
Net interest income
from fi nancial assets	153	153	106	106

18.2 Segment reporting

Segment assets include all operating assets used by a segment, in particular non-current assets, inventories, receivables as well as cash and cash equivalents. Segment liabilities comprise all operating liabilities and consist primarily of liabilities and provisions.

Segment investments include all investments in non-current operating assets. The breakdown into segments is largely based on the respective shares in total sales, unless a direct allocation is possible.

Westag & Getalit AG's segment reporting is based on a breakdown into geographic regions by customers domiciled in Germany and abroad (primary reporting format).

	Domestic in € ,000	Abroad in € ,000	Westag total in € ,000
Fiscal 2010
Sales	173,825	42,801	216,626
Profi t contribution	49,301	11,488	60,789
Fixed cost	36,579	8,722	45,301
Result	12,374	2,686	15,060
Fiscal 2009
Sales revenues	162,165	39,246	201,411
Profi t contribution	47,626	10,933	58,559
Fixed cost	35,357	8,272	43,629
Result	12,269	2,661	14,930

	Domestic in € ,000	Abroad in € ,000	Westag total in € ,000
Fiscal 2010
Segment assets	130,378	19,214	149,592
Segment liabilities	39,606	5,837	45,443
Segment investments	8,171	1,204	9,375
Segment depreciation	8,260	1,217	9,477
Fiscal 2009
Segment assets	122,187	17,725	139,912
Segment liabilities	34,274	4,972	39,246
Segment investments	8,552	1,240	9,792
Segment depreciation	8,199	1,189	9,388

Segment reporting by divisions (secondary reporting format)

in € ,000	Plywood/ Formwork	Doors/ Frames	Laminates/ Elements	Other	Westag total
Fiscal 2010
Sales	32,878	103,683	74,185	5,880	216,626
Segment investments	190	4,968	2,869	1,348	9,375
Segment assets	16,540	52,876	54,523	25,653	149,592
Fiscal 2009
Sales	31,802	93,626	69,835	6,148	201,411
Segment investments	3,686	2,498	3,157	451	9,792
Segment assets	17,073	45,754	51,185	25,900	139,912

18.3 Other fi nancial obligations

	2010 in € ,000	2009 in € ,000
Other fi nancial obligations
Purchase commitments in connection with capital expenditure	948	823
Rental and lease contracts	419	429
Other fi nancial obligations	98	125
Total	1,465	1,377

The rental and lease contracts include an "Erbbaurecht" (leasehold) with a remaining term of 63 years in an amount of € 189 thousand (2009: € 189 thousand), which is discounted at a rate of 5%.

Future minimum lease payments under operating leases in an amount of € 23 thousand will become due in the following periods (2009: € 228 thousand). Payments in an amount of € 81 thousand (2009: € 224 thousand) will have to be made under the rental and lease contracts in the next 12 months.

18.4 Related party disclosures

According to information supplied by Syntalit AG on December 18, 2006, Syntalit holds the majority of our company's ordinary shares (75.5%). In addition, we were advised by Gethalia Foundation that this company is a shareholder of Syntalit AG and the full 75.5% of the voting shares held by Syntalit AG in our company have to be counted towards Gethalia Foundation pursuant to section 22 para. 1 sentence 1 No. 1 of the German Securities Trading Act (WpHG). Since then, we have received no notifi cation of a change in shareholdings subject to reporting requirements. With regard to our relationships with affi liated companies, we would like to point out that we did not conduct any legal transactions with Syntalit AG and Gethalia Foundation.

The respective report required under section 312 of the German Stock Corporation Act (AktG) concludes with the following declaration: "Transactions which are subject to reporting requirements did not take place."

	2010 in € ,000	2009 in € ,000
Total Supervisory Board compensation	68	68
Total Management Board compensation	1,600	1,550
Total compensation received by former Management Board members and their surviving dependants	341	337
Pension provisions for former Management Board members and their surviving dependants as well as for active Management Board members	4,685	4,501
Service cost for the Management Board and the Supervisory Board included in pension provisions	10	9
Consulting services (Mr Pedro Holzinger)	60	60

No advances, loans, guarantees or warranties are granted to members of the Supervisory Board and the Management Board.

18.5 Supervisory Board and Management Board compensation 19. Corporate Governance Code Westag & Getalit AG has issued the Declaration of Conformity regarding the recommendations made by the German Corporate Governance Code government commission that is required under section 161 of the German Stock Corporation Act (AktG) and has given shareholders access to this declaration via the Internet.

Auditor's fee

20. The total fee charged by the auditors for the fi scal year breaks down as follows:

	2010 in € ,000	2009 in € ,000
Auditor's fee
Audit	100	97
Tax consulting services	38	36
Other services	33	32
Total	171	165

21. Translation to IFRS 1 21.1 Equity reconciliation

HGB-IAS/IFRS

	2010 in € ,000	2009 in € ,000
Equity reconciliation HGB-IAS/IFRS
Equity according to HGB	104,954	101,086
Tangible assets	0	3,107
Own shares	0	- 1,513
Deferred tax assets	345	- 349
Special item with an equity portion	1,177	- 3,019
Provisions for pensions	- 2,328	1,354
Equity according to IFRS	104,148	100,666

21.2 Net profi t reconciliation HGB-IAS/IFRS

	2010 in € ,000	2009 in € ,000
Net profi t reconciliation HGB-IAS/IFRS
Net profi t according to HGB	10,756	10,230
Other operating income	- 177	- 223
Personnel expenses	493	- 112
Depreciation	0	737
Extraordinary result	- 538	0
Taxes on income	126	- 122
Net profi t according to IFRS	10,660	10,510

22.

Events after the balance sheet date

23. Financial, currency and credit risks

No events having a material impact on the fi nancial statements have occurred after the balance sheet date.

Westag & Getalit AG is exposed to a moderate extent to fi nancial and currency risks related to the procurement of materials from foreign currency countries. These risks are mitigated in individual cases and to a small extent by concluding hedging transactions while monitoring currency trends. No such transactions existed on the balance sheet date. In order to eliminate default risks, we have taken out insurance cover for most of our accounts receivable.

24.

Proposal regarding the appropriation of the retained earnings The 2010 accumulated profi t according to HGB amounts to € 11,662 thousand and is composed as follows:

	2010 in € ,000
Net profi t 2010	10,756
Retained earnings brought forward	6,206
Transfer to other revenue reserves in accordance with section 58 (2) AktG	- 5,300
Retained earnings	11,662

We submit to the Annual General Meeting the following proposal regarding the appropriation of the retained earnings:

	2010 in € ,000
Distribution of a dividend of € 0.94 € per ordinary share	2,688
Distribution of a dividend of € 1.00 € per preference share	2,575
	5,263
Residual profi t to be brought forward to new account	6,399
Retained earnings	11,662

Ordinary shares consist of 2,860,000 no par shares and preference shares consist of 2,575,193 no par shares.

For the proposal regarding the appropriation of the accumulated profi t, the number of own shares held at the time of preparation of the balance sheet (284,807 share certifi cates) was deducted from the total number of preference shares.

25. Statement of changes in equity

in € ,000	Subscribed capital	Capital reserve	Revenue reserve	Accumulated profi t	Total
As of Jan. 1, 2009	14,644	24,376	43,911	9,708	92,639
Sale of own shares				119	119
Addition in accordance with section 58 II AktG			5,100	- 5,100	0
Dividend				- 2,602	- 2,602
Net profi t				10,510	10,510
As of Dec. 31, 2009	14,644	24,376	49,011	12,635	100,666
As of Jan. 1, 2010	14,644	24,376	49,011	12,635	100,666
Purchase/sale of own shares				- 1,895	- 1,895
Addition in accordance with section 58 II AktG			5,300	- 5,300	0
Dividend				- 5,283	- 5,283
Net profi t				10,660	10,660
As of Dec. 31, 2010	14,644	24,376	54,311	10,817	104,148

Dividends paid out per share amount to:

	2010 in € ,000	2009 in € ,000
Ordinary shares	0.94	0.44
Preference shares	1.00	0.50

26. Responsibility Statement

"To the best of our knowledge, and in accordance with the applicable reporting principles for fi nancial reporting, the fi nancial statements give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of Westag & Getalit AG."

Rheda-Wiedenbrück, February 17, 2011

Westag & Getalit Aktiengesellschaft The Management Board

Wenninger Beckers Dr. Paulitsch Sander

CORPORATE GOVERNANCE REPORT

Declaration of Conformity

The Management Board and the Supervisory Board of Westag & Getalit AG issued the last Declaration of Conformity pursuant to section 161 of the German Stock Corporation Act on December 8, 2010. For the period from December 9, 2009 to July 1, 2010, the following Declaration refers to the German Corporate Governance Code (hereinafter referred to as "Code") as amended on June 18, 2009. For the period from July 2, 2010, the following Declaration relates to the Code as amended on May 26, 2010, which was published in the electronic Bundesanzeiger on July 2, 2010.

Pursuant to section 161 of the German Stock Corporation Act, the Management Board and the Supervisory Board of Westag & Getalit AG declare that the company has complied with the recommendations of the Government Commission on the German Corporate Governance Code save for the following exceptions:

1. Since January 1, 2010, the D&O insurance taken out by Westag & Getalit AG for the members of the Management Board and the Supervisory Board has included a deductible that complies with the Code and the revised version of section 93 para. 2 sentence 3 of the German Stock Corporation Act (AktG). This was not the case until December 31, 2009 (Clause 3.8 (2)).

In view of the amendment to section 93 para. 2 sentence 3 of the German Stock Corporation Act (AktG) regarding Management Board members, the Management Board and the Supervisory Board decided to include the above deductibles in the existing D&O insurance with effect from January 1, 2010.

1. The targets relating to the composition of the Supervisory Board do not aim for an appropriate consideration of women (Clause 5.4.1 (2) phrase 2 of the Code).

The Supervisory Board attaches great importance to the expertise of its members and to great diversity in its composition. This approach has proven to be successful in the past. The Supervisory Board considers these to be the relevant criteria for its composition and not the proportionality of the sexes.

1. The company's statutes do not provide for the compensation of the members of the Supervisory Board to refl ect the exercising of the chair and membership in committees (Clause 5.4.6 (1) phrase 3 of the Code).The compensation of the members of the Supervisory Board does not take into account the performance of the company (Clause 5.4.6 (2) of the Code). Payments made or advantages extended by the company to the members of the Supervisory Board for services provided, in particular consulting or agency services are stated in total in the notes to the fi nancial statements and are not shown in individualised form and broken down by components in the Corporate Governance Report (Clause 5.4.6 (3) phrase 2 of the Code).

The Management Board and the Supervisory Board are of the opinion that the compensation

defi ned in the company's statutes adequately refl ects membership of the committees and therefore regard separate compensation as inappropriate. They also believe that a performance-linked compensation would not improve the motivation and responsibility with which they perform their tasks.

Instead, the members should perform their supervisory function irrespective of monetary incentives. The compensation of the Supervisory Board members is laid down in the statutes, which are published on the company's website. A repetition of the respective provisions of the statutes in the Corporate Governance Report is not believed to result in any additional benefi t. To protect the privacy of the Supervisory Board members, the advantages granted for a member's personal performance are shown individually and broken down by components in the Corporate Governance Report only if the respective member of the Supervisory Board agrees to such disclosure.

1. The company has facilitated the exercising of voting rights for the shareholders but has not offered them the option of postal voting (Clause 2.3.3 phrase 2).

To facilitate postal votes, the statutes would fi rst have to be amended at an Annual General Meeting.

Targets regarding the composition of the Supervisory Board and state of implementation

Only those candidates should be proposed who fulfi l the legal requirements and are below the age limit specifi ed in the rules of procedure of the Supervisory Board, who have the expertise, experience, integrity, independence and personality that are needed to perform the tasks of a Supervisory Board member of Westag & Getalit AG in a responsible manner and to complement the other Supervisory Board members effectively. The Supervisory Board is of the opinion that its current composition complies with the requirements of the German Corporate Governance Code, especially with regard to diversity, with the exception of the degree of female representation.

Management and controlling structures as well as transparency

The management and supervisory structures of Westag & Getalit AG comply with the provisions of the German Stock Corporation Act, the statutes and the rules of procedure of the Management Board and the Supervisory Board. The Management Board is composed of four members, whose tasks are allocated on the basis of functional aspects. The Supervisory Board is composed of six members, four of whom were elected by the shareholders while two were elected by the workforce. Material decisions by the Management Board must be approved by the Supervisory Board. The cooperation between the Management Board and the Supervisory Board of Westag & Getalit AG has traditionally been characterised by responsibility and transparency. As regards the dealings with its shareholders, the company has a policy of providing comprehensive, regular and timely information. A fi nancial calendar regularly informs our shareholders of important events. In addition, detailed documents and information are made available on our website.

AUDITORS' REPORT

We have audited the fi nancial statements - comprising the balance sheet, income statement, statement of changes in equity, cash fl ow statement and the notes - together with the bookkeeping system and the management report prepared by Westag & Getalit Aktiengesellschaft, Rheda-Wiedenbrück, for the fi scal year from January 1 to December 31, 2010. The preparation of the fi nancial statements and the management report in accordance with the IFRS as adopted by the EU and the supplementary provisions of German Commercial Law required to be applied under section 324a of the German Commercial Code (HGB) and the supplementary provisions of the company's statutes is the responsibility of the company's management. Our responsibility is to express an opinion on the fi nancial statements and the management report based on our audit.

We conducted our audit of the separate fi nancial statements in accordance with section 317 of the German Commercial Code (HGB) and German generally accepted audit standards for the audit of fi nancial statements promulgated by the "Institut der Wirtschaftsprüfer in Deutschland e.V." (IdW). Those standards require that we plan and perform the audit in such a way that misstatements materially affecting the presentation of the net assets, fi nancial position, and results of operation in the fi nancial statements in accordance with the applicable fi nancial reporting standards and in the management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the company and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the fi nancial statements and the management report are examined primarily on a test basis as part of the audit. The audit includes an evaluation of the accounting principles applied and the signifi cant estimates made by the management, as well as evaluating the overall presentation of the fi nancial statements and the management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations except for the following: The division of the operating segments and the report on the segment results, the segment assets and the segment liabilities required under IFRS 8 in both the separate fi nancial statements to IFRS and the interim report do not comply with the provisions of IFRS 8, as the company believes that the disclosure of such information would cause material damage compared to its competitors who are not obliged to disclose such information. Insofar, the accounts do not give a true and fair view of the net assets, fi nancial position and results of operation of the segments to be established pursuant to IFRS 8.

On the basis of the knowledge we have gained during the audit, the separate fi nancial statements, save for the above reservation, comply with IFRS as adopted in the EU and the supplementary provisions of German commercial law to be applied in accordance with section 324a of the German Commercial Code (HGB) as well as the supplementary provisions of the company's statutes as well as with IFRS in general and the general accepted accounting principles and give a true and fair view of the net assets, fi nancial position and result of operations of the company in accordance with these requirements. The management report is consistent with the fi nancial statements, provides an appropriate view of the company's position and appropriately presents the opportunities and risks of future development.

Hanover, February 18, 2011

Peters & Partner GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft

Michael Peters Auditor

Jochen Mischer Auditor

BALANCE SHEET AS OF DECEMBER 31, 2010 (ACCORDING TO HGB)

	Assets	31.12.2010 in € ,000	31.12.2009 in € ,000
	A. Fixed assets
I.	Intangible assets
	Software, licenses and other industrial property rights	663	362
	II. Tangible assets
	Land and leasehold rights and buildings, including buildings on third-party land	22,871	22,938
	Plant and machinery	28,576	26,901
	Other fi xtures and fi ttings, tools and equipment	10,457	8,516
	Payments on account and tangible assets in course of construction	77	1,057
		61,981	59,412
	III. Financial assets
	Equity investments	1,200	1,200
	Other loans	63	179
		1,263	1,379
		63,907	61,153
	B. Current assets
I.	Inventories
	Raw materials and supplies	16,631	14,458
	Work in progress	3,290	3,023
	Finished goods and merchandise	14,023	12,333
		33,944	29,814
	II. Accounts receivable and other assets
	Accounts receivable	27,253	22,181
	Receivables from companies in which an interest is held	28	20
	Other assets	4,158	3,952
		31,439	26,153
	III. Investments
	Own shares	0	1,513
	IV. Cheques, cash on hand and cash in other bank accounts	20,176	19,594
		85,559	77,074
	C. Prepaid expenses	126	90
	Total assets	149,592	138,317

Equity and liabilities	31.12.2010 in € ,000	31.12.2009 in € ,000
A. Equity and reserves
I. Subscribed capital
Ordinary shares	7,322	7,322
Preference shares
Subscribed capital	7,322	7,322
Own shares	- 730	0
	6,592	7,322
	13,914	14,644
II. Capital reserve	24,345	24,344
III. Revenue reserve
Legal reserve	596	596
Reserve for own shares	0	1,513
Other revenue reserves	54,437	48,500
	55,033	50,609
IV. Retained earnings	11,662	11,489
	104,954	101,086
B. Special item with an equity portion	1,177	1,354
C. Provisions
Pension provisions	11,803	10,887
Provisions for taxation	178	2,034
Other provisions	14,820	12,315
	26,801	25,236
D. Liabilities
Advances from customers	293	227
Accounts payable	11,408	5,581
Other liabilities	3,972	4,833
	15,673	10,641
E. Deferred income	987	0
Total equity and liabilities	149,592	138,317

INCOME STATEMENT - FINANCIAL YEAR 2010 (ACCORDING TO HGB)

	2010 in € ,000	2009 in € ,000
Sales revenues	216,626	201,411
Changes in fi nished goods, inventories and work in process	1,439	- 1,576
Other own work capitalised	264	348
	218,329	200,183
Other operating income	3,090	3,568
Cost of materials
Cost of raw materials, consumables and supplies, and of purchased materials	- 105,249	- 93,357
Cost of purchased services	- 1,670	- 1,329
	- 106,919	- 94,686
Personnel expenses
Wages and salaries	- 54,544	- 51,930
Social security and other pension costs	- 11,929	- 11,283
	- 66,473	- 63,213
Depreciation and amortisation of non-current assets	- 9,477	- 10,125
Other operating expense	- 23,979	- 21,422
Income from other investments and long-term loans	142	87
Other interest and income	253	340
Interest and similar expenses	- 8	- 7
Result from ordinary activities	14,958	14,725
Extraordinary income from adjustment to the BilMoG Act	737	0
Extraordinary expenses from adjustment to the BilMoG Act	- 199	0
Extraordinary result	538	0
Taxes on income	- 4,526	- 4,298
Other taxes	- 214	- 197
	- 4,740	- 4,495
Net profi t	10,756	10,230
Retained earnings brought forward	6,206	6,240
Withdrawal from the reserve for own shares	0	119
Transfer to other revenue reserves	- 5,300	- 5,100
Retained earnings	11,662	11,489

AUDITORS' REPORT

We have audited the fi nancial statements - comprising the balance sheet, income statement, statement of changes in equity, cash fl ow statement and the notes - together with the accounting system and the management report prepared by Westag & Getalit Aktiengesellschaft, Rheda-Wiedenbrück, for the fi scal year from January 1 to December 31, 2010. The accounting system, the preparation of the fi nancial statements and the management report in accordance with the provisions of German Commercial Law and the supplementary provisions of the company's statutes is the responsibility of the company's management. Our responsibility is to express an opinion on the fi nancial statements together with the accounting system and the management report based on our audit.

We conducted our audit of the fi nancial statements in accordance with section 317 of the German Commercial Code (HGB) and German generally accepted audit standards for the audit of fi nancial statements promulgated by the "Institut der Wirtschaftsprüfer in Deutschland e.V. " (IdW). Those standards require that we plan and perform the audit in such a way that misstatements materially affecting the presentation of the net assets, fi nancial position, and results of operation in the fi nancial statements in accordance with the applicable fi nancial reporting standards and in the management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the company and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accountingrelated internal control system and the evidence supporting the disclosures in the accounts, the fi nancial statements and the management report are examined primarily on a test basis as part of the audit. The audit includes an evaluation of the accounting principles applied and the signifi cant estimates made by the management, as well as evaluating the overall presentation of the fi nancial statements and the management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, on the basis of the knowledge we have gained during the audit, the fi nancial statements comply with the provisions of German law as well as the supplementary provisions of the company's statutes as well as with the general accepted accounting principles and give a true and fair view of the net assets, fi nancial position and result of operations of the company in accordance with these requirements. The management report is consistent with the fi nancial statements, provides an appropriate view of the company's position and appropriately presents the opportunities and risks of future development.

Hanover, February 18, 2011

Peters & Partner GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft

Michael Peters Auditor

Jochen Mischer Auditor

Our Decoplex® fl oor panels are decorative, have a long life and are supplied ready for installation

Timeless elegance characterises the "Pure" sliding door element whose ornamental strip aperture adds a decorative touch

Kitchen worktops in trendy wooden colours and the typical surface structure of wood add to a lively atmosphere

Contact details of the divisions

Plywood/Formwork Phone 05242 17-1000 Fax 05242 17-71000

Doors/Frames

Phone 05242 17-2000 Fax 05242 17-72000

Laminates/Elements

Phone 05242 17-3000 Fax 05242 17-73000

Westag & Getalit AG

Postfach 26 29 | 33375 Rheda-Wiedenbrück | Germany Phone +49 5242 17-0 | Fax +49 5242 17-75000 www.westag-getalit.de | ir@westag-getalit.de