UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C. 20549
  Form 20-F
   o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934orþ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934oro

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this
    shell company reportFor the transition period from
    
    to   Commission file number
    001-04192
  
 KHD Humboldt Wedag
    International Ltd.
    (Exact name of Registrant as
    specified in its charter)
  Not Applicable
   (Translation of
    Registrants Name into English)
  British Columbia,
    Canada
   (Jurisdiction of incorporation
    or organization)
 Suite 1620  400
    Burrard Street, Vancouver, British Columbia, Canada V6C
    3A6
    (Address of principal
    offices)
  Alan Hartslief
 Fax:
    011-43-1-588-1499
 Faulmanngasse 4, 5th
    Floor
 1040 Vienna Austria
  with a copy to:
  Virgil Z. Hlus
 Clark Wilson LLP
 800-885 West
    Georgia Street
 Vancouver, British
    Columbia
 Canada V6C 3H1
 Facsimile:
    604-687-6314
  (Name, Telephone,
    E-mail
    and/or Facsimile number and Address of Company Contact
    Person)
  Securities registered or to be
    registered pursuant to Section 12(b) of the Act.
  Title of each class

Name of each exchange on which registeredCommon Shares, Without Par Value

New York Stock Exchange   Securities registered or to be
    registered pursuant to Section 12(g) of the Act.
  Not Applicable
 (Title of Class)
  Securities for which there is a
    reporting obligation pursuant to Section 15(d) of the
    Act:
  Not Applicable
 (Title of Class)
    There were 30,259,911 common shares, without par value,
    issued and outstanding as of December 31, 2009.
  o þ
  o þ
    þ o
  o o
    o þ o
    U.S.
    GAAP  o

International Financial Reporting Standards as issued by the
    International Accounting Standards
    Board  o

Other  þ
   þ o
  Rule 12b-2 o þ
    o o




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OVERVIEW
          FULL YEAR
    RESULTS
                FOURTH
    QUARTER RESULTS




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##### 



OUTLOOK
            
  President and Chief Executive Officer




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##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD.
  Form 20-F
  TABLE OF
    CONTENTS
   
 Page No.PART 1ITEM 1.


IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
    ADVISERS


1ITEM 2.


OFFER STATISTICS AND EXPECTED TIMETABLE


1ITEM 3.


KEY INFORMATION


1Selected Financial Data


1Capitalization and Indebtedness


3Reasons for the Offer and Use of Proceeds


3Risk Factors


3ITEM 4.


INFORMATION ON THE COMPANY


13History and Development of the Company


13Business Overview


13Organizational Structure


23Property, Plant and Equipment


24ITEM 4A.


UNRESOLVED STAFF COMMENTS


24ITEM 5.


OPERATING AND FINANCIAL REVIEW AND PROSPECTS


24Operating Results


25Liquidity and Capital Resources


37Research and Development, Patents and Licenses,
    Etc.


46Trend Information


46Off-balance Sheet Arrangements


46Tabular Disclosure of Contractual Obligations


46Safe Harbor


47ITEM 6.


DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES


47Directors and Senior Management


47Compensation


49Board Practices


52Employees


53Share Ownership


54ITEM 7.


MAJOR SHAREHOLDERS AND RELATED PARTY
    TRANSACTIONS


55Major Shareholders


55Related Party Transactions


55ITEM 8.


FINANCIAL INFORMATION


57Consolidated Statements and Other Financial
    Information


57Significant Changes


58ITEM 9.


THE OFFER AND LISTING


58Offer and Listing Details


58Plan of Distribution


59Markets


59Selling Shareholders


59Dilution


59Expenses of the Issue


59ITEM 10.


ADDITIONAL INFORMATION


59Share Capital


59Memorandum and Articles of Association


59Material Contracts


60Exchange Controls


61Taxation


62




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##### 



Page No.Dividends and Paying Agents


64Statement by Experts


64Documents on Display


64Subsidiary Information


65ITEM 11.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


65ITEM 12.


DESCRIPTION OF SECURITIES OTHER THAN EQUITY
    SECURITIES


67PART IIITEM 13.


DEFAULTS, DIVIDEND ARREARAGES AND
    DELINQUENCIES


67ITEM 14.


MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
    HOLDERS AND USE OF PROCEEDS


67ITEM 15.


CONTROLS AND PROCEDURES


67ITEM 16.


RESERVED


68ITEM 16A.


AUDIT COMMITTEE FINANCIAL EXPERT


68ITEM 16B.


CODE OF ETHICS


69ITEM 16C.


PRINCIPAL ACCOUNTANT FEES AND SERVICES


69ITEM 16D.


EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
    COMMITTEES


70ITEM 16E.


PURCHASES OF EQUITY SECURITIES BY OUR COMPANY AND
    AFFILIATED PURCHASERS


70PART IIIITEM 17.


FINANCIAL STATEMENTS


71ITEM 18.


FINANCIAL STATEMENTS


122ITEM 19.


EXHIBITS


122SIGNATURES


125




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##### 



PART I  and/or
          ITEM 1
    Identity
    of Directors, Senior Management and Advisers    ITEM 2
    Offer
    Statistics and Expected Timetable    ITEM 3
    Key
    Information  A.
    Selected
    Financial Data   1




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##### 



Selected
    Financial Data
    (Stated in United States dollars in accordance with Canadian
    GAAP)
    (in thousands, other than per share amounts)
  Fiscal Years Ended December 312009


2008


2007


2006


2005Revenues

$
576,408


$
638,354


$
580,391


$
404,324


$
316,978Operating income


71,549



56,385



53,010



40,555



25,551Income (loss) from continuing operations


40,711



(6,952
)


50,980



34,152



22,864(Loss) income from discontinued operations










(9,351
)


(2,874
)


5,361Extraordinary gain










513







Income (loss) from continuing operations per shareBasic


1.34



(0.23
)


1.71



1.13



0.84Diluted


1.34



(0.23
)


1.68



1.12



0.84(Loss) income from discontinued operations per shareBasic










(0.31
)


(0.10
)


0.20Diluted










(0.31
)


(0.09
)


0.19Extraordinary gain per shareBasic










0.02







Diluted










0.02







Net income (loss)


40,711



(6,952
)


42,142



31,278



28,225Net income (loss) per shareBasic


1.34



(0.23
)


1.42



1.03



1.04Diluted


1.34



(0.23
)


1.39



1.03



1.03Total assets


788,903



765,658



789,311



641,920



523,056Net assets


325,191



265,623



313,120



295,754



262,347Long-term debt,


11,649



11,313



13,920



10,725



2,920Shareholders equity


319,788



261,914



307,194



273,288



244,259Capital stock, net of treasury stock


58,270



50,033



44,566



44,212



53,574Weighted average common stock outstanding, diluted


30,354



30,401



30,402



30,415



27,509  2




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##### 



Selected
    Financial Data
    (Stated in United States dollars in accordance with U.S.
    GAAP)
    (in thousands, other than per share amounts)
  Fiscal Years Ended December 312009


2008


2007


2006


2005Revenues

$
576,408


$
638,354


$
580,391


$
404,324


$
316,978Operating income


68,587



58,455



45,046



38,596



25,551Income (loss) from continuing
    operations(1)


37,749



(4,882
)


43,031



32,220



22,843Loss from discontinued
    operations(1)










(9,351
)


(2,874
)


(1,950
)Extraordinary
    gain(1)










513







Income (loss) from continuing operations
    per share(1)Basic


1.24



(0.16
)


1.44



1.07



0.84Diluted


1.24



(0.16
)


1.42



1.06



0.84Loss from discontinued operations
    per share(1)Basic










(0.31
)


(0.10
)


(0.07
)Diluted










(0.31
)


(0.10
)


(0.07
)Extraordinary gain per
    share(1)Basic










0.02







Diluted










0.02







Net income
    (loss)(1)


37,749



(4,882
)


34,193



29,346



20,893Net income (loss) per
    share(1)Basic


1.24



(0.16
)


1.15



0.97



0.77Diluted


1.24



(0.16
)


1.13



0.96



0.77Total assets


786,978



765,676



789,541



641,920



523,401Net assets


318,682



262,982



306,854



291,567



253,843Long-term debt


11,649



11,313



13,920



10,725



2,920Shareholders equity


313,279



259,274



300,939



269,101



235,755Capital stock, net of treasury stock


65,451



57,214



50,162



44,174



53,574Weighted average common stock outstanding, diluted


30,354



30,401



30,402



30,415



27,509     (1)
    
    Attributable to our common shareholders.  Reconciliation
    to United States GAAP
    B.
    Capitalization
    and Indebtedness    C.
    Reasons
    for the Offer and Use of Proceeds    D.
    Risk
    Factors   3




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Risk
    Factors Relating to Our Business
  The
    worldwide macroeconomic downturn has reduced, and could continue
    to reduce, the demand for our industrial plant technology,
    equipment and service business and the amount of royalty we
    receive from the Wabush iron ore mine.
        percentage-of-completion 12-month
   4




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The
    worldwide economic downturn has resulted in the prolonging or
    cancellation of some of our customers projects and may
    negatively affect our customers ability to make timely
    payment to us.
      The
    operation of the Wabush iron ore mine is generally determined by
    a third party operator and we have limited decision making power
    as to how the property is operated. The operators failure
    to perform could affect our revenues.
    Failure
    to manage our market, product and service portfolio effectively,
    and to develop an effective marketing and sales strategy to
    leverage market position in key geographical regions, may
    adversely affect our financial condition and results of
    operations.
    Failure
    to successfully deliver and implement major projects in line
    with established project and business plans may adversely affect
    our results of operations and financial condition.
  sub-surface, sub-surface,
 5




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##### 



The
    industrial plant equipment, technology and service industry has
    lengthy sales cycles due to customised technology and
    products.
    Any
    significant disruption of our operations may harm our business
    reputation and cause an adverse effect on our financial
    results.
    Changes
    in the prices and cost of raw materials could lead to a decrease
    in the demand for cement and, in turn, in the demand for cement
    plants we produce.
  and/or
 6




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##### 



We are
    subject to risks associated with changing technology and
    manufacturing techniques, which could place us at a competitive
    disadvantage.
    Failure
    to attract, motivate and retain skilled personnel may have a
    material adverse effect on our business and results of
    operations.
    Our
    competitors include firms traditionally engaged in the
    industrial plant technology, equipment and service business and
    failure to understand the competitive landscape could lead to a
    decrease of our market share.
  and/or
  We are
    exposed to political, economic, legal, operational and other
    risks as a result of our global operations, which may negatively
    affect our business, results of operations, financial condition
    and cash flow.
   7




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##### 



Transactions
    with parties in countries designated by the United States State
    Department as state sponsors of terrorism may lead some
    potential customers and investors in the United States and other
    countries to avoid doing business with us or investing in our
    shares.
  Code of Federal
    Regulations
    We may be
    exposed to unidentified or unanticipated risks which could
    impact our risk management strategies in the future and could
    negatively affect our results of operations and financial
    condition.
    Any
    significant inflation or deflation may negatively affect our
    business, results of operations and financial
    condition.
      Some of
    our subsidiaries operating in the industrial plant technology,
    equipment and service business are staffed by a unionized
    workforce, and union disputes and other employee relations
    issues may materially and adversely affect our financial
    results.
   8




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##### 



We are
    subject to local legislation and regulations in various
    countries in which we operate. Failure to identify, interpret
    correctly and comply with local regulations and legislation may
    impact our reputation and our business.
    In some
    countries, our projects and investments may be exposed to risks
    relating to conduct, ethics, corporate responsibility and
    anti-competitive practices. Failure to implement our Code of
    Conduct, Code of Ethics and other internal policies in
    investment decisions and day to day operations could have a
    material impact on our business.
    Some of
    our current and historical operations are subject to a wide
    range of environmental, health and safety regulations.
    If we are
    unable to protect the confidential or unique aspects of our
    technology, our competitive advantage may be reduced.
    We could
    infringe third party intellectual property rights.
   9




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##### 



We could
    become dependent on licences.
    We are
    exposed to risks associated with joint ventures, strategic
    alliances and third party agreements to offer complementary
    products and services.
    We are
    exposed to uninsured risks as part of our global
    business.
    We are
    exposed to various counterparty risks which may adversely impact
    our financial position, results of operations, cash flows and
    liquidity.
     10




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##### 



and/or
  We may
    face a lack of suitable acquisition, merger, or other
    proprietary investment, candidates, which may limit our
    growth.
    Royalties
    and other interests may not be honoured by operators of a
    project.
    Increased
    competition for royalty interests and resource investments could
    adversely affect our ability to acquire additional royalties and
    other investments in resources.
   11




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##### 



We will
    be dependent on the payment of royalties by the owners and
    operators of our royalty interests, and any delay in or failure
    of such royalty payments will affect the revenues generated by
    the Wabush iron ore mine or any other royalty interests we may
    acquire.
    Changes
    in the market price of the commodities that underlie royalty
    interests will affect our profitability and the revenue
    generated therefrom.
    General
    Risks Faced by Our Company
  Investors
    interests will be diluted and investors may suffer dilution in
    their net book value per share if we issue additional shares or
    raise funds through the sale of equity securities.
    Our
    constating documents contain indemnification provisions and we
    have entered into agreements indemnifying our officers and
    directors against all costs, charges and expenses incurred by
    them.
    Certain
    factors may inhibit, delay or prevent a takeover of our company
    which may adversely affect the price of our common
    stock.
  Investment Canada Act
 12




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##### 



Fluctuations
    in interest rates and foreign currency exchange rates may affect
    our results of operations and financial condition.
  Form 20-F
  Form 20-F
  ITEM 4
    Information
    on the Company  A.
    History
    and Development of the Company  Companies
    Act of 1934 Canada
    Business Corporations Act Business Corporations Act Business Corporations Act
    B.
    Business
    Overview         13




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Description
    of our Mineral Royalty Interest Segment
  sub-lease sub-lease
  sub-lease, sub-lease
     14




---



##### 



Description
    of our Industrial Plant Technology, Equipment and Service
    Segment
     15




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##### 



2009


2008


2007(United States dollars in thousands)Africa

$
6,532


$
7,596


$
21,393Americas


22,297



60,556



118,417Asia


149,267



145,636



196,348Russia & Eastern Europe


224,885



213,708



83,592Europe


39,983



57,577



35,502Middle East


132,018



150,856



123,283Australia


1,426



2,425



1,856Total

$
576,408


$
638,354


$
580,391   Business
    Activities  Cement
    scale-up
      Business
    Activities  Coal and Minerals
   16




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Recent
    Developments
    Global
    Risk Control
    Joint
    Ventures with Partners in Russia
  and/or and/or
  Research
    and Development
      2 2
  2 2
       17




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New
    Order Intake and Order Backlog
      Form 20-F
          Existing
    Market Conditions
   18




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Competition
      
    full equipment line suppliers which are companies providing
    either a similar, or even broader, range of equipment services
    to the cement industry; and
    part line competitors which are companies focusing on a smaller
    range of equipment and technologies.        Sales
    and Distribution Channels
           19




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##### 



Patents
    and Licenses
    Discontinued
    Operations
  Disposition
    of Financial Services Operations
           20




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2 3
  available-for-sale
               21




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dividend-in-kind.
      available-for-sale
   22




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##### 



Real
    Estate and Other Interests
  Business Corporations Act (British Columbia)
    C.
    Organizational
    Structure    Name of Wholly-Owned Subsidiary

Jurisdiction of Incorporation or OrganizationKHD Holding AG

SwitzerlandKHD Humboldt Wedag International Holding GmbH

AustriaKHD Humboldt Wedag International GmbH

AustriaHumboldt Wedag Inc.

DelawareHumboldt Wedag India Private Ltd.

IndiaHumboldt Wedag Australia Pty Ltd.

AustraliaKHD Investments Ltd.

Marshall IslandsNew Image Investment Company Limited

WashingtonInverness Enterprises Ltd.

British ColumbiaKHD Humboldt Wedag (Cyprus) Limited

CyprusMFC & KHD International Industries Limited

SamoaKHD Humboldt Wedag (Shanghai) International Industries Limited

ChinaKHD Sales and Marketing Ltd.

Hong KongKHD Humboldt Wedag International, FZE

United Arab EmiratesEKOF Flotation GmbH

GermanyKHD Humboldt Wedag Machinery Equipment (Beijing) Co. Ltd.

ChinaBlake International Limited

British Virgin Islands  23




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##### 



Jurisdiction of



OurName of

Incorporation or

Owner

BeneficialNon-Wholly-Owned Subsidiary

Organization

of Interests

ShareholdingKHD Humboldt Wedag International AG

Germany

KHD Humboldt Wedag International Ltd.

98.2%(1)KHD Humboldt Wedag GmbH

Germany

KHD Humboldt Wedag International Ltd.

98.2%(1)KHD Humboldt Wedag Industrial
    Services AG

Germany

Blake International Limited

88%Humboldt Wedag GmbH

Germany

KHD Humboldt Wedag International AG

98.2%ZAB Zementanlagenbau GmbH Dessau

Germany

KHD Humboldt Wedag GmbH

98.2%HIT Paper Trading GmbH

Austria

Blake International Limited

88%Paper Space GmbH

Germany

Blake International Limited

88%     (1)
    
    Held by our company and/or our subsidiaries.  D.
    Property,
    Plant and Equipment  Office
    Space
        Royalty
    Interest  Wabush Iron Ore Mine
  sub-lease
  ITEM 4A
    Unresolved
    Staff Comments    ITEM 5
    Operating
    and Financial Review and Prospects   24




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##### 



A.
    Operating
    Results      Overview
               25




---



##### 



Provisions
    for Terminated Customer Contracts
  and/or and/or and/or
  and/or and/or
     26




---



##### 



(United States dollars in thousands)Balance as at December 31, 2008

$
23,729Additional costs recognized


8,641Reductions through negotiations with suppliers and customers


(15,448
)(6,807
)Reclassification to inventory reserve


1,518Paid and payable


(5,953
)Currency translation adjustments


456Balance as at December 31, 2009

$
12,943     (United States dollars in thousands)(Reduction in) provisionsAdditional costs recognized in 2009, net of reductions through
    negotiations with suppliers and customers

$
(6,807
)Inventories (raw materials and finished goods), reversal of
    write-downs


(2,488
)Inventories
    (contracts-in-progress),
    changes in
    percentage-of-completion
    estimates


(8,276
)Customer receivables


(258
)(Recovery of) loss on terminated customer contracts for the year
    ended December 31, 2009

$
(17,829
)   Restructuring
    Activity
  Form 20-F
 27




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##### 



Form 6-K
       28




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##### 



Other EmployeeRestructuringCosts andContractual


ContractualSeverance


Severance CostsCosts


Associated withAssociated


Workers





Leasewith the


Council





Termination


CurrencyWorkshop


Agreement


Facility


and Other


Translation


TotalClosure


(Non-Workshop)


Closure


Costs


Adjustment


Provision(United States dollars in thousands)Provisions during the six months ended June 30, 2009

$
3,092


$
824


$
1,302


$
1,328


$



$
6,546Currency translation adjustment during the six months ended
    June 30, 2009


















502



502Provisions as at July 1, 2009


3,092



824



1,302



1,328



502



7,048Transactions during the quarter ended September 30, 2009:Reversal resulting from the sale of the Cologne workshop


(3,092
)






(1,302
)


(1,328
)






(5,722
)Incremental provision






9,785















9,785Paid and payable






(489
)














(489
)Currency translation adjustment


















(218
)


(218
)Provisions as at September 30, 2009






10,120











284



10,404Transactions during the quarter ended December 31, 2009:Reduction of severance benefits due to voluntary exit






(1,969
)














(1,969
)Incremental provision






353















353Paid and payable






(627
)














(627
)Currency translation adjustment






9











(145
)


(136
)Provisions as at December 31, 2009

$



$
7,886


$



$



$
139


$
8,025   Settlement
    of Preferred Shares of Mass Financial and its Former
    Subsidiary
    and/or available-for-sale
  Form 20-F
 29




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##### 



Form 20-F
    (a)
    Cdn$8.28 million being satisfied by Mass Financial agreeing
    to transfer 788,201 of our common shares to us. The number of
    shares to be delivered was calculated by dividing
    Cdn$8.28 million by the book value of our common shares as
    at December 31, 2008. 262,734 of our common shares, valued
    at Cdn$2.76 million, were delivered to us on May 12,
    2009 and the remainder (having a value equivalent to
    Cdn$5.52 million) were to be delivered no later than
    July 20, 2009. In July 2009, Mass Financial did not deliver
    the remainder of the common shares and, as permitted under the
    terms of the agreement, made a cash payment of
    Cdn$5.52 million to us in lieu of delivery of the remainder
    of the common shares;  (b)
    Cdn$1.71 million being satisfied by way of cash payment by
    Mass Financial to our company on May 12, 2009;  (c)
    Cdn$1.75 million being satisfied by way of issuance to our
    company of an assignable promissory note having a principal
    amount of Cdn$1.75 million, a term of 24 months and an
    interest rate of 4% per annum payable annually in cash. The note
    is repayable at the option of the issuer by the issuance of
    common shares of Mass Financial based on the number of common
    shares of Mass Financial equalling the amount being repaid
    divided by the
    30-day
    volume weighted average trading price for the Mass Financial
    common shares. The promissory note can be repaid or be redeemed
    at any time in cash at the option of the issuer; and  (d)
    Cdn$539,697 being satisfied by setting-off of accrued and unpaid
    interest on our indebtedness to Mass Financial pursuant to a
    loan agreement with Mass Financial dated January 31, 2006.  30-day
  Form 6-K
   30




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##### 



Divestment
    of Coal and Minerals Customer Group and Workshop in Cologne
     31




---



##### 



(United States dollars in thousands)Cash and cash equivalents

$
3,819Restricted cash


4Receivables


12,185Inventories


6,881Contract deposits, prepaid and other


3,147Future income tax assets


49Current assets


26,085Property, plant and equipment


227Future income tax assets


75Non-current assets


302Total assets


26,387Accounts payable and accrued expenses


9,820Progress billings above costs and estimated earnings on
    uncompleted contracts


2,949Advance payments received from customers


5,523Income tax liability


189Provision for warranty costs


3,093Current liabilities


21,574Accrued pension liabilities


1,204Provision for warranty costs


108Future income tax liability


808Other long-term liabilities


284Long-term liabilities


2,404Total liabilities


23,978Minority interest


163Net assets held for sale

$
2,246Purchase price

$
7,500Net assets held for sale


(2,246
)Gain on sale of workshop and related assets

$
5,254   Discontinued
    Operations
   32




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##### 



Summary
    of Quarterly Results
    December 31,

September 30,

June 30,

March 31,2009

2009

2009

2009(United States dollars in thousands, except per share
    amounts,)Revenues

$
210,200


$
148,233


$
105,847


$
112,128Gross profit


65,898



29,148



21,952



19,392Restructuring recovery (costs), excluding inventory write-down
    and write-up


1,616



(4,063
)


(17
)


(6,756
)Operating income (loss)


58,966



11,459



2,461



(1,337
)Loss on settlement of investment in preferred shares of former
    subsidiaries










(9,538
)


Income (loss) from continuing operations


39,485



7,475



(7,454
)


1,205Income (loss) from continuing operations, per shareBasic


1.30



0.25



(0.25
)


0.04Diluted


1.30



0.25



(0.25
)


0.04Net income (loss)


39,485



7,475



(7,454
)


1,205Net income (loss) per shareBasic


1.30



0.25



(0.25
)


0.04Diluted


1.30



0.25



(0.25
)


0.04   December 31,

September 30,

June 30,

March 31,2008

2008

2008

2008(United States dollars in thousands, except per share
    amounts)Revenues

$
163,682


$
193,596


$
144,240


$
136,836Gross profit (loss)


(356
)


36,574



28,332



25,207Operating (loss) income


(14,582
)


31,923



23,779



15,265Income from continuing operations


(64,857
)


30,804



19,670



7,431(Loss) Income from continuing operations, per shareBasic


(2.12
)


1.01



0.65



0.25Diluted


(2.12
)


1.01



0.64



0.24Net (loss) income


(64,857
)


30,804



19,670



7,431Net (loss) income per shareBasic


(2.12
)


1.01



0.65



0.25Diluted


(2.12
)


1.01



0.64



0.24   Acquisitions
    and Divestitures
       33




---



##### 



Overview
    of 2009 Results
    Year Ended December 312009

2008

2007(United States dollars in millions, except per share
    amounts)Revenues

$
576.4


$
638.4


$
580.4Cost of revenues


457.8



516.6



494.4Other operating income  resource property


13.5



27.2



18.1Selling, general and administrative expense


74.8



56.2



46.7Operating income


71.5



56.4



53.0Income (loss) from continuing operations


40.7



(7.0
)


51.0Basic earnings (loss) per share, continuing operations


1.34



(0.23
)


1.71Diluted earnings (loss) per share, continuing operations


1.34



(0.23
)


1.68     Summary
    of Three-Month and Twelve-Month Results
    Three Months Ended

Twelve Months EndedDecember 31,

December 31,

December 31,

December 31,2009

2008

2009

2008(United States dollars in thousands, except per share
    amounts)Revenues

$
210,200


$
163,682


$
576,408


$
638,354Gross profit (loss)


65,898



(356
)


136,390



89,757Operating income (loss)


58,966



(14,582
)


71,549



56,385Income (loss) from continuing operations


39,485



(64,857
)


40,711



(6,952
)Income (loss) from continuing operations, per shareBasic


1.30



(2.12
)


1.34



(0.23
)Diluted


1.30



(2.12
)


1.34



(0.23
)Net income
    (loss)(1)


39,485



(64,857
)


40,711



(6,952
)Net income (loss) per
    share(1)Basic


1.30



(2.12
)


1.34



(0.23
)Diluted


1.30



(2.12
)


1.34



(0.23
)     (1)
    
    Including both continuing and discontinued operations.  Year
    Ended December 31, 2009 Compared to the Year Ended
    December 31, 2008
     34




---



##### 



Form 20-F 12-month
                mark-to-market
 35




---



##### 



Year
    Ended December 31, 2008 Compared to the Year Ended
    December 31, 2007
    Form 20-F
    2005-2008
     36




---



##### 



mark-to-market
          B.
    Liquidity
    and Capital Resources    December 31,2009

2008(United States dollars in millions)Cash and cash equivalents

$
420.6


$
409.1Total assets


788.9



765.7Long-term debt


11.6



11.3Shareholders equity


319.8



261.9      37




---



##### 



Ratio



Minimum Value

Actual ValueAdjusted EBITTotal
    Revenue



3.0

7.9Adjusted EBITInterest
    Expenses



3.5

22.0Adjusted EquityAdjusted
    Total Assets

* 100

25

38.1Billing to DateContracts
    in Progress

* 100

75

111.1       Changes
    in Financing and Capital Structure
    Operating
    Activities
       38




---



##### 



Investing
    Activities
      Financing
    Activities
      Discontinued
    Operations
    Foreign
    Currency
       39




---



##### 



Derivative
    Instruments
    Inflation
    Transactions
    with Entities in Countries Designated by the U.S. State
    Department as State Sponsors of Terrorism
  Code of Federal
    Regulations
    Application
    of Critical Accounting Policies
      Revenue
    Recognition
  percentage-of-completion Revenue percentage-of-completion
 40




---



##### 



percentage-of-completion Long-Term Construction Type Contracts 81-1 (SOP 81-1) percentage-of-completion
    2.
    the construction contract specifies the parties rights as
    to the goods, consideration to be paid and received, and the
    resulting terms of payment or settlement;        percentage-of-completion
    percentage-of-completion and/or
  contract-in-progress
  Inventories
  work-in-progress
  work-in-progress contracts-in-progress,
  Receivables
   41




---



##### 



Valuation
    of Securities
    Available-for-sale available-for-sale and/or
  available-for-sale
        Warranty
    Costs
   42




---



##### 



Pension
    Benefits
        Income
    Taxes
        
    the history of the tax loss carry-forwards and their expiry
    dates;
    future reversals of temporary differences;
    our projected earnings; and
    tax planning opportunities.      Provisions
    for Supplier Commitments on Terminated Customer
    Contracts
   43




---



##### 



Provisions
    for Restructuring Costs
      Changes
    in Accounting Policies including Initial Adoption
    International
    Financial Reporting Standards
     44




---



##### 



Adoption
    of New Accounting Standards and Amendments in 2009
  Goodwill and Intangible Assets Goodwill
    and Other Intangible Assets Research and Development Costs Revenues
    and Expenditures during the Pre-operating Period
  Financial
    Instruments  Disclosures
  Financial Instruments
     Disclosures
    
    classifying and disclosing fair value measurements based on a
    three-level hierarchy;
    reconciling beginning balances to ending balances for
    Level 3 measurements;
    identifying and explaining movements between levels of the fair
    value hierarchy;
    providing a maturity analysis for derivative financial
    liabilities based on how the entity manages liquidity
    risk; and
    disclosing the remaining expected maturities of non-derivative
    financial liabilities if liquidity risk is managed on that basis.  Financial
    Instruments  Recognition and Measurement
  Financial
    Instruments  Recognition and Measurement
 45




---



##### 



held-to-maturity Impaired Loans available-for-sale
  Credit
    Risk and the Fair Value of Financial Assets and Financial
    Liabilities
  Credit
    Risk and the Fair Value of Financial Assets and Financial
    Liabilities
  C.
    Research
    and Development, Patents and Licenses, Etc.    D.
    Trend
    Information    E.
    Off-balance
    Sheet Arrangements        F.
    Tabular
    Disclosure of Contractual Obligations  Payments Due by Period(United States dollars in thousands)Contractual Obligations as

Less than


1 - 3


3 - 5


More thanat December 31, 2009

1 Year


Years


Years


5 Years


TotalLong-term debt obligations

$
214


$
11,744


$



$



$
11,958Operating lease obligations


3,079



3,473



1,061



937



8,550Purchase
    obligations(1)


153,636















153,636Other long-term liabilities reflected on our balance sheet under
    Canadian
    GAAP(2)






15,607











15,607Total

$
156,929


$
30,824


$
1,061


$
937


$
189,751     (1)
    
    Purchases to complete our industrial plant technology, equipment
    and service contracts which are accounted for by the
    percentage-of-completion
    accounting method.(2)
    
    Not including pension obligations. 46




---



##### 



G.
    Safe
    Harbor    ITEM 6
    Directors,
    Senior Management and Employees  A.
    Directors
    and Senior Management    Date ofCommencement of

Expiration of TermOffice with our

of Office with ourName and age

Present Position with our Company

Company

CompanyMichael J. Smith(61)

Non-Executive Chairman and Director


1986



2011Jouni Salo(51)

President and Chief Executive Officer


2009



N/AAlan Hartslief(51)

Chief Financial Officer and Secretary


2007



N/AJames Purkis(46)

Chief Operating Officer


2008



N/ADr. Shuming
    Zhao(1)(2)(3)(55)

Director


2004



2010Gerhard Rolf
    (70)(1)

Director


2009



2010Silke
    Stenger(1)(2)(3)(41)

Director


2003



2011Indrajit
    Chatterjee(1)(2)(3)(64)

Director


2005



2012     (1)
    
    Member of our audit committee.(2)
    
    Member of our compensation committee.(3)
    
    Member of our nominating and corporate governance committee.  Michael
    J. Smith  Non-Executive Chairman and
    Director
      Jouni
    Salo  President and Chief Executive Officer
   47




---



##### 



Alan
    Hartslief  Chief Financial Officer and
    Secretary
    James
    Purkis  Chief Operating Officer
    Dr. Shuming
    Zhao  Director
    Gerhard
    Rolf  Director
    Silke
    Stenger  Director
    Indrajit
    Chatterjee  Director
   48




---



##### 



Family
    Relationships
    B.
    Compensation    Executive
    Compensation
    SUMMARY
    COMPENSATION TABLE
  Non-equity IncentiveCompensation PlanCompensation($)Share-

Option-



Long-



All other

TotalBased

Based

Annual

Term

Pension

Compen-

Compen-Salary

Awards

Awards

Incentive

Incentive

Value

sation

sationName and Principal Position

Year

($)

($)

($)

Plans

Plans

($)

($)

($)Michael J.
    Smith(1)


2009



222,250























164,398



386,648Non-Executive Chairman and DirectorJouni
    Salo(2)


2009



490,952











314,594











16,504



822,050President, Chief Executive Officer and former Chief Operating
    OfficerJames
    Busche(3)


2009



30,000























202,680
(6)


232,680
(6)Former Chief Executive Officer and PresidentAlan
    Hartslief(4)


2009



297,901











322,015







43,524



186,200



849,640Chief Financial Officer and SecretaryJames
    Purkis(5)


2009



331,020











211,444











64,128



606,592Chief Operating OfficerGeorge Zimmerman


2009



254,892























76,500
(7)


331,392Senior Vice President     (1)
    
    Mr. Smith resigned as our President and Chief Executive
    Officer effective March 7, 2006, our Chief Financial
    Officer effective October 16, 2007 and our Secretary
    effective March 1, 2008.(2)
    
    Mr. Salo was appointed as our Chief Operating Officer
    effective November 1, 2008 and, effective April 13,
    2009, he was appointed as our President and Chief Executive
    Officer. He resigned as Chief Operating Officer effective
    August 12, 2009.(3)
    
    Mr. Busche ceased to hold the position of President and
    Chief Executive Officer effective April 13, 2009.(4)
    
    Mr. Hartslief was appointed our Chief Financial Officer
    effective October 16, 2007 and our Secretary effective
    March 1, 2008.(5)
    
    Mr. Purkis was appointed the President of our Construction
    Division effective June 1, 2008, Executive Vice-President
    effective November 1, 2008, and Chief Operating Officer
    effective August 12, 2009. Mr. Purkis has notified us
    that he intends to resign as our Chief Operating Officer
    effective May 31, 2010.(6)
    
    Includes $165,600 paid to Montgomery Partners Limited.(7)
    
    Includes $66,638 of long-term deferred compensation. 49




---



##### 



Directors
    Compensation
    Share-

Option-

Non-EquityBased

Based

Incentive Plan

Pension

All otherFees Earned

Awards

Awards

Compensation

Value

Compensation

TotalName(1)

($)(2)

($)

($)

($)

($)

($)

($)Silke Stenger


189,000























189,000Indrajit Chatterjee


148,950























148,950Dr. Shuming Zhao


38,200























38,200Gerhard
    Rolf(3)


60,208























60,208Dr. Kelvin K.
    Yao(4)


15,000























15,000     (1)
    
    Compensation provided to our director and Chairman, Michael
    Smith, is disclosed in the table above under the heading
    Executive Compensation.(2)
    
    Our directors are each paid an annual fee of $30,000 and $750
    for each directors meeting attended as well as additional
    fees, as applicable, for their respective participation on our
    Audit and Compensation Committees.(3)
    
    Mr. Rolf was appointed a director of our company effective
    May 1, 2009.(4)
    
    Mr. Yao resigned as a director of our company effective
    May 1, 2009.    Employment
    Agreements and Termination of Employment or Change of
    Control
         50




---



##### 



and/or
  and/or
 51




---



##### 



and/or
  C.
    Board
    Practices  Business Corporations Act
  Expiration ofName of Director

Director Since

Current TermIndrajit Chatterjee


2005



2012Michael J. Smith


1986



2011Silke Stenger


2003



2011Dr. Shuming Zhao


2004



2010Gerhard Rolf


2009



2010      52




---



##### 



D.
    Employees   53




---



##### 



E.
    Share
    Ownership    Number of



Number ofName

Common Shares



Stock Options to PurchaseOffice Held

Beneficially Owned

Percentage

Common SharesMichael J.
    Smith(1)
    Non-Executive Chairman and Director

Nil

Nil

NilJouni
    Salo(2)Chief Executive Officer and President

Nil

Nil

NilJames
    Busche(3)Former Chief Executive Officer and President

Nil

Nil

NilAlan
    Hartslief(4)Chief Financial Officer and Secretary

Nil

Nil

NilJames
    Purkis(5)Chief Operating Officer

Nil

Nil

NilGeorge Zimmerman Senior Vice President

Nil

Nil

16,668, exercise price of $13.06 per share, expiry date of May
    17, 2016;33,334, exercise price of $26.85 per share, expiry date of May
    17, 201733,332, exercise price of $31.81 per share, expiry date of May
    19, 2018Dr. Shuming Zhao Director

Nil

Nil

NilGerhard
    Rolf(6)Director

Nil

Nil

NilDr. Kelvin K.
    Yao(7)Director

Nil

Nil

NilSilke Stenger 
    Director

Nil

Nil

NilIndrajit Chatterjee Director

Nil

Nil

Nil     (1)
    
    Mr. Smith resigned as our President and Chief Executive
    Officer effective March 7, 2006, our Chief Financial
    Officer effective October 16, 2007 and our Secretary
    effective March 1, 2008.(2)
    
    Mr. Salo was appointed as the President of our company
    effective April 13, 2009 and as President of our Cement
    Division effective May 1, 2008. Mr. Salo was our Chief
    Operating Officer from November 1, 2008 until
    August 12, 2009.(3)
    
    Mr. Busche ceased to hold the position of President and
    Chief Executive Officer effective April 13, 2009.(4)
    
    Mr. Hartslief was appointed our Chief Financial Officer
    effective October 16, 2007 and our Secretary effective
    March 1, 2008.(5)
    
    Mr. Purkis was appointed the President of our Construction
    Division effective June 1, 2008, Executive Vice-President
    effective November 1, 2008, and Chief Operating Officer
    effective August 12, 2009. Mr. Purkis has notified us
    that he intends to resign as our Chief Operating Officer
    effective May 31, 2010.(6)
    
    Mr. Rolf was appointed as a director of our company
    effective May 1, 2009.(7)
    
    Dr. Yao resigned as a director of our company effective
    May 1, 2009. 54




---



##### 



Stock
    Option Plan
    Equity
    Incentive Plan
    ITEM 7
    Major
    Shareholders and Related Party Transactions  A.
    Major
    Shareholders    Name

Amount Owned

Percent of
    Class(1)Peter Kellogg


6,283,100
(2)


20.8
%     (1)
    
    Based on 30,259,911 common shares issued and outstanding on
    March 26, 2010.(2)
    
    In his public filings, Mr. Kellogg disclaims beneficial
    ownership of 5,643,100 of the shares, or approximately 18.6% of
    our issued and outstanding common shares.          B.
    Related
    Party Transactions   55




---



##### 



and/or
  Continuing
    Operations
    2009

2008

2007Dividend income on common
    shares(1)

$
280


$



$
238Royalty expense paid and
    payable(1)


(614
)


(815
)


(1,025
)Fee income


494



94



Fee expense for managing resource property


(839
)


(1,707
)


(1,118
)Fee expense for management services, including expense
    reimbursements


(4,059
)


(4,303
)


(1,308
)Interest income  net investment income on preferred
    shares of former subsidiaries






3,782



3,751Interest income  other


309







(48
)Interest expense


(447
)


(21
)


(530
)Impairment charge on a receivable










(238
)     (1)
    
    Included in income from royalty interest in resource property.    2009

2008Other receivables

Investment income

$
62


$
21Other receivables

Due from affiliates


218



1,957Other receivables

Income on the preferred shares of former subsidiaries






9,265Equity method investments




73



325Investment in preferred shares of former subsidiaries








19,125Accounts payable and accrued expenses

Due to affiliates


1,594



844Accounts payable and accrued expenses

Interest due to a former subsidiary






2,681         Discontinued
    Operations
     56




---



##### 



Business
    Corporations Act
  C.
    Interests
    of Experts and Counsel    ITEM 8
    Financial
    Information  A.
    Consolidated
    Statements and Other Financial Information    Financial
    Statements Filed as Part of the Annual Report:
                   57




---



##### 



Legal
    Proceedings
    Dividend
    Distributions
    B.
    Significant
    Changes    ITEM 9
    The
    Offer and Listing A  Offer
    and Listing Details    Exchange(1)High
    (U.S.$)(2)

Low
    (U.S.$)(2)Annual Highs and Lows2005


13.26



7.752006


22.10



10.342007


45.74



18.002008


35.79



6.502009


14.20



6.65Quarterly Highs and Lows2008First Quarter


32.43



20.85Second Quarter


35.79



23.61Third Quarter


31.47



18.11Fourth Quarter


21.00



6.502009First Quarter


13.59



6.65Second Quarter


9.60



6.81Third Quarter


12.39



8.12Fourth Quarter


14.20



8.90Monthly Highs and Lows2009September


12.39



9.09October


11.42



9.10November


12.57



8.90December


14.20



11.652010January


16.10



12.50February


14.28



11.82March (to March 23, 2009)


14.63



13.50  58




---



##### 



(1)
    
    Shares were traded on the Nasdaq Global Select Market up to and
    including June 15, 2007 and then on the NYSE on and after
    June 18, 2007.(2)
    
    All numbers have been adjusted to reflect the two (2) for
    one (1) stock split effective September 10, 2007.  201-680-5258; 201-680-4604).
  B.
    Plan
    of Distribution    C.
    Markets    D.
    Selling
    Shareholders    E.
    Dilution    F.
    Expenses
    of the Issue    ITEM 10
    Additional
    Information  A.
    Share
    Capital    B.
    Memorandum
    and Articles of Association            winding-up
    Business
    Corporations Act
 59




---



##### 



Investment Canada Act Investment Canada Act
      C.
    Material
    Contracts         60




---



##### 



D.
    Exchange
    Controls    Investment Canada Act Investment Canada
    Act
  This summary is of a general nature only and is not intended
    to be, and should not be construed to be, legal advice to any
    holder or prospective holder of our common shares, and no
    opinion or representation to any holder or prospective holder of
    our common shares is hereby made. Accordingly, holders and
    prospective holders of our common shares should consult with
    their own legal advisors with respect to the consequences of
    purchasing and owning our common shares.
  Investment Canada Act Investment
    Canada Act Investment Canada
    Act Investment Canada Act Investment
    Canada Act Investment Canada Act
 61




---



##### 



Investment Canada
    Act Investment Canada Act
  Investment Canada Act
  (a)
    the acquisition of our common shares by a person in the ordinary
    course of that persons business as a trader or dealer in
    securities;  (b)
    the acquisition of control of our company in connection with the
    realization of security granted for a loan or other financial
    assistance and not for a purpose related to the provisions of
    the Investment Canada Act; and  (c)
    the acquisition of control of our company by reason of an
    amalgamation, merger, consolidation or corporate reorganization
    following which the ultimate direct or indirect control in fact
    of our company, through ownership of our common shares, remains
    unchanged.  E.
    Taxation  Material
    Canadian Federal Income Tax Consequences
  Income
    Tax Act
  Income Tax Act Income Tax Act
  This summary is of a general nature only and is not intended
    to be, and should not be construed to be, legal, business or tax
    advice to any particular holder or prospective holder of our
    common shares, and no opinion or representation with respect to
    the tax consequences to any holder or prospective holder of our
    common shares is made. Accordingly, holders and prospective
    holders of our common shares should consult their own tax
    advisors with respect to the income tax consequences of
    purchasing, owning and disposing of our common shares in their
    particular circumstances.
  Dividends
  Income Tax Act Income
    Tax Act
 62




---



##### 



Capital
    Gains
  Income
    Tax Act Income Tax Act
  Material
    United States Federal Income Tax Consequences
      The following discussion is for general information only and
    is not intended to be, nor should it be construed to be, legal,
    business or tax advice to any holder or prospective holder of
    our common shares, and no opinion or representation with respect
    to the United States Federal income tax consequences to any such
    holder or prospective holder is made. Accordingly, holders and
    prospective holders of common shares are urged to consult their
    own tax advisors with respect to Federal, state, local, and
    foreign tax consequences of purchasing, owning and disposing of
    our common shares.
  U.S.
    Holders
    Distributions
   63




---



##### 



Capital
    Gains
    Foreign
    Tax Credit
  dollar-for-dollar year-by-year
  Passive
    Foreign Investment Corporation
      U.S. Holders and prospective holders should consult
    their own tax advisors regarding the potential application of
    the PFIC rules to their ownership of our common shares.
  F.
    Dividends
    and Paying Agents    G.
    Statement
    by Experts    H.
    Documents
    on Display  Suite 800-885 West
 64




---



##### 



I.
    Subsidiary
    Information    ITEM 11
    Quantitative
    and Qualitative Disclosures About Market Risk          Derivatives
    Interest
    Rate Risk
   65




---



##### 



As at December 31, 2009(In thousands)Expected Cash
    Flow(1)Carrying Value

Fair Value

2010

2011

2012

2013

2014

ThereafterLong-term receivables

$
6,332


$
6,332


$
253


$
6,481















Debt obligations

$
11,649


$
11,649


$
214


$
11,744















     (1)
    
    Including interest and dividends where applicable.  As at December 31, 2008(In thousands)Expected Cash
    Flow(1)Carrying Value

Fair Value

2009

2010

2011

2012

2013

ThereafterDebt obligations

$
11,313


$
11,313


$
277


$
277


$
11,451











     (1)
    
    Including interest and dividends where applicable.    Foreign
    Currency Exchange Rate Risk
    As at December 31, 2009(In thousands)Fair

Expected Cash
    Flow(1)Carrying Value

Value

2010

2011

2012

2013

2014

ThereafterInvestments(2)

$
16,432


$
16,432


$
16,432


$
















Long-term
    receivables(3)


6,332



6,332



253



6,481















Debt
    obligations(4)


11,649



11,649



214



4,744















     (1)
    
    Including interest and dividends where applicable.(2)
    
    Investments consist of equity securities which are denominated
    in either Canadian dollars or Euros.(3)
    
    Long-term receivables are denominated in either Canadian dollars
    or Euros.(4)
    
    Debt obligations are denominated in Euros.  As at December 31, 2008(In thousands)Fair

Expected Cash
    Flow(1)Carrying Value

Value

2009

2010

2011

2012

2013

ThereafterInvestments(2)

$
2,777


$
2,777


$
2,777


$



$












Debt
    obligations(3)


11,313



11,313



277



277



11,451











     (1)
    
    Including interest and dividends where applicable. 66




---



##### 



(2)
    
    Investments consist of equity securities which are denominated
    in either Canadian dollars or Euros.(3)
    
    Debt obligations are denominated in Euros.  Equity
    Price Risk
    As at December 31, 2009(In thousands)Expected Cash
    Flow(1)Carrying Value

Fair Value

2010

2011

2012

2013

2014

ThereafterInvestments(2)

$
16,432


$
16,432


$
16,432



















     (1)
    
    Including interest and dividends where applicable.(2)
    
    Investments consist of equity securities.  As at December 31, 2008(In thousands)Expected Cash
    Flow(1)Carrying Value

Fair Value

2009

2010

2011

2012

2013

ThereafterInvestments(2)

$
2,987


$
2,987


$
2,987



















     (1)
    
    Including interest and dividends where applicable.(2)
    
    Investments consist of equity securities.  ITEM 12
    Description
    of Securities Other than Equity Securities   PART II  ITEM 13
    Defaults,
    Dividend Arrearages and Delinquencies    ITEM 14
    Material
    Modifications to the Rights of Security Holders and Use of
    Proceeds    ITEM 15
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
    Rule 13a-15
 67




---



##### 



Report
    of Management on Internal Control over Financial
    Reporting
  Rule 13a-15(f) 13d-15(f)
  1.
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of our assets and our consolidated entities;2.
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of the consolidated financial
    statements in accordance with GAAP, and that receipts and
    expenditures of our company are being made only in accordance
    with authorizations of management and our directors; and3.
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use, or disposition of
    our assets that could have a material effect on the consolidated
    financial statements.  Internal Control  Integrated Framework
    Form 20-F.
  Changes
    in Internal Control Over Financial Reporting
    Inherent
    Limitations on Effectiveness of Controls
    ITEM 16
    [Reserved]  ITEM 16A
    Audit
    Committee Financial Expert   68




---



##### 



ITEM 16B
    Code
    of Ethics  Code
    of Ethics and Code of Conduct
              ITEM 16C
    Principal
    Accountant Fees and Services  Audit
    Fees
    Audit
    Related Fees
    Tax
    Fees
    All
    Other Fees
   69




---



##### 



Audit
    Committee Pre-approval Policies and Procedures
  Rule 2-01 Regulation S-X.
    ITEM 16D
    Exemptions
    from the Listing Standards for Audit Committees    ITEM 16E
    Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers  § 240.10b-18(a)(3)
  Issuer Purchases of Equity SecuritiesMaximum Number(or ApproximateTotal Number of

Dollar Value) ofShares Purchased as

Shares that May YetPart of Publicly

be Purchased UnderTotal Number of

Average Price Paid

Announced Plans or

the Plans orPeriod

Shares Purchased

per Share

Programs

ProgramsMonth #1 (May 1 to May 31)


262,734
(1)

$
9.00(1
)


N/A



N/AMonth #2 (December 1 to December 31)


295,639
(2)

$
13.93
(2)


N/A



N/ATotal


558,373


$
11.61



N/A



N/A     (1)
    
    On May 12, 2009, our former subsidiary, Mass Financial
    Corp., transferred 262,734 of our common shares to us as partial
    consideration for the redemption of certain of the preferred
    shares of Mass Financial that we held. The shares were valued at
    the book value as at December 31, 2008, being Cdn$10.50 per
    share. For more information, see the section entitled
    Settlement of Preferred Shares of Mass Financial and its
    Former Subsidiary.(2)
    
    On December 21, 2009, our wholly-owned subsidiary, 0850541
    B.C. Ltd., purchased 295,639 of our common shares from our
    subsidiary KHD Investments Ltd., for a purchase price per share
    equal to the price of our common shares as quoted by the New
    York Stock Exchange at the close of business on the date of
    closing of the Agreement, being $13.93 per share. As
    consideration for the purchase of the common shares, 0850541
    B.C. Ltd. delivered to KHD Investments a Canadian-dollar
    denominated, non-interest bearing demand promissory note in the
    principal amount of Cdn$4.4 million, being the purchase
    price (in Canadian dollars) of the common shares. We agreed to
    contribute Cdn$4.4 million to the capital of 0850541 B.C.
    Ltd. and agreed to assume the obligation to repay the principal
    amount of the promissory note to KHD Investments Ltd. On
    December 31, 2009, we entered into a liquidation agreement
    with 0850541 B.C. Ltd. whereby we approved the winding up and
    liquidation of the 0850541 B.C. Ltd. and 0850541 B.C. Ltd.
    agreed to return to us the aggregate 558,373 shares of our
    common stock it held, which included the shares acquired from
    Mass Financial Corp. described in footnote (1) above, for
    no consideration, all of which common shares we agreed to
    cancel, and did cancel, prior to December 31, 2009.  ITEM 16F
    Change
    in Registrants Certifying Accountant    ITEM 16G
    Corporate
    Governance    
    Section 303A.03 of the NYSEs Listed Company Manual
    requires the non-management directors of a listed company to
    meet at regularly scheduled executive sessions without
    management. 70




---



##### 




    Section 303A.08 of the NYSEs Listed Company Manual
    requires shareholder approval of all equity compensation plans
    and material revisions to such plans.    ITEM 17
    Financial
    Statements  Financial
    Statements Filed as Part of the Annual Report:
                   71




---



##### 



REPORT OF
    MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL
    REPORTING
  Rule 13a-15(f) 15d-15(f)
    Internal Control  Integrated Framework
    /s/ Jouni Salo 
    Jouni Salo 
    President and Chief Executive Officer

/s/ Alan Hartslief
    Alan Hartslief
    Chief Financial Officer     72




---



##### 



REPORT OF
    INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS
           Internal Control  Integrated Framework
               73




---



##### 



REPORT OF
    INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS
     Internal Control 
    Integrated Framework
        Internal Control  Integrated Framework
        74




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    December 31, 2009 and 2008
    (United States Dollars in Thousands)
  Notes


2009


2008ASSETSCurrent AssetsCash and cash equivalents





$
420,551


$
409,087Short-term cash deposits






6,916



Securities


5



16,432



2,987Restricted cash






24,979



32,008Accounts receivable, trade


6



96,982



62,760Other receivables


7



36,179



28,313Inventories


8



80,815



110,161Contract deposits, prepaid and other


9



53,893



58,694Future income tax assets


10



1,748



7,679Total current assets






738,495



711,689Non-current AssetsNote receivables


11



1,672



Account receivable, trade


6



4,660



Property, plant and equipment


12



2,257



2,489Interest in resource property


13



27,150



24,861Equity method investments






73



325Future income tax assets


10



13,405



6,339Investment in preferred shares of former subsidiaries


11







19,125Other non-current assets






1,191



830Total non-current assets






50,408



53,969$
788,903


$
765,658LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesAccounts payable and accrued expenses


14


$
191,746


$
178,582Progress billings above costs and estimated earnings on
    uncompleted contracts


8



77,841



171,843Advance payments received from customers






26,927



11,331Income tax liabilities






18,092



9,112Deferred credit, future income tax assets


10



1,748



4,212Accrued pension liabilities, current portion


15



2,070



2,158Provision for warranty costs, current portion


16



28,282



30,856Provision for supplier commitments on terminated customer
    contracts


17



12,943



23,729Provision for restructuring costs


18



8,025



Total current liabilities






367,674



431,823Long-term LiabilitiesLong-term debt


19



11,649



11,313Accrued pension liabilities, less current portion


15



28,861



29,209Provision for warranty costs, less current portion


16



25,711



7,524Deferred credit, future income tax assets


10







4,176Future income tax liability


10



14,210



7,646Other long-term liabilities


20



15,607



8,344Total long-term liabilities






96,038



68,212Total liabilities






463,712



500,035Minority Interests






5,403



3,709Shareholders Equity


21Common stock, without par value; authorized unlimited number






141,604



143,826Treasury stock






(83,334
)


(93,793
)Contributed surplus






7,232



7,623Retained earnings






185,790



155,681Accumulated other comprehensive income






68,496



48,577Total shareholders equity






319,788



261,914$
788,903


$
765,658    75




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF INCOME (LOSS)
    For the Years Ended December 31, 2009, 2008 and 2007
    (United States Dollars in Thousands, Except Earnings per
    Share)
  Notes


2009


2008


2007Revenues





$
576,408


$
638,354


$
580,391Cost of revenues






(457,847
)


(516,631
)


(494,432
)Recovery of (loss on) terminated customer contracts


17



17,829



(31,966
)


Gross profit






136,390



89,757



85,959Income from interest in resource property






13,530



27,185



18,132Selling, general and administrative expense






(74,796
)


(56,156
)


(46,700
)Stock-based compensation recovery (expense)  selling,
    general and administrative


22



391



(4,401
)


(4,381
)Restructuring costs


18



(9,220
)






Gain on sale of workshop and related assets


4



5,254







Operating income






71,549



56,385



53,010Interest income






7,043



21,449



13,155Interest expense






(2,793
)


(2,291
)


(2,668
)Foreign currency transaction gains (losses), net






(2,006
)


2,149



(2,003
)Loss on investments in preferred shares in former subsidiaries


11



(9,538
)


(55,076
)


Share of profit (loss) of equity method investees






(254
)


(272
)


142Other income (expense), net


23



3,825



(9,912
)


4,169Income before income taxes and minority interests from
    continuing operations






67,826



12,432



65,805Provision for income taxes:Income taxes


24



(23,026
)


(12,800
)


(8,278
)Resource property revenue taxes


24



(3,039
)


(5,864
)


(4,161
)(26,065
)


(18,664
)


(12,439
)Income (loss) before minority interests from continuing
    operations






41,761



(6,232
)


53,366Minority interests






(1,050
)


(720
)


(2,386
)Income (loss) from continuing operations






40,711



(6,952
)


50,980Loss from discontinued operations, net of tax














(9,351
)Extraordinary gain, net of tax














513Net income (loss)





$
40,711


$
(6,952
)

$
42,142Basic earnings (loss) per share


25 from continuing operations





$
1.34


$
(0.23
)

$
1.71 from discontinued operations














(0.31
) extraordinary gain














0.02$
1.34


$
(0.23
)

$
1.42Diluted earnings (loss) per share


25 from continuing operations





$
1.34


$
(0.23
)

$
1.68 from discontinued operations














(0.31
) extraordinary gain














0.02$
1.34


$
(0.23
)

$
1.39Weighted average number of common shares outstanding basic






30,354,207



30,401,018



29,895,468 diluted






30,354,207



30,401,018



30,402,130    76




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)For the Years Ended December 31, 2009,
    2008 and 2007
    (United States Dollars in Thousands)
  2009


2008


2007Net income (loss) for the year

$
40,711


$
(6,952
)

$
42,142Other comprehensive income (loss), net of taxUnrealized gains and losses on translating financial statements
    of self-sustaining foreign operations and adjustments from the
    application of U.S. dollar reporting


19,919



(47,099
)


45,473Unrealized losses on securities:Fair value loss on
    available-for-sale
    securities






(55,076
)


Reclassification adjustment for other than temporary decline in
    value






55,076



Other comprehensive income (loss)


19,919



(47,099
)


45,473Comprehensive income (loss)

$
60,630


$
(54,051
)

$
87,615    77




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS
    EQUITY
    For the Years Ended December 31, 2009, 2008 and
    2007
  AccumulatedOtherCompre-hensiveIncome:Common Stock


Treasury Stock








CurrencyNumber of





Number of





Contributed


Retained


TranslationShares


Amount


Shares


Amount


Surplus


Earnings


Adjustment


TotalBalance at December 31, 2006


34,488,136


$
108,595



(5,021,754
)

$
(64,383
)

$
2,131


$
176,742


$
50,203


$
273,288Net income






















42,142







42,142Distribution of SWA Reit and Investments Ltd.






















(56,251
)






(56,251
)Shares issued for increase of equity interest in a non-
    wholly-owned subsidiaries


676,766



18,749























18,749Exercise of stock options


672,218



11,015











(2,193
)










8,822Price adjustment for shares received in connection with
    disposition of MFC Merchant Bank SA in 2006














(10,073
)














(10,073
)Shares received on settlements of receivables










(371,921
)


(11,174
)














(11,174
)Shares received as consideration for disposition of MFC Merchant
    Bank SA










(219,208
)


(8,163
)














(8,163
)Stock-based compensation


















4,381











4,381Translation adjustment


























45,473



45,473Balance at December 31, 2007


35,837,120



138,359



(5,612,883
)


(93,793
)


4,319



162,633



95,676



307,194Net loss






















(6,952
)






(6,952
)Exercise of stock options


299,438



5,467











(1,097
)










4,370Cancellation of shares by transfer agent


(1,030
)


























Stock-based compensation


















4,401











4,401Translation adjustment


























(47,099
)


(47,099
)Balance at December 31, 2008


36,135,528



143,826



(5,612,883
)


(93,793
)


7,623



155,681



48,577



261,914Net income






















40,711







40,711Settlement with an affiliate










(262,734
)


(2,365
)














(2,365
)Cancellation of treasury stock


(558,373
)


(2,222
)


558,373



12,824







(10,602
)






Stock-based compensation


















(391
)










(391
)Translation adjustment


























19,919



19,919Balance at December 31, 2009


35,577,155


$
141,604



(5,317,244
)

$
(83,334
)

$
7,232


$
185,790


$
68,496


$
319,788Total of retained earnings and accumulated other comprehensive
    incomeDecember 31, 2007





























$
258,309December 31, 2008





























$
204,258December 31, 2009





























$
254,286    78




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    For the Years Ended December 31, 2009, 2008 and 2007
    (United States Dollars in Thousands)
  2009


2008


2007Cash flows from continuing operating activitiesIncome (loss) from continuing operations

$
40,711


$
(6,952
)

$
50,980Adjustments for:Amortization and depreciation


3,452



4,295



3,279Foreign currency transaction losses (gains), net


2,006



(2,149
)


2,003Minority interests


1,050



720



2,386(Gain) loss on short-term securities


(2,812
)


11,218



110Stock-based (recovery) compensation


(391
)


4,401



4,381Loss on investment in preferred shares of former subsidiaries


9,538



55,076



Future income taxes


513



8,621



(2,785
)(Recovery of) loss on terminated customer contracts


(17,829
)


31,966Restructuring costs, asset impairment charges


227







Gain on sale of workshop and related assets


(5,254
)






Changes in operating assets and liabilities, net of effects of
    acquisitions and dispositions:Short-term cash deposits


(6,699
)






Short-term securities


357



1,176



(2,576
)Restricted cash


7,728



(9,478
)


(5,813
)Receivables


(67,860
)


(15,317
)


11,314Inventories


45,866



666



(28,089
)Contract deposits, prepaid and other


3,413



(27,931
)


(6,652
)Accounts payable and accrued expenses


16,135



44,024



6,652Progress billings above costs and estimated earnings on
    uncompleted contracts


(93,192
)


(4,264
)


76,890Advance payments received from customers


20,021



2,355



(595
)Income tax liabilities


8,421



(11,115
)


7,838Provision for warranty costs


16,709



(3,046
)


10,373Provision for restructuring costs


7,773







Other


269



424



407Cash flows (used in) provided by continuing operating activities


(9,848
)


84,690



130,103Cash flows from continuing investing activitiesPurchases of property, plant and equipment


(1,801
)


(3,037
)


(3,471
)Sales (purchases) of long-term securities, net










(456
)Purchases of subsidiaries, net of cash acquired


(791
)


(1,547
)


(7,807
)Settlement of investment in preferred shares of former
    subsidiaries


6,195







Proceeds from sale of workshop and related assets, net of cash
    disposed of


3,681







Other






(1,620
)


Cash flows provided by (used in) continuing investing activities


7,284



(6,204
)


(11,734
)Cash flows from continuing financing activitiesBorrowings










3,292Debt repayments






(2,056
)


(6,132
)Issuance of shares






4,370



8,822Distribution in connection with SWA Reit and Investments
    Ltd.










(5,399
)Cash flows provided by continuing financing activities






2,314



583Cash flows provided by operating activities of discontinued
    operations










198Cash flows provided by investing activities of discontinued
    operations










58Cash flows used in financing activities of discontinued
    operations










(245
)Exchange rate effect on cash and cash equivalents


14,028



(26,110
)


30,756Increase in cash and cash equivalents


11,464



54,690



149,719Cash and cash equivalents, beginning of year


409,087



354,397



204,678Cash and cash equivalents, end of year

$
420,551



409,087


$
354,397Cash and cash equivalents at end of year consisted of:Cash

$
406,219


$
393,872


$
349,435Money market funds


14,332



15,215



4,962$
420,551


$
409,087


$
354,397Nonmonetary supplemental information (see Note 31)    79




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009
  Note 1.
    The
    Company and Summary of Significant Accounting Policies        A.
    Basis of
    Presentation    Principles of Consolidation
  Consolidation of
    Variable Interest Entities. Interests in
    Joint Ventures,
    Foreign
    Currency Translation
   80




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Use
    of Estimates and Assumptions and Measurement
    Uncertainty
    B.
    Accounting
    Standards and Amendments Adopted in 2009    Goodwill
    and Intangible Assets
  Goodwill and Intangible
    Assets Goodwill and Other Intangible Assets Research and Development Costs Revenues and Expenditures during the
    Pre-operating Period
  Financial
    Instruments  Disclosures
  Financial Instruments
     Disclosures
    
    classifying and disclosing fair value measurements based on a
    three-level hierarchy;
    reconciling beginning balances to ending balances for
    Level 3 measurements;
    identifying and explaining movements between levels of the fair
    value hierarchy;
    providing a maturity analysis for derivative financial
    liabilities based on how the entity manages liquidity
    risk; and
    disclosing the remaining expected maturities of non-derivative
    financial liabilities if liquidity risk is managed on that basis.  Financial
    Instruments  Recognition and
    Measurement
  Financial
    Instruments  Recognition and Measurement
 81




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    held-to-maturity Impaired Loans available-for-sale
  Credit
    Risk and the Fair Value of Financial Assets and Financial
    Liabilities
  Credit
    Risk and the Fair Value of Financial Assets and Financial
    Liabilities
  C.
    Significant
    Accounting Policies  (i)  Financial
    Instruments
  and/or
    Available-for-sale held-to-maturity
      (a) held-to-maturity
 82




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    available-for-sale
      (a)
    quoted prices (unadjusted) in active markets for identical
    assets or liabilities (Level 1);  (b)
    inputs other than quoted prices included in Level 1 that
    are observable for the asset or liability, either directly
    (i.e., as prices) or indirectly (i.e., derived from prices)
    (Level 2); and  (c)
    inputs for the asset or liability that are not based on
    observable market data (unobservable inputs) (Level 3).      (ii)  Cash
    and Cash Equivalents
    (iii)  Restricted
    Cash
    (iv)  Securities
  available-for-sale
 83




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Available-for-sale available-for-sale available-for-sale available-for-sale available-for-sale available-for-sale
    (v)  Receivables
  available-for-sale.
    (vi)  Allowance
    for Credit Losses
      (vii)  Derivative
    Financial Instruments
      (viii)  Inventories
  work-in-progress, contracts-in-progress
 84




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    percentage-of-completion percentage-of-completion contracts-in-progress
    (ix)  Property,
    Plant and Equipment
      Lives

MethodBuildings


25 years



straight-lineManufacturing plant equipment


3 to 20 years



straight-lineOffice equipment


3 to 10 years



straight-line   (x)  Interest
    in Resource Property
    (xi)  Asset
    Retirement Obligations
  Asset Retirement Obligations period-to-period
  (xii)  Provisions
   85




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (xiii)  Revenue
    Recognition and Cost of Revenues
  percentage-of-completion
    catch-up and/or percentage-of-completion
        (xiv)  Warranty
    Costs
      (xv)  Research
    and Development Costs
    (xvi)  Stock-Based
    Compensation
  Stock-based
    Compensation and Other Stock-based Payments
 86




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (xvii)  Employee
    Future Benefits
      (xviii)  Taxes
    on Income
              (xix)  Earnings
    Per Share
   87




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      D.
    Recent
    Accounting Standards and Amendments not yet Adopted  Business
    Combinations and Non-controlling Interests
  Business
    Combinations Consolidations, Non-controlling Interest.
      Equity
  Equity
    Accounting
    Changes
  Accounting Changes
  Note 2.
    Capital
    Disclosure on the Companys Objective, Policies and
    Processes for Managing Its Capital Structure   88




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    debt-to-adjusted debt-to-equity debt-to-adjusted debt-to-equity
  2009


2008Total debt

$
11,649


$
11,313Less: cash and cash equivalents


(420,551
)


(409,087
)Net debt (net cash and cash equivalents)

$
(408,902
)

$
(397,774
)Total equity

$
319,788


$
261,914Debt-to-adjusted
    capital ratio


Not applicable



Not applicable   debt-to-adjusted
  2009


2008Long-term debt

$
11,649


$
11,313Shareholders equity

$
319,788


$
261,914Long-term
    debt-to-equity
    ratio


0.04



0.04   debt-to-adjusted debt-to-equity debt-to-equity
    Note 3.
    Acquisitions
    of Subsidiaries  Years
    2009 and 2008
    Year
    2007
       89




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 4.
    Disposition
    of Subsidiaries  Workshop
    and Coal and Minerals Customer Groups
        Financial
    services operations
  Related Party Transactions
 90




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2 3
  available-for-sale
  15-year
         91




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          dividend-in-kind.
   92




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Real
    estate and other interests
        Note 5.
    Securities  Short-term
    securities
  2009


2008Trading securities:Common shares, at fair value

$
16,432


$
2,947Available-for-sale
    security:Investment in a private company, at cost






40$
16,432


$
2,987     Note 6.
    Accounts
    Receivable, Trade  2009


2008Trade receivables, gross amount

$
104,045


$
65,307Less: Allowance for credit losses


(2,403
)


(2,547
)Trade receivables, net amount

$
101,642


$
62,760This amount is included in the consolidated balance sheet as
    follows:Current portion

$
96,982


$
62,760Long-term portion


4,660



$
101,642


$
62,760    93




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Past-Due

2009


2008Below 30 days

$
2,877


$
4,851Between 31 and 60 days


2,286



1,857Between 61 and 90 days


601



2,448Over 90 days


9,941



10,182$
15,705


$
19,338     Past-Due

2009


2008Below 30 days

$
318


$
487Between 31 and 60 days


179



8Between 61 and 90 days






Over 90 days


1,906



2,052$
2,403


$
2,547     2009


2008Balance, beginning of the year

$
2,547


$
2,932Additions


943



1,509Reversals


(881
)


(944
)Write-offs


(286
)


(821
)Cumulative translation adjustment


80



(129
)Balance, end of the year

$
2,403


$
2,547     Note 7.
    Other
    Receivables  2009


2008Investment income (of which $62 and $21 were due from affiliates
    at December 31, 2009 and 2008, respectively)

$
460


$
1,235Government taxes


28,220



8,697Due from affiliates (see Note 29)


218



1,957Income from interest in resource property


4,584



3,402Income on the preferred shares of former subsidiaries






9,265Derivative assets


269



1,450Other


2,428



2,307$
36,179


$
28,313      94




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 8.
    Inventories  2009


2008Raw materials

$
24,956


$
12,317Work-in-progress


179



483Contracts-in-progress


55,358



96,876Finished goods


322



485$
80,815


$
110,161   contracts-in-progress
  2009


2008Costs incurred to date on uncompleted contracts

$
392,713


$
560,581Estimated earnings recognized to date on these contracts


87,345



99,567480,058



660,148Less: loss contracts (not including loss on the terminated
    customer contracts discussed in Note 17)


(2,575
)


(1,861
)Less: billings to date


(500,280
)


(733,705
)(22,797
)


(75,418
)Currency translation adjustments


314



451$
(22,483
)

$
(74,967
)This amount is included in the consolidated balance sheet as
    follows:Costs and estimated earnings in excess of billings on
    uncompleted contracts (included in inventories 
    contracts-in-process)

$
55,358


$
96,876Progress billings above costs and estimated earnings on
    uncompleted contracts (included in liabilities)


(77,841
)


(171,843
)$
(22,483
)

$
(74,967
)       Note 9.
    Contract
    Deposits, Prepaid and Other  2009


2008Prepayments and deposits for inventories on construction
    contracts

$
53,441


$
58,171Prepaids, deposits and other


452



523$
53,893


$
58,694  95




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 10.
    Future
    Income Tax Assets and Liabilities    2009


2008Non-capital tax loss carry-forwards

$
45,657


$
46,752Uncompleted contracts


(18,366
)


(23,420
)Other


3,546



5,91830,837



29,250Valuation allowance


(29,894
)


(22,878
)$
943


$
6,372Future income tax assets are included in the consolidated
    balance sheet as follows:Current

$
1,748


$
7,679Non-current


13,405



6,33915,153



14,018Future income tax liabilities are included in the consolidated
    balance sheet as follows:Non-current


(14,210
)


(7,646
)Net future income tax assets

$
943


$
6,372       Country

Amount


Expiration datesCanada

$
57,353


2010-2029Germany


82,220


IndefiniteSwitzerland


279


2014-2016China


1,900


2010-2012U.S.


5,470


2016-2029    96




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 11.
    Investments
    in Preferred Shares of Former Subsidiaries    2009


2008Preferred shares of former subsidiaries at gross amount of
    Cdn$nil and Cdn$127,866 at December 31, 2009 and 2008

$



$
104,415Offset of amount owing to a former subsidiary (Cdn$nil and
    Cdn$37,000 at December 31, 2009 and 2008) (see Note 4)






(30,214
)Fair value loss






(55,076
)Preferred shares of former subsidiaries, net

$



$
19,125       (a)
    Cdn$8,284 being satisfied by Mass Financial agreeing to transfer
    to the Company 788,201 of the Companys common shares.
    262,734 of the Companys common shares, valued at
    Cdn$2,762, were delivered to the Company on May 12, 2009
    and the remainder (which was equivalent to Cdn$5,522) would be
    delivered no later than July 20, 2009. In July 2009, Mass
    Financial, as permitted in the agreement, elected to deliver the
    remainder in cash to the Company;  (b)
    Cdn$1,710 being satisfied by way of cash payment by Mass
    Financial to the Company on May 12, 2009;  (c)
    Cdn$1,750 being satisfied by way of issuance by Mass Financial
    to the Company of a promissory note having a principal amount of
    Cdn$1,750, a term of 24 months and an interest rate of 4%
    per annum payable annually in cash. The note is repayable at the
    option of the issuer by the issuance of common shares of Mass
    Financial based on the number of common shares of Mass Financial
    equaling the amount being repaid divided by the
    30-day
    volume weighted average trading price for the Mass Financial
    common shares. The promissory note can be repaid or be redeemed
    at any time in cash at the option of the issuer; and  (d)
    Cdn$540 being satisfied by setting-off accrued and unpaid
    interest on indebtedness owed by the Company to Mass Financial
    pursuant to a loan agreement with Mass Financial dated
    January 31, 2006.  30-day
   97




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 12.
    Property,
    Plant and Equipment  2009


2008Accumulated


Net





Accumulated


NetCost


Depreciation


Book Value


Cost


Depreciation


Book ValueBuildings

$
474


$
235


$
239


$
1,335


$
853


$
482Manufacturing plant and equipment


14,726



12,812



1,914



11,722



9,850



1,872Office equipment


257



153



104



240



105



135$
15,457


$
13,200


$
2,257


$
13,297


$
10,808


$
2,489       Note 13.
    Interest
    in Resource Property  2009


2008Cost

$
32,547


$
27,816Accumulated Amortization


(5,397
)


(2,955
)Net

$
27,150


$
24,861       Note 14.
    Accounts
    Payable and Accrued Expenses  2009


2008Accounts payable

$
180,567


$
162,315Value-added and other taxes


2,352



3,639Affiliates


1,594



844Compensation


7,192



7,106Interest


21



42Interest due to a former subsidiary (see Note 4)






2,681Derivative liabilities


20



285Other






1,670$
191,746


$
178,582     Note 15.
    Employee
    Future Benefits   98




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2009


2008Accrued benefit obligation, beginning of year

$
31,367


$
33,186Current service cost






48Interest cost


1,579



1,670Deferred compensation


328



70Net pension cost


1,907



1,788Cash benefit payments


(1,996
)


(2,070
)Divestiture of workshop


(1,204
)


Reclassification to account payables


(30
)


Currency translation adjustments


887



(1,537
)Accrued benefit obligation, end of year

$
30,931


$
31,367Included in the consolidated balance sheet as follows:Current portion

$
2,070


$
2,158Long-term portion


28,861



29,209$
30,931


$
31,367     2009


2008Weighted average discount rate


5.3
%


6.0
%Rate of increase in future compensation


0.0
%


0.0
%         Year

Amount2010

$
2,0702011


2,3102012


2,2752013


2,3122014


2,341Thereafter


19,623$
30,931  99




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 16.
    Provision
    for Warranty Costs    Reconciliation of Net Income

2009


2008


2007Balance at beginning of year

$
38,380


$
43,302


$
29,115Costs incurred


(8,533
)


(10,013
)


(3,371
)Warranty reserves established on completed contracts


30,762



16,554



19,913Reversal of reserves at end of warranty period


(5,074
)


(9,630
)


(6,292
)Derecognition upon sale of coal and minerals customer group


(3,201
)






Currency translation adjustments


1,659



(1,833
)


3,937Balance, at end of year

$
53,993


$
38,380


$
43,302Included in the consolidated balance sheet as follows:Current portion

$
28,282


$
30,856


$
31,503Long-term portion


25,711



7,524



11,799$
53,993


$
38,380


$
43,302   Note 17.
    Provision
    for Supplier Commitments and Loss on Terminated Customer
    Contracts      2009


2008Balance, at beginning of year

$
23,729


$
Costs recognized


8,641



23,034Reductions through negotiations with suppliers and customers


(15,448
)


(6,807
)


23,034Reclassification to inventory reserve


1,518



Paid and payable


(5,953
)


Currency translation adjustments


456



695Balance, at end of year

$
12,943


$
23,729     2009


2008(Reduction in) provisions:Supplier commitments

$
(3,406
)

$
17,027Penalty for cancellation of purchase orders


(3,401
)


3,401Inventories
    (contracts-in-progress)






2,606(6,807
)


23,034Inventories (raw materials and finished goods), reversal of
    write-downs


(2,488
)


2,637Inventories
    (contracts-in-progress),
    changes in
    percentage-of-completion
    estimates


(8,276
)


6,037Customer receivables


(258
)


258(Recovery of) loss on terminated customer contracts for the year

$
(17,829
)

$
31,966  100




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 18.
    Provision
    for Restructuring Costs              Provisions:Contractual severance associated with German workers
    council agreements

$
7,816Other employee related restructuring costs


1,177Impairment of fixed assets


227Total restructuring costs

$
9,220     Balance as at December 31, 2008

$
Provision during the period, excluding inventory and fixed asset
    write-downs


16,684Paid and payable


(1,116
)Reversal resulting from the sale of the Cologne workshop


(5,722
)Reduction of severance benefits due to voluntary exits


(1,969
)Currency translation adjustments


148Balance as at December 31, 2009

$
8,025  101




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 19.
    Long-term
    Debt  2009


2008Note payable to a bank, 8,127 at both December 31,
    2009 and 2008, interest at 2.45% per annum due quarterly and the
    entire principal balance due February 2011. The Company is in
    compliance with financial covenants stipulated by the bank

$
11,649


$
11,313Less current portion






$
11,649


$
11,313     Maturity

Principal


Interest


Total2010

$



$
214


$
2142011


11,649



95



11,744$
11,649


$
309


$
11,958     Note 20.
    Other
    Long-term Liabilities    Note 21.
    Share
    Capital, Authorized      Note 22.
    Stock-Based
    Compensation      1997
    Stock Option Plan
   102




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted AverageExercise PriceNumber of Shares


Per ShareOutstanding at December 31, 2006


1,173,336


$
13.17Granted


1,029,994



24.80Exercised


(672,218
)


13.06Forfeited


(22,224
)


13.06Outstanding at December 31, 2007


1,508,888



21.13Granted


425,826



31.67Exercised


(299,438
)


14.60Forfeited


(55,556
)


28.29Outstanding at December 31, 2008


1,579,720



24.96Cancelled by agreements


(72,500
)


31.16Forfeited


(1,065,556
)


23.74Outstanding at December 31, 2009


441,664



26.89     Stock
    options granted in 2009
    Stock
    options granted in 2008
       103




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock
    options granted in 2007
            2008 Equity Incentive Plan
   104




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Options Outstanding


Options ExercisableWeighted-AverageRemaining


Weighted-Average





Weighted-AverageNumber


Contractual Life


Exercise Price


Number


Exercise PriceExercise Prices per Share

Outstanding


(In Years)


per Share


Exercisable


per Share$13.06


75,004



6.63


$
13.06



75,004


$
13.06$26.85


116,668



7.63


$
26.85



66,664


$
26.85$29.25


66,664



7.50


$
29.25



44,440


$
29.25$31.53


66,664



8.50


$
31.53



22,220


$
31.53$31.81


116,664



8.63


$
31.81



49,998


$
31.81441,664



7.83


$
26.89



258,326


$
24.62     Note 23.
    Other
    Income (Expense), Net  2009


2008


2007Gain (loss) on trading securities, net

$
2,812


$
(11,218
)

$
(110
)Unrealized holding (losses) gains on currency derivative
    contracts, net


(430
)


1,164



(145
)Other income


1,520



1,982



4,666Other expenses


(77
)


(1,840
)


(242
)Other income (expense), net

$
3,825


$
(9,912
)

$
4,169   Note 24.
    Income
    Taxes    2009


2008


2007Income before income taxes and minority interests from
    continuing operations

$
67,826


$
12,432


$
65,805Computed provision for income taxes at statutory rates

$
(19,669
)

$
(3,667
)

$
(21,136
)(Increase) decrease in taxes resulting from:Foreign tax rate differences


(1,923
)


(758
)


(1,082
)Non-taxable income


93



1,702



1,862Stock-based compensation


134



(1,287
)


(1,465
)Resource property revenue taxes


(3,039
)


(5,864
)


(4,161
)Permanent differences


(695
)


(1,297
)


(1,610
)Change in valuation allowance


(1,180
)


(205
)


12,754Reduction in future tax rate


(330
)


(239
)


(3,955
)Amortization of deferred credit, future income tax assets


2,913



6,298



6,062Loss on investment in preferred shares of former subsidiaries


(2,828
)


(16,248
)


Other, net


459



2,901



292Provision for income taxes

$
(26,065
)

$
(18,664
)

$
(12,439
)Consisting of:Resource property revenue taxes

$
(3,039
)

$
(5,864
)

$
(4,161
)Other income taxes


(23,026
)


(12,800
)


(8,278
)$
(26,065
)

$
(18,664
)

$
(12,439
)  105




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 25.
    Earnings
    (Loss) Per Share    2009


2008


2007Basic earnings (loss) from continuing operations available to
    common shareholders

$
40,711


$
(6,952
)

$
50,980Effect of dilutive securities:










Diluted earnings (loss) from operations

$
40,711


$
(6,952
)

$
50,980   Number of Shares2009


2008


2007Weighted average number of common shares outstanding 
    basic


30,354,207



30,401,018



29,895,468Effect of dilutive securities:Options










506,662Weighted average number of common shares outstanding 
    diluted


30,354,207



30,401,018



30,402,130     Note 26.
    Commitments
    and Contingencies  Leases
    Year

Amount2010

$
3,0792011


2,3422012


1,1312013


5482014


513Thereafter


937$
8,550     Litigation
    Guarantees
    Purchase
    Obligations
   106




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 27.
    Business
    Segment Information  sub-lease
    Year Ended December 31, 2009Industrial PlantTechnology,Equipment and

Resource

CorporateService

property

and other

TotalRevenues from external customers

$
576,408


$



$



$
576,408Income from interest in resource property






13,530







13,530Interest expenseExternal


2,316







477



2,793Internal










411



411Income (loss) from continuing operations before income taxes and
    minority interests


85,838



9,883



(27,895
)


67,826   Year Ended December 31, 2008Industrial PlantTechnology,Equipment and

Resource

CorporateService

Property

and Other

TotalRevenues from external customers

$
638,354


$



$



$
638,354Income from interest in resource property






27,185







27,185Interest expenseExternal


2,198







93



2,291Internal










1,474



1,474Income (loss) from continuing operations before income taxes and
    minority interests


57,641



22,769



(67,978
)


12,432   Year Ended December 31, 2007Industrial PlantTechnology,Equipment and

Resource

CorporateService

Property

and Other

TotalRevenues from external customers

$
580,391


$



$



$
580,391Income from interest in resource property






18,132







18,132Interest expenseExternal


2,094







574



2,668Internal


269







498



767Income (loss) from continuing operations before income taxes and
    minority interests


61,277



15,367



(10,839
)


65,805    107




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009


2008


2007Cement

$
526,688


$
547,368


$
518,573Coal and minerals


49,720



90,986



61,818$
576,408


$
638,354


$
580,391   As at December 31, 2009Industrial PlantTechnology,Equipment and


Resource


CorporateService


Property


and Other


TotalSegment assets

$
728,090


$
31,935


$
76,567


$
836,592Less: intercorporate investment














(47,689
)Consolidated total assets













$
788,903Equity method investments


73











73Cash expenditures for capital assets


1,795







6



1,801   As at December 31, 2008Industrial PlantTechnology,Equipment and


Resource


CorporateService


Property


and Other


TotalSegment assets

$
698,371


$
28,605


$
89,066


$
816,042Less: intercorporate investment














(50,384
)Consolidated total assets













$
765,658Equity method investments


325











325Cash expenditures for capital assets


3,027







10



3,037     2009


2008


2007Canada

$
1,700


$
11,720


$
512Africa


6,532



7,596



21,393Americas


20,597



48,836



117,905Asia


149,267



145,636



196,348Russia & Eastern Europe


224,885



213,708



83,592Europe


39,983



57,577



35,502Middle East


132,018



150,856



123,283Australia


1,426



2,425



1,856$
576,408


$
638,354


$
580,391      108




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009


2008Canada

$
27,302


$
25,047Africa






63Americas


119



200Asia


438



586Russia & Eastern Europe


14



21Europe


1,525



1,411Middle East


9



14Australia






8$
29,407


$
27,350   Note 28.
    Financial
    Instruments    2009


2008Carrying


Fair


Carrying


FairAmount


Value


Amount


ValueFinancial Assets:Held for trading:Cash and cash equivalents (including short-term cash deposits
    and restricted cash)

$
452,446


$
452,446


$
441,095


$
441,095Short-term securities


16,432



16,432



2,947



2,947Derivative assets


269



269



1,450



1,450Loans and receivables:Receivables*


111,004



111,004



80,926



80,926Available-for-sale
    instruments that do no have a quoted market price in an active
    market:Short-term securities, unlisted










40



40Investment in preferred shares of former subsidiaries










19,125



19,125Total

$
580,151


$
580,151


$
545,583


$
545,583Financial Liabilities:Other financial liabilities:Accounts payable and accrued expenses*

$
189,374


$
189,374


$
174,658


$
174,658Debt


11,649



11,649



11,313



11,313Other long-term liabilities


15,607



15,607



8,344



8,344Held for trading:Derivative liabilities


20



20



285



285Total

$
216,650


$
216,650


$
194,600


$
194,600     *
    
    not including derivative financial instruments   109




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        and/or available-for-sale
     110




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Level 1


Level 2


Level 3


TotalFinancial Assets:Held for trading:Short-term securities


16,432











16,432Derivative assets






269







269Total

$
16,432


$
269


$



$
16,701Financial Liabilities:Held for trading:Derivative liabilities

$



$
20


$



$
20           RisksMarket RisksFinancial Instrument

Credit

Liquidity

Currency

Interest Rate

Other PriceCash and cash equivalents (including short-term cash deposits
    and restricted cash)


X







X



XShort-term securities










X







XDerivative assets and liabilities


X



X



XInvestment in preferred shares of
    former subsidiaries


X



X







XReceivables


X







XAccounts payable and accrued expenses






X



XLong-term debt














XOther long-term liabilities














X   Interest
    rate risk
   111




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Sensitivity
    analysis:
    Credit
    risk
  and/or
      Amounts Recognized on the Consolidated Balance Sheet:

2009Cash and cash equivalents (including short-term cash deposits
    and restricted cash)

$
452,446Derivative assets


269Receivables


111,004563,719Guarantee (see Note 26)


869Maximum credit risk exposure

$
564,588   Currency
    risk
    Sensitivity
    analysis:
   112




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Other
    price risk
  available-for-sale
  Sensitivity
    analysis:
    Liquidity
    risk
        Concentration
    risk
     113




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Additional
    disclosure
    2009


2008


2007Interest income on financial assets not classified as held for
    trading*

$
5,545


$
17,820


$
12,146Interest income on financial assets classified as held for
    trading


1,498



3,629



1,009Total interest income

$
7,043


$
21,449


$
13,155Interest expense on financial liabilities not classified as held
    for trading

$
(2,789
)

$
(2,280
)

$
(2,667
)Interest expense on financial liabilities classified as held for
    trading


(4
)


(11
)


(1
)Total interest expense

$
(2,793
)

$
(2,291
)

$
(2,668
)Dividend income on financial assets classified as held for
    trading

$
165


$
237


$
302Dividend income on financial assets classified as available for
    sale


280







238Net gain (losses) on financial assets classified as held for
    trading


2,812



(9,765
)


(1,714
) including change in fair value of the trading
    securities


2,622



(10,929
)


(1,559
)Credit losses


(797
)


(1,840
)


(238
)     *
    
    including income of $nil, $3,782 and $3,751 in 2009, 2008 and
    2007, respectively, on the preferred shares of former
    subsidiaries  Note 29.
    Related
    Party Transactions  and/or
  Continuing
    operations
  2009


2008


2007Dividend income on common shares*

$
280


$



$
238Royalty expense paid and payable*


(614
)


(815
)


(1,025
)Fee income


494



94



Fee expense for managing resource property


(839
)


(1,707
)


(1,118
)Fee expense for management services, including expense
    reimbursements


(4,059
)


(4,303
)


(1,308
)Interest income  net investment income on preferred
    shares of former subsidiaries






3,782



3,751Interest income  other


309







(48
)Interest expense


(447
)


(21
)


(530
)Impairment charge on a receivable










(238
)     *
    
    included in income from interest in resource property   114




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Discontinued
    Operations
    Note 30.
    Interest
    in Joint Ventures    2009


2008Current assets

$
14,483


$
7,979Long-term assets


46



519Current liabilities


13,944



7,966Long-term liabilities


212



Revenues


5,276



6,928Cost of revenues


4,397



5,606Selling, general and administrative expenses


647



745Interest income


145



315Other expenses


(379
)


69Income before taxes


144



823Net income


42



619Cash flows resulting from operating activities


817



1,023Cash flows resulting from financing activities






Cash flows resulting from investing activities






(47
)     Note 31.
    Consolidated
    Statements of Cash Flows  Supplemental
    Disclosure           115




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 32.
    Subsequent
    Events    Plan of
    Arrangement
        two-for-one
    Note 33.
    Differences
    between Canadian and United States Generally Accepted Accounting
    Principles    December 31Reconciliation of Net Income

2009


2008


2007Income (loss) before minority interest from continuing
    operations in accordance with Canadian GAAP

$
41,761


$
(6,232
)

$
53,366Change in fair value of guarantees issued










15Remove reversal of previous inventory write-downs


(2,488
)






Stock-based compensation (expense) recovery


(474
)


2,070



(7,964
)Income (loss) from continuing operations in accordance with U.S.
    GAAP


38,799



(4,162
)


45,417Discontinued operations in accordance with U.S. GAAP, net of tax










(9,351
)Extraordinary gain










513Net income (loss) in accordance with U.S. GAAP


38,799



(4,162
)


36,579Less: net income attributable to the non-controlling interests


(1,050
)


(720
)


(2,386
)Net income (loss) attributable to common shareholders of KHD Ltd

$
37,749


$
(4,882
)

$
34,193Basic earnings (loss) per common share: U.S.
    GAAP Continuing operations

$
1.24


$
(0.16
)

$
1.44Discontinued operations










(0.31
)Extraordinary gain










0.02$
1.24


$
(0.16
)

$
1.15Diluted earnings (loss) per share attributable to common
    shareholders of KHD Ltd : U.S. GAAPContinuing operations

$
1.24


$
(0.16
)

$
1.42Discontinued operations










(0.31
)Extraordinary gain










0.02$
1.24


$
(0.16
)

$
1.13   116




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31Reconciliation of Shareholders Equity

2009


2008


2007Shareholders equity in accordance with Canadian GAAP

$
319,788


$
261,914


$
307,194Deferred income taxes


(1,071
)


(1,071
)


(1,071
)Stock-based compensation expense


(1,635
)


(1,527
)


(4,659
)Inventories


(2,488
)






Unrecognised pension benefit expense, net of tax


(1,315
)


(42
)


(525
)Shareholders equity in accordance with U.S. GAAP

$
313,279


$
259,274


$
300,939   December 31Comprehensive Income

2009


2008


2007Net income (loss) in accordance with U.S. GAAP

$
38,799


$
(4,162
)

$
36,579Other comprehensive income (loss) , net of taxUnrealized gains and losses on translating financial statements
    of self- sustaining operations and adjustments from the
    application of U.S. dollar reporting


20,974



(48,478
)


48,144Unrealized losses on securities:Fair value loss on
    available-for-sale
    securities






(55,076
)


Reclassification adjustment for other than temporary decline in
    value






55,076



Net unrealized losses on securities










Unrecognised pension recovery (expense), net of tax:Unrecognised actuarial (loss) gain arising during the year


(1,272
)


494



(536
)Net unrecognised pension (expense) recovery


(1,272
)


494



(536
)19,702



(47,984
)


47,608Comprehensive income (loss), net of tax, in accordance with U.S.
    GAAP

$
58,501


$
(52,146
)

$
84,187Comprehensive income (loss) attributable to:Common shareholders of KHD Ltd

$
56,419


$
(51,498
)

$
79,141Non-controlling interests


2,082



(648
)


5,046$
58,501


$
(52,146
)

$
84,187     Stock-Based
    Compensation
     117




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Guarantee
  Guarantors
    Accounting and Disclosure Requirements for Guarantees, Including
    Indirect Guarantees of Indebtedness of Others, Contingencies,
  Defined
    Benefit Pension
        Investment
    in Jointly Controlled Entities
  Form 20-F
  Minority
    Interests
  less-than-wholly-owned
  Inventory
    Write-down
   118




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting
    Guidance Adopted in 2009
  FASB
    Accounting Standards Codification and the Hierarchy of Generally
    Accepted Accounting Principles  a Replacement of FASB
    Statement No. 162
  Business Combination Business Combinations Business Combinations.
  805-20, Business Combinations  Identifiable Assets and
    Liabilities and Any Noncontrolling Interest Accounting for Assets Acquired and
    Liabilities Assumed in a Business Combination that Arise from
    Contingencies Contingencies Accounting for Contingencies 450-20, Contingencies  Loss Contingencies Reasonable Estimation of the Amount of a
    Loss, an Interpretation of FASB Statement No. 5
  Consolidation Noncontrolling
    Interests in Consolidated Financial Statements, an Amendment of
    ARB No. 51
  Derivatives and Hedging Disclosures about Derivative Instruments and Hedging
    Activities, an Amendment of FASB Statement No. 133 ,
  470-20, Debt with Conversion and Other Options 14-1, Accounting for Convertible Debt Instruments That May Be
    Settled in Cash upon Conversion (Including Partial
    Settlement) ,
  Derivatives and Hedging FAS 133-1 FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees:
    An Amendment of FASB Statement No. 133 and FASB
    Interpretation No. 45; and Clarification of the Effective
    Date of FASB Statement No. 161 , Accounting for Derivative Instruments
    and Hedging Activities,
 119




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Guarantors Accounting and Disclosure Requirements for
    Guarantees, Including Indirect Guarantees of Indebtedness of
    Others,
  Earnings per Share EITF 03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions Are Participating Securities ,
  Transfers and Servicing FAS 140-3, Accounting for Transfers of Financial Assets and Repurchase
    Financing Transactions Accounting for Transfers and Servicing of Financial
    Assets and Extinguishments of Liabilities
  Leases Accounting by
    Lessees for Nonrefundable Maintenance Deposits ,
  Investments  Equity Method and Joint Ventures 08-6, Equity Method Investment Accounting Considerations
  855-10, Subsequent Events Subsequent
    Events
  Debt and Equity Securities FAS 115-2 FAS 124-2, Recognition and Presentation of
    Other-than-Temporary
    Impairments other-than-temporary available-for-sale other-than-temporary
 120




---



##### 



KHD
    HUMBOLDT WEDAG INTERNATIONAL LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  820-10-65-1, Fair Value Measurements and Disclosure FAS 157-2, Effective Date of FASB Statement No. 157 Financial
    Instruments 820-10-65-1.
  Recent
    Accounting Guidance Not Yet Adopted
  Transfers and Accounting for Transfers of Financial Assets, an amendment of
    FASB Statement No. 140
  Amendments to FASB Interpretation No. 46(R Consolidation
    of Variable Interest Entities an interpretation of ARB
    No. 51
  2009-05, Measuring Liabilities at Fair Value No. 157-f, Measuring Liabilities under FASB Statement No. 157 Fair Value Measurements,
  715-20), Defined Benefit Plan Employers Disclosures about Pensions and Other
    Postretirement Benefits
 121




---



##### 



ITEM 18
    Financial
    Statements    ITEM 19
    Exhibits  Exhibits Required
    by
    Form 20-F
  Exhibit Number / Description
  1
.1

Articles of
    Amalgamation.(1)1
.2

By-laws.(1)1
.3

Certificate of
    Continuance(3)1
.4

Notice of
    Articles(3)1
.5

Articles(10)1
.6

Certificate of Change of
    Name(6)1
.7

Vertical Short Form Amalgamation
    Application(7)1
.8

Notice of
    Articles(7)1
.9

Certificate of
    Amalgamation(7)2
.1

Trust Indenture between our company and Computershare Trust
    Company of Canada, dated January 7,
    2004(4)2
.2

Supplemental Indenture between our company and Computershare
    Trust Company of Canada, dated October 27,
    2005.(6)4
.1

Memorandum of Agreement between our company and Wabush Iron Co.
    Limited, Stelco Inc. and Dofasco Inc. dated November 24,
    1987.(2)4
.2

Amendment to Mining Lease between our company and Wabush Iron
    Co. Limited, Stelco Inc. and Dofasco Inc. dated January 1,
    1987.(2)4
.3

First Amendment to Memorandum of Agreement between our company
    and Wabush Iron Co. Limited, Stelco Inc. and Dofasco
    Inc.(2)4
.4

Amended 1997 Stock Option Plan of our
    company.(1)4
.5

Trust Indenture, dated January 7, 2004, between our company and
    Computershare Trust Company of Canada, as Trustee, for the
    issuance of 4.4% Convertible Unsecured Subordinated Bonds
    due December 31,
    2009.(5)4
.6

Variation Agreement dated December 22, 2004 between our company
    and Sutton Park International Limited varying our companys
    interest obligation to Sutton Park International Limited in
    respect of the 4.4% Convertible Unsecured Subordinated Bond
    in the principal amount of 6,786,436, maturing December
    31,
    2009.(5)4
.7

Arrangement Agreement dated September 11, 2006 between our
    company and Cade Struktur
    Corporation.(7)4
.8

Arrangement Agreement dated March 29, 2007 between our company
    and Sasamat Capital Corporation.4
.9

Arrangement Agreement dated February 26, 2010 between our
    company and KHD Humboldt International (Deutschland)
    AG.(8)8
.1

Significant subsidiaries of our company as at March 26, 2010:   122




---



##### 



Name of Wholly-Owned Subsidiary

Jurisdiction of Incorporation or OrganizationKHD Holding AG

SwitzerlandKHD Humboldt Wedag International Holding GmbH

AustriaKHD Humboldt Wedag International GmbH

AustriaHumboldt Wedag Inc.

DelawareHumboldt Wedag India Private Ltd.

IndiaHumboldt Wedag Australia Pty Ltd.

AustraliaKHD Investments Ltd.

Marshall IslandsNew Image Investment Company Limited

WashingtonInverness Enterprises Ltd.

British ColumbiaKHD Humboldt Wedag (Cyprus) Limited

CyprusMFC & KHD International Industries Limited

SamoaKHD Humboldt Wedag (Shanghai) International Industries Limited

ChinaKHD Sales and Marketing Ltd.

Hong KongKHD Humboldt Wedag International, FZE

United Arab EmiratesEKOF Flotation GmbH

GermanyKHD Humboldt Wedag Machinery Equipment (Beijing) Co. Ltd.

ChinaBlake International Limited

British Virgin Islands   Jurisdiction of



OurName of

Incorporation or

Owner

BeneficialNon-Wholly-Owned Subsidiary

Organization

of Interests

ShareholdingKHD Humboldt Wedag International 
    (Deutschland) AG

Germany

KHD Humboldt Wedag
    International Ltd.

98.2%KHD Humboldt Wedag GmbH

Germany

KHD Humboldt Wedag
    International Ltd.

98.2%KHD Humboldt Wedag Industrial
    Services AG

Germany

Blake International Limited

88%Humboldt Wedag GmbH

Germany

KHD Humboldt Wedag
    International
    (Deutschland) AG

98.2%ZAB Zementanlagenbau GmbH Dessau

Germany

KHD Humboldt Wedag GmbH

98.2%HIT Paper Trading GmbH

Austria

Blake International Limited

88%Paper Space GmbH

Germany

Blake International Limited

88%   11
.1

Code of
    Ethics(9)12
.1

Section 302 Certification under Sarbanes-Oxley Act of 2002
    for Jouni
    Salo(10)12
.2

Section 302 Certification under Sarbanes-Oxley Act of 2002
    for Alan
    Hartslief(10)13
.1

Section 906 Certification under Sarbanes-Oxley Act of 2002
    for Jouni
    Salo(10)13
.2

Section 906 Certification under Sarbanes-Oxley Act of 2002
    for Alan
    Hartslief(10)15
.1

Consent of Deloitte & Touche
    LLP.(10)99
.1

Audit Committee
    Charter(6)99
.2

Compensation Committee
    Charter(7)99
.3

Nominating and Corporate Governance
    Charter(7)     (1)
    
    Incorporated by reference from our
    Form 20-Fs
    filed in prior years.(2)
    
    Incorporated by reference from our
    Form 10-K
    for the year ended December 31, 1989.(3)
    
    Incorporated by reference from our
    Form 6-K
    as filed with the Securities and Exchange Commission on
    November 23, 2004.(4)
    
    Incorporated by reference from our
    Form 20-F
    as filed with the Securities and Exchange Commission on
    April 26, 2004. 123




---



##### 



(5)
    
    Incorporated by reference from our
    Form 20-F
    as filed with the Securities and Exchange Commission on
    April 6, 2005.(6)
    
    Incorporated by reference from our
    Form 20-F
    as filed with the Securities and Exchange Commission on
    April 3, 2006.(7)
    
    Incorporated by reference from our
    Form 20-F
    as filed with the Securities and Exchange Commission on
    April 3, 2007.(8)
    
    Incorporated by reference from our
    Form 6-K
    as filed with the Securities and Exchange Commission on
    March 3, 2010.(9)
    
    Incorporated by reference from our
    Form 6-K
    as filed with the Securities and Exchange Commission on
    October 5, 2009.  (10)
    
    Filed herewith. 124




---



##### 



SIGNATURES  Form 20-F
  KHD Humboldt Wedag International Ltd.
  
  
    
  
   125