21 Notes on the Cash Flow Statement

The cash flow from operating activity is calculated using the indirect method. The indirect calculation adjusts the relevant changes in balance sheet items to remove any exchange rate effects and/or changes in the scope of consolidation. This means that the changes to the relevant balance sheet items cannot be reconciled with the corresponding values based on the published consolidated balance sheets.

The changes in the payments made and received in advance encompass transactions with both third parties and associated companies. The cash flow from investment activity shows the actual outflow of funds; so these figures also cannot be reconciled with the additions in fixed assets in the consolidated balance sheet. If subsidiaries or business activities are acquired or sold, the influences ensuing from these transactions are shown as separate items in the cash flow statement. Financial investment in current securities falling due in more than three months is reported separately under cash flow from investing activity, as these transactions must rather be attributed to the cash and cash equivalents in economic terms. The Group is financed mainly by bank loans granted in the form of loan commitments. Within the defined approval limits for loan commitments, our utilization of credit may be subject to considerable fluctuations both within a year and over several years.

The raising and repayment of loans in foreign currencies are translated at the exchange rate prevailing at the time of the transaction, with the result that here too, a reconciliation of the entire inflows and outflows for changing the financial liabilities in the balance sheet is not possible.

For more details on the composition of cash and cash equivalents. See Note 11