The cash flow statement is prepared according to the indirect method starting with operating profit for the year and showing the Chr. Hansen Group’s cash flow from operating activities, investing and financing activities as well as cash and cash equivalents at the beginning and end of the year.

Cash flow from operating activities is stated as operating profit for the year adjusted for non-cash operating items and change in working capital. Working capital includes inventories, receivables, trade payables and other liabilities relating to operations.

Cash flow from investing activities includes purchases and sales of intangible assets, property, plant and equipment and other investments and payments in connection with acquisitions and divestments of companies and activities.

Cash flow from financing activities includes capital increases, dividends paid, and raising and repayment of long-term and short-term debt not included in working capital.

Cash assets comprise cash, bank balances, and highly liquid bonds.

Segment information comprises business segments and geographical segments. The segment information complies with the Chr. Hansen Group’s accounting policies and with the internal financial management.

The business segment is the Chr. Hansen Group’s primary segment, while the geographical segment is secondary.

The key ratios have been calculated in accordance with ”Recommendations and Ratios 2005” issued by the Danish Society of Financial Analysts.

Key figures and definitions of the ratios are stated on the flaps of the cover of this annual report.

Changes in accounting policies over the past five years
As from 2001/02 mortgage loans are recognized at amortized cost, while proposed dividend is recognized as a separate line item under equity. Changes in the value of derivative financial instruments classified as hedging instruments for future transactions are recognized directly in equity until realization of the hedged item.