Annual Report 2009/2010 Geschäftsbericht 2009/2010 ... - biolitec AG

52 Management Report Konzernlagebericht
Liquidity risks and risks from cash flow fluctuations
The risk of a short-term liquidity shortage is observed by the management via liquidity monitoring.
Therefore, the maturity of financial assets, especially accounts receivable and accounts payable as well
as the expected operating cash flow are considered.
Due to the momentary available liquidity together with the projected medium-term capital requirements
the Executive Board sees no risks. There is a general risk of cash flow fluctuations, especially in
cases of unexpected outcomes of legal disputes or due to unexpected negative changes on key markets.
However, the Executive Board is convinced that even in such cases the disposable financial assets
are sufficient to counter-balance such cash flow fluctuations and therefore sees no further risks.
Investment risks
Some of the subsidiaries’ existence is dependent on financing by the parent company or other subsidiaries.
Especially the distribution company in the USA is refinanced this way. The net lendings/net borrowings
of the group’s companies value in different currencies – often not even in functional currencies
– and therefore a risk of currency conversions can be observed.
A disclosure on the group’s legal risks can be found in the notes’ section “Process and Legal risks.”
Anticipated company development
Taking into account the aforementioned projected chances and risks, a positive business performance
can be expected during the next two years. This evaluation is made under the premise that the market
penetration of biolitec’s products can be increased through intensified distribution activities, the production
related processes are optimized according to the developing technological standard as well as
no unexpected legal disputes arise.
Explanatory Report by the Executive Board on the pursuant to
§§ 289 V, 315 II No. 5 of the German Commercial Code (HGB)
Legal Background
The Accounting Law Reform Act (BilMoG) enacted 29 May 2009 amended §§289, 315 of the German
Commercial Code (Handelsgesetzbuch, HGB) and §§120, 175 German Stock Corporation Act
(Aktiengesetz,AktG). Pursuant to the Reform Act, the Executive Board must present a written report to
shareholders at the Annual General Meeting on matters including the new disclosure requirements in
the management report per §289 V HGB and in the Group management report per §315 II No. 5 HGB
regarding the internal control and risk management system in place for the accounting and consolidated
accounting process.
In the later German Act Implementing the Shareholders’ Rights Directive (Gesetz zur Umsetzung der
Aktionärsrichtlinie – ARUG) legislators bundled requirements for providing explanatory reports under §
176 I Sentence 1 AktG and eliminated the previous regulations under §120 III Sentence 2 and §175 II
Sentence 1 AktG. The reference to §289 V HGB added by BilMoG and the management report disclosures
on the internal control and risk management system in place for the accounting and consolidated
accounting process were not incorporated. On the other hand, the German Department of Justice