Messer Group Financial Statementsannualreport2010.messergroup.com/_media/pdf/Financial_Statement…1 Consolidated Balance Sheet of Messer Group GmbH, Sulzbach/Taunus, as at December

2010Messer Group Financial Statements

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Consolidated Balance Sheet of Messer Group GmbH, Sulzbach/Taunus, as at December 31, 2010 (in K€)

Notes Dec. 31, 2010 Dec. 31, 2009

A S S E T S Intangible assets 11 479,087 497,561 Property, plant and equipment 12 905,081 847,242 Investments accounted for using the equity method 13 13,924 10,451

Investments in other companies and financial investments 14, 15 12,418 6,065

Deferred tax assets 10 10,506 13,729 Other non-current receivables and assets 16 54,885 49,264

Non-current assets 1,475,901 1,424,312 Inventories 17 84,040 44,354 Trade receivables 18 166,155 145,299 Assets held for sale 19 6,941 1,255 Income tax assets 2,765 3,360 Other receivables and other assets 20 34,813 40,603 Cash and cash equivalents 21 101,762 81,257

Current assets 396,476 316,128

Total assets 1,872,377 1,740,440

E Q U I T Y A N D L I A B I L I T I E S

Share capital and additional paid-in capital 671,855 669,855 Other reserves 5,905 5,905 Retained earnings 199,680 181,546 Profit after income taxes 30,066 22,634 Fair value reserve 4,223 3,015 Currency translation reserve 24,156 (5,865)

Equity attributable to shareholders of the parent company

935,885 877,090

Minority interests 27 127,071 96,145

Equity 27 1,062,956 973,235 Provisions for employee benefits 22 19,711 18,465 Other provisions 23 12,766 14,750 Non-current financial debt 24 421,372 364,394 Deferred tax liabilities 10 44,204 42,484 Other non-current liabilities 25 7,458 13,971

Non-current liabilities 505,511 454,064 Other provisions 23 20,575 16,592 Current financial debt 24 56,454 63,905 Trade payables 127,354 134,947 Income tax liabilities 6,763 3,484 Other current liabilities 26 91,377 94,213

Liabilities held for sale 19 1,387 —-

Current liabilities 303,910 313,141

Total equity and liabilities 1,872,377 1,740,440

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Consolidated Income Statement of Messer Group GmbH, Sulzbach/Taunus, for the Year Ended December 31, 2010 (in K€)

Notes

Jan. 1- Dec. 31, 2010

Jan. 1- Dec. 31, 2009

(restated)

Net sales 5 909,020 796,749

Cost of sales (479,605) (417,392)

Gross profit 429,415 379,357

Distribution and selling costs (252,086) (241,620)

General and administrative costs (83,463) (73,521)

Other operating income 6 21,527 16,434

Other operating expenses 7 (6,099) (6,072)

Impairment losses on goodwill 11 (22,435) (5,200)

Operating profit 86,859 69,378

Result from equity method investments 13 2,333 1,657

Other investment results, net (53) (129)

Interest income 8 2,160 2,353

Interest expense 8 (20,195) (21,327)

Other financial result, net 9 2,340 (7,611)

Financial result, net (13,415) (25,057)

Profit before income taxes 73,444 44,321

Income taxes 10 (24,504) (8,138)

Profit after income taxes 48,940 36,183

of which attributable to:

shareholders of the parent company 30,066 22,634

minority interests 18,874 13,549

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Messer Group GmbH, Sulzbach/Taunus Statement of Income and Expenses recognized directly in Equity (in K€)

Jan. 1- Dec. 31,

2010 Jan. 1- Dec. 31,

2009 Profit after Income Taxes 48,940 36,183

Translation adjustments relating to foreign subsidiaries 36,631 (12,950)

Change arising from the fair value measurement of hedging instruments used to hedge interest rate and currency risks related to the US Private Placement

1,871 (14,095)

Deferred taxes (576) 4,470

Change arising from the fair value measurement of a hedging instrument in an equity method investment (83) (177)

Unrealized (losses)/gains on available-for-sale financial assets (4) 24

Income and expenses recognized directly in equity 37,839 (22,728)

Total income and expenses recognized in equity 86,779 13,455

Of which attributable to

shareholders of the parent company 61,295 1,829

minority interests 25,484 11,626

For further details regarding equity, see Note 27 of the Notes to the Consolidated Financial Statements.

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Analysis of changes in equity for the Year Ended December 31, 2010 (in K€)

Share capital

Additi- onal paid- in capital

Other reserves

Retained earning/ Profit after income taxes

Accumulated income and expenses rec-ognized di-rectly in equity

Equity attribut-able to the shareholders of the parent company

Minority interests

Total equity

Balance at January 1, 2009 100,000

567,305 5,905 181,546 17,955 872,711 80,333 953,044

Total compre-hensive income — — — 22,634 (20,805) 1,829 11,626 13,455 Transfers to/from reserves — — — — — — — — Dividends paid — — — — — — (5,407) (5,407) Share capital increases / addition to minority interests — 2,550 — — — 2,550 9,849 12,399 Share capital reduction / decrease to minority interests — — — — — — (256) (256) Balanced at December 31, 2009 100,000

569,855 5,905 204,180 (2,850) 877,090 96,145 973,235

Total compre-hensive income — — — 30,066 31,229 61,295 25,484 86,779 Transfers to/from reserves — — — — — — — — Dividends paid

— — — (4,500) — (4,500) (10,979

) (15,479) Share capital increases / addition to minority interests — 2,000 — — — 2,000 16,433 18,433 Share capital reduction / decrease to minority interests — — — — — — (12) (12) Balanced at December 31, 2010 100,000

571,855 5,905 229,746 28,379 935,885

127,071

1,062,956

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Consolidated Cash Flow Statement of Messer Group GmbH, Sulzbach/Taunus, for the financial year 2010 (in K€)

An-hang

Jan. 1- Dec. 31, 2010

Jan. 1- Dec. 31, 2009

(restated) Profit before income taxes 73,444 44,321Income taxes paid (16,685) (10,854)Depreciation and amortization of property, plant and equipment and intangible assets

11,12 120,065 97,948

Impairment losses on non-current financial assets — 15Other non-cash income (5,015) (1,555)Changes in investments in equity method investments 13 (2,333) (2,795)Interest result, net 18,006 17,578Other non-cash financial result (2,340) 7,108Changes in assets resulting from finance lease arrangements (30,965) (43,836)Changes in inventories (10,897) (2,063)Changes in receivables and other assets 350 4,563Changes in provisions 3,468 738

Changes in trade payables and other liabilities (3,686) 27,857Cash flow from operating activities 143,412 139,025Purchase of property, plant and equipment and intangible assets (122,994) (165,157)Purchase of investments and other non-current assets (6,773) (439)Acquisition of subsidiaries (9,072) (218)Acquisition of shares of other shareholders — (211)Proceeds from disposals of property, plant and equipment and intangible assets 7,641 4,708Proceeds from disposals of investments and loans 33 18,422Interest and similar income 2,163 2,353Cash flow from investing activities (129,002) (140,542)Changes in capital by shareholders of the parent company 27 (2,500) —Proceeds from non-current financial debt 48,002 100,384Proceeds from current financial debt 6,926 —Repayment of non-current financial debt (12,574) (58,354)Repayment of current financial debt (22,406) (2,318)Dividends paid to minority shareholders (10,979) (5,407)Contributions by minority shareholders 16,433 10,020Interest and similar expenses paid (20,265) (19,235)Other financial result, net (368) (7,470)Cash flow from financing activities 2,269 17,620

Changes in cash and cash equivalents 16,679 16,103

Cash and cash equivalents

at the beginning of the period 81,257 65,863

Exchange rate impact on cash and cash equivalents 4,501 (709)

Cash and cash equivalents classified as held for sale (675) —

at the end of the period 101,762 81,257

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Notes to the Consolidated Financial Statements of Messer Group GmbH, Sulzbach/Taunus, for the Financial Year 2010 1. General information Messer Group GmbH (the “Company”) is a holding company with its registered office situated at Otto-Volger-Str. 3c, 65843 Sulzbach/Taunus, Germany. The Messer Group (“Messer Group” or “Group”) manufactures and markets industrial gases (in particular oxygen, nitrogen, argon, helium, carbon dioxide, hydrogen and specialty gases), gas application processes and customer-site gas systems (so-called on-site facilities). The main customers of the Messer Group include major enterprises in the manufacturing, chemical, steel-production, pharmaceutical and food processing industries and the waste disposal sector. At December 31, 2010, Messer Industrie GmbH (“Messer Industrie“), in which the Messer family has bundled its industrial gases activities, is the sole shareholder of Messer Group GmbH via its investment in Messer Holding GmbH and that company’s wholly-owned subsidiary, Messer Griesheim Vierte Vermögensverwaltungs GmbH. Messer Industrie is the ultimate group parent company and is required to prepare consolidated financial statements. Messer Group GmbH therefore prepares sub-consolidated financial statements. The requirements of § 315 a (3) HGB relating to the preparation of the consolidated financial statements of Messer Group GmbH in accordance with International Financial Reporting Standards (“IFRS”) have been met. The year-end reporting date of Messer Group GmbH and its consolidated subsidiaries is 31 December of each respective year. The only exception is Messer Produktionsgesellschaft mbH Salzgitter, which has an August 31 year-end. The consolidated financial statements for the financial year 2010 were approved for issue on March 9, 2011 in accordance with a resolution of the Company’s Executive Management. Messer GasPack GmbH and Messer Industriegase GmbH, Messer Produktionsgesellschaft mbH Salzgitter and Messer Produktionsgesellschaft mbH Siegen, all fully consolidated German subsidiaries, fulfill the conditions stipulated by § 264 (3) HGB and are therefore exempted from publishing annual financial statements. 2. Accounting principles and policies Basis of preparation The consolidated financial statements have been drawn up in Euros. Unless otherwise stated, all amounts are rounded to thousands (K€). Differences may arise due to rounding. Statement of compliance with IFRS The 2010 consolidated financial statements have been drawn up in accordance with International Financial Reporting Standards (IFRS) and the Interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC), such as those Standards and Interpretations apply in the EU. The accounting principles and polices used in the 2010 consolidated financial statements have been applied consistently.

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New financial reporting rules The following new or revised Standards and Interpretations were mandatory for the first time in the consolidated financial statements for the year-ended December 31, 2010:

- Amendments to IFRS 1 (revised January 1, 2010) First-time Adoption of International Financial Reporting Standards which give a new structure to the Standard

- IFRS 3 (revised 2008) Business Combinations and IAS 27 Consolidated and Separate Financial Statements (revised 2008)

- Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards under the title “Additional Exceptions for First-time Adopters”

- Amendments to IFRS 2 Share-based Payment under the title “Group Cash-settled Share-based Payment Transactions”

- Amendments to IAS 39 Financial instruments: Recognition and Measurement under the title “Eligible Hedged Items in Conjunction with Hedging Relationships”

- IFRIC 12 Service Concession Arrangements - IFRIC 15 Agreements for the Construction of Real Estate - IFRIC 16 Hedges of a Net Investment in a Foreign Operation - IFRIC 17 Distributions of Non-cash Assets to Owners - IFRIC 18 Transfers of Assets from Customers - First Annual Collection of Amendments to IFRS“ (2008) -- Amendments to IFRS 5 Non-current

Assets Held for Sale and Discontinued Operations - Second Annual Collection of Amendments to IFRS (2009).

The application of these Standards und Interpretations did not have a significant impact on the presentation of the Group’s net assets, financial and earnings position. The amendments to Standards, Interpretation and amendment to an Interpretation shown below were not mandatory for the Consolidated Financial Statements for the year ended December 31, 2010 and were therefore not applied; they are mandatory from the beginning of the financial year 2011:

- IAS 24 Related Party Disclosures (revised 2009) - Amendments to IAS 32 Financial instruments: Presentation under the title “Classification of

Rights Issues” - Amendments to IFRS 1 under the title “Limited Exemption from Comparative IFRS 7 Disclosures

for First-time Adopters” - IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments - IFRIC 14 Prepayments of a Minimum Funding Requirement

Alongside the Standards and Interpretations stated above, the IASB and IFRIC published the following new or amended Standards and Interpretations which have not yet been endorsed by the EU and which were therefore not applied in the consolidated financial statements for the year-ended December 31, 2010:

- IFRS 9 Financial instruments - Amendments to IFRS 1 under the title “Severe Hyperinflation with Amendments IFRS-First-time

Adopters” (IFRS 1), whose functional currency at the date of adoption of IFRS is deemed to be hyperinflationary.

- Amendments to IFRS 7 – Disclosures – Transfers of Financial Assets - Amendments to IAS 12 under the title “Deferred Tax Assets on Investment Property” - Annual Collection of Amendments to IFRS (2010).

The Group does not currently expect that application of these Standards and Interpretations will have a significant impact on the consolidated financial statements with the exception of the amendments to IFRS 9 which could have an impact on classification and measurement of financial assets. Messer Group GmbH does not plan to apply this Standard early and the potential impact has therefore not yet been determined.

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Consolidation principles A full list of investments is published in the electronic version of the German Federal Gazette. The principal subsidiaries at December 31, 2010 were:

Name and registered office of subsidiary Country Shareholding

in %

Messer France S.A.S., Puteaux Cedex France 100 %Hunan Xianggang Messer Gas Products Co., Ltd., Xiangtan City, Hunan Province China 55 %Sichuan Pangang Messer Gas Products Co., Ltd., Sichuan Province China 60 %Messer Polska Sp.z o.o., Chorzów Poland 99.53 %Messer Tehnogas AD, Belgrad Serbia 81.94 %Messer Hungarogáz Kft., Budapest Hungary 100 %Messer Ibérica de Gases S.A., Vila-Seca, Tarragona Spain 100 %Messer Belgium N.V., Zwijndrecht Belgium 99.77 %Messer Technogas s.r.o., Prag Czech Republic 100 %Messer Austria GmbH, Gumpoldskirchen Austria 100 %Messer Schweiz AG, Lenzburg Switzerland 100 %Messer Tatragas spol.s.r.o., Bratislava Slovakia 100 %Messer Industriegase GmbH, Sulzbach Germany 100 %Foshan MS Messer Gas Co., Ltd., Gaoxin District Foshan Guangdong Province China 85 %Messer Italia S.p.A., Settimo Torinese Italy 100 %Messer Croatia Plin d.o.o., Zapresic Croatia 99.96 %

The consolidated financial statements comprise the financial statements of Messer Group GmbH and its subsidiaries as at December 31. Interim financial statements were drawn up at December 31, 2010 for the one subsidiary with a differing accounting year-end (August 31, 2010). The financial statements of subsidiaries are therefore all drawn up to the same balance sheet date and using the same accounting policies as applied by the parent company. The consolidated financial statements at December 31, 2010 include Messer Group GmbH and those of its subsidiaries controlled, directly or indirectly, by Messer Group GmbH. An entity is deemed to be controlled when Messer Group GmbH holds more than one half of its voting power or has the power to direct the financial and operating policies of the entity concerned to gain benefits from its activities. In determining whether the Group has control over another entity, potential voting rights are taken into consideration where those rights can be exercised at the present time or which can be converted at a later date, such as where mutual call/put options are in place which make it highly probable that that the corresponding interests will be acquired. The financial statements of the relevant entities are included in the consolidated financial statements from the date on which control is gained and until the date on which control ceases. Investments in entities over which the Group has a significant influence, or which are jointly controlled, are accounted for, either as a result of mandatory rules or on the basis of an accounting option, using the equity method (associated companies or joint ventures). Significant influence is presumed when the Group holds 20 % or more of the voting rights but does not control the entity. The Group’s share of such entities is included in the line item “Income from equity method investments“. The carrying amount of equity method investments is written down if their value is impaired on a lasting basis. Where a Group entity transacts with an associated company of the Group, unrealized profits and losses are eliminated to the extent of the Group's interest in the relevant associated company. Intragroup receivables and payables, sales, income and expenses are eliminated on consolidation. Intra group sales of goods or services are transacted on the basis of full cost transfer prices. Other intangible assets The difference between the cost to the Group of acquired entities and the fair values of the identifiable assets and liabilities as well as contingent liabilities acquired is recognized in accordance with IFRS 3.36. Goodwill, the residual amount arising from the above procedure, is tested for impairment at least once a

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year in accordance with IAS 36. An excess of the net fair value over the costs for the identifiable assets acquired, liabilities assumed and contingent liabilities is recognized – after reassessment – in profit or loss. The results of subsidiaries acquired or disposed in the course of a financial year are included in the consolidated income statement as of the date on which control is acquired or up to the effective date of disposal. Other intangible assets such as brands, patents, licenses, customer bases, software, etc. are measured on initial recognition at cost. Patents, licenses, customer lists and software, etc. are amortized on a straight-line basis over expected useful lives of 3 to 20 years. The amortization expense on other intangible assets is included within the related expense line item, usually cost of sales or distribution and selling expenses. The brand-names “Messer” and “ASCO” are well-established in the markets in which the Group operates and will continue to be promoted. For this reason, it is therefore considered that the brand-names “Messer” and “ASCO” have indefinite useful lives. An impairment test is carried out at least once a year in accordance with IAS 36 to determine whether these brand-names have been impaired. Impairment losses are presented in the income statement on the line “Impairment losses on intangible assets and property, plant and equipment”. Property, plant and equipment Property, plant and equipment are recognized initially at acquisition or manufacturing cost and depreci-ated over their estimated useful lives. The manufacturing costs of self-constructed assets include all di-rectly attributable costs and an appropriate portion of overheads, including depreciation, and are therefore measured taking account of all cost components required to construct the assets. Borrowing costs are recognized as expense in the period in which they are incurred, unless they are directly attributable to a qualifying asset. In the event that there is a statutory requirement to restore an item to its original condi-tion, cost also includes the present value of future expected payments for disassembly and recultivation. In the case of major inspections, costs which satisfy the relevant recognition requirements are included in the carrying amount of the item of property, plant and equipment as a replacement in accordance with IAS 16.14. Repair costs are recognized as expense as incurred. On disposal of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount is recognized as a gain or loss in the income statement. Scheduled depreciation is computed using the straight-line method over the following useful lives: Buildings 10 - 50 years Plant and machinery 5 - 20 years thereof Air separation units 15 years

Other equipment, fixtures and fitting 3 - 10 years Items leased under the terms of long-term agreements or other arrangements which transfer substantially all of the risks and rewards incidental to ownership to the Group, are recognized as assets and measured at the lower of the fair value of the assets or the present value of the lease payments during the lease term. The corresponding obligation is recorded as a liability. Leased assets are depreciated on a straight-line basis over their estimated useful lives or, if shorter, over the lease term. Impairment losses on intangible assets and property, plant and equipment An impairment test for goodwill, other intangible assets and property, plant and equipment involves comparing the recoverable amount of the asset with its carrying amount in order to determine whether an impairment loss needs to be recognized. In accordance with IAS 36, goodwill is allocated to smallest of cash-generating unit for which goodwill is monitored by management. The recoverable amount is defined as the higher of the asset’s fair value less costs to sell and its value in use. Value in use corresponds to the present value of future cash flows which the Group expects to generate from using the asset and from its disposal at the end of its useful life. In case of impairment losses the carrying amount of any goodwill is reduced first. If the amount of impairment losses exceeds the carrying amount of goodwill, the difference is generally allocated proportionally to the remaining non-current assets to reduce their carrying amount accordingly. Impairment losses on assets (excluding goodwill) are reversed when the reasons for impairment no longer exist. In this case the assets are written back up to their amortized cost.

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Investments in other companies and financial investments Investments are classified in accordance with IAS 39 to the category “Available-for-sale financial assets”. Since this relates to non-listed shares for which there is no active market, the fair value of such investments cannot be measured reliably. They are therefore measured at cost, where appropriate reduced by impairment losses. Other financial investments classified as "Loans and receivables" are measured at their fair value if they are non-interest bearing and have a maturity of less than one year. Impairment losses are recog-nized in the event that a payment disruption is identified at the balance sheet date. In the case of items with a maturity in excess of one year and which are non-interest bearing, the nominal amount is dis-counted using market interest rates appropriate for matching periods. In subsequent periods, the carrying amount is increased using the effective interest method and the reversal of the write-down is recognized as income. Other financial investments which are classified to the category “Held-to-maturity investments” are measured at their amortized cost, where appropriate reduced by impairment losses. An impairment test is performed for all equity and other financial investments if there is an indication that an asset is impaired. Impairment losses are recognized as an expense. If the reasons for the impairment losses no longer exist, those losses are reversed. In this case, the reversal may not result in an asset being stated at a level higher than its amortized cost. Inventories Inventories are stated at the lower of cost (acquisition or manufacturing cost) or net realizable value at the balance sheet date, using the average cost method. Manufacturing cost includes all directly attributable costs and an appropriate portion of material and production overheads, including depreciation. Trade and other receivables Trade and other receivables are measured on initial recognition at their fair value. Appropriate allowances are recognized to cover significant specific risks. In addition, flat-rate specific allowances are also recognized. Receivables are written off as soon as they are deemed to be uncollectible. Cash and cash equivalents Cash and cash equivalents include all cash balances and demand deposits, as well as short-term liquid financial investments which can be readily converted to cash. Provisions for employee benefits The net obligations for defined pension benefit plans are computed separately for each plan, with future pension benefits being estimated on the basis of employees’ service in current and past periods. The fair value of plan assets meeting the criteria for plan assets set out in IAS 19.7 is offset against the present value of the obligation. The present value of the obligation is measured by actuaries using the projected unit credit method. When the benefits offered by a plan are improved, the proportion relating to employees’ past service is recognized as expense in profit or loss over the average period up to the date on which the benefits vest. To the extent that entitlements vest immediately on introduction of a plan or on a change to an exiting pension plan, the past service is recognized immediately as expense. For the purposes of measuring the obligation, cumulative actuarial gains or losses which exceed 10 % of the higher of the present value of the defined benefit obligation or the present value of plan assets are recognized in profit or loss over the average remaining period of service of the employees covered by the relevant plan. Otherwise, actuarial gains or losses are not recognized (corridor approach). Amounts are not recognized until the following year. Obligations for end-of-employment compensation and for early retirement benefits are measured on the basis of actuarial computations, taking into account the interest rates and salary trends applicable in each of the countries concerned.

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Obligations for defined contribution pension plans are recognized in the income statement in the relevant period. Other provisions Provisions are recognized when a present obligation as a result of a past event exists which will result in a probable outflow of economic benefits that can be reasonably estimated. Where the time value of money is material, provisions are discounted using a pre-tax rate that reflects, where relevant, the specific risks of the liability. Where a provision is discounted, any increase due to the unwinding of the interest over time is recognized as interest expense. Financial debt Financial debt is measured at amortized cost. Transaction costs are capitalized and amortized over the term of the underlying liability using the effective interest method. The fair value option is not applied for financial debt. Trade payables and other liabilities Trade payables and other liabilities are stated at amortized cost considering the effective interest method. Public sector grants Public sector grants are recognized when there is reasonable assurance that the conditions attaching to them have been complied with and the grants will be received. Expense-dependent grants are recognized systematically as income over the period necessary to match them with the related costs. If the grant relates to an asset, it is recognized as deferred income and recognized as income on a straight-line basis over the expected useful life of the asset. Management of financial risks and derivative financial instruments In conjunction with its operating activities, the Messer Group is exposed to a number of financial risks, in particular the effect of exchange rate and interest rate changes. The risk management system considers primarily the unpredictability of the financial markets and aims at minimizing the potential negative impact on the net financial result. In general risk management is handled by Group Treasury in compliance with guidelines approved by the Executive Management. Group Treasury identifies, measures and hedges financial risks. The guidelines contain the general principles applicable for risk management and the detailed rules for specific areas, such as exchange and interest rate risks, the use of derivative financial instruments and the investment of surplus cash. Derivative instruments are only used when underlying transactions (also referred to as “hedged items”) require to be hedged. Hedged items are defined as obligations entered into on a contractual basis neces-sary to achieve Messer Group’s objectives. Derivative instruments are therefore only used to safeguard Messer Group’s business success up to limits fixed in the Company’s statutes. Macro-hedging (i. e. aggregating individual items and hedging only the net amount) is not applied. Most of the transactions for which this type of hedging could be applied are hedged in full in terms of scope or amount, using a variety of financial instruments. The selection of a specific instrument is always determined by the Executive Management taking account of the specific risk profile i. e. the potential re-turns associated with each risk. Income and operating cash flows are, to a large extent, unrelated to market interest rates, since the Group does not hold any significant interest-bearing assets. Loans or credits subject to variable interest rates are hedged partly with the aid of interest rate swaps (cash flow hedges of future interest payments). Under these arrangements, loans with variable interest rates are converted in substance to

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ones with fixed or maximum rates. In conjunction with the interest rate swaps, the difference between the fixed interest rate for a pre-determined period and the variable interest rate is settled at specified intervals (computed by reference to an agreed amount). On acquisition, derivative financial instruments are recognized in the balance sheet, measured at cost, and subsequent to initial recognition, at fair value. The treatment of gains and losses resulting from derivative financial instruments depends on the nature of the hedged item. Each derivative contract is designated on acquisition as either (1) a hedge of the estimated recoverable amount of a recognized asset or liability (a fair value hedge) or (2) the hedge of a forecast transaction or firm commitment (a cash flow hedge). Changes in the fair value of derivatives which are designated as fair value hedges, and which are highly congruent with changes in the value of the underlying transaction, are recognized directly in the income statement together with any changes in the fair value of the hedged assets or liabilities. Changes in the fair value of derivatives which are designated as cash flow hedges and which are highly congruent with the value of the underlying transaction, are recognized directly in equity. When the forecast transaction or firm commitment results in the recognition of an asset or liability, then the gains and losses previously recognized in equity are removed from equity and taken into account in the measurement of the cost of the asset or liability. In all other cases, the gains or losses previously recognized in equity are transferred to net profit or loss in the same period as that in which the hedged forecast transaction or firm commitment impacts the income statement. Hedge accounting is only applied if effectiveness (range of 80 – 125 %) can be demonstrated. At December 31, 2010, only cash flow and fair value hedges were in place. Certain financial derivatives provide an effective economic hedge for risk management purposes, but do not meet the criteria for hedge accounting specified by IAS 39. Changes in the fair values of financial derivatives which do not meet the criteria for hedge accounting in accordance with IAS 39 are recognized directly in profit or loss (Other financial result, net). When a hedging instrument expires or is sold, or when a hedging instrument no longer meets the criteria for hedge accounting in accordance with IAS 39, any cumulative gains or losses recognized up to that date in equity remain there and are not removed from equity until the forecast transaction or firm commitment is recognized in profit or loss. However, cumulative gains and losses previously recognized directly in equity are recognized as income or expense when it is no longer expected that the forecast transaction or firm commitment will occur. Deferred taxes Deferred taxes are recognized, in accordance with the balance sheet-based liability method, on temporary differences between the carrying amounts of assets and liabilities for group accounting purposes and their corresponding tax bases, and on tax losses available for carryforward. In accordance with IAS 12.15 (in conjunction with IAS 12.21B) temporary differences relating to the first-time recognition of goodwill are not taken into account in the computation of deferred taxes. Deferred taxes are measured using currently enacted or substantially enacted tax rates which will apply when the timing differences are expected to reverse. Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which the unused tax losses can be utilized and/or can be offset against taxable differences between the carrying amounts of assets and liabilities for accounting purposes and their corresponding tax bases. Deferred tax assets and liabilities are only offset if they relate to taxes imposed within the same tax jurisdiction and the entity has a legal right to offset the tax assets and liabilities. Income taxes relating to items that are recognized directly in equity are also recognized directly in equity and not in profit or loss. Deferred taxes are recognized directly in equity if the underlying item or transaction is also recognized directly in equity.

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Revenue recognition a On-site sales and pipeline sales Customers requiring large volumes of industrial gases (typically oxygen, nitrogen, and hydrogen) and with a relatively constant demand are usually supplied by plants adjacent to or on their facilities. The capacities of these plants also, as a general rule, cover the liquid-gas requirements of the surrounding market. The Messer Group owns and maintains these plants. The product supply contracts usually run for 10 to 15 years and include minimum take-or-pay purchase requirements or prices and price escalation clauses. Revenue is recognized when the gas is delivered to the customer, which corresponds to the date of transfer of risk and passage of title of the industrial gases. If the customer does not take delivery of the minimum purchase requirements, the additional revenue is recorded generally up to the contractual minimum. Similar terms and financial accounting treatment usually apply with regard to sales made via pipelines, the only difference being that, in this case, several customers are supplied via one pipe-line. In accordance with IFRIC 4 certain gas supply contracts – in particular those that involve gas production plants rented on a long-term basis (so-called “on-site plants”) – are required to be evaluated in accordance with IAS 17 to identify whether they constitute a finance lease and, if so, to be classified as such. In the event that the arrangements constitute a finance lease pursuant to IAS 17, it is assumed that the asset has been sold at the inception of the lease arrangements and revenues are recognized equivalent to the present value of the minimum lease payments attributable to the asset. b Liquid gas bulk supply sales Bulk supplies are usually stored in tanks which are owned by Messer and leased to customers on their own premises. The gases are delivered to customers in tankers, tube trailers or rail cars from which the gases are transferred to the leased-out tanks. The agreements used in the bulk supply business typically have a two to three year term. Revenue is recognized on bulk supply sales once the gases have been transferred to the tank. Income from the rental of tanks is recognized according to the terms of the lease agreements. c Cylinder sales Customers requiring small volumes of gases (including most specialty gases) are supplied products in cylinders, which the Group typically owns and leases to the customer. Cylinder gases are generally sold by individual purchase orders or by contracts, with terms ranging between one and two years in Europe. Revenue is recognized when the cylinders are delivered to the customer. Income on the rental of cylinders is recognized according to the terms of the lease agreements. Selling costs Distribution and selling costs include all expenses which are related to the sale and marketing of a product. This primarily includes expenses for the sales department, representatives' commissions, packaging and delivery, freight, transportation insurance, insurance coverage for receivables, bank fees for exports, advertising (related to products), technical advice for customers, samples and exhibitions. Use of assumptions and estimates The preparation of financial statements in conformity with IFRS requires management to make certain estimates and assumptions which affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date, and the reported amounts of revenues and expenses for the reporting period. Principal estimates required to be made in preparing the financial statements include those related to the measurement of deferred tax assets and the pension provision. The nature of the assets and liabilities involved as well as their carrying amounts at the balance sheet date are disclosed in the relevant note on those items. Further estimates are made to calculate allowances and write-downs on receivables and inventories and to measure other provisions. The recognition of provisions also requires the use of assumptions.

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In addition, the allocation of goodwill to the various cash-generating units and the performance of the impairment test on the basis of expected future cash flows of these cash-generating units over the detailed forecast period of 5 years are subject to estimates made at a group level. For further information regarding the carrying amount of goodwill, see Note 11. Actual results could differ from those estimates. Foreign currency translation The consolidated financial statements are prepared in Euro, the Group’s presentation currency. Each entity within the Group determines its own functional currency. The items included on the financial statements of each entity are measured on the basis of this functional currency. Foreign currency transactions are translated initially using the spot exchange rate, applicable at the date of the transaction, between the functional currency and the foreign currency. Monetary assets and liabilities denominated in a foreign currency are translated into the functional currency at the closing rate. All exchange differences are recognized in profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value was determined. The functional currency of all group entities not based within the European Currency Area (ECU) area is the relevant local currency in each country. At the balance sheet date, assets and liabilities of these subsidiaries are translated at the balance sheet date into Messer Group’s presentation currency. The resulting exchange differences are recognized as a separate component of equity and therefore have no impact on profit or loss for the year. On the disposal of a foreign operation, the cumulative amount of the exchange differences recognized directly in equity relating to that foreign operation is recognized in profit or loss when the gain or loss on disposal is recognized. Exchange gains and loss on foreign currency trade accounts receivable and payable are included in the line items "Other operating income" and "Other operating expenses". The following summary shows the exchange rate development of the main functional currencies which are of particular importance of the Messer Group: Closing rates Average exchange rates Selected currencies ISO code Dec. 31,

2010 Dec. 31,

2009 Jan. 1– Dec. 31,

2010 Jan. 1– Dec. 31,

2009 1 € 1 € 1 € 1 €

Polish zloty PLN 3.97 4.13 4.00 4.33Chinese renminbi CNY 8.77 9.76 9.00 9.51Hungary forint HUF 279.53 272.70 276.08 279.58Serbian dinar RSD 105.47 96.15 103.06 93.79Czech crowns CZK 25.18 26.41 25.38 26.48

15

3. Restatement of prior year figures – more appropriate presentation of the Group’s

financial position, financial performance and cash flows

The presentation of items in the financial statements and the amounts reported for prior years are only permitted to be changed when this is required by a new or amended accounting rule, or results in a the financial statements providing more reliable and relevant information about the entity’s net assets, financial and earnings situation (IAS 8.14 in conjunction with IAS 8.22). A change was made in the financial year 2010 with a view to providing more reliable and more relevant information about the entity’s net assets, financial and earnings situation. Solely on the basis of the requirement contained in IFRC 4 in conjunction with IAS 17, the Messer Group acts as the lessor under finance lease arrangements. In this context, the finance lease arrangements are part of the Group’s operating activities and the resulting interest income is reported as other operating income. These retrospective restatements, which provide more reliable and more relevant information about the Group’s financial and earnings situation, do not have an impact on the Group’s net assets situation. The income statement and the statement of cash flows were restated as follows (changes to prior year figures are designated as “restated”):

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Jan. 1– Dec. 31,

2009 restated

restatement

Jan. 1– Dec. 31, 2009

Net sales 796,749 — 796,749

Cost of sales (417,392) — (417,392)

Gross profit 379,357 — 379,357

Distribution and selling costs (241,620) — (241,620)

General and administrative costs (73,521) — (73,521)

Other operating income 16,434 1,175 15,259

Other operating expenses (6,072) — (6,072)

Impairment losses on goodwill (5,200) — (5,200)

Operating profit 69,378 1,175 68,203

Result from equity method investments 1,657 — 1,657

Other investment results, net (129) — (129)

Interest income 2,353 (1,175) 3,528

Interest expense (21,327) — (21,327)

Other financial result, net (7,611) — (7,611)

Financial result, net (25,057) (1,175) (23,882)

Profit before income taxes 44,321 — 44,321

Income taxes (8,138) — (8,138)

Profit after income taxes 36,183 — 36,183

of which attributable to:

shareholders of the parent company 22,634 — 22,634

minority interests 13,549 — 13,549

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Jan. 1– Dec. 31, 2009

restated restatement 1.1. - 31.12.2009

Profit before income taxes 44,321 — 44,321Income taxes paid (10,854) — (10,854)Depreciation and amortization of property, plant and equip-ment and intangible assets 97,948 — 97,948Impairment losses on non-current financial assets 15 — 15Other non-cash income (1,555) — (1,555)Change in investments in equity method investments (2,795) — (2,795)Interest result, net 17,578 1,175 16,403Other non-cash financial result 7,108 — 7,108Change in inventories (5,462) — (5,462)Change in receivable and other assets (35,874) — (35,874)Change in provisions 738 — 738

Change in trade payables and other liabilities 27,857 — 27,857Cash flow from operating activities 139,025 1,175 137,850Purchase of property, plant and equipment and intangible assets (165,157) — (165,157)Purchase of investments and other non-current assets (439) — (439)Acquisition of subsidiaries (218) — (218)Acquisition of shares of other shareholders (211) — (211)Proceeds from disposals of property, plant and equipment and intangible assets 4,708 — 4,708Proceeds from disposals of investments and loans 18,422 — 18,422Interest and similar income 2,353 (1,175) 3,528Cash flow from investing activities (140,542) (1,175) (139,367)Changes in capital by shareholders of the parent company — — —Proceeds from non-current financial debt 100,384 — 100,384Proceeds from current financial debt — — —Repayment of non-current financial debt (58,354) — (58,354)Repayment of current financial debt (2,318) — (2,318)Dividends paid to minority shareholders (5,407) — (5,407)Contributions by minority shareholders 10,020 — 10,020Interest and similar expenses paid (19,235) — (19,235)Other financial result, net (7,470) — (7,470)Cash flow from financing activities 17,620 — 17,620

Change in cash and cash equivalents 16,103 — 16,103

Cash and cash equivalents

at the beginning of the period 65,863 — 65,863

Exchange rate impact on cash and cash equivalents (709) — (709)

Additions of cash and cash equivalents resulting from first-time consolidations — — —

at the end of the period 81,257 — 81,257

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4. Group reporting entity

The consolidated financial statements include, besides Messer Group GmbH, 66 (2009: 68) German and foreign companies, on a full consolidation basis, which Messer Group GmbH has the power to control in accordance with IAS 27. This includes 61 (2009: 63) companies based outside Germany. 6 (2009: 5) German and foreign associated companies are accounted for using the equity method. The group reporting entity has changed compared to the previous year as a result of the following first-time consolidations and other events: First-time consolidations On September 1, 2010 the Messer Group acquired 50 % of the shares of ASCO Real Estate Holdings Ltd., New Zealand. Since control is not exercised over this entity, it is consolidated as an associated company. Business combinations achieved in stages On September 30 2010 the Messer Group, via its subsidiary ASCO Kohlensäure AG, Switzerland, acquired the remaining 49 % of the shares of ASCO Carbon Dioxide S.a.r.l., France. The seller had previously (on 9/10 February 2009) sold and transferred its shares in conjunction with a separate agreement which took effect on 30 September 2010. Since the transfer of the shares was deemed to be probable, the company was already 100 % consolidated. The liability for the purchase consideration, already recorded in Messer Group’s books, was paid during the year under report. There was no other impact on the consolidated balance sheet. On December 13, 2010 Messer Schweiz AG, Switzerland, acquired the remaining 74 registered shares (49.33 %) of ASCO Kohlensäure AG, Switzerland. Since the original purchase agreement contained a call option for the Messer Group and a put option for the seller regarding the remaining shares, and the exercise of these options was considered probable, the company was already 100 % consolidated. The liability for the purchase consideration, already recorded in Messer Group’s books, was paid during the year under report. There was no other impact on the consolidated balance sheet. Other Messer Airgas S.l.u., Spain, and Visaginos Deguonies Stotis UAB, Lithuania, both dormant companies without any significant assets and liabilities, were liquidated in 2010. The liquidation of these two entities did not have a significant impact on the consolidated financial statements. With effect from January 1, 2010, the Messer Group company Laborex-Sanesco medizinisch-technische Geräte GmbH, Austria, changed its name to Messer Medical Austria GmbH. On February 16, 2010, the medical business of Messer Medical S.r.l., Italy, was sold to a local competitor as part of an asset deal. The asset deal was completed on March 16, 2010.

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5. Net sales Net sales are generated primarily by the sale of bulk supply products, cylinder gases as well as on-site and pipeline supplies. Net sales in 2010 related to the following distribution channels:

Jan. 1– Dec. 31,

2010 Jan. 1– Dec. 31,

2009

Bulk 313,939 35 % 265,822 34 % Cylinder gases 284,294 31 % 262,436 33 % Pipeline/On-Site 244,431 27 % 194,352 24 % Hardware/Other 66,356 7 % 74,139 9 % Total 909,020 100 % 796,749 100 %

6. Other operating income

Jan. 1– Dec. 31,

20101.1. - 31.12.2009

restated Gains on the sale of fixed assets 5,631 2,112 Income from the reversal of provisions 3,447 1,924 Interest on non-current lease receivables 2,924 1,175 Exchange rate gains from operating activities 1,742 1,703 Derecognition of liabilities 1,011 1,000 Other reimbursements 891 767 Insurance claims 704 523 Other income relating to prior periods 703 926 Income from associated companies 385 1,210 Other 4,089 5,094 Total 21,527 16,434

7. Other operating expenses

Jan. 1– Dec. 31,2010

Jan. 1– Dec. 31, 2009

Exchange rate losses from operating activities 1,356 1,610 Legal and consulting expenses 662 1,079 Losses on the disposal of fixed assets 602 418 Other taxes 436 268 Expenses relating to prior periods 328 215 Bank charges 225 173 Other 2,490 2,309

Total 6,099 6,072

8. Interest result, net Interest expenses for the period under report relate primarily to the Senior Facilities Agreements and to interest expense in conjunction with the US Private Placement. Interest income relates mainly to cash held on bank accounts.

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9. Other financial result, net

Jan. 1– Dec. 31,

2010Jan. 1– Dec. 31,

2009 Foreign currency exchange gains 13,006 5,443 Foreign currency exchange losses (8,222) (5,915) Other (2,444) (7,139)

Total 2,340 (7,611) Finance costs of K€ 11,156 arose at the level of Messer Holding GmbH in 2004 in conjunction with the refinancing of the Messer Group following its restructure in that year. Due to the fact that Messer Group GmbH and its subsidiaries were the beneficiaries of the K€ 525,000 credit raised (and not Messer Holding GmbH), a partial amount of K€ 5,321 was retrospectively recorded as expense in 2009 following a tax field audit at the level of Messer Holding GmbH and Messer Group GmbH for the year 2004. This amount is included in the line “Other”. The remainder (K€ 5,835) of the finance cost will remain definitively at the level of Messer Holding GmbH and will not be charged to Messer Group GmbH.

10. Income taxes

Jan. 1– Dec. 31,

2010Jan. 1– Dec. 31,

2009

Current income taxes (20,315) (12,467)

Deferred income taxes (4,189) 4,329 Total (24,504) (8,138)

Deferred taxes on items recognized directly in equity were as follows:

Jan. 1– Dec. 31,

2010Jan. 1– Dec. 31,

2009 Deferred taxes on gains arising on the fair value measurement of hedging instruments used to hedge interest rate and currency risks relating to the US Private Placement (2,345) (1,769)

Deferred tax liabilities recognized directly in equity (2,345) (1,769)

In the following table, the computations of deferred taxes of consolidated companies based on specific-company local tax rates are aggregated with the effects of consolidation procedures and the expected tax expense is reconciled to the actual tax expense reported in the income statement. For the purposes of computing the expected tax expense for 2010, the income before tax has been multiplied by the applicable average group income tax rate of 21.88 % (2009: 18 %).

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Jan. 1– Dec. 31,

2010 Jan. 1– Dec. 31,

2009

Tax rate 21.88 % 18.00 %Income before income taxes 73,444 44,321Expected tax expenses 16,070 7,978Impairment losses on goodwill 4,214 580Valuation allowance/non-recognition of deferred taxes on temporary differences (2,441) 860Valuation allowance/non-recognition of deferred taxes on tax losses available for carryforward 1,951 612Effect of tax credits (1,449) (2,482)Non-deductible withholding taxes/other taxes 1,620 1,838Effect of changed tax rates 5,284 (2,290)Equity method accounting for associated companies (501) (454)Tax-exempt income from investments (845) —Tax expense/ (income) for prior years 258 (171)Expenses not deductible for tax purposes 2,100 1,336Tax rate differences at foreign subsidiaries (1,748) 387Other (9) (56)

Actual tax expense 24,504 8,138Effective tax rate 33.36 % 18.36 %

At December 31, 2010 tax losses of the Messer Group available for carryforward amounted to K€ 154,929 (2009: K€ 153,652). Deferred tax assets were recognized on tax losses of K€ 77,673 (2009: K€ 80,751) available for carryforward by foreign subsidiaries, since it is probable that the tax losses will be recovered. Taxable profits are forecast for each of the relevant tax jurisdictions. Deferred tax assets were not recognized on tax losses of K€ 77,256 (2009: K€ 72,901) since it is not considered sufficiently probable that the tax losses will be recovered. The tax losses of the Messer Group expire as follows:

Expiry within Dec. 31, 2010 Dec. 31, 2009 1 year 1,424 394 2 years 1,100 1,041 3 years 1,231 1,232 Later than 3 years 2,619 2,303 Unrestricted carryforward 148,555 148,682 Total 154,929 153,652

In accordance with IAS 12, deferred taxes are required to be recognized on the difference between the group's share of equity recognized in the consolidated balance sheet for a subsidiary and the tax base of the cost of investment for this subsidiary at the level of the parent company (so-called “outside basis differences”), if it is probable that the difference will be realized. The Messer Group has not recognized deferred tax liabilities on outside basis differences since there is no plan to realize such differences.

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Deferred taxes at December 31, 2010 related to the following balance sheet items:

Dec. 31, 2010

Dec. 31, 2009

Recognized in profit or loss

Recognized directly in equity

Addition on first-time consolidation

Deferred tax assets Tax losses and tax credits 13,681 18,795 (5,114) — —Intangible Assets and Property, plant and equipment 20,100 14,131 5,969 — —Inventories 937 1,019 (82) — —Trade receivables 2,106 1,952 154 — —Provisions for employee benefits 2,281 1,804 477 — —Other 4,117 3,250 867 — —Total 43,222 40,951 2,271 — — Deferred tax liabilities Intangible assets (24,235) (27,612) 3,377 — —Property, plant and equipment (25,473) (24,117) (1,356) — —Other non-current receivables and assets (10,922) (10,246) (676) — —Inventories (7,923) (1,487) (6,436) — —Other receivables and other assets (2,855) (1,911) (944) — —Non-current and current financial debt (2,649) (1,753) (320) (576) —Other current provisions (2,049) (1,483) (566) — —Other (814) (1,097) 283 — —Total (76,920) (69,706) (6,638) (576) — Deferred tax liabilities, net (33,698) (28,755) (4,367) (576) —

Deferred tax assets and liabilities, after offset at an individual company level, are made up as follows: Deferred taxes Dec. 31, 2010 Dec. 31, 2009

Deferred tax assets 10,506 13,729 Deferred tax liabilities (44,204) (42,484) Deferred tax liabilities, net (33,698) (28,755)

Deferred tax assets and liabilities in the balance sheet and deferred taxes in the income statement can be reconciled as follows: Dec. 31, 2010 Dec. 31, 2009 Change in deferred tax assets in the statement of financial position

3,223 5,396

Change in deferred tax liabilities in the statement of financial position

1,720 4,022

Difference 4,943 9,418 of which: Recognized in the statement of comprehensive income 4,189 4,329 Change in group reporting entity, first-time consolidations — — Recognized directly in equity 576 4,470 Translation differences 178 619

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11. Intangible assets

GoodwillOther intangible

assets Total

Acquisition cost

Balance at January 1, 2010 396,201 215,782 611,983Additions — 3,418 3,418Reclassifications (1,600) (808) (2,408)Transfers — 103 103Disposals — (845) (845)Translation differences 9,652 2,483 12,135

Balance at December 31, 2010 404,253 220,133 624,386

Accumulated amortization and impairment losses

Balance at January 1, 2010 (34,077) (80,345) (114,422)Additions (22,435) (9,176) (31,611)Reclassifications — 717 717Transfers — (16) (16)Disposals — 698 698Translation differences (388) (277) (665)

Balance at December 31, 2010 (56,900) (88,399) (145,299)

Carrying amount at January 1, 2010 362,124 135,437 497,561

Carrying amount at December 31, 2010 347,353 131,734 479,087

Goodwill is subjected to an annual impairment test. In accordance with IAS 36, goodwill is allocated to the smallest cash-generating units and, at that level, tested for impairment by comparing the discounted amount of expected future cash flows against the carrying amount of the relevant cash-generating unit. The separate legal entities of the Messer Group operating in various countries have been identified as the smallest group of assets generating cash flows that are largely independent of the cash inflows from other assets or groups of assets. In countries in which the Messer Group has production and selling companies which compliment each other in business terms, the relevant entities are aggregated into measurement units.

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The following table shows the analysis of goodwill at December 31, 2010: Dec. 31, 2010 Dec. 31, 2009 Messer Hungarogáz Kft., Hungary 48,100 49,306 Hunan Xianggang Messer Gas Products Co., Ltd., China 41,102 36,909 MG Odra Gas spol.s.r.o., Czech Republic 23,333 22,242 Messer Croatia Plin d.o.o., Croatia 23,281 23,461 Messer Tehnogas AD, Serbia 21,600 29,052 Messer Polska Sp.z o.o., Poland 21,538 20,535 Yunnan Messer Gas Products Co., Ltd., China 20,278 18,209 Messer Tatragas spol.s.r.o., Slovakia 19,884 19,884 Messer Technogas s.r.o., Czech Republic 14,312 13,643 Messer Belgium N.V., Belgium 13,978 13,978 Messer Schweiz AG, Switzerland 13,653 11,411 Messer France S.A.S., France 10,614 10,614 Messer Austria GmbH, Austria 9,782 18,782 Messer Slovenija d.o.o., Slovenia 8,669 10,669 Foshan MS Messer Gas Co., Ltd., China 8,366 7,512 Messer Slovnaft s.r.o., Slovakia 8,231 13,731 Elme Messer Gaas A.S., Estonia 8,099 8,098 Messer Algérie SPA, Algeria 7,966 7,580 Wujiang Messer Industrial Gas Co., Ltd., China 5,565 4,997 Messer MOL Gáz Kft., Hungary 3,508 3,596 Messer Magnicom Gaz S.R.L., Romania 3,429 3,470 Messer Ibérica de Gases S.A., Spain 2,992 2,992 Messer Sarajevo Plin d.o.o., Bosnia and Herzegovina 2,548 2,548 Messer Energo Gaz S.R.L., Romania 2,053 2,077 Messer Sunshine (Ningbo) Gas Products Co., Ltd., China 1,685 1,513 Messer Romania Gaz S.R.L., Romania 1,117 1,130 Messer Mostar Plin d.o.o., Bosnia and Herzegovina 695 695 Asco Carbon Dioxide S.a.r.l., France 597 597 Elme Messer Argos Co. Ltd., Ukraine 170 157 Kharkovski Autogeni Plant, Ukraine 111 104 Messer Bulgaria EOOD, Bulgaria 97 97 OxysphAir S.P.R.L., Belgium 0 1,600 Messer Vardar Tehnogas d.o.o.e.l., Macedonia 0 935 347,353 362,124

The recoverable amount computed for each operating entity is derived from its value in use, which is defined as the present value of the future cash flows expected to be derived from the operating entity. Cash flow forecasts are based on the most recent forecasts of the relevant cash-generating units approved by management. Using past actual results as the starting point, the sustainable future profit of each of the entities was measured on the basis of detailed forecasts up to 2015. The future profit for periods subsequent to the detailed forecasting period was based on the final period of the detailed forecasts (using the perpetual annuity model). Forecasted cash flows were discounted back to their present value at the valuation date using an appropriate discount factor specific to the country concerned. A Capital Asset Pricing Model (CAPM) was used to determining the discount factor. Under this model, the discount factor is broken-down into the following components: the base interest rate, a risk uplift and a growth knock-down factor. The risk-free base interest rate was derived from the return on state bonds with long maturity periods taking the relevant country rating (Moody’s) into account. The risk uplift was determined as the product of the market risk premium and the so-called “beta factor” which reflects the relative risk of a specific share compared to the market as a whole. The market risk premium was calculated using the Damodaran model taking the relevant country rating (Moody’s) into account. The beta factor was based on an analysis of stockmarket-listed entities (peer group) comparable to the Messer Group. Country-specific discount factors applied in 2010 ranged from 6.46 % to 11.46 % (2009: 6.44 % to 11.15 %).

25

In the case of five operating entities, the impairment test carried out for 2010 resulted in the recognition of impairment losses of K€ 22,435. The impairment losses arose as a result of changed assessment of the future earnings position of the relevant entities. The changed assessment was the result in the case of four of the five companies of a more cautious forecast of future business to reflect the perceived effects of the economic crisis. In the case of the joint venture Messer Slovnaft s.r.o., Slovakia, the expected decrease in future business volumes with the on-Site customer, Slovnaft, was taken into account. These impairment losses were recognized in the income statement on the line “Impairment losses on goodwill”. In conjunction with a sensitivity analysis, the country-specific discount factors were increased across the board by one percentage point. Under this scenario, additional impairment losses on goodwill would have been required for the following entities: Messer Tehnogas A.D., Serbia (€ 6.6 million), Messer Austria GmbH, Austria (€ 5.7 million), Messer Iberica de Gases S.A., Spain (€ 3.0 million), Messer Slovenija d.o.o., Slovenia (€ 2.6 million), Messer Belgium N.V, Belgium (€ 2.3 million) and Messer Slovnaft s.r.o., Slovakia (€ 1.1 million). In the case of a few operating entities, the value in use computed using the above-described principles was lower than the carrying amount of the fixed assets of these cash-generating units. In all of these cases, the fair value of the fixed assets allocated to these cash-generating units (less costs to sell) was higher than the current carrying amount. Since these entities did not have any goodwill allocated to them, it was not necessary to recognize any impairment losses. The impairment test carried out in 2010 did not give rise to the recognition of any further material impairment losses. Other intangible assets comprise customer bases and licenses, with carrying amounts at December 31, 2010 of K€ 63,049 (2009: K€ 68,640) and K€ 59,311 (2009: K€ 57,946) respectively and sundry other intangible asset. The customer bases relate primarily to the purchase price allocation made at May 7, 2004 and are being amortized straight-line over a maximum amortization period (at December 31, 2010) of 13.3 years. The useful life of the customer bases is set at a maximum of 20 years; this is higher than the original maximum contractual periods of 15 years, since it is highly probable that the relevant contract extension clauses will be applied by customers. The amortization expense for the year is included in distribution and selling costs. Licenses relate mainly to rights to use the brand names “Messer” (K€ 48,333) and “ASCO” (K€ 5,005). Since these are intangible assets with an indefinite useful life as defined by IAS 38, they are not amortized on a scheduled basis, but rather subjected to an annual impairment test in accordance with IAS 36. The impairment tests were carried out on the basis of a mathematical calculation based on the license price analogy method. The discount factors used corresponded to those used for the impairment test on goodwill. There was no requirement to recognize an impairment loss as at December 31, 2010. Impairment losses of K€ 13 (2009: k€ 82) were recognized on other intangible assets in 2010 in accordance with IFRS 5 and IAS 36. These impairment losses were presented in the income statement on the line “Distribution costs“. Reclassifications relate primarily to the reclassification of Homecare business to the line “Non-current assets held for sale”. Further details are provided in Note 19.

26

GoodwillOther intangible

assets Total

Acquisition cost

Balance at January 1, 2009 401,474 213,587 615,061Additions — 2,016 2,016Change in group reporting entity 597 131 728Transfers — 2,713 2,713Disposals — (723) (723)Translation differences (5,870) (1,942) (7,812)

Accumulated amortization and impairment losses 396,201 215,782 611,983

Balance at January 1, 2009 (29,356) (71,295) (100,651)

Additions (5,200) (9,310) (14,510)

Change in group reporting entity — (15) (15)Transfers — (901) (901)Disposals — 662 662Translation differences 479 514 993Balance at December 31, 2009 (34,077) (80,345) (114,422)



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12. Property, plant and equipment

Land and buildings

Plant and machinery

Other equipment,

fixtures and fittings

Advance payments and

construction in progress Total

Cost Balance at January 1, 2010 181,776 1,104,401 278,426 135,095 1,699,698Additions 1,532 39,878 10,560 70,205 122,175Change in group reporting entity — (27) — — (27)

Reclassifications (64) (947) (2,405) — (3,416)Transfers 11,380 133,680 11,753 (156,368) 445Disposals (2,362) (6,087) (4,582) (172) (13,203)Translation differences 4,196 31,127 7,252 5,466 48,041

Balance at December 31, 2010 196,458 1,302,025 301,004 54,226 1,853,713

Accumulated depreciation and impairment losses Balance at January 1, 2010 (77,814) (601,848) (171,596) (1,198) (852,456)Additions (5,065) (65,915) (17,320) (154) (88,454)Change in group reporting entity — 27 — — 27

Reclassifications 3 622 1,838 — 2,463Transfers (81) (33) (742) 324 (532)Disposals 1,172 5,163 3,892 — 10,227Translation differences (1,734) (14,255) (3,908) (10) (19,907)

Balance at December 31, 2010 (83,519) (676,239) (187,836) (1,038) (948,632)Carrying amount at January 1 ,2010 103,962 502,553 106,830 133,897 847,242

Carrying amount at December 31, 2010 112,939 625,786 113,168 53,188 905,081

The line item Plant and machinery includes gas cylinders, gas cylinder sets and pallets (referred to hereafter "cylinders") with a carrying amount of K€ 33,520 accounted for at the level of the 100 % subsidiary Messer GasPack GmbH ("GasPack“). In accordance with an agreement dated December 14, 2007, GasPack has sold a 95 % co-ownership interest in these gas cylinders -- on the basis of sale-and-leaseback arrangements -- to a trust company in which Messer Industrie GmbH has a 50 % shareholding. The trust company acts on a trustee basis for two investors – unrelated to the Messer Group – who own the 95 % co-ownership interest in the cylinders. The trust company has leased back the 95 % co-ownership interest to GasPack for a period of 8 years. GasPack rents out the cylinders – as it did before the sale-and-leaseback arrangements had been put in place – to the European subsidiaries of the Messer Group, which in turn uses the cylinders in its normal operations. At the end of the rental period, the trust company has a put option with GasPack for the 95 % co-ownership interest in the cylinders. If the put option is not exercised, the trust company may sell its co-ownership interest on the market. In this case, GasPack has a pre-emptive right to purchase the co-ownership interest at the market price. GasPack has also bought back a significant portion of the rights of the trust company to receive receivables relating to future lease installments and to the buy-back receivable of the trust company. SIC-27 “Evaluating the Substance of Transactions Involving the Legal Form of a Lease" is applicable to these arrangements, with the consequence that the cylinders remain in full on the consolidated balance sheet, measured at their amortized cost. The reclassifications relate on the one hand to the reclassification of items of property, plant and equipment to the line “Non-current Assets Held for Sale”. For further information regarding non-current

28

held-for-sale assets, reference is made to Note 19. During the year under report, an impairment loss of K€ 435 (2009: K€ 2,884) was recognized on property, plant and equipment in accordance with IAS 36. This related to held-for-sale land and buildings (K€ 239), plant and machinery (K€ 24), other operational equipment (K€ 18) and assets under construction (K€ 154) at the level of two subsidiaries. These impairment losses were presented in the income statement on the lines “Cost of sales” (K€ 417), “Selling expenses“ (K€ 18). The Messer Group leases items of property, plant and equipment under operating and finance lease arrangements. Assets capitalized under finance leases and reported as property, plant and equipment comprise the following: Dec. 31, 2010 Dec. 31, 2009

Land and buildings 5,874 4,752Machinery and equipment 1,490 1,898

7,364 6,650Accumulated depreciation (1,879) (1,606)

Total 5,485 5,044

Depreciation on property, plant and equipment recognized as assets under finance leases is included in the depreciation expense within the appropriate income statement line by function.

Land and buildings

Plant and machinery

Other equipment,

fixtures and fittings

Advance payments and

construction in progress Total

Cost Balance at January 1, 2009 180,296 1,028,269 245,330 118,928 1,572,823Additions 2,634 38,728 16,327 105,452 163,141Change in group reporting entity — — 34 — 34

Reclassifications (1,186) (4,373) (303) — (5,862)Transfers 1,880 59,381 23,116 (86,682) (2,305)Disposals (239) (10,005) (5,084) (288) (15,616)Translation differences (1,609) (7,599) (994) (2,315) (12,517)

Balance at December 31, 2009 181,776 1,104,401 278,426 135,095 1,699,698

Accumulated depreciation and impairment losses Balance at January 1, 2009 (73,598) (567,493) (148,239) (978) (790,308)Additions (5,419) (59,941) (17,931) (147) (83,438)Change in group reporting entity — — (25) — (25)

Reclassifications 492 4,273 180 — 4,945Transfers 98 9,973 (9,326) (252) 493Disposals 132 8,898 3,467 166 12,663Translation differences 481 2,442 278 13 3,214

Balance December 31, 2009 (77,814) (601,848) (171,596) (1,198) (852,456)Carrying amount at January 1, 2009 106,698 460,776 97,091 117,950 782,515

Carrying amount at December 31, 2009 103,962 502,553 106,830 133,897 847,242

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13. Investments accounted for using the equity method The following investments in associated companies are stated on the basis of Messer’s interest in the equity of the relevant entity at December 31, 2010:

Name and registered office of company Shareholding (%) Carrying amount

Dec. 31,

2010 Dec. 31,

2009 Dec. 31, 2010 Messer Information Services GmbH, Groß-Umstadt/Germany 50.00 50.00 1,630Cryogenic Engineering GmbH, Sulzbach/Germany 49.00 49.00 2,112Eloros Sp.z o.o., Warschau/Poland 50.00 50.00 5,674LIMES S.A.S., Saint Herblain/France 50.00 50.00 714Balti Messer OÜ, Tallinn/Estonia 50.00 50.00 2,671ASCO Real Estate Holdings Ltd., Christchurch/New Zealand 50.00 — 1,123 13,924

The following table shows summarized financial information for the associated companies:

Jan. 1- Dec. 31,

2010Jan. 1- Dec. 31,

2009

Net sales 34,312 26,832

Profit after income taxes 4,539 281

Property, plant and equipment 52,069 58,882

Current liabilities 18,773 19,813

Non-current liabilities 33,411 37,607

Equity 23,084 18,393

Balance sheet total 75,268 75,811

Number of employees 79 69 Equity method investments developed as follows: Acquisition cost


Additions 2,333

Change in group reporting entity 993

Disposals (84)

Translation differences 231Balance at December 31, 2010 13,924

Accumulated write-downs

Balance at January 1, 2010 0

Disposals —

Balance at December 31, 2010 0

Carrying amount at January 1, 2010 10,451

Carrying amount at December 31, 2010 13,924 Additions relate exclusively to the Group’s interest in the profits of associated companies. The disposals result from the change in a derivative instrument recognized directly in the equity of LIMES S.A.S., France.

30

Investments accounted for using the equity method are classified as related parties of the Messer Group. At December 31, 2010, amounts due from associated companies and joint ventures comprise loan receivables (K€ 1,615), trade receivables (K€ 566) and other assets (K€ 2,755). At the same time, the Messer Group reports financial liabilities (K€ 2,594) and accounts payable (K€ 3,083) to associated companies and joint ventures and advance payments from customers (K€ 5,039). Messer Group GmbH has issued guarantees on behalf of associated companies totaling K€ 65. The remaining shareholders of the associated companies involved are not party to these guarantees. Acquisition cost


Additions 153

Disposals (18,379)

Translation differences 219Balance at December 31, 2009 10,451


Balance at January 1, 2009 (2,443)

Disposals 2,443

Balance at December 31, 2009 0


Carrying amount at December 31, 2009 10,451

14. Investments in other companies The item “Investments in other companies” comprises equity investments in various entities that are not consolidated or accounted for using the equity method. Acquisition cost

Balance at January 1, 2010 3,507Additions 6,601Disposals (31)Translation differences (79)Balance at December 31, 2010 9,998


Balance at January 1, 2010 (105)

Additions (265)Translation differences 5Balance at December 31, 2010 (365)


Carrying amount at December 31, 2010 9,633 The additions relate to a capital increase at the level of Messer Albagass SH.P.K, Albania and Elme Messer Metallurgs S.I.A. as well as the acquisition of additional shares in Plin Sarajevo d.d., Bosnia-Herzegovina.

31

Acquisition cost

Balance at January 1, 2009 3,549Additions 60Translation differences (102)Balance at December 31, 2009 3,507


Balance at January 1, 2009 (111)

Translation differences 6Balance at December 31, 2009 (105)


Carrying amount at December 31, 2009 3,402

15. Other financial investments

Other financial investments developed as follows:

Non-current loan

receivables

Sundry other financial

investments Total Balance at January 1, 2010 1,695 1,301 2,996Additions 175 — 175Disposals (20) (13) (33)Reclassifications — (23) (23)Transfers — — —Translation differences 35 1 36



Balance at January 1, 2010 (178) (155) (333)Additions — — —Disposals — — —Reclassifications — 4 4Translation differences (35) (2) (37)

Balance at December 31, 2010 (213) (153) (366)



32

Non-current loan

receivables

Sundry other financial

investments Total Balance at January 1, 2009 100,698 2,347 103,045Additions 6,442 138 6,580Disposals (105,440) (23) (105,463)Reclassifications — (999) (999)Transfers — (195) (195)Translation differences (5) 33 28



Balance at January 1, 2009 (99,429) (351) (99,780)Additions (6,177) (15) (6,192)Disposals 105,428 15 105,443

Reclassifications — 195 195Translation differences — 1 1

Balance at December 31, 2009 (178) (155) (333)



The line “Non-current loan receivables“ includes a fully written-down receivable of K€ 105,428 in 2009 owed by Messer Griesheim Singapur Holding GmbH to Messer Group GmbH which Messer Group GmbH waived with effect from December 31, 2009.

16. Other non-current receivables and assets Dec. 31, 2010 Dec. 31, 2009 Trade receivable 7,858 6,216 Allowance for doubtful accounts (6,966) (5,412) Sundry receivables from operating activities 6,708 4,071 Other 14 19 7,614 4,894 Finance lease receivables 47,271 44,370 Total 54,885 49,264

Sundry receivables from operating activities relate primarily to Goyal MG Gases Pvt. Ltd and to one associated company.

33

As a result of the application of IFRIC 4, the Messer Group is party to transactions in which it is the lessor in finance lease arrangements. This relates to the long-term rental of gas production plants. Finance lease receivables are measured at the present value of future minimum lease payments. The present value of minimum lease payments under finance leases can be derived from the following summary: Dec. 31, 2010 Dec. 31, 2009 due within 1 year 7,502 6,633 due within 1 to 5 years 26,489 24,093 due later than 5 years 37,728 37,645 Gross investment in leases 71,719 68,371 Unrealized interest income (19,709) (20,004) due within 1 year 4,739 3,997 due within 1 to 5 years 16,208 14,084 due later than 5 years 31,063 30,286 Net investment in leases 52,010 48,367

17. Inventories Dec. 31, 2010 Dec. 31, 2009

Raw materials and supplies 13,037 13,856 Work in progress 37,263 8,490 Finished goods and goods for resale 33,740 22,008

Total 84,040 44,354

Of the net inventories reported at December 31, 2010, K€ 5,774 (2009: K€ 6,109) are being carried at net realizable value. Write-downs of K€ 2,400 (2009: K€ 1,673) have been recognized to reduce inventories to their net realizable value. The write-downs were recorded as cost of sales. The total amount of inventories recognized during the reporting period as expense totaled K€ 186,821 (2009: K€ 150,738). The increase in work in progress compared to the end of the previous year was mainly attributable to plant under construction where the Messer Group is the lessor in finance lease arrangements.

18. Trade receivables Dec. 31, 2010 Dec. 31, 2009

Trade receivable 193,752 171,056 Allowance for doubtful accounts (27,597) (25,757)

Total 166,155 145,299

19. Non-current assets held for sale and disposal groups Dec. 31, 2010 Dec. 31, 2009 Non-current assets held for sale 831 1,255 Disposal groups 4.723 —

In conjunction with the planned carve-out of Homecare activities and the related sales of Messer Medical Austria GmbH, Austria and OxysphAIR S.P.R.L., Belgium effective March 31, 2011, all assets and liabilities of these two companies are classified as held for disposal at December 31, 2010. Fur-ther details are provided in note 35. The following table shows the aggregated amounts of items held for disposal by the two companies:

Dec. 31, 2010

34

Goodwill and other intangible assets 1,691 Property, plant and equipment 953 Other non-current assets 19 Inventories 1,201 Receivables and other assets 1,571 Cash and cash equivalents 675 Total 6,110 Current provisions 133 Non-current provisions 11 Other current liabilities 1,243 Total 1,387

Measurement at fair value less costs to sell did not result in an impairment loss. On March 4, 2009 and with effect from April 1, 2009 Messer Danmark A/S, Denmark sold its the cylinder business (along with 4,000 gas cylinders, its customer base and existing receivables) to a local competitor. The land and building of the former site continue to be reported at December 31, 2010 as held for disposal with a carrying amount of T€ 692, because management has decided to sell the asset and commenced the search for a buyer. The plan to sell the assets has not been changed. The medical business of Messer Medical S.r.l., Italy, was classified as held-for sale with effect from December 31, 2009 and sold as part of an asset deal to a local competitor on February 16, 2010. The items of property, plant and equipment sold were measured at December 31, 2009 at their fair value and reclassified from non-current to current assets (K€ 560). Completion of the asset deal was linked to a minimum volume of customers. Since this minimum volume was achieved, the asset deal was completed on March 16, 2010.

20. Other receivables and other assets Dec. 31, 2010 Dec. 31, 2009 Deposits and guarantees 3,074 4,509 Receivables from employees 3,037 3,090 Other loans 1,193 1,908 Sundry receivables from operating activities 1,081 1,560 Receivables in conjunction with consolidated tax filing arrangements with Messer Industrie 642 1,212 Receivables from associated companies 203 150 Receivables from other companies in which an investment is held 1,000 805

Receivables from related parties — 2,927 Other 3,237 2,598

Loans and receivables 13,467 18,759 Current financial assets — 974 Held-to-maturity investments — 974 Derivative financial instruments (no hedging relationship)

3,476 679

Financial assets held for trading 3,476 679

Other tax receivables 6,626 11,397 Deferred expenses 4,034 3,099 Advance payments to suppliers 1,879 1,698 Finance lease receivables 4,739 3,997

35

Other assets relating to associated companies 398 — Derivative financial instrument (hedging relationship) 194 — Other assets 17,870 20,191 Total 34,813 40,603

The item “Deposits and guarantees” comprises mainly deposits of the Chinese companies placed with local banks in conjunction with the construction of new air separation and on-site facilities. The derivative financial instruments not in hedging relationships comprise the positive fair values of existing forward currency contracts and interest-rate swaps. Since no hedging relationship as defined by IAS 39 is in place for these derivatives, the instruments are classified as held for trading and measured at their fair value, with fair gains and losses recognized in accordance with IAS 39.46 in the income statement. For information relating to derivative financial instruments in hedging relationships is provided in Note 31 “Other disclosures relating to financial instruments”. For further information regarding finance lease receivables, we refer to the disclosures made in Note 16 “Other non-current receivables and assets”.

21. Cash and cash equivalents Cash and cash equivalents are defined as cash and demand deposits as well as short-term, high liquid investments that are readily convertible to cash. Dec. 31, 2010 Dec. 31, 2009

Cash, bank balances and checks 98,296 80,154 Cash equivalents 3,466 1,103 Cash and cash equivalents 101,762 81,257

22. Provisions for employee benefits Dec. 31, 2010 Dec. 31, 2009

Pension provisions 13,671 12,920 Provisions for other employee benefits 6,040 5,545 Total 19,711 18,465

Pension benefits are provided to employees in a number of countries through both defined benefit and defined contribution pension plans. The benefits vary according to the legal, fiscal and economic circumstances in each country. Plan benefits are generally based on years of service and the level of employee compensation. Provisions for other employee benefits relate mainly to company or statutory severance benefits and early retirement benefits. Some of the obligations for defined benefit pension plans are covered by plan assets held in independent trust funds. The net assets of these funds are invested primarily in real estate, fixed-income securities and marketable equity securities. Obligations for defined benefit pension plans -- of which K€ 13,671 is reported on the liabilities side of the balance sheet in the line item “Provisions for employee benefits” and K€ 718 is reported on the assets side of the balance sheet within the line item “Other receivables and other assets” -- were calculated as follows:

36

Dec. 31, 2010 Dec. 31, 2009 Domestic Foreign Domestic Foreign

Present value of unfunded obligations 16,630 22,597 13,864 18,070Fair value of fund assets (776) (19,862) (570) (16,954)Present value of obligations 15,854 2,735 13,294 1,116Unrecognized actuarial gains (losses) (3,709) (1,927) (2,072) 106Gain not accounted for due to cap contained in IAS

19.58b — — — 133Obligations for defined benefit pension plans 12,145 808 11,222 1,355

All of the pension plans of foreign companies are financed by pension plan assets, whereas in the case of the German companies only the part relating to the salary conversion plan is covered by des-ignated fund assets. The following table reconciles the funded status of defined benefit pension plans with the amounts re-cognized in the consolidated financial statements at December 31, 2010/2009: Dec. 31, 2010 Dec. 31, 2009 Domestic Foreign Domestic Foreign Change in the present value of defined benefit plan obligations

Present value of defined benefit plan obligations at beginning of year 13,864 18,070 11,409 16,737

Translation differences 1,918 — (22) Service cost 472 1,187 391 989 Interest expense 745 755 697 699 Employee contributions — 106 — 100 Actuarial losses (gains) 1,645 1,200 1,493 750

Benefits paid (112) (639) (109) (1,183)

Other 16 — (17) —

Present value of defined benefit plan obligations at end of year 16,630 22,597 13,864 18,070

Change in plan assets

Fair value of plan assets at beginning of year 570 16,954 531 16,118 Initial recognition as plan assets 194 — — Return/loss on plan assets (17) 122 28 577 Employer contributions 29 1,073 28 1,009 Employee contributions — 385 — 344

Benefits paid — (436) — (1,078)

Unrecognized plan assets surplus — — —

Other — (17) —

Translation differences — 1,764 — (16)

Fair value of plan assets at end of year 776 19,862 570 16,954

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The following table shows the composition of plan assets:

Dec. 31, 2010 Dec. 31, 2009 Fair value Fair value Bonds 12,015 58 % 11,028 63 % Shares/funds 3,281 16 % 2,695 15 % Real estate 3,407 17 % 2,538 15 % Other assets 656 3 % 668 4 % Cash funds 1,279 6 % 595 3 % Total 20,638 100 % 17,524 100 %

The total cost for defined benefit pension plans consists of the following: Dec. 31, 2010 Dec. 31, 2009

Domestic Foreign Domestic Ausland Service cost 472 912 391 745

Interest expense 746 755 697 699

Expected return on plan assets (26) (801) (24) (703)

Amortization amount – loss (gain) 49 (5) — (48)

Gain not accounted for due to cap contained in IAS 19.58b — (146) — 133

Adjustment for pension fund benefits 20 — — —

Pension cost 1,261 715 1,064 826

The net amount of cumulative unrecognized actuarial gains and losses at the end of the previous reporting period is recognized over the average remaining working lives of the employees participating in the plans if that net amount exceeds 10 % of the present value of the defined benefit obligation of the relevant plan or 10 % of the fair value of the plan assets of the relevant plan. The following table shows the principal actuarial assumptions used for these plans (expressed as averages):

Dec. 31, 2010 Dec. 31, 2009 Domestic Foreign Domestic Foreign % % % % Discount rate 4.75 3.81 5.40 4.75

Expected rate of salary increases 2.00 1.50 2.50 1.54

Expected return on plan assets 4.00 4.12 4.50 4.60

Expected rate of pension increases 2.00 2.00 1.75 0.50 The following amounts have been assessed for the current annual period and previous annual periods for the defined benefit plans:

2010 2009 2008 2007 Present value of defined benefit plan obligations 39,227 31,934 28,146 27,359

Fair value of plan assets 20,638 17,524 16,649 14,283

Surplus in the plans 18,589 14,410 11,497 13,076

Experience adjustments arising on plan liabilities 835 97 (501) (301)

Experience adjustments arising on plan assets (933) (129) (404) (89) The cost of defined contribution plans (mainly for the German statutory pension insurance scheme) amounted to K€ 1,303 for the financial year 2010 (2009: K€ 1,206).

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23. Other provisions

Jan. 1, 2010 Allocated Utilized Reversed

Change in group

reporting entity /

reclassifica-tions

Translation differences

Dec. 31, 2010

Non-current

Litigation 7,531 497 (63) (313) — (186) 7,466Environmental risks 4,630 — — (1,000) — — 3,630Personnel 1,262 117 (70) (71) (33) 17 1,222Other 1,327 14 (267) (612) — (14) 448Total 14,750 628 (400) (1,996) (33) (183) 12,766

Current Personnel 9,209 9,023 (5,972) (984) (11) 96 11,361Outstanding supplier invoices 3,740 3,478 (2,337) (780) — 37 4,138

Litigation 1,293 79 (119) (90) — 1 1,164Other 2,350 2,432 (388) (520) — 38 3,912Total 16,592 15,012 (8,816) (2,374) (11) 172 20,575

Further information regarding the provision for litigation is provided in Note 32 “Litigation”. Environmental risks relate primarily to land in Belgium for which recultivation obligations exist. The related provisions have been reversed in part on the basis of new expert reports. Non-current employee-related provisions at December 31, 2010 relate primarily to obligations for long-service awards. Current provisions for personnel costs reported at December 31, 2010 related mainly to bonuses and holiday pay. Other current provisions include a provision for pending losses on an onerous engineering contract amounting to K€ 1,618.

24. Financial debt The US Private Placement (USPP) comprises 2 series: Series A for US$ 116.5 million, which is sub-ject to an interest rate of 5.24 % p. a. and has a 7-year term and Series B for US$ 135.5 million, which is subject to an interest rate of 5.46 % p. a. and has a 10-year term. Both series are due at the end of the term and fully hedged by cross currency interest rate swaps. The Senior Facilities Agreement (SFA I) comprises 2 tranches: a loan (Term A Loan) of € 110.0 million to be repaid in half-yearly installments equivalent to 5 % of the original loan and a final installment of 40 %. In addition, a revolving credit of € 150.0 million has been made available which falls due at the end of the credit period. Both credit tranches run until February 2, 2012. On January 19, 2009 Messer Group GmbH became party, as borrower, to a new unsecured credit agreement (SFA II) covering an amount of € 100 million. The lenders are banks that were party to the SFA I. All amounts outstanding under SFA II are required to be repaid on February 2, 2012. The terms and conditions of SFA II are largely identical with those of SFA I. Unused credit lines at December 31, 2010 amounted to € 60.6 million (2009: € 101.1 million). Loan balances and maturities at December 31, 2010 were as follows:

39

Description Interest

rate Credit line Utilized Maturity p. a.

Mio. $ 116.5 US Private Placement (1) 5.240 % 87,188 87,188 August 2, 2012Mio. $ 135.5 US Private Placement (2) 5.460 % 101,406 101,406 August 2, 2015Mio. € 110.0 Term Facility A (3) 2.938 % 55,790 55,790 February 2, 2012Mio. € 113.1 Revolving Facility SFA I (4) 1.273 % 103,197 69,916 February 2, 2012Mio. € 100.0 Capex Facility SFA II 2.420 % 100,000 100,000 February 2, 2012Mio. € 18.0 Ancillary Facility (5) — 17,906 — February 2, 2012Mio. € 8.0 Ancillary Facility (6) — 7,138 — September 1, 2012Mio. € 10.9 Ancillary Facility (7) 4.401 % 10,900 8,645 February 2, 2012Other local credits (8) 2.565 % 55,571 55,571 various Financial lease liabilities (8) 3.646 % 645 645 various 539,741 479,161 Capitalized transaction costs — (1,335) 539,741 477,826

(1) The US$ interest rate has been hedged by a cross currency interest rate swap over the whole term with a € fixed interest

rate of 3.886 % p. a.; US$ amounts are translated at an exchange rate of € 1: US$ 1.3362 (2) The US$ interest rate has been hedged by a cross currency interest rate swap over the whole term with a € fixed interest

rate of 4.357 % p. a.; US$ amounts are translated at an exchange rate of € 1: US$ 1.3362 (3) Variable weighted interest rate (€, CHF, HUF, PLN) at December 31, 2010; foreign currency amounts translated using the

closing rate at December 31, 2010 (4) Variable weighted interest rate (€, CHF) at December 31, 2010; foreign currency amounts translated using the closing rate

at December 31, 2009, K€ 9.903 used as a guarantee facility (5) K€ 94 used as a guarantee facility (6) K€ 862used as a guarantee facility (7) Variable weighted interest rate (PLN) at December 31, 2010; foreign currency amounts translated using the closing rate at

December 31, 2010 (8) Variable weighted interest rate at December 31, 2010; foreign currency amounts translated using the closing rate at De-

cember 31, 2010 Capitalized transaction costs relate to the arrangement fees paid to the financing banks and various legal and advisory costs directly attributable to the SFA I + II and USPP. These costs are being recognized as expense over the terms of the liabilities using the effective interest method in accordance with IAS 39.47. The following disclosures are made in accordance with IFRS 7.22 ff. with regard to the cross currency interest rate swaps which have been entered into to hedge obligations under the USPP. These swaps are treated for accounting terms as 100 % effective cash flow hedges so that fair value gains and losses arising on them are recognized, net of deferred taxes, in the fair value reserve for cash flow hedges: 1) As a result of the four swaps concluded, there is no exposure to a currency risk on the USPP

(denominated in US$) nor to an interest rate risk. 2) The conditions of the hedging relationship match the maturity, payment schedule, currency

and amount of the respective conditions of the USPP, so that it is possible to assume that the hedging relationship is virtually 100 % effective.

3) Cash flows relating to the hedging relationships will arise in the periods through to August 2, 2012 and August 2, 2015.

4) At December 31, 2010, the derivative instruments had a negative fair value of K€ 15,440 (2009: K€ 30,978). The positive fair value of K€ 23,016 (2009: K€ 36,683) on the foreign currency measurement of the USPP is also recognized in equity.

The following table summarizes the Group’s financial debt, measured on the basis of nominal amounts:

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Dec. 31, 2010 Dec. 31, 2009 Non-current Liabilities to banks/insurance companies 421,372 364,850 Finance lease liabilities 338 618 Other 115 261 Capitalized transaction costs (453) (1,335) 421,372 364,394

Current Liabilities to banks 43,723 47,857 Financial lease liabilities 307 404 Other 13,306 16,646 Capitalized transaction costs (882) (1,002) 56,454 63,905 Total financial debt, net 477,826 428,299 Liabilities with a fixed interest rate 214,993 201,618

Financial debt with variable interest rates (hedged) 125,000 80,000

Financial debt with variable interest rates (not hedged) 139,168 149,018 Total financial debt, gross 479,161 430,636 The weighted average nominal interest rates for debt are:

Due to banks/insurance companies (including hedges) 3.52 % p. a. 3.74 % p. a. Finance leases 3.65 % p. a. 3.79 % p. a. Other loans 3.00 % p. a. 2.94 % p. a.

The average interest rate on debt (including interest rate swap agreement) at December 31, 2010 was 3.51 % p. a. (Dec, 31, 2009: 3.71 %). Financial debt (excluding transaction costs) falls due as follows:

2011 57,3362012 314,0032013 6,3692014 472015 101,406After 2015 —

479,161

The Company is subject to various covenants under the provisions of the SFA I, SFA II and USPP. For example, the ratio of net debt to operating profit before interest, tax, depreciation and amortization (EBITDA) is not permitted to exceed a predefined level. EBITDA as a ratio of consolidated net interest is not permitted to exceed an agreed level. Moreover, the Group must maintain a minimum equity level and may not exceed a defined amount of capital expenditure (CAPEX).

41

Messer also has obligations under long-term leases. Future lease payments are as follows:

Dec. 31, 2010 Finance leases

Operating leases

2011 324 11,674 2012 202 10,366 2013 101 9,294 2014 47 8,237 2015 — 7,379

Nach 2015 — 15,730

Total minimum lease payments 674 62,680 Interest portion 29 Finance lease liabilities 645 Obligations due within one year (excluding interest) 307

Rental and operating lease expense for the financial year 2010 amounted to K€ 13,898, of which K€ 86 related to contingent rental payments. An amount of K€ 35 was earned in 2010 from sub-letting. The aggregate amount of future expected rental income for non-cancellable sub-let arrangements at the balance sheet date was K€ 4,210. Most of the operating leases are for buildings and cars or logistics arrangements.

25. Other non-current liabilities

Dec. 31,

2010Dec. 31,

2009 Sundry other liabilities 7,458 13,971 Financial liabilities measured at amortized cost 7,458 13,971

Sundry other liabilities comprise mainly obligations for purchase rights included in the purchase and sale agreements relating to shares in ASCO Carbon Dioxide Ltd., New Zealand, as well as in Messer Gas Products (Zhangjiagang) Co., Ltd., China.

42

26. Other current liabilities

Dec. 31,

2010Dec. 31,

2009 Payroll liabilities 11,205 8,952 Social security payable 5,688 4,780 Interest payable 4,737 5,286 Deposits received for hardware 4,407 3,771 Payable to other companies in which an investment is held 3,983 281 Other liabilities to customers 2,129 2,506

Liabilities to related parties — 3,120

Sundry other liabilities 3,853 6,008 Financial liabilities measured at amortized cost 36,002 34,704 Derivative financial instruments (no hedging relationship) 1,796 3,006 Financial liabilities held for trading 1,796 3,006 Derivative financial instruments (hedging relationship) 15,440 30,978 Deferred income 13,907 11,073 Advanced payments received 18,912 8,704 Other taxes payable 5,320 5,748 Other liabilities 53,579 56,503

Total 91,377 94,213

The derivative financial instruments with no hedging relationship relate to the negative fair values of forward currency contracts and to the negative fair values of interest rate swaps. Since no hedging relationship as defined by des IAS 39 is in place for these derivatives, the instruments are classified as held for trading and measured at their fair value, with fair gains and losses recognized in accordance with IAS 39.47 in the income statement. Further information regarding derivative financial instruments with a hedging relationship is provided in the notes relating to the hedging of financial debt (Note 24) and the description of financial instruments (Note 31). The line item "Deferred income” includes public sector grants amounting to K€ 133.

43

27. Equity Subscribed capital and capital reserves Subscribed capital is unchanged from the previous year and is fully paid up. Additional paid-in capital comprises amounts paid in by the shareholder. In order to strength the equity situation, the shareholder Messer Griesheim Vierte Vermögensverwaltungs GmbH paid in a capital contribution to Messer Group GmbH on March 23, 2010 which was transferred to the Company’s capital reserves. Messer Group GmbH’s capital reserves increased accordingly by K€ 2,000 during the year under report. Other reserves Other reserves result from the top-up of a majority investment in a group subsidiary. A credit difference of K€ 5,905 arose on the consolidation of these additional shares. This amount was transferred in previous years (without income statement impact) to group reserves. Retained earnings Retained earnings comprise the non-distributed earnings of consolidated group companies. In accordance with the shareholders’ resolution on August 30, 2010, Messer Griesheim Vierte Vermögensverwaltungs GmbH, passed a resolution to pay a dividend of K€ 4,500. Accumulated income and expenses recognized directly in equity All changes in equity that do not have an income statement impact and which do not relate to capital transactions with equity holders (e.g. share capital increases or distributions) are reported here. This includes translation differences, unrealized gains and losses on the fair value measurement of held-for-sale assets and available-for-sale financial assets as well as changes arising of the fair value measurement of hedging contracts used to hedge interest-rate and currency risks. Minority interests This item comprises the portion of third party shareholders’ interest in the equity of consolidated sub-sidiaries. The main minority interests are held by third party shareholders in Serbia, the Czech Republic, China and in the Baltic countries. Dividend payments to other shareholders include distributions of the previous year's results as well as other payments to shareholders made in proportion to shareholdings. Further information regarding repurchases of other shareholders’ interests is provided in Note 4 Group re-porting entity. Capital management In order to be able to safeguard its going-concern status in the long-term, it is important that Messer Group GmbH has a strong equity base. Equity corresponds to all line items reported within equity in the balance sheet. Other items which have the legal status of equity or other instruments similar in character to equity are not employed. The owners, the Executive Management and the Supervisory Board ensure that the lending banks and insurance companies, creditors and the market in general retain their trust in the Messer Group by maintaining that strong equity base. Under the terms of the SFA I, SFA II and the USPP, the Group is required to maintain a minimum capital of € 550 million. Equity (including minority interests) amounted to K€ 1,062,956 at the year-end (2009: K€ 973,235). The required minimum capital was therefore well exceeded. The Executive Management and the Supervisory Board regularly check that this and other targets are met and report to the lending banks/insurance companies accordingly.

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28. Personnel expense Personnel expense comprises wages, salaries, social security and other employee benefits (e.g. pensions).

Jan. 1- Dec. 31, 2010 Jan. 1- Dec. 31, 2009 Personnel expense 148,247 135,275

Personnel expenses include wages and salaries amounting to K€ 118,202, contributions to defined contribution and benefit plans amounting to K€ 2,687 and compulsory social security contribution of K€ 27,358.

29. Average number of employees (annual average) The average number of employees was as follows:

Regional Jan. 1- Dec. 31, 2010 Jan. 1- Dec. 31, 2009 Western Europe 906 900

Central Europe 1,040 1,064

Eastern Europe 1,335 1,315

China, Vietnam and Peru 1,958 1,891 Total number of employees 5,239 5,170

Functional Jan. 1- Dec. 31, 2010 Jan. 1- Dec. 31, 2009 Production and filling 2,114 2,118

Marketing and sales 877 890

Logistics 741 725

Engineering 597 556 General and administration 910 881 Total number of employees 5,239 5,170

30. Contingent liabilities and other financial commitments Contingent liabilities Obligations from issuing guarantees were as follows: Dec. 31, 2010 Dec. 31, 2009

in € million Maximum potential obligation

Amount recog-nized as liability

in € million Maximum poten-tial obligation

Financial guarantees 13.7 — 18.2 —

Financial guarantees relate mainly to commitments to cover the contractual obligations of principal debtors. Pledges given to secure the liabilities of group companies were eliminated on consolidation and are thus not included in the above amounts.

45

In addition, Messer Group GmbH has assumed guarantee obligations of former shareholders to Messer Holding GmbH (K€ 9,903), resulting from the acquisition of shares in Messer Holding GmbH by Messer Industrie on May 6, 2004. Other financial obligations The Group has committed to purchase or invest in the construction and maintenance of various pro-duction facilities. Obligations under these agreements represent commitments to purchase plant and equipment at market prices in the future. Moreover, long-term contracts exist that include obligations. At December 31, 2010, purchase and capital expenditure commitments amounted to K€ 82,437. In addition, three Messer entities have a contractual obligation to purchase the whole of the production of the air separator company Eloros Sp.z o.o. (an associated company) for a period of 5 years until September 2014. Volumes are produced on the basis of requirements submitted by the Messer enti-ties involved. In conjunction with the refinancing arrangements put in place in August 2005 via the SFA and USPP, the Group has pledged shares in principal subsidiaries as collateral. In addition, Messer Griesheim Vierte Vermögensverwaltungs GmbH’s shares in Messer Group GmbH were also pledged as collat-eral. For further information regarding contingent liabilities in conjunction with litigation risks, we refer to the disclosures made in Note 32 “Litigation”.

31. Other disclosures relating to financial instruments The following table shows the carrying amounts and fair values of financial instruments according to the categories stipulated by IAS 39: in K€ Measured in accordance with IAS 39 at

Carrying amounts Dec. 31,

2010

amortized cost cost fair value (directly in

equity)

fair value (through profit

or loss)

Fair value Dec. 31,

2010 Loans and receivables 290,670 290,670 — — — 290,670Held-to-maturity investments 1,113 1,113 — — — 1,113Available-for-sale financial assets 16,574 — 9,633 — 6,941 6,941Financial assets held for trading 3,476 — — — 3,476 3,476Financial liabilities measured at amortized cost 649,330 649,330 — — — 649,330Financial liabilities held for trading 1,796 — — — 1,796 1,796Financial liabilities available for sale 1,387 — — — 1,387 1,387

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In addition to these balance sheet items (allocated to IAS 39 categories), there are also finance lease receivables amounting to K€ 52,010 (2009: K€ 48,367 see Notes 16 and 20), finance lease liabilities amounting to K€ 645 (2009: K€ 1,022 see Note 24) and derivative financial instruments with a hedging relationship amounting to K€ 15,440 (2009: K€ 30,978; see Note 26). The category “Loans and receivables” comprises non-current loans receivable amounting to K€ 1,672 (2009: K€ 1,517; see Note 15), other non-current receivables and assets amounting to K€ 7,614 (2009: K€ 4,894; see Note 16), trade receivables amounting to K€ 166,155 (2009: K€ 145,299; see Note 18), other receivables and assets amounting to K€ 13,467 (2009: K€ 18,759; see Note 20) and cash and cash equivalents amounting to K€ 101,762 (2009: K€ 81,257; see Note 21). The category “Held-to-maturity investments” comprises sundry other investments amounting to K€ 1,113 (2009: K€ 2,120; see Note 15 and 20). The category “Available-for-sale financial assets” comprises investments in other companies amounting to K€ 9,633 (2009: K€ 3,402; see Note 14) as well as held-for-sale assets as reported in Note 19 (2009: K€ 1,255) The category “Financial assets held for trading” comprises derivative financial instruments (with and without hedging relationship) reported within other receivables and assets (see Note 20). The category “Financial liabilities measured at amortized cost” comprises financial debt amounting to K€ 478,516 (2009: K€ 429,614; see Note 24), other non-current liabilities amounting to K€ 7,458 (2009: K€ 13,971, see Note 25), trade payables amounting to K€ 127,354 (2009: K€ 134,947) and other current liabilities amounting to K€ 36,002 (2009: K€ 34,704; see Note 26). The category “Financial liabilities held for trading” comprises only derivative financial instruments (without hedging relationship) as disclosed in Note 26. Non-current debt of K€ 1,387 (2009: K€ 0; see Note 19) has been allocated to the category “Financial liabilities available for sale”. in K€ Measured in accordance with IAS 39 at

Carrying amounts Dec. 31,

2009

Measured in accordance

with IAS 39 at

Fair value Dec. 31, 2009

Carrying amounts Dec.

31, 2009

Measured in accordance

with IAS 39 at

Fair value Dec. 31,

2009

Loans and receivables 251,726 251,726 — — — 251,726Held-to-maturity investments 2,120 2,120 — — — 2,120Available-for-sale financial assets 4,657 — 3,402 — 1,255 1,255Financial assets held for trading 679 — — — 679 679Financial liabilities measured at amortized cost 613,236 613,236 — — — 613,236Financial liabilities held for trading 3,006 — — — 3,006 3,006

47

The following table shows the net results from financial instruments according to the categories stipulated by IAS 39: 2010 on subsequent measurement

from interest at fair

value Translation differences

Write- downs

on derecognition

Net result at fair value

Loans and receivables 2,114 74 246 (6,616) — (4,182)Held-to-maturity investments 27 — — — — 27Available-for-sale financial assets — — — — — —Financial assets and liabilities held for trading — 4,007 — — (1,669) 2,338Financial liabilities measured at amortized cost (19,366) (1,721) 1,609 — 1,011 (18,467)

2009 on subsequent measurement

from interest at fair

value Translation differences

Write- downs

on derecognition

Net resultat fair value

Loans and receivables 1,967 (22) (36) (8,392) — (6,483)Held-to-maturity investments 99 — — (15) — 84Available-for-sale financial assets — — — — — —Financial assets and liabilities held for trading (1,492) (324) — — — (1,816)Financial liabilities measured at amortized cost (17,852) (1,584) (196) — 1,000 (18,632)

Derivative financial instruments In conjunction with the USPP arranged in August 2005 with a volume of US$ 252 million for terms of 7 and 10 years, the Group concluded four cross currency interest rate swaps with matching amounts and terms to hedge interest rate and currency risks. Fair value gains and losses on these cross currency interest rate swaps and on the related foreign currency liabilities were recognized directly in equity with a positive amount of € 5.2 million (net of deferred taxes of € 2.3 million) due to the effectiveness of the hedges. Currency risks arising from fixed obligations at the level of Sichuan Pangang Messer Gas Products Co. Ltd., China, have been hedged on the basis of a fair value hedge. Changes in the fair value of the hedge and hedged item amounting to K€ 189 were recognized with income statement effect in the financial year 2010. In addition to these hedges, the Group also hedged interest rates during the year in the form of interest rate swaps for liabilities amounting to € 125 million. These interest rate hedges do not fulfill the criteria stipulated by IAS 39 and were therefore recorded with an income of K€ 4,122 in 2010. The Group is exposed to a credit risk in the case of OTC derivatives with a positive fair value. We minimize this risk by only concluding derivative transactions with banks of first-class standing. Forward currency contracts provide, in part, an effective economic hedge for risk management purposes, but do not meet the criteria for accounting for hedging instruments as stipulated by IAS 39. These forward currency contracts had a negative fair value of K€ 92 and the change of the current value, which is included in other financial result, net.

48

At the balance sheet date, the nominal volumes and fair values for the following derivatives amounted to:

Nominal amounts Fair value Maturity Cross currency interest rate swaps 188,595 (15,540) See Note 24

Forward currency contracts with a positive fair value 17,682 756 to October 5, 2011

Forward currency contracts with a negative fair value 17,112 (848) to February 17, 2011Interest-rate swaps with a positive fair

value 65,000

2,914to August 2, 2019

Interest-rate swaps with a negative fair value

60,000(948)

to February 3, 2017

Credit risk The Messer Group is exposed to only a small credit risk, defined as the unexpected loss of cash funds or income. Firstly, financial transactions are only entered into with banks with an excellent credit standing, and secondly, as a result of the broad business base, there are no unusual concentrations in terms of customers or countries. Non-current loans receivable, other non-current receivables and assets, trade receivables and other current receivables and assets classified at “Loans and receivables” have the following age-structure:

Carrying amount

of which: not impaired, but overdue

of which: neither impaired nor overdue

less than 30 days

between 30 and 60 days




more than 270 days

Dec. 31, 2010 188,908 138,946 22,604 8,812 4,448 2,800 4,483 6,815 Dec, 31, 2009 170,469 119,068 18,446 9,244 6,231 4,224 7,880 5,376

Credit risk was taken into account by recognizing appropriate allowances to cover significant specific risks. In addition, portfolio allowances were also recognized on the basis of the age-structure of trade accounts receivable and relevant past experience. No losses are expected to be incurred on the items disclosed above as “not impaired, but overdue”. These items are partially covered by collateral. The time window more than 270 days includes an amount of K€ 3,800 receivable from the former joint venture, Goyal MG Gases Pvt. Ltd. The risk of a potential loss on this receivable is covered by provisions recognized in conjunction with legal disputes. Further information regarding the provision for litigation is provided in Note 32 “Litigation”. Impairment losses on non-current and current trade receivables developed as following during the year under report: 2010 2009 Balance at January 1 31,169 25,244

Net change 3,787 6,128Change in group reporting entity (86) —Translation differences (307) (203)

Balance at December 31 34,563 31,169

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Liquidity risk The liquidity risk (defined as the risk that the Messer Group will not be able to meet its financial commitments as and when they fall due) is limited partly by creating the necessary financial flexibility and partly by efficient cash management procedures. The following table shows the expected cash flows for financial liabilities:

Cash flows 2011 Cash flows 2012 - 2015

Cash flows from 2016 onwards

Description

Carrying amount Dec. 31, 2010

Expected cash flow

Interest Principal Interest Principal Interest Principal

Financial liabilities measured at amortized cost 649,330 (690,289) (14,953) (220,385) (27,298) (427,653) — —Financial debt (1) 478,516 (518,492) (14,953) (57,029) (25,023) (421,487) — —Other non-current liabilities 7,458 (8,441) — — (2,275) (6,166) — —Trade payables 127,354 (127,354) — (127,354) — — — —Other current liabilities 36,002 (36,002) — (36,002) — — — — Financial liabilities held for trading 1,796 (1,641) (664) (550) (358) (299) 230 —Forward currency contract 848 (849) — (550) — (299) — —Forward interest rate swaps 948 (792) (664) — (358) — 230 — Derivatives (with hedging relationship) 15,440 (23,015) — — — (23,015) — —Cross Currency Interest Rate Swaps (1) 15,440 (23,015) — — — (23,015) — — Finance lease liabilities 645 (674) (17) (307) (12) (338) — — (1) The carrying amount includes the positive fair value of the interest rate swap and the negative fair value of the currency

swap. The cash flow only takes account of the negative currency impact on maturity since fixed USD interest rates have been hedged against fixed EUR interest rates. The cash flows related to the fixed EUR interest rates are taken into ac-count in financial debt.

All instruments are included that were held at December 31, 2010 and for which payments have already been contractually agreed. Forecasted figures for future new liabilities are not included. Foreign currency amounts are converted using the relevant closing exchange rate at December 31, 2010. Cash flows relat-ing to the interest-rate swaps were calculated on the basis of netted interest payments, using interest rate curves provided by the banks concerned.

50

Cash Flows 2010 Cash Flows 2011- 2014

Cash Flows from 2015 onwards

Description


Expected cash flow

Interest Principal Interest Description


Expected cash flow

Financial liabilities measured at amortized cost 613,236 (667,567) (14,581) (234,154) (35,395) (284,421) (4,958) (94,058)Financial debt (1) 429,614 (482,378) (14,581) (64,503) (33,225) (271,053) (4,958) (94,058)Other non-current liabilities 13,971 (15,538) — — (2,170) (13,368) — —Trade payables 134,947 (134,947) — (134,947) — — — —Other current liabilities 34,704 (34,704) — (34,704) — — — — Financial liabilities held for trading 3,006 (3,022) (1,348) (181) — (1,493) — —Forward currency contract 322 (325) — (181) — (144) — —Interest rate swaps 2,684 (2,697) (1,348) — — (1,349) — — Derivates (with hedging relationship) 30,978 (36,683) — — — (16,951) — (19,732)Cross Currency Interest Rate Swaps (1) 30,978 (36,683) — — — (16,951) — (19,732) Finance lease liabilities 1,022 (1,084) (32) (404) (30) (618) — — (1) The carrying amount includes a positive fair value of the interest rate swap and the negative fair value of the currency

swap. The cash flow only takes account of the negative currency impact on maturity since fixed USD interest rates have been hedged against fixed EUR interest rates. The cash flows related to the fixed EUR interest rates are taken into ac-count in financial debt.

Market risk The market risk for financial instruments relates mainly the interest rate and currency risk. Interest rate risk Interest rate risk can arise when liabilities subject to interest are not hedged in terms of maturity or amount by either corresponding assets or derivatives. The Company uses derivatives to hedge against the risk of interest rate change on a significant proportion (65 %) of its total financial debt. Variable financial instruments are subject to a cash flow risk in terms of the uncertainties pertaining to future interest payments. The cash flow risk is measured on the basis of sensitivity analyses. The interest rate analysis assumes a shift in interest rate curves for all currencies of +/- 100 basis points as at December 31, 2010. The remaining interest rate derivatives are give rise to interest risks (accounted for through profit or loss). If market interest rates had been 100 basis points higher (lower) at December 31, 2010, the result would have been K€ 6,064 (2009: K€ 1,740) higher (lower). In the case of variable financial liabilities and cash deposits, the result would have been K€ 374 (2009: K€ 678) lower (higher) if market interest rates had been 100 basis points lower (higher) at December 31, 2010.

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Currency risk The currency risk for the Messer Group arises from both financing and operating activities. Foreign cur-rency risks are hedged to the extent that group cash flows are affected. Foreign currency risks relating to financing activities result from foreign currency financial and loans used to finance group companies. The Group Treasury department hedges these risks. Foreign exchange de-rivatives are employed to convert foreign currency financial obligations and intragroup loans in to the func-tional currency of the parent company. As far as operating activities are concerned, the individual group companies conduct their business for the most part in their own functional currency. The Messer Group’s currency risk from operating activities is therefore considered to be small. A number of group companies are, however, exposed to foreign cur-rency risks in connection with forecasted cash flows which are not denominated in their own functional currency. This relates mainly to payments in conjunction with a long-term supply agreement and capital expenditures. Messer Group employed foreign exchange derivates as a hedging. Currency risks as defined in IFRS 7 result from financial instruments which are denominated in a currency other than the functional currency and which are monetary in nature; exchange differences arising on the translation of financial statements into the group currency are not taken into account. The currency risk is measured on the basis of sensitivity analyses. For this purpose, it is assumed that currency could appreciate/depreciate by 10 % compared to the Euro. The Group’s currency risk (net) from balance sheet items and planed transactions were as follows: If the Euro had appreciated (depreciated) against essential currencies by 10 % at December 31, 2010 the hypo-thetical impact on earnings would have been K€ 3,333 lower (higher) (2009: K€ 2,069). This hypothetical impact on earnings results from the sensitivity of the exchange rates of K€ 2,114 EUR/USD, K€ 1,311 EUR/PLN, K€ 612 EUR/CNY, K€ 495, EUR/HKR and K€ 1,172 EUR/CHF.

32. Litigation Various lawsuits are still pending in India against the former joint venture, Goyal MG Gases Pvt. Ltd., and that entity’s shareholders. In conjunction with these disputes, Goyal MG Gases Pvt. Ltd. and its shareholders are demanding compensation in arbitration proceedings for alleged infringement of various contractual agreements. On the other hand, Messer Group GmbH has a repayment claim of US$ 4.8 million plus interest. This claim results from the fact that Messer Griesheim GmbH (now Air Liquide Deutschland GmbH) was called on as a guarantor by Citibank because Goyal MG Gases Pvt. Ltd. had not repaid a credit in ac-cordance with the terms of the agreement. The claim was transferred in its entirety to Messer Group GmbH in conjunction with the agreement with Air Liquide. The Indian enforcement ruling obtained be-fore the London High Court over the receivable from Goyal MG Gases Pvt. Ltd. is turning out to be more time-consuming than expected. In April 2006, the company Mous made a claim for compensation against the Belgian subsidiary, Messer Belgium N.V., for the cost of the equipment and for the alleged loss of profits (in total € 4.3 mil-lion) as a result of a defect in a freezer tunnel supplied by the Group. On the basis of the assessment of local management, the claim is only justified up to the amount of the cost of the equipment and an export report, since there is no causal link between claim made for financial losses relating to unsold products, since the calculation cannot be supported and since the claimant did not undertake to mini-mize the damage arising. For this reason, a provision has been recognized. In July 2007, a settlement was agreed with Air Liquide Industriegase GmbH & Co. KG regarding the claims brought by this entity in conjunction with arbitration proceedings. In conjunction with this set-tlement, Messer Group GmbH has transferred the business of Messer Hellas S.A. to Air Liquide Hellas S.A. by way of an asset deal. Messer Group GmbH has guaranteed any warranty or other claims of Air Liquide Hellas S.A. arising in connection with this transaction.

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A number of legal disputes are pending in Greece. The only material case relates to a claim made by the Mitilini Hospital against our Greek subsidiary for the repayment of K€ 2,344 plus interest and costs. The Mitilini Hospital asserts -- following a tax field audit carried out at the hospital -- that unlawful payments of K€ 1,962 were made without corresponding deliveries of medical gases and medical equipment being made by our subsidiary. In accordance with normal legal procedures, the burden of proof and the obliga-tion to present the case to the court rests with the Mitilini Hospital. This includes proving that our Greek subsidiary actually received the amount. No cash receipts for the amount involved have been recorded in the accounting records of the Greek subsidiary. Based on the latest information, the claim made by the hospital will, if at all, only be partially accepted by the relevant court. Moreover, the account records of our Greek subsidiary include offsettable receivables against the hospital for a similar amount. For this reason, a provision has not been recognized in conjunction with the claim made by the Mitilini Hospital. In December 2006 Messer Polska Sp.z.o.o. (Messer Polska) submitted an application to the Customs Office in Kattowitz for binding confirmation that no consumption taxes would arise on the production and sale of acetylene by Messer Polska. The correctness of the request was confirmed to us by three independent advisory firms since acetylene is used in practice primarily for welding and hence not for heating purposes or as a fuel. Acetylene does not therefore fall within the scope of the EU Energy Di-rective (2003/96/WE) which is mandatory for Poland and directly enforceable. According to this Direc-tive, energy-related products not used for propulsion or heating purposes are not subject to consump-tion taxes. Moreover, Polish consumption tax legislation defines the tax measurement base for Polish consumption tax on the basis of a litre of liquid at a temperature of 15 degrees Celsius. At 15 degrees Celsius, however, acetylene is a gas and not a liquid. Polish consumption tax legislation does not therefore define the tax measurement basis for acetylene sufficiently accurately; based on our under-standing of the situation, acetylene is not subject to Polish consumption tax. In June 2007 the responsible Customs Office in Kattowitz rejected the request for binding information and decided that acetylene is subject to consumption tax under the applicable Polish legislation. The court of first instance, the Administrative Court in Gleiwitz, accepted the argument of the Customs Office in Kattowitz on March 31, 2008. In June 2008, Messer made a successful appeal to the Supreme Administrative Court in Warsaw. In May 2010, the contested ruling from the court of first in-stance was annulled since the Administrative Court in Gleiwitz has erroneously assessed the applica-bility of the EU Energy Directive to acetylene. At that stage, the legal dispute was passed back to the Administrative Court in Gleiwitz. Messer’s new claim was rejected by this court on October 4, 2010, so far without written opinion. As soon as this is received, we will appeal again to the Supreme Administr-ative Court.

Regardless of the fact that Polish consumption tax legislation does not define the tax measurement basis for acetylene, the Customs Office in Kattowitz has assessed the tax for 1 kg of acetylene at PLN 1.695 (approximately € 420) whereby the average market price for 1 kg of acetylene is PLN 14 (approximately € 4). This would give rise to a theoretical consumption tax for 2004 of PLN 2,442,350,409 (approximately € 635 million). Similar amounts arise for the years 2005 - 2008.

The Customs Office has not sent out tax assessments for any single year or for any combination of years referred to above. The assessment proceeding has formally been suspended while the pending legal action and appeals remain open and no final judgment has been passed. No consumption tax liability exists at the balance sheet date. Based on our assessment of the situation, we have decided not to recognise a provision. Moreover, our interpretation of the law that acetylene is not subject to consumption tax, has been confirmed by three leading tax experts and is supported by the ruling of the Supreme Administrative Court in Warsaw in May 2010.

Potential claims for consumption taxes can only be brought against Messer Polska and its assets. No other subsidiary of the Messer Group is exposed to any liability from the claims of the Customs Office in Kattowitz.

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33. Related parties

Transactions with related parties are conducted on an arm’s length basis. Related parties (entities) Messer Industrie GmbH und Greenbelt Ltd. Stefan Messer is a director of Messer Industrie and of Greenbelt Ltd., British Virgin Islands. At the balance sheet date, the Messer Group has current receivables of K€ 642 from Messer Industrie (all relating to the consolidated tax filing status in place with that entity for value added tax purposes), and current financial debt of K€ 2,940. At December 31, 2010, the Group has a current financial debt of K€ 1,850 to Greenbelt Ltd., British Virgin Islands. Messer Eutectic Group (MEC Group) The majority of the shares in MEC Global GmbH are held by MIG Holding GmbH, a fellow subsidiary of Messer Industrie. MEC Global GmbH indirectly holds 94 % of the shares of MEC Holding GmbH. All transactions of the MEC Group with Messer Group entities are therefore deemed to be related party transactions. At December 31, 2010, the Messer Group has receivables (K€ 68), trade payables (K€ 383) from/to MEC Group. The Messer Group also has a non-current liability of K€ 5,019 to a subsidiary of the MEC Group, resulting from a right to buy back shares in the company sold in 2007 to Messer Gas Products (Zhangjiagang) Co., Ltd., China as well as short-term financial debt amounted to K€ 5,701. Net sales to the MEC Group amounted to K€ 357. Messer Group GmbH and MEC Holding GmbH each have a 50 % investment in Messer Information Services GmbH, which is included in the consolidated financial statements of the Messer Group as an associated company. Messer Griesheim Vierte Vermögensverwaltungs GmbH Trade receivables of K€ 127 and were due from Messer Griesheim Vierte Vermögensverwaltungs GmbH at December 31, 2010. Related parties (individuals) Management (Geschäftsführung) The Executive Management (Geschäftsführung) of Messer Group GmbH during the reporting period comprised the following: - Stefan Messer, Industriekaufmann, Königstein im Taunus - Dr. Hans-Gerd Wienands, Attorney, Kerpen The total remuneration of the Executive Management of Messer Group GmbH for the financial year 2010 amounted to K€ 3,253 (2009: K€ 2,659). Of this amount, fixed remuneration of the Executive Management oard including benefits in kind and other benefits totaled K€ 1,058 (2009: K€ 1,011). Variable remuneration totaled K€ 1,500 (2009: K€ 1,215) and is linked to the attainment of specified performance figures. A total of K€ 695 (2009: K€ 434) was allo-cated to the pension provision in 2010. A trust agreement is in place between Messer Group GmbH and Stefan Messer, under which Messer Group GmbH, as trustee, has legally acquired 33% of the shares of Messer Haiphong Industrial Gas Products Co. Ltd, Vietnam, on behalf of Stefan Messer and two other directors of Messer Industrie. Under the terms of the agreement, the trustee has agreed to acquire the stated percentage of shares as share-holder in its own name and on account of the trustor and to hold these in accordance with the agreement in its own name, but at the risk and on account of the trustors. The consideration for the acquisition of the

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stated percentage of shares was paid on January 13, 2011. We refer to the disclosures made for events after the balance sheet date. Supervisory Board The Supervisory Board (Aufsichtsrat) of Messer Group GmbH during the reporting period comprised the following: - Dr. Jürgen Heraeus, Chairman, Entrepreneur, Chairman of the Supervisory Board of Heraeus

Holding GmbH, - Dr. Bodo Lüttge, Deputy Chairman, Dipl. -Kaufmann, - Dr. Karl-Gerhard Seifert, Chemist, Chairman of the Supervisory Board of Alessa Chemie GmbH, - Wilhelm Peter Storm van’s Gravesande, Consultant, - Petra Neumann-Messer, Dipl.-Volkswirt The remuneration of the Supervisory Board during the reporting period amounted to K€ 140.

34. Cost of materials Cost of materials included in the line item “Cost of sales” amounted to K€ 333,172 (2009: K€ 264,521).

35. Events after the balance sheet date Eloros Sp.z.o.o., Poland, (“Eloros”) is a joint venture between Messer Polska Sp.z.o.o., Poland, (“Messer Polska”) and Cryogenic Engineering GmbH, in which both of the venturers hold 50 % of the shares. Eloros was included in the consolidated financial statements of Messer Group GmbH in the fi-nancial year 2010 as an associated company on the basis of the at-equity accounting method. Messer Industrie holds a call option for the period from January 1, 2015 to December 31, 2016 to acquire the Eloros shares held by Cryogenic Engineering GmbH. Effective January 1, 2011, Messer Polska ac-quired the call option from Messer Industrie for a consideration of K€ 3,771. It is highly probable that Messer Polska will exercise the call option on January 1, 2015. The obligation relating to the put op-tion, which is held by Cryogenic Engineering GmbH, was therefore transferred to Messer Polska effec-tive January 1, 2011. For this reason, following acquisition of the option from Messer Industrie, Eloros will be fully consolidated in the consolidated financial statements of Messer Group GmbH with effect from January 1, 2011 in line with prevailing IFRS rules and by analogous application of similar trans-actions within the Messer Group. The relevant IFRS (IFRS 3.42) does not contain clear requirements for business combinations achieved in stages under “common control”. Since no other Standard deals with this issue, the Messer Group applies IFRS 3 accordingly. The previously held 50% investment of Messer Polska in Eloros will be measured at its fair value at acquisition date (January 1, 2011). The gain of K€ 4,087 arising on fair value measurement will be recognized as income in the financial year 2011. We expect goodwill of K€ 8,177 to arise on first-time consolidation. For details of further financial consequences, we refer to our comments in the section “Investments accounted for using the equity method”. Effective January 1, 2011, the Messer Group ceased to have control over the majority of the members of the supervisory board of Elme Messer Gaas A.S., Tallinn/Estonia. The company and its direct subsidiaries (the “Elme Messer Group”) will therefore be included in the consolidated financial state-ments of the Messer Group in future as an associated company. IAS 27.34 (d) requires that invest-ments in associated companies are accounted for with effect from January 1, 2011 at their fair value. The fair value of the Messer Group’s investment in the sub-group amounts to € 27 million. The loss of control is expected to give rise to a gain of approximately € 6 million. Sales of the Elme Messer Group in 2010 amounted to K€ 19,344 and the balance sheet total to K€ 36,971. Minority interests include K€ 14,371 relating to the Elme Messer Group. Effective January 31, 2011, Messer Albagas s.h.p.k, Albania, acquired the non-current assets and inventories of Sofigaz s.h.p.k., Albania, by way of asset deal for a consideration of € 3.5 million. Messer Group GmbH holds 67 % of the shares of Messer Haiphong Industrial Gases Co. Ltd.,

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Vietnam, at 31 December 2010. In accordance with an agreement dated May 17, 2010, which con-tained conditions precedent that were required to be satisfied by the end of January 2011 at the latest, Messer Group GmbH – acting in the capacity of trustee on behalf of Stefan Messer and two other shareholders of Messer Industrie – acquired the remaining 33 % of the shares. The purchase price was settled on January 13, 2011. Due to the existing trust agreement between Messer Group GmbH and the trustors, the group’s shareholding does not change. On January 20, 2011 Messer Group GmbH carried out a one-sided capital increase in order to refinance and recapitalise Messer Haiphong Industrial Gas Products Co. Ltd. The trustors’ shareholdings decreased accordingly from 33 % to 12.31 %, and the shareholding of the Messer Group rose to 87.69 %. A credit difference of K€ 765 arose on the consolidation of these additional shares. This amount will be transferred (without income statement impact) to group reserves. The Messer Group spun off its Homecare activities (“Business to Consumer” or “B2C”) into a sepa-rate company effective March 31, 2011. The new company, operating under the name “Messer Medi-cal”, will be managed under the umbrella of the family holding company, MIG Holding GmbH, a hold-ing company of the Messer family, which manages the affairs of the MEC Group. The Institutional Care and B2B Medical Gases activities will continue to be managed by the Messer Group. The com-panies Messer Medical Austria GmbH, Austria, and OxysphAIR S.P.R.L., Belgium -- both of which were included in the consolidated financial statements at December 31, 2010 -- ceased to be consoli-dated companies with effect from March 31, 2011. The aggregate purchase prices amounting to € 18.3 million were determined by an independent public accountant. For further information regarding the financial impact, we refer to our comments in the section “Non-current assets and liabilities held for sale”. The gain arising on deconsolidation is expected to be € 12.7 million.

36. Previous year’s financial statements The Supervisory Board approved the consolidated financial statements as at December 31, 2009 on April 30, 2010.

36. Costs of the auditors

The costs of the auditors of the financial statements of the Messer companies (KPMG) can be broken down as follows: 2010 2009 Audits of financial statements 369 360

Other audit-related services — —

Tax consultancy services 41 11

Other services — —

410 371

Sulzbach/Taunus, March 9, 2011 Messer Group GmbH

Messer Group GmbH

Messer-Platz 1

65812 Bad Soden / Taunus

Germany

Phone: +49 6196 7760-0

Fax: +49 6196 7760-442

www.messergroup.com

Documents

Messer Group Financial Statementsannualreport2010.messergroup.com/_media/pdf/Financial_Statement…1 Consolidated Balance Sheet of Messer Group GmbH, Sulzbach/Taunus, as at December