Investor Presentaiton

The Act on Accounting also requires that all corporations for which audit is compulsory (see below) are obliged to prepare an annual report in addition to financial statements. The Act on Accounting and also some other acts specify the disclosure requirements of the annual report. Financial statements are an inte- gral part of the annual report as well. The Act on Corporations requires that all cor- porations that are part of a group prepare a report on relations between related parties. This report forms an integral part of the annual report where relevant. Auditing requirements Audits are compulsory for: - large accounting units; - medium accounting units; small accounting units that are joint-stock companies and that, in both the current and previous accounting period, have met at least one of the following criteria: - net turnover exceeds CZK 80 million per annum; ― total assets exceed CZK 40 million; ― the average number of employees exceeds 50; ― all other small accounting units that meet at least two of the above criteria in both the current and previous accounting period; ― foundations and certain other non-profit organisations. Audit requirements also apply to annual reports: The auditor expresses an opinion on whether the annual report is consistent with the financial statements for the same financial year and whether it was prepared in accordance with legal requirements; or the auditor issues only one report which comprises their opinion on both the financial statements and the annual report. The Act on Auditors defines the responsibility of the Chamber of Auditors, which authorises auditors and sets the standards for audits. Au- dits are carried out in accordance with the Inter national Standards on Auditing issued by the International Federation of Accountants (IFAC) and relevant guidance (aplikační doložky) of the Chamber of Auditors of the Czech Republic. Auditors must be appointed by a corpora- tion's general meeting and its supervisory board is responsible for audit quality supervi- sion. Public interest entities are also defined in the Act on Auditors, which stipulates responsi- 80

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