Investor Presentaiton

Financial reporting to Main features of financial reporting Czech accounting rules are similar International Financial Reporting Standards (IFRS), although there are some significant dif- ferences. In particular, Czech accounting rules are much less detailed compared to IFRS. The Act on Accounting serves as the main framework, and detailed guidance is provided in the Decree on Double-Entry Accounting and the Czech Accounting Standards. Different decrees and standards specify the rules and standards for different types of cor- porations (accounting units), e.g. companies, sole entrepreneurs, banks, insurance compa- nies and non-profit organisations, as well as municipalities and institutions financed by the state. All corporations recorded in the Commercial Register are obliged to use double-entry book- keeping. Some specific accounting units that are not recorded in the Commercial Register are permitted to keep simplified accounting records (tax evidence). All corporations recorded in the Commercial Register are obliged to publish their annual statutory financial statements, annual reports and consolidated financial statements in the Commercial Register; all financial data about all Czech corporations is thus publicly accessible. The Act on Accounting defines public inter- ests entities in line with EU legislation; i.e. accounting units whose transferable securities are admitted to trading on a regulated market, credit institutions and insurance companies. All accounting units and groups are catego- rised depending on the following criteria: net turnover, balance sheet total and number of employees. In total, there are four account- ing unit categories (micro, small, medium and large) and three group categories (small, medium and large). All accounting records must be in Czech. All accounting records must be kept and finan- cial statements presented in Czech crowns (CZK). It is possible to specify a business year-end other than 31 December. An annual physical count of inventory and fixed assets is required. The general structure of accounts must be in accordance with the standard chart of accounts. Statutory financial statements consist of a bal- ance sheet, an income statement (minimally classified by nature), a cash flow statement, a statement of changes in equity and notes. 78

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