7 Reporting and Audit of the Annual Financial Statements

7.1 Reporting

7.1.1
Shareholders and third parties are predominantly informed by means of the consolidated financial statements. During the financial year they are additionally informed by means of a half-year financial report and, in the fist and second halves, by interim reports or quarterly financial reports. The Consolidated Financial Statements and the Condensed Consolidated Financial Statements in the half-year financial report and the quarterly financial report are prepared under observance of internationally recognised accounting principle.

7.1.2
The consolidated financial statements will be prepared by the executive board and examined by the auditor and the supervisory board. In addition, the Financial Reporting Review Panel and the Federal Financial Supervisory Authority are authorized to check that the consolidated financial statements comply with the applicable accounting regulations (enforcement).
The consolidated financial statements shall be publicly accessible within 90 days of the end of the financial year; interim reports shall be publicly accessible within 45 days of the end of the reporting period.
The time limit for publication of the consolidated financial statements of Krones AG is not currently met.

7.1.3
The corporate governance report shall contain information on the company’s stock option programmes and similar securities-based incentive systems.

7.1.4
The company shall publish a list of third party companies in which it has a shareholding that is not of lesser importance for the enterprise. The trading portfolios of banks and financial services companies, on which voting rights are not exercised, are disregarded in this context. The following shall be stated: name and registered offices of the company, the amount of the shareholding, the amount of equity and the operating result of the previous financial year.

7.1.5
Notes on the relationships with shareholders considered to be "related parties", pursuant to the applicable accounting regulations, shall be provided in the consolidated financial statements.

7.2 Audit of annual financial statements

7.2.1
Prior to submitting a proposal for election, the supervisory board or, respectively, the audit committee shall obtain a statement from the intended auditor on whether, and where applicable, which, professional, financial and other relationships exist between the auditor and its executive bodies and head auditors on the one hand, and the enterprise and the members of its executive bodies on the other hand, that could cast doubt on its impartiality. This statement shall include the extent to which other services were performed for the enterprise in the past year, especially in the field of consultancy, or which have been agreed upon under contract for the following year.
The supervisory board shall agree with the auditor that the chairman of the supervisory board or, respectively, the audit committee, will be informed immediately of any grounds for disqualification or impartiality occurring during the audit, unless such grounds are eliminated.

7.2.2
The supervisory board commissions the auditor to carry out the audit and fixes the fee due.

7.2.3
The supervisory board shall arrange for the auditor to report immediately on all facts and events of importance for the tasks of the supervisory board which arise during the performance of the audit.
The supervisory board shall arrange for the auditor to inform it and/or note in the auditor's report if, during the performance of the audit, the auditor comes across facts which show that the statement on the Code made by the executive board and supervisory board is incorrect.

7.2.4
The auditor takes part in the supervisory board's deliberations on the annual financial statements and consolidated financial statements and reports on the essential results of its audit.