The unaudited interim report of Linde AG at June 30, 2005 has been drawn up in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), London, where these became operative on or before June 30, 2005. The term IFRS also includes International Accounting Standards (IAS) where these are still effective. All mandatory interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC), formerly the Standing Interpretations Committee (SIC), for the fiscal year 2005 were also applied.

We have used the same accounting and valuation policies to draw up the interim report as those used to prepare the Group financial statements for the year ended December 31, 2004, with the exception of the following changes.

We have applied IFRS 2 "Share-based Payment" with effect from January 1, 2005. Further details about this are given in the section on the share option scheme.

IFRS 3 "Business Combinations" and related versions of IAS 36 "Impairment of Assets" and IAS 38 "Intangible Assets" (both revised in 2004) already applied in the 2004 Group financial statements to companies acquired after March 31, 2004. For companies acquired before March 31, 2004, the application of the above standards is mandatory from January 1, 2005. As a result, there will be no more scheduled amortization of goodwill from 2005 onwards. Goodwill will now be assessed for impairment annually. In the first six months of fiscal 2004, scheduled amortization of goodwill was €64 million.

In addition to the standards mentioned above, the following new or revised standards and interpretations issued by IASB and IFRIC came into force on January 1, 2005. However, these either had no material effect on the net assets, financial position and results of operations of the Linde Group or were not relevant to the Group financial statements.

• IFRS 4 "Insurance Contracts"
• IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations"
• IFRIC 1 "Changes in Existing Decommissioning, Restoration and Similar Liabilities"
• IFRIC 2 "Members’ Shares in Co-operative Entities and Similar Instruments".