The unaudited interim report of Linde AG for the three months ended 31 March 2007 has been drawn up on the basis of §315a of the German Commercial Code (HGB) in accordance with International Financial Reporting Standards as adopted in the European Union.

We have used the same accounting policies to draw up the interim report as those used to prepare the Group financial statements for the year ended 31 December 2006, with the exception of the following changes, and have also applied IAS 34 "Interim Financial Statements".

At 31 December 2006, the classification of financing costs in relation to pension provisions was adjusted in line with IAS 19. As a result of the acquisition of BOC and the disposal of the KION Group, a major part of the pension obligations has been financed by externally managed pension assets from the 2006 financial year, which is intended to reduce the financing costs of these obligations. Until 2006, the interest cost in the pension provisions and the expected return on plan assets have been recognised in functional costs. In 2006, the financing costs were included in the financial result for the first time, as they arise from the way in which pension obligations are financed. This means that better information can be provided about the impact of the pension obligations on the results of operations. Because of this change in accounting policy, the disclosure in the prior year period has been adjusted ("adjusted").

The application of the following Standards is mandatory from 1 January 2007: IFRS 7 "Financial Instruments: Disclosures", Amendment to IAS 1 "Presentation of Financial Statements: Capital Disclosures" and Revised Guidance on Implementing IFRS 4 "Insurance Contracts". These Standards have no impact on the net assets, financial position and results of operations of The Linde Group, but will result in changes to the information which is required to be disclosed in the Group financial statements for the year ended 31 December 2007 or to more information being given.

In addition to the Standards mentioned above, the following new or revised Standards and Interpretations have been issued by the IASB and IFRIC. These have not been applied in the quarterly financial statements for the three months ended 31 March 2007, as they are either not yet mandatory or have not yet been adopted by the European Commission.

• IFRS 8 "Operating Segments"
• IFRIC 11 "IFRS 2 – Group and Treasury Share Transactions"
• IFRIC 12 "Service Concession Arrangements"