Compliance Standards: Financial Reporting

1 54 Fresenius Medical Care North America Code of Business Conduct PolicyFresenius Medical Care will comply with all finan-cial Reporting rules and regulations that apply toits business. The Company s external Financial Reporting is gov-erned by numerous laws and regulations (the Accounting and Financial Reporting Rules ), includingthe Securities Exchange Act of 1934. These rulesrequire that the Company keep Financial records thatfairly and accurately reflect the Financial condition ofFresenius. Since the shares of Fresenius Medical Care AG andits North American subsidiary (Fresenius Medical CareHoldings, Inc.) are registered with the Securities andExchange Commission (the SEC ), the Accountingand Financial Reporting Rules also require Freseniusto file certain Financial and other reports with the SEC,and require these reports to fairly and accuratelyreflect the Financial condition of Fresenius.

2 Fresenius will establish policies and procedures toensure Compliance with Accounting and FinancialReporting Rules and will provide applicable personnelwith training on such policies and other things, the Accounting and FinancialReporting Rules require Fresenius to: Make and keep books, records and accounts, which, in reasonable detail, accurately and fairly reflect thebusiness transactions in which Fresenius engages, such as the provision of services and sales of prod-ucts, and the acquisition and disposition of the assets of Fresenius. Devise and maintain a system of internal accountingcontrols to provide reasonable assurances that transactions are recorded accurately and timely to permit the preparation of Financial statements in con-formity with generally accepted accounting princi-ples, which are commonly known as GAAP.

3 Provide quarterly and annual reports to the SEC, including Financial statements prepared in accor-dance with GAAP. Financial statements include a balance sheet, statements of earnings and cash flows for all periods presented. Required disclo-sures will be included in these Financial ActionsThe Accounting and Financial Reporting Rulesalso prohibit: Any circumvention or knowing failure to imple-ment a system of internal accounting controls or knowing falsification of any book, record, or account of Fresenius. Fraud in connection with the purchase or sale of the shares of Fresenius. Misrepresentations or omissions of material infor-mation in Fresenius SEC ViolationsViolations or suspected violations of theAccounting and Financial Reporting Rules mustbe reported to a supervisor or other appropriateFresenius manager.

4 In determining the proper course for Reporting a viola-tion or suspected violation, employees should consultthe Five-Step Integrity Process within the section enti-tled Getting Answers To Questions within this Codeof Business Conduct. Failure to report a potential problem deprivesFresenius of an opportunity to investigate and takecorrective action. Even small problems that are notaddressed in a timely manner can become seriousissues for Fresenius in the future. Accordingly, failureto report a suspected violation may subject an employ-ee to disciplinary action, up to and including termina-tion of AuditsFresenius will conduct internal audits of compli-ance with the Accounting and Financial ReportingRules and will report findings and recommenda-tions to: The Chief Financial Officer The Internal Audit Steering Committee; and The Board of Directors of Fresenius Medical Care Holdings ( FMCH ).

5 The FMCH Board of Directors will forward findingsand recommendations to FMC AG as necessary toensure the accuracy and completeness of FMCAG s Financial Statements. Compliance standards : Financial Reporting55 Fresenius Medical Care North America Code of Business Conduct The Internal Audit Department will develop anannual internal audit plan for review and approvalby: The Chief Financial Officer Internal Audit Steering Committee; and The FMCH Board of Directors. The plan will be designed to, among other things,test the integrity of Financial Reporting and controlsystems. The results of all internal audits will be made avail-able to the Company s independent external ComplianceFresenius complies with Sarbanes-Oxley, whichis government regulation related to externalfinancial Reporting .

6 This requires that: Finance and Information Technology manage-ment document and assess the design and effec-tiveness of internal controls related to external Financial reporing; Finance and Information Technology management are responsible for resolving any identified internal control deficiencies by remediating thecontrol or by identifying, documenting and assessing a mitigating control; Certain members of Finance management areresponsible for Reporting on a quarterly basis thatthe Financial results in their area are reported in accordance with generally accepted accountingprinciples ( GAAP ), as well as identifying any deviations from GAAP; and Certain members of Finance and Information Technology management are required to com-plete an annual questionnaire indicating that:-Any internal control deficiencies have been resolved, and-There has been no change in the internal control structure since their assessment of theinternal Medical Care North America Code of Business Conduct Disagreeing with Accounting TreatmentQ:I disagree with the accounting treatment ofa particular journal entry.

7 The issue could have an impact on our income statement. What should I do?A:Discuss the situation with your supervisor tomake sure that you agree on the facts of the situationand explain why you disagree with the proposedaccounting treatment. There may be a simple misun-derstanding that requires clarification. If you are notable to resolve the matter with your direct supervisor,the issue should be brought to the attention of themost senior Financial person in your field location. Ifyou are still unable to receive a satisfactory response,the issue should be brought to the attention of the divi-sional Chief Financial Officer. If necessary, the issuemay then be brought to the attention of the ChiefFinancial Officer of FMCH. If the matter is notresolved within the Financial line of Reporting , the mat-ter should be raised with the Fresenius ChiefCompliance RecordationQ:I have become aware of certain transac-tions that have not been recorded properly in the books and accounts of the Company.

8 It is not my job to record these transactions, but I am concerned that fail-ure to address this issue could put the Company at risk. What should I do?A:You should immediately bring the situation toyour supervisor s attention. If the situation is notresolved by doing this, the issue should be raisedthrough the chain of command noted in the Asked to Improperly RecordQ:I have been asked to improperly record (or not record) an accounting entry for an interim month end close by a senior finan-cial or operating person in my location. The person has attempted to justify this request by noting that the entry does not impact our quarterly or annual Reporting asit is an interim month. The person has fur-ther indicated that the entry will ultimately be recorded correctly in the next SEC Reporting period.

9 What should I do?A:You should discuss this issue with your directsupervisor or raise the issue through the chain ofcommand noted in the response to the first questionabove. This request is inappropriate, as timely andaccurate information is necessary to make operatingdecisions regardless of whether it is an interim orreporting Asked to Suspend ResearchQ:I have identified a potential adjustment thatmay result in a reduction to earnings in thecurrent period. My supervisor has request-ed that I suspend my research of this issueuntil a later Reporting period so that cur-rent earnings would not be negatively impacted. What should I do?A:This matter should be raised immediatelythrough the chain of command noted in the responseto the first question above. This is an inappropriaterequest in that it indicates the management of earn-ings, which will mislead our investors, creditors, andanalysts that utilize our SEC reports to evaluate theresults of the Company s operations and cash Reporting : Q & A50 Fresenius Medical Care Code of Business Conduct PolicyFresenius personnel are responsible and account-able for the proper expenditure of Company fundsand use of Company authorization must be obtained prior tocommitment or expenditure of Fresenius funds orother PurposeCompany assets may be used for Fresenius busi-ness purposes only, and should not be used foroutside or personal reasons.

10 This policy applies to: Office equipment Medical supplies Computers and software All forms of Company records and funds. (It does not apply to occasional or incidental use ofoffice equipment for personal convenience.) All personnel are expected to take measures to pro-tect computer systems and networks from unautho-rized use, access or modification of , Loss, Theft, or AbuseProtect Company property against waste, loss,theft or abuse. Company assets entrusted to Fresenius employeesare to be maintained properly and returned to theCompany in an acceptable condition. Damage to or theft of Company assets and equipmentshould be reported promptly to appropriate personnel,within 24 hours, as well as to the Office of Health,Safety and Risk Management. Assets and equipment that are no longer neededshould be reported to appropriate Company person-nel.