Great importance is attached to corporate governance at Demag Cranes AG. It forms the fundamental basis of our relationship with our shareholders, employees and business partners. It also engenders trust in future investors and capital providers. Through responsible management, the Management Board and Supervisory Board ensure the Company’s ability to continue as a going concern and sustainable value creation.

The German Corporate Governance Code summarises the regulations for successful corporate governance and thus for good and responsible management. The Government Commission on the German Corporate Governance Code appointed by the Federal Ministry of Justice adopted the Code on 26 February 2002 and reviews it at least once a year to see whether any amendments are required. The German Corporate Governance Code was last revised on 26 May 2010.

Responsible Cooperation Between Management Board and Supervisory Board

The Management Board is responsible for managing the Company. The Supervisory Board monitors and regularly advises the Management Board in its management of the business. The two boards work closely together in the interests of the Company.

Transparency

Shareholders, capital market participants, analysts, shareholders’ associations and the media are all informed regularly and in a timely manner about the situation and any significant changes in the Company. In order to inform all parties equally and without delay, Demag Cranes AG mainly uses the Internet, where quarterly reports, annual reports, invitations to and information on Annual General Meetings, press releases, ad hoc news, the financial calendar, etc. are all published. Demag Cranes AG also maintains close relations with its shareholders through proactive investor relations work.

Directors’ Dealings

Pursuant to Section 15a of the German Securities Trading Act (WpHG), members of the Management Board and Supervisory Board of Demag Cranes AG as well as certain employees with management functions, and persons closely related to the aforementioned, must disclose the acquisition and sale of shares in Demag Cranes and related financial instruments if the total value of the transactions conducted by a member of the aforementioned group of people and persons closely related to that member within a single calendar year amounts to or exceeds EUR 5,000.00 (directors’ dealings). No transactions were reported to the Company in the financial year.

Reporting and Audit of the Financial Statements

The Demag Cranes Group has prepared the Consolidated Financial Statements in accordance with International Financial Reporting Standards (IFRS). The Financial Statements of Demag Cranes AG have been prepared in accordance with the German Commercial Code.

The Annual General Meeting appointed Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf, Germany, as auditors of the Financial Statements and Consolidated Financial Statements for financial year 2009/2010.

Adequate Control and Risk Management

Good corporate governance includes responsible management of risks by the Company. The Management Board ensures adequate risk management and risk control in the Company. For this purpose, Demag Cranes AG has set up systematic risk management to ensure that risks are identified and assessed at an early stage and existing risk exposure is optimised. Risk management and risk control are continually refined and adapted to the changing environment. The key features of Demag Cranes AG’s control and risk management system are available on the Internet at www.demagcranes-ag.com/financialreport2009/2010.

Compliance

Demag Cranes AG has a comprehensive compliance system, which the Management Board and the Company’s Compliance Officers continuously refine and adapt to the changing requirements.

The aim of the compliance system is to prevent employees from violating laws or Company policies and to help them comply properly with these laws and policies. Key instruments of the system are the compliance policies and the Code of Conduct, which sets down minimum standards of conduct for all Group employees.

Group-wide compliance activities focus on antitrust law and combating corruption. Other issues addressed by the Company’s compliance efforts include prevention of violation of insider trading rules, occupational health and safety, corporate security and IT security. Company employees receive regular training on individual compliance policies.