The Supervisory Board has formed a total of four committees: the Mediation Committee required to be formed by Section 27 (3) of the German Co-determination Act (MitbestG), the General Committee, the Audit Committee and the Nominations Committee. The committees primarily prepare topics and resolutions for meetings of the full Supervisory Board. In some cases, they also have decision-making powers transferred to them, insofar as the law permits, by the Supervisory Board. With the exception of the Nominations Committee, the committees each have four members, of whom two are employee representatives and two are employer representatives. The Nominations Committee comprises all six shareholder representatives on the Supervisory Board. The Mediation, General and Nominations Committees are chaired by the Chairman of the Supervisory Board. The Audit Committee is chaired by Prof. Dr. h. c. Karlheinz Hornung.

Specifically, the General Committee prepares the personnel-related decisions of the Supervisory Board, such as the terms of Management Board members’ employment contracts including their remuneration, the appointment and dismissal of Management Board members and the nomination of the Chairman of the Management Board. Since the German Act on the Appropriateness of Management Board Remuneration (VorstAG) came into force the full Supervisory Board takes the final decisions on issues relating to Management Board remuneration. The General Committee held three meetings during the reporting period and on 5 February 2010 adopted a resolution in writing without meeting. The main purpose of the first meeting of financial year 2009/2010 and the decision taken in writing by circular resolution was to draw up proposals for the full Supervisory Board so that targets could be set for the variable remuneration of the members of the Management Board for financial year 2009/2010. The General Committee meeting held in May 2010 dealt with issues related to Management Board remuneration for the period after the current Matching Stock Program expires. At its last meeting in financial year 2009/2010, the General Committee, in accordance with its newly assigned remit, discussed with the Management Board the further course of action on the basis of preliminary and conditional non-binding indications of interest from foreign companies regarding the acquisition of Demag Cranes AG shares and also agreed with the Management Board in this respect that further discussions with the relevant parties were not in the interest of the Company or its stakeholders.

The Audit Committee prepares the Supervisory Board’s decision on the adoption of the Financial Statements and the approval of the Consolidated Financial Statements. To this end, it is responsible for conducting a preliminary audit of the Financial Statements and Consolidated Financial Statements, the Management Reports and the proposal on the appropriation of net income. The Audit Committee also discusses the half-yearly and quarterly financial reports with the Management Board prior to their publication and deals in particular with risk management and compliance issues. The Audit Committee met four times in total in the past financial year. At its first meeting of financial year 2009/2010, it dealt with the preliminary audit of the 2008/2009 Financial Statements and Consolidated Financial Statements, the corresponding Management Reports and the Management Board proposal on the appropriation of net income. At the subsequent meetings, the Audit Committee discussed the preliminary quarterly results and obtained information in particular on the current status of risk management and compliance. The meeting on 30 April 2010 dealt with the results of an informal review by Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft as at 31 March 2010. The Chairman of the Audit Committee has at no time been a member of the Company’s Management Board, is independent and, as a result of his education and professional experience, has appropriate accounting and auditing expertise.

The Nominations Committee did not meet in financial year 2009/2010. Once again, there was no reason during the past financial year to convene a meeting of the Mediation Committee pursuant to Section 27 (3) of the German Co-determination Act (MitbestG).

The first meeting of the Audit Committee in current financial year 2010/2011 took place on 29 November 2010. Here, the Audit Committee dealt in particular with the preliminary audit of the Financial Statements and Consolidated Financial Statements of the Company for financial year 2009/2010, the combined Management Report and the Management Board proposal on the appropriation of net income. At the meeting, the Management Board also reported on the results of the restructuring programme as per 30 September 2010. In this context, emphasis is placed on the constructive co-operation between the management and employee representatives in the Demag Cranes Group, which is characterised by open communication and mutual trust and without which the successful implementation of the restructuring programme would not have been possible. At the same meeting, the Audit Committee decided on its recommendation for the proposal to elect the auditors for financial year 2010/2011. According to Section 319 a (1) 4 German Commercial Code (HGB), the review partner of the existing auditors must be excluded from the audit of a company if he has already been responsible for the audit of the company for several years. Furthermore, the Audit Committee also believes it is appropriate to change the auditing company at certain intervals. In view of this, the Audit Committee recommended that the Supervisory Board propose to the Annual General Meeting that, following a selection process, Warth & Klein Grant Thornton AG Wirtschaftsprüfungsgesellschaft, Düsseldorf, be elected as auditors for financial year 2010/2011. The full Supervisory Board followed this proposal at its meeting on 3 December 2010.

The Audit Committee would like to thank Deloitte & Touche for their critical and constructive support in recent years.

The Supervisory Board’s Audit Committee has obtained a statement from Warth & Klein Grant Thornton AG Wirtschaftsprüfungsgesellschaft regarding the extent of the business, financial, personal and other relationships between this audit firm and its executive bodies and head auditors on the one hand and the Company, the companies of the Demag Cranes Group and the members of their executive bodies on the other as well as the extent of the services agreed for financial year 2010/2011 (especially in the field of consultancy) for the Company and the companies of the Demag Cranes Group. This did not provide any grounds to doubt the independence of Warth & Klein Grant Thornton AG Wirtschaftsprüfungsgesellschaft.