Transactions with Related Parties

Demag Cranes AG and the subsidiaries included in the Consolidated Financial Statements transact business with numerous other companies, including in some cases with related parties. Related parties notably include the entities contained in the list of Demag Cranes AG subsidiaries, joint ventures and investments, plus employees in key positions within Demag Cranes AG together with their families.

The Group’s main transactions with related parties arise in the course of normal business dealings. All such transactions are effected on an arm’s length basis. The table below provides information on outstanding transactions with related parties as at 30 September 2010:

The table below shows balances at the balance sheet date on transactions with the related parties mentioned and the expenses incurred in the reporting period:

Detailed information on the compensation system and compensation paid to individual members of the Management Board and Supervisory Board is provided in the Remuneration Report (in the Corporate Governance section). The Remuneration Report forms an integral part of the Combined Management Report.

Management Board

Members of the Management Board were paid fixed and variable compensation in financial year 2009/2010. The variable compensation depends on the attainment of targets for operating EBIT and operating net income after tax. Members of the Management Board also participate in the Matching Stock Program (MSP). This is described in Note 23 ("Shareholders’ Equity"). Non-cash compensation is also provided in the amounts required to be recognised under tax regulations for the use of company cars. As in the previous year, the Company has not granted any advances or credits to members of the Management Board.

Total Compensation

The table below shows the compensation for the active members and one former member of the Management Board:

The total compensation paid to active members of the Management Board was EUR 4,357,000 (2008/2009: EUR 1,686,000). This consisted of EUR 1,350,000 (2008/2009: EUR 1,029,000) in fixed compensation, EUR 2,478,000 (2008/2009: EUR 413,000) in variable compensation and EUR 529,000 (2008/2009: EUR 244,000) in other compensation. The total figure includes in additions to pension provisions of EUR 378,000 for the financial year (2008/2009: EUR 56,000). The fair value of share-based compensation (the MSP) stood at EUR 496,000 at the grant date. At total of EUR 269,000 for the financial year (2008/2009: 235,000) in expenditure was recognised.

A member of the Management Board departing in the previous year received EUR 313,000 in fixed compensation in financial year 2008/2009, EUR 0,000 in variable compensation and EUR 3,444,000 in other compensation. Other compensation mainly consists of a EUR 3,438,000 final settlement for early termination of contract. This covered all income the departing member of the Management Board would have received had the contract continued after 31 March 2009. Entitlements under the share option scheme expired on termination. Pension provisions for former members of the Management Board amounted to EUR 152,000 as at 30 September 2010 (2009: EUR 96,000).

In accordance with the Articles of Association, members of the Supervisory Board received fixed compensation totalling EUR 402,000 for financial year 2009/2010 (2008/2009: EUR 404,000) for their activities on the Supervisory Board of Demag Cranes AG and on the supervisory boards of other Group companies. A further EUR 124,000 (2008/2009: EUR 130,000) was paid in attendance fees. Out-of-pocket expenses came to EUR 19,000 (2008/2009: EUR 15,000). There is no variable compensation for members of the Supervisory Board. As in the previous year, the Company has not granted any advances or credits to members of the Supervisory Board.