07.12.2010

Under Section 161 of the German Stock Corporations Act (AktG), the Management Board and Supervisory Board of listed German stock corporations are required to declare each year that the recommendations of the “Government Commission on the German Corporate Governance Code” published by the Federal Ministry of Justice in the official section of the electronic Bundesanzeiger (Federal Gazette) have been and will be complied with or, if not, which recommendations have not been or will not be applied and why not.

The Management Board and Supervisory Board of Demag Cranes AG last issued the following Compliance Statement pursuant to Section 161 of the German Stock Corporations Act (AktG) on 7 December 2010:

Demag Cranes AG can confirm that the recommendations published by the Federal Ministry of Justice in the official section of the electronic Federal Gazette with regard to the "Governance Commission on the German Corporate Governance Code" have been complied with in full with the following exceptions since issuing the last declaration of conformity on 2 March 2010 and up to 2 July 2010, in accordance with the Code in force on 18 June 2009 and since 3 July 2010, in accordance with the Code in force on 26 May 2010.

a)     Clause 3.8 provides for the agreement of a deductible if the Company takes out a D&O policy on behalf of the Management and Supervisory Boards. Demag Cranes AG’s D&O insurance policy does not include a deductible for the Supervisory Board, since the Management Board and Supervisory Board do not deem this to be either necessary or suitable for controlling the behaviour of the board members.

b)     In accordance with Clause 5.4.1 (2), the Supervisory Board must specify concrete objectives regarding its composition and, in particular, provide for an appropriate degree of female representation. The Supervisory Board recognised the importance of diversity with the objectives regarding its composition adopted on 3 September 2010. It aims to achieve an appropriate degree of female representation and is therefore to include women as soon as possible. The Supervisory Board did not specify a precise number or proportion of female members, deeming such targets to be inappropriate, since the search for suitable candidates should focus on the specific situation of Demag Cranes AG and the resulting requirements. This should ensure that the composition of the Supervisory Board is determined in the best interests of the Company based on the qualifications and suitability of candidates.

c)     In accordance with Clause 5.4.6, the members of the Supervisory Board should be paid performance-related remuneration in addition to their fixed basic remuneration. The Articles of Association of Demag Cranes AG do not include a performance-related component for members of the Supervisory Board, so that it can preserve the independence it must have to be able to carry out its monitoring function. The performance of this function should not be tied to any monetary incentives.

d)     Gemäß In accordance with Clause 5.4.5, Supervisory Board members who are members of the management board of a listed company may not accept more than a total of three supervisory board mandates in non-group listed companies or in supervisory bodies of companies with similar requirements. The Supervisory Board member Robert J. Koehler is chairman of the management board of SGL CARBON AG, Wiesbaden, and has a total of four supervisory board mandates in non-group listed companies, including his position as member of the Supervisory Board of Demag Cranes AG, and no mandates in supervisory bodies of companies with similar requirements. This does not affect his monitoring duties as a member of the Supervisory Board of Demag Cranes AG. Mr. Koehler has sufficient time to perform his mandate at Demag Cranes AG.

e)     In accordance with Clause 5.4.3, an application for the judicial appointment of a Supervisory Board member should be limited in time up to the next general meeting. On some occasions, an opinion has been expressed that the recommendation also applies to the judicial appointment of employee representatives to the Supervisory Board. As a matter of precaution, the Management Board and Supervisory Board are declaring that this recommendation was not implemented in having employee representatives appointed by court to the Supervisory Board of Demag Cranes AG. As employee representatives on the Supervisory Board are not elected by the general meeting, the Management Board and Supervisory Board believe it is inappropriate to limit their judicial appointment in time up to the next general meeting.

Apart from the above exceptions, the recommendations of the “Government Commission on the German Corporate Governance Code” in force on 26 May 2010 are being fully complied with.

Düsseldorf, 7 December 2010

The Management Board                                   The Supervisory Board


 


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