25.01.2007

Declaration by the Management Board and Supervisory Board of Demag Cranes AG on the recommendations of the "Government Commission for the German Corporate Governance Code" (Regierungskommission Deutscher Corporate Governance Kodex) according to paragraph 161 of the German Stock Corporation Act

Compliance is hereby declared with the recommendations of the "Government Commission for the German Corporate Governance Code" which was published by the Ministry for Justice in the official section of the electronic Federal Gazette with the exception of the following recommendations which have or will not be complied with in full or in part:

a)     In accordance with No. 3.8, an appropriate deductible shall be agreed if the Company concludes a D&O insurance for the Management and the Supervisory Boards. The D&O insurance of Demag Cranes AG does not include any deductible for the Management and the Supervisory Boards. No. 3.8 has thus not been and will not be followed by the Management and the Supervisory Boards.

b)      In accordance with the recommendations set forth in No. 5.4.3 of the Code, an application for the appointment of a Supervisory Board member by the Court shall be limited until the next General Shareholders' Meeting. This recommendation was not followed by the Management and the Supervisory Boards with regard to the application to the Court for the appointment of Dr. Martin Posth and Klaus Ginsel as further Supervisory Board members.

c)      In accordance with the recommendations of No. 5.4.7, the Supervisory Board members shall receive performance-related remuneration in addition to fixed remuneration. The articles of association of Demag Cranes AG do not provide for any performance-related remuneration component for the Supervisory Board members. This recommendation set forth in No. 5.4.7 has not been and will not be followed by the Management and the Supervisory Boards.

d)      The remuneration of the Supervisory Board members shall in accordance with No. 5.4.7 be stated individually in the Corporate Governance report and broken down into its individual components. No additional transparency is achieved by this measure and for this reason this recommendation has not been and shall not be followed by the Management and the Supervisory Boards.

e)      In accordance with No. 6.6 of the Corporate Governance Code, the ownership of shares in the Company or derivative instruments relating thereto should be disclosed by the Management Board and Supervisory Board members if such ownership directly or indirectly exceeds one percent of the shares issued by the Company. If the total shares owned by all Management Board and Supervisory Board members exceed one percent of the shares issued by the Company, the total ownership should be disclosed separately for the Management and the Supervisory Boards. This recommendation set forth in No. 6.6 has not been and will not be followed by the Management and the Supervisory Boards.

f)      According to No. 7.1.2, the consolidated financial statements shall be made publicly available within 90 days following the end of the financial year, the interim reports within 45 days following the end of the interim report period. Since Demag Cranes AG has only been operating as a listed joint-stock company since 23 June 2006 and, therefore, the consolidated financial statements and the interim reports need to be adjusted to the requirements accordingly, this recommendation has not been followed by the Management and the Supervisory Boards. The Management and Supervisory Boards intend, however, to follow this recommendation with the consolidated financial statements for financial year 2006/2007 and from the interim report for the second quarter of financial year 2006/2007.

D├╝sseldorf 25 January 2007, Annual Report 2005 / 2006

The Management Board                                   The Supervisory Board


 


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