Report of the Supervisory Board

The Supervisory Board was kept regularly informed throughout 2005 about business developments and the general situation of the Company, and monitored the management of the Company by the Executive Board on the basis of written and oral reports. Business transactions requiring Supervisory Board approval were examined and discussed with the Executive Board. The Supervisory Board granted its approval to the acquisition and disposal of shareholdings, the takeover of parts of companies, the submission of offers for major projects and capital measures.

Last year, there were six plenary meetings of the Supervisory Board, four meetings of the Presiding Committee of the Supervisory Board, and four meetings of the Audit Committee. As well as addressing matters relating to current business and major projects, the Supervisory Board also dealt in detail with corporate strategy and the position of Bilfinger Berger in relation to its competitors, and discussed these matters with the Executive Board. The Supervisory Board was intensively involved in the acquisition of Babcock Borsig Service, Assetis, Simon Engineering and PPRM. All major aspects were examined, such as the results of the due diligence, the earnings situation, business plan, quality of management, effects on the consolidated financial statements and integration concept. The Supervisory Board receives regular reports on the actual development of new subsidiaries and associated companies compared with the assumptions made at the time of acquisition.

Another focus of consultation was the Group’s earnings trend, with positive results on the one hand, but on the other hand the charges from the losses of the Australian building-construction activities. The cause of these losses, the activities of the Project Controlling department and the measures taken were discussed in detail with the Executive Board and subjected to an intensive investigation. As a result of its investigation, the Supervisory Board approved the measures initiated by the Executive Board. Detailed examinations were also carried out of general issues of the management of subsidiaries and associated companies, the corporate planning, return-on-capitalemployed controlling, and the comparison of the course of business with the expected figures. The changes in the shareholder structure resulting from Dresdner Bank’s sales of its shareholding in the Company were dealt with in detail.