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DR. GERHARD CROMME, CHAIRMAN OF THE SUPERVISORY BOARD

In the year under review, the Supervisory Board performed the functions for which it is responsible according to statutory provisions and the Articles of Association. We regularly advised the Executive Board on the management of the Company and supervised the conduct of business. The Supervisory Board was directly involved in all decisions of fundamental significance for the Company. In written and verbal reports the Executive Board furnished us with regular, up-to-date and comprehensive information on all relevant issues of strategy and corporate planning, business progress, the state of the Group including the risk situation, and risk management. Where the actual course of business deviated from plans and targets, this was explained to us in detail and examined by us on the basis of the documents presented. The Executive Board agreed the Company's strategic alignment with us. All events of importance to the Company were discussed in detail by the Supervisory Board Executive Committee (Praesidium) and the full Supervisory Board on the basis of reports by the Executive Board. Where required by statutory provisions and the Articles of Association, the Supervisory Board voted on the reports and resolution proposals of the Executive Board after detailed examination and discussion. Outside the Supervisory Board meetings, I was personally in regular contact with the Executive Board and was kept informed about the current business situation and key business transactions. In separate strategy meetings, I discussed the perspectives and future focus of the individual Group segments with the Executive Board.

Four Supervisory Board meetings were held in fiscal 2005/2006. Between meetings, the Executive Board informed us in detail by means of written reports about all projects and plans of particular importance to the Company. Where necessary, we passed resolutions by written vote.

Intensive work in the Supervisory Board committees

To enhance the efficiency of its work, the Supervisory Board has set up a total of five committees which prepare the resolutions of the Supervisory Board as well as the issues to be dealt with at the full meetings. Where legally permissible, in individual cases decision-making powers of the Supervisory Board were delegated to committees. This delegation of work has proved extremely valuable in practice. All committees are chaired by the Supervisory Board Chairman, with the exception of the Audit Committee. The compositions of the individual committees are shown on the page Supervisory Board.

The Executive Committee (Praesidium) met four times in the reporting period. Between meetings, I discussed projects of particular importance to the Group with the members of the Executive Committee. The main subjects of discussion were the future focus of the Steel segment with the steel mill project in Brazil and ways to strengthen the segment's market position in the NAFTA region. The Executive Committee also dealt with the implementation of the German Corporate Governance Code and prepared the efficiency review of the Supervisory Board.

The Personnel Committee, which is responsible for concluding employment contracts with the Executive Board members and for other Executive Board matters, likewise met four times. Key subjects of discussion here were the renewal or termination of Executive Board employment contracts, the compensation system and the amount of compensation paid to the Executive Board, the acceptance of external directorships by Executive Board members and the retention of a law firm to which a member of the Supervisory Board belongs.

Once again in the past fiscal year it was not necessary to convene the Mediation Committee in accordance with Art. 27 par. 3 German Codetermination Act (MitbestG).

The Audit Committee likewise met four times; its work focused in particular on the parent-company and consolidated financial statements as well as the further development of the risk management system. It discussed the quarterly reports, awarded the audit engagement, and determined the audit priority areas and the level of compensation for the auditors. Further subjects of discussion were the transition of the consolidated financial statements to IFRS and in connection with this the adjustment of the performance indicators for the Group, a report by Corporate Internal Auditing about its internal auditing work and a routine report on litigation in the Group. The auditors participated in all four Audit Committee meetings and reported in detail about their audit activities and the audit review of the quarterly financial statements.

The Strategy, Finance and Investment Committee met twice in fiscal 2005/2006. It dealt with the Group's international focus and strategic development as well as its corporate and investment plan, and prepared the relevant resolutions of the Supervisory Board. The project to build a steel mill in Brazil and the future strategy of the Steel segment in the NAFTA region were also discussed in detail.

The chairmen of the committees reported in detail on the meetings and the work of the committees in the full-session meetings.

Wide spectrum of topics again discussed in the full Supervisory Board meetings

The development of sales, earnings and employment in the Group and the individual segments, the financial situation and all major investment and disposal projects were the subject of regular deliberations at the full-session meetings. In several meetings we discussed the steel mill project in Brazil, the administrative fine proceedings of the EU Commission in connection with infringement of competition law in the Elevator segment, the future alignment of the Steel segment in the NAFTA region and Executive Board matters.

In the meeting on November 30, 2005 we focused on the parent-company and consolidated financial statements for the year ended September 30, 2005 and the corporate plan for fiscal 2005/2006. We discussed further subjects on the basis of detailed reports by the Executive Board: the sale of treasury stock held by ThyssenKrupp AG to the Alfried Krupp von Bohlen und Halbach Foundation, Thyssen- Krupp's rating situation, the strategic development of the Group as well as the steel mill project in Brazil and the Dofasco project. The Supervisory Board approved the expansion of the ANSC-TKS Galvanizing joint venture of ThyssenKrupp Steel in China to include a further hot-dip galvanizing line, the acquisition of the German service companies of the Standardkessel group as well as the acquisition of the Brazilian RIP group by ThyssenKrupp Services. We were also informed about the status of the planned acquisition of Atlas Elektronik in association with EADS and the sale of the special profiles business unit of Hoesch Hohenlimburg to the Calvi group. After the negotiations had been concluded we then approved both projects by written procedure on the basis of detailed documents in December 2005. In the absence of the Executive Board, the Supervisory Board dealt with the efficiency review of the Supervisory Board. The review findings were the basis for the further optimization of our work. Suggestions for further improving the reporting and on the scheduling of meetings as well as procedures at the meetings were subsequently implemented.

In the meeting on January 27, 2006 – immediately before the Annual General Meeting – the Executive Board reported on the current situation of the Group, the status of the steel mill project in Brazil and the alternatives for improving ThyssenKrupp Steel's market position in North America. The Supervisory Board approved the conclusion of an agreement between ThyssenKrupp and Mittal Steel on the purchase of the Dofasco shares following the planned acquisition of Arcelor by Mittal. Furthermore, we approved the acquisition of the operations of Tianrun Crankshaft to strengthen the Automotive activities in China and the acquisition of the activities of VPK Metals.

The meeting on May 12, 2006 centered on the Group's strategic development. On the basis of detailed documents, the Supervisory Board approved the building of a steel mill in Brazil with an annual capacity of 5 million tons of slabs. A further topic was the structural and organizational realignment of the activities of ThyssenKrupp Automotive in North America: the Supervisory Board approved the disposal of ThyssenKrupp Budd Plastics Division and ThyssenKrupp Stahl Company. In addition we approved the investment plan for fiscal 2006/2007 and the financing thereof. In this context we noted with consent the Executive Board's deliberations concerning the acquisition of treasury stock; the authorization for this was issued by the Annual General Meeting on January 27, 2006. After a detailed presentation, we discussed the development and future alignment of the Technologies segment with the Executive Board. The Supervisory Board was also informed about the planned concentration of the Group's head offices in Essen and the establishment of a Corporate Academy at this location.

In addition to the report by the Executive Board on the situation of the Group, the agenda for the Supervisory Board meeting on August 11, 2006 also included the combination of the Technologies and Automotive segments, the current status of the steel mill project in Brazil and the planned NAFTA strategy of the Steel and Stainless segments. In this connection we also discussed the fundamental alignment of the Stainless segment with the Executive Board. The Supervisory Board also dealt with Executive Board matters and approved a new organizational chart for the Executive Board. In addition, the Supervisory Board approved the acquisition of the worldwide aerospace service activities of Alcoa by the Services segment and in the absence of the Executive Board discussed a new system of Supervisory Board compensation.

At the beginning of November 2006, on the basis of detailed information, the Supervisory Board approved by written vote the sale of the body and chassis operations of ThyssenKrupp Automotive in North America to Martinrea International.

High corporate governance standards maintained

The Supervisory Board continuously monitored the further development of corporate governance standards. The Executive Board – also on behalf of the Supervisory Board – reports in corporate governance at ThyssenKrupp in accordance with section 3.10 of the German Corporate Governance Code. On October 01, 2006 the Executive Board and Supervisory Board issued an updated Declaration of Conformity according to Art. 161 of the Stock Corporation Act (AktG) and made it permanently available to stockholders on the Company website. ThyssenKrupp AG complies with all recommendations of the Government Commission on the German Corporate Governance Code in the currently applicable version of the Code of June 12, 2006.

Detailed discussion of the audit of the parent-company and
consolidated financial statements

The parent-company financial statements for the period October 01, 2005 to September 30, 2006, prepared by the Executive Board in accordance with HGB (German GAAP) rules, and the management report of ThyssenKrupp AG were audited by KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Berlin and Frankfurt am Main. The audit contract had been awarded by the Audit Committee of the Supervisory Board in accordance with the resolution of the Annual General Meeting on January 27, 2006. The auditors issued an unqualified audit opinion.

The consolidated financial statements of ThyssenKrupp AG were prepared for the first time on the basis of IFRS in accordance with Art. 315a HGB. The consolidated financial statements and the management report on the Group were also given an unqualified audit opinion.

One focus of the audit this year was the reporting and risk management of long-term supply agreements. The report on this as well as the other audit reports and the financial statement documentation were sent to all Supervisory Board members in good time. They were the subject of intense discussion at the meeting of the Audit Committee on November 17, 2006 and at the meeting of the Supervisory Board on November 30, 2006. At both meetings, the auditors took part in the discussion of the parent-company and consolidated financial statements. They reported on the main results of the audits and were available to the Supervisory Board to answer questions and provide supplementary information.

Following our own examination of the parent-company financial statements, the consolidated financial statements, the management report and the management report on the Group, we approved the result of the audit and, in the meeting on November 30, 2006, on the recommendation of the Audit Committee approved the parent-company and consolidated financial statements. The parent-company financial statements are thus adopted. We concurred with the proposal of the Executive Board for the appropriation of net income.

Changes in the composition of the Supervisory Board and Executive Board

In the year under review, there was one change in the composition of the Supervisory Board. Mr. Wolfgang Boczek stepped down from the Supervisory Board at the close of November 30, 2005 and entered into retirement. By court ruling effective January 03, 2006, Mr. Gerold Vogel was appointed to the Supervisory Board as his successor. Mr. Vogel also succeeds Mr. Boczek as a member of the Strategy, Finance and Investment Committee. The Supervisory Board thanks Mr. Boczek for his constructive and expert contributions and many years of trustful cooperation.

In its meeting in January 2006, the Supervisory Board extended the appointment of Dr.-Ing. Ekkehard D. Schulz as Executive Board Chairman of ThyssenKrupp AG until the close of the Annual General Meeting on January 23, 2009. In the May 2006 meeting the appointment of Dr. Olaf Berlien as Executive Board member was extended until March 31, 2012, and in the November 2006 meeting the appointment of Mr. Edwin Eichler was extended until September 30, 2012.

At the close of September 30, 2006 Mr. Gary Elliott resigned from the Executive Board and has taken up a new post in the Group as chairman of the ThyssenKrupp national holding company in the USA. Dr. Stefan A. Kirsten is to leave the Executive Board at his own request at the close of November 30, 2006. The Supervisory Board thanks both gentlemen for their successful work for the Group. Mr. Edwin Eichler has taken over responsibility for the Elevator segment while remaining in charge of the Services segment. Dr. Kirsten's functions will be allocated to Dr. Ulrich Middelmann with the exception of information management, which is to be assigned to Mr. Ralph Labonte.

The Supervisory Board thanks the executive and management boards, the employees and employee representatives of all Group subsidiaries for their work, which has contributed to another successful fiscal year for ThyssenKrupp.

The Supervisory Board

Dr. Gerhard Cromme
Chairman
Düsseldorf, November 30, 2006