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The Executive Board - also on behalf of the Supervisory Board - reports in the following on corporate governance at ThyssenKrupp in accordance with section 3.10 of the German Corporate Governance Code:

ThyssenKrupp has always been guided by internationally and nationally recognized standards of good and responsible corporate management. Corporate governance is for us a central issue embracing all areas of the Group. The Executive and Supervisory Boards work together closely in the interests of the Company and are committed to enhancing the long-term value of the Company.

Unqualified declaration of conformity

On October 01, 2003 the Executive Board and Supervisory Board issued the statutory Declaration of Conformity in accordance with Art. 161 of the Stock Corporation Act (AktG), stating that ThyssenKrupp complies with all the recommendations of the Government Commission on the German Corporate Governance Code. This unqualified Declaration of Conformity also applied throughout the 2003/2004 fiscal year, as confirmed by the Executive Board and Supervisory Board in their Declaration of Conformity on October 01, 2004.

Beyond this, ThyssenKrupp also complies with the suggestions of the Code with one exception: there are no plans at present to introduce staggered periods of office for the stockholder representatives on the Supervisory Board. At our exchange-listed subsidiary Eisen- und Hüttenwerke AG, the German Corporate Governance Code is implemented taking into account the particularities of its membership in the Group. Variances are set out in the company's Declaration of Conformity of September 16, 2004.

Internet support for stockholders

Our stockholders are kept regularly informed about important dates by a financial calendar, which is published in the Annual Report, the quarterly reports and on the Company website. They can exercise their voting rights at the Annual General Meeting in person or by proxy, for which they can authorize the representative of their choice or a company-nominated proxy acting on their instructions. Proxy voting instructions for the Annual General Meeting on January 23, 2004 could also be issued in advance and during the meeting by electronic media. These facilities will also be available to the stockholders for the next Annual General Meeting on January 21, 2005.

Close cooperation between Executive Board and Supervisory Board

The Executive Board provides the Supervisory Board with regular detailed updates on all relevant issues relating to corporate planning and strategic development, on business transactions and the situation of the Group including an overview of risks. The Articles of Association make provision for important business transactions to be subject to Supervisory Board approval. For more details, please turn to the Report by the Supervisory Board.

The period of office of the employee representatives on the Supervisory Board ends at the close of the Annual General Meeting which resolves on discharging the Supervisory Board from responsibility for fiscal 2007/2008. The period of office of the stockholder representatives ends at the close of the Annual General Meeting on January 21, 2005. The Supervisory Board submits an election proposal for the election of the stockholder representatives. In selecting candidates, the aim is to ensure that the Supervisory Board always comprises members who have the requisite knowledge, abilities and professional experience and are sufficiently independent. Other factors taken into consideration are the Group's international business activities, potential conflicts of interest and the age limit for Supervisory Board members specified in the Rules of Procedure.

The Company has taken out directors and officers (D&O) liability insurance with an appropriate deductible for the members of ThyssenKrupp AG's Executive and Supervisory Boards.

There was only one case of a consultancy or other service contract between members of the Supervisory Board and the Company in the reporting period. Insofar as the international law firm Clifford Chance, one of whose partners is Supervisory Board member Dr. von Schenck, acted in a legal advisory capacity for the Company, the engagement was approved by the Supervisory Board Personnel Committee. Conflicts of interest of Executive or Supervisory Board members, which must be disclosed immediately to the Supervisory Board, did not occur.

Success-based compensation for Executive and Supervisory Boards

Executive Board compensation comprises a fixed component and a variable component. In addition to their bonus, Executive Board members also receive stock appreciation rights under the Company's Long Term Management Incentive Plan (LTMI) as a variable component of compensation. Another component of Executive Board compensation is a Mid Term Incentive Plan (MTI). Compensation is based in particular on the duties of the individual Executive Board member, his/her personal performance and that of the Executive Board as well as on the business situation, success and prospects of the Company relative to its competitive environment. The Notes to the Consolidated Financial Statements contain details of the LTMI and the MTI.

In fiscal 2003/2004, compensation for the active Executive Board members totaled €11,443.8K (prior year €7,645.5K), of which €3,982.0K (prior year €4,272.0K) related to fixed salaries and €6,980.6K (prior year €3,373.5K) to bonuses. In addition, the Executive Board members received payments of €481.2K from the 3rd installment of the LTMI. The breakdown by individual Executive Board member is shown in the following table. In addition to these amounts, the Executive Board was granted 420,000 stock appreciation rights under the LTMI and 211,867 stock rights under the MTI. At the end of the respective performance period, the stock appreciation rights under the LTMI result in a cash remuneration if at least one of the two performance hurdles of the LTMI has been met. The amount of compensation payable under the MTI is established at the end of the three-year performance period. At September 30, 2004 the hypothetical maturity of the stock appreciation rights issued in the 4th and 5th installments of the LTMI and the stock rights of the 1st and 2nd installments of the MTI would have provided a cash yield.

The amounts payable to individual Executive Board members under the two programs, assuming maturity at the balance sheet date, are also shown in the table below:

Executive Board compensation 2003/2004 in thousand €
* LTMI calculation based on the intrinsic value of the 4th installment of €0.50 and of the 5th installment of €13.11 ** MIT calculation based on the end-of-period price for ThyssenKrupp stock of €15.69
			Annual income									Rights
			Fixed salary		Bonus		Stock appreciation rights paid 3rd installment LTMI		Total			LTMI * stock appreciation rights (4th/5th installments)		MTI ** stock rights (1st/2nd installments)		Total
Prof. Dr.-Ing. Dr. h.c. Ekkehard D. Schulz, Chairman			792.0		1,402.5		160.40		2.354,90			561.4		631.6		1.193,00
Prof. h.c. (CHN) Dr. Ulrich Middelmann, Vice Chairman			600.0		1,062.5		100.25		1.762,75			425.3		478.5		903,8
Dr. Olaf Berlien			480.0		850.0		0.00		1.330,00			340.3		382.8		723,1
Edwin Eichler			480.0		850.0		0.00		1.330,00			340.3		382.8		723,1
Dr.-Ing. Jürgen Harnisch (until 04-14-2004)			258.2		457.2		80.20		795,6			340.3		313.9		654,2
Dr. A. Stefan Kirsten			480.0		850.0		0.00		1.330,00			340.3		382.8		723,1
Ralph Labonte			480.0		850.0		40.10		1.370,10			327.8		382.8		710,6
Dr.-Ing. Wolfram Mörsdorf (from 04-15-2004)			221.8		322.0		0.00		543,8			0.0		82.6		82,6
Prof. Dr.-Ing. Eckhard Rohkamm (until 02-21-2004)			190.0		336.4		100.25		626,65			340.3		286.4		626,7
Total			3,982.0		6,980.6		481.20		11.443,80			3,016.0		3,324.2		6.340,20

In addition, the Executive Board members receive non-cash benefits in the total amount of €826.4K. They mainly comprise the tax value of real property, related incidental costs and the use of Company cars. The Executive Board members are responsible for paying tax on these non-cash benefits. In principle they are available in the same way to all Executive Board members; they vary in amount according to the personal situation of the individual member. No loans or advance payments were granted to members of the Executive or Supervisory Boards in the year under review.

The members of the Executive Board also received pension plans. The pension of an Executive Board member is based on a percentage of the fixed salary component, the percentage increasing with the term of the Executive Board member's appointment (30% from the start of the first, 50% from the start of the second and 60% from the start of the third term of office). The pension plan is therefore not linked to the development of the variable compensation components.

Total compensation paid to former members of the Executive Board and their surviving dependants amounted to €14.4 million. An amount of €129.9 million was accrued for pension obligations benefiting former Executive Board members and their surviving dependants.

Under Art. 14 of the Articles of Association, in addition to reimbursement of their expenses and a meeting attendance fee of €500, Supervisory Board members receive compensation comprising the following elements: a fixed component of €16,000 and a bonus of €800 for each €0.01 by which the dividend paid out to stockholders for the past fiscal year exceeds €0.10 per share. On top of this, there is an annual compensation, based on the long-term performance of the Company, of €2,000 for each €100,000,000 by which average earnings before tax and minority interest (EBT) in the last three fiscal years exceeds €500,000,000. This compensation component will be payable for the first time after the Annual General Meeting which resolves on discharging the Supervisory Board from responsibility for the fiscal year ending on September 30, 2005.

The Chairman receives three times the above fixed compensation, bonus and long-term performance-based component, and the Vice Chairman double these amounts. Chairmanship and membership of Supervisory Board committees are compensated separately according to the German Corporate Governance Code. Supervisory Board members who only served on the Supervisory Board for part of the fiscal year receive a proportionally reduced compensation amount.

For fiscal year 2003/2004, the members of the Supervisory Board will receive total compensation of €1,592,588 (prior year €1,356,482) based on the proposed dividend of €0.60 per share. The individual Supervisory Board members receive the amounts listed in the following table:

Supervisory Board compensation 2003/2004 in €
* including deductions made under Art. 14 par. 3 Articles of Association
			Fixed compensation		Bonus		Compensation for committee work		Total
Dr. Gerhard Cromme, Chairman			48,000		120,000		56,000		224,000
Bertin Eichler, Vice Chairman (from 01-23-2004)			22,033		55,082		28,918		104,426 *
Dieter Schulte, Vice Chairman (until 01-23-2004)			10,055		25,136		13,197		48,388
Dr. Karl-Hermann Baumann			16,000		40,000		56,000		112,000
Wolfgang Boczek			16,000		40,000		14,000		70,000
Carl-L. von Boehm-Bezing			16,000		40,000		---		56,000
Udo Externbrink (until 01-23-2004)			5,028		12,568		4,399		21,995
Herbert Funk (until 01-23-2004)			5,028		12,568		---		17,596
Dr. Klaus Götte (until 03-31-2004			8,000		20,000		---		22,400 *
Heinrich Hentschel (from 01-23-2004)			11,016		27,541		---		38,557
Klaus Ix			16,000		40,000		14,000		70,000
Hüseyin Kavvesoglu (from 01-23-2004)			11,016		27,541		9,639		48,196
Dr. Martin Kohlhaussen			16,000		40,000		14,000		62,534 *
Dr. Heinz Kriwet			16,000		40,000		14,000		70,000
Reinhard Kuhlmann			16,000		40,000		9,639		61,906 *
Dr.-Ing. Klaus T. Müller (from 01-23-2004)			11,016		27,541		---		38,557
Dr. Mohamad-Mehdi Navab-Motlagh			16,000		40,000		14,000		70,000
Dr. Friedel Neuber (died on 10-23-2004)			16,000		40,000		---		56,000
Dr. Kersten von Schenck (from 04-01-2004)			8,000		20,000		---		28,000
Peter Scherrer			16,000		40,000		---		56,000
Thomas Schlenz			16,000		40,000		42,038		98,038
Dr. Henning Schulte-Noelle			16,000		40,000		---		56,000
Wilhelm Segerath			16,000		40,000		14,000		70,000
Ernst-Otto Tetau (until 01-23-2004)			5,028		12,568		4,399		21,995
Bernhard Walter			16,000		40,000		14,000		70,000
Total			368,220		920,545		322,229		1,592,588 *

Members of the ThyssenKrupp AG Supervisory Board received compensation of €184,238 in fiscal 2003/2004 for supervisory board mandates at Group subsidiaries. Beyond this, with one exception, they received no further compensation or benefits in the reporting year for personal services rendered, in particular advisory and mediatory services. The international law firm Clifford Chance, one of whose partners is Supervisory Board member Dr. von Schenck, received a total of €77,496 for consultancy services for subsidiaries of the ThyssenKrupp Group in the past fiscal year.

Responsible risk management

Good corporate governance also involves dealing responsibly with risks. The systematic risk management activities performed as part of our value-based Group management approach identify risks and optimize risk exposure. The risk management system at ThyssenKrupp AG is examined by the auditors in Germany and abroad. It is continuously evolved and adapted to the changing conditions. For more details, please turn to the section on "Risk Management".

Continuous improvement in transparency

We attach great importance in our corporate communications to ensuring that all target groups receive the same information at the same time. Private investors also have access to the latest news and developments at the Group on our website. All stock exchange (ad hoc) announcements made by ThyssenKrupp AG are posted online. The Company's Articles of Association and the Rules of Procedure for the Executive Board, Supervisory Board and the Audit Committee can also be viewed on our website. Details of how ThyssenKrupp is implementing the recommendations and suggestions of the German Corporate Governance Code are also available online. All stockholders and interested readers can subscribe to an electronic newsletter, which reports news from the Group.

According to Art. 15a of the Securities Trading Law (Wertpapierhandelsgesetz), the members of the Executive and Supervisory Boards are obligated to disclose the purchase and sale of ThyssenKrupp shares. At September 30, 2004 no such disclosures had been made to ThyssenKrupp AG in the reporting year. Similarly, there were no cases of share ownership subject to disclosure under section 6.6 of the German Corporate Governance Code at September 30, 2004.

The other directorships held by Executive and Supervisory Board members are listed here.

Details of related party transactions are given in the Notes to the Consolidated Financial Statements.

Auditing by KPMG

It was agreed with the auditors KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Berlin and Frankfurt am Main that the Chairman of the Audit Committee would be informed immediately of any possible grounds for exclusion or bias arising during the audit insofar as they are not immediately eliminated, and that the auditors would report immediately on any findings and occurrences during the audit which have a significant bearing on the duties of the Supervisory Board. It was also agreed that the auditors would inform the Supervisory Board or make a note in the audit report of any facts ascertained during their examination which are inconsistent with the Declaration of Conformity issued under Art. 161 Stock Corporation Act (AktG) by the Executive Board and Supervisory Board.