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Dr. Gerhard Cromme Chairman of the Supervisory Board

Throughout 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. 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, we 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.

Five Supervisory Board meetings were held in fiscal 2004/2005, one of which was the constituent meeting after the Annual General Meeting. Between meetings, the Supervisory Board was informed 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.

Efficient work in the Supervisory Board committees

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. In individual cases, decision-making powers of the Supervisory Board were delegated to committees. All committees are chaired by the Supervisory Board Chairman, with the exception of the Audit Committee. The current compositions of the individual committees are shown in "Supervisory Board Committees".

The Executive Committee (Praesidium) met four times in the reporting period. The main subjects of discussion were fundamental issues of the further development of the Group, the implementation of the German Corporate Governance Code and the preparation of 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. In the year under review it dealt mainly with questions relating to the organization of the Executive Board, the appointment of new Executive Board members and the future distribution of responsibilities, the compensation system and the amount of compensation paid to the Executive Board, as well as the acceptance of external directorships by Executive Board members and the question of 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 met five times in the reporting period. In particular, it addressed 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. Further important issues were the parameters and timetable for switching the accounting system at ThyssenKrupp to IFRS as from 2005/2006, as well as the Company's compliance program. The auditors participated in 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, which met twice in fiscal 2004/2005, 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. This Committee discussed in detail the project to build a steel mill in Brazil and in this connection the Group's medium-term financing strategy.

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

Wide spectrum of topics 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 dealt with the situation on the international raw material markets as well as the development of the euro against the US dollar and other key currencies, and discussed the impact of each of these on ThyssenKrupp's business activities with the Executive Board. The steel mill project in Brazil was also the subject of several detailed presentations and discussions in the full-session meetings.

On the basis of detailed documents, the Supervisory Board approved the merger of ThyssenKrupp Werften with Howaldtswerke-Deutsche Werft by written procedure in November 2004. Thereafter the Executive Board kept us informed on the integration status and the further development of the new shipyard alliance.

In the meeting on November 30, 2004 we focused on the parent-company and consolidated financial statements for the year ended September 30, 2004 and the corporate plan for fiscal 2004/2005. On the basis of detailed reports by the Executive Board we discussed the Group's strategic development and medium-term investment plan as well as the steel mill project in Brazil. In the absence of the Executive Board, the Supervisory Board dealt in this meeting with the efficiency review of the Supervisory Board. The discussion focused on the work of the committees, Supervisory Board compensation, the composition of the Supervisory Board in view of the forthcoming re-election of the stockholder representatives in the Annual General Meeting in January 2005 as well as the use of electronic media for dispatching Supervisory Board documents.

In December 2004 the Executive Board informed us of the regaining of investment-grade status at Standard & Poor's and of the status of negotiations on the disposal of the ThyssenKrupp Residential Real Estate group and the ThyssenKrupp Fahrzeugguss group.

In the meeting on January 21, 2005 – immediately before the Annual General Meeting – the Executive Board reported on the current situation of the Group. On the basis of detailed documents, the Supervisory Board approved the disposal of the ThyssenKrupp Residential Real Estate activities and ThyssenKrupp Fahrzeugguss as part of the portfolio optimization.

In a further Supervisory Board meeting after the Annual General Meeting on January 21, 2005, the Supervisory Board was reconstituted with the newly elected stockholder representatives and new committee members were elected. Dr. Gerhard Cromme was confirmed as Chairman and Mr. Bertin Eichler as Vice Chairman of the Supervisory Board.

In April 2005 we approved the disposal of the ThyssenKrupp Elastomertechnik group and in May 2005 the sale of the EWK Edelstahl-Witten-Krefeld group, in each case by written procedure.

Central to the discussions in the meeting on May 13, 2005 was the Group's strategic development plan. We were informed in depth about the status of the steel mill project in Brazil. A further topic was the division of the Steel segment to form two independent segments for the Carbon Steel and Stainless Steel activities. In addition, new initiatives under the ThyssenKrupp best program and the planned Groupwide strengthening of the service offensive were discussed. We also approved the investment plan for fiscal 2005/2006 and the financing thereof and discussed the investment framework for the next three fiscal years with the Executive Board in the context of the medium-term financing plan.

Following the Executive Board's report on the situation of the Group in the Supervisory Board meeting on August 12, 2005, we discussed the status of the steel mill project in Brazil against the background of developments on the world steel market. We held an in-depth discussion with the Executive Board on the interest held by ThyssenKrupp in RAG and the possibility of disposing of it to support RAG's plans for an initial public offering. A further key theme of this meeting was the appointment of new Executive Board members and the associated adjustments to the schedule of responsibilities for the Executive Board. Furthermore, we approved the disposal of ThyssenKrupp MetalCutting.

Declaration of Conformity reflects good corporate governance

The Supervisory Board continuously monitored the further development of corporate governance standards. The Executive Board – also on behalf of the Supervisory Board – reports on corporate governance at ThyssenKrupp in accordance with section 3.10 of the German Corporate Governance Code. On October 01, 2005 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 02, 2005.

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

The parent-company financial statements for the period October 01, 2004 to September 30, 2005, 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 21, 2005. The auditors issued an unqualified audit opinion.

The consolidated financial statements of ThyssenKrupp AG were prepared on the basis of US GAAP. In accordance with the exemption provision of Art. 292a HGB, German GAAP consolidated financial statements were not prepared. Accordingly, additional disclosures pursuant to Art. 292a HGB were added. The US GAAP consolidated financial statements and the management report on the Group were also given an unqualified audit opinion.

One focus of the audit this year were the structures of the ThyssenKrupp Group in terms of risks from fraudulent activities by employees and board members. 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 16, 2005 and at the meeting of the Supervisory Board on November 30, 2005. 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, 2005, 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.

Change in the composition of the Supervisory Board and Executive Board

In the year under review, there were several changes in the composition of the Supervisory Board. On October 23, 2004, our long-standing Supervisory Board member Dr. Friedel Neuber died. We paid tribute to Dr. Neuber's work in last year's Annual Report and at the Annual General Meeting on January 21, 2005.

The period of office of the stockholder representatives expired at the close of the Annual General Meeting on January 21, 2005. Dr. Gerhard Cromme, Dr. Martin Kohlhaussen, Dr. Heinz Kriwet, Dr. Kersten v. Schenck and Dr. Henning Schulte-Noelle were re-elected to the Supervisory Board. Prof. Jürgen Hubbert, Prof. Dr. Bernhard Pellens, Dr. Heinrich v. Pierer, Mr. Christian Streiff and Prof. Dr. Gang Wan were elected as new members of the Supervisory Board. In the ensuing constituent meeting, Dr. Gerhard Cromme was elected Chairman of the Supervisory Board. The new Supervisory Board no longer includes Dr. Karl-Hermann Baumann, Mr. Carl-L. von Boehm-Bezing, Dr. Mohamad Mehdi Navab-Motlagh and Mr. Bernhard Walter.

Of the employee representatives, Mr. Reinhard Kuhlmann resigned from office at the close of the Annual General Meeting on January 21, 2005, in order to take up a new post in the Group. By court ruling effective May 04, 2005, Mr. Markus Bistram was appointed member of the Supervisory Board in his place.

The Supervisory Board thanks the former Supervisory Board members for their constructive and expert contributions and for their many years of cooperation based on trust.

Effective October 01, 2005, the Supervisory Board appointed Mr. Gary Elliott, Mr. Jürgen H. Fechter and Dr.-Ing. Karl-Ulrich Köhler as new members of the Executive Board of ThyssenKrupp AG. Mr. Elliott is responsible for the Elevator segment, Mr. Fechter for the Stainless segment and Dr.-Ing. Köhler for the Steel segment. This means that in the future each segment will be represented by its executive board chairman on the Executive Board of ThyssenKrupp AG.

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 a successful fiscal year for ThyssenKrupp.

The Supervisory Board

Dr. Gerhard Cromme

Chairman

Düsseldorf, November 30, 2005