Transactions with Related Parties

Demag Cranes AG and the subsidiaries included in the Financial Statements transact business with numerous other companies, including in some cases with related parties. Related parties notably include the entities contained in the list of Demag Cranes AG subsidiaries, joint ventures and investments, plus employees in key Group positions and their families.

The Group’s main transactions with related parties arise in the course of normal business dealings. All such transactions are effected on an arm’s length basis. The table below provides information on related parties as at 30 September 2009:

The table below shows balances at the balance sheet date on transactions with the related parties mentioned and the expenses incurred in the reporting period:

Compensation of the Management Board and Members of the Supervisory Board

Detailed information on the compensation system and compensation paid to individual members of the Management Board and Supervisory Board is provided in the Remuneration Report (in the Corporate Governance section). The Remuneration Report forms an integral part of the Management Report.

Management Board

Members of the Management Board were paid fixed and variable compensation in financial year 2008/2009. The variable compensation depends on the attainment of targets for operating EBIT and operating net income after tax. Members of the Management Board also participate in the Matching Stock Program (MSP). This is described in Note 24 "Shareholders’ Equity". Non-cash compensation is also provided in the amounts required to be recognised under tax regulations for the use of company cars.

Total Compensation

The table below shows the compensation for the active members and one former member of the Management Board:

The total compensation paid to active members of the Management Board was EUR 1,920,000 (2007/2008: EUR 2,596,000). This consisted of EUR 1,029,000 (2007/2008: EUR 800,000) in fixed compensation, EUR 413,000 (2007/2008: EUR 1,440,000) in variable compensation and EUR 244,000 (2007/2008: EUR 153,000) in other compensation. The total figure includes the fair value of share-based compensation (the MSP), at EUR 235,000 for the financial year 2008/2009 (2007/2008: EUR 203,000). Total compensation also includes EUR 56,000 (2007/2008: EUR 0,000) in additions to pension provisions.

A member of the Management Board departing in the financial year received EUR 313,000 in fixed compensation (2007/2008: EUR 581,000), EUR 0,000 in variable compensation (2007/2008: EUR 1,046,000) and EUR 3,444,000 in other compensation (2007/2008: EUR 15,000). Other compensation in the financial year mainly consists of a EUR 3,438,000 final settlement for early termination of contract covering all income the departing member of the board would have received, had the contract continued after 31 March 2009. Entitlements under the share option scheme expired on termination. The fair value of share-based compensation in the previous year was EUR 275,000. Pension provisions for former members of the Management Board amounted to EUR 96,000 as at 30 September 2009 (2008: EUR 66,000).

Supervisory Board

In accordance with the Articles of Association, members of the Supervisory Board received fixed compensation totalling EUR 404,000 for financial year 2008/2009 (2007/2008: EUR 408,000) for their activities on the Supervisory Board of Demag Cranes AG and on the supervisory boards of other Group companies. A further EUR 130,000 (2007/2008: EUR 126,000) was paid in attendance fees. Out-of-pocket expenses came to EUR 15,000 (2007/2008: EUR 19,000). There is no variable compensation for members of the Supervisory Board.