Good corporate governance is a high priority for the Board of Management and the Supervisory Board. This includes providing open, timely, and regular information and communication to our shareholders and other investors, business partners, employees, and the public.

Management and Control Structure

Supervisory Board

As a German corporation (AG), Dyckerhoff is subject to the German stock corporation law, and therefore has a two-tier management and control structure, consisting of a Board of Management with four members, and a Supervisory Board with nine members. In accordance with the One-Third Participation Act (Drittelbeteiligungsgesetz), two-thirds of the Supervisory Board members are shareholder representatives, and one third are employee representatives. The Supervisory Board has issued its own rules of procedure. The term of office of the current members of the Supervisory Board ends with the close of the 2011 Annual General Meeting.

In view of the revised version of section 5.4.1 of the German Corporate Governance Code in December 2010, the Supervisory Board has named the following objectives for its composition:

• As the Company operates internationally, at least two members of the Supervisory Board should be non-German nationals.
• At any time, at least one member of the Supervisory Board should have expertise in the areas of accounting or auditing. Moreover, the members should have the necessary knowledge, abilities, and professional experience to properly complete their tasks.
• There should be at least one female member of the Supervisory Board. This objective should be implemented within the next five years.
• Any proposed representatives of the shareholders should declare themselves ready to vacate their position in the Supervisory Board upon reaching the age of 80, if they are still in office at that time.
• At least one of the Supervisory Board members from the shareholder side should be independent, i.e. should not have any business or personal relationship with the Company or its Board of Management, which could be grounds for a conflict of interest.
• No more than two members of the Supervisory Board should be former members of the Management Board.
• Members of the Board of Management may not become members of the Supervisory Board during the two years following the end of their appointment, unless they are chosen on the suggestion of shareholders holding more than 25 % of the voting rights in the Company.
• Members of the Supervisory Board should not hold any directorships or consultancy positions at any of the Company's major competitors.
• The personal requirements for Supervisory Board members determined by article 100 of the German Stock Corporation Act (AktG) should be taken into consideration.

The Supervisory Board monitors and advises the Board of Management in the conduct of business. The Supervisory Board discusses business development and planning, as well as strategy and its implementation at regular intervals. The approval of the Supervisory Board is mandatory for major decisions such as company acquisitions or disposals, which are outside the normal course of business, major investments, and significant financial measures. It also decides on the appointment, dismissal, and mandate renewal of members of the Board of Management, the remuneration structure of the Board of Management, and the total remuneration of individual members of the Board of Management. Furthermore, the Supervisory Board approves the annual financial statements of Dyckerhoff AG and the Group’s consolidated financial statements, taking into account the reports of the auditors at the time, and the results of the review performed by the Finance Committee; the auditor attends these meetings. In accordance with its rules of procedure, the Supervisory Board is also responsible for monitoring the effectiveness of the internal control system, the risk management system, and the internal audit system.

The Supervisory Board has established two committees: the Finance Committee is particularly concerned with issues related to accounting, and also handles the other tasks, which are the responsibility of the Audit Committee according to the German Corporate Governance Code. When monitoring the effectiveness of the internal control system, the risk management system, and the internal audit system, the Finance Committee prepares the resolutions for the Supervisory Board's plenary meetings. The Finance Committee also deals with the application of accounting principles, as well as with quarterly financial statements. Together with the auditor, the Finance Committee discusses the annual financial statements of the Company, and the Group's consolidated financial statements, as prepared by the Board of Management, and, on the basis of the auditor’s report on these financial statements, prepares recommendations for the adoption of the annual financial statements, and the Group's consolidated financial statements, by the Supervisory Board. The Finance Committee has three members.

There is also an Executive Committee. It deals with the employment and pension contracts of the members of the Board of Management and all associated issues. Furthermore, it prepares the drafts for the Supervisory Board for the appointment, dismissal, and mandate renewal of members of the Board of Management, and makes proposals to the plenary session of the Supervisory Board on the remuneration structure of the Board of Management, and the total remuneration of the individual members of the Board of Management, when decisions are to be made on these topics. The Executive Committee consists of the Chairman of the Supervisory Board and two other Supervisory Board members.

Board of Management

As the management body of the Group parent company, the Board of Management manages the Company’s affairs. It consists of four members. Its objective is to create value on a sustainable basis, acting on its own responsibility and in the Company’s best interests, in other words taking into account the interests of the shareholders, its employees, and other stakeholders in the Company. The Board of Management is responsible for corporate policy, the Company’s strategic orientation, investment, financial and personnel planning, resource allocation, and management of the divisions. The Board of Management is responsible for preparing the quarterly financial statements, the annual financial statements of Dyckerhoff AG, as well as the consolidated financial statements. The Board of Management provides regular, timely, and comprehensive information to the Supervisory Board on all issues of relevance to the Company regarding planning, the risk situation, and risk management. In so doing, the Board of Management also addresses, and provides reasons for any deviations between business performance and the established plans and objectives. The Board of Management coordinates the Company’s strategic direction with the Supervisory Board, and discusses progress in implementing the strategy on a regular basis with the Supervisory Board. The activities of the Board of Management are regulated by its rules of procedure, which detail matters reserved for the Board of Management as a whole, the responsibilities of the individual units, and the majorities required for passing resolutions.

Shareholders

Dyckerhoff reports four times per fiscal year on business developments, and its financial and earnings situation. The Annual General Meeting usually takes place within the first five months of the fiscal year. The Board of Management enables shareholders to exercise their voting rights even if they cannot attend, by allowing the authorization of a company-appointed proxy to act on their instructions.

Among other matters, the Annual General Meeting approves the appropriation of profit, the actions of the Board of Management and the Supervisory Board, and appoints the external auditor. Capital measures and any changes to the Articles of Association, except simple wording changes, must be approved by the Annual General Meeting, and implemented by the Board of Management. Shareholders can make counterproposals to motions proposed by the Board of Management and the Supervisory Board, and challenge resolutions adopted by the Annual General Meeting. Shareholders, who together hold shares with a nominal value of EUR 100,000, which represents 39,062 shares, can also demand an appointment by the court of a special auditor to examine management transactions.

As part of our investor relations activities, we host an annual conference for analysts. Moreover, the Board of Management is also available for one-on-one meetings with analysts or financial investors, if required.

Share Transactions

Individuals who hold management positions within Dyckerhoff must report personal transactions in shares of Dyckerhoff, or related financial instruments, particularly derivatives, in accordance with article 15a of the German Securities Trading Act (WpHG). This requirement also applies to persons closely related to those individuals described above, such as spouses. The requirement does not apply, if the total amount of transactions for any individual in a management position together with persons closely related to them, is below EUR 5,000 for a calendar year.

Dyckerhoff AG was not informed of any notifiable transactions during the past fiscal year.

Declaration of Conformity pursuant to Article 161 of the German Stock Corporation Act (AktG)

The Corporate Governance Code was amended on May 26, 2010. The Declaration of Conformity of Dyckerhoff AG was issued on December 15, 2010. The deviations detailed in December 2009 still apply. The latest Declaration of Conformity and the preceding declarations are available on the Company's web site. The declared deviations relate to

• The D&O insurance for the Supervisory Board, which does not include a deductible, as in our assessment the agreement of a deductible is still not customary in most comparable companies' D&O policies,
• The Supervisory Board Nomination Committee, which, by resolution of the Supervisory Board, will not be established, as the choice of qualified candidates for the shareholder side of the Supervisory Board can be handled in the plenary session, without compromising the quality and efficiency of the selection process,
• The remuneration of the Supervisory Board, which does not contain any variable components, as performance-related remuneration would not be appropriate for all members of the Supervisory Board, and should therefore be done away with completely, and,
• The remuneration of the members of the Supervisory Board, which is not detailed individually in the Remuneration Report, as the members of the Supervisory Board only receive fixed remuneration, which is already outlined in the function-related information provided in the Annual Report, together with the provisions in the Company's Articles of Association.

The latest Declaration of Conformity and the preceding declarations can be found here.

The Remuneration Report, which is part of the Corporate Governance Report, can be found here.



Wiesbaden, March 11, 2011

Dyckerhoff Aktiengesellschaft
Board of Management       Supervisory Board