ONE ROOF

12 Annual Report 2009
by higher levels of new orders in national and interna-
tional civil and structural engineering. Other focuses of
discussion included the German commercial building
sector, which is currently in recession, the weakness of
the markets in Poland and the Czech Republic, outcomes
of large-scale projects in the Middle East, and concentration
on new market segments such as offshore. Overall,
no significant impact is to be expected from the
German economic stimulus packages, especially in
building construction, and only minor forward impetus
is anticipated in national markets as a result of the varying
trends in the course of the economic crisis. A positive
note is the further growth in the profitable international
side of the business.
With a view to the HOCHTIEF Real Estate division, as
the Supervisory Board found in its discussions, the
German market for real estate development is considered
particularly stable among markets in Europe.
Despite a slight recovery in the second half of the year,
increasing pressure to invest and a trend toward inflation-proof
asset classes, however, the investment market
still faces problems. The Supervisory Board expressly
welcomed the effects of the conservative business
strategy in this connection. With high occupancy levels
and high levels of sales prior to completion, the need
did not arise at any time for distress sales at the expense
of margins. The targeted aim of focusing on market
segments such as office, residential, urban district developments
and healthcare has proved successful. The
Supervisory Board was also pleased with the performance
of aurelis with its successful refinancing under
difficult conditions on the financial market, and with the
development of HOCHTIEF Property Management to
become one of Germany’s largest real estate managers.
In the HOCHTIEF Services division, the Supervisory
Board paid close attention to the service range and
pressure on margins in a still growing market, and to
initiatives to minimize impacts of the recession with regard
to industrial clients—from short-time working and
cutbacks (despite greater propensity to outsource)
through to loss of clients due to insolvency. A further
agenda topic was the development of technical expertise,
notably in the industrial services segment with
regard to the energy and process industry, and the
strong market growth expected for 2011 with its implications
for the unit’s ongoing development and management.
At Group-wide level, the Supervisory Board addressed
claims and variation orders, the further development of
the Group’s compliance structure and the outcomes of
auditing activities.
The Supervisory Board regularly reviewed the develop-
ment of corporate governance at HOCHTIEF. In accord-
ance with Point 3.10 of the German Corporate Govern-
ance Code, the Executive Board provides a joint
Executive Board and Supervisory Board report on corporate
governance in the next section of this report.
The codes of procedure for the Supervisory Board and
its committees were amended in line with the revision
of the Code effective June 18, 2009. HOCHTIEF has also
implemented new provisions in the German Stock Corporations
Act (AktG) and the Code with regard to D&O
insurance for the Executive Board and the Supervisory
Board. With effect from January 1, 2010, a deductible
was agreed as required in the Act and the Code.
In accordance with Point 5.6 of the Code, the Super-
visory Board has also examined the efficiency of its
activities. The members of the Supervisory Board answered
a questionnaire for this purpose on all material
aspects of the Supervisory Board’s activities. After
evaluation of the questionnaires, the findings were discussed
in detail by the Supervisory Board and necessary
modifications agreed to improve efficiency.
The Supervisory Board has formed four committees,
whose members are listed in the Boards section. The
Audit Committee met three times in 2009. It looked in
detail at the quarterly reports, financial statements and
financial reporting, and also devoted considerable attention
to Internal Auditing’s audit findings. In addition,
the Audit Committee discussed risk management and
compliance within the HOCHTIEF Group, the effectiveness
of the internal control system, the motion for the
General Shareholders’ Meeting regarding the nomination
for external auditor, priority areas for auditing and
the commissioning of and the fee agreement with the
external auditor.
The Human Resources Committee met three times. It
dealt mainly with the Executive Board compensation
system and the amount of Executive Board compensation.
It also prepared the Supervisory Board’s personnel-related
decisions and—prior to the entry into force
of the new legislation (VorstAG) on reasonable levels of
management compensation—passed the necessary