Four ordinary meetings and two extraordinary meetings of the Supervisory Board were held in the 2006 financial year. None of the members of the Supervisory Board attended fewer than half the meetings. There were no conflicts of interest for Supervisory Board members in 2006.

At our meetings, in addition to reviewing current business developments, we also dealt with the risk position of the company and those individual transactions of fundamental importance for which the Executive Board requires our approval. After a thorough review and detailed discussions about each of the proposals of the Executive Board, the Supervisory Board granted all necessary approvals. Due to time pressures, three decisions were made on the basis of documents provided outside the Supervisory Board meetings in written or electronic form, after the facts relating to those decisions had been discussed in the full meeting.

The advisory and monitoring activities of the Supervisory Board focused in 2006 particularly on the acquisition of BOC. This recommended cash offer, a very complex transaction with far-reaching strategic and financial consequences, was accepted, and the acquisition was completed on schedule on 5 September 2006. The Supervisory Board welcomes the repositioning of the Group as a result of the acquisition as a world-leading gases and plant construction company. One of the most urgent tasks facing us now is the swift integration of The BOC Group into The Linde Group. Therefore, from September 2006 we were heavily involved in the integration process. The Executive Board regularly updated us on the state of affairs, so that we were satisfied that the integration of the two companies was proceeding apace.

The Chairman of the Supervisory Board was involved at an early stage in the deliberations on the proposed acquisition of BOC. The full Supervisory Board considered the proposal for the first time at an extraordinary meeting on 17 February 2006. At this meeting, which was devoted solely to the potential acquisition of BOC, we formed a complete picture of the transaction and its feasibility, the associated opportunities and risks, the resulting business and strategic objectives, the financing structure envisaged and the impact on our Group. Following an in-depth discussion, concerning strategic, antitrust and financial issues in particular, the Supervisory Board approved in principle the proposed acquisition, with a transaction volume of around €15 billion, and the financing solution proposed by the Executive Board, including the use of authorised share capital.

At our meeting to approve the financial statements on 3 March 2006, we reviewed in detail and approved the annual financial statements of Linde AG and the Group financial statements for the year ended 31 December 2005 and agreed the proposed appropriation of earnings. We also discussed the latest developments relating to the potential acquisition of BOC, following a detailed presentation by the Executive Board and representatives from the investment banks advising us. Issues discussed at length included the state of negotiations and the next steps to be taken, the results of the due diligence review and the measures adopted to finalise the financial structure. At this meeting, the Supervisory Board confirmed its approval in principle of the acquisition of 100 percent of the shares of BOC on the basis of a cash offer and of the measures being taken to finance the offer, in particular the conclusion of a finance agreement with a banking consortium. The final decision of the Executive Board to make a cash offer for BOC of 1,600 pence per share, published on 6 March 2006, was approved by the standing committee of the Supervisory Board, which had been authorised to do so by the Supervisory Board in accordance with the bylaws of the company.

At the meeting immediately before the Shareholders’ Meeting on 4 May 2006, the Executive Board first presented a report on the current situation of the Group. The meeting also served to prepare for the subsequent Shareholders’ Meeting. In addition, the Executive Board presented a report to the Supervisory Board on the structural optimisation of the Material Handling business segment, with the aim of making it legally independent, and on the specific restructuring measures required. The Executive Board also reported to us in detail on the status of the work being done on the proposed acquisition of BOC. It presented us with a timetable and a set of action points, which included the clearance being sought for the deal from the EU and US competition authorities and preparations for various financing measures and for the integration process. In addition, the Executive Board explained two draft resolutions on transactions requiring approval. After reviewing the resolutions, we granted our approval in both cases: on the one hand, of the capital expenditure requested by the Executive Board to build an on-site air separation plant in the Netherlands and, on the other, for the purchase inter alia of a gases company in Turkey.

At our meeting on 12 September 2006, the Executive Board provided us with a detailed report of the latest state of affairs regarding the BOC acquisition, which was completed on schedule on 5 September 2006 and, against this background, presented us with its detailed plans for the integration of the two companies and for the proposed reorganisation of The Linde Group, on which we questioned them exhaustively. The discussions of the Supervisory Board also focused on the strategic orientation of the company, the progress achieved with the implementation of the corporate strategy and the Executive Board’s report on the status of our portfolio optimisation, as well as the business operations that would need to be disposed of as a result of conditions imposed by the competition authorities in connection with the acquisition of BOC. In the context of our portfolio optimisation strategy, we also discussed the Material Handling business segment becoming legally independent, the bundling of the brands into the new umbrella company, KION Group GmbH, and the business model and management appointments for that company.

The only item on the agenda at our extraordinary meeting on 5 November 2006 was the decision on the sale of the Material Handling business segment. After intense discussion of the sale process described to us in the presentation, and of the final offers and the key points in the contracts of sale negotiated, as well as of financial and strategic considerations, and after putting questions to the Executive Board, and to the Mergers & Acquisitions Director and a representative of the investment bank advising us, the Supervisory Board approved the disposal of the Material Handling business segment at a price of €4 billion to the buyers’ consortium Kohlberg Kravis Roberts & Co.(KKR)/Goldman Sachs Capital Partners.

On 28 November 2006, the Executive Board presented us with a preview of the 2006 financial statements and the budget for the 2007 financial year, including financial, capital expenditure and personnel plans. We questioned the Executive Board in depth about the assumptions they had made. The Executive Board gave us detailed explanations and supplied reasons where there were discrepancies between corporate plans or targets set in the previous year and actual performance. We approved the 2007 capital expenditure programme of The Linde Group. We also reviewed in detail the status of the portfolio optimisation, based on documents provided to us in advance and a verbal report made to us by the Executive Board, and granted our approval in principle to sales of companies and changes in investment holdings, either as a result of conditions imposed by the competition authorities or, in some cases, for other reasons. The Executive Board also informed us in detailed verbal and written reports about the proposed launch of a medium-term notes programme for the issue of medium-term and long-term bonds. We approved the Executive Board’s request.

Furthermore, the Executive Board advised us at our meetings in September and November 2006 of the proposed rationalisation of locations for the administrative departments of the reorganised Group including BOC, especially in Germany and in the UK. We discussed with the Executive Board the possibility of transferring the registered office of the company. On 28 November 2006, we approved the Executive Board’s declaration of intent, to propose the relocation of the registered office of the company at the Shareholders’ Meeting on 5 June 2007.