HOCHTIEF Annual Report 2006 - Financial statements > Notes to the Consolidated Financial Statements

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Notes to the Consolidated
Financial Statements

Declaration by the Executive Board

The Executive Board of HOCHTIEF Aktiengesellschaft is responsible for preparing and for ensuring the comprehensiveness and accuracy of the HOCHTIEF Group Consolidated Financial Statements and the combined HOCHTIEF Group and HOCHTIEF Aktiengesellschaft Management Report. The Consolidated Financial Statements as of December 31, 2006 are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. All prior-year figures are restated due to the first-time application of the amended IAS 19.

Due and proper preparation of the Consolidated Financial Statements and Group Management Report is assured by internal monitoring systems, uniform Group-wide guidelines and workforce training. Legal compliance, adherence to internal guidelines and the reliability and operability of our monitoring systems are kept under constant review throughout the Group. As required by law, our risk management system is geared toward ensuring that the Executive Board can identify potential risks at an early stage and take the necessary evasive action.

Deloitte & Touche GmbH Wirtschaftspr�fungsgesellschaft, elected as auditors by resolution of the General Shareholders' Meeting, have audited the Consolidated Financial Statements and the combined Group and HOCHTIEF Aktiengesellschaft Management Report and issued the unqualified Auditors' Report reproduced at the end of these Notes. The Consolidated Financial Statements, the combined Group and HOCHTIEF Aktiengesellschaft Management Report and the report on the audit were discussed in detail in the presence of the auditors by the Audit Committee and at the Supervisory Board meeting on the financial statements. The findings of the Supervisory Board's examination are set out in the Supervisory Board Report (see pages 8-10 of this Annual Report).

Signed in Essen on February 20, 2007

by the Executive Board:

	Dr. Keitel              Ehlers          Dr. Lohr
	
	Dr. L�tkestratk�tter    Dr. No�         Dr. Rohr

General information

The Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and with supplementary provisions of German commercial law applicable under Section 315a (1) of the German Commercial Code (HGB).

In addition to the Statement of Earnings, Balance Sheet and Statement of Cash Flows, the Consolidated Financial Statements also include a Statement of Changes in Equity and a Statement of Recognized Income and Expense. Segment reporting is provided in these Notes.

For purposes of clarity, a number of items are combined in the Statement of Earnings and in the Balance Sheet. These items are broken down into their constituents and commented on elsewhere in these Notes. The Statement of Earnings is presented using the nature of expense method of analysis.

The Consolidated Financial Statements are presented in euros. The Consolidated Financial Statements relate to the 2006 fiscal year, comprising the reporting period from January 1 to December 31, 2006. Corresponding prior-year figures are stated.

All monetary amounts in the text of these Notes are rounded to the nearest thousand euros unless specifically stated otherwise.

Basis of consolidation

The Consolidated Financial Statements include HOCHTIEF Aktiengesellschaft and all significant domestic and foreign subsidiaries in which it directly or indirectly holds the majority of voting rights. This generally goes hand in hand with a majority shareholding. In the case of one subsidiary included in the Consolidated Financial Statements, HOCHTIEF Aktiengesellschaft is not the majority shareholder but holds the majority of voting rights by virtue of a pooling agreement. Significant associates are accounted for using the equity method.

Holdings in subsidiaries or associated companies deemed to be of minor significance from a Group perspective are not consolidated and are accounted for in accordance with IAS 39.

The combined list of subsidiaries, associates and other equity interests held by the HOCHTIEF Group and HOCHTIEF Aktiengesellschaft (pursuant to Sections 285 (11) and 313 (2) 1-4 of the German Commercial Code (HGB)) is published in the