Ladies and Gentlemen,

As the new Lord High Mayor of the City of Mannheim, I am a member of the Supervisory Board of MVV Energie AG in line with the company's Articles of Association. At its meeting on 9 August 2007, the Supervisory Board elected me as Chairman and thus as successor to the previous Lord High Mayor, Gerhard Widder. I should like to thank the Supervisory Board for the trust it has placed in me with this election.

On behalf of all members of the Supervisory Board, I should also like to extend my sincere thanks to Gerhard Widder for his responsible work as longstanding Chairman of the Supervisory Board of MVV Energie AG. In his 24 years as Chairman of the Supervisory Board, previously of Stadtwerke Mannheim AG (from 5 August 1983), and following the renaming of the company upon its IPO in 1999, of MVV Energie AG, Gerhard Widder contributed significantly to the company's successful development and through all these years provided constructive and critical support to the Executive Board in the implementation of its successful growth strategy. Continuing Gerhard Widder's record of good work will be a priority for me in my role as the new Chairman of the Supervisory Board of MVV Energie AG. The major changes facing the German and European energy markets represent both a challenge and an opportunity, one which MVV Energie AG intends to exploit consistently and competitively.

During the 2006/07 financial year, the Supervisory Board performed its duties in accordance with the requirements of the law and of the Articles of Association, monitoring the work of the Executive Board on an ongoing basis and assisting it in an advisory capacity. We were provided by the Executive Board with regular, prompt and comprehensive information as to all major events and developments at the company and were involved at an early stage in all decisions of significance.

We were informed on a regular basis of the business performance and development of the net asset, financial and earnings position of MVV Energie AG and the MVV Energie Group. The Executive Board also briefed us on the risk situation and risk management, as well as on its financial, investment, personnel and strategic planning. At the meetings of the Supervisory Board, we were informed extensively by the Executive Board as to all major business transactions and then discussed these jointly and in detail. In addition to the presentations and documents relating to the meetings, we were also provided with quarterly reports and further oral and written reports on events of significance and the decisions required. In the case of all decisions and actions requiring its consent, which in some cases were prepared by its committees, the Supervisory Board inspected the draft resolutions and reached the respective decisions.

The Supervisory Board met on ten occasions during the period under report and also held a two-day retreat. The Audit Committee held four meetings and the Personnel Committee met five times during the year under report. The committee established for the capital increase met three times during the year under report.

Main topics of discussion

Major topics of our discussions included the preparation of the 2007 Annual General Meeting, the expansion of the district heating supply in Berlin's real estate market and the purchase of a district heating grid and the stocking up our stake in a district heating company in the Czech Republic.

In September 2007, the Supervisory Board approved the 2007/08 business plan, acknowledged the medium-term planning for the group of companies and dealt in detail with risk management and risk analysis. We also addressed the implementation of the German Corporate Governance Code. Further information about corporate governance at the MVV Energie Group, as well as the Statement of Compliance adopted in December 2007, can be found here and have also been made available on the internet at www.mvv-investor.de.

In the past year, the Supervisory Board also performed an efficiency review pursuant to Point 5.6 of the German Corporate Governance Code and adopted the improvements required as a result of the review, for example the conception of seminars for Supervisory Board members in cooperation with Mannheim Business School gGmbH.

Composition of Supervisory and Executive Boards

At its meeting on 9 August 2007, the Supervisory Board of MVV Energie AG elected the new Lord High Mayor of Mannheim, Dr. Peter Kurz, a member of the Supervisory Board since 4 August 2007, as its Chairman and thus as the successor of the previous Lord High Mayor, Gerhard Widder.

Michael Homann, Dr. Frank Mentrup and Manuel Mertes retired from the Supervisory Board during the 2006/07 financial year. We should like to thank the departing members of the Supervisory Board for their constructive participation in the work of our body. The retiring employee representatives have been replaced by Detlef Falk and Dr. Reiner Lübke. Following his nomination by the principal shareholder, Dr. Stefan Fulst-Blei was elected to succeed Dr. Frank Mentrup by the Annual General Meeting of MVV Energie AG on 9 March 2007.

There were also changes in the composition of the Executive Board. Karl-Heinz Trautmann, responsible for sales, trading and environmental energy, retired from his position on the Executive Board on 15 October 2006 and left the company at his own request. The Supervisory Board complied with his request for the premature termination of his contract. Karl-Heinz Trautmann had been a member of the Executive Board of MVV Energie AG since October 2003. We thank him for his contribution to the successful development of the company.

On 17 April 2007, the Supervisory Board appointed Matthias Brückmann to the Executive Board of MVV Energie AG for the period from 1 August 2007 to 31 July 2012. Mr. Brückmann will be responsible for the sales division.

Events after the balance sheet date

On 11 October 2007, the Supervisory Board endorsed the resolution adopted by the Executive Board of MVV Energie AG to act on the authorisation provided by the Articles of Association to increase the company's share capital by around Euro 25.96 million by issuing 10,139,506 shares in return for cash contributions and granting shareholders subscription rights. By strengthening its equity base, MVV Energie AG has laid important foundations for new investments and for the further successful development of its growth strategy.

Approval of the consolidated financial statements

The auditing company Ernst & Young AG, Wirtschaftsprüfungsgesellschaft, Steuerberatungsgesellschaft, Mannheim, audited the consolidated financial statements and group management report of the MVV Energie Group for the 2006/07 financial year pursuant to the resolution passed by the 2007 Annual General Meeting and the subsequent mandate by the Supervisory Board.

The consolidated financial statements and the group management report, both of which were compiled in accordance with International Financial Reporting Standards (IFRS) taking due account of Section 315a of the German Commercial Code (HGB), were granted an unqualified audit opinion. The annual financial statements of MVV Energie AG compiled in line with the German Commercial Code (HGB) and the accompanying management report for the 2006/07 financial year were also audited by the auditor and granted an unqualified audit opinion.

The consolidated financial statements and group management report of the MVV Energie Group, the annual financial statements and management report of MVV Energie AG, the appropriation of earnings proposed by the Executive Board and the auditor’s audit reports were all submitted to the Supervisory Board in good time for its respective meeting. These documents were carefully inspected by the Audit Committee and the Supervisory Board and were discussed in detail in the presence of the auditor. The Supervisory Board raised no objections and concurred with the findings of the audit. At our meeting on 14 December 2007, we approved the consolidated financial statements and group management report of the MVV Energie Group and the annual financial statements and management report of MVV Energie AG. The annual financial statements are thus adopted. We endorse the appropriation of earnings proposed by the Executive Board.

The Executive Board further compiled a report for the 2006/07 financial year on the company’s relationships with closely related companies (dependent company report). This report demonstrates that MVV Energie AG received commensurate compensation for and was not disadvantaged by the legal transactions with affiliated companies outlined therein. The dependent company report was audited by the auditor, who granted the following audit opinion:

"Following the audit and assessment we have performed in accordance with our professional obligations, we confirm

• that the factual disclosures made in the report are accurate,
• that the compensation of the company in the transactions listed in the report was not incommensurately high based on the circumstances known at the time of such transaction being executed."

We were provided in good time with copies of the dependent company report and of the audit report compiled by the auditor. Following its own review, the Supervisory Board concurred with the assessment made by the auditor and thus approved this report.

Moreover, Ernst & Young, Wirtschaftsprüfungsgesellschaft, Steuerberatungsgesellschaft, Mannheim, also audited the early warning risk identification system at MVV Energie AG and was of the opinion that this system was suited to fulfil its legal obligations.

The Supervisory Board would like to thank the Executive Board, the management teams at the shareholdings, as well as all employees and employee representatives, for their commitment and successful work during the 2006/07 financial year.

Mannheim, December 2007

Supervisory Board

Dr. Peter Kurz, Chairman