Ladies and Gentlemen,

In the 2007/ 08 financial year, the Supervisory Board continued to perform the duties incumbent on it by law and under the Articles of Incorporation with due diligence. In line with our supervisory and control function, we monitored and advised the Executive Board in its management of the business on an ongoing basis and satisfied ourselves of the correctness of its actions. We were provided by the Executive Board with regular, prompt and comprehensive information about the performance and position of the company, as well as about all major business transactions. The information from the Executive Board included presentations of the company’s business, sales and earnings performance, as well as of its net asset and financial position. The Executive Board also briefed us on the company’s financial, investment and personnel budgets, its strategic planning and its risk situation and risk management.

The Supervisory Board met on five occasions during the period under period, while the Personnel Committee and the Audit Committee each held four meetings. At our meetings, we carefully examined and held detailed discussions concerning the presentations and reports submitted by the Executive Board in respect of major events and resolutions. On the basis of this information, the Supervisory Board adopted resolutions, where appropriate prepared by its committees, on all decisions requiring its approval.

Main topics of our discussions

On 11 October 2007, the Supervisory Board committee formed to deal with the capital increase approved the resolution adopted by the Executive Board of MVV Energie AG to act on the authorisation granted to it by the Articles of Incorporation to strengthen the company’s equity base by increasing the share capital by around Euro 25.96 million by issuing 10,139,506 new shares in return for cash contributions with shareholders’ subscription rights.

Further major topics at the meetings of the Supervisory Board in the year under report included the disposal of shares in the Polish company KPEC Sp. z o.o., Bydgoszcz, and MVV Polska Sp. z o.o., the establishment of SECURA Energie GmbH for the nationwide sale of green electricity, the contribution of the shareholding held by MVV Energie AG in Stadtwerke Solingen GmbH to the Rheinisch/Bergisch Municipal Utility Association (RBSV GmbH) and the planned construction of Block 9 at the large power plant in Mannheim (GKM). The Supervisory Board dealt just as closely with the planned expansion of the district heating supply in Mannheim and the Rhine/Neckar metropolitan region, as well as with various regional projects in the energy-related services business, notably the construction and operation of biomass cogeneration plants.

On 26 September 2008, the Supervisory Board of MVV Energie AG approved the conversion of MVV RHE AG to the legal form of a limited liability company (GmbH) to provide an appropriate depiction of the existing functions of MVV RHE AG following the relocation of numerous business activities to other companies in the MVV Energie Group. This conversion is intended to reduce complexity and costs at the MVV Energie Group. In the course of the conversion, the company’s 51 existing employees will be relocated to MVV Energie AG. The Supervisory Board of MVV RHE AG will be disbanded. At the same meeting, the Supervisory Board discussed the entry of MVV Umwelt GmbH into the British market and approved the foundation of the British subsidiary MVV Environment Ltd. In addition, the Supervisory Board approved the acquisition by MVV Energie AG or 24/7 Trading GmbH of a licence for the joint utilisation of a sustainable energy trading and risk management system together with RheinEnergie AG, Cologne.

Furthermore, the Supervisory Board approved the 2008/09 business plan, discussed the medium-term planning and dealt in detail with risk management and risk analysis.

The Audit Committee dealt at several meetings with the topics of “Audit plan and audit focuses for the group auditing department“ and “Compliance management system“. On the recommendation of the Audit Committee, the Supervisory Board appointed a compliance manager.

As part of the implementation of the German Corporate Governance Code, the Supervisory Board performed an efficiency review pursuant to Point 5.6 of the Code in the past year once again and adopted the resultant improvement measures in its work. Reference is made to the internet site www.mvv-investor.de for information about corporate governance at the MVV Energie Group and the Declaration of Conformity adopted in December 2008 for the past financial year.

Composition of the Supervisory and Executive Boards

Dr. Karl Heidenreich retired from his position on the Supervisory Board of MVV Energie AG as of the conclusion of the Annual General Meeting on 14 March 2008. Pursuant to the proposal submitted by the Supervisory Board, Dr. Rolf Martin Schmitz, CEO of RheinEnergie AG, Cologne, was elected as his successor by the Annual General Meeting of MVV Energie AG on 14 March 2008. We would like to thank Dr. Heidenreich for his constructive contributions to the work of our body.

Dr. Rudolf Schulten, CEO of MVV Energie AG, approached me in my function as Chairman of the Supervisory Board at the end of July 2008 to request the premature rescission of his employment contract, which ran until September 2013, to enable him to assume another management position in the energy industry. On 26 September 2008, the Supervisory Board of MVV Energie AG consented to Dr. Rudolf Schulten retiring from his position prematurely as of 30 September 2008. We would like to thank Dr. Schulten for the successful further development of the MVV Energie Group which occurred under his chairmanship.

On 25 August 2008, the Supervisory Board established the procedure for filling the position thereby becoming vacant with the most suitable candidate as quickly as possible. Responsibility for the Commercial Affairs executive board division has been assumed by Dr. Werner Dub (Technology Director) from the expiry of the financial year until the vacant position is filled. The other executive board divisions continue to be headed by Matthias Brückmann (Sales) and Hans-Jürgen Farrenkopf (Personnel).

Events after the balance sheet date

At an extraordinary meeting held on 23 October 2008, the Supervisory Board of MVV Energie AG appointed Dr. Georg Müller to the Executive Board of MVV Energie AG and as CEO for a five-year term. Dr. Müller, to date CEO of RWE Rhein-Ruhr AG, Essen, will assume this function as of the beginning of 2009. Dr. Müller convinced the Supervisory Board on account of his proven specialist competence, longstanding experience, high personal integrity and distinctly entrepreneurial and strategic approach.

Approval of the consolidated financial statements

The consolidated financial statements and group management report of the MVV Energie Group for 2007/08 were audited by Ernst & Young AG, Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Mannheim, pursuant to the resolution passed by the 2008 Annual General Meeting and the subsequent mandate by the Supervisory Board and were granted an unqualified audit opinion. Both the consolidated financial statements and the group management report were prepared in accordance with International Financial Reporting Standards (IFRS), taking due account of Section 315a of the German Commercial Code (HGB). The annual financial statements of MVV Energie AG prepared in line with HGB and the accompanying management report for the 2007/08 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 profits proposed by the Executive Board and the auditor’s audit report 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. We endorse the findings of the audit performed by the auditor. At our meeting on 19 December 2008, 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 profits proposed by the Executive Board.

The Executive Board further compiled a report for the 2007/ 08 financial year on the company’s relationships with closely related companies (dependent company report). According to the report, MVV Energie AG was not disadvantaged by the legal transactions performed with associated 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 AG, 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 executive boards and management teams at the shareholdings, as well as all employees, members of works councils and employee representatives for their active contributions to the success of our company in the 2007/ 08 financial year. With their expertise, innovation and drive, we will together be able to master the major new challenges in the energy market and maintain the company’s successful performance.

Mannheim, December 2008
Supervisory Board

Dr. Peter Kurz, Chairman