Dear Shareholders,

In 2006, Deutsche Post World Net consolidated its ranking as the world’s leading logistics group and remained well positioned for the future. Exel plc and BHW Holding AG, acquired in the previous year, were successfully integrated into the Group. In the EXPRESS Division, DHL secured long-term access to air freight capacity on trans-Pacific routes through the acquisition of a minority stake in Polar Air Cargo Worldwide, Inc. In November, the Group’s company Williams Lea acquired the British company The Stationery Office, thus further expanding its international platform for Value-added services in the MAIL Division.

Once again, the Supervisory Board concentrated during the year on the Group’s strategic focus. Every important company decision was discussed in detail with the Board of Management, which informed the Supervisory Board in a timely and comprehensive manner on all important issues concerning planning and business development. There were regular reports on risks and risk management, on important business transactions and projects in each of the divisions, and on strategic measures and the strategic focus of the company. Measures subject to approval by the Supervisory Board under its by-laws were discussed in considerable detail. The members of the Board of Management presented their reports on the basis of the related rules of procedure agreed with the Board of Management. Moreover, the Board of Management continuously informed the Chairman of the Supervisory Board about important business transactions and impending decisions, also between Supervisory Board meetings. We prepared our approval for business measures in the relevant committees. The chairs of the committees reported regularly on the committees’ work at Supervisory Board meetings.

Supervisory Board continually advises and monitors the Board of Management
The Supervisory Board met twice in each half of the year. No member of the Supervisory Board was absent from more than half of the meetings. At all of its meetings, the Supervisory Board concerned itself with questions of corporate strategy, the business performance of the divisions, and risk management.

At the financial statements meeting on March 9, 2006, the Board approved the 2005 annual and consolidated financial statements after in-depth discussion. Prior to the meeting, the Finance and Audit Committee and the Chairman of the Supervisory Board each had detailed discussions with the auditors. In addition, the joint report by the Board of Management and the Supervisory Board on corporate governance and the agenda was approved, including the proposed resolutions for the 2006 Annual General Meeting (AGM). The meeting also addressed the efficiency review of the Supervisory Board’s activities and the remuneration system for the Board of Management.

At the meeting on May 10, 2006, following the AGM, the Supervisory Board reconstituted itself. The long-standing Chairman Josef Hattig and other members left the Supervisory Board with effect from the end of the AGM, and the AGM elected new members in their place. The members of the Supervisory Board elected me as the new Chairman and re-elected Rolf Büttner as the Deputy Chairman of the Supervisory Board. In addition, new members were appointed to the committees and business developments in the first months of the year were discussed.

In July, the Supervisory Board, voting under the circular procedure, approved the sale of the Group company Modra Pyramida in the Czech Republic.

Following the resignation of Dr. Peter Kruse from his seat on the Board of Management, a new allocation of duties of the Board of Management members was discussed and approved at the Supervisory Board meeting of September 22, 2006. With effect from that date, John P. Mullen assumed overall responsibility for the EXPRESS Division. The European overland transport business was removed from the EXPRESS Division and transferred to the LOGISTICS Division as a separate business unit under the name DHL Freight. At the same meeting, the Supervisory Board approved the acquisition of a minority stake in Polar Air Cargo Worldwide, Inc. by DHL and the sale of BHW Rückversicherung SA.

Additional adjustments were made to the allocation of business activities at the meeting on December 14, 2006. The Parcel Germany business was reallocated from the EXPRESS Division to the MAIL Division. At the same meeting, the Group’s business plan was approved for the years 2007–2009. In addition, the Board approved the sale of Vfw AG. The Declaration of Conformity with the 2006 German Corporate Governance Code was also approved.

Supervisory Board committees working efficiently
The Executive Committee met four times during the year under review. Agenda items included Board of Management issues and the further development of the company’s corporate governance. As in recent years, the recommended efficiency review for the work of the Supervisory Board was carried out on the basis of the revised questionnaire, which was completed by every Supervisory Board member. The results showed that the Supervisory Board’s efficiency has again improved.

The Personnel Committee met three times and focused primarily on the Group’s Pandemic Preparedness Plan and on health management.

The Finance and Audit Committee met five times, with Dr. Manfred Lennings and Prof. Dr. Ralf Krüger chairing two and three meetings respectively. The committee discussed the acquisitions and disposals of companies, which were also discussed in the plenary meetings of the Supervisory Board, and the Group’s business plan for 2007–2009. It also examined and approved the annual and consolidated financial statements and discussed the interim reports. In turn, the auditors took part in the committee’s financial statements meeting. Intensive discussions were also carried out on accounting and risk monitoring as well as on cooperation with the auditors. In addition, the committee approved real estate transactions. It also heard presentations by the responsible members of the Board of Management on the performance of individual divisions.

Once again, the Mediation Committee, which must be formed pursuant to Section 27(3) of the Mitbestimmungsgesetz (German Co-determination Act), did not have to meet in the year under review.

Annual financial statements and dependent company report audited
PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Düsseldorf (PwC), the auditing company appointed by the AGM to audit the financial statements, audited the annual and consolidated financial statements for fiscal 2006, including the respective management reports, and issued unqualified audit opinions.

After a detailed preliminary examination by the Finance and Audit Committee, the Supervisory Board reviewed the annual and consolidated financial statements and the management reports for fiscal 2006 at today’s plenary meeting. The auditor’s reports were made available to all Supervisory Board members and were intensively discussed at the meeting with the Board of Management and the auditors in attendance. The audit included the Board of Management’s proposal for the appropriation of the unappropriated surplus. At today’s meeting, after detailed discussion with the Board of Management and the auditors’ representative, the Supervisory Board concurred with the results of the audit of the annual and consolidated financial statements and the management reports conducted by the auditors and approved the annual and consolidated financial statements for fiscal 2006. Based on the final result of the examination of the annual financial statements, the consolidated financial statements, the management reports and the proposal for the appropriation of the unappropriated surplus by the Supervisory Board and the Finance and Audit Committee, there are no objections to be raised. The Supervisory Board endorses the Board of Management’s proposal for the appropriation of the unappropriated surplus and the payment of a dividend of €0.75 per share.

PwC also audited the Board of Management’s report disclosing relations with affiliated companies (dependent company report) required by Section 312 of the Aktiengesetz (German Stock Corporation Act) and issued the following audit opinion:

“On completion of our audit in accordance with professional standards, we confirm that

1. the factual statements made in the report are correct,

2. the company’s compensation with respect to the transactions listed in the report was not inappropriately high.”

The dependent company report was audited in terms of completeness and accuracy. The Board of Management exercised due care in identifying the affiliated companies. It took the necessary precautions in recording the transactions and other measures which the company undertook or refrained from undertaking in the fiscal year under review either with, at the request of, or in the interest of the German federal government as the controlling entity or with companies affiliated with the federal government. According to the findings of the audit, there are no apparent grounds indicating that transactions or measures were not recorded in full. The Supervisory Board therefore endorses the results of the audit conducted by the auditors. There are no objections to be raised to the declaration of the Board of Management at the end of the report.

Information required pursuant to Section 289(4) and Section 315(4) of the Handelsgesetzbuch (German Commercial Code)
The Management Report of the company (pages 60 and 93) and the Group Management Report (pages 18 and 53) include the information required pursuant to Section 289(4) and Section 315(4) of the Handelsgesetzbuch (German Commercial Code). The Board of Management has explained the information in a report which will be available for inspection on the company’s website and in its offices beginning when the Annual General Meeting is convened, and will also be available to shareholders at the Annual General Meeting. The Supervisory Board has reviewed the information and the report by the Board of Management. The results of the review showed that the information provided is accurate. Consequently, the Supervisory Board hereby concurs in the explanations provided by the Board of Management in its report on the information required pursuant to Section 289(4) and 315(4) of the German Commercial Code.

Changes in the Supervisory Board and Board of Management
The following changes took place in the Supervisory Board of Deutsche Post AG in 2006: Gerd Ehlers, Dr. Jürgen Großmann, Josef Hattig and Dr. Manfred Lennings left the Board with effect from the end of the AGM on May 10, 2006. The AGM elected Werner Gatzer, Dr. Hubertus von Grünberg, Harry Roels and Elmar Toime. Willem G. van Agtmael, Hero Brahms and Prof. Dr. Ralf Krüger were re-appointed by the AGM for varying terms of office. At its constituting meeting immediately after the AGM, the Supervisory Board elected me as Chairman and re-elected Rolf Büttner as Deputy Chairman. A new committee appointment resulted from the election of Prof. Dr. Ralf Krüger as Chairman of the Finance and Audit Committee. Following the departure of Mr. Hans W. Reich at the end of September, Ms. Ingrid Matthäus-Maier was appointed to the Supervisory Board as a shareholder representative pursuant to a court order of October 12, 2006. This appointment will be submitted for ratification to the shareholders at the AGM on May 8, 2007.

The following changes took place in the company’s Board of Management: Since January 1, 2006 John Murray Allan has been in charge of the LOGISTICS Division. Following the resignation by Dr. Peter Kruse from his seat on the Board of Management on September 22, 2006, the Group’s management structure was streamlined. All business activities in the areas of air and ocean logistics and European overland transport were combined in the LOGISTICS Division. At the same time, John P. Mullen took charge of the entire EXPRESS Division. In December 2006, the Parcel Germany business was transferred from the EXPRESS Division to the MAIL Division, and thus placed under the responsibility of Dr. Hans-Dieter Petram effective January 1, 2007.

Company in compliance with all recommendations of the German Corporate Governance Code
The Board of Management and the Supervisory Board submitted an updated Declaration of Conformity pursuant to Section 161 of the German Stock Corporation Act in December 2006 and published it on the company’s website. The previous declarations can also be viewed on the website. Deutsche Post AG is in compliance with all recommendations of the German Corporate Governance Code in the version of June 12, 2006. Additional information on corporate governance within the company, including the remuneration of the Board of Management and the Supervisory Board members is contained in the Corporate Governance Report.

We would like to thank the Board of Management and all employees of the Group for their commitment and successful efforts in fiscal year 2006.

Bonn, March 13, 2007
The Supervisory Board

Dr. Jürgen Weber
Chairman