Info for Item 9

In respect of Item 9 of the Agenda, the Board of Executive Directors provides the following:

Report on an agreement between business enterprises
(control and profit and loss transfer agreements)

On August 8/12, 2003, BASF Aktiengesellschaft (hereinafter referred to as "BASF") and its wholly owned subsidiary BASF Plant Science Holding GmbH (hereinafter referred to as "BPH") concluded a written control and profit and loss agreement with effect from January 1, 2004.

The object of BPH is to control the worldwide operations of BASF in the areas of plant biotechnology and seed. In addition to its function as a holding, the company provides, in particular, management services for BASF and BASF Plant Science GmbH.

BPH discloses the following annual net profits (rounded) for the financial years 2001 to 2003:

2001:     €0.03 million
2002:     €0.10 million
2003:     €0.10 million

The main contents of the Agreement are as follows:

BPH places its management under the control of BASF, which is entitled to issue instructions.

BPH shall conduct its business as a dependant enterprise of BASF, but in its own name.

BPH undertakes, subject to the creation of reserves specified in greater detail, to transfer its entire net income to BASF. Furthermore, certain reserves are to be dissolved and used to offset a net loss of distributed as profit at the request of BASF. The transfer of reserves in existence prior to the Agreement is excluded. BASF undertakes to make good losses suffered by BPH under the provisions of Section 302 of the German Stock Corporation Act if such losses are not offset by the withdrawal from retained earnings according to Section 272 (3) of the German Commercial Code and capital surpluses resulting from shareholder contributions under Section 272 (2) No. 4 of the German Commercial Code, which amounts were allocated to these reserves during the term of the Agreement. Since BASF has a 100 percent holding in BPH, there is no agreement on an indemnification of compensation for outside shareholders.

The Agreement is effective from January 1, 2004, but, for the purposes of the right to issue instructions, not until it has been entered in the Commercial Register. It is concluded for an indefinite period and may be terminated by either party at the end of the financial year of BPH after notice of three months has been given, but not earlier than December 31, 2008.

To become effective, the Agreement requires the approval of the Annual Meeting of BASF and the shareholders ’ meeting of BPH. . To be passed by the Annual Meeting of BASF, the resolution must be approved by a majority of at least three-quarters of the shares capital represented when the resolution is voted on. The shareholders ’ meeting of BPH approved the conclusion of the Agreement with the notarized shareholders ’ resolution of September 2, , 2003.

There are the following reasons for the conclusion of the Agreement:

As the result of future research commissions, BPH will incur considerable research and development costs, not all of which can receive tax benefit. However, in order to obtain the tax benefit, current tax law offers the foundation of an "affiliation" between BPH (subordinated company) and BASF (parent company) , which enables the tax results to be consolidated between the two companies.

A condition for the foundation of the affiliation is, apart from financial, organizational and economic integration in BASF that has existed since the foundation, the conclusion of a control and profit and loss transfer agreement. In the event that the control and profit and loss transfer agreement were approved by the Annual Meeting and recorded in the Commercial Register in 2004, the affiliation would come into effect on January 1, 2004 and effect a consolidation of the results from this date.

No corporate risks are evident in this that exceed normal business risks.

We therefore recommend that the Annual Meeting of BASF Aktiengesellschaft approves the control and profit and loss transfer agreement with BASF Plant Science Holding GmbH.


Ludwigshafen am Rhein, March 17, 2004

BASF Aktiengesellschaft

The Board of Executive Directors