Dear Shareholders,

Wincor Nixdorf AG can look back on a successful fiscal year 2005/2006. Our international business has grown, and we have strengthened our position as one of the leading providers of IT solutions for retail banking and the retail trade. The Company pushed forward with its efficiency improvement program, with the purpose of boosting international competitiveness. All these factors have contributed to improved net sales and operating profit. The Supervisory Board monitored and assisted the successful work carried out by the Board of Directors in the period under review.

The Work of the Supervisory Board.
In fiscal 2005/2006, the Supervisory Board of Wincor Nixdorf AG fulfilled its duties in accordance with statutory requirements and the Company’s articles of association. First and foremost, this task involved advising and monitoring the Board of Directors on a regular basis as it led and managed the business. As part of this collaborative approach, the Board of Directors discussed and agreed to all decisions of a fundamental nature for the Company and its Group subsidiaries directly with the Supervisory Board and informed us in a regular, timely and comprehensive manner by means of verbal and written reports of all material matters related to corporate planning, strategic direction and development, business performance and the state of the Group, including risks and risk management activities. All business matters of importance to the Company were aired and discussed by the Supervisory Board based on reports provided by the Board of Directors.

The Supervisory Board held five scheduled meetings over the fiscal year 2005/2006, in which the Board of Directors kept us informed about the development of the Company. In addition to these five scheduled meetings, we held an extraordinary meeting the day before the Annual General Meeting of Wincor Nixdorf AG shareholders. The only item on the agenda for this meeting was the Supervisory Board’s proposal to the AGM of Prof. Dr. Harald Wiedmann as a replacement candidate for a position on the Supervisory Board representing the shareholder group. The initial candidate, Edward A. Gilhuly, had notified us that he would not be able to stand for election. Apart from the aforementioned, there were no other circumstances necessitating further extraordinary meetings of the Supervisory Board or specific supervisory measures. The five scheduled meetings were held on November 30, 2005, as well as February 21, April 24, July 26 and September 19, 2006. Karl-Heinz Stiller and Eckard Heidloff attended all meetings in their capacity as members of the Board of Directors. All the necessary resolutions were passed at these meetings on the basis of documentation prepared in advance on the issues to be decided. Between each meeting, the Board of Directors kept me promptly and fully informed about important events of particular significance in assessing the position and performance of the business and in managing and leading the Company. In addition, I was in continuous contact with the Board of Directors and was furnished with details about our current business position and significant occurrences, developments and decisions.

The Supervisory Board analyzed the efficiency of its activities at regular intervals.

Key Areas of Deliberation by the Supervisory Board.
The Supervisory Board regularly discussed the business, net sales and operating profit performance of the Group and its segments at its individual meetings. We also looked at matters concerning the Group’s cash flows, the implementation of strategy and HR development.

The Supervisory Board paid special attention in its meetings to the Company’s development as an integrated solutions provider, the issue of outsourcing and the implementation of a Contractual Trust Arrangement (CTA). The CTA has allowed us to safeguard our pension commitments by appointing an independent trustee to administer the pension obligations of Wincor Nixdorf AG and its German subsidiaries by means of a corresponding transfer of assets to the trustee.

At its meeting on September 19, 2006, the Supervisory Board gave its approval to the fiscal 2006/2007 budget proposed by the Board of Directors and to the medium-term strategic business development plan.

Committee Work.
The work of the Supervisory Board is supported by three committees, whose role is to prepare the ground for Supervisory Board resolutions and to examine issues to be addressed subsequently in plenary sessions. In certain cases, the Supervisory Board delegated decision-making authority to its committees.

With the exception of the Audit Committee, which is chaired by Supervisory Board member Hero Brahms, committees are chaired by the Chairman of the Supervisory Board.

The Audit Committee convened three times in the fiscal year under review. The main focus of its work was the audit of the annual accounts and the consolidated financial statements for Wincor Nixdorf AG, the fiscal 2006/2007 budget and the Contractual Trust Arrangement (CTA). Other issues addressed were the Company’s risk report and risk management policy.

The Personnel Committee authorized the issue of stock options to members of the Board of Directors and to Wincor Nixdorf employees.

The Mediation Committee did not have to convene during the fiscal year just ended; no conflicts of interest occurred during the period under review. There are no further committees.

Corporate Governance and Declaration of Compliance.
With regard to Corporate Governance, this annual report contains a separate section with a report by the Board of Directors, issued also on behalf of the Supervisory Board, pursuant to Section 3.10 of the German Corporate Governance Code. The Board of Directors and the Supervisory Board issued an updated declaration of compliance pursuant to Section 161 of the German Stock Corporation Act on November 30, 2006, and made the declaration, along with details of non-compliance, permanently available to shareholders on the Company website.

Approval of the Annual Accounts and Adoption of the Consolidated Financial Statements.
On February 21, 2006, the Annual General Meeting of Shareholders appointed KPMG Deutsche Treuhand-Gesellschaft AG, Bielefeld, as auditors of the accounts. The annual accounts for the fiscal year from October 1, 2005, to September 30, 2006, prepared by the Board of Directors under German statutory accounting regulations (German GAAP) pursuant to the German Commercial Code, and the Management Report of Wincor Nixdorf AG have been audited by KPMG and given an unqualified audit opinion. The Wincor Nixdorf AG consolidated financial statements for the same year have been prepared under IFRS.

The auditor has issued an unqualified audit opinion for the annual German GAAP accounts of Wincor Nixdorf AG and the consolidated IFRS financial statements of Wincor Nixdorf AG.

The audit reports by KPMG Deutsche Treuhand-Gesellschaft AG Wirtschaftsprüfungsgesellschaft for the annual accounts and the consolidated financial statements were sent in a timely manner to all Supervisory Board members, together with the annual German GAAP accounts and the consolidated IFRS financial statements.

The Audit Committee commenced its detailed review of the Company accounts and the consolidated financial statementsat its meeting on November 30, 2006, with the auditors in attendance. This was immediately followed by a comprehensive discussion of both sets of accounts by the complete Supervisory Board. The auditor was present at the meetings of both bodies at which he reported on his audit activities and was available to provide detailed complementary information.

Following detailed examination of the annual accounts, the consolidated financial statements, the management report and the Group management report, we concurred with the results of the auditor’s audit and approved the annual accounts and the consolidated financial statements at our meeting on November 30, 2006, in accordance with the Audit Committee’s recommendation issued the same day. As such, the annual accounts have been approved. We agreed with the proposal made by the Board of Directors regarding the appropriation of net income (profit available for distribution).

The Supervisory Board also determined its proposed resolutions for the agenda of the Company’s Annual General Meeting of Shareholders to be held on January 29, 2007, and approved this Supervisory Board report.

Composition of the Supervisory Board.
In accordance with Section 7 of the Company’s articles of association, the Supervisory Board consists of six shareholder representatives and six employee representatives. No conflicts of interest occurred within the Supervisory Board during the period under review. The terms of office of Hero Brahms, Walter Gunz and Prof. Walter Kröll continue up to the Annual General Meeting responsible for approving their actions for the fiscal year 2007/2008. The terms of office of the six employee representatives, those of Dr. Alexander Dibelius and Dr. Harald Wiedmann and my own term of office as Chairman of the Supervisory Board are due to expire at the end of the Annual General Meeting that will resolve a motion on the approval of our actions for the fiscal year 2009/2010. However, irrespective of my term of office, I informed the Supervisory Board at our meeting on November 8, 2006, that for personal reasons I intended to step down as Chairman at the end of the next ordinary AGM on January 29, 2007, and that a successor shall be appointed to replace me. At the same meeting, following a thorough discussion, the Supervisory Board adopted a resolution to propose Karl-Heinz Stiller for election as my replacement on the Supervisory Board. Mr. Stiller will step down from his current position as President and Chief Executive Officer of Wincor Nixdorf AG at the end of the next ordinary AGM and resign from the Board of Directors. After careful deliberation, the Supervisory Board unanimously agreed that his outstanding experience, understanding of the Company’s operations and knowledge make him an ideal candidate for this office and that his election to the Supervisory Board would be in the acknowledged best interest of Wincor Nixdorf AG. It is these particular qualities of Karl-Heinz Stiller that led the Supervisory Board to propose his election.

The Supervisory Board wishes to express its thanks to the Board of Directors and all employees and employee representatives for their successful efforts during the year under review.

Paderborn, November 30, 2006

Johannes P. Huth
Chairman of the Supervisory Board