B -- Scope of consolidation

The Consolidated Financial Statements include BASF SE, the parent company, with its headquarters in Ludwigshafen, Germany, as well as all the material subsidiaries in which BASF SE directly or indirectly exercises a majority of the voting rights (collectively, the “Company”). Material, jointly operated companies are included on a proportional consolidation basis.

Associated companies are accounted for using the equity method. These are companies in which the Company has a participation of at least 20% or can exercise a significant influence over the operating and financial policies. In total, this applies to:

First-time consolidations in 2007 comprised:

• the formation of three companies headquartered in South Africa, the Netherlands and the United States;
• the Chinese manufacturer of catalysts for motorcycles and small engines, Guilin REEcat Catalyst Co., Ltd, in Guilin, China, acquired in April;
• a project company which was acquired through Wintershall’s asset swap with Gazprom; and
• an additional 15 subsidiaries due to their increased importance, which were previously not consolidated, with headquarters in Germany, the Netherlands, India, the Czech Republic, China and the United States.

In 2007, 51 companies were deconsolidated due to merger, sale or immateriality.

First-time consolidations in 2006 comprised:

• a total of 59 companies related to the acquisition of Engelhard Corp.;
• a total of 65 companies related to the acquisition of the construction chemicals business from Degussa AG;
• a total of three companies related to the acquisition of Johnson Polymer;
• CropDesign N.V., a biotechnology company acquired in June;
• PEMEAS GmbH, acquired in December; and
• an additional 22 subsidiaries due to their increased importance, which were previously not consolidated, with headquarters in Germany, Spain, Australia, China, Malta and Switzerland.

In 2006, three companies were deconsolidated due to merger, sale or immateriality.