Pursuant to the recommendation of subsection 3.10 of the German Corporate Governance Code, the Management Board and Supervisory Board of METRO AG deliver the following report on corporate governance at METRO Group. ¹ cbi:///cms/90734

"The Management Board and the Supervisory Board hereby declare cbi:///cms/90738

that METRO AG fully complies with the recommendations of the Commission of the German Corporate Governance Code in its version of 18 June 2009 published by the Federal Ministry of Justice in the official part of the electronic Federal Bulletin. cbi:///cms/90739

During the financial year 2009, the Management and Supervisory Boards of METRO AG reinforced their voluntary commitment to the German Corporate Governance Code through a new determination in the boards' by-laws. It states: cbi:///cms/90741

"The Management Board and Supervisory Board of METRO AG base their actions on the relevant valid recommendations of the German Corporate Governance Code and only deviate from the code's recommendations in well-founded exceptional cases. If the Management Board or Supervisory Board intend to deviate from a recommendation, the organs inform each other of the planned move prior to its implementation." cbi:///cms/90742

The declaration of compliance issued by METRO AG's Management Board and Supervisory Board, in accordance with the law, is directed only at the recommendations of the German Corporate Governance Code. In addition to the recommendations, the code contains suggestions that a company can, but does not have to address. cbi:///cms/90745

METRO AG follows the vast majority of suggestions laid down in the German Corporate Governance Code. In the financial year 2009, there were only two points that were not fully implemented: cbi:///cms/90746

In 2009, the Management Board of METRO AG launched the efficiency and value-enhancing programme Shape 2012. Under this programme, METRO Group is centralising business areas that are key to the Group's financial management and supervision. Compliance is one of these. This structural adjustment is also being implemented with a view to METRO Group's international character and complexity and takes account of increasing regulatory requirements affecting METRO AG as the listed holding company of METRO Group. Accordingly, the Management Board in March 2009 agreed on a substantially enhanced compliance concept that is now being rolled out across the Group's businesses. cbi:///cms/90752

METRO Group's business principles, which go back to 2007, represent the core component of the Group-wide compliance programme, but the future compliance system also comprises additional elements. Aside from an organisational reinforcement and additional staffing, the programme aims for the sustained prevention of regulatory infringements within the Company. In organisational terms, this results in a clear delineation vis-à-vis the Internal Audit department. Risk prevention is carried out through the systematic identification of all behavioural risks, the creation of organisational structures and rigorous risk monitoring by the responsible divisions of METRO Group. In terms of content, too, compliance will thus be even more broadly based within METRO Group. cbi:///cms/90753

The necessary toolbox for rigorous monitoring of behavioural risks includes, above all, the assignment of clear responsibilities, the adaptation or introduction of clear behavioural guidelines and the development and provision of sensible risk management and control processes. Added to this must be special training courses for managers and employees as well as sustainable communications regarding the need for an effective compliance management system. Employees within the compliance organisation have started the long-term Group-wide roll-out of these elements. The responsible management teams, all employees at the management companies of METRO Group's sales divisions and all national subsidiaries will in future be able to draw on the support and advice of Compliance Officers. cbi:///cms/90754

Compliance within METRO Group thus aims to prevent or at least hinder regulatory infringements. The Chief ComplianceOfficer reports directly to the Chairman of the Management Board of METRO AG, Dr Eckhard Cordes. cbi:///cms/90755

METRO Group's risk management forms another integral component of value-oriented corporate management. It helps management to exploit opportunities and limit risks, and is based on systematic and Group-wide risk reporting. As a result, unfavourable developments are recognised at an early stage, allowing for the timely introduction of appropriate countermeasures. In addition, existing opportunities are identified, evaluated and realised in a systematic manner. cbi:///cms/90758

In order to continue its profitable growth and optimise its capital allocation, METRO Group has to ensure that it manages its core business in a sustainable manner. This means that social and environmental requirements must be considered at an early stage in all activities along the supply chain. cbi:///cms/90761

The aim of METRO Group's sustainability management is to protect the foundations of its future business in a responsible manner. To this end, the relevant social and environmental challenges faced by the trade and retail industry must be continually identified. The resulting concrete actions and objectives help the Company to exploit potential opportunities and minimise its risks. The key focus is on the areas of action of employees, the supply chain, products, the environment, corporate social responsibility and stakeholder dialogue. cbi:///cms/90762

Integrated management systems and an organisational structure with clearly defined responsibilities are key preconditions of a sustainability approach that contributes to the long-term increase in company value. For this reason, the Management Board of METRO AG has created a Sustainability Board, which is chaired by METRO AG's CEO, Dr Eckhard Cordes. By recommending binding sustainability targets, guidelines and actions to METRO AG's Management Board, the Sustainability Board contributes to the continued development of the Company's sustainability strategy. In addition, the Board determines key topics and key performance indicators to measure the Company's sustainability performance. cbi:///cms/90763

The Sustainability Board is assisted by four working groups that develop concepts and prepare the Board's decisions. The working groups focus on the subject areas of quality, health and the environment, energy and resource management, employees and social affairs as well as social policies and stakeholder dialogue. cbi:///cms/90764

METRO Group's sales divisions ensure that the measures adopted by the Management Board are practically and rigorously applied in the day-to-day business environment. They comment on the suggestions of the working groups and contribute their own proposals. In addition, they report on the progress of projects and provide the data necessary for performance measurement. cbi:///cms/90765

In the financial year 2009, about 290,000 employees from more than 150 nations were the architects of METRO Group's success. METRO Group pursues an innovative, forward-looking personnel policy with the aim of attracting and retaining sufficient numbers of skilled and dedicated employees in a competitive global environment. METRO Group manages to get people excited about the Company and the retail sector by offering multifaceted career prospects and opportunities for personal growth, rigorous training and qualification programmes as well as by promoting cultural diversity. cbi:///cms/90768

A constructive, fair and open social dialogue is a key factor in reaching corporate goals. METRO Group advocates fair and equitable working conditions around the world. Within its own stores and companies, it is unreservedly committed to the four core labour standards of the International Labour Organization (ILO). cbi:///cms/90769

METRO Group's suppliers also have to meet high standards along the entire supply chain - from the manufacturing site to the store shelf. These include demanding quality specifications as well as the consideration of human rights, animal welfare and environmental aspects. Prohibitions of forced labour, child labour or any other form of exploitation form an integral part of METRO Group's supplier agreements. cbi:///cms/90772

With respect to imports of certain products from outside the European Union, METRO Group has pledged to screen and monitor its suppliers and to help them to introduce better working conditions. METRO Group is a founding member of the Business Social Compliance Initiative, or BSCI, whose objective is to ensure basic human rights in the production and supply chain. In order to guarantee minimum social standards in the product manufacturing stage, METRO Group makes compliance with the BSCI Code of Conduct mandatory for its suppliers. cbi:///cms/90773

METRO Group focuses on sparing and efficient use of energy and resources at its various sites in order to continually reduce the cost and environmental impact of its operations. Employee training and the use of state-of-the-art technology help to markedly reduce consumption of electricity and heat in the stores. In addition, METRO Group enhances its energy efficiency through work process optimisation and technological modernisation. Renewable energy is purchased as green electricity and generated in the Company's own plants. cbi:///cms/90776

The year 2009 saw the opening of the shopping centre "Meydan Merter" in Istanbul, Turkey, which was developed by METRO Group's real estate subsidiary METRO Group Asset Management. The 1,200 square metre collector field of the centre's solar chilling plant captures the sun's radiation energy, producing warm water that can then be used in the building's air-conditioning system. During summer, the energy is used to power an absorption refrigeration system that covers the shopping centre's air-conditioning needs. cbi:///cms/90777

Additional information on this subject can be found on the website of METRO Group in the section Sustainability and Responsibility - Environment. cbi:///cms/90778

The Management Board of METRO AG has six members: Dr Eckhard Cordes (Chairman), Thomas Unger (Vice-Chairman), Olaf Koch, Zygmunt Mierdorf, Frans W. H. Muller and Joël Saveuse. ² cbi:///cms/90783

Information on each member of the Management Board including their respective responsibilities and terms of office is available on the Internet of METRO Group in the section Company - The Boards - Management Board. cbi:///cms/90785

The Management Board is responsible for running METRO AG and the Group, with METRO AG acting as a strategic management holding company. METRO Group's sales divisions have undivided responsibility for the operational business. The management duties of the Management Board include, in particular, the development and implementation of the Group's strategic positioning in coordination with the Supervisory Board. In addition, the Management Board of METRO AG ensures the availability of investment funds and decides on their allocation within the Group. METRO AG also handles the Group-wide task of attracting and supporting highly qualified managers. METRO AG's other holding company tasks include the provision of the organisational structures and control and monitoring systems needed to ensure effective business management. All METRO Group sales divisions are represented on the Management Board to ensure that key Group functions are effectively orientated towards necessary operational requirements. The Chief Executive Officer of Metro Cash & Carry was appointed to the Management Board of METRO AG in 2006; the Chief Executive Officer of Real joined the Management Board in 2008. The Vice-Chairman is in charge of advising and supervising the management of the Galeria Kaufhof and Media Markt and Saturn sales divisions. cbi:///cms/90786

Fundamental regulations governing the working relationship within the Management Board are specified in the by-laws the Management Board has adopted with the consent of the Supervisory Board. The members of the Management Board assume joint responsibility for the Group's overall management. They work as a team and regularly inform each other of important measures and developments in their respective areas of responsibility. Irrespective of the Management Board's collective responsibility, the individual members of the Management Board manage their respective business segments on their own responsibility. Matters requiring a Board resolution are specified in the by-laws of the Management Board. The Chairman of the Management Board is responsible for the coordination of all business segments and the Board's representation towards shareholders and the public. In addition, he is the first point of contact for the Supervisory Board Chairman. cbi:///cms/90788

Information on the personnel composition of the Supervisory Board as well as additional information on each member of the Supervisory Board is also available on the Internet of METRO Group in the section Company - The Boards - Supervisory Board. cbi:///cms/90796

The Supervisory Board of METRO AG advises the Management Board and monitors its corporate management including its attainment long-term corporate and Group objectives. The Supervisory Board is brought into the planning of the development of METRO Group by the Management Board to the same degree that it is included in decisions about important measures. Aside from its legally prescribed approval obligations, the Supervisory Board has determined its own approval requirements for certain actions and business dealings of the Management Board. cbi:///cms/90797

The Supervisory Board of METRO AG regularly convenes for five regular meetings in each financial year. Guidelines on the scheduling of meetings and resolutions are laid down in the by-laws of the Supervisory Board. Details on the meetings and the collaboration between the Management and Supervisory Boards of METRO AG in the financial year 2009 can be found in the report of the Supervisory Board. cbi:///cms/90798

The Supervisory Board Presidential Committee addresses the following issues: cbi:///cms/90801

The Personnel Committee helps the Supervisory Board prepare the following issues and may present recommendations for resolutions: cbi:///cms/90804

Instead of the Supervisory Board, the Personnel Committee decides on the following issues, in particular: cbi:///cms/90806

The Accounting and Audit Committee supports the Supervisory Board particularly in matters pertaining to accounting and financial reporting, dependency controlling, auditing, compliance and risk management. In lieu of the Supervisory Board, the Committee handles the following key duties: cbi:///cms/90809

In addition, the Accounting and Audit Committee prepares Supervisory Board meetings and presents draft resolutions. The preparatory tasks of the Accounting and Audit Committee include, in particular: cbi:///cms/90811

The Chairman of the Accounting and Audit Committee is elected by its members. The personal requirements tied to this office are laid down in the committee's by-laws: the Chairman must be impartial and possess professional knowledge in the areas of accounting and auditing as well as internal control measures (financial expert). The Chairman must be a shareholder representative. The position of Chairman or Vice-Chairman of the Accounting and Audit Committee should not be assigned to a former member of the Management Board whose appointment was terminated less than two years previously. In the interest of good corporate governance, the Chairman of the Supervisory Board should also not serve as Chairman or Vice-Chairman of the Accounting and Audit Committee at the same time. Based on these requirements, the Accounting and Audit Committee has elected Dr jur. Hans-Jürgen Schinzler as Chairman of the Committee. The requirements of §§ 107 Section 4, 100 Section 5 of the German Stock Corporation Act are thereby fulfilled. cbi:///cms/90813

The other members should possess sufficient professional knowledge and experience in accounting and auditing as well as internal control processes. Ideally, one member should, in addition, possess specialist knowledge in the area of corporate governance and compliance. cbi:///cms/90814

The shareholder representatives of the Supervisory Board of METRO AG are elected at the Annual General Meeting. The Supervisory Board submits proposals for election with the support of the Nominations Committee. The Committee regularly looks for suitable candidates and makes recommendations to the Supervisory Board. In the process, the Committee considers both legal stipulations and the recommendations of the German Corporate Governance Code on the appointment of the Supervisory Board. When making suggestions, the Nomin ations Committee ensures that a qualified appointment to the Committees is possible. cbi:///cms/90816

The Nominations Committee is comprised exclusively of shareholder representatives. In line with the by-laws of the Supervisory Board, it consists of the Supervisory Board Chairman as well as two impartial shareholder representatives. With this appointment policy, the Supervisory Board of METRO AG underscored its commitment to take advice from a committee tied to the interests of all shareholders when determining suitable candidates for Supervisory Board membership. cbi:///cms/90817

Members of the Nominations Committee include Messrs Franz M. Haniel (Chairman), Dr-Ing. e. h. Bernd Pischetsrieder and Dr jur. Hans-Jürgen Schinzler. cbi:///cms/90818

The German Co-determination Act (MitbestG 1976) prescribes the establishment of a Mediation Committee. The Mediation Committee submits personnel proposals to the Supervisory Board when the two-thirds majority required for appointing and removing members of the Management Board has not been achieved. cbi:///cms/90819

Members of the Mediation Committee include Messrs Franz M. Haniel, Klaus Bruns, Prof. Dr Dr h. c. mult. Erich Greipl and Werner Klockhaus. cbi:///cms/90820

The respective Committee Chairman promptly informs the Supervisory Board of Committee deliberations and resolutions. Usually, an oral report is made at the next Supervisory Board meeting. cbi:///cms/90821

The Management Board's information obligations to the Supervisory Board and its Committees are governed by an information guideline that is part of the Management Board's by-laws. Its specifications regarding information and reporting policies are substantiated by the meeting and subject schedule of the Supervisory Board and its Committees. It prescribes at what time regular and focus topics must be discussed jointly by the Management and Supervisory Boards or with the Committees. The meeting and subject schedule is part of the Supervisory Board's by-laws. cbi:///cms/90822

The Supervisory Board of METRO AG regularly reviews the efficiency of its activities. The latest efficiency review was conducted in the financial year 2009 based on the evaluation of an intragroup questionnaire. The efficiency review had concrete consequences for the interaction between the Company's Management and Supervisory Boards. For example, the previously mentioned meeting and subject schedule was developed in consideration of the results of the 2009 efficiency review. cbi:///cms/90823

METRO AG's Annual General Meeting gives its shareholders the opportunity to use their legal rights, that is, to exercise their rights to vote as well as to address questions to the Company's Management Board, in particular. cbi:///cms/90828

To help shareholders exercise their individual rights at the Annual General Meeting, documents and information for each Annual General Meeting are made available ahead of time on the website of METRO Group. In addition to legally prescribed documents, this information includes, in particular, the latest annual report. cbi:///cms/90829

The registration and legitimisation procedure for METRO AG's Annual General Meeting is in line with German Stock Corporation Act and international standards. Each shareholder who would like to participate in an Annual General Meeting of METRO AG and exercise his or her voting right there must register and supply proof of the right to participate and exercise voting rights. Written proof of share ownership in German or English from the institution maintaining the securities deposit account satisfies this requirement. Deposit of shares is not necessary. Proof of share ownership corresponds to the beginning of the 21st day before each Annual General Meeting. Like the registration for the Annual General Meeting, it must be submitted to METRO AG at the address specified in the invitation within the timeframe specified by law and the Articles of Association. Concrete registration and participation conditions are made public in the invitation for each Annual General Meeting. cbi:///cms/90830

Shareholders who are unable to or do not wish to attend the Annual General Meeting in person may exercise their voting rights through a proxy. The necessary voting right authorisation must be provided in writing. To the benefit of shareholders, eased formal stipulations apply in certain cases. These are described in the invitation to the Annual General Meeting, for example, for voting right authorisations to banks or shareholder associations. cbi:///cms/90831

Shareholders can also authorise Company-appointed proxies to exercise their voting rights (known as proxy voting). The following rules apply: in addition to voting right authorisations, shareholders must also pass instructions on how to exercise these voting rights. The proxies appointed by the Company are obliged to vote according to these instructions. Authorisations and instructions to the proxies appointed by the Company may be submitted via the Internet or in writing. METRO AG proxies are also available for assignment of voting rights during the Annual General Meeting for those shareholders who initially participate in an Annual General Meeting but who want to leave early without forgoing the exercise of their voting rights; naturally, the right to appoint other proxies to exercise one's voting rights is not affected by this. The details on proxy voting are listed in the invitation to each Annual General Meeting. cbi:///cms/90832

In the interest of shareholders, the Chairman of the Annual General Meeting, as a rule the Chairman of the Supervisory Board, works to ensure that the Annual General Meeting is conducted efficiently and effectively. In line with the German Corporate Governance Code, the objective is to complete a standard METRO AG Annual General Meeting after four to six hours at the latest. cbi:///cms/90833

Pursuant to § 15a of the German Securities Trading Act (WpHG), members of the Management and Supervisory Boards of METRO AG must inform METRO AG of any transactions involving own Metro shares or related financial instruments, in particular derivatives. This obligation also applies to persons who are in close relationship with members of these two corporate bodies. No disclosure requirement applies as long as the transactions conducted by a board member and the person who is in close relationship with the board member do not reach a total amount of €5,000 by the end of the calendar year. cbi:///cms/90836

METRO AG is obliged by law to disclose all notifications of socalled directors' dealings that it has received. In the financial year 2009, METRO AG received no such notifications. Future notifications will, where applicable, be published on the website of METRO Group in the section Investor Relations - Publications - Directors' Dealings. cbi:///cms/90837

METRO AG also observes transparency recommendations that extend beyond the legal obligations as laid down in Subsection 6.6 of the German Corporate Governance Code. METRO AG thus discloses transactions involving the Company's shares, ownership of METRO AG shares or related financial instruments by members of the Management or Supervisory Boards when it directly or indirectly exceeds one percent of the shares issued by METRO AG. If the total share ownership of all members of the Management and Supervisory Boards exceeds 1 percent of the shares issued by the Company, the total ownership is stated separately for the Management Board and the Supervisory Board. The threshold values of one percent were not reached in the financial year 2009. cbi:///cms/90838

At the Annual General Meeting of METRO AG on 13 May 2009, KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) was elected to be the auditor for the financial year 2009. The Supervisory Board's commissioning of the contract to carry out the accounts audit was prepared by the Accounting and Audit Committee and considered the recommendations listed in Subsection 7.2 of the German Corporate Governance Code. cbi:///cms/90841

Throughout the audit, KPMG made no reports to the Supervisory Board regarding grounds for disqualification or conflicts. There was also no evidence that any existed. Furthermore, in the course of the audit, there were no unexpected, substantial findings and events concerning Supervisory Board functions. As a result, an extraordinary report from the auditor to the Supervisory Board was not required. The auditor found no deviations from the Management and Supervisory Boards' statements of compliance with the German Corporate Governance Code. cbi:///cms/90842

In-depth information on the topic of corporate governance at METRO Group can be found on the website of METRO Group in the Company section. cbi:///cms/90847