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Annual Report

Declaration of conformity

(AS OF THE DATE OF THE RELEVANT DECLARATION)

The statutorily required annual declaration of conformity of the Board of Management and the Supervisory Board of Volkswagen AG with the German Corporate Governance Code as required by section 161 of the Aktiengesetz (AktG – German Stock Corporation Act) was published on December 3, 2010. The Board of Management and Supervisory Board declare in this document that they complied on July 2, 2010 with the recommendations of the Government Commission on the German Corporate Governance Code as issued on June 18, 2009 until the release of the revised version on May 26, 2010, except for articles 3.8(2) (deductible under the D&O insurance), 4.2.3(3), sentences 2 and 3 (comparison parameters for variable compensation) and 4.2.3(4) (cap on severance payments). Since January 1, 2010, article 3.8(2) (deductible under the D&O insurance) has been complied with by entering into the scheduled new D&O insurance contract and article 4.2.3(3), sentences 2 and 3 (comparison parameters for variable compensation), has been complied with by implementing the Long-Term Incentive Program. Due to the legal protection granted to rights under existing contracts, the recommendation in article 4.2.3(4) (cap on severance payments) has been taken into account since November 20, 2009 only when entering into new Board of Management contracts.

From July 2, 2010 until the current declaration of conformity was issued on December 3, 2010, the Code as amended on May 26, 2010 was complied with, with the following two exceptions: due to the protection of rights under existing contracts, contracts entered into before November 20, 2009 do not include the cap on severance payments (article 4.2.3(4)). Article 5.4.1(2) (composition of the Supervisory Board) is a new addition; following the respective consultations and the definition of specific objectives at the Supervisory Board meeting on November 19, 2010, this recommendation has only been complied with since that date.

The Board of Management and Supervisory Board have moreover declared that they now comply with the recommendations of the German Corporate Governance Code as amended on May 26, 2010 without qualification except for article 4.2.3(4) (cap on severance payments). The cap on severance payments is taken into account when entering into new Board of Management contracts, but not when entering into contracts with members of the Board for their third term of office and beyond. Existing rights are protected in such cases.

The current joint declaration of conformity by the Board of Management and the Supervisory Board under section 161 of the AktG has been published on our website, www.volkswagenag.com/ir.

The Volkswagen Group will also largely comply with the suggestions of the Code. However, there are no plans to take long-term performance into account in determining Supervisory Board compensation (article 5.4.6(2), sentence 2). In this regard, we will continue tracking in particular court judgments and the debate on this matter in professional circles.

In their declaration of conformity with the German Corporate Governance Code on November 29, 2010, the Board of Management and Supervisory Board of AUDI AG declared that the recommendations of the Code as issued on June 18, 2009 until the release of the revised version on July 2, 2010 had largely been complied with. However, there were qualifications: the Supervisory Board has not formed a Nomination Committee (article 5.3.3) and members are not elected to the Supervisory Board on an individual basis (article 5.4.3, sentence 1). Since November 23, 2009, a cap on severance payments has been agreed when entering into new Board of Management contracts, which means that article 4.2.3 has been complied with for new contracts since that date. Due to the protection of existing rights, contracts entered into before that date remain unaffected by these new arrangements. Effective January 1, 2010, a deductible under the D&O insurance was included in the insurance contract in accordance with the recommendation in article 3.8, which means that this recommendation has also been complied with since that date. As a result of the new remuneration system for members of the Board of Management resolved on February 22, 2010 and approved by the 2010 Annual General Meeting in accordance with section 120(4) of the AktG, the recommendations in article 4.2.3 (comparison parameters for variable compensation) have been complied with since that date. Since the release of the revised version on May 26, 2010, the recommendations of the Code have been complied with, except that the Supervisory Board has not formed a Nomination Committee (article 5.3.3). The Board believes that such a committee will only increase the number of committees without noticeably improving the Supervisory Board’s work. Members are not elected to the Supervisory Board on an individual basis (article 5.4.3, sentence 1). List-based elections are quite common in democratic voting processes. The recommendations in article 5.4.1 are new additions. Following consultations, the Supervisory Board defined specific objectives for its composition, which means that the recommendations in article 5.4.1 of the Code have been complied with since November 29, 2010. Details of the composition of the Supervisory Board of AUDI AG planned for the future are provided in the 2010 Annual Report of the Audi Group. The declaration of conformity is published at www.audi.com.

The following applies to AUDI AG with regard to the suggestions contained in the Code: with immediate effect, AUDI AG will broadcast the Annual General Meeting on the Internet until the start of the plenary discussions. This will strike an acceptable balance between the individual investors’ need for information and their general personal rights. By following this procedure, there is no need to enable absent shareholders to contact the company’s proxies (article 2.3.3, sentence 3, 2nd half-sentence) during the Annual General Meeting. Moreover, the performance-related remuneration of members of the Supervisory Board does not include any components based on long-term performance (article 5.4.6(2), sentence 2). AUDI AG will continue tracking the debate on this matter in professional circles.

DECLARATION OF CONFORMITY OF VOLKSWAGEN AG
www.volkswagenag.com/ir

DECLARATION OF CONFORMITY OF AUDI AG
www.audi.com

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