48. Notes on related parties

In financial year 2016/17, METRO maintained the following business relations to related companies:

Transactions with companies of CECONOMY

METRO had business relations with companies of CECONOMY. For the purposes of the consolidated financial statements, the CECONOMY companies are considered related parties of METRO until the demerger effective date on 12 July 2017, as METRO AG was controlled by the current CECONOMY AG until that date. Accordingly, services received and benefits received from CECONOMY are included pro rata in the 2016/17 financial disclosures until 12 July 2017.

The services provided to related parties of CECONOMY mainly comprise income from procurement synergies, rental income and income under the Transitional Service Agreement (TSA), which regulated the offsetting of the services provided in the transition phase to the other operating unit as of 1 October 2016. In financial year 2016/17, income from procurement synergies totalled €44 million (2015/16: €63 million). In financial year 2016/17, rental income totalled €14 million (2015/16: €19 million). Income from the TSA amounted to €8 million in financial year 2016/17 (2015/16: €0 million). In addition, the provided benefits include income from services in the amount of €4 million (2015/16: €9 million).

The services received by CECONOMY companies were mainly related to procurement logistics expenses. The liability to CECONOMY reported as of 30 September 2016, which resulted from the initial injection of liquid funds agreed in the demerger agreement, was settled in financial year 2016/17.

Transactions with associated companies and other related parties

The services totalling €90 million (2015/16: €89 million) that METRO companies received from associates and related parties in financial year 2016/17 consisted mainly of real estate leases in the amount of €80 million (2015/16: €80 million, thereof €78 million from associates; 2015/16: €74 million) and the rendering of services in the amount of €10 million (2015/16: €9 million).

Other future financial obligations in the amount of €756 million (2015/16: €597 million) consist of tenancy agreements with the following associated companies, OPCI FWP France, OPCI FWS France, METRO Habib Pakistan and the Mayfair Group.

In financial year 2016/17, METRO companies provided services to companies, included in the group of associates and related parties, in the amount of €3 million (2015/16: €0 million).

Business relations with related parties are based on contractual agreements providing for arm’s length prices. As in financial year 2015/16, there were no business relations with related natural persons and companies of management in key positions in financial year 2016/17.

Related persons (compensation for management in key positions)

METRO management in key positions consists of members of the Management Board and the Supervisory Board of METRO AG.

Unlike in the previous year's financial statements as of 30 September 2016, the expenses for the Management Board of the former METRO AG until the day of the demerger on 12 July 2017 attributable to METRO were not calculated on the basis of an employee-related allocation key. Rather, the financial data for the presented economic activities of METRO were taken from the separate company code set up within the former METRO AG for METRO starting in the first quarter of 2016/17, which comply with the regulations of the Transitional Service Agreement (TSA).

Thus, the determined expenses plus the expenses for the period after the demerger (13 July 2017 to 30 September 2017) for members of the Management Board of the new METRO AG amounted to € 5.5 million for short-term benefits (2015/16: €6.8 million) and €0.8 million for post-employment benefits (2015/16: €0.5 million). The expenses for existing compensation programmes with long-term incentive effect in financial year 2016/17 amounted to €5.1 million (2015/16: €4.9 million).

The short-term compensation for the members of the the former METRO AG Supervisory Board, calculated on the basis of the employee-related allocation key up to the date of the demerger on 12 July 2017 plus the compensation for the period after the demerger (13 July 2017 to 30 September 2017) amounted to €1.5 million (2015/16: €1.5 million).

The total compensation for members of the Management Board in key positions in financial year 2016/17 amounted to €12.9 million (2015/16: €13.7 million).