Dieses Testatsexemplar richtet sich - unbeschadet eines etwaigen, gesetzlich begründeten Rechts Dritter zum Empfang oder zur Einsichtnahme - ausschließlich an Organe des Unternehmens. Soweit nicht im Rahmen der Auftragsvereinbarung zwischen dem Unternehmen und Ernst & Young ausdrücklich erlaubt, ist eine Weitergabe an Dritte nicht gestattet. Notwithstanding any statutory right of third parties to receive or inspect it, this short-form report is addressed exclusively to the governing bodies of the Company. It may not be distributed to third parties unless such distribution is expressly permitted under the terms of engagement agreed between the Company and Ernst & Young.

50Hertz Transmission GmbH Berlin Short-form report Financial statements and management report 31 December 2014 Translation from the German language

Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft Translation of the German language

Table of contents

Audit opinion

Financial reporting

Engagement Terms, Liability and Conditions of Use

General Engagement Terms

Note:

We have issued the audit opinion presented below in compliance with legal and professional requirements subject to the conditions described in the enclosed “Engagement Terms, Liability and Conditions of Use”. Translation of the German audit opinion concerning the audit of the financial statements and management report prepared in German

Audit opinion

We have audited the annual financial statements, comprising the statement of financial position, the income statement, the cash flow statement and the notes to the financial statements, together with the bookkeeping system, and the management report of 50Hertz Transmission GmbH, Berlin, for the fiscal year from 1 January to 31 December 2014. Pursuant to Sec. 6b (5) EnWG [“Energiewirtschaftsgesetz”: German Energy Industry Act], our audit of the financial statements additionally covered compliance with the accounting duties pursuant to Sec. 6b (3) EnWG, which requires separate accounts to be kept for activities pursuant to Sec. 6b (3) EnWG. The maintenance of the books and records and the preparation of the annual financial statements and management report in accordance with the German commercial law and compliance with the duties pursuant to Sec. 6b (3) EnWG are the responsibility of the Company’s management. Our responsibility is to express an opinion on the annual financial statements, together with the bookkeeping system, the management report and compliance with the accounting duties pursuant to Sec. 6b (3) EnWG based on our audit.

We conducted our audit of the annual financial statements in accordance with Sec. 317 HGB [“Handelsgesetzbuch”: German Commercial Code] and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the annual financial statements in accordance with [German] principles of proper accounting and in the management report are detected with reasonable assurance and such that it can be assessed with reasonable assurance whether the accounting duties pursuant to Sec. 6b (3) EnWG have been met in all material respects. Knowledge of the business activities and the economic and legal environment of the Company and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the books and records, the annual financial statements and the management report as well as for compliance with the accounting duties pursuant to Sec. 6b (3) EnWG are examined primarily on a test basis within the framework of the audit. The audit includes assessing the accounting principles used and significant estimates made by management, evaluating the overall presentation of the annual financial statements and management report as well as assessing whether the carrying amounts and classification of accounts pursuant to Sec. 6b (3) EnWG are reasonable and verifiable and that the consistency principle has been observed. We believe that our audit provides a reasonable basis for our opinion. Translation of the German audit opinion concerning the audit of the financial statements and management report prepared in German

Our audit of the annual financial statements, together with the bookkeeping system, and the management report has not led to any reservations.

In our opinion, based on the findings of our audit, the annual financial statements comply with the legal requirements and give a true and fair view of the net assets, financial position and results of operations of the Company in accordance with [German] principles of proper accounting. The management report is consistent with the annual financial statements and as a whole provides a suitable view of the Company’s position and suitably presents the opportunities and risks of future development.

Our audit of compliance with the accounting duties pursuant to Sec. 6b (3) EnWG, which requires separate accounts to be kept for activities pursuant to Sec. 6b (3) EnWG, has not lead to any reservations.

Berlin, 10 February 2015

Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft

- signed - - signed -

Glöckner Herlitz Wirtschaftsprüfer Wirtschaftsprüferin [German Public Auditor] [German Public Auditor] Report on the fiscal year 2014 of 50Hertz Transmission GmbH, Berlin from 1 January to 31 December 2014

Translation from the German language

50Hertz Transmission GmbH Eichenstrasse 3A 12435 Berlin Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Table of contents

Page

1. Management report of 50Hertz Transmission GmbH ...... 3 1.1 Purpose of the Company ...... 3 1.2 Overall economic and industry-related conditions ...... 3 1.3 Business development ...... 7 1.4 Economic situation of 50Hertz Transmission ...... 11 1.5 Forecast report ...... 16 1.6 Risk management system ...... 18 1.7 Opportunities and risks...... 18 1.8 Subsequent events ...... 22 1.9 Accounting-related internal control and risk management system ...... 22

2. Statement of financial position ...... 25

3. Income statement ...... 26

4. Statement of cash flows ...... 27

5. Statement of changes in fixed assets ...... 28

6. Notes to the financial statements ...... 29 6.1. General ...... 29 6.2. Accounting and valuation methods ...... 30 6.3. Notes to the statement of financial position ...... 35 6.4. Notes to the income statement ...... 39 6.5. Other notes ...... 44

7. Company boards ...... 49 7.1. Members of the supervisory board ...... 49 7.2. Members of management ...... 50

Page 2 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

1. Management report of 50Hertz Transmission GmbH

1.1 Purpose of the Company

50Hertz is the term used jointly for 50Hertz Transmission GmbH (50Hertz Transmission) and 50Hertz Offshore GmbH (50Hertz Offshore); both companies are affiliates of Eurogrid GmbH (Eurogrid), Berlin. Transmission system operator Elia System Operator NV/SA (Elia), Brussels, Belgium, and Global InfraCo S.à.r.l., Luxembourg, Luxembourg, indirectly hold a shareholding in Eurogrid via Eurogrid International CVBA/SCRL, Brussels, Belgium.

50Hertz is one of four transmission system operators for electrical energy operating in Germany responsible for the extra-high-voltage grid.

As transmission system operator, 50Hertz operates an extra-high-voltage grid which, at voltage levels of 150 kilovolts (kV), 220 kV and 380 kV, spans northern and eastern Germany with a network grid length of around 10,000 km. 50Hertz’s customers and partners are distribution grid operators based in the balancing zone whose plants are directly connected to the transmission grid, operators of power stations connected to the transmission grid, pumped storage plants, wind farms, major industrial consumers, transit and balancing group customers as well as business partners governed by the laws EEG [“Erneuerbare-Energien-Gesetz”: Renewable Energy Act] and KWKG [“Kraft-Wärme-Kopplungsgesetz”: German Combined Heat and Power Act].

As transmission system operator responsible for the balancing zone, 50Hertz is responsible for its secure, reliable, efficient and environmentally friendly operation, maintenance and need- based expansion as well as for maintaining the balance of generation and consumption within the balancing zone’s whole electricity supply system. Since 2012, 50Hertz has been certified as an ownership unbundled grid operator by the Federal Network Agency [“Bundesnetzagentur”: BNetzA].

1.2 Overall economic and industry-related conditions

Economic and political environment

The positive trend in general economic development in Germany lost momentum over the course of 2014. Following a drop in gross domestic product (GDP) in the second quarter, development stabilized in the following quarters, albeit only slightly. According to preliminary investigations published by the Federal Statistical Office in Germany (Destatis) on 15 January 2015, GDP (adjusted for price effects) increased by 1.5% in 2014 compared to the prior year. The slowdown in economic growth was initially due to less favorable conditions for foreign trade. Nevertheless, the foreign trade balance is positive overall for 2014. Germany’s most important driving force is also proving robust: The situation on the labor market remains stable, with the number of people in employment reaching a new high in 2014. Private consumer

Page 3 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014 spending developed positively, while spending by public bodies was also up. Within Germany, companies and government increased their capital expenditures.

The economic outlook for 2015 is more optimistic, which is why the federal government in its annual economic report for 2015 forecast a price-adjusted increase in GDP of 1.5% in comparison to the figures forecast for 2014.

Electricity consumption in 2014 decreased by 3.8% on the prior year, while Arbeitsgemeinschaft Energiebilanzen e. V. (working group on energy balances) had predicted a year-on-year decrease in total energy consumption in Germany of 4.8% for 2014. The most important cause for this is deemed to be the lower demand for heat energy as a result of mild weather conditions in the winter and spring. The electricity generated by renewable energies again increased by 3.3% on the prior year. While hydropower across Germany recorded a decrease in 2014, onshore and offshore wind power as well as photovoltaic and biomass increased their share of electricity generation.

The situation on the money and capital markets was influenced by a slowdown in economic development in 2014. The European Central Bank tried to counter this by further loosening its monetary policy instruments. For the first time, negative interest rates were charged on short- term deposits which banks had to pay for making deposits with the European Central Bank. Although moderate monetary growth was seen in the course of the year, this did not boost price rises in the eurozone nor did lending to commercial business see a significant increase. For this reason, interest rates on short-term deposits for Eurogrid hovered around 0%.

The development of the economy as a whole as well as the development in electricity consumption did not have any significant influence on 50Hertz’s earnings.

The political environment of the transmission system operators in fiscal year 2014 was shaped by legal implementation of the energy policy agenda agreed in the coalition agreement. The amendment to the EEG came into force mid-year, which had the main effect of restricting the exceptional circumstances for exemption from cost allocations. The adjustment of payment rates and the determination of expansion targets also have an influence on the business activities of the transmission system operators.

Regulatory framework for the energy industry

European law

On a European level, several legal measures came into force in 2014 or are still at the implementation stage, which are designed to help create a uniform single electricity market as well as further expand the volume of electricity generated from renewable energies.

Page 4 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Back in November 2013, the EU Commission had published draft guidelines for energy and environmental state aid that more closely defined the requirements needed to be met for aid to still be deemed compatible with the European single market. These guidelines came into force mid-2014. The amended German EEG and the exemptions and reductions contained therein were reviewed by the EU Commission using these new guidelines and confirmed as being compatible with European state aid rules.

The relief granted to energy-intensive industry companies in the EEG 2012, which had been reviewed in an official EU state aid investigation, was also approved retroactively under these new guidelines. Only a small share of companies must repay the relief granted in excess of the permitted limits thereby breaching competition rules.

However, the German aid model under the EEG was validated by two landmark rulings made by the European Court of Justice on the compatibility of national eco-electricity with European law. The two rulings stressed that national aid models that solely favor domestically generated electricity may be justified by the general interest in promoting the generation of electricity from renewable sources. The European Court of Justice thus upheld its previous ruling on this matter.

With the “Commission Regulation on Determining a Guideline for Capacity Allocation and Congestion Management”, the first network code pursuant to Article 8 of EU Regulation No. 714/2009 was approved by the member states of the EU on 5 December 2014 by way of comitology. The regulation is expected to come into force mid-2015 and aims to create a uniform EU framework in the area of capacity allocation and congestion management (CACM).

National law

The new allocation of ministerial responsibilities following the 2013 federal elections, which saw energy issues bundled in the Federal Ministry of Economics and Technology, impacted national legislation in that the new energy concept was developed further and its effects consolidated. The focus was on the further development of the EEG, with the federal government also put under pressure to act as a result of the EEG state aid investigation by the European Commission.

The amendment to the EEG was relevant to 50Hertz with regard to mandatory direct marketing as of certain output limits as well as the definition of expansion plans for offshore and onshore wind power, solar energy and biomass.

Alongside the amendment to the EEG, the Federal Requirements Plan Act was also amended and for pilot projects offered the possibility of partial underground cabling for HVDC transmission lines.

Page 5 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

In addition to legislative activities, several court rulings have also brought about significant changes to the regulatory framework of the energy industry.

With two rulings, the Federal Court of Justice continued its string of fundamental rulings on the judicial review of the appropriateness of network user charges. In one ruling, the Federal Court of Justice limited the requirements for secondary burden of proof regarding the amount of network user charges for upstream grid operators. These satisfy the burden of proof by disclosing their calculations. On the other hand, however, the Federal Court of Justice declared its principles on benefit sharing it had developed in other areas of law to also be applicable to lawsuits regarding network user charges. According to these principles, an upstream grid operator may not contest the repayment claim made by the grid operator filing the lawsuit that the latter had passed on network user charges to its grid users that were alleged to be too high.

In its second ruling, the Federal Court of Justice defined its requirements under which a grid operator may on a case-by-case basis plead the statute of limitations for lawsuits demanding repayment of excessive network user charges, thereby providing a little more legal certainty for lawsuits filed against grid operators.

The proceedings filed at the Düsseldorf higher regional court against the decision on pooling reached by the Federal Network Agency were taken into account in the development of 50Hertz’s network user charges. For the end of 2013, the regulatory authority had reacted to criticism from the Düsseldorf higher regional court by amending the StromNEV [“Stromnetzentgeltverordnung”: Ordinance on Electricity Network User Charges] and implementing corresponding changes to the legal basis for pooling. The proceedings were subsequently dropped.

Furthermore, with regard to the extent to which assets have to be transferred when switching grid-related concessions in municipal areas, the Federal Court of Justice determined that “mixed-use plants”, i.e., those that cater to both local and regional supply, must also be transferred to the new concessionaire, provided they at least serve to directly connect end consumers. Determining the criteria for the extent to which assets are transferred cleared up this long-disputed issue.

50Hertz (as well as other German transmission system operators) raised the question in several higher regional court proceedings as to what extent business models can be designed to prevent payment of an EEG cost allocation. 50Hertz, as trustee of the EEG cost allocation account, is obligated to ensure that the EEG cost allocation is levied in accordance with legal provisions on non-discriminatory terms based on the aggregated volume delivered to end consumers. These proceedings are therefore being followed until a clear and definitive verdict has been reached.

Page 6 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Grid development plans

The electricity grid development plan (NEP) and the offshore grid development plan (O-NEP) 2013 were confirmed at the beginning of January 2014. In 2014, the transmission system operators published and consulted on the first draft of the NEP 2014. After taking into account the consultation findings, the second draft of the NEP and the O-NEP 2014 was published and presented to the Federal Network Agency on 4 November 2014. Based on feedback from numerous consultations following the preparation of the first draft and due to the EEG reform that has since followed, the transmission system operators performed a complete recalculation of the B 2024 base scenario in order to better present the new development of renewable energies, particularly their regional distribution, with the latest findings. The high transmission needs between north and south as well as the necessity of measures in accordance with federal requirements planning was largely confirmed; however, some projects also saw regional shifts. In 50Hertz’s area, a slightly more northerly feed-in point for the eastern direct current connection is now better suited to source the electricity from the region – from Wolmirstedt instead of Bad Lauchstädt as previously – and to transmit the electricity to the south. In Mecklenburg-Western Pomerania, lines need to be upgraded from 220 kV to 380 kV by 2024 on account of the increased and faster expansion of wind power in the region. The NEP and O-NEP 2014 drafts are expected to be approved mid-2015.

The transmission system operators also carried out sensitivity analyses during the year. These analyses revealed indications for the effects of reducing expansion targets for offshore wind power, capping peaks from onshore wind turbines and substantially increasing CO2 prices to the grid development requirement.

The transmission system operators put forward a proposal to the Federal Network Agency on 30 April 2014 for the scenario framework for the NEP and O-NEP for the 2025 target date. Following consultation, the Federal Network Agency revised this framework and on 19 December 2014 approved it as the basis of its calculations for the 2015 grid development plans.

1.3 Business development

Grid usage and grid connection

The current price list was published on 1 January 2015. Prices are down by approximately 9% on 2014. 50Hertz’s grid customers were last informed about this in December 2014.

Page 7 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Regulatory issues

The revenue cap for 2014 were set with effect as of 1 January 2014 in accordance with the provisions of the ARegV [“Anreizregulierungsverordnung”: Incentive Regulation Ordinance] and formed the basis of the price list valid since 1 January 2014. The revenue cap decreased by some 4% compared to 2013. This fall is primarily due to the fact that the expected redispatch costs recognized were lower than the expected costs recognized in the prior year. In addition, repayment amounts based on the voluntary commitment for system services were taken into account from the actual settlement for 2012.

The revenue cap in effect from 1 January 2015 was also determined in accordance with the provisions of the ARegV. Compared to 2014, the increase comes to 4% and is primarily attributable to the rise in offshore costs, which were passed on to all transmission system operators in the cost sharing process. Offsetting effects from the voluntary commitments were taken into account in the increase.

Since the beginning of the second regulatory period on 1 January 2014, the revenue cap has been based on the Festlegung der kalenderjährlichen Erlösobergrenze für die zweite Regulierungsperiode [“Determining the calendar year revenue cap for the second regulatory period”] by the Federal Network Agency, which 50Hertz received after completing the cost review. Manageable costs increased by approximately 25% on the prior year. 50Hertz’s efficiency value determined during the international efficiency comparison is 100%.

For the second regulatory period, the Federal Network Agency set four new voluntary commitments for redispatch, grid losses, offshore grid losses and balancing energy instead of the voluntary commitment for system services. The voluntary commitments ensure the general regulatory recognition of costs for the measures listed in the voluntary commitments as permanently non-manageable costs.

By 31 December 2014, of the 92 active applications filed since 2008 for the approval of investment measures, 50Hertz had received a total of 81 approvals. Based on the total application volume of EUR 9.6b, an investment volume of EUR 5.6b had been approved by the Federal Network Agency by the aforementioned date.

Energy management

Balancing group management

50Hertz settles all balancing groups in its balancing zone on a monthly basis. As of the end of 2014, there were 1,451 balancing groups for the 516 traders, electricity distributors, generators and grid operators operating in the balancing zone.

Page 8 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

EEG settlement

In 2014, the EEG electricity generated within 50Hertz’s balancing zone increased by approximately 5% in comparison to the prior year; however, this was below the overall forecasts (e.g., approximately 8% in the case of wind). In 2014, the share of output sold directly increased again on 2013, reporting growth of around 18%. As of year-end 2014, around 90% of onshore wind turbines and the entire offshore wind generation was sold in the balancing zone using subsidized direct marketing (formerly: market premium model). Overall, around 27% of EEG electricity output in 50Hertz’s balancing zone was sold by the transmission system operator. Supplies to other transmission system operators in the horizontal equalization of burdens fell accordingly, while payments received increased slightly.

The lower than expected volume of wind and solar energy generated in connection with the use of the maximum liquidity reserve permitted by law when calculating the cost allocation over the course of the year led to largely positive account balances; resulting in a nationwide account balance of EUR 1.4b as of 30 September 2014.

The calculation for 2015 again used the liquidity reserve permitted by law. Deducting the positive account balance on 30 September 2014 from the cost allocation, an EEG cost allocation of 6.17 ct/kWh was published. This is this first time since it was introduced that the EEG cost allocation fell slightly. By contrast, the core cost allocation for 2015 adjusted for the account balance effect increased by 0.81 ct/kWh as a result of the addition of renewable energies.

Other cost allocations in the energy industry

In addition to the KWKG cost allocation, the cost allocation pursuant to Sec. 19 (2) StromNEV and the offshore liability cost allocation, the allocation for interruptible loads was levied for the first time in 2014, which also covers the costs from 2013. It came to 0.009 ct/kWh in 2014 and will decrease to 0.006 ct/kWh in 2015.

As in 2013, the amount of the offshore liability cost allocation levied in 2014 was the maximum value permitted totaling 0.25 ct/kWh. While the value for 2013 was legally prescribed as a result of the introduction of the cost allocation, subsequent values are based on corresponding forecast values. The forecast for 2014 exceeded the cap of 0.25 ct/kWh. The difference is taken into account in the cost allocation for 2016. The annual settlement of the offshore liability cost allocation for 2013 resulted in a nationwide credit balance of EUR 468m. This credit will be repaid to grid customers via the offshore liability cost allocation in 2015. Non-privileged end customers thus receive a slightly negative cost allocation (repayment) of -0.051 ct/kWh.

Page 9 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Grid losses, voltage control and operating consumption

50Hertz covers the energy it needs to cover grid losses in the long term by means of a risk- averse procurement strategy. In order to minimize risks, 2.0 terawatt-hours (TWh) have already been procured for 2015 and 2.2 TWh for 2016 in 2013. In 2014, grid losses came to 1.9 TWh.

A solution to improve the redispatch processes was intensely worked on in 2014. The Federal Network Agency’s new regulation requires all generators with a feed-in capacity of over 10 MW to continuously report free redispatch potential. In the future, this data will form the basis to optimize redispatch measures in a central IT system for German transmission system operators. Progress was also made on the redispatch process on the contractual side in 2014: The existing redispatch agreements were definitively adapted to match the new legal framework in 2014. The resulting standard redispatch agreement is to be implemented by all transmission system operators and generation companies in the future.

Employees

The number of employees at 50Hertz Transmission increased from 779 to 844 as of 31 December 2014, a rise of 8% compared to the prior year. Insourcing measures for temporary workers that had previously been hired via agencies are included in this growth.

There were 22 industrial and commercial apprentices. 11 employees are completing a trainee program with stations in the different departments of 50Hertz as well as European transmission system operators and non-governmental organizations (NGO).

For the second time, employees were able to participate in the success of the fiscal year 2013 in the form of a stock program. Each employee was offered five Elia shares free of charge as well as a discounted price on 15 additional shares. This offer was exercised by 89% of the eligible employees, 70% also decided to participate on their own as well.

Health and occupational safety

The primary aim is to shape conditions at the workplace or in the working environment in such a way that they fulfill the employees’ health and safety requirements at all times. In 2014, 50Hertz underwent an audit in line with the international standards, which was successfully completed with the “Occupational Health and Safety Assessment Series 18001:2007” certification. All 50Hertz executives and employees were instructed on topics such as health and occupational safety and provided with the necessary information, for example, on risk assessment in the workplace. Security passes were also issued to all operational employees.

In 2014, there were two reportable work-related accidents, eight commuting accidents and no accidents while traveling on business at 50Hertz Transmission. None of these resulted in serious injury.

Page 10 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

50Hertz strives to include employees from subcontractors in the high standards it applies for its own employees.

Research and development

As part of the integration of renewable energies and the required development of the electrical system, 50Hertz carries out a range of R&D projects and studies. In addition to increasing acceptance of overhead line projects, the objective here is to provide support in the areas of energy markets, system security and new technologies. Overall, around EUR 2m was spent on research and development projects in 2014 (prior year: around EUR 1m).

1.4 Economic situation of 50Hertz Transmission

The Company operates exclusively in the field of electricity transmission as defined by Sec. 6b (3) EnWG [“Energiewirtschaftsgesetz”: German Energy Industry Act]. For this reason, the separate activity-based financial statements to be prepared correspond to the Company’s financial statements.

Results of operations

Income statement 1 Jan to 1 Jan to 31 Dec 2014 31 Dec 2013 Change in EUR m in EUR m in EUR m Cost-matching income 7,163.4 7,191.6 -28.2 Other cost-matching income 429.1 469.3 -40.2

Non-profit issues 7,592.5 7,660.9 -68.4

Revenue from the grid business 962.8 936.4 26.4

Other income 109.8 66.0 43.8 Expenses for the grid business -614.1 -543.8 -70.3

Other expenses -209.0 -197.4 -11.6 Investment result/financial result 9.7 11.4 -1.7

Result from ordinary activities 259.2 272.6 -13.4

50Hertz Transmission’s absolute income and expenses are largely characterized by the settlement not through profit or loss of the EEG and additional cost allocations. The transmission system operators sell the renewable electricity fed in by upstream grid operators and directly connected producers to an electricity exchange, provided that this is not sold directly. In addition to this sales revenue, the transmission system operators levy a charge for all trading and distribution companies operating in the balancing zone to cover the difference between the costs for the reimbursement of electricity generated from renewable sources and the revenue from selling the electricity generated from renewable sources. The settlement of the EEG generated revenue of EUR 6,462.0m (prior year: EUR 6,284.1m).

Page 11 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Under revenue and cost of materials, the settlement volume of services rendered to third parties accounts for EUR 701.4m of both revenue and cost of materials (prior year: EUR 907.5m).

Under other income, EUR 97.2m was attributable to the settlement of the KWKG (prior year: EUR 88.5m). Income of EUR 171.8m (prior year: EUR 225.4m) related to the allocation mechanism for reductions in charges granted to grid customers in accordance with Sec. 19 (2) StromNEV. Income of EUR 153.3m (prior year: EUR 155.4m) was raised in the fiscal year from the offshore liability cost allocation for delays and interruptions when establishing grid connections. In the fiscal year 2014, the allocation mechanism was added pursuant to Sec. 18 (1) AbLaV [“Verordnung zu abschaltbaren Lasten”: Regulation on agreements on interruptible loads]. In accordance with this regulation, contractual agreements are concluded with providers of interruptible loads and the related costs for support to guarantee system stability at grid operators as part of a nationwide compensation mechanism are financed via a cost allocation. This cost allocation generated income of EUR 6.8m for the first time in the fiscal year.

Overall, income and expenses from the individual allocation mechanisms are recognized without affecting the profit or loss of 50Hertz. In the fiscal year, a total business volume of EUR 7,592.5m (prior year: EUR 7,660.9m) relates to the settlement of non-profit issues.

Revenue from the grid business primarily related to increased network user charges (EUR 963.8m; prior year: EUR 988.9m), system services (EUR 41.6m; prior year: EUR 31.4m) as well as balancing group management (EUR 33.4m; prior year: EUR 52.8m). In addition, EUR -83.7m (prior year: EUR -140.4m) relates to effects from the compensation for network user charges in different periods, which are realized with a time delay as a result of the current regulatory framework.

Expenses for the grid business mainly contain expenses for the procurement of electricity of EUR 231.8m (prior year: EUR 235.7m) and for system services of EUR 310.1m (prior year: EUR 251.1m).

Other expenses include personnel expenses of EUR 78.9m (prior year: EUR 68.9m). This increase compared to 2013 is due to a collectively bargained wage and salary adjustment from 2014 and also represents the constant growth in headcount. Amortization, depreciation and write-downs came to EUR 67.9m (prior year: EUR 64.5m) in the fiscal year.

The negative interest result as part of the financial result amounts to EUR 18.2m (prior year: EUR 6.7m). Under investment result, 50Hertz Transmission generated income from the profit transfer from 50Hertz Offshore of EUR 27.9m (prior year: EUR 18.1m). In the fiscal year 2014, the interest result was influenced by the considerable increase in the volume of financing as

Page 12 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014 well as the unwinding of the discount on provisions. Interest income from the short-term deposits only partly compensated for these two effects.

The result from ordinary activities amounts to EUR 259.2m (prior year: EUR 272.6m). In comparison to the prior year, which included one-off effects that no longer applied in the fiscal year, this positive result is mainly characterized by the compensation for the further increase in investment activity. In addition, positive contributions to earnings resulted from the adjusted measurement of individual provisions as well as from efficiency improvements in operating expenses.

Income taxes for assessment periods before the consolidated tax group was formed with Eurogrid resulted in a positive profit contribution of EUR 1.0m (prior year: EUR 4.5m). The expense of other taxes amounts to EUR 0.7m (prior year: EUR 1.1m). The Company closed the fiscal year 2014 with a profit for the period (before profit transfer) of EUR 259.5m (prior year: EUR 276.0m), which will be transferred to Eurogrid.

Net assets and financial position

Statement of financial position 31 Dec 2014 31 Dec 2013 Change in EUR m in EUR m in EUR m Assets

Fixed assets 2,534.9 2,030.0 504.9 Current assets (including prepaid 1,364.4 883.3 481.1 expenses) 3,899.3 2,913.3 986.0

Equity and liabilities

Equity 855.8 855.8 0.0

Non-current liabilities 827.8 780.9 46.9

Medium and current liabilities 2,215.7 1,276.6 939.1

3,899.3 2,913.3 986.0

In addition to intangible assets of EUR 44.4m (prior year: EUR 39.0m), fixed assets mainly comprise 50Hertz Transmission’s technical grid systems of EUR 1,257.2m (prior year: EUR 1,135.4m), prepayments and assets under construction of EUR 331.8m (prior year: EUR 262.5m) as well as financial assets of EUR 784.3m (prior year: EUR 478.1m). The latter primarily relates to the investment in 50Hertz Offshore (EUR 331.0m) with a contribution to the capital reserves of EUR 130.0m in 2014 as well as a loan issued to 50Hertz Offshore (EUR 440.0m) with an increase of EUR 168.7m in 2014. In addition, securities classified as fixed assets of EUR 10.4m from the acquisition of shares in European Energy Exchange AG (EEX) were recognized. For fiscal year 2014, additions to investments in property, plant and equipment amount to EUR 258.0m (prior year: EUR 244.6m). These primarily relate to the

Page 13 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014 construction of the second section of the connection line from south to west, the 380 kV overhead line from Bärwalde to Schmölln as well as the construction of transformer substations in Parchim and Förderstedt. Furthermore, 50Hertz Transmission invested in capacity increases of transformer substations in Perleberg and Hamburg as well as the expansion of additional locations.

Under current assets, EUR 659.8m (prior year: EUR 642.5m) relates to trade receivables. This reflects the high settlement volumes attributable to the largely non-profit grid business also when considering the results of operations. Other assets of EUR 146.3m (prior year: EUR 98.2m) mainly relate to claims from the cost allocation processes.

As of the reporting date, the inclusion in Eurogrid’s cash pool system resulted in a receivable due from affiliates of EUR 548.2m (prior year: EUR 122.3m). At EUR 855.8m, equity was unchanged on the prior year; it is made up of capital stock (EUR 200m) and capital reserves (EUR 655.8m).

Non-current liabilities include shareholder loans granted by Eurogrid of EUR 550.0m (prior year: EUR 500.0m). This item also mainly contains various provisions of EUR 88.9m (prior year: EUR 85.8m) and deferred income of EUR 141.1m (prior year: EUR 147.4m), with longer terms.

Medium and current liabilities mainly contain the remaining provisions of EUR 1,519.7m (prior year: EUR 862.2m), which in turn mainly result from the EEG and the other cost allocation processes (EUR 1,279.6m; prior year: EUR 662.8m). The increase mainly relates to higher EEG obligations as of the reporting date. Trade payables amounted to EUR 179.2m (prior year: EUR 179.8m).

Statement of cash flows

Consolidated statement of cash flows 1 Jan to 1 Jan to (condensed) 31 Dec 2014 31 Dec 2013 Change in EUR m in EUR m in EUR m Cash flow from operating activities 943.7 1,064.0 -120.3

Cash flow from investing activities -566.2 -401.3 -164.9

Cash flow from financing activities 40.5 -276.0 316.5

Change in cash and cash equivalents 418.0 386.7 31.3

Cash and cash equivalents at the end of the 548.3 130.3 418.0 period

The development in cash flow from operating activities reflects the extent to which the Company’s liquidity situation fluctuates, mainly due to the settlement of the non-profit business.

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In particular, the EEG cost allocation with the liquidity buffer contained therein together with lower payments than expected to plant operators had an extremely positive effect on the liquidity situation as of the reporting date. Favorable weather conditions and lower energy costs also had an overall positive impact on liquidity.

As well as payments for additions to property, plant and equipment (EUR 258.0m), the cash flow from investing activities includes the issue of a loan (EUR 168.7m) as well as the contribution to the capital reserves (EUR 130.0m) at 50Hertz Offshore.

Cash flow from financing activities comprises the net cash outflow from the profit transfer for the fiscal year 2014 (EUR 259.5m). This item also includes a cash inflow from the shareholder from increasing the existing long-terms by EUR 50m as well as the granting of a short-term loan totaling EUR 250m. The financing of 50Hertz was secured throughout the entire fiscal year 2014. The cash pool with Eurogrid was in place throughout the entire fiscal year.

In fiscal year 2014, there was a consolidated tax group for income tax in place with Eurogrid. Furthermore, 50Hertz Transmission acts as the interposed parent for 50Hertz Offshore in terms of income tax and VAT.

Overall picture of the economic situation

In the fiscal year 2014, the result from ordinary activities was again mainly characterized by the profit and loss effect of increasing investments. Furthermore, measures to increase efficiency as well as one-off effects from the adjustment of the valuation of provisions led to a positive profit contribution.

The financial obligations due in fiscal year 2014 were covered at all times by the available liquidity and the shareholder loan.

Equity investments

50Hertz Transmission has a 100% shareholding in 50Hertz Offshore. 50Hertz Transmission assigned the task of constructing and operating the grid connections of offshore wind farms in the Baltic Sea to 50Hertz Offshore.

As a result of the strong global demand for know-how on how to integrate renewable energies, 50Hertz Transmission and Elia System Operator SA founded the joint venture Elia Grid International SA in Brussels in spring 2014. The purpose of the company is to provide consulting and engineering services in the area of grids and system services. This international opening supports the Group in its objective to detect, create and secure growth opportunities. Elia Grid International SA also offers the employees at the respective group companies

Page 15 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014 international employment prospects. 50Hertz Transmission holds slightly less than 50% of the company’s capital stock; the shares have a value of almost EUR 2.5m.

In 2013 and 2014, 50Hertz Transmission acquired shares in European Energy Exchange AG (EEX) in Leipzig, which resulted in a total share of 4.31% in the capital stock and a share value of EUR 10.4m. The EEX develops, operates and connects secure, solvent and transparent markets for energy and energy-related products. 50Hertz intends to use this strategic decision to invest in the EEX as a way to be able to better fulfill its role as market developer. Further limited acquisitions are expected for 2015.

50Hertz Transmission has an 11.1% shareholding in Central Allocation Office GmbH (CAO) based in Freising. 50Hertz Transmission holds 20% of the shares in European Market Coupling GmbH (EMCC) based in Hamburg. The two companies have the purpose of providing congestion management services for transmission grids. The introduction of new load flow- based procedures involving coupling the market in northwestern Europe means a key portion of EMCC’s tasks will not be needed in the future, which is why the Company’s liquidity was approved and implemented in the fiscal year 2014. The notional value of EUR 1.00 for the investment in EMCC was retained as of 31 December 2014.

50Hertz Transmission has a 10.1% shareholding in CORESO SA (CORESO) based in Brussels, Belgium. CORESO is the coordination and service center for load flows in the central western European region.

TSCNET Services GmbH was founded in Munich on 1 September 2014. 50Hertz Transmission paid EUR 2,500 as a capital contribution, giving it a 10% share in the company’s capital stock. The plan is to acquire additional shareholders. The purpose of the company is in particular the rendering of technical support services in the area of electrical system security and capacity calculations, in order to support transmission system operators managing their grids.

1.5 Forecast report

50Hertz will continue to invest in the development of the transmission grid in order to securely and efficiently establish the increasing share of renewable energies and to be able to transport these in the direction of consumption centers. 50Hertz’s largest onshore projects at the moment are the construction of the southwest connecting line, the expansion, retrofit and modernization of the Magdeburg grid area and the construction of new substations to include renewable energies, particularly in Brandenburg.

The investment volume for 2015 will again increase significantly in comparison to the prior year (investment volume for 2014: EUR 267.7m excluding financial assets). The purchase commitment for investments already reached EUR 382.2m as of 31 December 2014.

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As a result of the increasing investment activities and the volumes from the EEG to be pre- financed, the financing volume will increase. The liquidity situation for the EEG business continues to be dominated by fluctuations; however, this is expected to be more relaxed in 2015 compared to prior years. This requires the development of 50Hertz’s financial instruments and continued active cash management. Financing will be secured via the parent company Eurogrid for which Moody’s confirmed a Baa1 rating in June 2014.

Cost development for actual grid operations – in particular, maintenance, personnel, administration and operations – will be shaped by grid expansion as well as the energy policy. The amount needed to cover these costs will be determined in a cost review and the Europe- wide efficiency benchmark. 50Hertz makes continuous efforts to ensure a high degree of efficiency in its processes and cost structures in order to minimize the increased costs that are necessary for the new energy concept in Germany. The costs for balancing energy, redispatch measures as well as grid losses are primarily influenced by the development of electricity prices, weather conditions and grid topology. However, any resulting risks to earnings are limited by the existing regulatory framework.

OPEX in the 50Hertz Group will be up on the prior-year level (2014: EUR 157.9m in the 50Hertz Group) as a result of further business development, primarily at 50Hertz Transmission.

50Hertz Transmission’s result from ordinary activities for 2015 will probably be considerably lower than the net profit for the prior year (2014: EUR 259.2m), as the special effects of past fiscal years either declined or were not incurred. The earnings forecast for 2014 in 2013 was largely realized. The standard returns of 7.39% after taxes on equity permitted by regulators can probably also be achieved in the coming fiscal years.

The forecast for 2015 is mainly based on the following premises:

• Maintaining Eurogrid’s current rating and thus easy access to the financial markets • Normal business development of 50Hertz Transmission without any extraordinary weather conditions, such as hurricanes, and without any major technical disruptions • Smaller impact of various one-off effects • Stable regulatory framework • Continued moderate development in energy costs • Ongoing high degree of cost discipline in business processes

With regard to the quality of grid availability, 50Hertz constantly makes efforts to maintain a high level of quality and a low disruption rate. 50Hertz Transmission also strives to keep the accident frequency and availability of employees at the current level or to improve it further by implementing measures targeted at addressing health and occupational safety. 50Hertz, as an attractive employer, will do everything it can to achieve a high level of employee satisfaction.

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Overall, 50Hertz Transmission expects business development to be positive in 2015 – albeit down considerably on the 2014 level – with a sound capital base.

1.6 Risk management system

The aims of the risk management system are to avoid any risks jeopardizing 50Hertz’s ability to continue as a going concern, to reduce existing risk items and to optimize the risk/opportunity profile. Risks are recognized, recorded, evaluated and monitored in a standardized manner applying the risk guidelines. The assessment of potential losses and the likelihood of their occurrence is based on scenarios. This ensures that the risk situation is continually monitored, especially to ensure the early recognition of risks to the Group’s ability to continue as a going concern, and supports the selection and implementation of measures to overcome such risks. Enhancement of the risk management system entails the systematic development and central pursuit of plans of action for combating key corporate risks. Relevant individual risks and the overall risk situation are reported regularly to management, the supervisory board and the shareholders. The respective decision makers are informed ad hoc in the event of any significant changes. The functionality and effectiveness of the risk management system is regularly subject to review.

1.7 Opportunities and risks

Opportunities

While maintaining efficiency and ensuring that it invests in the transmission and grid connections as and when it is needed, 50Hertz has the opportunity to improve its regulated asset base and to achieve organic growth. Further opportunities for 50Hertz as an independent transmission system operator in Europe involve it actively implementing the changes and new regulations relating to the new energy concept in Germany as well as being a reliable and high- performing partner for the customers being supplied in the balancing zone.

Risks from political, regulatory and legislative matters

50Hertz’s network user charges are subject to regulations issued by the Federal Network Agency. Any decisions made by the Federal Network Agency in the current regulatory framework could have a significant impact on 50Hertz, be it positive or negative. In particular, the approved return on equity for the third regulatory period (from 2019 onwards) may be below the original forecast, which could have a strong negative impact on 50Hertz’s profitability and business value.

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Furthermore, the regulatory framework is subject to intensive European, national and regional legal debate. 50Hertz monitors and follows European and national legislative proceedings. European guidelines and regulations due to be transposed soon into national law (e.g., provisions contained in the third energy liberalization package) can also lead to new burdens or risks for 50Hertz.

The Federal Network Agency has been evaluating the incentive regulation for all grid operators since the beginning of 2014. Pursuant to Sec. 33 (1) ARegV, the Federal Network Agency was required to present its findings and recommended actions in a report to the Federal Ministry of Economics and Technology by the end of 2014. This could result in amendments to the ARegV in 2015. Various models to enhance incentive regulation are currently being discussed. 50Hertz gives critical support to these discussions and tries to contribute its expertise of how to create a practicable model.

Energy policy laws and guidelines, particularly surrounding renewable energies, also have a strong influence on 50Hertz’s risk situation and liquidity. Changes to such legislation or the interpretation of this legislation by the Federal Network Agency, can either significantly improve or worsen the Company’s risk or liquidity situation.

Uncertainty regarding approval of an adequate level of income to cover the costs of the operating phase and the conditional ex-post review of investing activities by the regulatory authorities in terms of appropriateness, scope and amount pose a risk for 50Hertz. This risk is confronted by constantly monitoring the costs and weighing these up against the benefits.

Investments that are not approved by the Federal Network Agency also lead to lower imputed costs and therefore to a decrease in network user charges.

The authorization to operate the grid in Germany cannot expire, but can be revoked if 50Hertz (for example) does not possess the human, technical and economic resources and reliability to ensure that grid operations are sustainably in compliance with legal requirements. Furthermore, negative consequences for the value of the company as a result of losing this authorization cannot be ruled out.

Technology/infrastructure

50Hertz’s fixed assets are geographically widespread and can be the potential target for theft, acts of terrorism and sabotage.

As an infrastructure operator for a secure and reliable electricity supply to more than 18 million people, 50Hertz makes every effort to also be as well-equipped as possible for crisis situations. Crisis tools are therefore constantly refined and emergency exercises regularly carried out, so as to train skills and identify any potential for improvement.

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In the event of voltage fluctuations or interruptions, power outages or a failure to implement legally prescribed emergency measures, 50Hertz can be held liable for any customer and/or third-party damage. Additional costs that will not necessarily be recognized by the regulatory authorities may also be incurred.

The connection of offshore wind farms is a business field with additional technical and organizational challenges, because the legislature has decided to place wind farms relatively far away from the German coast. Despite careful preparation and analyses, technical problems are often only discovered in the implementation stage and have to then be solved immediately. Delays and changes are therefore possible in the planning and construction stages. Should 50Hertz be deemed responsible for the delay (normally also the case if e.g., the fault lies with one of 50Hertz’s contractual partners), the Company must essentially reimburse the wind farm operator for the financial loss incurred. Any expenses in connection with such indemnification payments can partly be offset by compensation obtained by means of recourse from suppliers. According to the EnWG, the risks for transmission system operators are limited: the transmission system operator only has to pay a portion of the compensation payment itself in the event of culpable delay or damage to the connection. Nevertheless, significant risks still remain at the transmission system operator making the connection.

The construction of lines constantly meets with opposition from locals, leading to long-winded approval proceedings. Line construction delays are therefore still possible despite the intense efforts of 50Hertz’s approval and communication experts. This can lead to an increase in critical situations for the existing grid operations as the new lines are urgently needed in high- consumption areas, mainly for transporting the ever-growing volatile feed-in volume of renewable energies in 50Hertz’s balancing zone, and also because the planned shutdown of nuclear power plants in southern federal states is getting closer.

The infrastructure operated by 50Hertz is supported by an IT security structure. The creation of this, which began in the past year, was systematically continued in 2014. An IT security program to set up an IT security management system for 50Hertz was prepared and its implementation kicked off. A penetration test of the grid control system environment has been performed and individual measures have already been implemented. The initiatives concerning the IT security catalog (Federal Network Agency) and the IT security law (BSI/BMI) were discussed by the relevant corporate bodies covering the transmission system operators.

There were no IT-related security incidents with a material influence on 50Hertz’s business processes in 2014.

Health and occupational safety

Despite all of the precautionary measures, accidents cannot be ruled out at 50Hertz’s facilities or in connection with the use of 50Hertz’s plants. These may result in human injury or, in

Page 20 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014 extreme cases, death or other serious consequences. This could result in lawsuits against 50Hertz, which bring with them considerable financial obligations, reductions in financial and personnel resources as well as loss of reputation. Risk analyses have been performed for activities at 50Hertz and the relevant measures developed and implemented. The functionality of the Company’s occupational safety management system has been certified pursuant to OHSAS 18001. Employees in manual jobs are instructed six times a year, those in engineering and commercial areas once a year.

The know-how of our employees is essential for the Group’s business activities. Essential know- how can be lost as a result of employee turnover and insufficient know-how transfer. Measures are implemented to reduce this risk, e.g., positions are occupied in tandem before an employee leaves the Company.

Markets and finances

The EEG settlement results in high liquidity risks; however, these have no effect on earnings. Extreme fluctuations can also arise in the costs for balancing energy, grid losses and redispatch measures. Earnings effects here are reduced by regulatory models.

In the area of energy procurement, 50Hertz is subject to the general market risks that are seen on the electricity market. 50Hertz uses electricity products and contracts customary on the market for the energy it needs to cover system-related grid losses, in order to be able to counter the existing market price risks in an appropriate manner. Based on a risk-averse procurement strategy and taking the regulatory framework conditions to compensate for costs for grid losses into account, 50Hertz actively manages its market activities and its related internal risk considerations. When procuring the energy needed to cover grid losses for its own portfolios, 50Hertz acts on the electricity market exclusively with the objective of covering its own needs. Using physical and financial contracts on the electricity market gives rise to general cover risks and also credit risks and liquidity risks in connection with market partners. These are countered with internal control measures.

50Hertz finances itself via the parent company Eurogrid on the bank and capital market. Risks from financing bottlenecks are limited by means of a line of credit that has been secured for the long term, but not yet drawn.

Overall risk situation

50Hertz’s ability to continue as a going concern was not jeopardized by individual risks or its aggregated risk position in fiscal year 2014. Taking into account the measures taken, there are no such risks for fiscal year 2015 either.

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1.8 Subsequent events

No events of significant importance occurred from the time of the reporting date to the issue date of 50Hertz Transmission’s financial statements.

1.9 Accounting-related internal control and risk management system

So that 50Hertz can successfully operate in its complex economic environment, it has created an effective and integrated internal control system, which, in its entirety, contains all relevant business processes. This system regulates the identification, recording, evaluation and reporting of risks and is integrated into the strategy, planning and budgeting processes as well as the Company’s management and reporting systems.

The internal control system forms an integral component of the risk management system. This system comprises preparing reports for the supervisory board, audit and investment committees at the level of Eurogrid International as well as management, and is tailored to company-specific requirements in terms of its scope and structure.

Key elements of the internal control system with regard to the financial reporting processes are the widely applied dual control principle, an auditable voucher system and the strict segregation of duties between/within the specialist departments of 50Hertz Transmission and between 50Hertz Transmission and Eurogrid. The processing of data in the accounting system is organized uniformly for all companies included in Eurogrid’s consolidated financial statements and is based on uniform processes regarding the allocation and processing of invoices and vouchers. There is also a uniform method for preparing the financial statements regarding the preparation process and deadlines.

The standard commercial software used for accounting purposes is subject to an annual review regarding the compliance of the IT procedures applied including the structures and procedures of the system in use, taking into account the requirements of an effective internal control system. There is an adequate authorization concept in place to ensure compliance of accounting and a reduced risk of fraudulent activities. This is applied consistently. The business transactions of the Eurogrid group companies are processed centrally in the accounting/tax department at 50Hertz Transmission.

Measures to limit accounting-related risks primarily include the clear allocation of responsibilities, graded release strategies, data access rights established according to the principle of segregation of duties and the application of uniform regulations on organization and setting deadlines as well as the assessment of business transactions. The effectiveness of the internal control system is checked regularly in a separate process by the internal audit function. Moreover, the audit committee of Eurogrid International together with the supervisory board of 50Hertz Transmission continuously monitors and checks that management of the Company is

Page 22 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014 being performed properly. The audit committee and the supervisory board base their assessment on regular reports and analyses of the management of 50Hertz Transmission, on the findings of the audit procedures performed by the internal audit function and the audit of the financial statements of the group companies. Furthermore, the group companies and their risk areas are recorded and assessed as part of risk management.

Berlin, 10 February 2015

The management

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Financial statements of 50Hertz Transmission GmbH as of 31 December 2014 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

2. Statement of financial position EUR m Note 31 Dec 2014 31 Dec 2013 ASSETS Fixed assets (1) Intangible assets 44.4 39.0 Property, plant and equipment 1,706.2 1,512.9 Financial assets 784.3 478.1 2,534.9 2,030.0 Current assets Inventories (2) 2.2 3.8 Receivables and other assets (3)

Trade receivables 659.8 642.5 Receivables from affiliates 548.4 122.6

Receivables from other investees and investors 0.0 1.2 Other assets 146.3 98.2 1,354.5 864.5 Cash and cash equivalents (4) 0.1 8.0 1,356.8 876.3 Prepaid expenses 2.4 1.9 Special loss account from the recognition of provisions (5) 3.6 3.6 Excess of covering assets over pension and (6) 1.6 1.5 similar obligations 3,899.3 2,913.3 EUR m Note 31 Dec 2014 31 Dec 2013 EQUITY AND LIABILITIES Equity (7) Issued capital 200.0 200.0 Capital reserves 655.8 655.8 855.8 855.8 Special items (8) 6.9 7.5 Provisions (9) Pensions and similar obligations 11.0 10.1 Tax provisions 0.4 0.4 Other provisions 1,597.2 937.5 1,608.6 948.0 Liabilities (10) Prepayments received on account of orders 55.8 56.3 Trade payables 179.2 179.8

Liabilities to affiliates 803.2 502.3

Liabilities to other investees and investors 0.3 - Other liabilities 95.5 92.6 1,134.0 831.0 Deferred income (11) 294.0 271.0 3,899.3 2,913.3

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3. Income statement

1 Jan to 1 Jan to EUR m Note 31 Dec 2014 31 Dec 2013

Revenue (12) 8,126.2 8,128.0 Decrease in work in process (prior year: increase) -1.5 0.7 Own work capitalized (13) 23.0 17.4 Other operating income (14) 517.5 517.2 Cost of materials (15) -7,777.5 -7,735.4 Personnel expenses (16) -78.9 -68.9 Amortization, depreciation and write-downs (17) -67.9 -64.5 Other operating expenses (18) -491.4 -533.3 Investment result (19) 27.9 18.1 Interest result (20) -18.2 -6.7 Result from ordinary activities 259.2 272.6 Income taxes (21) 1.0 4.5 Other taxes (22) -0.7 -1.1 Expense from profit transfer (23) -259.5 -276.0 Net income for the year 0.0 0.0

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4. Statement of cash flows

1 Jan to 1 Jan to EUR m 31 Dec 2014 31 Dec 2013

Net income for the year before profit/loss transfer 259.5 276.0 Write-downs of fixed assets 67.9 64.5 Increase in provisions 660.6 305.7 Other non-cash income -0.5 -0.6 Gain from the disposal of fixed assets (prior year: loss) -0.5 0.2 Decrease in inventories (prior year: increase) 1.6 -0.4 Increase in receivables and other assets (prior year: -64.8 301.8 decrease) Increase in liabilities and other equity and liabilities 19.9 116.8

Cash flow from operating activities 943.7 1,064.0

Cash paid for investments in property, plant and -267.7 -248.7 equipment and intangible assets Cash received from construction cost subsidies 6.2 2.2 Cash received from disposals of fixed assets 1.5 0.4 Cash paid for investments in fixed financial assets -306.3 -155.4 Cash received from disposals of fixed financial assets 0.1 0.2

Cash flow from investing activities -566.2 -401.3

Cash received from shareholder loans 300.0 200.0 Cash paid for the repayment of shareholder loans - -200.0 Cash paid for the profit/loss transfer -259.5 -276.0

Cash flow from financing activities 40.5 -276.0

Change in cash and cash equivalents 418.0 386.7 Cash and cash equivalents at the beginning of the period 130.3 -256.4

Cash and cash equivalents at the end of the period 548.3 130.3

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5. Statement of changes in fixed assets

EUR m Cost Amortization, depreciation and impairment Carrying amount

1 Jan 2014 Additions Reclassifications Disposals 31 Dec 2014 1 Jan 2014 Additions Reclassifications Disposals 31 Dec 2014 31 Dec 2014 31 Dec 2013

Intangible assets

Purchased software, licenses and other plant rights 60.7 9.7 0.4 - 70.8 21.7 4.7 - - 26.4 44.4 39.0 Prepayments ------60.7 9.7 0.4 - 70.8 21.7 4.7 - - 26.4 44.4 39.0

Property, plant and equipment

Land, land rights and buildings including buildings on third-party land 136.9 1.1 1.5 0.9 138.6 43.7 1.6 - 0.7 44.6 94.0 93.2

Technical equipment and machinery 2,743.2 60.6 118.0 22.1 2,899.7 1,607.8 55.9 - 21.2 1,642.5 1,257.2 1,135.4

Other equipment, furniture and fixtures 71.2 6.2 0.9 3.4 74.9 49.4 5.7 - 3.4 51.7 23.2 21.8

Prepayments and assets under construction 262.5 190.1 -120.8 - 331.8 - - - - - 331.8 262.5 3,213.8 258.0 -0.4 26.4 3,445.0 1,700.9 63.2 - 25.3 1,738.8 1,706.2 1,512.9

Financial assets

Shares in affiliates 201.0 130.0 - - 331.0 - - - - - 331.0 201.0 Loans to affiliates 271.3 168.7 - - 440.0 - - - - - 440.0 271.3 Securities classified as fixed assets 5.4 5.0 - - 10.4 - - - - - 10.4 5.4 Investments 0.5 2.6 - - 3.1 0.3 - - - 0.3 2.8 0.2 Other loans 0.2 - - 0.1 0.1 - - - - - 0.1 0.2 478.4 306.3 - 0.1 784.6 0.3 - - - 0.3 784.3 478.1

Fixed assets 3,752.9 574.0 0.0 26.5 4,300.4 1,722.9 67.9 - 25.3 1,765.5 2,534.9 2,030.0

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6. Notes to the financial statements

6.1. General

50Hertz Transmission GmbH (50Hertz Transmission) is registered in the commercial register of Charlottenburg district court under HRB no. 84446.

The financial statements of 50Hertz Transmission were prepared in accordance with the provisions of the HGB [“Handelsgesetzbuch”: German Commercial Code] and the supplementary provisions of the GmbHG [“Gesetz betreffend die Gesellschaften mit beschränkter Haftung”: German Limited Liability Companies Act] also taking into account the EnWG [“Energiewirtschaftsgesetz”: German Energy Industry Act]. All amounts are in millions of euros (EUR m). In the interest of clarity, items have been combined in the consolidated income statement and in the statement of financial position and disclosed separately and explained in the notes. The income statement has been prepared using the nature of expense method. The presentation of individual items in the statement of financial position and income statement was adjusted; the prior-year figures were also structured accordingly to improve comparability.

50Hertz Transmission qualifies as a large corporation in accordance with the size criteria under Sec. 267 (3) HGB and has prepared the financial statements in line with the requirements for this legal form.

50Hertz Transmission is included in the consolidated financial statements of Eurogrid GmbH (Eurogrid), with its registered office in Berlin, and in the consolidated financial statements of Elia System Operator NV/SA, with its registered office in Brussels, Belgium. The consolidated financial statements of Elia System Operator NV/SA with the largest group of companies can be obtained from Elia System Operator NV/SA, Boulevard de l´Empereur 20, 1000 Brussels, Belgium. The consolidated financial statements prepared by Eurogrid cover the smallest group of companies and can be obtained from the Bundesanzeiger [German Federal Gazette] (www.bundesanzeiger.de). The Company is registered in the commercial register of Berlin- Charlottenburg district court under HRB no. 130427 B. As a result of being included in the consolidated financial statements of Eurogrid, there is no separate obligation to prepare consolidated subgroup financial statements comprising 50Hertz Transmission and 50Hertz Offshore GmbH (50Hertz Offshore).

A profit and loss transfer agreement was concluded between Eurogrid and 50Hertz Transmission effective 1 June 2010. At the same time, a consolidated tax group for income tax purposes was formed with Eurogrid as the parent of the tax group.

As a result of the domination and profit and loss transfer agreement in place between 50Hertz Transmission and 50Hertz Offshore, 50Hertz Transmission acts as the interposed parent for 50Hertz Offshore. There is a consolidated tax group for income tax and VAT purposes in place between these two companies.

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6.2. Accounting and valuation methods

ASSETS

Fixed assets

Purchased intangible assets are recognized at acquisition cost and amortized on a straight-line basis over their estimated useful lives.

Property, plant and equipment are stated at cost less depreciation. Production costs for internally produced assets include appropriate pro rata overheads in addition to the directly attributable costs. Borrowing costs are not included.

Items of property, plant and equipment acquired or produced before 1 January 2008 are depreciated using the declining balance method. A transition to the straight-line method is used as soon as this results in higher depreciation amounts. The straight-line method is used for items of property, plant and equipment acquired or produced as of 1 January 2008.

The useful lives are based on the useful lives accepted by the Federal Network Agency in order to better take into account the increasing regulatory accounting needs and to increase the informative value of the financial statements with regard to the applicable regulatory framework. The use of accepted useful lives appropriately reflects the actual depletion of the fixed assets. Amounts in the statement of financial position resulting from the opening statement of financial position in DEM were not included in this valuation change, but instead rolled forward based on the “1990 revaluation”.

Impairments are only recorded when the asset needs to be written down to a lower net realizable value.

Financial assets are recorded at the lower of cost or market and in accordance with the requirement to reinstate original value. Extraordinary write-downs are not recorded for temporary impairment.

Loans are recognized at their nominal value and, where appropriate, discounted to the reporting date.

Separately usable moveable fixed assets costing less than EUR 150 that have a limited life are recognized immediately in profit or loss. Assets costing between EUR 150 and EUR 1,000 are posted to a collective item pursuant to Sec. 6 (2a) EStG [“Einkommensteuergesetz”: German Income Tax Act] in the year of acquisition, also for the statutory accounts. The collective item is

Page 30 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014 written off in installments of one fifth in the year in which it is recognized and each of the following four years.

Current assets

Inventories are measured at acquisition and production cost using generally accepted simplified valuation methods and applying the lower of cost or market principle. Inventory risks arising from decreased salability are covered by adequate allowances.

Receivables, other assets and cash and cash equivalents are stated at their nominal value or net realizable value, whichever is lower. All recognizable individual risks and the general credit risk are accounted for by appropriate allowances.

Prepaid expenses

Prepaid expenses refer to expenses of the reporting date, insofar as they concern future periods.

Special loss account from the recognition of provisions

A special loss account from the recognition of provisions pursuant to Sec. 17 (4) DMBilG [“DM- Bilanzgesetz”: German Act on Opening Balance Sheets in German Marks] is recognized on the assets side for provisions that had to be recognized in the opening statement of financial position in DEM in connection with the first-time application of Sec. 249 (1) Sentence 1 HGB on 1 July 1990. The special loss account changes according to the utilization and reversal of the underlying provisions recognized in the opening statement of financial position in DEM, which only include provisions for eliminating ecological burdens. This account is continued up until the complete utilization or reversal of the provisions recognized in the opening statement of financial position in DEM in the amount originally recognized at nominal value as a result of the DMBilG.

Excess of covering assets over pension and similar obligations

In accordance with Sec. 246 (2) Sentence 2 and Sentence 3 HGB, a positive difference between the fair value of the covering assets and the Company’s existing pension obligations or comparable long-term obligations existing on the reporting date is disclosed as an asset. This amount arises from the full insolvency protection of the provision for employee entitlements from working lifetime accounts.

Page 31 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

EQUITY AND LIABILITIES

Equity

The issued capital is measured at nominal value.

Special item

Investment subsidies and grants received are recorded in the special item. The items are released to income in accordance with depreciation of the subsidized assets.

Provisions

In the calculation of provisions, all recognizable risks and uncertain liabilities were taken into account as required according to prudent business judgment and recorded at the settlement value necessary.

The projected unit credit method was selected for the measurement of pension obligations and long-service bonuses. Discounting was calculated at a flat rate using the mean market interest rate of 4.53% p.a. (prior year: 4.90% p.a.) for a remaining term of 15 years in accordance with the RückAbzinsV [“Rückstellungsabzinsungsverordnung”: German Ordinance on the Discounting of Provisions]. The interest rate of 4.53% p.a. (prior year: 4.90% p.a.) was also used for the measurement of obligations from working lifetime accounts. The calculations are based on the 2005 G mortality tables of Prof. Dr. Klaus Heubeck. Future wage and salary increases were set at 3.00% p.a. (prior year: 3.00% p.a.). As before, expected pension increases were taken into account at rates between 1.00 and 2.50% p.a.

Provisions for the company pension plan recorded under the Company’s congruent pension obligations are covered to a large extent by employer’s pension liability insurance. The amount of the provisions corresponds to the amount of the covering assets. The fair value of the covering assets corresponds to the cash surrender value on the reporting date of the employer’s pension liability insurance. Provisions for employee entitlements from working lifetime accounts are fully protected against insolvency; the provisions for the German phased retirement scheme are only partially protected against insolvency. In accordance with Sec. 246 (2) Sentence 2 HGB, the respective covering assets are netted against the provisions for the company pension plan, working lifetime accounts and the German phased retirement scheme; interest expenses from unwinding the discount on provisions are netted against interest income from topping up the covering assets.

Obligations from phased and early retirement arrangements (the latter only until 31 December 2011) are recognized under other provisions on the basis of actuarial reports and using an interest rate of 2.91% p.a. (prior year: 3.50% p.a.) in accordance with the RückAbzinsV over an

Page 32 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014 average term of two years. This involved determining and measuring the actuarial present value of future payment obligations. These calculations are also based on the 2005 G mortality tables of Prof. Dr. Klaus Heubeck. Future salary increases were set at 2.5% p.a. (prior year: 2.5% p.a.).

Other non-current provisions were discounted pursuant to the RückAbzinsV.

The interest portion from the increase in personnel-related provisions is recorded in the interest result.

Liabilities

Liabilities are recognized at the settlement value deemed necessary.

Payments from customers collected in connection with the examination and preparation of grid connections (connection approvals) in accordance with Sec. 4 KraftNAV [“Kraftwerks- Netzanschlussverordnung”: Ordinance for Regulating Grid Connections] are disclosed as prepayments. Customer payments are also recorded in connection with the installation of jointly used facilities. Subsidies received are recorded as prepayments until the underlying project is completed.

Deferred income

Construction cost subsidies received are recognized as deferred income and released on a straight-line basis. Until 31 December 2002, construction cost subsidies received were released to income over 20 years unless a shorter term had been agreed. Since 1 January 2003, construction cost subsidies received have been released to income over the useful life of the asset.

Amounts paid to 50Hertz Transmission in prior years from cross-border congestion management are recorded as deferred income. These are used for investments for maintaining or expanding connection capacities. In return, 50Hertz Transmission must pay a consideration for the amounts received, which it recognizes as a subsidized construction loan under equity and liabilities. The deferred horizontal grid income is recognized over 30 years as determined by the Federal Network Agency. In addition to the income from congestion management, other income generated in connection with additional voluntary commitments was also recognized as deferred income. Here too, the deduction is also performed by taking the network user charges in subsequent years into account.

Other amounts also primarily relate to deferred income from long-term contractual relationships which are only recognized in profit or loss in subsequent periods.

Page 33 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Deferred taxes

50Hertz Transmission is included in the consolidated tax group for income tax purposes of Eurogrid. Deferred taxes arising due to temporary or quasi-permanent differences between the carrying amounts of assets, liabilities, prepaid expenses and deferred income in the statutory accounts and their tax carrying amounts or due to tax loss carryforwards are determined at the level of the controlling entity.

Grid-based accounting

When preparing the annual financial statements, expenses and income and the corresponding receivables and liabilities in the area of grid-based accounting were determined based on preliminary data provided by third parties and partly based on forecasts.

This primarily relates to the settlement of the cost allocation processes, the accounting of the balancing group, grid utilization as well as the accounting of system services. For a final statement on the actual expenses and income incurred, external data of each partner are decisive, in particular the actual electricity volumes, some of which are only confirmed when the respective certification of the independent auditor has been issued.

As this data is by nature not available in its entirety when the financial statements are prepared, the corresponding items in the financial statements were estimated using the data available and taking into account the information available at the time of preparing the financial statements.

FOREIGN CURRENCY TRANSLATION

Foreign currency assets and liabilities are translated using the average spot rate on the reporting date.

Page 34 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

6.3. Notes to the statement of financial position

(1) Fixed assets

The breakdown of the fixed asset items summarized in the statement of financial position and their development is shown in the statement of changes in fixed assets.

Under financial assets, a capital increase to the capital reserves at 50Hertz Offshore totaling EUR 130m as well as an increase in the shareholder loan totaling EUR 168.7m to 50Hertz Offshore are reported in the fiscal year. Founding Elia Grid International SA/NV resulted in an addition of just under EUR 2.5m. Securities classified as fixed assets of EUR 10.4m (prior year: EUR 5.4m) from the acquisition of shares in EEX were also included.

List of shareholdings

The shareholdings of 50Hertz Transmission break down as follows:

Shareholding Equity Earnings % EUR m EUR m 1. Affiliates 50Hertz Offshore GmbH, Berlin 100.0 331.0 - 1) 2. Investments Elia Grid International SA/NV, Brussels, 49.9 4.2 -0.8 2) Belgium European Market Coupling Company 20.0 1.8 -0.1 2) GmbH, Hamburg Central Allocation Office GmbH, Freising 11.1 1.8 0.1 4) CORESO SA., Brussels, Belgium 10.1 1.8 0.2 2) TSCNET Service GmbH, Munich 10.0 - - 5) 3. Securities classified as non-current assets EEX AG, Leipzig 4.31 119.7 13.7 3)

1) Profit and loss transfer agreement 2) Financial statements as of 31 December 2014 3) Consolidated financial statements as of 31 December 2013 4) Financial statements as of 31 December 2013 5) No information available as of the reporting date

Page 35 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

(2) Inventories

EUR m 31 Dec 2014 31 Dec 2013 Change Raw materials, consumables and supplies 2.0 2.1 -0.1 Work in process 0.2 1.7 -1.5 2.2 3.8 -1.6

(3) Receivables and other assets

31 Dec 2014 thereof due 31 Dec 2013 thereof due EUR m > one year > one year

Trade receivables 659.8 - 642.5 -

Receivables from affiliates 548.4 - 122.6 - thereof from shareholder 548.4 - 122.5 - Receivables from other investees and 0.0 - 1.2 - investors Other assets 146.3 0.1 98.2 0.1

1,354.5 0.1 864.5 0.1

Receivables from affiliates primarily include a receivable from the shareholder from the cash pool with Eurogrid of EUR 548.2m (prior year: EUR 122.3m). All other receivables from affiliates and from other investees and investors relate to trade receivables.

Other assets mainly contain compensation claims from the cost allocation processes. These relate to claims from the settlement pursuant to Sec. 19 (2) StromNEV (EUR 73.9m; prior year: EUR 17.8m), from the KWKG (EUR 21.8m; prior year: EUR 10.0m) as well as from the offshore liability cost allocation (EUR 13.3m; prior year: EUR 14.7m). Furthermore, margin deposits for grid loss procurement totaling EUR 25.8m (prior year: EUR 27.7m) at European Commodity Clearing AG (ECC), the clearing house of exchanges including EEX, are recognized.

(4) Cash and cash equivalents

Cash and cash equivalents comprised cash on hand as well as bank balances on the reporting date.

(5) Special loss account from the recognition of provisions

Page 36 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

The development of the special loss account from the recognition of provisions occurs in line with the development of the nominal obligation of the provision for ecological burdens. This nominal obligation amounted to EUR 3.6m (prior year: EUR 3.6m) as of the reporting date.

(6) Excess of covering assets over pension and similar obligations

Offsetting the recognized provision against the cash surrender value from the employer’s liability insurance (covering assets) produces an excess of covering assets over pension and similar obligations of EUR 1.6m as of the reporting date (prior year: EUR 1.5m). The item results from netting the provisions for working lifetime accounts of EUR 4.6m (prior year: EUR 3.3m) with the respective cash surrender values of EUR 6.2m (prior year: EUR 4.8m).

(7) Equity

The Company’s issued capital of EUR 200m is fully paid in and is held in full by Eurogrid. The capital reserves remain unchanged on the prior year at EUR 655.8m.

The net income for the year of EUR 259.5m was transferred to Eurogrid.

(8) Special item

The special item for investment subsidies and grants amounts to EUR 6.9m (prior year: EUR 7.5m).

(9) Provisions

The provisions for pension obligations arise from the settlement amount of the liabilities offset of EUR 22.6m (prior year: EUR 22.1m) and the fair value of the assets offset (covering assets) of EUR 11.6m (prior year: EUR 12.0m).

The tax provisions relate to periods not yet covered by the tax group for income tax purposes.

Page 37 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Other provisions break down as follows:

EUR m 31 Dec 2014 31 Dec 2013 Change Outstanding EEG invoices 373.4 396.0 -22.6

EEG balancing energy 729.9 85.7 644.2

Additional cost allocation processes 176.3 181.1 -4.8

Network user charges 204.1 156.8 47.3

Personnel-related provisions 13.6 11.4 2.2

Easements for line use rights 68.8 71.3 -2.5

Litigation risks 4.6 9.4 -4.8

1,570.7 911.7 659.0 Sundry other provisions 26.5 25.8 0.7

1,597.2 937.5 659.7

Other provisions primarily include obligations from the cost allocation processes, particularly from the settlement of the EEG.

In the personnel-related provisions, provisions for the German phased retirement scheme of EUR 1.7m (prior year: EUR 3.0m) were offset against the cash surrender values from the employer’s liability insurance (covering assets) of EUR 1.1m (prior year: EUR 2.5m).

(10) Liabilities

EUR m 31 Dec 2014 31 Dec 2013 Total Due in Total Due in < one year > five years < one year > five years

Prepayments received 55.8 55.8 - 56.3 56.3 - Trade payables 179.2 179.2 - 179.8 179.8 0.0

Liabilities to affiliates 803.2 253.2 550.0 502.3 2.3 500.0 thereof to the shareholder 801.1 251.1 550.0 501.9 1.9 500.0

Liabilities to other 0.3 - - - - - investees and investors

Other liabilities 95.5 95.5 0.0 92.6 79.3 0.0 thereof from taxes 10.8 10.8 - 17.1 17.1 - thereof relating to social 0.3 0.3 - 0.3 0.3 - security 1,134.0 583.7 550.0 831.0 317.7 500.0

At EUR 803.2m (prior year: EUR 502.3m), liabilities to affiliates relate almost exclusively to a loan with the shareholder of EUR 800.0m (prior year: EUR 500.0m). Just like liabilities to other

Page 38 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014 investees and investors (EUR 0.3m), the remaining amount (EUR 3.2m) relates to trade payables. Other liabilities mainly include liabilities from the EEG settlement (EUR 23.2m; prior year: EUR 0.5m) as well as from additional cost allocation processes (EUR 25.6m; prior year: EUR 19.4m).

(11) Deferred income

EUR m 31 Dec 2014 31 Dec 2013 Change

Investment-related construction cost subsidies 47.2 45.8 1.4

Income from congestion management as well as amounts for future offsetting from voluntary 229.4 206.2 23.2 commitments

Other deferred income 17.4 19.0 -1.6

294.0 271.0 23.0

6.4. Notes to the income statement

(12) Revenue

1 Jan to 1 Jan to EUR m 31 Dec 2014 31 Dec 2013 Change

EEG income 6,462.0 6,284.1 177.9

Services for third parties 701.4 907.5 -206.1

Cost-matching income 7,163.4 7,191.6 -28.2

Network user charges 963.8 988.9 -25.1

System services 41.6 31.4 10.2

Balancing group management 33.4 52.8 -19.4

Compensation for network user charges in -83.7 -140.4 56.7 different periods

Other revenue 7.7 3.7 4.0

Revenue from grid business 962.8 936.4 26.4

8,126.2 8,128.0 -1.8

EEG income relates to income from selling renewable energies on the electricity exchange, the agreed EEG cost allocation as well as deliveries to other transmission system operators to offset the burdens on the transmission system operators from the implementation of the EEG.

Page 39 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Services for third parties include the business for selling EEG electricity as well as the procurement of grid losses for other grid operators.

In addition to network user charges, revenue from the grid business contains all revenue generated by the Group directly in connection with grid operations. The income from balancing group management represents the cross charging of balance energy costs to all balancing group customers operating in the balancing zone. The compensation for network user charges in different periods includes effects arising with a time delay as a result of the current regulatory framework. These relate to network user charges both from earlier periods and from following periods.

(13) Own work capitalized

Own work capitalized includes costs from the fiscal year included in production costs as part of the Company’s investment projects.

(14) Other operating income

1 Jan to 1 Jan to EUR m 31 Dec 2014 31 Dec 2013 Change

KWKG cost allocation*) 97.2 88.5 8.7

Income pursuant to Sec. 19 (2) 171.8 225.4 -53.6 StromNEV*)

Income from the offshore liability cost 153.3 155.4 -2.1 allocation*)

Income from the reversal of provisions 36.6 23.1 13.5

Income from the reversal of special items 0.5 0.6 -0.1 for investment grants

Income from the reversal of construction 5.7 5.4 0.3 cost subsidies

Services 34.7 7.6 27.1

Other income**) 17.7 11.2 6.5

517.5 517.2 0.3

*) Cost-matching income including effects from other periods

**) This includes cost-matching income from the allocation for interruptible loads of EUR 6.8m

Income from the reversal of provisions stems from the adjustment to the valuation of external obligations and the associated reversal of various provisions.

Page 40 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Income from offsetting pro rata, offshore-related costs to 50Hertz Offshore is recognized under services. As a result of the change to the underlying offsetting logic to match the amended regulatory conditions in the fiscal year 2014, direct comparison with the services item in the prior year is not possible. The adjusted offsetting logic should result in more clearly assigned income and expenses from offshore activities in line with the regulatory framework.

There were no significant effects from other periods recognized under other operating income in fiscal year 2014. Income from currency translation amounted to EUR 0.0m (prior year: EUR 0.0m).

(15) Cost of materials

1 Jan to 1 Jan to EUR m 31 Dec 2014 31 Dec 2013 Change Cost of raw materials, consumables -7,424.3 -7,444.8 20.5 and supplies and purchased goods

Cost of purchased services -353.2 -290.6 -62.6

-7,777.5 -7,735.4 -42.1

Cost of materials contains a large volume of non-profit items:

1 Jan to 1 Jan to EUR m 31 Dec 2014 31 Dec 2013 Change EEG electricity procured -6,462.0 -6,284.1 -177.9 Services for third parties -701.4 -907.5 206.1

Income-matching costs -7,163.4 -7,191.6 28.2

Expenses for the grid business -614.1 -543.8 -70.3

-7,777.5 -7,735.4 -42.1

(16) Personnel expenses

1 Jan to 1 Jan to EUR m 31 Dec 2014 31 Dec 2013 Change Wages and salaries -65.6 -57.0 -8.6 Social security -9.6 -8.5 -1.1 Expenses Pension costs -3.5 -3.2 -0.3 Other benefit costs -0.2 -0.2 0.0 -78.9 -68.9 -10.0

Page 41 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Average headcount for the year

1 Jan to 1 Jan to 31 Dec 2014 31 Dec 2013 Change

Wage earners 170 170 -

Salaried employees 646 590 56

816 760 56

An average of 20 trainees were employed in fiscal year 2014 (prior year: 19 trainees).

(17) Amortization, depreciation and write-downs

Amortization and depreciation in the fiscal year correspond to the normal depletion of fixed assets; there was no cause for write-downs.

(18) Other operating expenses

1 Jan to 1 Jan to EUR m 31 Dec 2014 31 Dec 2013 Change KWKG cost allocation*) -97.2 -88.5 -8.7 Expenses pursuant to Sec. 19 (2) -171.8 -225.4 53.6 StromNEV*) Expenses from the offshore -153.3 -155.4 2.1 liability cost allocation*) Services -31.8 -28.6 -3.2

Sundry other expenses**) -37.3 -35.4 -1.9

-491.4 -533.3 41.9

*) Cost-matching income including effects from other periods

**) This includes cost-matching income from expenses for interruptible loads of EUR 6.8m

Sundry other expenses include allocations to sundry other provisions and to impairment losses.

There were no significant effects from other periods recognized under other operating expenses in fiscal year 2014. Expenses from currency translation amounted to EUR 0.0m (prior year: EUR 0.0m).

Page 42 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

(19) Investment result

1 Jan to 1 Jan to EUR m 31 Dec 2014 31 Dec 2013 Change

Income from profit transfer agreements 27.9 18.1 9.8 with affiliates

27.9 18.1 9.8

Income from the profit transfer from affiliates relates fully to 50Hertz Offshore.

(20) Interest result

1 Jan to 1 Jan to EUR m 31 Dec 2014 31 Dec 2013 Change Income from securities and non- 0.3 0.1 0.2 current loans Other interest and similar income 15.9 9.4 6.5 thereof from affiliates 15.8 9.4 6.4 Interest and similar expenses -34.4 -16.2 -18.2 thereof to affiliates -23.4 -15.7 -7.7 -18.2 -6.7 -11.5

Under the discounting of provisions and unwinding the discount of provisions, an amount of EUR 8.3m (prior year: EUR 5.9m) relates to interest expenses. In accordance with Sec. 246 (2) Sentence 2 HGB, interest expenses are netted against interest income of EUR 0.4m (prior year: EUR 0.5m).

(21) Income taxes

Income taxes of EUR 1.0m (prior year: EUR 4.5m) are the result of subsequent claims for assessment periods before the consolidated tax group was formed with Eurogrid.

(22) Other taxes

Other taxes of EUR 0.7m (prior year: EUR 1.1m) relate to property tax, vehicle tax and electricity tax.

Page 43 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

(23) Profit transfer

The net profit for fiscal year 2014 of EUR 259,467,807.52 (prior year: EUR 276,032,297.59) was transferred to Eurogrid on the basis of the profit and loss transfer agreement in place.

(24) Profit appropriation

There were no transfers to/withdrawals from other revenue reserves in the fiscal year. The net income for the year has been transferred in full to the shareholder.

6.5. Other notes

Notes to the cash flow statement

Based on the recommendations of GAS 2 as issued by the German Accounting Standards Committee (GASC), the cash flow statement shows cash flows from operating, investing and financing activities.

The cash inflow from operating activities included interest received of EUR 15.8m (prior year: EUR 9.4m). Interest payments amounted to EUR 23.5m (prior year: EUR 19.3m).

The cash and cash equivalents at the end of the period (EUR 548.3m) consist of cash in hand and bank balances of EUR 0.1m as well as the interest-bearing short-term deposits via the cash pool at Eurogrid of EUR 548.2m. In the prior-year period, there were short-term investments via the cash pool at Eurogrid of EUR 122.3m as well as bank balances of EUR 8.0m.

No income tax-related cash flows were incurred in the fiscal year 2014 (prior year: EUR -0.1m).

Other financial obligations

On 31 December 2014, there was a purchase obligation for investments and maintenance measures of EUR 397.4m (prior year: EUR 257.5m). The purchase obligation exists solely to third parties.

Offshore expenses between 50Hertz and TenneT TSO arising from the horizontal settlement gives rise to financial obligations for 50Hertz in future periods. The total amount of these future cumulative amounts comes to EUR 1.0m and will be reflected in 50Hertz’s network user charge calculations in the next three years following the corresponding billing by TenneT TSO.

Page 44 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Contingent liabilities

In connection with Eurogrid issuing the bond of EUR 500m on 22 October 2010, 50Hertz Transmission and 50Hertz Offshore were named as additional guarantors. The guarantors are irrevocably, unconditionally and jointly liable for the punctual payment of all amounts Eurogrid has to make for the bond.

On 14 June 2011, 50Hertz Transmission and 50Hertz Offshore entered a five-year syndicated loan agreement, as guarantors, between Eurogrid and Royal Bank of Scotland, N.V. as syndicate leader and Commerzbank AG, Luxembourg branch, for a volume of EUR 350m.

On 9 December 2011, 50Hertz Transmission and 50Hertz Offshore issued a maximum guarantee to BNP Paribas S.A., Frankfurt/Main branch, totaling EUR 126m to hedge a short- term overdraft facility from Eurogrid. The maximum guarantee was increased to EUR 157.5m by first addendum dated 15 July 2013.

In connection with Eurogrid issuing the registered bonds of EUR 50m on 3 December 2014, 50Hertz Transmission and 50Hertz Offshore were named as additional guarantors. The guarantors are irrevocably, unconditionally and jointly liable for the punctual payment of all amounts Eurogrid has to make for the registered bond.

Issuing a guarantee to 50Hertz Offshore resulted in an obligation of EUR 4.2m which is not currently expected to be utilized.

50Hertz Transmission is jointly and severally liable with Stromnetz Berlin GmbH (formerly: Vattenfall Europe Distribution Berlin GmbH) and Vattenfall Europe Berlin AG & Co. KG/their legal successor for the obligations from the franchise agreement with the state of Berlin.

50Hertz Transmission is jointly and severally liable with Stromnetz Hamburg GmbH (formerly: Vattenfall Europe Distribution Hamburg GmbH) and Vattenfall Europe Hamburg AG & Co. KG/their legal successor for the obligations from the franchise agreement with the Free and Hanseatic City of Hamburg.

As part of the spin-off of Stromnetz Berlin GmbH (formerly: Vattenfall Europe Distribution Berlin GmbH) and Vattenfall Europe Berlin AG & Co. KG/their legal successor performed in 2006, legal entities involved in the spin-off are jointly and severally liable before the effective date of the spin-off as a result of the BRG [“Betriebsrentengesetz”: German Company Pensions Act], the liability period is ten years.

We currently do not expect any risk of claims relating to the above contingent liabilities to arise.

Page 45 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Audit fees

The total auditor’s fee calculated pursuant to Sec. 285 No. 17 HGB is disclosed in the consolidated financial statements of Eurogrid GmbH.

Related party transactions

In the reporting period there were no transactions with related parties which were not conducted at arm’s length.

Substantial transactions in accordance with Sec. 6b (2) EnWG

In accordance with Sec. 6b (2) EnWG, substantial transactions with affiliates and associates or with companies which belong to the same shareholders must be presented.

Apart from the financing transactions mentioned in the notes to the financial statements, 50Hertz did not enter into any transactions outside of its operating activities.

Activity-based financial statements in accordance with Sec. 6b (3) EnWG

The activities of 50Hertz Transmission belong exclusively to the field of electricity transmission. For this reason, the separate activity-based financial statements to be prepared in accordance with Sec. 6b (3) EnWG are in line with the Company’s financial statements.

Disclosures on company boards

The members of the supervisory board and management are presented in a separate list, included as an attachment to the notes to the financial statements.

Expenses for management remuneration amounted to EUR 1,505k in the reporting period (prior year: EUR 1,587k). It consists of fixed remuneration, performance-related remuneration and other fixed components. Remuneration also includes the fringe benefit of the issue of 570 Elia shares totaling EUR 20k. The fair value as of the date of issue came to EUR 35.75 per share.

Pension obligations of EUR 3.1m (prior year: EUR 3.0m) relate to former members of management; a total of EUR 0.5m of this is covered by employers’ liability insurance.

The members of the supervisory board of 50Hertz Transmission received EUR 21k for their activities (prior year: EUR 21k).

Page 46 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Loans granted to board members

Loans granted to members of the supervisory board amounted to EUR 3k in the prior year. These were fully repaid in the 2014 reporting period.

Page 47 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

Berlin, 10 February 2015

The management of

50Hertz Transmission GmbH

Schucht Giegerich Dr. Biermann Dr. Golletz

Page 48 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

7. Company boards

7.1. Members of the supervisory board

Daniel Dobbeni Chairman of the Board of Eurogrid International, Braine-I’Alleud (Belgium) – Chairman –

Peter Hausmann* Member of the Executive Board of Industriegewerkschaft Bergbau, Chemie und Energie [“Mining, Chemical and Energy trade union”], Hanover – Deputy Chairman –

Markus Berger Director of Asset Management, Elia System Operator SA., Antwerp (Belgium)

Werner Kerschl Investment Director of Industry Funds Management Pty Ud., London (UK)

Andrea Ludwig* Electrical engineer, Berlin

Dr. Lutz Pscherer* Electrical engineer, Berlin

* Employee representative

Page 49 of 50 Translation from the German language 50Hertz Transmission GmbH Financial statements 2014

7.2. Members of management

Boris Schucht, Berlin – Chairman –

Dr. Dirk Biermann, Berlin – Markets and system operations –

Udo Giegerich, Berlin – Commercial –

Dr. Frank Golletz, Dresden – Technical –

Page 50 of 50 Translation of the German language

Engagement Terms, Liability and Conditions of Use

We, Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, conducted our audit of these financial statements on behalf of the Company. Besides satisfying the legal disclosure requirement (Sec. 325 HGB [“Handelsgesetzbuch”: German Commercial Code]) for statutory audits, the audit opinion is addressed exclusively to the Company and was issued for internal purposes only. It is not intended for any other purpose or to serve as a decision-making basis for third parties. The result of voluntary audits summarized in the audit opinion is thus not intended to serve as a decision-making basis for third parties and must not be used for purposes other than those intended.

Our work is based on our engagement letter for the audit of these financial statements including the General Engagement Terms for “Wirtschaftsprüfer und Wirtschaftsprüfungsgesellschaften” [German Public Auditors and Public Audit Firms] as issued by the Institute of Public Auditors in Germany [“Institut der Wirtschafts- prüfer”: IDW] on 1 January 2002.

To clarify, we point out that we assume no responsibility, liability or other obligations towards third parties unless we have concluded a written agreement to the contrary with the respective third party or liability cannot effectively be precluded.

We make express reference to the fact that we will not update the audit opinion to reflect events or circumstances arising after it was issued, unless required to do so by law.

It is the sole responsibility of anyone taking note of the summarized result of our work contained in the audit opinion to decide whether and in what way this information is useful or suitable for their purposes and to supplement, verify or update it by means of their own review procedures. [Translator's notes are in square brackets] General Engagement Terms for Wirtschaftsprüfer and Wirtschaftsprüfungsgesellschaften [German Public Auditors and Public Audit Firms] as of January 1, 2002 DokID: 11248 1VY4PI0 DokID: 11248 This is an English translation of the German text, which is the sole authoritative version

1. Scope 7. Transmission of the Wirtschaftsprüfer's professional statement

(1) These engagement terms are applicable to contracts between Wirt- (1) The transmission of a Wirtschaftsprüfer's professional statements (long- schaftsprüfer [German Public Auditors] or Wirtschaftsprüfungsgesellschaften form reports, expert opinions and the like) to a third party requires the [German Public Audit Firms] (hereinafter collectively referred to as the Wirtschaftsprüfer's written consent to the extent that the permission to transmit to "Wirtschaftsprüfer") and their clients for audits, consulting and other engagements a certain third party does not result from the engagement terms. to the extent that something else has not been expressly agreed to in writing or is not compulsory due to legal requirements. The Wirtschaftsprüfer is liable (within the limits of No. 9) towards third parties only if the prerequisites of the first sentence are given.

(2) lf, in an individual case, as an exception contractual relations have also (2) The use of the Wirtschaftsprüfer's professional statements for promotional been established between the Wirtschaftsprüfer and persons other than the purposes is not permitted; an infringement entitles the Wirtschaftsprüfer to client, the provisions of No. 9 below also apply to such third parties. immediately cancel all engagements not yet conducted for the client.

2. Scope and performance of the engagement 8. Correction of deficiencies

(1) Subject of the Wirtschaftsprüfer's engagement is the performance of agreed (1) Where there are deficiencies, the client is entitled to subsequent fulfillment services - not a particular economic result. The engagement is performed in [of the contract]. The client may demand a reduction in fees or the cancellation of accordance with the Grundsätze ordnungsmäßiger Berufsausübung [Standards the contract only for the failure to subsequently fulfill [the contract]; if the of Proper Professional Conduct]. The Wirtschaftsprüfer is entitled to use qualified engagement was awarded by a person carrying on a commercial business as persons to conduct the engagement. part of that commercial business, a government-owned legal person under public law or a special government-owned fund under public law, the client may demand the cancellation of the contract only if the services rendered are of no interest to (2) The application of foreign law requires - except for financial attestation him due to the failure to subsequently fulfill [the contract]. No. 9 applies to the engagements - an express written agreement. extent that claims for damages exist beyond this.

(3) The engagement does not extend - to the extent it is not directed thereto - to an examination of the issue of whether the requirements of tax law or special (2) The client must assert his claim for the correction of deficiencies in writing regulations, such as, for example, laws on price controls, laws limiting competition without delay. Claims pursuant to the first paragraph not arising from an and Bewirtschaftungsrecht [laws controlling certain aspects of specific business intentional tort cease to be enforceable one year after the commencement of the operations] were observed; the same applies to the determination as to whether statutory time limit for enforcement. subsidies, allowances or other benefits may be claimed. The performance of an engagement encompasses auditing procedures aimed at the detection of the defalcation of books and records and other irregularities only if during the conduct (3) Obvious deficiencies, such as typing and arithmetical errors and formelle of audits grounds therefor arise or if this has been expressly agreed to in writing. Mängel [deficiencies associated with technicalities] contained in a Wirtschaftsprüfer's professional statements (long-form reports, expert opinions and the like) may be corrected - and also be applicable versus third parties - by the Wirtschaftsprüfer at any time. Errors which may call into question the (4) If the legal position changes subsequent to the issuance of the final conclusions contained in the Wirtschaftsprüfer's professional statements entitle professional statement, the Wirtschaftsprüfer is not obliged to inform the client of the Wirtschaftsprüfer to withdraw - also versus third parties - such statements. In changes or any consequences resulting therefrom. the cases noted the Wirtschaftsprüfer should first hear the client, if possible.

3. The client's duty to inform 9. Liability (1) The client must ensure that the Wirtschaftsprüfer - even without his special request - is provided, on a timely basis, with all supporting documents and (1) The liability limitation of § ["Article"] 323 (2)["paragraph 2"] HGB records required for and is informed of all events and circumstances which may ["Handelsgesetzbuch": German Commercial Code] applies to statutory audits be significant to the performance of the engagement. This also applies to those required by law. supporting documents and records, events and circumstances which first become known during the Wirtschaftsprüfer's work. (2) Liability for negligence; An individual case of damages If neither No. 1 is applicable nor a regulation exists in an individual case, pursuant (2) Upon the Wirtschaftsprüfer's request, the client must confirm in a written to § 54a (1) no. 2 WPO ["Wirtschaftsprüferordnung": Law regulating the statement drafted by the Wirtschaftsprüfer that the supporting documents and Profession of Wirtschaftsprüfer] the liability of the Wirtschaftsprüfer for claims of records and the information and explanations provided are complete. compensatory damages of any kind - except for damages resulting from injury to life, body or health - for an individual case of damages resulting from negligence is limited to € 4 million; this also applies if liability to a person other than the client should be established. An individual case of damages also exists in relation to a 4. Ensuring independence uniform damage arising from a number of breaches of duty. The individual case of damages encompasses all consequences from a breach of duty without taking The client guarantees to refrain from everything which may endanger the into account whether the damages occurred in one year or in a number of independence of the Wirtschaftsprüfer's staff. This particularly applies to offers of successive years. In this case multiple acts or omissions of acts based on a employment and offers to undertake engagements on one's own account. similar source of error or on a source of error of an equivalent nature are deemed to be a uniform breach of duty if the matters in question are legally or economically connected to one another. In this event the claim against the Wirtschaftsprüfer is limited to € 5 million. The limitation to the fivefold of the 5. Reporting and verbal information minimum amount insured does not apply to compulsory audits required by law. (3) Preclusive deadlines lf the Wirtschaftsprüfer is required to present the results of his work in writing, only that written presentation is authoritative. For audit engagements the long- A compensatory damages claim may only be lodged within a preclusive deadline form report should be submitted in writing to the extent that nothing else has been of one year of the rightful claimant having become aware of the damage and of agreed to. Verbal statements and information provided by the Wirtschaftsprüfer's the event giving rise to the claim - at the very latest, however, within 5 years staff beyond the engagement agreed to are never binding. subsequent to the event giving rise to the claim. The claim expires if legal action is not taken within a six month deadline subsequent to the written refusal of acceptance of the indemnity and the client was informed of this consequence.

The right to assert the bar of the preclusive deadline remains unaffected. 6. Protection of the Wirtschaftsprüfer's intellectual property Sentences 1 to 3 also apply to legally required audits with statutory liability limits. The client guarantees that expert opinions, organizational charts, drafts, All rights reserved. This form may not be reprinted, either in whole or part, copied © IDW Verlag GmbH · Tersteegenstraße 14 40474 Düsseldorf in any manner, without the express written consent of publisher. sketches, schedules and caIculations - expecially quantity and cost computations - prepared by the Wirtschaftsprüfer within the scope of the engagement will be used only for his own purposes. 52002KND 1/2002

Lizensiert für / Licensed to: Mitgliedsunternehmen des Verbunds von EY-Gesellschaften | 4309421 10. Supplementary provisions for audit engagements (6) To the extent that the annual sales tax return is accepted as additional work, (1) A subsequent amendment or abridgernent of the financial statements or this does not include the review of any special accounting prerequisities nor of the management report audited by a Wirtschaftsprüfer and accompanied by an issue as to whether all potential legal sales tax reductions have been claimed. No auditor's report requires the written consent of the Wirtschaftsprüfer even if these guarantee is assumed for the completeness of the supporting documents and documents are not published. If the Wirtschaftsprüfer has not issued an auditor's records to validate the deduction of the input tax credit. report, a reference to the audit conducted by the Wirtschaftsprüfer in the management report or elsewhere specified for the general public is permitted only with the Wirtschaftsprüfer's written consent and using the wording authorized by him. 12. Confidentiality towards third parties and data security

(1) Pursuant to the law the Wirtschaftsprüfer is obliged to treat all facts that he (2) lf the Wirtschaftsprüfer revokes the auditor's report, it may no longer be comes to know in connection with his work as confidential, irrespective of whether used. lf the client has already made use of the auditor's report, he must announce these concern the client himself or his business associations, unless the client its revocation upon the Wirtschaftsprüfer's request. releases him from this obligation.

(3) The client has a right to 5 copies of the long-form report. Additional copies will be charged for separately. (2) The Wirtschaftsprüfer may only release long-form reports, expert opinions and other written statements on the results of his work to third parties with the consent of his client.

11. Supplementary provisions for assistance with tax matters (3) The Wirtschaftsprüfer is entitled - within the purposes stipulated by the client - to process personal data entrusted to him or allow them to be processed by third (1) When advising on an individual tax issue as well as when furnishing parties. continuous tax advice, the Wirtschaftsprüfer is entitled to assume that the facts provided by the client - especially numerical disclosures - are correct and complete; this also applies to bookkeeping engagements. Nevertheless, he is obliged to inform the client of any errors he has discovered. 13. Default of acceptance and lack of cooperation on the part of the client

lf the client defaults in accepting the services offered by the Wirtschaftsprüfer or if (2) The tax consulting engagement does not encompass procedures required to the client does not provide the assistance incumbent on him pursuant to No. 3 or meet deadlines, unless the Wirtschaftsprüfer has explicitly accepted the otherwise, the Wirtschaftsprüfer is entitled to cancel the contract immediately. engagement for this. In this event the client must provide the Wirtschaftsprüfer, The Wirtschaftsprüfer's right to compensation for additional expenses as well as on a timely basis, all supporting documents and records - especially tax for damages caused by the default or the lack of assistance is not affected, even assessments - material to meeting the deadlines, so that the Wirtschaftsprüfer if the Wirtschaftsprüfer does not exercise his right to cancel. has an appropriate time period available to work therewith.

(3) In the absence of other written agreements, continuous tax advice encompasses the following work during the contract period: 14. Remuneration (1) In addition to his claims for fees or remuneration, the Wirtschaftsprüfer is a) preparation of annual tax returns for income tax, corporation tax and entitled to reimbursement of his outlays: sales tax will be billed separately. He business tax, as well as net worth tax returns on the basis of the annual may claim appropriate advances for remuneration and reimbursement of outlays financial statements and other schedules and evidence required for tax and make the rendering of his services dependent upon the complete satisfaction purposes to be submitted by the client of his claims. Multiple clients awarding engagements are jointly and severally b) examination of tax assessments in relation to the taxes mentioned in (a) liable. c) negotiations with tax authorities in connection with the returns and assessments mentioned in (a) and (b) (2) Any set off against the Wirtschaftsprüfer's claims for remuneration and d) participation in tax audits and evaluation of the results of tax audits with reimbursement of outlays is permitted only for undisputed claims or claims respect to the taxes mentioned in (a) determined to be legally valid. e) participation in Einspruchs- und Beschwerdeverfahren [appeals and complaint procedures] with respect to the taxes mentioned in (a). In the afore-mentioned work the Wirtschaftsprüfer takes material published legal decisions and administrative interpretations into account. 15. Retention and return of supporting documentation and records (1) The Wirtschaftsprüfer retains, for ten years, the supporting documents and (4) If the Wirtschaftsprüfer receives a fixed fee for continuous tax advice, in the records in connection with the completion of the engagement - that had been absence of other written agreements the work mentioned under paragraph 3 (d) provided to him and that he has prepared himself - as well as the correspondence and (e) will be charged separately. with respect to the engagement.

(5) Services with respect to special individual issues for income tax, corporate tax, business tax, valuation procedures for property and net worth taxation, and (2) After the settlement of his claims arising from the engagement, the net worth tax as well as all issues in relation to sales tax, wages tax, other taxes Wirtschaftsprüfer, upon the request of the client, must return all supporting and dues require a special engagement. This also applies to: documents and records obtained from him or for him by reason of his work on the engagement. This does not, however, apply to correspondence exchanged a) the treatment of nonrecurring tax matters, e. g. in the field of estate tax, between the Wirtschaftsprüfer and his client and to any documents of which the capital transactions tax, real estate acquisition tax client already has the original or a copy. The Wirtschaftsprüfer may prepare and b) participation and representation in proceedings before tax and retain copies or photocopies of supporting documents and records which he administrative courts and in criminal proceedings with respect to taxes, returns to the client. and c) the granting of advice and work with respect to expert opinions in connection with conversions of legal form, mergers, capital increases and reductions, financial reorganizations, admission and retirement of 16. Applicable law partners or sharehoIders, sale of a business, liquidations and the like. Only German law applies to the engagement, its conduct and any claims arising therefrom.

Lizensiert für / Licensed to: Mitgliedsunternehmen des Verbunds von EY-Gesellschaften | 4309421