Annual Report 2019 CONTENTS

THE FEHMARNBELT TUNNEL

Preface 3 Management Report 4 Key figures and financial ratios 21 Statement of comprehensive income 22 Balance sheet 23 Statement of changes in equity 25 Cash flow statement 26 Notes 27 Statement by the Board of Directors and Board of Management 50 The independent auditor‘s report 51 Board of Directors and Board of Management 54 Femern A/S Annual Report 2019

Preface agreement on the commencement of the construction works in Denmark.

The Fehmarnbelt project is making good pro- With the agreement, Femern A/S was re- gress and commenced parts of the actual quested to seek to conclude supplementary construction phase of the tunnel project in agreements with the two main contractor con- 2019. sortia, Fehmarn Link Contractors (FLC) and Fehmarn Belt Contractors (FBC) to launch a On 6 February 2019, Femern A/S received series of construction activities in Denmark. the signed German plan approval for the Feh- marnbelt project from the approval authority On 27 September 2019, Femern A/S con- in Schleswig-Holstein. cluded a supplementary agreement with the contractor consortium FBC on the establish- The issuing of the plan approval in Schleswig- ment of a work harbour, etc. at Rødbyhavn. Holstein marked a crucial milestone for the The Agreement entered into force on 1 No- implementation of the Fehmarnbelt project, vember 2019. Hence, the construction phase which has thus received both political and ad- of the tunnel project commenced . ministrative approval in Germany. In parallel with the negotiations with the main In accordance with German practice, the plan contractors, Femern A/S has continued to approval has been appealed to the German work with the preparation of the construction Federal Administrative Court where a court phase. process is now at hand. In both Denmark and Germany, Femern A/S The Federal Administrative Court has stated has carried out a series of specific construc- that the final, oral proceedings in the judicial tion preparatory activities in relation to the process will take place in September - Octo- fixed link across the Fehmarnbelt. ber 2020. This is consistent with the overall time schedule for the Fehmarnbelt Fixed Link Work on preparatory activities for the con- project. struction works at Rødbyhavn will be completed in 2020. In the light of the positive development in the German approval process, on 26 March Read more about Femern A/S and the Feh- 2019, the political parties behind the Feh- marnbelt project at www.femern.dk, where marnbelt project entered into a political you can also subscribe to the company's newsletter

Peter Frederiksen Claus F. Baunkjær Chairman of the Board Managing Director, CEO Femern A/S Femern A/S

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Management Report has thus now been granted political and administrative approval in Germany, and there is also agreement between Femern A/S and Femern A/S is responsible for planning and the relevant German authorities regarding the constructing the fixed link across Fehmarn- manner in which the construction work should belt on behalf of the Danish state, as well as be implemented in practice. providing the data needed for the plan approval of the coast-to-coast link. The German plan approval was presented to the public in the spring of 2019 allowing for The overall framework for the company's complaints to be lodged against the plan ap- work is laid down by the agreement signed in proval to the Federal Administrative Court. It September 2008 between Denmark and Ger- is customary in Germany to appeal to the many on plan approval, financing, construc- German Federal Administrative Court con- tion and operation of a fixed link across the cerning plan approval of major infrastructure Fehmarnbelt between Rødbyhavn and Putt- projects. garden. At the time of expiry of the deadline for ap- The treaty has been approved in Germany by peals on 8 May 2019, a total of eight com- an act passed in the Bundestag and Bundes- plaints were lodged against the plan ap- rat in 2009, and, in Denmark, the Danish Par- proval. The complaints were directed against liament has passed a planning act “Act on the the plan approval and consequently, the Ger- project engineering of a fixed link across the man approval authority in Schleswig-Hol- Fehmarnbelt with associated landworks”, stein. As project proponent, Femern A/S is April 2009. also a subpoenaed party of the Federal Ad- ministrative Court. The Danish Parliament passed the "Act on the construction and operation of a fixed link The complaints will be dealt with directly by across the Fehmarnbelt with associated land- the Federal Administrative Court. After re- works in Denmark" on 28 April 2015. The ceipt of the complaints against the plan ap- Construction Act is the final Danish environ- proval, the Federal Administrative Court has mental approval for the project. given the complainants on opportunity to sub- mit detailed complaint arguments to the Fed- The total economic framework for the coast- eral Administrative Court. to-coast project in the Construction Act is DKK 55.1 billion (2015 price level). In the up- In July 2019, the German approval authority dated financial analysis presented in Febru- and Femern A/S received the detailed com- ary 2016, the construction budget was calcu- plaint justifications from the Federal Adminis- lated at DKK 52.6 billion. (2015 price level) in- trative Court. During October and November cluding reserves of DKK 7.3 billion. There is 2019, the approval authority and Femern A/S also a central reserve of DKK 2.5 billion. in close coordination provided the Federal Administrative Court with responses to all Plan approval in Germany eight complaints. On 6 February 2019, Femern A/S received In December 2019, the Federal Administra- the signed German plan approval for the Feh- tive Court scheduled the dates for the final, marnbelt project. The issuing of the plan ap- oral proceedings at the Federal Administra- proval in Schleswig-Holstein marks a major tive Court that will take place from September milestone for the implementation of the Feh- to October 2020. marnbelt project. The Fehmarnbelt project

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The statement of the Federal Administrative  Establishment of residential and adminis- Court is in its essence in accordance with trative facilities on Lolland the overall time schedule for the Fehmarn-  Ordering of special marine equipment belt project with an anticipated start of con-  Other minor preparatory works (PPW) struction work in Germany in 2021. On 27 September 2019, Femern A/S entered The major construction contracts into an agreement with the contractor consortium FBC on the establishment of the work On 30 May 2016, Femern A/S entered into harbour, etc. at Rødbyhavn, without com- four major construction contracts for the con- mencing the complete construction contract struction of the Fehmarnbelt tunnel with the with the FBC as a whole. preferred contractors. The contracts were signed with the condition that the construction The agreement entered into force on 1 No- work should only be started when the final vember 2019 and marked an important mile- German plan approval has been obtained or stone for the Fehmarnbelt project with the when The Ministry of Transport and Housing commencement of the tunnel project’s con- makes a decision on this matter. struction phase on the Danish side. Major On 26 March 2019, In the light of develop- physical construction activities in connection ments in the German approval process, the with the establishment of the work harbour political parties behind the Fehmarnbelt pro- will be commenced in 2020. ject (Social Democracy, Venstre - the Liberal Party, the Danish People's Party, Radikale The total economy in the agreement with the Venstre - the Danish Social Liberal Party, the construction consortium FBC is within the po- Socialist People's Party, the Conservative litical agreement of 26 March 2019, and the People's Party and Liberal Alliance) entered costs of the supplementary agreement are into a political agreement on the launching of fully financed within the project construction the construction work in Denmark on the Feh- budget of DKK 52.6 billion (2015 price level). marnbelt Fixed Link. Negotiations with the contractor consortium In the light of the political agreement, Femern FLC on commencement of the establishment A/S was requested to try to reach an agree- of the tunnel element factory, etc. are in pro- ment with the two main contractor consortia, gress. A minor partial agreement with FLC Fehmarn Link Contractors (FLC), that will was signed in January 2020. construct a tunnel element factory, the tunnel itself and the tunnel portals and ramps, and State support case Fehmarn Belt Contractors (FBC), that will establish the work harbour and dredge the tun- On 13 December 2018, the General Court of nel trench in the Fehmarnbelt, as well as land the European Union passed judgement on reclamation, on commencing the following the financing model for the Fehmarnbelt pro- construction activities in Denmark, etc.: ject. With the judgement, the EU Commis- sion's previous state support approval in 2015  Establishment of a work harbour at of the financing of the coast-to-coast project Rødbyhavn was cancelled. The European Commission  The construction of parts of the tunnel el- must thus make a new decision on the financ- ement factory at Rødbyhavn ing model for the Fehmarnbelt Fixed Link.  Establishment of the tunnel portal on Lol- land

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As a consequence of the judgement, the EU On the German side, on 12 April 2019, Commission commenced a formal investiga- Femern A/S received a so-called "immediate tion procedure on 5 July 2019 in respect of enforcement" authorisation from the German state support before it can make a new deci- approval authorities in Schleswig-Holstein for sion on the financing of the Fehmarnbelt pro- the implementation of a number of minor pre- ject. In this context, the EU Commission is- construction phase preparatory activities at sued a so-called "letter of formal notice", to the production area on Fehmarn. A number of which all interested parties have been able to these activities have been commenced. The offer comments. activities are scheduled to be performed during the period of 2019 - 2020 simultaneously On behalf of the Ministry of Transport and with the court process at the Federal Admin- Housing and Femern A/S, the office of the Le- istrative Court. gal Adviser to the Danish Government has submitted comments to the letter of formal During the construction phase, Femern A/S notice to the EU Commission. Simultane- will, as the developer, have three main tasks: ously, the Ministry of Transport and Housing has been in dialogue with the European Com-  Management of the contracts relating to mission with a view to providing the basis for the overall management objectives of the the EU Commission’s preparation of a robust project. new approval of the state guarantee model  Monitoring of the contractors' perfor- under the state support rules as soon as pos- mance of the work to ensure that it is in sible. compliance with the requirements established in Denmark and Germany. On 20 March 2020 the EU Commission has  Reporting, information and communica- made a decision on approval of the state sup- tion on the status and progress. port for financing of the Fehmarnbelt project, where a new support model for the project Management, monitoring and reporting in re- has been approved. Femern A/S will analyse lation to the construction works are laid down the decision and the consequences and dis- in the major construction contracts and the cuss it with the owner. It is assessed that the company’s contract management systems Fehmarnbelt project still has a robust econ- that focus on the management objectives omy. Time, Economy, Quality and Safety, Organi- sation and Risk management. Management of the construction phase Development of the organisation in the construction phase Femern A/S' preparations for the commencement of the construction works at Rødbyhavn Femern A/S' set up of the owner’s organisa- are well underway. In the light of the political tion is progressing as planned in relation to agreement of 2 March 2018 between the po- the plans and progress in the project. The es- litical parties behind the Fehmarnbelt Fixed tablished organisation comprises specialists Link on the bringing forward of pre-construc- and experienced staff with in-depth project tion phase preparatory works, Femern A/S knowledge of the implementation of major has carried out a number of site preparation construction projects. activities for the production area at Rødby- havn. In this connection, the political agree- In November 2019, Femern A/S took over the ment of 26 March 2019 includes completion Danhotel property in Rødbyhavn with a view of minor pre-construction phase preparatory to transforming the property to the company's activities that will be concluded in 2020. Owner’s Site Office during the construction

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phase. After modernisation and conversion,  Module 1 with a focus on important man- the property will house office workplaces, agement disciplines meeting and exhibition facilities, a reception  Module 2 with a focus on management desk and accommodation space for the com- communication and dissemination pany's employees.  Module 3 with a focus on diversity and inclusion With the acquisition of Danhotel in Rødby- havn and the company's offices in Burg at The third module was implemented in 2019 Fehmarn and in Hamburg, as well as repre- with a special focus on diversity and inclusion sentation in Berlin, the physical framework for in the process of recruiting employees whose Femern A/S' activities is in place. individual competencies and resources con- In 2019, Femern A/S worked intensively with tribute to ensuring the project progress and the transition of the organisation to the con- quality in solutions for the overall project. struction phase, and a number of new com- Corporate Social Responsibility petencies have been added. (CSR) Recruitment and retention With the launch of the major physical con- In order to be able to live up to the project struction activities, the Fehmarnbelt project is objectives for the construction phase, it is entering into a phase where there will be a essential to have employees with the right continued focus on salary and working condi- competencies available throughout the tions, establishment of apprenticeships, a whole duration of the project. safe working environment and consideration In 2019, the company implemented a tar- of climatic, natural and environmental as- geted recruitment strategy to ensure that expects as essential elements in the company's perienced staff could be attracted within, i.a. CSR efforts. the engineering disciplines. The company Femern A/S' CSR policy is included under the has experienced a great deal of interest in the 'Quality and Safety’ management target and project in the process of attracting strong can- put into practice predominantly via specific re- didates from both home and abroad. quirements and clauses in construction con- Retention of current employees is also im- tracts that also include robust mechanisms portant for the company since experience and for documentation, management and review. thorough knowledge of construction con- The UN's Sustainable Development Goals tracts, official approvals and other framework Femern A/S subscribes to the United Nations conditions in both Denmark and Germany is Global Compact. The 10 Global Compact central to the continued development and principles are based on internationally recog- project implementation. nised standards of human and labour rights, Management respect for the environment and anti-corrup- As part of its role as the owner organisation, tion and constitute the starting point for the Femern A/S has developed a management company's CSR policy and Code of Conduct. development programme based on a combi- With this as the point of departure, the com- nation of management and organisation the- pany carried out an analysis in 2019, as well ory, individual management development, as a prioritisation of the UN's Sustainable De- management coach and inspirational presen- velopment Goals with a view to their future in- tations. The programme has been imple- tegration into the strategic work with CSR. mented in 3 modules:

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The analysis was partly based on the frame- The result of the analysis is illustrated in the work conditions in the State Treaty between figure below in the form of a prioritised break- Denmark and Germany, the Danish Con- down of the Sustainable Development Goals struction Act and the German plan approval, into one central target that reflects Femern and partly on the CSR and sustainability re- A/S' core objective, and five central Sustaina- quirements to the contractors in the construc- ble Development Goals that affect and are af- tion contracts. Furthermore, the analysis was fected by the project, as well as a number of based on the expectations of the project that supporting objectives. have become apparent in the dialogue with key stakeholders in the consultation process and the project approval in Denmark and Ger- many. This is a dynamic development process.

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Prioritising the UN Sustainable Development Goals

Femern A/S is overall responsible for con- to promoting an efficient, safe and sustaina- structing and operating the fixed link across ble European transportation system. The Fehmarnbelt. For this purpose, the company project is, therefore, supported under the so- contributes to the achievement of Sustainable called TEN-T/CEF (Connecting Europe Fa- Development Goal 9: Build robust infrastruc- cility) programme. The Fehmarn tunnel and ture, promote inclusive and sustainable in- the development of the rail network is an im- dustrialisation and support innovation portant part of the so-called Scan-Med Corri- dor between Finland in the north and Italy In addition, central Sustainable Development and Malta in the south. Goals in connection with Femern A/S' man- Today, freight trains between Scandinavia/ agement, monitoring and reporting of the con- East Denmark and the European continent do tractors’ work will be: not travel via Rødby-Puttgarden, but take a  Goal No. 8 Decent work and economic 160 km detour via the Great Belt. With the growth Fehmarnbelt Fixed Link, a modern, double-  Goal No. 12 Responsible consumption track and fully electrified railway will be estab- and production lished. This creates the basis for a transition  Goal No. 13 Climate action to green mobility. For passenger train ser-  Goal No. 14 Life below water vices, the journey time between Copenhagen  Goal No. 15 Life on land and Hamburg will be reduced from 4.5 hours to less than 3 hours. The more direct route between Scandinavia and Central Europe via Sustainable, robust, reliable, high-quality Fehmarnbelt also means that European infrastructure freight trains in transit that today occupy rail Sustainable European transport capacity on Funen and Jutland can provide space for additional passenger trains be- The Fehmarnbelt Fixed Link is considered tween the different regions of Denmark. by the EU Commission to be a high priority infrastructure project that both contributes to connecting the European growth centres and

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The Fehmarnbelt tunnel will be built with a de- steel beams and concrete slabs. The contrac- sign life of at least 120 years, and the link's tors’ focus on waste and resources supports purpose is reflected especially in Sustainable Sustainable Development Goal 12. Development Goal 9.1: "Development of reliable, sustainable and robust high-quality in- Optimised resource consumption, climate frastructure, including regional and cross-bor- considerations and opportunities for the appli- der infrastructure to support economic devel- cation of new environmentally friendly tech- opment and human well-being, with a focus nologies will also be included as essential elements in the future supply of the installations on equal access for all at an affordable price". in the tunnel. It is a requirement of the construction contracts that the contractors systematically in- Promote responsible growth and employ- clude climate and environment-friendly solu- ment as well as apprenticeships tions in the planning and construction of the Decent work and economic growth works. As the owner, Femern A/S’ supervision helps to ensure that the climate, nature With the Fehmarnbelt Fixed Link, citizens, and the environment are affected to the least businesses and the markets on both sides of possible degree by the company’s activities. the Fehmarnbelt will come closer to each Similarly, resistance and adaptability to cli- other. This creates mobility for the labour mate-related risks are integrated into the re- force and increased competitiveness for busi- quirements for the project’s physical design nesses in a region that actually includes large and implementation in accordance with Sus- parts of northern Germany, Denmark and tainable Development Goal 13: Climate ac- Sweden. tion. During the construction, the tunnel project will During the construction phase, the company in itself be a primary employer and growth will also have a continued focus on support- generator in the region. Femern A/S has in- ing Sustainable Development Goal 12: Re- corporated working clauses and social sponsible consumption and production. An clauses in the contracts and, during the con- important element in this work will be to coop- struction phase, will supervise the contrac- erate systematically with the contractors on tors’ compliance with these clauses. The continuous improvement, for example con- same applies to the requirements for working cerning: environment and safety. The requirements support Sustainable Development Goal 8:  Optimised consumption of primary build- Decent work and economic growth and in- ing materials cludes all workers who, on behalf of the con-  Responsible energy consumption and tractor, contribute to the execution of the pro- supply ject-related tasks in Denmark and Germany.  Innovation and implementation of climate- friendly solutions It is essential for Femern A/S that the con-  Preparation of the construction for future struction of the fixed link be undertaken in the green technologies. context of the Danish and German labour market system. In 2019, the company In addition to the focus on energy consump- launched a structured process for dialogue in tion, the contractors who have undertaken the Denmark with representatives of, i.a. contrac- demolition of buildings have placed emphasis tors, trade unions, employers' organisations, on the recycling of building materials such as the Danish Working Environment Authority, SKAT (the Danish Tax Agency), the police,

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the municipalities and vocational colleges. A Rødbyhavn. These shall be made available to similar dialogue is planned with the German the contractors at the beginning of the con- stakeholders prior to the initiation of the construction phase. As the contractors employ struction works in Germany. additional workers, they are committed to providing similar residential accommodation. Wages and working conditions(work clauses) Apprentices, students and trainees (social clauses) Femern A/S has incorporated explicit clauses on pay and working conditions applicable to The objective for the Fehmarn project is to work in Denmark and Germany, respectively contribute to the employment of apprentices in the company's major construction con- within the practical/craft trades, trainees tracts. On the Danish side, reference is made within, e.g., engineering disciplines, and of- to the collective agreements in the Danish la- fice trainees. The requirement is put into bour market and to Danish and international practice via social clauses with target figures regulations. Depending on the respective for apprentices in all relevant tenders and field, the minimum requirements include: contracts.

 Minimum wage level For the major construction contracts, a total  Working Hours of at least 500 apprentice man-years is ex-  Pay supplements for work on public holi- pected during the construction period. days  Overtime Social clauses are also included in the  Holiday pay smaller contracts as well as in the framework  Pension contributions and consultancy agreements. In connection  Compensation for travel expenses, ac- with the preparatory works (PPW), 23 ap- commodation and meals for stationed prentice man-years have been established at employees. the beginning of 2019 as a result hereof. Dur- ing 2019, a further 2.3 man-years were real- Similarly, it is incorporated in the contracts ised in connection with minor contracts, 1 that the contractors shall comply with applica- man-year for consultants and framework ble German legislation and collective agree- agreements, and 1 man-year in Femern A/S' ments for works performed on the German own organisation. The number of appren- side of the Fehmarnbelt. tices, trainees and students will increase in line with the implementation of the larger Accommodation physical construction activities.

As part of the effort to promote well-being and In 2020, the company will continue to inte- create a good working environment, Femern grate and promote the achievement of the ap- A/S, in cooperation with the labour market's prenticeship requirement through supervision partners and Lolland Municipality, has formu- and through cooperation with contractors, lated contractual requirements to the contrac- businesses, educational institutions and the tors to offer and provide suitable accommo- labour market’s partners. dation for employees who cannot reasonably commute between their usual places of resi- Working environment and safety dence and the work site. As the Owner, Femern A/S has overall re- In 2019, Femern A/S established the first 20 sponsibility for health and safety in the Feh- housing units near the construction site in marnbelt project and for ensuring compliance with working environment legislation. The

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company has drawn up a plan for occupa- the concept is expected in the beginning of tional health and safety. January 2020.

A significant element in the achievement of a Femern A/S has established a crisis unit that safe working environment is the decision to shall act in accordance with the emergency cast the tunnel elements indoors under con- response plan. In cooperation with the emer- trolled factory-like conditions at the upcoming gency authorities, the company has drawn up tunnel element factory at Rødbyhavn. This contingency plans for the emergency ser- will make it easier for contractors to design vices’ actions during the construction phase. equipment and working processes so that Dialogue with the authorities and contractors they will be as safe as possible. At the same will continue throughout the construction time, a production facility will be created that phase. The crisis unit will hold exercises in is independent of wind and weather and pro- 2020 to ensure the necessary emergency vide optimum conditions for the quality of the service/emergency management in the event concrete work. of unforeseen incidents.

According to the major construction con- Ensure consideration of nature and pro- tracts, the contractors shall document that tect biodiversity health and safety conditions are integrated into the design, execution and organisational The Fehmarnbelt project is to be imple- planning of the works, e.g., for the organisa- mented with the greatest possible consideration of work processes and methods and se- tion of nature and the environment. This ap- lection of materials. In addition, the contracts plies both to the construction phase and to the include requirements to education and train- operation of the completed tunnel. With re- ing and the establishment of a follow-up and sponsibility for a large cross-border infra- sanction system to ensure that risky behav- structure project, Femern A/S is committed to iour at work is not tolerated. taking into account the German, Danish and European environmental legislation. This In 2019, as part of the building site prepara- consideration is reflected in the specific envi- tion under the smaller contracts, contractors ronmental requirements in the construction performed over 40,000 hours of work without contracts and is the company's model for su- accidents. pervision.

In 2020, Femern A/S will continue to place Femern A/S has developed an environmental emphasis on dialogue and supervision of all management system based on the ISO14001 contractors relating to the working environ- standard. The construction contracts require ment and safety, including assessing and that the contractors establish corresponding commenting on the contractors’ design and environmental management systems. The planning documents in advance of the com- work of implementation and optimisation of mencement of new activities. the environmental management systems across the major construction contracts was Emergency and crisis organisation started in 2019. This work will continue in 2020 in line with the implementation of new In 2019, Femern A/S developed a rescue and activities. emergency concept for the construction phase as a part of the safety documentation. In addition, Femern A/S is working to ensure The company has been in continuous dia- that temporary local effects on nature are logue with the Danish and German emer- minimised via so-called remedial and com- gency authorities, and the final completion of

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pensatory initiatives. The measures are de- 10 water holes on the Danish side. Protected signed to protect and establish valuable hab- amphibians have been collected and moved itats and contribute to the promotion of biodi- to the new water holes, and an amphibian versity. The effort is in harmony with Sustain- fence has been established to prevent return able Development Goal 14: Life below water migration to the working areas both on Lol- and 15: Life on land. land and on Fehmarn.

Life below water In 2019, a part of the preparatory construction works was subject to time constraints due to The consideration for life offshore has been considerations for nature. For example, the included as an essential objective for the en- necessary discharge of Strandholm Lake tire life of the project. Femern A/S has devel- could not be done during the bird's breeding oped a marine monitoring programme that is season. carried out before, during, and after the commencement of the Fehmarnbelt tunnel. The In 2020, the company expects to establish a monitoring shall as a starting point be based 1.5 ha marsh to substitute for a 0.5 ha previ- on measurement stations and registration of, ously drained marsh area and establish a i.a. waves, currents and underwater noise, new lake, which will be approximately 16 ha and sediment in the sea and its deposits on in area, including beaches, as a substitute for the seabed. In addition bathing water quality Strandholm Lake. and coastal and seabed forms, plant and an- imal communities, including populations of, On Fehmarn, around 12 ha compensation bi- i.a. birds and harbour porpoises in the Feh- otopes were established in 2019 for different marnbelt will be monitored. bird species, and nest boxes were set up as part of the remedial and compensatory In 2019, the purpose of the monitoring was to measures on the German side. test equipment, methods, and reporting for- mats and to develop the data comparison ba- CSR Results 2019 sis for the construction phase. In 2019, Femern A/S continued to implement In 2020, the marine construction works in the company's CSR policy and met the year’s connection with the construction of the work objectives under the policy focus areas of harbour will be started. Thus, Femern A/S’ Corporate Governance and Management, monitoring of impacts on the marine environ- Health, Safety and Job Satisfaction, the Envi- ment is commenced. ronment, Protection of Nature and Climate, and Dialogue and Communication. Life on land

As a part of the remedial and compensatory measures onshore, Femern A/S has so far established 76 ha of grass and meadows and

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CSR Results 2019

Corporate Governance and Management

 Labour clauses on pay and working conditions and social clauses on apprentices, students and trainees are incorporated in all relevant contracts  Planning of the handling of CSR requirements during the construction phase, including review and monitoring, has been initiated  The organisation is continuously adapted to the construction phase, i.a. through a focus on competence development, recruitment and diversity

Health, Safety and Job Satisfaction

 Safety in connection with the preparatory activities at Lolland has been in focus  A rescue and emergency concept for the construction phase has been developed as a part of the safety documentation in dialogue with the authorities  The preparation of agreements on cross-border cooperation between the Danish and German teams is currently in progress  An internal emergency response plan has been developed to ensure handling of unforeseen incidents in the construction phase in cooperation with the contractors and authorities  In 2019, a Health and Safety day for the employees was replaced by a strategically focused employee seminar as part of the kick-off for the construction phase as well as the workshops in connection with the holding of the statutory WA  The design & build contractor’s planning documents have been reviewed to ensure that they identify and minimise safety risks

Environment, Protection of Nature, and Climate

 A number of environmental remedial and compensatory measures have been implemented both on Lol- land and on Fehmarn in 2019  The condition and development of nature and the functionality of the remedial measures have been monitored  Implementation and optimisation of the environmental management system across the construction contracts are implemented

 There has been a focus on minimising the company's CO2 footprint in connection with the preparatory works (PPW)  Communication with stakeholders regarding the impact of construction activities on environmental conditions and nature in Denmark and Germany

Dialogue and Communication

 Dialogue and information for citizens in the vicinity have been implemented via Info Centres, social media channels, stakeholder meetings and popular events  Information about the project is propagated via Danish, German and international media  Communication channels for direct communication with citizens in the local areas during the construction phase have been established  External partners have been supported in their communication on benefits of the Fehmarnbelt tunnel

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CSR objectives and activities, 2020

During the construction phase, the company's CSR efforts will largely focus on the integration of the Sustainable Development Goals under the three prioritised CSR focus areas. The CSR objectives and activities for 2020 are summarised below:

Build sustainable, robust, reliable, high-quality infrastructure

 Integration of climate change considerations into relevant tenders and contracts  Monitoring of climate impacts and use of resources during the construction phase  Systematic implementation of climate concerns and ongoing improvements in cooperation with contractors

Promote responsible growth and employment, as well as apprenticiships

 Integration of the labour clauses concerning pay and working and living conditions and social clauses on training and work experience contracts in relevant tenders and contracts  Monitoring of compliance with the labour and social clauses  Supervision of the working environment and safety  Review of the contractors’ design and planning documents from a working environment and safety per- spective prior to the initiation of new construction works

Ensure consideration of nature and protect biodiversity

 Review of the contractors’ environmental management systems  Implementation of the marine review/verification and monitoring programme  The establishment, monitoring and care of the remedial and compensatory measures onshore

Cross-disciplinary

 Implementation and development of supervision strategies across the major construction contracts  Dialogue and communication on CSR-related circumstances with relevant stakeholders

15 Annual Report 2019 Femern A/S

Corporate Relations elected representatives on the board are Vil- lads Engstrøm, Anne Bøgh Johansen, Femern A/S is a state-owned limited com- Jeanne Christensen and Randi Weihrauch. pany, established under civil law. Femern A/S has signed an agreement with Femern A/S is via A/S Femern Landanlæg a Øresundsbro Konsortiet I/S concerning fi- part of Sund & Bælt Holding A/S, which is nancial management. wholly owned by the Danish Ministry of Transport and Housing. The Minister for The Fehmarnbelt project is a priority project Transport is authorised, according to the within the trans-European transport network Planning Act and the Construction Act re- and, as such, receives EU funding. The EU spectively, in all significant matters to pro- funding has made a significant contribution vide general or specific instructions to the to financing the planning and feasibility stud- company with regard to matters related to ies and will also contribute significantly to fi- the company’s business. nancing the construction works.

Femern A/S has its head office in Copenha- Employees gen. Furthermore, the company has offices in Rødbyhavn, in Burg on Fehmarn and in Femern A/S is a project organisation, still in Hamburg, as well as a representative office the structuring process. The structure follows in Berlin. In connection with the start of the the progress of the project, taking into ac- construction works on the Danish side, count the start-up phase that is normal for Femern A/S has in November 2019 taken such a complex project. over the property "Danhotel" in Rødbyhavn 2019 2018 with a view to converting the property to the company's Owner’s Site Office during the Number of employees* 104 91 construction phase. After modernisation and Gender composition - Female 43 per cent 41 per cent conversion, the property will house approxi- - Male 57 per cent 59 per cent mately 75 office workplaces, meeting and exhibition facilities, reception desk and over- Gender composition, senior managers night accommodation for the company's em- - Female 25 per cent 25 per cent ployees. - Male 75 per cent 75 per cent

The company is managed by a Board of Di- Gender composition, other management levels rectors, elected at the annual general meet- - Female 24 per cent 11 per cent ing on the recommendations of the Minister - Male 76 per cent 89 per cent for Transport. There are also four members Educational background elected by and among the company's em- - Higher 70 per cent 68 per cent ployees. Prior to the annual general meeting - Intermediate 22 per cent 23 per cent on 26 April 2019, employees had voted to - Short 8 per cent 9 per cent elect four representatives on the board for Staff turnover 3.8 per cent 2.0 per cent four years (2019 - 2023). Average age 47 years 47 years Training per employee DKK 10,389 DKK 10,762 The company’s Board of Directors currently Absenteeism (incl. long-term consists of Peter Frederiksen (Chairman), absence due to illness) 1.6 per cent 1.2 per cent

Jørn Tolstrup Rohde (Vice-chairman), Walter * At the end of 2019, the company had 104 employees, cor- Christophersen, Rainer Feuerhake, Claus responding to 97 full-time employees. The average number of employees for 2019, based on ATP payments, corre- Jensen, Lene Lange, Ruth Schade and Mik- sponds to 87 employees. kel Haugård Hemmingsen. The employee-

16 Femern A/S Annual Report 2019

The organisation includes employees with funding is set off totalling DKK 1,469.4 mil- Danish, German, Swedish and British na- lion. tionalities. Financing In 2019, work was done with regard to inclusion and diversity at several levels. The ef- Apart from the company's invested capital, forts have been implemented in the relevant activities are financed by borrowing and EU working processes to ensure that there is funding via the EU Commission's TEN- progress in the area. In the continuing devel- T/CEF programme. The EU Commission se- opment of the organisation, it will be a goal- lected the Fehmarnbelt project as a priority oriented focus area. At the end of 2019, project in 2003 within the trans-European women constituted 25 per cent of the highest transport net (TEN-T/CEF). level of management. The Fehmarnbelt project was granted fund- Finance ing from the EU Commission for 2008-2015 totalling EUR 204.9 million, corresponding to The company's result before tax was a loss just over DKK 1.5 billion. In 2017, the EU of DKK 409.4 million and after-tax a loss of Commission and the Court of Auditors had DKK 319.3 million, of which fair value adjust- both given their final evaluation of the fund- ment of loans entered into constitute DKK ing period. After completion of the audit, the 408.1 million. total disbursed support for the period amounts to DKK 1,351 million. Value adjustments of financial liabilities and assets are taken into the statement of total The EU funding programme for the develop- income and are thus not capitalised as a part ment of an improved European transport of the project under road and railway works network for the period 2014-2020 is termed under construction. the TEN-T/CEF. In 2015, the EU Commis- sion decided to allocate EUR 589 million, or The company incurred costs of DKK 634.3 DKK 4.4 billion, in support of the project in million in 2019. Estimated EU funding 2015-2019. In 2016, the EU Commission ex- amounts to DKK 68.4 million, which is offset tended the funding period to include the year against total costs. The net increase is thus 2020. The funding amount awarded is based DKK 565.9 million. on the CEF-programme awarding a maximum of 40 per cent in support of cross-bor- Out of the total cost of the project, DKK der railway-related activities, which are cal- 433.7 million is attributed to project design culated to constitute 51 per cent of the total work, pre-construction preparatory activities activities of the Fehmarnbelt project. and compensation for bidders, i.a. for later start-up of construction activities and the Disbursement of the EU funding is in the plan approval process in Schleswig-Holstein. form of advance payments of the budgeted The remaining DKK 200.6 million was used amount of the support payment and as final for salaries and administration, including payment once the company has docu- property rental and IT, as well as financing mented that eligible expenses have been in- costs. curred.

Since Femern A/S was established, project The supplementary agreement concluded costs (excluding fair value adjustment of fi- with the FBC contractor on commencement nancials) have amounted to DKK 5,721.3 of parts of the contract's construction activi- million, of which DKK 5,531.3 million has been capitalised in the balance sheet. EU

17 Annual Report 2019 Femern A/S

ties in Denmark and the outcome of the on- The placing of liquidity is based on achieving going negotiations with FLC and whether the a high level of security and liquidity. At the contracts in their entirety can be initiated in end of 2019, the liquid assets were placed 2021, which is dependent upon the progress as bank deposits, short-term Danish flexible of the proceedings at the Federal Adminis- bonds and government securities. The credit trative Court, is of vital importance for the quality of the liquidity investments is in the possibility of exploiting the support awarded rating category AA to AAA according to the under the current support programme (CEF international credit rating agencies, and thus I). a minimal credit risk.

At a later stage it will be possible to apply for Net financing costs in 2019, including fair further funding under the subsequent CEF II value adjustments, comprised a total of DKK programme for the period 2021-2028. The 479.9 million, compared with DKK 129.3 mil- EU Commission has announced that the lion in 2018. The financial value adjustments Fehmarnbelt project is a strong candidate for in 2019 represented an outlay of DKK 408.1 further funding under the CEF programme. million against an expense of DKK 125.3 million in 2018. Note that the Danish govern- From 2015 onwards, the company's finances ment provides a special guarantee for inter- are fixed in the Construction Act passed on est and repayments plus other ongoing obli- 28 April 2015. gations related to the company's borrowing against a guarantee commission of 0.15 per The company has two different means of cent. At the end of 2019, the interest-bearing borrowing: net debt amounted to DKK 3,941.9 million  Direct state loans via Danmarks Na- compared with DKK 2,997.7 million at the tionalbank (relending) end of 2018.  Loans on the money and capital markets At the end of the year, the equity is based on a state guarantee. DKK 105.1 million after the year’s result for

2019 of DKK -319.3 million is taken into con- The company financed its activities in 2019 sideration. The current value adjustment of via EU funding and relending via the Na- contracted loans constitutes minus DKK tionalbank. Financing of the coming year's 408.1 million. The contracted loans have borrowing requirement for construction of the maturities of up to 10 years. The longer ma- fixed link has been secured and, at the be- turity loans are entered into in order to in- ginning of 2019, a total loan agreement of crease the budget security in the company's nominally DKK 11,750 million has been en- long-term financing. The adjustment is tered into, of which DKK 5,550 million com- purely an accounting record without any li- prises advance loans. The advance loans quidity-related impact. were disbursed in the first half of 2019. Total loan financing on 31 December 2019 is thus Cash flow nominally DKK 11,750 million, whilst the fair value is DKK 12,617 million. Cash flow from operations constitutes DKK 195.9 million, derived primarily from changes The excess loan proceeds are invested in in the working capital, which comprises cur- securities with a nominal value of DKK 8,461 rent assets and current liabilities. Invest- million to be used for financing in the coming ments in fixed assets constitute DKK 644.0 period. The net debt is nominally DKK 3,155 million net and the contractors’ drawing on million, and the fair value has been assessed as DKK 3,642 million.

18 Femern A/S Annual Report 2019

the loan facility is DKK 137.0 million. Invest- Expenses in 2020 will primarily be covered ments in funds in securities amounts to DKK by loan financing. Loan financing is expected 5,267.1 million. to occur via direct state loans (relending).

In addition to EU funding of DKK 49.1 mil- The ongoing outbreak of COVID-19 is not lion, financing activities include liabilities of anticipated to have any impact on the expec- DKK 5,781.3 million. There has not been any tations for the year result. reduction of liabilities during this year. With regard to the construction work the The company's liquid assets on 31 Decem- company is in dialogue with the contractors ber 2019 (year closing) total DKK 214 million and other business partners about possible compared with DKK 182 million on 31 De- consequences on the physical activities on cember 2018. the Danish and German side. With regard to the financing costs of the construction pro- Events after the balance sheet date ject, the effect is considered to be limited as it is expected that the interest and inflation On 20 March 2020 the EU Commission has will remain at a low level throughout a longer made a decision on approval of the state sup- period. port for financing of the Fehmarnbelt project, where a new support model for the project Risk management and control envi- has been approved. Femern A/S will analyse ronment the decision and the consequences and discuss it with the owner. It is assessed that the Risk management is an integral part of Fehmarnbelt project still has a robust econ- Femern A/S’ management concept and an omy. ongoing theme in all processes and phases, from the ongoing proceedings at the Federal Outlook for 2020 Administrative Court and in the actual construction phase. The risk management is a For the coming year, the budget includes al- continuation of the work carried out in the al- ready decided activities of the order of DKK ready completed phases, including the Dan- 1.6 billion (equivalent to approximately DKK ish and German plan approval process and 1.5 billion at the 2015 price level). the procurement and contract processes for It is expected that the implementation pack- the major contracts. The risk management is age, cf. the political agreement of 26 March based on the principles and guidance from 2019 will be implemented in its entirety. The international standards that are also familiar activities that may be decided initiated in to the project’s contractors and consultants. 2020 will be financed within the total con- The aim of risk management is to identify, struction budget of DKK 52.6 billion (2015 quantify, assess, address and manage price level). threats and opportunities in a manner that A result of the order of DKK 1-2 million be- ensures that the project's objectives are pro- fore tax and fair value adjustments is ex- moted. It is a key element of the risk man- pected in 2020. Other costs will be capital- agement process that the entire organisation ised. of Femern A/S, from the Board of Manage- ment to the owner of the specific risk, is able Income in the form of EU subsidies for to establish and maintain awareness of “risk” works-related costs in 2020 will be offset throughout the progress of the entire project. against capitalised costs.

19 Annual Report 2019 Femern A/S

Based on the company's and the contrac- final design of the solution that they subse- tor's risk register, as well as the strategic risk quently build. The same is true of the risk profile of the project, a number of key risks management in the project, which is based have been identified. Effective and timely on the assumption that risks are placed handling of these risks is significant for the where risks are best managed. This means overall achievement of goals, particularly re- that risks - and thereby, risk management - garding activities in the construction phase are placed with the party that can best influ- and compliance with the construction ence/mitigate a given risk at the least cost. budget. The nature and significance of the The contractors have full ownership of De- risks changes continually depending on the sign & Build risks and are contractually project’s phase of development and the con- obliged to work actively with risk manage- tractors' works. The development of the risks ment in relation to the contracts. The obliga- is, therefore, assessed continually so that tions are reflected in the contractors’ set of mitigating actions can be initiated either by plans and daily processes for risk manage- the company or by the contractors. ment, where reports are submitted continually to Femern A/S. For the construction-re- The risk management process is monitored lated risks, the risk management is handled and evaluated by Femern A/S' Risk Commit- in close cooperation with the contractors, tee. The committee meets regularly to moni- where Femern A/S monitors the process on tor and document the development of the a common platform so that there is full trans- project's overall risk profile (including the parency in the handling of the individual contractors’ central risks), the most signifi- risks. cant risks currently and in the subsequent quarters and to develop mitigation strategies Work is ongoing continuously to consolidate for individual risks. The Risk Committee also the risk platform in cooperation with the con- monitors the risk reserve and follows its use tractors so that the risk management meets closely. the contractual requirements and thus follows the international standard ISO 31000 The company's risk management and inter- Risk Management Principles and Guidelines. nal accounting and financial reporting reviews are designed to minimise the risk of errors in connection with the implementation of the construction works. The internal review system distinguishes clearly between roles and areas of responsibility, reporting requirements and procedures for certification and approval. The internal reviews are reviewed by the auditors and reported to the Board of Directors. A fixed procedure has been established and documented for the preparation of a quarterly risk report for shareholders and the Board of Directors.

Cooperation with the contractors

The contracts with the contractors are so- called turnkey contracts (Design & Build) where the contractors are responsible for the

20 Femern A/S Annual Report 2019

Key figures and financial ratios (DKK 1,000)

2015 2016 2017 2018 2019 Operating expenses -2,028 -2,374 -919 1,451 -1,297 Profit or loss from primary operations -2,028 -2,374 -919 -1,451 -1,297 Tax 4,209 3,595 -993 27,839 90,029 Profit or loss for the year 2,181 1,221 -1,912 -98,887 -319,331 Net capital investments during the year 644,731 545,875 190,472 358,940 578,928 Equity 523,973 525,194 523,282 424,395 105,064 Balance sheet total 2,939,811 3,403,112 3,587,894 7,375,020 13,323,491

Financial ratios, per cent: Profit ratio (primary operations) 0.0 0.0 0.0 0.0 0.0 Rate of return (primary operations) 0.0 0.0 0.0 0.0 0.0

Note: The key figures are calculated as stated in note 1, Applied accounting practice.

21 Annual Report 2019 Femern A/S

Statement of comprehensive income 1 January 2019 – 31 Decem- ber 2019 (1,000 DKK)

Note Statement of comprehensive income 2019 2018

Costs 3 Other operating expenses -625 -796 4 Staff costs -672 -655 Total costs -1,297 -1,451

Profit or loss from primary operations (EBIT) -1,297 -1,451

Financials Net fair value adjustment -408,063 -125,275 Total Financials -408,063 -125,275

Profit or loss before tax -409,360 -126,726

5 Tax 90,029 27,839 Profit or loss for the year and comprehensive income -319,331 -98,887

Profit or loss allocation: It is proposed that the annual loss of DKK -319.3 million be carried forward to next year.

Femern A/S has no other comprehensive income in the current financial year or comparative year.

22 Femern A/S Annual Report 2019

Balance sheet 31 December 2019 (1,000 DKK)

Note Assets 2019 2018

Non-current assets

Intangible fixed assets 6 Software 8,299 8,005 Total intangible assets 8,299 8,005

Property, plant and equipment

7 Road and railway facilities under construction 4,211,480 3,645,551

8 Land and buildings 17,082 6,338 9 Leasehold improvements 0 130 10 Operating plant 1,287 2,455 11 Leasing assets 48,749 0 Total property, plant and equipment 4,278,598 3,654,474

12 Loans to contractors 137,041 0 Total Financial Assets 137,041 0

Total non-current assets 4,423,938 3,662,479

Current assets Receivables 13 Receivables 160,055 194,519 19 Debt securities held in portfolio 8,434,511 3,223,024 14 Prepayments and accrued income 90,991 112,674 Total receivables 8,685,557 3,530,217

15 Cash at bank and in hand 213,996 182,324

Total current assets 8,899,553 3,712,541

Total assets 13,323,491 7,375,020

23 Annual Report 2019 Femern A/S

Balance sheet 31 December 2019 (1,000 DKK)

Note Liabilities 2019 2018

Equity 16 Share capital 500,000 500,000 17 Free reserves -394,936 -75,605 Total equity 105,064 424,395

Debt Liabilities Non-current liabilities 18 Deferred tax liabilities 393,043 406,068 19 Bond loans and amounts owed to credit institutions 12,607,366 6,406,764

11 Leasing obligations 36,562 0 Total non-current liabilities 13,036,971 6,812,832

Current liabilities 19 Bond loans and amounts owed to credit institutions 0 0

11 Leasing obligations 12,187 0 20 Trade creditors and other liabilities 169,269 136,716 19, 21 Derivatives, liability 0 1,077 Total current liabilities 181,456 137,793

Total liabilities 13,218,427 6,950,625

Total equity and liabilities 13,323,491 7,375,020

1 Accounting policies 2 Significant accounting estimates and assessments 19 Financial risk management 22 Contractual liabilities, contingent liabilities and securities 23 Related parties 24 Events after the balance sheet date 25 Approval of the annual report for publication

24 Femern A/S Annual Report 2019

Statement of Changes in equity (DKK 1,000 DKK)

Free Share capi- reserves Total tal

Balance on 1 January 2018 500,000 23,282 523,282 Profit or loss for the year and comprehensive income 0 -98,887 -98,887 Balance on 31 December 2018 500,000 -75,605 424,395

Balance on 1 January 2019 500,000 -75,605 424,395 Profit or loss for the year and comprehensive income 0 -319,331 -319,331 Comprehensive income 0 -319,331 -319,331

Balance on 31 December 2019 500,000 -394,936 105,064

25 Annual Report 2019 Femern A/S

Cash Flow Statement (1,000 DKK)

Note 2019 2018

Cash flow from operating activities Loss before net financials -1,297 -1,451

Adjustments Tax 90,029 27,839 Cash flow from operations (operating activities) before 88,732 26,388 change in working capital

Change in working capital Receivables, prepayments and accrued income 93,570 -113,388 Trade creditors and other liabilities 13,600 117,483 Total cash flow from operating activities 195,902 30,483

Cash flow from investing activities Acquisition of intangible assets -294 -8,005 Acquisition of property, plant and equipment -643,729 -381,348 Purchase of securities -5,267,089 -3,223,024 Long-term loans -137,041 0 Total cash flow from investing activities -6,048,153 -3,612,377

Free cash flow -5,852,251 -3,581,894

Cash flow from financing activities EU subsidy received 49,051 32,680 Liabilities 5,781,269 5,150,107 Reduction of liabilities 0 -1,507,194 Financing costs 53,603 342 19 Total cash flow from financing activities 5,883,923 3,675,935

Change for the period in cash at bank and in hand 31,672 94,041

Cash at bank and in hand on 1 January 182,324 88,283 Cash at bank and in hand on 31 December 213,996 182,324

Cash at bank and in hand is composed as follows: Cash at bank and in hand and deposit accounts 213,996 182,324 15 Total cash at bank and in hand on 31 December 213,996 182,324

26 Femern A/S Annual Report 2019

Notes

Note Accounting policies

General Femern A/S is a limited liability company established in Denmark. Femern A/S is a subsidiary of A/S Femern Landanlæg and appears in the consolidated accounts for Sund & Bælt Holding A/S, which is the ultimate parent company.

The annual accounts of Femern A/S for 2019 are presented in accordance with the International Financial Reporting Standards (IFRS) as issued by IASB and approved by the EU, as well as additional Danish disclosure requirements for annual reports for class C accounts, as stipulated in the IFRS Executive Order issued in accordance with the Danish Financial Statements Act. To as- sist readers of the accounts, some of the details required according to the IFRS are also included in the Management Report. Similarly, details not deemed to be important for readers of the accounts have been omitted.

The annual accounts are presented in DKK, which is also the company's functional currency. All amounts are stated in thousands of DKK unless otherwise stated.

The applied accounting policies as described below are consistent with those used in the annual accounts for 2018 with the exception of changes referred to in the section “Implementation of new and amended accounting standards”.

The company has opted to use the so-called Fair Value Option in IFRS 9. This means that all financial assets and liabilities (loans, deposits and derivatives) are measured at fair value, and changes in fair value are included in the statement of comprehensive income. Loans and liquid assets are classified at fair value measurement at the time of first being recognised on the balance sheet, whereas derivatives are always recognised at fair value, cf. IFRS 9.

The reason for opting for the Fair Value Option is that the company consistently applies a portfolio consideration in connection with financial management, which implies that the intended exposure to various financial risks is achieved through a range of different financial instruments - primary and derivative. This means that no distinction is made between, for example, loans and derivatives in the management of the financial market risk, the focus is solely on the overall exposure. The choice of financial instruments for covering financial risk in financial management can, therefore, give rise to accounting asymmetries unless the Fair Value Option is used.

In the opinion of the company, the Fair Value Option is the only measurement principle permitted under IFRS that reflects this view. The reason is that the other principles all give rise to inappro- priate asymmetries between otherwise identical exposures, depending on whether the exposure was established in the form of loans or derivatives, or necessitate extensive requirements for documentation of hedging as is the case with the rules on "hedge accounting". As derivatives, financial assets and loans are measured at fair value, measurement in the accounts will achieve the same result for loans and associated cover with derivatives when the covering of the financial risk is effective, and the company thus achieves symmetry in its accounting methods. Loans without associated derivatives are measured at fair value, as opposed to the main rule of IFRS 9, which recognises loans at amortised cost price, naturally giving rise to fluctuations in the result for the year due to value adjustments.

27 Annual Report 2019 Femern A/S

Implementation of new and revised accounting standards With effect from 1 January 2019, Femern A/S has implemented the following amendments or new accounting standards: IFRS 16 "Leasing contracts" and IFRS 9 "Early redemption with negative compensation" (a minor change of classification), which enters into force for the financial year beginning on 1 January 2019 or later. The implementation of IFRS 16 “Leasing” has led to changes as described below. Other new or updated accounting standards have not led to changes in applied accounting practice.

IFRS 16 “Leasing”, which has replaced the current accounting standard on leasing, IAS 17, means that virtually all leasing agreements today should be included in the balance sheet in the form of a leasing obligation and an asset that represents the lessees right to use the underlying asset. A distinction is no longer made between operational and financial leasing.

The implementation of IFRS 16 has increased the group's fixed assets by DKK 48.7 million as on 31 December 2019, whereby the long-term and short-term debt obligations are increased by DKK 36.5 million and DKK 12.2 million as on 31 December 2019. This increase in the company's assets and liabilities is approximately 0.4 per cent of the balance sheet total, which has a limited impact on the financial ratios to the balance sheet. The equity is not affected by the implementation

The costs related to leasing are included in the calculation for road and railways under construction. The implementation of IFRS has, therefore, no effect on the costs.

Repayments on the leasing commitment are included in the cash flows from financing activities in the cash flow statement. Under the previously applicable accounting standard, IAS 17, all payments relating to the operational leasing agreements were presented as a part of the cash flows from operating activities. The year’s cash flow is unchanged.

The company has applied the modified retrospective transition method, whereby the comparative figures are not adjusted.

The company's identified leasing agreements in accordance with IFRS 16 relate primarily to the rental of premises. At the time of the transition, the leasing commitments are measured in the present value of the remaining lease payments. The leasing period is defined as the irrevocable leasing period. The leasing asset is assessed based on the assessed leasing obligation. The company has not included leasing agreements with a maturity of less than twelve months or of low value.

Agreed accounting standards and interpretations that have not yet come into force Currently, there are no amended accounting standards and interpretations adopted by the IASB and approved by the EU, and that shall enter into force later that are relevant to the company.

Currency conversions Transactions in foreign currency are converted when first recognised at the rate in effect on the date of the transaction. Exchange rate differences occurring between the transaction date and the payment date are recognised in the statement of comprehensive income as a financial item.

Receivables, debt and other monetary items in foreign currencies are converted to the exchange rate of the balance sheet date. The difference between the exchange rate on the date of the balance sheet and the rate at the time when the receivable or debt arose, or the exchange rate on the date of the preceding balance sheet is included in the calculation of the total income under financial items. 28 Femern A/S Annual Report 2019

Non-monetary assets and liabilities in foreign currencies that are not revalued at their fair value are converted at the exchange rate that applies on the transaction date.

Exchange rate conversion of financial assets and liabilities is part of the value adjustment, and currency conversion of debtors, creditors, etc. is attributed to financial income and costs.

Segment information According to IFRS, information must be provided on revenue, expenditure, assets and liabilities per segment. It is the Company’s assessment that the company comprises one segment. The internal reporting and top management's financial management is effected on the basis of one total segment.

Income statement and statement of comprehensive income The company's objective is to undertake project planning and owner's management of the fixed link across the Fehmarnbelt. The company's expenses are capitalised and included in the cost price for "roads and railways under construction" under plant, property and equipment. Only a part of the company's general costs for administration is included in the calculation of income statement and statement of comprehensive income.

Public funding Public funding includes EU subsidies and guarantees provided by the Danish government. Public funding is included when it is reasonably likely that the conditions for funding are fulfilled and that the funding will be received.

Funding to cover costs is included in the statement of comprehensive income over the periods in which related costs are recognised. Funding is offset against costs incurred. Public funding linked to the construction of roads and railways is deducted from the asset's cost price.

Financials Financials contain interest income and expenses, capital gains and losses for cash at bank and in hand, securities, debts and derivatives as well as foreign currency transactions. Furthermore, re- alised gains and losses are included as regards derivative financial instruments.

Financial costs for financing assets under construction are included in the cost price for the assets.

Tax on the year’s results The company is subject to the Danish rules on mandatory joint taxation of the Sund & Bælt group's companies. Subsidiaries are jointly taxed from the date on which they are included in the consolidated accounts, and until the date on which they are excluded from the consolidated accounts.

Sund & Bælt Holding A/S is the management company for the joint taxation and, as a result, set- tles all payments of corporation tax with the tax authorities.

Balances under the interest deduction limitation rules of the Danish Corporation Tax Act are distributed among the jointly taxed companies according to the joint taxation agreement entered into. Deferred tax liabilities concerning such balances are recognised in the balance sheet, but deferred tax assets are only recognised if the criteria for doing so are fulfilled.

29 Annual Report 2019 Femern A/S

The current Danish corporation tax is distributed by the settlement of joint taxation contributions among the jointly taxed companies in proportion to their taxable earnings. Furthermore, the companies with tax losses receive a joint taxation contribution from companies able to use these losses to reduce their own tax profits.

Tax for the year comprises corporation tax, joint taxation contribution for the year and changes in deferred tax - including as a result of changes in the taxation rate - is recognised in the statement of comprehensive income with that part that can be attributed to the profit or loss for the year, and directly in the equity by the part that can be attributed to entries made directly in the equity.

Financial assets and liabilities Recognition of financial assets and liabilities is performed for the first time on the trading day.

Cash at bank and in hand is recognised at fair value initially and subsequently when measured in the balance sheet. Differences in fair value between balance sheet dates are recognised in the results under financials. All cash at bank and in hand will be classified when recognised as assets valued at fair value.

Loans are recognised at their fair price in the balance sheet at the first recognition date and subsequently. All loans are classified on the recognition date as financial liabilities measured at fair value via the statement of comprehensive income. Regardless of the extent of interest rate hedging, all loans are measured at fair value with continuous recognition of fair value adjustments that are stated as the difference in fair value between balance sheet dates.

The fair value of loans is determined as their market value in the event of discounting of known future and expected cash flows with the relevant discount rates. Discount rates are determined based on current market rates deemed to be available to the company as a borrower.

Loans with contractual maturity in excess of 1 year are included as long-term debt.

According to IFRS 13, fair values of financial assets and liabilities are stated according to a 3- level hierarchy for the valuation method. The first level of the valuation hierarchy includes the financial assets and liabilities calculated at liquid and available market prices. Level 2 then follows with the valuation of assets and liabilities at quoted market prices as input to recognised and common valuation methods and pricing formulas. Finally, there is level 3 with assets and liabilities in the balance sheet, the value of which is not based on observable market data and therefore requires special mention.

The company has based the calculation of fair values on re-lending at liquid and available market prices, i.e. at level 1, while derivatives and other financial liabilities are based on quoted market data as input to current, recognised and standardised valuation methods and pricing formulas at level 2, cf. the valuation hierarchy in IFRS 13. There have not been any transfers between the levels during the year.

Intangible assets Intangible assets are measured at cost price at the time of first recognition. Assets are subsequently measured at cost price, less depreciation and impairment applied.

Intangible assets comprise IT software and are depreciated according to the straight-line method over the expected useful lifetime, but for no longer than a maximum of 5 years.

30 Femern A/S Annual Report 2019

Property, plant and equipment Property, plant and equipment are measured at cost price at the time of first recognition. The cost price includes the price of acquisition plus costs directly related to acquisition up to the date on which the asset is ready for use. Assets are subsequently measured at cost price, less depreciation and impairment applied.

Leasing assets relate primarily to the rental of premises. The leasing asset is valued based on the assessed leasing obligation, and the leasing asset’s usage time is defined to be the irrevocable leasing period.

The value of roads and railways during the construction period is assessed according to the following principles:

 Costs for the facilities based on concluded agreements and contracts are capitalised directly  Other direct or indirect costs are capitalised as the value of the company's own work  Net financing costs are capitalised as interest during construction  EU funding received is set off against the cost price

Areas include investments in land and buildings planned for use for the project during the construction and operation phases.

Other assets are stated at cost price and depreciated according to the straight-line method over the useful lives of the assets, which constitute:

Administrative IT systems and programs (software) 3-5 years Improvements in leased premises, lease maturity, but max. 5 years Other plant, machinery and equipment 5-10 years Buildings for permanent use 25 years

Depreciation is recognised in road and railways under construction.

The depreciation method and useful lives are reassessed annually and revised if any major change in conditions or expectations has occurred. In the event of a change in the depreciation period, the effect is recognised moving forward as a change in accounting estimate.

The basis of depreciation is stated in consideration of the asset's scrap value and is reduced by any impairment. The scrap value is determined on the date of acquisition and is revised annually. If the scrap value exceeds the book value of the asset, depreciation will cease.

Gains and losses from disposal of plant, property and equipment are calculated as the difference between sales price less cost of sales and book value on the date of sale. Profit or loss is calculated for the road and railway under construction.

Leasing contracts in force from 1 January 2019 A leasing asset and a leasing obligation are included in the balance sheet when a specific identifi- able asset is available to the group during the leasing period in accordance with a concluded leasing agreement and when the group has the right of access to virtually all the economic benefits from the use of the identified asset and the right to determine the use of the identified asset.

Leasing commitments are measured at the first inclusion to the present value of the future leasing services discounted with an alternative rate of interest. The leasing commitment is measured at

31 Annual Report 2019 Femern A/S

the amortised cost price using the effective compound method. The leasing commitment is recal- culated when there are changes in the underlying contractual cash flows from changes in the group’s assessment of whether a derogation or termination option is expected to be used with reasonable probability.

The leasing asset is measured at the first factoring in at cost price, which corresponds to the value of the leasing commitment. Subsequently, the asset is measured at cost price minus the accumulated depreciation and impairment. The leasing asset is depreciated over the shortest period of the leasing period and the leasing asset's service life.

The leasing asset is adjusted for changes in the leasing commitment as a result of changes in the conditions in the leasing agreement or changes in the contract's cash flows in accordance with changes in an index or an interest rate.

The leasing asset is depreciated according to the straight-line method over the expected leasing period that constitutes:

Leasehold premises 5 years

Depreciation is calculated for roads and railways under construction.

The company has chosen not to include leasing assets with a low value and short-term leasing agreements in the balance sheet.

Leasing contracts applicable before 1 January 2019 Leasing contracts are classified for accounting purposes as financial and operational leasing obligations. A leasing agreement is classified as financial when significant risks and benefits of own- ing the leased asset are transferred to the lessee. Other leasing agreements are classified as operational.

Operational leasing is calculated according to the straight-line method for roads and railways under construction for the period of the concluded leasing contract unless a different systematic method better reflects the lessee's benefit within the contract period. The leasing contracts are for leasing periods of 1 to 7 years.

Financial fixed assets Financial fixed assets include contractors’ drawing on the loan facility provided in the contract and measured at the amortised cost price.

Impairment of assets Intangible, tangible and financial fixed assets are tested for loss in the event of depreciation (other assets are covered by IFRS 9) when there is an indication that it is possible that the accounting value cannot be recovered. A loss due to impairment is recognised at the amount by which the asset's book value exceeds the recoverable amount, i.e. the asset's net sales price or value in use, whichever the higher. The utility value is calculated at the present value of the expected future cash flow using a discount factor that reflects the market's current required rate of return.

Receivables Receivables are measured at amortised cost price. An impairment is done for the mitigation of losses where it is considered that the value of an individual receivable or a portfolio of receivables

32 Femern A/S Annual Report 2019

is impaired. Impairments are determined based on the experience of historical loss and future expected losses.

Prepayments and accrued income, assets Prepayments and accrued income recognised under assets include costs paid concerning the subsequent financial year.

Debt securities held in portfolio Listed securities are included as current assets from the day of trading and measured at the fair value on the balance sheet date.

Cash at bank and in hand Cash at bank and in hand includes cash funds and short-term deposits that can be converted to cash funds without hindrance, and which entail only an insignificant risk of changes in value.

Current tax and deferred tax According to the joint taxation rules, Sund & Bælt Holding A/S is liable for tax on earnings, etc. for the jointly taxed companies and for any obligations to include tax at source on interest, royalties and dividends for the jointly taxed companies.

Current tax liabilities and current tax receivables are recognised in the balance sheet as tax calculated on taxable income for the year, adjusted for tax on taxable income for previous years and for tax paid on account.

Joint taxation contributions payable and receivable are included in the balance sheet under affiliated companies’ debts.

Deferred tax is measured according to the liability method for all temporary differences between the book value and the value for taxation of assets and liabilities. When the statement definition of value for taxation can be performed according to different taxation rules, deferred tax is measured on the basis of the management's planned use of the assets or settlement of the liability, respectively.

Deferred tax assets, including the value for taxation of tax losses that can be carried forward, are recognised under other non-current assets at the value at which they are expected to be used, either by elimination of the tax on future earnings or by set-off against deferred tax liabilities within the same legal tax entity and jurisdiction.

Balances below the interest deduction limitation rules of the Danish Corporation Tax Act are distributed among the jointly taxed companies according to their joint taxation agreement. Deferred tax liabilities concerning such balances are recognised in the balance sheet, but tax assets are only recognised if the criteria for deferred tax assets are met.

Other financial liabilities Other financial liabilities are measured at amortised cost price, which usually corresponds to the nominal value.

Deferred income, liabilities Deferred income recognised under liabilities includes payments received concerning earnings in the subsequent years.

33 Annual Report 2019 Femern A/S

Cash flow statement The cash flow statement for the company is compiled according to the indirect method based on the entries in the statement of comprehensive income for the year. The company's cash flow statement shows cash flow for the year, changes in cash reserves for the year and the company's cash reserves at the start and end of the year.

Cash flows from operations are stated as the result before financials adjusted for non-cash result items, calculated corporation tax and changes in the working capital. The working capital includes the operations-related balance sheet items under current assets and short-term liabilities.

Cash flows from investment activities include the buying and selling of intangible, tangible and financial assets.

Cash flows from financing activities include borrowing, repayments of debt, repayment of leasing obligations, financing items as well as dividends to shareholders.

Cash and cash equivalents comprise cash and securities that at the time of purchase have a residual maturity of less than three months and which without impediment can be translated into cash equivalents, and with only negligible risks to changes in value.

Financial ratios The financial ratios are compiled in accordance with the CFA Society of Denmark's "Recommen- dations and Financial Ratios".

The financial ratios presented in the key figures and financial ratios summary are calculated as follows:

Profit margin: The result of primary activities less other earnings as a percentage of turnover.

Return on capital employed: The result of main activities less other earnings as a percentage of all assets.

34 Femern A/S Annual Report 2019

Note 2 Significant accounting estimates and assessments

Determining the carrying amounts of some assets and liabilities requires estimation of the effects of uncertain future events on those assets and liabilities at the end of the reporting period. Esti- mates that are material to the financial reporting are made, i.a. by calculating the fair value of certain financial assets and liabilities.

For some financial assets and liabilities, an estimate is made of expected future inflation when calculating the fair value.

The calculation of the fair value of financial instruments is associated with estimates of the relevant discount factor for the company, volatility on reference rate of interest, and currency for financial instruments with optionality in the cash flows and estimates of future development of inflation for real interest rate loans and swaps. The estimates made for the calculation of fair values and depreciation requirements are, as far as possible, based on observable market data, and are regularly assessed with current price indications, cf. note 1.

In connection with the calculation of deferred tax, an estimate is made for the future exploitation of tax losses that can be carried forward, which is based on the expected future earnings of the group and the expected useful life of the fixed assets. In addition, an estimate is made of capital gains on financials that can be used to recover capped rate limitations within a 3-year period. As far as possible, the estimate is based on observable market data and is continuously assessed with developments of inflation and current interest rate indications, cf. note 20.

Note 3 Other operating expenses (DKK 1,000)

Other external costs are costs that are incurred during the year relating to operations and include administrative expenditure, etc. and project workers. A significant part of other external costs is capitalised and included in the cost price for "roads and railways under construction" under intangible fixed assets.

Fees to the company's auditor elected by the Annual General Meeting 2019 2018 Statutory audit 74 76 Other statements of assurance 0 0 Tax advice 0 0 Other services 137 18 Total fees to the company's auditor elected by the Annual General Meeting 211 94 Recognised in road and railway facilities under construction -121 -18 Fees to the company's auditor elected by the Annual General Meeting in the comprehensive income statement 90 76

35 Annual Report 2019 Femern A/S

Note 4 Staff costs (DKK 1,000) Staff costs include all costs for personnel, the Board of Management and the Board of Directors. The staff costs include direct payroll costs, pension payments, the cost of courses and other direct staff costs. The same applies to costs for pay-related taxes, earned holiday allowance and similar expenses. The staff costs are capitalised and included in the cost price for "roads and railways under construction" under plant, property and equipment. However, a share of the costs is included for the remuneration of the management as a cost.

2019 2018 Wages and salaries, remuneration and emoluments 77,550 72,373 Pension contributions 3,281 2,309 Social security 2,374 1,508 Other staff costs 4,340 2,631 Total staff costs 87,545 78,821 Recognised in road and railway facilities under construction -86,873 -78,166 Staff costs in the comprehensive income statement 672 655

Average number of employees 87 78

Remuneration for Board of Management Non- monetary For 2019 Fixed salary Pensions benefits Total Claus F. Baunkjær 2,568 100 3 2,671 Total 2,568 100 3 2,671

Non- monetary For 2018 Fixed salary Pensions benefits Total Claus F. Baunkjær 2,528 72 3 2,603 Total 2,528 72 3 2,603

36 Femern A/S Annual Report 2019

Note 4 Staff costs (DKK 1,000), cont.

Fees to the Board of Directors 2019 2018 Peter Frederiksen 370 362 Jørn Tolstrup Rohde* 0 0 Rainer Feuerhake 159 155 Walter Christophersen 142 139 Claus Jensen* 0 0 Lene Lange 142 139 Ruth Schade 142 139 Mikkel Haugård Hemmingsen* 0 0 Jeanne Christensen 159 155 Anne Bøgh Johansen (took up office on 26 April 2019) 107 Villads Engstrøm 159 155 Randi Weihrauch 159 155 Kirsten Margrethe Christensen (resigned on 26 April 2019) 51 155 Total fees to the Board of Directors 1,590 1,554 *The members of the Board of Directors receive their remuneration from Sund & Bælt Holding A/S.

If the company terminates the employment of the CEO, a contract has been signed for the payment of severance pay corresponding to 12 months’ salary.

There are no incentive payments or bonus schemes for the Board of Management and Board of Directors.

Note 5 Tax (DKK 1,000)

2019 2018 Tax paid (joint taxation contribution) -77,127 -95,933 Change in deferred tax -12,924 68,053 Adjustment of tax paid, previous year 22 -2,888 Adjustment of deferred tax, previous year 0 2,929 Other adjustments 0 0 Total tax -90,029 -27,839

Tax on the year's results is specified as follows: Calculated 22.0 per cent tax on year's results -90,059 -27,880 Effect of changed tax rate 0 0 Other adjustments 30 41 Total -90,029 -27,839 Effective tax rate 22 per cent 22 per cent

37 Annual Report 2019 Femern A/S

Note 6 Software (DKK 1,000)

Administrative IT systems and programs are depreciated according to the straight-line method over the expected useful life, which is a maximum of 5 years.

2019 2018 Acquisition value on 1 January 18,638 16,523 Additions for the year 1,853 2,115 Disposals for the year 0 0 Acquisition value on 31 December 20,491 18,638 Depreciation on 1 January 10,633 10,577 Additions for the year 1,559 56 Depreciation on 31 December 12,192 10,633

Balance on 31 December 8,299 8,005 Depreciation recognised in road and railway facilities under construction 1,559 56

Note 7 Road and railway facilities under construction (DKK 1,000)

2019 2018 Acquisition value on 1 January 3,645,551 3,289,066 Additions for the year 634,283 389,165 Disposals for the year 0 0 Received EU subsidy -68,354 -32,680 Acquisition value on 31 December 4,211,480 3,645,551

Balance on 31 December 4,211,480 3,645,551 Of which areas 194,947 194,947

In road and railway facilities under construction, financing expenses (net) for the year before fair value are capitalised at DKK 71,828.2 thousand, and the capitalisation rate is 100 per cent. Valu- ation adjustments are posted in the total income statement.

On 30 May 2016, Femern A/S signed conditional construction contracts for a total value of approximately DKK 30 billion with the international contractor consortia charged with the construction of the 18 km long Fehmarnbelt fixed link between Rødbyhavn and Puttgarden.

Concerning the conditional contracts for the construction of the Fehmarnbelt fixed link, the company is subject to a contingent liability of DKK 87.8 million. The amount is prepaid by the company and will be included as payment in the execution of a construction contracts. If the company cancels the contracts, the amount will be a cost.

38 Femern A/S Annual Report 2019

Note 8 Land and buildings (DKK 1,000)

Buildings are depreciated according to the straight-line method over the expected useful life of 25 years.

2019 2018 Acquisition value on 1 January 9,991 10,000 Additions for the year 11,146 -9 Acquisition value on 31 December 21,137 9,991 Depreciation on 1 January 3,653 3,251 Additions for the year 402 402 Depreciation on 31 December 4,055 3,653

Balance on 31 December 17,082 6,338 Depreciation recognised in road and railway facilities under construction 402 402

Note 9 Leasehold improvements (DKK 1,000)

Leasehold improvements are depreciated according to the straight-line method over the term of the lease, however, over a maximum of 5 years.

2019 2018 Acquisition value on 1 January 30,875 30,875 Additions for the year 0 0 Acquisition value on 31 December 30,875 30,875 Depreciation on 1 January 30,745 30,336 Additions for the year 130 409 Depreciation on 31 December 30,875 30,745

Balance on 31 December 0 130 Depreciation recognised in road and railway facilities under construction 130 409

Note 10 Operating equipment (DKK 1,000)

Operating equipment is depreciated according to the straight-line method over the expected useful life of 5 years.

2019 2018 Acquisition value on 1 January 15,812 15,463 Additions for the year 0 349 Disposals for the year -666 0 Acquisition value on 31 December 15,146 15,812 Depreciation on 1 January 13,357 11,957 Additions for the year 1,168 1,400 Disposals for the year -666 0 Depreciation on 31 December 13,859 13,357

Balance on 31 December 1,287 2,455 Depreciation recognised in road and railway facilities under construction 1,168 1,400

39 Annual Report 2019 Femern A/S

Note 11 Lease assets (DKK 1,000)

Leasing is depreciated according to the straight-line method over 5 years.

2019 2018 Leasing assets Leasing assets relating to properties

Acquisition value on 1 January 0 0 Effect upon transition on 1 January 2019 60,936 0 Additions for the year 0 0 Disposals for the year 0 0 Acquisition value on 31 December 60,936 0 Depreciation on 1 January 0 0 Additions for the year 12,187 0 Disposals for the year 0 0 Depreciation on 31 December 12,187 0

Balance on 31 December 48,749 0 Depreciation recognised in road and railway facilities under construction 12,187 0

Leasing obligations Maturity of leasing obligations

Less than 1 year 12,187 0 From 1 to 3 years 24,375 0 Between 3-5 years 12,187 0 After 5 years 0 0 Total non-discounted leasing obligation on 31 December (year closing) 48,749 0

Leasing obligation included in the balance sheet Short-term 12,187 0 Long-term 36,562 0 Total 48,749 0

Note 12 Loans to contractors (1,000 DKK)

2019 2018 Loans to contractors 137,041 0 Total 137,041 0

In accordance with the construction contracts and supplementary agreements with the contractors, lending facilities shall be made available. The first tranche of the loan facility was paid in 2019.

The loan is repayable continuously over 36 months 1 year after its raising.

40 Femern A/S Annual Report 2019

Note 13 Receivables (DKK 1,000)

Receivables comprise EU subsidies receivable, balances with members and recharged expenditure. The book value of receivables represents the expected realisable value.

2019 2018 Members 74,457 100,091 EU subsidy receivable 32,913 13,610 VAT receivable 24,893 71,345 Accrued interest financial instruments 26,923 8,803 Other receivables 869 670 Total 160,055 194,519

Note 14 Prepayments and accrued income (DKK 1,000)

2019 2018 Deposits 385 313 Advance payments 90,606 112,361 Total prepayments and accrued income 90,991 112,674

Advance payments for the conditional contracts for the construction of the Fehmarnbelt fixed link are included in other advance payments.

Note 15 Cash at bank and in hand (DKK 1,000)

2019 2018 Cash at bank and in hand 213,996 182,324 Fixed-term deposit accounts 0 0 Total cash at bank and in hand 213,996 182,324

41 Annual Report 2019 Femern A/S

Note 16 Share capital

2019 2018 Number of shares with a nominal value of DKK 100 on 1 January 5,000,000 5,000,000 Number of shares with a nominal value of DKK 100 on 31 December 5,000,000 5,000,000

On 31 December 2019, the share capital comprised 5,000,000 shares at a nominal value of DKK 100.

The entire share capital is owned by A/S Femern Landanlæg, which is wholly-owned by Sund & Bælt Holding A/S, which is wholly-owned by the Danish state. The company is included in the consolidated accounts for Sund & Bælt Holding A/S.

Financial management The Board of Directors regularly evaluates the need to adjust the capital structure, including the need for cash funds, credit facilities and equity. The Danish state guarantees Femern A/S’ financial liabilities.

Note 17 Free reserves (DKK 1,000)

2019 2018 On 1 January -75,605 23,282 Profit or loss for the year -319,331 -98,887 On 31 December -394,936 -75,605

Note 18 Deferred tax liability (DKK 1,000)

2019 2018 Balance on 1 January -406,068 -335,237 Deferred tax for the year 12,924 -68,053 Adjustment of deferred tax, previous year 79 -2,929 Effect of changed tax rate 0 0 Other adjustments 22 151 Balance on 31 December -393,043 -406,068

Deferred tax relates to: Intangible fixed assets and property, plant and equipment -695,860 -608,486 Trimmed net financing costs 119,667 22,461 Tax loss 183,150 179,957 Total -393,043 -406,068

42 Femern A/S Annual Report 2019

Note 19 Financial risk management

Financing Financial management in the company is performed within the framework set by the company's Board of Directors and applicable guidelines from the Danish Ministry of Finance, which adminis- ters the Danish government's unlimited guarantee for the company's activities. The Board of Di- rectors determines the framework for currency and interest rate exposure, the composition of the company's borrowing and thus the overall financing.

The overall objective of financial management is to achieve the lowest possible cost of financing for the project throughout its useful life with regard to an acceptable level of risk acknowledged by the Board of Directors. The company is subject to the same types of financial risks as other enter- prises, but as a result of the nature of the project, has a very long time horizon. A long-term per- spective in weighing results and risks related to financial management is applied.

The company has access to relending, a form of borrowing provided by Danmarks Nationalbank on behalf of the government to the company, based on a specific government bond and with the same terms as government bonds sold on the market.

The company has raised financing for the coming year, and in 2018 loan agreements with a total principal amount of DKK 11,750 million were concluded, DKK 5,550 million of which was concluded as an advance loan that was disbursed in 2019. The company has covered the expected borrowing requirement for the coming years.

Currency risks The company's currency risks are related to the currency composition of its net debt, including derivatives, cash funds and trade creditors. Currency risks are managed through parameters for the combination of currencies.

The company can freely use DKK and EUR, and the current distribution is determined by the currency and interest rate relationship between the two currencies. Other currencies are always hedged when the counter value of exposure exceeds DKK 5 million.

Currency exposure distributed by DKK 4,874 million in EUR and DKK 1 million in GBP can be attributed to cash funds.

Exchange rate sensitivity can be valued at DKK 243.7 million in 2019 (DKK 43.2 million in 2018) in the event of currency fluctuations of +/- 5.0 per cent in all currencies different from the base currency. The calculated exchange rate sensitivity is not an expression of expected volatility in the currencies to which the company is exposed.

Interest rate risk Variable-rate debt or debt with a short remaining term to maturity necessitate interest rate adjustment in the short term, to market rates for the debt, which usually involves higher risk than fixed- rate debt with a long time to maturity when fluctuations in current interest expenses are used as risk measurement. On the other hand, interest expenses are often higher for longer times to maturity, as the rate curve normally has a positive slope and the choice of debt spread is, therefore, a weighting of interest expenses and risk profile.

43 Annual Report 2019 Femern A/S

With the financing of the coming year’s borrowing needs, the company has exposure alone to the 4-year and 8-year interest segments on the gross debt, while the excess liquidity is placed in securities with short remaining maturities. The sensitivity to an interest rate change of 1 percentage point relative to the cash flows during the coming financial year will have an impact of around DKK 57 million, which is attributable solely to the placement of surplus liquidity in securities with short residual maturity and proceeds from advance loans.

Yield exposure disclosed on nominal notional principal amounts (DKK 1,000):

For 2019 1-2 2-3 3-4 4-5 Yield buckets 0-1 years years years years years >5 years Nom. Value Fair value Cash at bank and in hand 213,996 0 0 0 0 0 213,996 213,996 Debt securities held in portfolio 5,510,943 2,870,455 0 0 0 0 8,381,398 8,461,434 Bond loans and other loans 0 0 0 0 0 0 0 0 Receivables 0 0 0 0 0 0 0 0 Derivatives, assets 0 0 0 0 0 0 0 0 Debt 0 0 0 -1,850,000 0 -9,900,000 -11,750,000 -12,617,287 Derivatives, liabilities 0 0 0 0 0 0 0 0 Trade creditors 0 0 0 0 0 0 0 0 Total principal amount 5,724,939 2,870,455 0 -1,850,000 0 -9,900,000 -3,154,606 -3,941,857

* Fair value includes accrued interest, see note 13 and note 20.

For 2018 1-2 2-3 3-4 4-5 Yield buckets 0-1 years years years years years >5 years Nom. Value Fair value Debt securities held in portfolio 798,692 2,394,250 0 0 0 0 3,192,942 3,231,827 Bond loans and other loans 0 0 0 0 0 0 0 0 Cash at bank and in hand 182,324 0 0 0 0 0 182,324 182,324 Bond loans and other loans 0 0 0 0 0 Bond debts and loans 1,850,000 3,700,000 0 0 -1,850,000 -9,900,000 -6,200,000 -6,410,756 Forward exchange contracts 0 0 0 0 0 0 0 -1,077 Net debt 2,831,016 6,094,250 0 0 -1,850,000 -9,900,000 -2,824,734 -2,997,682

The duration indicates the average time to maturity of the net debt. A high duration entails a rela- tively lower rate adjustment risk and vice versa.

The net liability's Macaulay duration is 20.9 years in 2019 (29.3 years in 2018). A change in the interest rate of 1 percentage point will have an impact of DKK 826 million, by 31 December 2019 (DKK 877 million in 2018).

Sensitivity calculations are performed on the basis of net debt on the balance sheet date.

44 Femern A/S Annual Report 2019

Credit risks Credit risks are defined as the risk of loss arising as a result of a counterpart failing to fulfil its payment obligations. The company's exposure to credit risks can be attributed to the placing of excess liquidity, receivables from derivative contracts and customer receivables, etc. The credit risk from financial counterparts is controlled and monitored continuously using a special line and limit system that defines the principles for calculating such risks as well as the maximum acceptable risk for a single counterpart. The latter is measured in relation to the counterpart's rating with international rating agencies (Moody's, Standard & Poor and Fitch/IBCA). Financial counterparts must meet requirements for high credit quality, and agreements are basi- cally only entered into with counterparts with a long-term rating higher than A1/A+ unless tougher requirements for securities can be fulfilled. The financial counterparts must also sign a Credit Support Annex (CSA agreement) providing security in the form of a deposit of government or mortgage credit bonds with high credit quality to cover a receivable from derivative contracts. Credit exposure is effectively limited by the threshold value of the CSA agreement, which de- pends on the counterpart's rating. The threshold value is the maximum unhedged receivable that can be accepted for a single counterpart. On the date of the balance sheet, the company had credit exposures in connection with the placement of excess liquidity with bank deposits and securities in the form of Danish mortgage bonds and German government bonds with short residual maturities. The bank deposit of DKK 500 million is placed in a bank with an AA-/ Aa3 rating, while the Danish mortgage bonds of DKK 3,158 million and the German government bonds of DKK 4,803 million have a credit quality of AAA / Aaa. The credit exposures are calculated at their fair value. The company's maximum credit exposure is an expression of the receivables recognised in the accounts. The fair value of the company's receivables and trade creditors measured at amortised cost price is deemed to correspond approximately to the book value.

Liquidity risk The company has limited liquidity risk due to its access to re-lending and the guarantee from the Danish government, as well as the flexibility to maintain a liquidity reserve of up to 6 months' liquidity requirement, which helps reduce the risk of having to raise loans on unfavourable terms due to temporary circumstances. With the raising of loans in 2019, including advance loan agreements, the company has covered its financing need for the coming years. Maturity on receivables, debt and trade creditors (DKK 1,000)

For 2019 1-2 2-3 3-4 4-5 Maturity 0-1 years years years years years >5 years Total Cash at bank and in hand 213,996 0 0 0 0 0 213,996 Debt securities held in portfolio 5,510,943 2,870,455 0 0 0 0 8,381,398 Bond loans and other loans 0 0 0 0 0 0 0 Receivables 0 0 0 0 0 0 0 Derivatives, assets 1,008,085 0 0 0 0 0 1,008,085 Debt 0 0 0 -1,850,000 0 -9,900,000 -11,750,000 Derivatives, liabilities -1,008,085 0 0 0 0 0 -1,008,085 Trade creditors 0 0 0 0 0 0 0 Total principal amount 5,724,939 2,870,455 0 -1,850,000 0 -9,900,000 -3,154,606

45 Annual Report 2019 Femern A/S

For 2018 1-2 2-3 3-4 4-5 Maturity 0-1 years years years years years >5 years Total Cash at bank and in hand 182,324 0 0 0 0 0 182,324 Debt securities held in portfolio 798,692 2,394,250 0 0 0 0 3,192,942 Bond loans and other loans 0 0 0 0 0 0 0 Receivables 0 0 0 0 0 0 0 Derivatives, assets 1,008,085 0 0 0 0 0 1,008,085 Debt 1,850,000 3,700,000 0 0 -1,850,000 -9,900,000 -6,200,000 Derivatives, liabilities -1,008,085 0 0 0 0 0 -1,008,085 Trade creditors 0 0 0 0 0 0 0 Total principal amount 2,831,016 6,094,250 0 0 -1,850,000 -9,900,000 -2,824,734

Division of shift in net debt, cf. IFRS 7 (DKK 1,000)

Short term Long term Derivatives, Derivatives, 2019 liabilities liabilities assets liabilities Total On 1 January, 2019 0 -6,406,764 0 -1,077 -6,407,841 Cash flow 0 -5,783,564 1,251 1,044 -5,781,269 Paid interest, reversed 0 -60,309 0 0 -60,309 Amortisation 0 51,334 0 0 51,334 Inflation adjustment 0 0 0 0 0 Currency adjustment 0 0 -1,218 0 -1,218 Fair value adjustment 0 -408,063 0 0 -408,063 Transfer 0 0 -33 33 0 On 31 December 2019 0 -12,607,366 0 0 -12,607,366

Short term Long term Derivatives, Derivatives, 2018 liabilities liabilities assets liabilities Total On 1 January 2018 -1,512,017 -1,127,326 0 0 -2,639,343 Cash flow 1,507,194 -5,150,107 0 0 -3,642,913 Paid interest, reversed -2,518 -37,022 0 0 -39,540 Amortisation 4,210 36,096 0 0 40,306 Inflation adjustment 0 0 0 0 0 Currency adjustment 0 0 0 -1,077 -1,077 Fair value adjustment 3,131 -128,405 0 0 -125,274 On 31 December 2018 0 -6,406,764 0 -1,077 -6,407,841

The fair value hierarchy* 2019 Level 1 Level 2 Level 3 Debt securities held in portfolio 7,934,991 499,520 0 Financial assets 7,934,991 499,520 0

Debenture loans and debt -12,607,366 0 0 Financial liabilities -12,607,366 0 0

* The fair value hierarchy constitutes a classification of assets and liabilities measured according to their fair value, and on which basis the levels of how well-functioning and liquid a market asset or liability is valued are ex- pressed.

46 Femern A/S Annual Report 2019

Note 20 Trade creditors and other liabilities (DKK 1,000)

2019 2018 Creditors 83,418 47,027 Members 46,324 64,603 Affiliated companies 1 4 Accrued interest 9,920 3,992 Received prepayments (EU subsidy) 0 0 Other payables 29,606 21,090 Total 169,269 136,716

Note 21 Derivatives (DKK 1,000)

2019 2019 2018 2018 Assets Liabilities Assets Liabilities Forward exchange contracts 0 0 0 1077 Total derivatives 0 0 0 1,077

Note 22 Contractual obligations, contingent liabilities and securities (DKK 1,000)

The company is part of a Danish joint taxation scheme with Sund & Bælt Holding A/S as the management company. As of the 2013 financial year, in accordance with the rules of the Danish Cor- poration Tax Act, the company is, therefore, jointly liable with the other jointly taxed companies for a total corporation tax of DKK 60.0 million and, with effect from 1 July 2012, is jointly liable for any obligations to collect withholding tax on interest, royalties and dividends for the jointly taxed companies.

The company has entered into conditional agreements concerning land acquisition and compensation for future taking down of wind turbines in the construction area on Fehmarn. The company is subject to a contractual obligation related to the conditional agreements of DKK 73 million.

Contractual obligations related to construction contracts entered into are described in note 7.

Otherwise, the company has no other obligations.

47 Annual Report 2019 Femern A/S

Note 23 Related parties (DKK 1,000) Related parties comprise the Danish government, companies and institutions owned by it.

Registered Related party office Affiliation Transactions Pricing The Danish State Copenhagen 100% ownership of Sund & Guarantee for the Determined by leg- Bælt Holding A/S company's debt islation. Accounts Guarantee com- for 0.15 per cent of mission the nominal debt Ministry of Trans- Copenhagen 100% ownership via Sund & Purchase of con- Market price port and Housing Bælt Holding A/S sultancy Sund & Bælt Copenhagen 100% ownership of A/S Handling of opera- Market price Holding A/S Femern Landanlæg tional tasks Joint taxation contribution A/S Femern Copenhagen 100% ownership of Femern Common payment Market price Landanlæg A/S VAT Sale of advice Sund & Bælt Copenhagen Subsidiary of Sund&Bælt Handling of joint Market price Partner A/S Holding A/S functions A/S Storebælt Copenhagen Subsidiary of Sund&Bælt Sale of consul- Market price Holding A/S tancy

A/S Øresund Copenhagen Subsidiary of Sund&Bælt Holding A/S Øresundsbro Kon- Copenhagen / Partnership owned 50% by Purchase of con- Market price sortiet I/S Malmö A/S Øresund sultancy BroBizz A/S Copenhagen Subsidiary of Sund&Bælt Handling of joint Market price Holding A/S functions

Operation* Operation Balance at ** Balance at Amount 31 December 31 December Related party Description 2019 Amount 2018 2019 2018

The Danish State Guarantee com- -16,712 -3,544 -16,035 -4,000 mission Ministry of Trans- Consultancy -1,156 -409 -57 0 port and Housing Sund & Bælt Handling of oper- -28,112 -26,462 -2,549 -1,249 Holding A/S ational tasks

Joint taxation 77,127 95,993 77,005 95,993 contribution A/S Femern Joint settlement 0 0 -46,310 -63,345 Landanlæg VAT

Sund & Bælt Joint expenses 31 455 0 117 Partner A/S A/S Storebælt Consultancy 5 28 -10 36

Øresundsbro Kon- Joint expenses -498 -579 -1 -4 sortiet and consultancy BroBizz A/S Joint expenses 79 52 -3 -4

* Operations - a positive amount is an expression of revenue, and a negative amount is an expression of expense. ** Balance - a positive amount is an expression of a receivable and a negative number is an expression of debt owed to the related party

48 Femern A/S Annual Report 2019

Note 24 Events after the balance sheet date

On 13 December 2018, the General Court of the European Union passed judgement on the financing model for the Fehmarnbelt project. On 5 July 2019, as a consequence of the judgement, the EU Commission started a formal inquiry procedure regarding state support before it can make a new decision on the financing for the Fehmarnbelt project.

On 20 March 2020 the EU Commission has made a decision on approval of the state support for financing of the Fehmarnbelt project, where a new support model for the project has been approved. Femern A/S will analyse the decision and the consequences and discuss it with the owner. It is assessed that the Fehmarnbelt project still has a robust economy.

Note 25 Approval of the Annual Report for publication

At the meeting of the Board of Directors on 25 March 2020, the Board of Directors approved the Annual Report for publication. The Annual Report will be presented to the shareholders of Femern A/S for approval at the Annual General Meeting on 17 April 2020.

49 Annual Report 2019 Femern A/S

Statement by the Board of Directors and Board of Management

The Board of Directors and Board of Man- company’s activities and cash flows for the agement have today considered and ap- financial year 1 January – 31 December proved the Annual Report for the financial 2019. year 1 January - 31 December 2019 for Femern A/S. It is also our view that the Management Re- port gives a true and fair view of develop- The Annual Report has been prepared in ac- ments in the company’s activities and finan- cordance with International Financial Report- cial conditions, the annual results and the ing Standards as adopted by the EU and ad- company’s overall financial position and a ditional Danish disclosure requirements in description of the significant risks and uncer- the Financial Statements Act. tainties to which the company is exposed.

It is our view that the annual accounts give a We recommend that the Annual Report be true and fair view of the company’s assets, approved at the Annual General Meeting. liabilities and financial position on 31 De- cember 2019, as well as the result of the Copenhagen, 25 March 2020

Board of Management

Claus F. Baunkjær CEO

Board of Directors

Peter Frederiksen Jørn Tolstrup Rohde Walter Christophersen Chairman Vice-Chairman

Claus Jensen Rainer Feuerhake Ruth Schade

Lene Lange Mikkel Haugård Hemmingsen Jeanne Christensen

Villads Engstrøm Anne Bøgh Johansen Randi Weihrauch

50 Femern A/S Annual Report 2019

The independent auditor's report

To the shareholders of Femern Bælt A/S Our conclusion concerning the accounts does not comprise the Management Report, Conclusion and we do not express any certain opinion It is our view that the annual accounts give a with regard to the Management Report. true and fair view of the company’s assets, liabilities and financial position on 31 De- It is our duty to read the Management Report cember 2019, as well as the result of the in the context of auditing the accounts and in company’s activities and cash flow for the fi- this context consider whether the Manage- nancial year 1 January – 31 December 2019 ment Report is significantly inconsistent with in accordance with International Financial the accounts or knowledge gained through Reporting Standards as adopted by the EU the audit or appears to contain any other sig- and additional Danish requirements in the nificant incorrect information. Danish Financial Statements Act. Furthermore, it is our responsibility to con- We have audited the annual accounts for sider if the Management Report contains re- Femern Bælt A/S for the financial year 1 quired information pursuant to the Financial January - 31 December 2019, which com- Statements Act. prises the comprehensive income statement, the balance sheet, cash flow statement, On this basis, we are of the opinion that the statement of equity, and notes, including the information in the Management Report is in accounting policies ("the accounts"). accordance with the annual accounts and prepared in accordance with the require- Basis of conclusion ments of the Financial Statements Act. We We have conducted our audit in accordance have not found any significant incorrect infor- with international auditing standards and ad- mation in the Management Report. ditional requirements under Danish auditing legislation. Our responsibility, according to The Board of Directors’ and Board of Management’s responsibility for the an- these standards and requirements can be nual accounts found in the section The Auditor's responsi- The Board of Directors and the Board of bility for auditing the accounts in the audi- Management are responsible for preparation tor's statement. We are independent of the of annual accounts that give a true and fair company in compliance with international view in accordance with International Finan- ethical rules for auditors (IESBA's ethical cial Reporting Standards as adopted by the rules) and any further requirements in Den- EU and additional disclosure requirements in mark, and we have complied with any other the Danish Financial Statements Act. The ethical obligations pursuant to such rules Board of Directors and Board of Manage- and requirements. In our opinion, the audit ment also have responsibility for the internal evidence obtained is sufficient and suitable review that the management regards as nec- as the basis of our conclusion. essary for preparing annual accounts free of material misstatement, whether due to fraud Opinion on the Management Report or error. The Board of Management is responsible for the Management Report.

51 Annual Report 2019 Femern A/S

When preparing the accounts, the Board of conspiracy, forgery, deliberate omis- Directors and Board of Management are re- sion, misrepresentation or breaches of sponsible for evaluating the company's fu- internal reviews. ture prospects, informing of circumstances concerning the continuation of operations  We gain an understanding of internal re- where relevant, as well as preparing the ac- views for the purpose of the audit in or- counts based on the accounting principle der to design audit procedures that are concerning continued operations, unless the appropriate in the circumstances, but Board of Directors and Board of Manage- not to express an opinion on the effec- ment either intend to liquidate the company, tiveness of the company's internal re- cease operations or have no realistic alter- views. native but to do this.  We consider the suitability of the ac- The Auditor's responsibility for auditing counting practices used by the Board of of the accounts Directors and Board of Management as Our goal is to achieve a high degree of cer- well as whether used estimates and in- tainty concerning the general accuracy of the formation are reasonable. accounts, regardless of whether this is due to fraud or error, and to issue an auditor's re-  We draw a conclusion as to whether the port with a conclusion. A high level of cer- accounts prepared by the management, tainty means an enhanced level of certainty, based on its accounting principles, indi- but not a guarantee that an audit, conducted cate grounds for continued operations, pursuant to international auditing standards and whether evidence from the audit and Danish requirements, will always detect suggests significant uncertainty related significant inaccuracies. Inaccuracies may to events and conditions that may im- also arise from fraud or errors and may be pede the company's ability to undertake seen as significant if it can reasonably be ex- further operations. If we conclude that pected that they independently or jointly in- such uncertainty is present, we will indi- fluence financial decisions made based on cate such information in the accounts the accounts. or, in the event that such information is unavailable, qualify our opinion. Our As part of the audit, pursuant to international conclusions are based on the auditing auditing standards and Danish requirements, evidence that we have accessed until we undertake professional evaluations and the date of our report. Future events or maintain professional scepticism throughout conditions can indicate that the com- the process. Furthermore: pany will be unable to continue opera-  We identify and assess the risk of a ma- tions. terial misstatement in the accounts, irre- spective of whether due to fraud or er-  We assess the overall presentation, ror, design and produce auditing docu- structure and content of the accounts, ments in response to these risks and including the notes, and whether the ac- collect auditing evidence where neces- counts reflect underlying transactions sary to support our conclusion. The risk and events in such a way as to provide of not detecting material misinformation a fair picture thereof. due to fraud is greater than that of not detecting material misinformation

caused by an error, as fraud can include

52 Femern A/S Annual Report 2019

We communicate with top management about the planned extent and timing of the audit, and significant auditing observations, including potential significant flaws in internal reviews, which we identify in the course of the audit.

Copenhagen, 25 March 2020

PricewaterhouseCoopers

Chartered Accountant Company

CVR No. 33 77 12 31

Christian Fredensborg Jakobsen Martin Enderberg Lassen Chartered accountant Chartered accountant mne16539 mne40044

53 Annual Report 2019 Femern A/S

Board of Directors and Board of Management

Board of Directors

Walter Christophersen Peter Frederiksen (Chairman) Self-employed Director Joined the board in 2011 Chairman since 2016 Term expires in 2021 Joined the board in 2016 Term expires in 2020 Board member in  Sund & Bælt Holding A/S Board member in  A/S Storebælt  Sund & Bælt Holding A/S (Chairman)  A/S Øresund  A/S Storebælt (Chairman)  A/S Femern Landanlæg  A/S Øresund (Chairman)  Femern A/S  A/S Femern Landanlæg (Chairman)  Femern A/S (Chairman)  Øresundsbro Konsortiet I/S (Chairman) Claus Jensen  A/S United Shipping & Trading Company President of the Danish Metal Workers Un-  Bunker Holding A/S ion  Uni-Tankers A/S Joined the board in 2014 Term expires in 2021

Jørn Tolstrup Rohde (Vice-Chairman) Board member in Director  CO-industri (Chairman)  Tænketanken EUROPA Vice-chairman since 2017 Joined the board in 2017  Sund & Bælt Holding A/S Term expires in 2021  A/S Storebælt  A/S Øresund Board member in  A/S Femern Landanlæg  3C Groups A/S (Chairman)  Femern A/S  Blue Ocean Robotics A/S (Chairman)  Øresundsbro Konsortiet I/S  Facit Bank A/S (Chairman)  European Workers Participation Fund,  Alfred Pedersen & Søn A/S (Chairman) EWPF  Sund & Bælt Holding A/S (Vice-Chair-  IndustriALL – European Trade Union man) (Vice-Chairman)  A/S Storebælt (Vice-Chairman)  Industrianställda i Norden, IN (Chairman)  A/S Øresund (Vice-Chairman)  A/S A-Pressen  A/S Femern Landanlæg (Vice-Chairman)  Akademiet for de Tekniske Videnskaber,  Femern A/S (Vice-Chairman) ATV  Øresundsbro Konsortiet I/S  Arbejderbevægelsens Erhvervsråd, AE  Løgismose Meyers A/S  Arbejderbevægelsens Kooperative Fi-  Dinex A/S nansieringsfond, AKF  Arbejdernes Landsbank  Arbejdsmarkeds Tillægspension, ATP  CPH Vækstkomité  Danmarks Nationalbank

54 Femern A/S Annual Report 2019

 AKF Holding Lene Lange  AlsFynBroen Director

 The E-20 Committee Joined the board in 2016  Green Business Forum Term expires in 2020  Climate Partnership  The Øresund metro Board member in  The Danish Economic Council  Sund & Bælt Holding A/S  Folk & Sikkerhed  A/S Storebælt  Foundation for Entrepreneurship  A/S Øresund  Fonden Peder Skram  A/S Femern Landanlæg  Industriens Kompetenceudviklingsfond,  Femern A/S IKUF  ValueAdvice ApS  Industriens Pensionsforsikring A/S  PatentCo ApS  Industriens Pension Service A/S  The independent institution Aarhus Jazz  Industriens Uddannelse- og Samar- Orchestra bejdsfond, IUS  IndustriPension Holding A/S  Interforcekomitéen Rainer Feuerhake  LINDØ port of Odense A/S Joined the board in 2010  Fagbevægelsens Hovedorganisation Term expires in 2020 (FH)

 The Labour Court (judge alternate)  The Nordic Association (ambassador)  TeknologipagtRådet  Danmarks Erhvervsfremmebestyrelse

Ruth Schade Group Managing Director

Joined the board in 2016 Term expires in 2020

Board member in  Sund & Bælt Holding A/S  A/S Storebælt  A/S Øresund  A/S Femern Landanlæg  Femern A/S  Maj Invest Holding A/S  Fondsmæglerselskabet Maj Invest A/S  Maj Invest Equity A/S  Harboe Ejendomme A/S  Keldernæs A/S  Visbjerggården A/S  Danfrugt Skælskør A/S

55 Annual Report 2019 Femern A/S

Mikkel Haugård Hemmingsen Board of Management CEO Claus F. Baunkjær Joined the board in 2016 Managing Director, CEO Term expires in 2020

CEO in Board member in  Sund & Bælt Holding A/S  Sund & Bælt Partner A/S  A/S Storebælt  A/S Øresund  A/S Femern Landanlæg

Board member in  BroBizz A/S (Chairman)  BroBizz Operator A/S (Chairman)  Sund & Bælt Partner A/S (Chairman)  Øresundsbro Konsortiet I/S

Jeanne Christensen HR Consultant (employee representative)

Joined the board in 2009 Term expires in 2023

Villads Engstrøm Design Coordination Manager (employee representative)

Joined the board in 2015 Term expires in 2023

Anne Bøgh Johansen Chief Legal Officer (employee representative)

Joined the board in 2019 Term expires in 2023

Randi Weihrauch Project Coordinator (employee representative)

Joined the board in 2017 Term expires in 2023

56 This publication was compiled by Femern A/S. Femern A/S is responsible for the planning of the Fehmarnbelt coast-to-coast link.

Please direct any queries concerning this publication to:

Femern A/S Vester Søgade 10 1601 Copenhagen V Denmark Tel. +45 33 41 63 00 [email protected] www.femern.com VAT 28986564

Published by Femern A/S April 2020

Design Femern A/S and BGRAPHIC Photos Femern A/S Printing Jørn Thomsen Elbo A/S

ISSN 1901-497X Femern A/S Vester Søgade 10 1601 Copenhagen V Denmark Tel. +45 33 41 63 00 VAT 28986564

Co-financed by the Connecting Europe Facility of the European Union www.femern.com