VP LUX S.à r.l. ANNUAL ACCOUNTS AND REPORT OF THE REVISEUR D ENTREPRISES AGREE. December 31, 2014

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1 VP LUX S.à r.l. ANNUAL ACCOUNTS AND REPORT OF THE REVISEUR D ENTREPRISES AGREE 32, Boulevard Royal L-2449 Luxembourg R.C.S. Luxembourg : B

2 TABLE OF CONTENTS Page MANAGEMENT REPORT 3-4 REPORT OF THE REVISEUR D ENTREPRISES AGREE 5-6 ANNUAL ACCOUNTS - Balance sheet as at 7 - Profit and loss account for the year ended 8 - Notes to the annual accounts 9-14

3 Management Report Financial Development: Profit & Loss for VP LUX for 2014 shows a result on ordinary activities of a profit of EUR 75 k compared to a loss of EUR 4 k in The increase in profit compared to the year ended 2013 is caused by higher net turnover and lower external costs. The profit after tax for 2014 of EUR 64 k is carried forward to the next year. Activity: VP LUX S.a r.j. is a Luxembourg Central Securities Depository (CSD) established in Its first objective was to facilitate access for mortgage credit institutions and other eligible issuers to issue euro-denominated bonds eligible as collateral for credit with central banks in the Eurosystem. As a fully-owned subsidiary of VP SECURITIES (the Danish CSD), its second objective is to offer its CSD-services and STP-solutions also to the Luxembourg investment fund market. VP LUX is approved by the Luxembourg financial supervisory authority (CSSF) and the Luxembourg central bank (BCL) to operate a CSD and is also approved, in accordance with the standards of the Eurosystem, for issuance and administration of securities eligible as collateral for Eurosystem credit operations. The VP LUX activities are subject to a professional indemnity insurance and crime insurance contract. VP LUX is a mainly fixed cost, network industry service provider that facilitates issuance of EUR-denominated bonds, including EMTN programs, covered bonds, corporate bonds and government bonds. The VP LUX value proposal to the bond market is a unique combination of low operational- and settlement risk and low safekeeping fees via leverage of the VP SECURITIES bond issuance and safekeeping platform. A distinctive feature of bonds issued via VP LUX is that they may qualify as eligible collateral with the Eurosystem as well as with the Danish Central Bank. The majority of bonds currently issued with VP LUX are AAA-rated mortgage credit bonds with an initial maturity of 1-5 years issued by inter alia Nykredit, Realkredit Danmark, DLR Kredit, Nordea Kredit and BRFkredit. By end of2014, the volume of bonds issued by VP LUX was 33.2 billion EUR. This is a decline compared to end of2013 and is a reflection of the current interest rate market situation that incentivise Danish mortgage credit banks to tap the DKK-market rather than the EUR-market. For VP SECURITIES Group in total the combined market value of bonds issued amounted to EUR 555 billion at the end of the year 2014, which is unchanged compared to 2013 In September 2014, VP LUX introduced vp.fund HUB that supports Investment Funds and Transfer Agents with "order routing", clearing and settlement in currencies other than the euro. This solution was already introduced by VP SECURITIES in 2013, and by the end of2014 investment funds equivalent EUR 1,9 billion had been issued via vp.fund HUB. By end of2014 the total value of investment funds issued with VP SECURITIES Group was 152 billion EUR - a rise of 11 percent. VP LUX offer low-cost and low-risk issuance of Eurosystem eligible collateral combined with automated, fast and safe distribution of the securities to relevant investor-markets. VP LUX therefore currently offer direct or relayed links to Clearstream Banking Luxembourg, Clearstream Banking Frankfurt, Monte Tito Ii, Euroclear Bank, VP SECURITIES and SIS SIX. During 2014, VP LUX have taken a number of initiatives to ensure Eurosystem approval of all links relevant for transfer of securities eligible as collateral for credit with central banks in the Eurosystem under the Eurosystem CCBM-procedures as well as via relevant tri-party collateral pools. A second aim of these initiatives is to prepare - 3 -

4 VP LUX for migration to TARGET2-Securities (T2S). A third aim is to allow for re-introduction as soon as possible access to distribute VP LUX issued securities also via the link between Euroclear Bank and Clearstream Banking S.A. (the "Bridge"). As mentioned in the annual report for 2013, this distribution channel was closed in October 2013 as a prerequisite for the Eurosystem 's approval of eligibility of the link between VP LUX and Clearstream Banking S.A. (as well as its relayed link to Clearstream Banking AG) for Eurosystem credit operations. As part of the Eurosystem approval of all relevant links a new eligible link from Clearstream Banking AG-CASCADE to VP SECURlTlES has in February 2015 been approved, and we currently expect all relevant Eurosystem decision processes to be finalised during VP LUX will migrate its settlement system to T2S (the pan-european platform for clearing and settlement of securities transactions) in September The preparations of the migration of the VP LUX settlement platform to T2S have progressed as planned in Currently all securities issued with VP LUX (bonds as well as investment funds) are eligible for settlement with T2S. VP LUX is a member of the Luxembourg T2S National User Group (NUG). VP LUX employed three full-time employees during In 2014 VP LUX had no research and development cost. The company does not have any branches and does not have own shares. Outlook for 2015: In 2015 VP LUX expects positive result on ordinary activities. The Board of Managers and the Managing Directors have discussed and approved the annual accounts of VP LUX for the year ended December 31, The annual accounts have been prepared in compliance with Luxembourg legal and regulatory requirements relating to the preparation of the annual account. We consider the accounting principles applied to be appropriate, and in our opinion, the annual accounts present a true and fair view of the company's assets and liabilities, its financial position, the financial result and cash flow. The annual accounts are recommended to the general meeting of shareholders for adoption Rune Schmidt - 4 -

5 Deloitte. To the Board of Managers of VP Lux S_a r.l 32, Boulevard Royal L-2449 Luxembourg Deloitte Audit Societe a responsabilite limitee 560, rue de Neudorf L-2220 Luxembourg BP L Luxembourg Tel: Fa x: REPORT OF THE REVISE UR D'ENTREPRISES AGREE Report on the annual accounts We have audited the accompanying annual accounts of VP Lux S.a r.l., which comprise the balance sheet as at and the profit and loss account for the year then ended, and a summary of significant accounting policies and other information. Responsibility of the Board of Managers for the annual accounts The Board of Managers is responsible for the preparation and fair presentation of these annual accounts in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the annual accounts, and for such internal control as the Board of Managers determines is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error. Responsibility of the reviseur d'entreprises agree Our responsibility is to express an opinion on these annual accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the annual accounts are free from material misstatement. Societe a responsabrlite limrtee au capital de RCS Luxembourg B VAT LU Autorisat1on d'etablissement :

6 Deloitte. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts. The procedures selected depend on the reviseur d'entreprises agree's judgement, including the assessment of the risks of material misstatement of the annual accounts, whether due to fraud or error. In making those risk assessments, the reviseur d 'entreprises agree considers internal control relevant to the entity's preparation and fair presentation of the annual accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Managers, as well as evaluating the overall presentation of the annual accounts. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the annual accounts give a true and fair view of the financial position of VP Lux S.a r.l. as of, and of the results of its operations for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the annual accounts. Report on other legal and regulatory requirements The management report, which is the responsibility of the Board of Managers, is consistent with the annual accounts. on agree Partner April 14,

7 BALANCE SHEET (expressed in EUR) A S S E T S L I A B I L I T I E S FIXED ASSETS CAPITAL AND RESERVES (note 4) Tangible assets (note 3) CURRENT ASSETS Subscribed capital Legal reserve Loss brought forward Result for the financial year Debtors becoming due and payable within one year Amount owed by affiliated undertakings Tax debtors Other debtors Cash at banks NON SUBORDINATED DEBTS Creditors becoming due and payable within one year Amounts owed to affiliated undertakings (note 5) Tax and social security debts Other creditors PREPAYMENTS TOTAL ASSETS TOTAL LIABILITIES The accompanying notes form an integral part of these annual accounts

8 PROFIT AND LOSS ACCOUNT For the year ended (expressed in EUR) C H A R G E S Other external charges (note 7) Staff costs (note 6) Wages and salaries Social security costs Value adjustments on tangible fixed assets Other operating charges (note 10) Interest payable and other financial charges Income taxes (note 8) Other taxes (note 8) Profit for the financial year TOTAL CHARGES I N C O M E Net turnover (note 9) Other interest and other financial income Loss for the financial year TOTAL INCOME The accompanying notes form an integral part of these annual accounts

9 NOTES TO THE ANNUAL ACCOUNTS NOTE 1 - GENERAL VP Lux S.à r.l. (the Company ) was incorporated on April 25, 2008 as a private limited company (Société à responsabilité limitée) under the Luxembourg Law for an unlimited period. The purpose of the Company is to deliver services as a Central Securities Depository, i.e. book-entry, clearing and settlement of securities and to carry out other services related hereto. The Company is registered as a Professional of the Financial Sector according to articles 26 of the Law of April 5, 1993 on the financial sector, as amended. The Company's financial year runs January 1 to December 31 of each year. The registered office of the Company is in Luxembourg: 32, Boulevard Royal L-2449 Luxembourg The Company is registered at the Luxembourg Commercial Register under the number R.C.S. Luxembourg B The Company is included in the consolidated accounts of VP SECURITIES A/S forming the largest body of undertakings of which the Company forms a part as a direct/indirect subsidiary undertaking. The registered office of VP SECURITIES A/S is located at Weidekampsgade 14, DK-2300 Copenhagen, Denmark. The consolidated financial statements are available at this address

10 NOTES TO THE ANNUAL ACCOUNTS - continued - NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General The annual accounts of the Company are prepared in conformity with Luxembourg legal and regulatory requirements. Accounting policies and valuation rules are, besides the ones laid down by the Law, determined and applied by the Board of Managers. Rounding differences up to one unit may occur in the tables shown in the notes. Where necessary, in order to better reflect the accounting provisions of the Luxembourg law, certain disclosure reclassifications have been made. Translation of foreign currencies The Company maintains its accounts in Euro (EUR) and the annual accounts are expressed in this currency. Income and expenses in currencies other than EUR are translated into EUR at applicable exchange rates at transaction date. Long term assets expressed in currencies other than EUR are translated into EUR at the exchange rate effective at the time of the transaction. At the balance sheet date, these assets remain translated at historic exchange rate. Cash at bank is translated at the exchange rate effective at the balance sheet date. Exchange losses and gains are recorded in the profit and loss account of the year. Other assets and liabilities are translated respectively at the lower or at the higher of the value converted at the historic exchange rate or the value determined on the basis of the exchange rate effective at the balance sheet date. The unrealized exchange losses are recorded in the profit and loss account of the year. The realized exchange gains are recorded in the profit and loss account at the moment of their realization. Tangible assets Tangible assets which are made up of leasehold improvements and other equipment are stated at their purchase price less value adjustments. They are amortized on a straight-line basis over a period of 3-10 years

11 NOTES TO THE ANNUAL ACCOUNTS - continued - NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Debtors Debtors are valued at their nominal value. They are subject to value adjustments where their recovery is compromised. These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply. Prepayments This asset item includes expenditures incurred during the financial year but relating to a subsequent financial year. Turnover The net turnover comprises the amounts derived from the sale of products and the provision of services falling within the Company s ordinary activities, after deductions of value added tax and other taxes directly linked to the turnover. Provisions Provisions are intended to cover losses or debts, the nature of which is clearly defined and which, at the date of the balance sheet, are either likely to be incurred or certain to be incurred but uncertain as to their amount or the date which they will arise. Provisions may also be created to cover charges which originate in the financial year under review or in a previous financial year, the nature of which is clearly defined and which at the date of the balance sheet are either likely to be incurred or certain to be incurred but uncertain as to their amount or the date on which they will arise

12 NOTES TO THE ANNUAL ACCOUNTS - continued - NOTE 3 - TANGIBLE ASSETS Tangible assets consist of leasehold improvements and other equipment. Movements of the year are as follows: Leasehold Other Total improvements equipment EUR EUR EUR Gross book value - opening balance Additions for the year Disposals for the year Gross book value - closing balance Amortisation - opening balance Amortisation for the year Reversal for the year Amortisation - closing balance Net book value - closing balance Net book value - opening balance NOTE 4 - CAPITAL AND RESERVES Subscribed capital As at and 2013, the share capital is set at EUR consisting of fully subscribed and paid shares of a par value of EUR each. Legal reserve An amount equal to at least 5% of the annual net income has to be allocated to a legal reserve until such reserve equals 10% of the paid-in share capital, as required by Luxembourg law. This reserve is not available for distribution

13 NOTES TO THE ANNUAL ACCOUNTS - continued - NOTE 5 - AMOUNTS OWED TO AFFILIATED UNDERTAKINGS The amounts owed to affiliated undertakings are detailed as follows: EUR EUR Debts on provision of services NOTE 6 - STAFF COSTS The average number of persons employed by the Company during the financial year is as follows: Number Number Employees 3 3 NOTE 7 - OTHER EXTERNAL CHARGES Other external charges are broken down as follows: EUR EUR Activity based costs IT cost Rent Advisory, consulting and audit expenses Insurance premium General expenses

14 NOTES TO THE ANNUAL ACCOUNTS - continued - NOTE 8 - PROVISIONS FOR TAXATION Provisions for taxation corresponds to the difference between the estimated provisions created by the Company and the advance payments for the financial years for which no final tax assessment notices have been received yet. The Company is subject to all taxes applicable to Luxembourg commercial companies. To better reflect the accounting provisions of the Luxembourg law, certain disclosure reclassifications have been made between Income tax and other taxes. NOTE 9 - NET TURNOVER The net turnover is fully made on the market of Luxembourg. NOTE 10 - MANAGEMENT REMUNERATION The Company granted emoluments amounting to EUR for the current year (2013: EUR 6.700) to the members of the Board of Managers of the Company. The Company has not granted advances or credits to the members of its Management. NOTE 11 - OFF-BALANCE SHEET COMMITMENTS One cash account is pledged as security, up to EUR , for a bank guarantee regarding the leased premises. As at, the Company has a total commitment for its office rental amounting to EUR (2013: EUR )