Financial Report power

Financial Report 2008 power

Financial Report Shareholders Aare-Tessin AG für Elektrizität (Atel) 18.88 % BKW FMB AG (BKW) 11.17 % Centralschweizerische Kraftwerke AG (CKW) 5.24 % Elektrizitäts-Gesellschaft Laufenburg AG (EGL) 12.32 % Energie Ouest Suisse SA (EOS) 13.71 % Stadt Zürich (Elektrizitätswerk der Stadt Zürich) (ewz) 12.61 % Nordostschweizerische Kraftwerke AG (NOK) 24.22 % Rätia Energie AG (RE) 1.85 % Board of Directors Konrad Peter, Chairman (independent), until 14 May 2008 Peter Grüschow, Chairman (independent), from 4 December 2008 Hans E. Schweickardt, Vice-Chairman (EOS) Dr. Conrad Ammann (ewz) Adrian Bult (independent) Thomas Burgener (cantonal representative) Heinz Karrer (Axpo) Otto E. Nägeli (independent) Herbert Niklaus (Atel) Fadri Ramming (cantonal representative) Doris Russi Schurter (independent) Kurt Rohrbach (BKW) Dr. Andrew Walo (CKW) Conrad Wyder (independent) Executive Board * Hans-Peter Aebi, CEO Luca Baroni, Finance & Accounting Rudolf Baumann, Operations Werner Meier, IT, until 22 February 2008 Knut Baur, IT (ad interim), from 28 February 2008 Thomas Tillwicks, Commercial Grid Management Monika Walser, Corporate Communications & Human Resources Auditors KPMG AG, Basle * As of 31 Dezember 2008

Financial Report Financial statements Income statement Notes 01.01.2008 to 31.12.2008 01.01.2007 to 31.12.2007 Operating income 1 47 787 43 968 Own work capitalised 7 100 1 733 Other income 2 15 099 7 289 Total operating income 69 986 52 990 Material and third-party supplies 3 11 277 8 911 Personnel expenses 4 36 284 26 567 Depreciation / amortisation 8 8 221 7 289 Impairments 8 1 246 Other operating expenses 5 8 556 6 278 Total operating expenses 65 584 49 045 Earnings before interest and taxes 4 402 3 945 Financial income 6 97 68 Financial expense 7 2 795 683 Earnings before taxes 1 704 3 330 Taxes 334 692 Net income 1 370 2 638

Financial Report Balance sheet Assets Notes 31.12.2008 31.12.2007 Property, plant and equipment 8 11 025 6 587 Intangible assets 8 33 426 18 386 Fixed assets 44 451 24 973 Fiduciary assets 9 184 077 137 214 Trade accounts receivable 10 19 844 16 205 Other receivables 11 1 112 272 Prepaid expenses and accrued income 12 3 020 3 233 Cash and cash equivalents 5 845 8 767 Current assets 213 898 165 691 Total assets 258 349 190 664 Balance sheet Equity and liabilities Notes 31.12.2008 31.12.2007 Share capital 13 15 000 15 000 General reserve 127 Retained earnings 3 773 2 530 Total equity 18 900 17 530 Non-current financial liabilities 14 15 000 Non-current liabilities 15 000 Fiduciary liabilities 9 184 077 137 214 Current financial liabilities 15 16 152 22 500 Trade accounts payable 16 10 486 2 958 Other liabilities 17 5 010 2 878 Accrued expenses and deferred income 18 8 724 7 584 Current liabilities 224 449 173 134 Total liabilities 239 449 173 134 Total equity and liabilities 258 349 190 664

Financial Report Cash flow statement Excluding fiduciary balance sheet items Notes 01.01.2008 to 31.12.2008 01.01.2007 to 31.12.2007 Net income 1 370 2 638 Net interest expense 7 353 589 Interest income 6 97 68 Tax expense 334 692 Depreciation / amortisation 8 8 221 7 289 Impairments 8 1 246 Loss on disposal of assets 22 Decrease / increase in trade accounts receivable 3 643 7 482 Decrease / increase in other receivables 840 144 Decrease in prepaid expenses and accrued income 213 1 074 Decrease / increase in trade accounts payable 5 231 8 303 Decrease / increase in other current liabilities 2 132 2 641 Increase in accrued expenses and deferred income 531 4 213 Interest paid 967 534 Interest received 101 64 Taxes paid 34 Cash flow from operating activities 14 173 17 921 Investments in property, plant and equipment 8 7 643 2 717 Investments in intangible assets 8 18 104 5 583 Payment of purchase price of fixed assets 24 123 Cash flow from investing activities 25 747 32 423 Increase in current financial liabilities 8 652 22 500 Cash flow from financing activities 8 652 22 500 Change in cash and cash equivalents 2 922 7 998 Statement Cash and cash equivalents at beginning of period 8 767 769 Cash and cash equivalents at end of period 5 845 8 767 Change in cash and cash equivalents 2 922 7 998

Financial Report Explanations of cash flow statement Investing activities 2008 not affecting cash: Invoices not received at 31 December for investments in property, plant and equipment: CHF 850 000 Invoices not received at 31 December for investments in intangible assets: CHF 1 811 000 Capitalised interest on borrowed capital: CHF 559 000 (CHF 71 000 property, plant and equipment / CHF 488 000 intangible assets) Financing activities 2008 not affecting cash: In the 2008 financial year, CHF 15 000 000 of a short-term loan was converted to a long-term loan until January 2010. In the 2007 financial year, all investing and financing activities had an impact on cash. Statement of changes in shareholders equity In CHF 1000 Share capital General reserve Retained earnings Total shareholders equity Shareholders equity 01.01.2007 15 000 108 14 892 Allocation Dividends paid Net income 2007 2 638 2 638 At 31.12.2007 15 000 2 530 17 530 Allocation 127 127 Dividends paid Net income 2008 1 370 1 370 At 31.12.2008 15 000 127 3 773 18 900

Financial Report Notes Introductory remarks The 2007 and 2008 financial years were dominated by operational preparations in the run-up to market liberalisation of the Swiss transmission system on 1 January 2009. These preparations entailed complex projects involving heavy demands on internal and external resources. From 2009 swissgrid ag s business operations will take place in a regulated environment. The expenses generated by swissgrid ag make up the main component of Swiss grid usage. Accounting principles Financial statements of swissgrid ag have been prepared in accordance with Swiss company law and in compliance with Swiss GAAP FER. They present a true and fair view of the net assets, financial position and results of operations of the company. These Swiss GAAP FER financial statements also correspond to the statutory financial statements provided for by the Swiss Commercial Code. Valuation principles Property, plant and equipment Property, plant and equipment are carried at the cost of acquisition or production less cumulative depreciation and any impairment losses recognised. Depreciation is calculated using the straight-line method on the basis of the estimated useful economic lives of the assets. In the following asset categories, the economic lives are as follows: Construction in progress: only in the case of an impairment Plant and business equipment: 3 to 10 years Operational and administrative buildings: 5 to 10 years / lease term in the case of investments in real estate owned by third parties Impairments of property, plant and equipment The value of property, plant and equipment is assessed annually. If indications exist of a loss of value i.e. it is unlikely that the depreciation in the full cost can be passed on to the recipients of swissgrid s products or services the recoverable amount is calculated. If the book value is higher than the recoverable value, an impairment is recognised.

Financial Report Intangible assets Intangible assets are carried at the cost of acquisition or production less cumulative amortisation and any impairments. Amortisation is calculated using the straight-line method on the basis of the estimated useful economic lives of the assets. In the following asset categories, the economic lives are as follows: Intangible assets under development: only in the case of an impairment Software: 3 to 10 years Technical regulations: 3 years Impairment of intangible assets The value of intangible assets is assessed annually. If indications exist of a loss of value i.e. it is unlikely that the amortisation in the full cost can be passed on to the recipients of swissgrid s products or services the recoverable amount is calculated. If the book value is higher than the recoverable value, an impairment is recognised. Construction in progress / intangible assets under development Construction in progress and intangible assets under development are assets that are not yet completed or operational. Assets are all items of property, plant and equipment and intangible assets, including own work performed by swissgrid employees. As of each balance sheet date, an examination is carried out to determine whether existing construction in progress or intangible assets under development have no value in use. These are recorded as an impairment in the year of completion. Ordinary depreciation or amortisation of these assets begins once they are completed or ready for operation. Project work (third-party and own work) resulting from the forthcoming market liberalisation of Switzerland s transmission system is capitalised from the completion of the pre-project phase onwards, provided the aim of the project is to develop and build IT applications (hardware and software). Project work based on the legislative framework (Electricity Supply Act, Electricity Supply Ordinance, Energy Act, Energy Ordinance) and carried out in order to create the technical regulations that first enabled swissgrid to acknowledge its role as national grid company in the legal sense, is also capitalised. The majority of the project work performed in preparation for market liberalisation of Switzerland s transmission system will be effective as of 1 January 2009. The resulting depreciation or amortisation of these assets from 2009 onwards is a component part of the tariffs to be billed in accordance with the Electricity Supply Act and the Electricity Supply Ordinance.

10 Financial Report Trade accounts receivable Accounts receivable are valued at their nominal value less any impairments required for business reasons. Cash and cash equivalents Cash and cash equivalents includes cash in hand, cash at banks and financial investments at banks maturing in 90 days or less. They are accounted for at their nominal value. Liabilities Liabilities include current and non-current debts which are carried at the repayment amount. Interest on borrowed capital Interest on borrowed capital is recognised as an expense in the period in which it occurs. Interest on borrowed capital relating to the creation of an asset is capitalised from the 2008 financial year. The capitalised interest is calculated in the period from when the asset is first created to when it is first used. Employee pension plan swissgrid ag is a member of an industry-wide retirement benefit plan (PKE Pensionskasse Energie). This is a legally independent pension fund. All permanent employees of the company are included in this plan from 1 January of the year in which they turn 18. They are covered for permanent disability and death. From 1 January of the year in which they turn 25, the employees are also covered by retirement insurance. Economic benefits from a pension fund surplus (for example, in the form of a positive impact on future cash flows) are not capitalised, since the prerequisites for this are not met and the company does not intend to use such benefits to reduce employer contributions. Any benefit arising from freely available reserves of employer contributions is recorded as an asset. An economic obligation (for example in the form of negative effects on future cash flows due to a pension fund deficit) is recorded if the prerequisites for recognising a provision are fulfilled. The contributions for the period, the difference between the annually calculated economic benefit from pension fund surpluses and obligations, as well as the change in the employer s contribution reserve are recognised in the income statement as personnel expenses.

Financial Report 11 Transactions with related parties Related parties are organisations and persons that can have a significant influence, either directly or indirectly, on financial or operational decisions of swissgrid ag. Shareholders who hold at least 20 % of the voting rights in swissgrid ag, either alone or together with others, are considered to be related parties. Other criteria in addition to the proportion of voting rights are also taken into account for shareholders (e.g. representation in committees, possibility of exerting influence based on shareholder structure). Subsidiaries of related shareholders, such as partner plant companies whose equity is wholly owned by related shareholders, are also considered to be related parties. Members of the Board of Directors and the Executive Board are also considered to be related parties. Relations with related parties, if significant, are disclosed in the respective notes relating to the balance sheet and the income statement. All transactions are conducted at arm s length.

12 Financial Report 1. Operating income 2008 2007 Third parties 409 Related parties 47 378 43 968 47 787 43 968 Operating income includes services for basic, project and design work, representation of interests and grid operation. In its capacity as grid operator, swissgrid ag is responsible for the secure, reliable, and cost-effective operation of the high-voltage grid. Operating income is generated solely with swissgrid shareholders. 2. Other income 2008 2007 Third parties 3 102 2 330 Related parties 11 997 4 959 15 099 7 289 Other income is generated from operating activities in other business areas, such as operation of the schedule balance groups, management of additional cost financing, and acting in the function of auction coordinator. 3. Material and third-party supplies 2008 2007 Project expenses and consulting in connection with the setup of swissgrid and the maintenance, repair and replacement of assets 6 959 5 676 Of which, with third parties 6 703 5 646 Of which, with related parties 256 30 Hardware / software maintenance 4 318 3 235 Of which, with third parties 3 933 3 235 Of which, with related parties 385 11 277 8 911

Financial Report 13 4. Personnel expenses 2008 2007 Salaries, bonuses, allowances 25 074 19 098 Employee insurance 4 129 2 817 Other personnel expenses 7 081 4 652 36 284 26 567 Headcount at 31.12. Persons 233 161 Full-time equivalents 226.4 158.2 Executive Board remuneration 2008 2007 Fixed remuneration (incl. per diem expenses) 1 801 1 790 Variable remuneration 319 472 Total remuneration to the Executive Board 2 120 2 262 Of which to the highest earning member of the Executive Board Fixed remuneration (incl. per diem expenses) 533 518 Variable remuneration 137 55 Total remuneration to the highest earning member of the Executive Board 670 573 The above amounts represent gross remuneration paid out in cash (excl. employer contributions for social insurance and non-cash benefits). The figures are based on the expenses debited to the financial statements (accrual basis). Remuneration to ad interim Executive Board members is not listed. Other personnel expenses include mainly recruitment costs, work done by third parties (temporary staff, freelancers), expenses and training.

14 Financial Report 5. Other operating expenses 2008 2007 Third parties 4 049 3 095 Board of Directors fees and expenses 694 879 Other related parties 3 813 2 304 8 556 6 278 Board of Directors fees and expenses represent fixed gross remuneration paid out in cash (excl. employer contributions for social insurance and VAT in cases where the payment is made to the employer). Remuneration to the Chairman of the Board of Directors is CHF 200 000 per year (CHF 20 000 of which is reimbursement of expenses; as of December 2008, the fee is CHF 250 000 per year incl. reimbursement of expenses of CHF 15 600) The other members of the Board of Directors receive remuneration of CHF 50 000 per year (CHF 5 000 of which is reimbursement of expenses). Because the position of Chairman of the Board of Directors was partly vacant in the 2008 financial year and the Board of Directors had fewer members compared with the previous year, the total remuneration for 2008 is lower than for 2007. Other operating income with related parties comprises rental and ancillary costs for swissgrid premises and rental costs for communication equipment.

Financial Report 15 6. Financial income 2008 2007 Interest income from third parties 97 68 97 68 7. Financial expense 2008 2007 Interest expenses to third parties 823 534 Interest expenses to related parties 89 55 Capitalised interest on borrowed capital 559 Foreign exchange losses 2 442 94 2 795 683

16 Financial Report 8. Fixed assets Table of plant, property and equipment 2008 In CHF 1000 Prepayments and construction in progress Plant and business equipment Operational and administrative buildings Total Acquisition cost at 01.01.2008 1 306 27 403 2 230 30 939 Additions 6 405 2 139 20 8 564 Disposals 2 734 2 734 Reclassification 3 684 1 010 1 540 1 134 Acquisition cost at 31.12.2008 4 027 27 818 3 790 35 635 Cum. depreciation at 01.01.2008 23 115 1 237 24 352 Depreciation 2 347 467 2 814 Impairments 156 156 Disposals 2 712 2 712 Reclassification Cum. depreciation at 31.12.2008 156 22 750 1 704 24 610 Net book value at 01.01.2008 1 306 4 288 993 6 587 Net book value at 31.12.2008 3 871 5 068 2 086 11 025 Due to a change in the framework conditions, one project had to be fundamentally revised. This led to an impairment of CHF 156 000. Computer systems totalling CHF 314 000 and construction work totalling CHF 81 000 were purchased from related parties. Fire insurance values amounted to CHF 39 000 000 as at 31 December 2008.

Financial Report 17 Table of plant, property and equipment 2007 In CHF 1000 (TCHF) Prepayments and construction in progress Plant and business equipment Operational and administrative buildings Total Acquisition cost at 01.01.2007 98 26 122 2 002 28 222 Additions 1 427 1 281 9 2 717 Disposals Reclassification 219 219 Acquisition cost at 31.12.2007 1 306 27 403 2 230 30 939 Cum. depreciation at 01.01.2007 21 037 865 21 902 Depreciation 2 078 372 2 450 Impairments Disposals Reclassification Cum. depreciation at 31.12.2007 23 115 1 237 24 352 Net book value at 01.01.2007 98 5 085 1 137 6 320 Net book value at 31.12.2007 1 306 4 288 993 6 587 No impairments were necessary in 2007. No plant, property or equipment was purchased from related parties in the 2007 financial year. Fire insurance coverage amounted to CHF 35 262 000 as at 31 December 2007.

18 Financial Report Table of intangible assets 2008 Software Technical regulations In CHF 1000 Purchased Own work Total Purchased Own work Total Acquisition cost at 01.01.2008 30 302 30 302 Additions 988 988 Disposals Reclassification 2 936 563 3 499 210 644 854 Acquisition cost at 31.12.2008 34 226 563 34 789 210 644 854 Cum. amortisation at 01.01.2008 17 751 17 751 Amortisation 5 187 135 5 322 21 64 85 Impairments Disposals Reclassification Cum. amortisation at 31.12.2008 22 938 135 23 073 21 64 85 Net book value on 01.01.2008 12 551 12 551 Net book value at 31.12.2008 11 288 428 11 716 189 580 769 Due to a change in the framework conditions, several projects had to be stopped or fundamentally revised. This led to impairments of CHF 1 090 000 (previous year: CHF 0). Work totalling CHF 983 000 (previous year: CHF 2 205 000) was carried out by related parties in the 2008 financial year. Technical regulations were drawn up which are shown as intangible assets under development as at 31 December 2008.

Financial Report 19 Intangible assets under development Total intangible assets Purchased Own work Total Purchased Own work Total 4 102 1 733 5 835 34 404 1 733 36 137 12 551 6 864 19 415 13 539 6 864 20 403 38 122 160 38 122 160 2 012 1 207 3 219 1 134 1 134 14 603 7 268 21 871 49 039 8 475 57 514 17 751 17 751 5 208 199 5 407 968 122 1 090 968 122 1 090 38 122 160 38 122 160 930 930 23 889 199 24 088 4 102 1 733 5 835 16 653 1 733 18 386 13 673 7 268 20 941 25 150 8 276 33 426

20 Financial Report Table of intangible assets 2007 Software Technical regulations In CHF 1000 Purchased Own work Total Purchased Own work Total Acquisition cost at 01.01.2007 29 734 29 734 Additions 568 568 Disposals Reclassification Acquisition cost at 31.12.2007 30 302 30 302 Cum. amortisation at 01.01.2007 12 912 12 912 Amortisation 4 839 4 839 Impariment Disposals Reclassification Cum. amortisation at 31.12.2007 17 751 17 751 Net book value at 01.01.2007 16 822 16 822 Net book value at 31.12.2007 12 551 12 551

Financial Report 21 Intangible assets under development Total intangible assets Purchased Own work Total Purchased Own work Total 820 820 30 554 30 554 3 282 1 733 5 015 3 850 1 733 5 583 4 102 1 733 5 835 34 404 1 733 36 137 12 912 12 912 4 839 4 839 17 751 17 751 820 820 17 642 17 642 4 102 1 733 5 835 16 653 1 733 18 386

22 Financial Report 9. Fiduciary balance sheet items (by business area) Fiduciary assets 2008 In CHF 1000 ITC Auctions SBG imbalances Financing of additional costs Total Trade accounts receivable 54 466 6 818 267 2 499 64 050 Other receivables 1 119 725 3 49 1 896 Prepaid expenses and accrued income 28 441 424 779 29 644 Cash and cash equivalents 10 835 76 422 101 1 129 88 487 Total 94 861 83 965 795 4 456 184 077 Fiduciary liabilities 2008 In CHF 1000 ITC Auctions SBG imbalances Financing of additional costs Total Trade accounts payable 9 233 9 362 280 18 875 Other liabilities 1 011 2 736 4 405 8 152 Accrued expenses and deferred income 84 617 71 867 515 51 157 050 Total 94 861 83 965 795 4 456 184 077 Fiduciary assets 2007 In CHF 1000 ITC Auctions SBG imbalances Financing of additional costs Total Trade accounts receivable 8 584 8 392 138 233 17 347 Other receivables 569 27 26 622 Prepaid expenses and accrued income 32 242 7 520 99 1 39 862 Cash and cash equivalents 856 74 545 15 3 967 79 383 Total 42 251 90 484 252 4 227 137 214 Fiduciary liabilities 2007 In CHF 1000 ITC Auctions SBG imbalances Financing of additional costs Total Trade accounts payable 9 414 2 252 15 91 11 772 Other liabilities 2 432 3 434 5 866 Accrued expenses and deferred income 32 837 85 800 237 702 119 576 Total 42 251 90 484 252 4 227 137 214

Financial Report 23 Business areas ITC, Auctions, SBG imbalances swissgrid ag is the clearing centre for the Cross Border Trade Agreement (CBT), serves as auction coordinator as well as operator of the schedule balance group system (SBG), and manages books and bank accounts in a fiduciary capacity in connection with these activities. Only fiduciary assets and liabilities are shown in the financial statements. The income statement does not contain any figures for the business areas ITC, Auctions and SBG imbalances. Financing of additional costs Since Art. 7 Para. 7 of the Energy Act (EnG) and the associated amendment to the Energy Ordinance (Arts. 5a 5c EnV) came into force on 1 January 2005, the new financing mechanism for additional costs has been applied. The principle of additional cost financing is based on a clearing process. Public electrical utilities that incur additional costs due to the feed-in of energy from independent producers declare such costs to the independent body. swissgrid ag has been functioning as the independent body since 2006, and as such passes on the aggregated additional costs incurred by all public electrical utilities as well as its enforcement costs to all grid operators who distribute electricity to end consumers across Switzerland. These costs are passed on in proportion to the volumes of electricity delivered to end consumers declared by the grid operators. The independent body is required to submit reports to the Federal Office of Energy. These reports cover, among other things, notification of defaulting grid operators, suspected cases of false declarations of additional costs, and the enforcement costs incurred. In connection with these activities, swissgrid ag manages books and bank accounts in a fiduciary capacity. The corresponding balances are shown in the balance sheet in these financial statements. From 2009, additional cost financing will be managed by the cost-covering feed-in remuneration (CFR) foundation.

24 Financial Report 10. Trade accounts receivable 31.12.2008 31.12.2006 Third parties 563 1 073 Related parties 19 281 15 132 19 844 16 205 The majority of trade accounts receivable from related parties are in connection with the management of performance mandates. 11. Other receivables 31.12.2008 31.12.2007 Third parties 1 109 235 Pension funds 3 35 Related parties 2 1 112 272 12. Prepaid expenses and accrued income 31.12.2008 31.12.2007 Third parties 1 283 1 343 Related parties 1 737 1 890 3 020 3 233 13. Share capital The share capital consists of 15 000 000 fully paid-up registered shares with a par value of CHF 1 per share. 14. Non-current financial liabilities 31.12.2008 31.12.2007 Third-party loans (bank loans) 15 000 Related party loans 15 000 The loan was unsecured and runs until January 2010.

Financial Report 25 15. Current financial liabilities 31.12.2008 31.12.2007 Third-party loans (bank loans) 13 652 20 000 Related-party loans 2 500 2 500 16 152 22 500 16. Trade accounts payable 31.12.2008 31.12.2007 Third parties 4 200 2 412 Related parties 6 286 546 10 486 2 958 17. Other liabilities 31.12.2008 31.12.2007 Pension funds 214 Third parties 4 423 2 878 Related parties 373 5 010 2 878 18. Accrued expenses and deferred income 31.12.2008 31.12.2007 Third parties 2 453 718 Related parties 283 2 451 Accruals for personnel expenses and employees insurance coverage 4 996 3 723 Accruals for taxes 992 692 8 724 7 584

26 Financial Report 19. Other, off-balance sheet liabilities Fixed purchase and operating commitments Under the terms of Art. 20, Para. 2a of the Electricity Supply Act, as of 2009 swissgrid operates the Swiss high-voltage grid. Under the terms of Art. 33, Para. 4 of the Electricity Supply Act, the transmission system must be transferred to swissgrid ag by the current owners and taken over by swissgrid ag by no later than 31 December 2012. Until the handover, swissgrid ag must compensate the owners for their chargeable costs (Art. 15 of the Electricity Supply Act). Owners costs of CHF 328 million were determined for 2009 in accordance with the ElCom ruling of 9 March 2009. Several of those participating in the proceedings took the ruling by ElCom to the Federal Administrative Court. For this reason, no exact cost specifications can be made for 2009 or for subsequent years. swissgrid ag assumes that these will be somewhere in the range between the originally declared costs of CHF 417 million and the costs of CHF 328 million ruled by ElCom. Long-term leases Long fixed-term leases exist with several parties. The obligations arising from these leases are shown as follows: In CHF 1000 Year 1 Year 2 7 Total 31.12.2008 2 443 4 886 7 329 31.12.2007 2 210 7 329 9 539 Off-balance sheet lease liabilities Off-balance sheet lease liabilities exist from vehicle leases. The amounts are as follows: In CHF 1000 Year 1 Year 2 7 Total 31.12.2008 51 32 83 31.12.2007 35 18 53

Financial Report 27 20. Employee pension plan Employer s contribution reserve Nominal value Renounced use Other impairments Discount Balance Sheet Previous year s balance Result from employer s contribution reserve in personnel expenses In CHF 1000 31.12.2008 31.12.2008 31.12.2008 31.12.2008 31.12.2008 Previous year 2008 Prev. year Patronage fund Pension fund (PKE) Total Economic benefit / economic obligation and retirement benefit plan expenses Over- / underfunding Economic share of the organisation Change compared with previous year / affecting income in FY Contributions concerning the business period Pension benefit expenses within personnel expenses in TCHF 31.12.2008 31.12.2008 Previous year 2008 Previous year Patronage fund 276 Pension fund with underfunding (PKE) 1 369 2 175 2 175 1 376 Total 1 093 2 175 2 175 1 376

28 Financial Report 21. Risk assessment The company-wide risks of swissgrid ag are identified, changes to risks currently being monitored are re-evaluated and the results of previous measures are regularly determined as part of a multi-level process. On this basis, the current risks are evaluated according to their probability and impact. Those risks that are assessed as significant are avoided, reduced or hedged through corresponding measures determined by the Board of Directors. 22. Events after the balance sheet date The following events occurred after the balance sheet date of 31 December 2008: On 6 March 2009, ElCom issued a ruling governing costs and tariffs for Level 1 grid usage and ancillary services. The ruling does not address the issue of whether higher costs for ancillary services can be passed on. A negative decision on this issue could jeopardise the liquidity and financial security of swissgrid. As this part of the ruling contradicts the Electricity Supply Ordinance (Art. 31b) as revised by the Federal Council in December 2008, swissgrid has lodged an appeal with the Federal Administrative Court against the ElCom ruling. Events after the balance sheet date have been taken into account up to 6 May 2009, the date on which the financial statements were approved by the Board of Directors of swissgrid ag.

Financial Report 29 Proposed appropriation of retained earnings The Board of Directors proposes to the Annual General Meeting that the retained earnings for 2008 be appropriated as follows: In CHF 2008 2007 Amount carried forward from the previous year 2 402 636.46 108 051.82 Net profit for the year 1 370 124.89 2 637 688.28 Retained earnings 3 772 761.35 2 529 636.46 Allocation to the General Reserve (Art. 671 Para. 1 and Para. 2 Item 3 Swiss Code of Obligations (CO)) 69 000.00 127 000.00 To be carried forward 3 703 761.35 2 402 636.46 Total appropriation 3 772 761.35 2 529 636.46 On behalf of the Board of Directors Chairman: Peter Grüschow

30 Financial Report Report of the Statutory Auditor Report of the Statutory Auditor on the Financial Statements to the General Meeting of swissgrid ag, Laufenburg As statutory auditor, we have audited the financial statements of swissgrid ag, which comprise the income statement, balance sheet, statement of cash flows, statement of changes in shareholders equity and notes as presented on pages 4 to 29 for the year ended 31 December 2008. Board of Directors Responsibility The board of directors is responsible for the preparation of the financial statements in accordance with Swiss GAAP FER, the requirements of Swiss law and the company s articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The board of directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity s preparation of the financial statements 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 system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Financial Report 31 Opinion In our opinion, the financial statements for the year ended 31 December 2008 give a true and fair view of the financial position, the results of operations and the cash flows in accordance with Swiss GAAP FER and comply with Swiss law and the company s articles of incorporation. Report on Other Legal Requirements We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO) and that there are no circumstances incompatible with our independence. In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the board of directors. We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company s articles of incorporation. We recommend that the financial statements submitted to you be approved. KPMG AG Orlando Lanfranchi Licensed Audit Expert Auditor in Charge Roman Martin Licensed Audit Expert Basle, 6 May 2009

swissgrid ag Werkstrasse 12 CH-5080 Laufenburg www.swissgrid.ch The German version is legally binding.