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Annual Report 2017Siemens Nederland N.V.

Contents

Page Supervisory Board report Report of the Management Board

Consolidated Financial Statements Statement of financial position Income statement Statement of comprehensive income Statement of changes in equity Statement of cash flows

Notes to the consolidated financial statements General disclosures Note 1 Basis of presentation Note 2 Summary of significant judgments, estimates and assumptions Note 3 Accounting policies Note 4 Fair value measurement Note 5 Risk management

Notes to the consolidated statement of financial position Note 6 Non-current intangible assets Note 7 Property, plant and equipment Note 8 Investments in associates and joint ventures Note 9 Non-current receivables Note 10 Inventories Note 11 Projects in process on the instructions of third parties Note 12 Trade and other receivables Note 13 Other financial assets Note 14 Cash and cash equivalents Note 15 Assets held for sale Note 16 Equity Note 17 Deferred tax liabilities Note 18 Other financial obligations (included in non-current liabilities) Note 19 Provisions Note 20 Trade and other payables Note 21 Tax liabilities Note 22 Financial instruments Note 23 Contingent liabilities

Notes to the consolidated statement of profit and loss Note 24 Revenue Note 25 Other operating income Note 26 Finance income and expenses Note 27 Tax on profit from continuing operations Note 28 Related parties Note 29 Compensation of executive management and the Supervisory Board Note 30 Rights to equity instruments Note 31 Employees Note 32 Depreciation, amortization, and impairment losses Note 33 Personnel costs Note 34 Joint operations

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Contents

Page Parent Company Statements Statement of financial position Income statement Notes to the company financial statements Note 1 General Note 2 Accounting policies Notes to the company statement of financial position Note 3 Non-current intangible assets Note 4 Property, plant and equipment Note 5 Investments in group companies Note 6 Non-current receivables Note 7 Inventories Note 8 Projects in process on the instructions of third parties Note 9 Trade and other receivables Note 10 Other financial assets Note 11 Cash and cash equivalents Note 12 Assets held for sale Note 13 Equity Note 14 Provisions Note 15 Deferred tax liabilities Note 16 Other financial obligations (included in non-current liabilities) Note 17 Current liabilities Note 18 Contingent liabilities Notes to the company statement of profit and loss Note 19 Related parties Note 20 Financial instruments Note 21 Employees Note 22 Depreciation, amortization, and impairment losses Note 23 Personnel costs Note 24 Audit fees Note 25 Compensation of the board Note 26 Events after the reporting date Other information Statutory rules concerning result appropriation Independent auditor’s report

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2017 Supervisory Board report

The Siemens Nederland N.V. Supervisory Board oversees the Managing Board's policies and assists the

Managing Board with advice. The Supervisory Board holds an ordinary meeting every quarter, partly together with

the Managing Board. At this meeting the Board discusses day-to-day business and the results achieved compared

to the approved budget on the basis of financial reports. Developments in the Siemens Group in the Netherlands

are also discussed, along with potential acquisitions and carve-outs. The Legal & Compliance topic is covered at

every meeting, as are any developments related to personnel and past and future social policy, and safety, health

and working conditions are discussed on the basis of statistics. The sustainability policy is furthermore also a

recurring topic of discussion. The Supervisory Board also attends events for business contacts and personnel. As

a rule there is always a member of the Supervisory Board present at the consultation meetings with the Works

Council.

Meeting of December 7, 2016

At this meeting the Supervisory Board discussed the annual financial accounts for the 2016 fiscal year and

drafted a preliminary report on them. Mr. Pierer von Esch reported on the Audit Committee meeting of December

6, 2016. The moving parameters of Dutch economy, the challenges Europe will face and the new opportunities

Siemens creates in the numerous sectors were explained. Siemens’ involvement in the energy paragraph was

discussed as well as digitalization, business trends and other new projects.

Meeting of April 12, 2017

For this meeting, the Supervisory Board members were informed in writing, as a regular meeting did not take

place. They were updated on the business highlights, the quarterly financial report, mergers and acquisitions,

legal and compliance, and issues regarding environment, health and safety, which are very high on the agenda of

the Board of Siemens AG.

Meeting of June 28, 2017

The Managing Board informed the Supervisory Board of the half-yearly results and the main lines of the strategic

policy, the general and financial risks as well as of the Company's management and control systems. The

Supervisory Board was notified about the Audit Committee meeting of June 27, 2017,

in which risk assessment and Enterprise Risk Management, audit scope and planning with EY among other things

were discussed. Furthermore, the Supervisory Board was informed about the status of the merger with Gamesa,

which would result in a carve-out of the Wind division and the Wind Service business. Also, the acquisition of the

Dresser Rand entities was discussed. The EHS strategy 2016-2020 was introduced.

Meeting of September 14, 2017

The meeting has discussed the governance of the regional companies in view of the envisaged vertical structure

of the company. The Supervisory Board also spoke extensively about developments such as digitalization,

automation and electrification and their influence on future business operations.

We thank the Managing Board and all employees for their efforts and commitment during the past year.

The Hague, December 8, 2017

Supervisory Board

Siemens Nederland N.V.

C. Kaeser, Chairman

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Managing Board Report

The financial and economic crisis is well and truly over. Economic growth in the Netherlands is strong, resulting in a level of

confidence among consumers and investors that was inconceivable just a few years ago. This presents our company

opportunities for growth, for example in areas such as modernization of (public) infrastructure, energy-efficiency in the built

environment and affordable, high-quality healthcare. It also presents our company with challenges to transition our portfolio

from traditional power generation and the oil and gas market, to renewable energy production. Both within our company, as

within society, we need to create momentum for several much-needed transformations. These include the energy transition,

the digitalization of industry and the development of a future-proof labor force. In all these areas, Siemens Nederland has a

valuable contribution to make.

About Siemens Nederland

At the end of the 2017 financial year, Siemens Nederland consisted of six divisions (Power and Gas, Energy Management,

Building Technologies, Mobility, Digital Factory, Process Industries and Drives) and one subsidiary (Siemens Healthineers).

During the year under review, the Wind Power & Renewables division was sold to another Siemens entity, as part of the

division’s merger with Gamesa. The portfolio includes products, systems, installations and services. At the end of the year

under review, Siemens Nederland had 2,058 permanent employees.

Organizational structure

Siemens Nederland N.V. is a wholly-owned subsidiary of Siemens International Holding B.V., with its registered office in

The Hague, and forms part of the fiscal entity managed by Siemens International Holding B.V. All parties in this entity share

joint and several liability. Siemens International Holding B.V. is ultimately a wholly-owned subsidiary of Siemens AG, with its

head offices in Berlin and Munich. During the year under review, Bernard Fortuyn retired as head of the Power and Gas and

Energy Management divisions and as a member of the Managing Board. The Managing Board now consists of two

members: Godert van der Poel (CFO) and the undersigned.

Key figures

From continuing operation Siemens Nederland closed the year with sales of 844.1 million euros, which together with new

orders amounting to 764.7 million euros and a net profit of 65.2 million euros, both achieved across the whole spectrum of

our portfolio in the past year, gives us confidence and continuity for the years ahead. Discontinued operations relates to the

Wind Power activities, which was sold in the current year and Healthcare business which will be sold in the first quarter of

fiscal year 2018. Besides Healthcare, the Mechanical Drives business unit will be demerged as separate company and sold

outside the Company’s consolidation group. Due to the upcoming sale, figures of the Healthcare business have been

classified as held for sale. Net profit from discontinued operations is 128.2 million euros which is inclusive of a gain of 113.0

million euros resulting from the sale of the Wind Power business. In total net profit of the year amounts to 193.4 million

euros. Siemens Netherlands N.V. reached at the end of fiscal year 2017 a reduction in CO₂ emissions of 21% (compared to

2014). The number of women in management positions has grown to 11.9%. In the fiscal year has been one compliance

related incident still under investigation. The Lost Time Injury Frequency Rate (LTIFR), a metric for injuries that occurred in

the workplace that resulted in an employee's inability to work the next full work day, of Siemens Netherlands N.V. ended at

0.69. (lost time injuries per every 1,000,000 hours worked) Health related absenteeism was 2.4%.

Financial results and developments

Net working capital decreased compared to prior year. In consequence, the financial credit balance available on demand

with the parent company deteriorated compared to the previous fiscal year. Mainly as a result of the net profit of 193.4

million euros, solvency ratio, defined as equity / total assets, at September 30, 2017 amounts to 42% compared to 37% as

of September 30, 2016. Siemens Nederland N.V. intends to distribute annual profit of 193.4 million for fiscal 2017 as a

dividend. No major changes in the funding structure of the firm are expected.

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Portfolio and strategic choices

As outlined in our Vision 2020 strategy, Siemens focuses on markets in which we can deliver maximum added value, and

which offer the company a solid perspective for long-term growth. In these various markets, we focus on electrification,

automation and digitalization as our key strategic priorities.

Electrification

One of our key strategic priorities is (and always has been) to provide solutions throughout the electrification chain. As one

of the participants in the ‘Energy Agreement’, which the Dutch government concluded with businesses and NGOs in 2013,

Siemens directly contributed to a sharp fall in the cost price of offshore wind energy. During the year under review, we also

worked on the infrastructure needed for efficient and flexible transport of renewable energy, building converter stations for

the COBRA cable which will connect the Dutch and Danish energy markets. On a more fundamental level, Siemens was

one of the initiators of the ‘Transitiecoalitie’, a partnership of 57 large companies that aims to speed up the energy transition

and in 2017 called on the new Dutch government to create the necessary conditions. Our aim is to achieve carbon-

neutrality by 2050 and to exceed the goals set out in the Paris agreement, by drawing up an ‘Energy agreement 2.0’.

Energy efficiency in the built environment and in transport and logistics are crucial areas requiring substantial progress in

the Netherlands. The reorganization of our Building Technologies division (see below) is squarely aimed at the former, while

through our partnership with VDL we help expand the Dutch fleet of electric buses in public transport.

Automation

Siemens’ automation solutions make a valuable contribution to a more modern and efficient infrastructure. During the 2017

financial year we worked on an extensive renovation of the Nederrijn/Lek weir ensemble, which plays a crucial role in the

distribution of surface water in the Netherlands and in ensuring efficient inland shipping. For NS Fiets we realized the first of

47 modern, fully automated bicycle garages, making the bike a more attractive option for the ‘first and last mile’.

Digitalization

Via the MindSphere platform Siemens enables clients to manage and analyze data gathered from machines and physical

infrastructure, in order to improve the efficiency and speed of a wide variety of processes. During the year under review we

worked on digitalization with clients in a number of areas. In Rotterdam we contributed to the launch of the first large-scale

smart grid in the Netherlands, allowing for a more flexible relationship between energy supply and demand. Via the Talking

Traffic project with Rijkswaterstaat (part of the Dutch ministry of Infrastructure and the Environment) we developed cloud

services to help improve traffic flow and lower emissions. A particular focus is digitalization in industry. It is generally

recognized that digitalization furnishes a unique opportunity to revive the Dutch manufacturing industry, increasing its global

competitiveness. A prime example is the collaboration with Airborne, which engineers and manufactures composites. The

digitalization of complex production processes makes it possible to develop more applications for this extremely light and

robust material. Our cooperation includes the Airborne Siemens Fieldlab Experience Center, a platform for education,

workshops and demonstrations, in cooperation with knowledge institutes and industrial partners.

Innovative partnerships

The solutions Siemens delivers are based on innovative technology, as well as a willingness to enter long-term partnerships

built on mutual trust and a close working relationship with customers. For example, in recent years Siemens Healthineers

has developed innovative partnerships with several Dutch hospitals and research institutions, enabling them to invest in the

quality and efficiency of patient care. In 2017, a new Managed Equipment Solutions (MES) contract was concluded with the

Tergooi Ziekenhuis, where Siemens will supply and maintain all medical imaging equipment for the next 15 years. Other

Siemens divisions have developed similar types of partnerships. For example, the Building Technology division offers

Energy Performance Contracts, under which investments in energy efficiency are financed by guaranteed energy savings.

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Sustainable and transparent

Siemens wants to be the first major industrial company in the world with a neutral CO₂ footprint by 2030. Siemens

technology is helping our customers improve their energy efficiency. Thanks to Siemens’ green portfolio they have achieved

a reduction of 521 million tons until fiscal year 2016 (487 until 2015), since the beginning of fiscal 2002, in their CO₂

emissions worldwide. In addition, Siemens is also continuously reducing its own CO₂ footprint. For instance, in the

Netherlands the Siemens offices in The Hague have been extensively renovated between 2014 and 2016, resulting in

structural energy savings of 25%. Along with our efforts to reduce emissions from business travel by 25% in 2019

(compared to 2014), this presents a major step forward on our journey to a carbon-neutral future.

Besides being sustainable, Siemens also aims to be a transparent company, with a clear policy and objectives for its

stakeholders. In the latest transparency benchmark initiative by the Ministry of Economic Affairs and the Netherlands

Institute of Chartered Accountants, Siemens Nederland was named as one of the three most transparent companies in the

technology sector.

Diversity

A key ambition for Siemens Nederland is to have balanced representation, in terms of gender diversity and diversity in the

wider sense. The cornerstone of Siemens’ recruitment and appointment policy is that a person’s suitability for a post is the

first and only criterion. Within this basic framework, our Global Diversity Initiative aims to promote diversity, by valuing and

utilizing unique differences among employees. Special attention is given to the number of women in management positions.

Although at the end of the year under review the Managing Board does not yet include any women, the Supervisory Board

does meet legal requirements. The number of women in management positions has grown to 11.9 (compared to 7.5% in

2015), and includes a division manager and a member of the Supervisory Board.

Strategic choices

To further expand our market position, it is important to make clear-cut portfolio choices, to mobilize motivated and highly

qualified employees, and to utilize our time and resources in a targeted manner. In the year under review the merger

between the Siemens Wind Power division and the Spanish wind turbine builder Gamesa was finalized. Siemens also

announced its intention to merge the Mobility division with French rail infrastructure provider Alstom, creating a “European

champion in mobility”, in the words of Siemens CEO Joe Kaeser. The mergers mark a new approach to our organizational

structure. The large, centralized conglomerates that dominated the 20th century were a product of an age in which money

was scarce and advantages of scale often proved decisive. Today, success increasingly depends on knowledge, creativity

and the ability to innovate in close cooperation with external partners and customers. This requires greater organizational

flexibility. Siemens is transforming from a giant tanker ship into a fleet of agile vessels. Strategic choices are also necessary

on a national level. In the Netherlands, changing market conditions required a reorganization of the Building Technologies

division. In the face of a steadily decreasing market for installation and servicing of fire alarm systems, some sixty jobs had

to be cut. At the same time, new employees with different qualifications were hired to take advantage of a substantial

growth market: smart, automated systems for increasing energy efficiency in the built environment. The reorganization was

finalized in 2017 and by the end of the fiscal year under review, the division was clearly back on track in terms of profits.

The strategic repositioning of the Building Technologies division illustrates an important trend and challenge throughout our

organization: market developments (in particular the shift towards more automated and digital solutions) require new skills

and expertise.

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Future perspectives

In 2017, the Dutch economy proved to be in excellent shape. Confidence among consumers and investors is high, and is

underpinned by impressive growth figures. This has created a climate in which we can – and must – invest in the long-term

future of our economy. The new Dutch government has taken up the challenge by drawing up what has been called the

‘greenest’ coalition agreement in history. It has committed to unprecedented investments in the energy transition, paving the

way for a new ‘Energy Agreement’. This commitment is shared by the private sector, which is keenly aware of the fact that

the energy transition represents an economic opportunity. We therefore expect large investments in areas such as (smart)

power grids, renewable energy generation, and energy savings in industry and the built environment. Siemens’ own

headquarters in The Hague, the first existing building to receive LEED Platinum certification, represents a strong showcase

of our abilities in this area. A second potential growth engine for our company is digitalization. Our Digital Factory division

has so far taken the lead in developing ‘smart’ solutions for (and with) customers. In 2017, all divisions have drawn up

strategies for the potential of digitalization in their markets: from personalized healthcare to smart grids and intelligent

building automation. Our success in this area will to a large extent depend on the quality and expertise of our (current as

well as future) employees. Therefore, we will continue to invest in acquiring new talent and in developing the potential of our

current workforce. Our achievements during the year under review give us every reason for confidence in our ability to seize

these various opportunities. Our financial position is healthy, we have again proved capable of executing demanding, large-

scale projects within budget and on time, and we have expanded valuable partnerships with key customers, authorities and

knowledge partners. Our portfolio of products, services and solutions is a close match for some of the most urgent

challenges they face, giving us a solid basis for future growth.

On 16 November 2017 Siemens AG announced measures in the Power & Gas and Process Industries & Drives divisions.

Structural changes in the oil and gas and power generation market, forced Siemens to take measures in the number of sites

and jobs worldwide. Part of this restructuring program is the intended closure of the site of Siemens Netherlands in

Hengelo. Approximately 650 people are employed on this site.

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Risk management

Siemens is subject to several risks in its daily activities, which risks are classified as strategic, operational, financial or

compliance risks. Good risk management is crucial to control these risks, since it allows Siemens to identify potential

problems before they occur so that risk-handling activities may be performed as needed to mitigate adverse impacts on

achieving objectives

Organization

The Management Board, ultimately responsible for establishing and supervising the risk management system, has

established a risk management committee, which is responsible for developing and monitoring the risk management

policies of Siemens Nederland N.V. The committee regularly reports on its activities to the Management Board. The aim of

the risk policies of Siemens Nederland N.V. is to map out and analyze the risks, determine appropriate risk limits and

controls, and to monitor the risks and compliance with the limits. The risk management policies and systems are evaluated

regularly and adjusted where necessary to changes in the market environment and the Group's activities. Through training

and development as well as on the basis of management standards and procedures, Siemens Nederland N.V. aims to

develop a disciplined and constructive climate in which all employees understand their roles and obligations.

Governance

The governance department of Siemens Nederland N.V. oversees management's monitoring of compliance with the

Group's risk management policies and procedures. In addition, the governance department deals with the adequacy of the

risk management system in relation to the risks to which Siemens Nederland N.V. is exposed. The governance department

together with the audit department of Siemens AG conduct regular and ad hoc reviews of the risk management controls and

procedures and reports its findings to the Management Board. Accordingly, if deficits are detected, it is possible to adopt

appropriate measures for their elimination. This coordination of processes and procedures is intended to help ensure that

the Management Board and the Supervisory Board are fully informed about significant risks in a timely manner.

Reporting

Each quarter, based on a systematic approach, Divisions review and classify risks in terms of likeliness and impact, which is

discussed in Executive Management meetings. On a yearly basis, Division management and representatives from Divisions

and Support units have a teambuilding session, which aims to avoid tunnel vision in determining risks and mitigating

measures. The Management board reports on the effectiveness of risk management and control, after having discussed this

including the main risk items in the audit committee.

Risk appetite

Strategic: Moderate Siemens is prepared to take moderate risks to realize its ambitions

Operational: Very low Siemens has a very low appetite to risks such as Reputation, Customer, HSE, Business Continuity or Information Security. Due to the very nature of part of its business it may have higher project management risks for some of its projects (such as new technology or complexity).

Financial: Very low Siemens Nederland is in a strong financial position in terms of both solvency and solvability and is also able to get additional funds from its mother Siemens AG.

Compliance: None Siemens requires full compliance with all applicable laws and regulations.

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Risk management tools Siemens has implemented and coordinated a set of risk management and control systems which supports in the early

recognition of developments that could jeopardize the continuity of the business. The most important of these systems

include Siemens’ enterprise-wide processes for strategic planning and management reporting. Strategic planning is

intended to support in considering potential risks well in advance of major business decisions, while management reporting

is intended to enable monitoring such risks more closely as business progresses.

Risk management at Siemens builds on a comprehensive, interactive and management-oriented Enterprise Risk

Management (ERM) approach that is integrated into the organization and that addresses both risks and opportunities.

Siemens’ ERM approach is based on the worldwide accepted Enterprise Risk Management – Integrated Framework (2004)

developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The framework connects

the ERM process with our financial reporting process and our internal control system. It considers a company’s strategy, the

efficiency and effectiveness of its business operations, the reliability of its financial reporting as well as compliance with

relevant laws and regulations to be equally important. The ERM process aims for early identification and evaluation of, and

response regarding, risks and opportunities that could materially affect the achievement of Siemens’ strategic, operational,

financial and compliance objectives. The time horizon covered by ERM is typically three years. Siemens’ ERM is based on

a net risk approach, addressing risks and opportunities remaining after the execution of existing control measures. In order

to provide a comprehensive view on business activities, risks and opportunities are identified in a structured way combining

elements of both top-down and bottom-up approaches. Risks and opportunities are generally reported on a quarterly basis.

This regular reporting process is complemented by an ad-hoc reporting process that aims to escalate critical issues in a

timely manner. Relevant risks and opportunities are prioritized in terms of impact and likelihood, considering different

perspectives, including business objectives, reputation and regulatory matters. This top down element ensures that potential

new risks and opportunities are discussed at management level and are included in the subsequent reporting process, if

found to be relevant. Reported risks and opportunities are analyzed regarding potential cumulative effects and are

aggregated within and for each of the organizations mentioned above. Responsibilities are assigned for all relevant risks

and opportunities with the hierarchical level of responsibility depending on the significance of the respective risk or

opportunity. In a first step, assuming responsibility for a specific risk or opportunity involves deciding upon one of Siemens’

general response strategies. Siemens’ general response strategies with respect to risks are avoidance, transfer, reduction

or acceptance of the relevant risk. Siemens’ general response strategies with respect to opportunities are partial or

complete realization of the relevant opportunity. In a second step, responsibility for a risk or opportunity also involves the

development, initiation and monitoring of appropriate response measures corresponding to the chosen response strategy.

These response measures have to be specifically tailored to allow for effective risk management. Accordingly, Siemens has

developed a variety of response measures with different characteristics.

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Identified risks

During 2017 no risks occurred which required changes in the risk management process. Based on the latest risk review as of September 30, 2017 the risks with the highest level of exposure were:

Risk area Risk Measures to mitigate risk Strategic: Increased competition from

current competitors Due to increased competition and overcapacity for new solutions, price pressure increases. Siemens strives to mitigate this by focusing offers not only on price-level and features but also by value creation for customers, moving from supplier to technology partner. To achieve such a position, Siemens aims as well to strengthen customer relationships.

Portfolio Due to changes in technology and market developments

Siemens is constantly reviewing its portfolio. End of fiscal year 2016 such a review resulted in a strategic re-orientation of (part of) its Building Technologies Division. This requires a move towards a more integrated technology approach, focus on lifecycle and total cost of ownership and Building Performance & Sustainability.

Global decline in Oil & Gas Due to the decline of the oil price, Oil & Gas investment has

severely declined. As mitigating measures, Siemens aims to improve market share by changing from project supplier to lifecycle supplier. To increase the competitive positions, Siemens strives to increase collaboration with other Siemens units, increase outsourcing to suppliers with modular production and further “LEAN” production process.

Operational: Project management Professional project management is very important to Siemens,

because a large proportion of its revenue is generated through projects. Customers also expect that the projects are managed in an excellent, innovative, and responsible manner. This applies in particular to major projects and turn-key projects. To meet this expectation, Siemens has implemented a globally harmonized system: PM@Siemens. This is a collective name given to a range of activities aimed at improving project management within Siemens. Examples include process improvements, assessments, and training. PM@Siemens is not a ready-made working method, but a set of guidelines through which we provide good project management guidance that is consistent on key points. The focus of this guidance is on the use of best practices. The aim is to harmonize the standards for good project management and sponsor them within the organization.

Shortage of (especially

technical) personnel Due to a general shortage it is difficult to attract qualified staff. Siemens tries to mitigate this risk by using a comprehensive approach. In particular by further improving existing and extending relationship with schools and universities, offering more internships and traineeships to identify talent besides attempting to relieve the general lack of personnel by promoting technical studies.

IT quality and reliability Due to a global and Siemens wide trend of ongoing outsourcing

the distance between service provider and end-user grows, resulting in additional costs, less quality and less flexibility. To mitigate the risk, Siemens Nederland has in part reversed some outsourcing by having local, own or supplier, on-site staff. To mitigate other issues inherent to the complexities of a Siemens world IT set-up which cannot be independently decided, Siemens Nederland is continuously aligning with HQ possible risk area's or area's for improvement.

Financial: Foreign exchange Siemens is exposed to currency risks as a result of sales and

purchases in currencies other than the functional currency. The risk on virtually all sales and purchases denominated in foreign currency is hedged in full through forward exchange contracts.

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Compliance: Changes of laws, legislations, Codes and Standards

If not dealt with or implemented adequately can lead to non-conformances (fines, limitations, legal cases, negative exposure) Siemens has assigned local governance owners, which review changes of laws, legislation, Codes and standards. In addition, it makes use of databases and experts to support implementation.

Bribing, corruption, adherence

to law This is important since Siemens is doing business in all parts of the world, including countries which score low on the "Corruptions perceptions index" as published by Transparency International. Siemens promotes integrity and acting in accordance with our values, and allows zero tolerance for corruption and violations of principles of fair competition. The Siemens compliance system is divided into 3 action levels: Prevent, Detect and Respond. These action levels encompass a comprehensive system of activities by which Siemens intends to ensure business in full accordance with applicable laws and regulations as well as Siemens' internal principles and rules.

The Hague, December 8, 2017

Chairman of the Management Board

Siemens Nederland N.V.

A.F. van der Touw

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Consolidated statement of financial position Statement of financial position as of September 30 (EUR million) before profit appropriation

Note 2017 2016

Non-current assets

Non-current intangible assets 6 9.8 18.6

Property, plant, and equipment 7 19.7 26.1

Non-current financial assets

Investments in associates and joint ventures 8 0.4 5.0

Non-current receivables 9 7.5 12.7

Total non-current assets 37.4 62.4

Current assets

Inventories 10 4.4 4.0

Receivables

Projects in process on the instructions of third parties 11 223.4 194.6

Trade and other receivables 12 531.7 659.9

Other financial assets 13 6.5 11.3

Cash and cash equivalents 14 2.1 2.6

Total current assets 768.1 872.4

Assets held for sale 15 107.2 41.7

Total assets 912.7 976.5

Equity 16

Issued capital 36.3 36.3

Share premium 150.9 150.9

Retained earnings 6.4 6.3

Other components of equity - -1.5

Profit for the year 193.4 169.1

Total equity 387.0 361.1

Non-current liabilities

Deferred tax liabilities 17 4.0 2.5

Other financial obligations 18 3.5 6.1

Provisions 19 20.2 23.5

Total non-current liabilities 27.7 32.1

Current liabilities

Provisions 19 45.7 50.3

Trade and other payables 20 385.8 440.2

Tax liabilities 21 3.1 51.1

Total current liabilities 434.6 541.6

Liabilities directly related with assets held for sale 15 63.4 41.7

Total liabilities 525.7 615.4

Total equity and liabilities 912.7 976.5

The notes are an integral part of these consolidated financial statements.

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Consolidated income statement

Fiscal year from October 1 through September 30 (EUR million)

Note 2017 2016*

Restated

Continuing operations

Revenue 24 844.1 1,133.0

Other operating income 25 0.5 -

Total operating income 844.6 1,133.0

Cost of sales 662.3 841.7

R&D expenses 2.0 1.4

Selling expenses 86.9 79.4

General and administrative expenses 2.5 3.6

Other operating expenses 0.3 4.6

Total operating expenses 754.0 930.7

Operating profit 90.6 202.3

Finance income 26 0.1 -

Finance costs 26 -2.4 -1.7

Income from other equity investments and group companies - -

Profit from continuing operations, before tax 88.3 200.6

Tax on profit from continuing operations 27 -23.1 -49.2

Profit from continuing operations, after tax 65.2 151.4

Discontinued operations

Profit from discontinued operations, after tax 15 128.2 17.7

Profit after tax 193.4 169.1

The profit after tax is attributable in full to Siemens International Holding B.V., the sole shareholder of Siemens Nederland

N.V.

The notes are an integral part of these consolidated financial statements.

*Due to the intended sale of its Healthcare business, prior year figures have been restated to discontinued operations

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Consolidated statement of comprehensive income

Fiscal year from October 1 through September 30 (EUR million)

Note 2017 2016

Profit for the year, net of tax 193.4 169.1

Other comprehensive income

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

Net movement on cash flow hedges 2.0 -2.0

Income tax effect -0.5 0.5

Net other comprehensive income to be reclassified to profit or loss in subsequent periods 1.5 -1.5

Other comprehensive income not to be reclassified to profit or loss in subsequent periods:

Re-measurement gains (losses) on defined benefit plans 19 0.1 3.0

Income tax effect 19 -0.0 -0.8

Net other comprehensive income not to be reclassified to profit or loss in subsequent periods 0.1 2.2

Other comprehensive income for the year, net of tax 1.6 0.7

Total comprehensive income for the year, net of tax 195.0 169.8

(Attributable in full to the shareholder of Siemens Nederland N.V.)

The notes are an integral part of these consolidated financial statements.

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Statement of changes in equity

Issued capital

Share premium

Retained earnings

Cash flow hedge

Profit for the year Total

At September 30, 2015 36.3 150.9 4.1 0.0 72.6 263.9

Profit after tax - - - - 169.1 169.1

Other comprehensive income - - 2.2 -1.5 - 0.7

Total comprehensive income - - 2.2 -1.5 169.1 169.8

Dividends - - - - -72.6 -72.6

Allocations to reserves - - - - - -

At September 30, 2016 36.3 150.9 6.3 -1.5 169.1 361.1

Profit after tax - - - - 193.4 193.4

Other comprehensive income - - 0.1 1.5 - 1.6

Total comprehensive income - - 0.1 1.5 193.4 195.0

Dividends - - -0.0 - -169.1 -169.1

Allocations to reserves - - - - - -

At September 30, 2017 36.3 150.9 6.4 - 193.4 387.0

-15-

Consolidated statement of cash flows

Fiscal year from October 1 through September 30 (EUR million)

2017 2016

Operating profit before tax from continuing operations 90.7 211.2

Operating profit before tax from discontinued operations 133.9 18.3

Operating profit before tax 224.6 229.5

Adjustments to reconcile operating profit to net cash flow:

Depreciation, amortization, and impairment losses 9.1 10.8

Change in provisions -3.2 4.6

Working capital adjustments:

Change in receivables 6.8 35.5

Change in inventories -0.2 0.6

Change in trade and other payables -55.6 -146.5

Interest received 0.5 0.5

Interest paid -3.6 -4.8

Income from group companies (after tax) - 0.0

Tax payments (income taxes) -72.1 -11.3

Net cash flows from operating activities 106.3 118.9

Payments for property, plant, and equipment -7.2 -7.7

Payment for increase in group companies - -0.4

Proceeds from sale of property, plant, and equipment 1.5 0.0

Net cash flows from/used in investing activities -5.7 -8.1

Change in financing receivables 68.0 -38.2

Dividends paid -169.1 -72.6

Net cash flows used in financing activities -101.1 -110.8

Change in cash and cash equivalents

Cash and cash equivalents at October 1 2.6 2.6

Cash and cash equivalents at September 30 2.1 2.6

-0.5 0.0

The notes are an integral part of these consolidated financial statements.

-16-

Notes to the consolidated statement of financial position and the consolidated income statement

General disclosures

The consolidated financial statements of Siemens Nederland N.V. (hereafter “the Company”), having its legal seat in The

Hague, the Netherlands, as of September 30, 2017 were approved for publication on the basis of a resolution of the

Management Board and Supervisory Board of December 8, 2017 and will be filed with The Chamber of Commerce, The

Hague under registration number 27015771.

Siemens Nederland N.V. focused its activities in fiscal year 2017 on six divisions namely Power and Gas, Energy

Management, Building Technologies, Mobility, Digital Factory, Process Industries and Drives and a Healthcare subsidiary

which is now held for sale. The portfolio includes products, systems, installations and services. Siemens Nederland N.V.

has more than 2,000 employees, making it one of the largest electrical and electronics engineering companies in the

Netherlands. It is a wholly-owned subsidiary of Siemens International Holding B.V., The Hague, and forms part of the tax

group led by Siemens International Holding B.V. All members of this group are jointly and severally liable for the taxes

payable by the tax group. Siemens International Holding B.V. is ultimately a wholly-owned subsidiary of Siemens AG, which

has its headquarters in Berlin and Munich, Germany.

Unless stated otherwise, all amounts are in millions of euros.

-17-

Accounting policies

(1) Basis of preparation

(1.1) Declaration of conformity

The consolidated financial statements of Siemens Nederland N.V. have been prepared in accordance with the International

Financial Reporting Standards as adopted in the European Union as of September 30, 2017 (IFRS) applicable to fiscal

years ended as of September 30, 2017.

(1.2) Measurement basis

Unless stated otherwise, the consolidated financial statements have been prepared on the basis of historical cost, with the

exception that derivative financial instruments are measured at fair value and any changes in value are recognized in the

income statement; the methods for determining fair value are explained in more detail in note 4.

The financial statements are presented in euros, the Company's functional currency.

(1.3) Changes to accounting policies

Newly applied standards

The Company has applied all relevant IFRS standards and IFRIC interpretations in effect and adopted by the European

Union as of September 30, 2017 and applicable to fiscal years ended on September 30, 2017. The application of those

standards and interpretations had no effect on the financial position of the Company and did not give rise to additional

disclosure requirements.

Standards issued but not yet effective

IFRS 15 Revenue from Contracts with Customers

This standard replaces IAS 18 Revenue and IAS 11 Construction Contracts and sets out a single framework for revenue

recognition. Its core principle is that an entity recognizes revenue to depict the transfer of promised goods or services to

customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those

goods or services. The Company early-adopts IFRS 15 and therefore comparable figures are required for the Company

statements of 2018. The Company analyzed its existing projects for differences in recognition between the existing

standards and IFRS 15. Based on this in-depth review, the Company is of the opinion that the new standard will not have a

material impact on results. On the 2017 financial statements there would be no impact on profit from operations and a shift

of revenue to costs of 2.5 million EUR.

IFRS 16 Leases

This standard replaces IAS 17 and provides a single lessee accounting model, requiring lessees to recognize assets and

liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. A lessee

measures right-of-use assets similarly to other non-financial assets (such as property, plant and equipment) and lease

liabilities similarly to other financial liabilities. As a consequence, a lessee recognizes depreciation of the right-of-use asset

and interest on the lease liability. Since the standard is effective for annual reporting periods beginning on or after 1 January

2019, Siemens is still reviewing the impact on its financial statements.

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IFRS 9 Financial Instruments

This standard replaces IAS 39 and specifies how an entity should classify and measure financial assets, financial liabilities,

and some contracts to buy or sell non-financial items. IFRS 9 requires an entity to recognize a financial asset or a financial

liability in its statement of financial position in a category reflecting the measurement, which is based on the contractual

cash flow characteristics and the entity’s business model for managing the financial asset. The Company has analyzed its

existing positions for differences in recognition between the existing standard and IFRS 16 and does not expect material

impact from the transition. In particular not from IAS 39 Incurred Loss Model to IFRS 16 Expected Credit Loss Model, since

the Company’s financial assets mainly relate to intragroup receivables which are due within the Siemens Group as part of

cash pooling.

(1.4) Scope of consolidation

The consolidated financial statements include the financial statements of the subsidiaries. All companies are accounted for

as subsidiaries if the Company has control over the entity's management and financial policies on the basis of additional

arrangements. In the process of consolidation, intercompany profits, revenue, expenses, and income, as well as receivables

and liabilities between the consolidated companies are eliminated. The Company's financial statements and those of the

subsidiaries are based on consistent accounting policies. The financial statements of subsidiaries are fully consolidated.

Interests in the assets and profit or loss attributable to third parties are reported separately in the consolidated statement of

financial position and the consolidated income statement.

As of September 30, 2017, Siemens Nederland N.V. held the following consolidated equity investment (asset held for sale):

Name Registered office

Share of issued capital

as of September 30, 2017

Share of issued capital

as of September 30, 2016

Siemens Healthcare Nederland B.V. The Hague 100% 100%

Siemens Nederland N.V. has assumed joint and several liability for liabilities arising from the legal acts performed by

Siemens Healthcare Nederland B.V. as from October 1, 2012 within the meaning of section 403 (1f) of Book 2 of the Dutch

Civil Code.

(1.5) Business combinations

All business combinations are accounted for using the purchase method or, if permitted, the carry-over method.

Under the purchase method, the cost of the acquisition is determined on the basis of the fair value of the consideration paid

for all assets and liabilities as of the acquisition date. The identifiable assets and liabilities arising from the acquiree are

initially measured on the basis of their fair values as of the acquisition date. If the cost of the acquisition exceeds the fair

value of the identifiable assets and liabilities, the difference is recognized as goodwill.

Under the carry-over method, all carrying amounts at the acquisition date are carried over to the statement of financial

position and the income statement; the comparative figures do not have to be adjusted. This happens after the values have

been put on the same basis as those applied in the current financial statements. The Company normally opts for the carry-

over method when an entity is acquired within the Siemens Group. No business combinations have occurred in the current

fiscal year.

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(2) Significant judgments, estimates, and assumptions used in this report

Judgments

In the application of financial reporting principles, management has made judgments involving estimates as well as the

following judgments with the most significant impact on the amounts included in the financial statements:

Operating lease liabilities – the Company as lessor

The Company leases out various building security installations. The Company has determined that it has retained all

significant risks and rewards incidental to ownership of these assets and therefore accounts for them as operating leases.

Finance lease liabilities – Siemens as lessor

The Company leases an office building for which it has determined that it retains all significant risks and rewards incidental

to ownership of these assets. Consequently the Company accounts for them as a finance lease.

Estimates and assumptions

The most important assumptions about the future and other significant sources of uncertainty associated with estimates as

of the reporting date, which entail a major risk of substantial adjustment to the carrying amounts of assets and liabilities in

the next fiscal year, are presented below.

Impairment of goodwill

At least once a year, the Company tests goodwill for impairment. This involves estimating the value in use of the cash

generating units to which the goodwill has been allocated. To estimate value in use, management has to estimate the

expected future cash flows of the cash generating unit and also determine an adequate discount rate for calculating the

present value of these cash flows. The goodwill carrying amount as of September 30, 2017 was EUR 9.8 million

(September 30, 2016: EUR 11.7 million). See note 6 for further information.

Pension and other post-employment benefit plans

The costs of post-employment defined benefit plans are determined on the basis of actuarial methods. The actuarial

methods comprise assumptions made about discount rates, expected returns on plan assets, future salary increases,

mortality rates, and the future indexation of pension payments. Because of the long-term nature of these plans, such

estimates are subject to significant uncertainty. The estimate at the beginning of the fiscal year determines the net periodic

cost of the fiscal year. At the end of the fiscal year, the amount of the pension provision is recalculated on the basis of

actual figures for the year ended and adjusted actuarial assumptions about the future. After this recalculation, differences in

the net obligation as a result of adjustments to assumptions and/or variations in estimates are added to pension provisions

and the corresponding expense or income recognized directly in equity (actuarial gains or losses). The defined benefit

arrangement only relates to an executive management plan without active participants, since it was discontinued in the prior

fiscal year. The Company agreed a defined benefit plan with its employees but in 2011 has transferred this arrangement

(except the executive management pension plan) to the Pension Fund for the Mechanical and Electrical Engineering

Industry (PME). See note 19 for further information.

Development costs

Development costs are capitalized in accordance with the accounting policies described in note 6. When determining the

amount to be recognized, management makes assumptions about the expected future economic benefits arising from the

assets, the discount rate to be applied, and the period in which the expected income will be generated.

-20-

Revenue recognition for projects

A significant portion of Siemens' revenue is generated in long-term projects. Revenue is recognized in line with the stage of

completion of the project in process (percentage of completion method for construction contracts, on the basis of the cost-

to-cost variant). For each project, the total revenue to be generated is determined, based on contract value. In addition, the

total costs to be incurred to complete the project are estimated. During the project, project revenue is recognized on the

basis of the ratio of costs actually incurred to total expected costs. In doing so, only progress-relevant costs are taken into

consideration. Revenue is not recognized for costs that are temporarily not progress-relevant, but these costs are presented

as long-term projects in the statement of financial position, under the inventories and work in process line item. Costs that

are permanently not progress-relevant are directly charged to the income statement without recognizing revenue. The

estimation element of the cost-to-cost variant of the percentage of completion method requires estimates and continual

updates of the total expected costs.

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(3) Accounting policies

(3.1) Goodwill

Goodwill, which arises during the acquisition of equity interests and/or independent business units, is the amount by which

the cost of the business combination exceeds the acquirer's interest in the net fair value of the identifiable assets, liabilities,

and contingent liabilities.

Goodwill is measured at cost less any accumulated impairment losses.

Goodwill is not amortized but tested annually for impairment. This is done more often if events or changes in circumstances

indicate that the carrying amount may be impaired. The impairment loss to be recognized is determined on the basis of an

assessment of the net realizable value of the cash generating unit to which the goodwill has been allocated. If the net

realizable value of the cash generating unit is lower than its carrying amount, an impairment loss is recognized.

(3.2) Other non-current intangible assets

Non-current intangible assets include, among other things, the direct costs of designing, building, testing, setting up, and

customizing an enterprise resource planning (ERP) system for internal use and for use by other corporate units. These

direct costs are amortized over the expected useful life of 3 years.

(3.3) Property, plant, and equipment

Property, plant, and equipment is initially recognized at cost. Property, plant, and equipment is depreciated using the

straight-line method over the estimated useful lives of the assets; a residual value of zero is assumed (except for land).

Depreciation of investments made in the current period commences on the date the asset is used for the first time.

Machinery and installations are depreciated applying the component approach, under which the depreciation period is

differentiated according to the nature of the asset. Land is not depreciated.

The annual straight-line depreciation charges, expressed as a percentage of cost, are as follows:

%

Land and buildings 0 to 2.5

Machinery and installations 10 to 25

Other durable operating assets 20 to 33

In the case of major investment projects, financing costs incurred during construction are recognized as part of the cost of

the item of property, plant, and equipment concerned.

Capitalized leased assets are depreciated over the shorter of estimated useful life or lease term of the asset, if there is no

reasonable assurance that Siemens will take ownership at the end of the lease term.

Assets held for sale are measured at the lower of their carrying amounts or fair value less costs to sell.

-22-

(3.4) Impairment of other non-current intangible assets and property, plant, and equipment

The carrying amounts of other non-current intangible assets and property, plant, and equipment are tested for impairment if

there have been changes or circumstances that suggest that the carrying amount of the asset may not be recovered. The

recoverability of assets in use is determined by comparing their carrying amounts with the present value of the future net

cash flows the assets are expected to generate. If the carrying amount of an asset is higher than the estimated future cash

flows or the direct realizable value less costs to sell, an additional write-down is recognized and charged to the income

statement for the difference between the carrying amount and the net realizable value of the asset. Assets available for sale

are measured at the lower of carrying amount or market value less costs to sell.

(3.5) Non-current financial assets

Interests in non-consolidated equity investments, where significant influence is exercised over the operating and financial

policies, are measured at historical cost less any write-downs required for permanent impairment in accordance with the

exemption allowed under IAS 28.17. They are accounted for using the equity method only if they do not meet the

requirements of this exemption. The measurement is then equal to the share of the net assets as determined in the latest

available annual or quarterly financial statements of these equity investments, adapted to Siemens policies (plus any

goodwill allocated to it). If Siemens Nederland N.V. has not accepted liability in excess of the value contributed to the capital

of the equity investment, it will never be measured at lower than zero.

Receivables arising from financial leases are measured at the present value of the lease installments still to be received.

Other non-current receivables as well as receivables arising from the equity investments are measured at amortized cost

less any allowances deemed necessary for receivables that may be uncollectable.

(3.6) Inventories and projects in process on the instructions of third parties

Inventories of merchandise, raw materials, and semi-finished goods are measured at the lower of average cost or market

value. Allowances necessary as a result of obsolescence are recognized on these amounts. Work in process is measured

on the basis of the direct costs incurred for the respective contracts, consisting primarily of material consumption, costs of

third parties and processing costs, as well as an allocation for indirect costs. Long-term projects are measured at net

realizable value, in relation to the progress of the project in process (percentage of completion method, cost-to-cost variant).

If any project is expected to be completed with a loss, a provision is recognized for the total loss still expected to be

incurred. This also applies to contracts won for which no work has yet been performed. The provision is presented in the

statement of financial position as order-related provisions under the provisions line item. If for any project the amount of

payments received in advance exceeds the amount of costs incurred or the net realizable value of the work in process, the

balance of the project concerned is reported under current liabilities (advance payments received on orders).

(3.7) Receivables

Receivables are initially recognized at fair value (including transaction costs) and subsequently at amortized cost less any

allowances deemed necessary for receivables that may be uncollectable. Receivables include liquid assets that are placed

in interest-bearing investments within the Siemens Group as part of cash pooling.

-23-

(3.8) Cash and cash equivalents

Cash and cash equivalents are measured at nominal values. Cash and cash equivalents include all credit balances with

banks, excluding affiliated companies, and short-term, highly liquid investments with an original maturity of three months or

less, which can be directly converted into cash and cash equivalents.

(3.9) Provisions

General

Provisions are recognized, if:

(a) there is a legal or constructive obligation as a result of a past event;

(b) it is probable that an outflow of resources will be required to settle the obligation; and

(c) the amount of the obligation can be reliably estimated.

If the Company expects to receive compensation for the provision in full or in part, for example as a result of an insurance

policy, the compensation is recognized as a separate asset, providing it is virtually certain that the compensation will be

received. The expense incurred in connection with the provision is recognized in the income statement, less any

compensation. If the effect of the time value of money is material, the provisions are discounted to present value by

applying a discount rate before tax, which, where applicable, takes into account the specific risks associated with the

obligation. If the provision is discounted, the increase in the provision with the passage of time is charged to financing costs.

Warranty provisions

Warranty provisions relate to warranties issued on products, systems, and projects sold. They are measured at the present

value of the expected settlement costs. These settlement costs are estimated on the basis of costs the Company has

incurred in the past for the sale of comparable products and/or on the basis of technical assessments. The majority of

warranty obligations have duration of one to two years.

Onerous contracts

A provision for onerous contracts is recognized in the statement of financial position, if the benefits expected to be

generated for the Company from a contract are lower than the unavoidable costs of meeting the obligations under the

contract. The provision is measured at the present value of the costs expected to terminate the contract or, if lower, the

present value of the net costs expected to continue to perform the contract. Before recognizing a provision, the Company

recognizes any impairment write-downs on the assets related to the contract.

-24-

(3.10) Pensions

Defined contribution plans

Defined contribution plans are post-employment benefit plans under which an entity pays fixed contributions into a separate

entity and will have no legal or constructive obligation to pay further contributions. Obligations in connection with

contributions to defined contribution plans are recognized as personnel expenses in the income statement when the

amounts fall due. Amounts paid in advance are recognized as assets, providing they can be repaid in cash or offset against

future payments.

Defined benefit plans

Defined benefit plans are post-employment benefit plans other than defined contribution plans. The net obligation of the

Company arising from defined benefit plans is calculated separately for each plan by estimating the pension benefits the

employees have accrued in exchange for their services in the reporting period and in prior periods. These pension benefits

are discounted to determine present value. Any unrecognized past service costs and the fair value of plan assets are

deducted. The discount rate reflects the yields at the reporting date on prime-rated corporate bonds with maturities that

approximate those of the liabilities of Siemens Nederland N.V. They are denominated in the same currency in which the

benefits are expected to be paid. The calculation is made by an actuary annually using the projected unit credit method.

Actuarial gains or losses are recognized directly in equity. As of April 1, 2011 only the executive management pension plan

qualified as a defined benefit plan. See note 19 for further information.

If the calculation results in a positive balance for Siemens Nederland N.V., the asset recognized is limited to an amount that

is no higher than the present value of economic benefits in the form of any future refunds from the plan or reductions in

future contributions to the plan. An economic benefit is available to Siemens Nederland N.V. if it can be realized during the

term of the plan or on settlement of the obligations of the plan.

(3.11) Non-current liabilities

Non-current liabilities are initially recognized at fair value (including transaction costs) and subsequently measured at

amortized cost. Share premiums, discounts, redemption premiums, and transaction costs are allocated to the respective

periods as interest expenses using the effective interest method.

-25-

(3.12) Leases

The determination of whether an arrangement is, or contains, a lease is based on the economic substance of the

arrangement at its inception and requires an assessment of whether fulfillment of the arrangement depends on the use of

one or more specified assets and whether the arrangement transfers the right to use that asset. A reassessment of the

lease after its inception is made only if any one of the following conditions is met:

(a) There is a change in the contractual terms, unless the change only renews or extends the arrangement;

(b) A renewal option is exercised or an extension is agreed to, unless the term of the renewal or extension had initially been

included in the lease term;

(c) There is a change in the determination of whether fulfillment is dependent on a specified asset; or

(d) There is a substantial change to the asset.

If an arrangement is reassessed and is determined to contain a lease (or not to contain a lease), lease accounting is applied

(or ceases to apply) according to the new circumstances from:

(a) If condition a, c, or d is met, the time when the change in circumstances occurs that gives rise to the reassessment;

(b) If condition b is met, the start of the extension period.

The Company as lessee

Operating lease installments are recognized as expenses in the income statement on a straight-line basis during the lease

term.

The Company as lessor

Leases under which the Company retains virtually all risks and rewards of ownership of the asset are classified as operating

leases. The initial costs incurred while negotiating an operating lease are added to the carrying amount of the leased asset.

Leases under which the Company transfers virtually all risks and rewards of ownership of the asset to the customer are

classified as finance leases. If the leased item is a Siemens product or installation, the initial costs are not capitalized but

deducted from the sales margin. If the leased item is not a Siemens product or installation, the initial costs are recognized

as part of the lease receivable.

(3.13) Other assets and liabilities

Other assets and liabilities (if they are financial instruments) are initially recognized at fair value (including transaction costs)

and subsequently measured at amortized cost, with the carrying amount of other assets adjusted where necessary.

(3.14) Foreign currency translation

Monetary assets and liabilities denominated in foreign currency are measured at the rate as of the reporting date. Income

and expenses denominated in foreign currency are translated at the transaction rates in the respective accounting period.

-26-

(3.15) Revenue

Revenue is recognized if it is probable that the economic benefits will flow to the Company and the amount of revenue can

be reliably determined. Revenue is recognized at the fair value of the consideration received, net of discounts and taxes.

Revenue must only be recognized when all of the following specific criteria have been satisfied:

Sale of goods

Revenue is recognized if the significant risks and rewards of ownership have been transferred to the buyer, normally on

delivery of the goods. In the case of long-term contracts, revenue is recognized in relation to the stage of completion.

Rendering of services

Commission for brokering contracts won for other Siemens businesses is recognized in relation to project progress. If the

outcome of the contract cannot be estimated reliably, revenue is recognized only to the extent of the expenses recognized

that are recoverable. Revenues from service transactions are recognized as services are performed. For long-term service

contracts, revenues are recognized on a straight-line basis over the term of the contract or, if the performance pattern is

other than straight-line, as the services are provided, i.e. under the percentage-of-completion method as described below.

Revenue recognition for projects

A significant portion of Siemens' revenue is generated in projects, normally relating to construction contracts. A construction

contract is a binding agreement between Siemens and a customer, under which facilities are constructed, goods are

produced, or (related) services rendered according to the customer's specifications. Related services are for the

construction of non-current assets, such as design, engineering, installation, and construction management.

Revenue is recognized in line with the stage of completion of the project in process (percentage of completion method, on

the basis of the cost-to-cost variant). For each project, the total contract revenue to be generated is determined, based on

the value agreed in the written order that has been accepted. In addition, the total costs to be incurred to complete the

project are estimated. This estimate is updated periodically and approved by authorized individuals in accordance with

internal control regulations. During the project, project revenue is recognized on the basis of the ratio of costs actually

incurred to total expected costs. In doing so, only progress-relevant costs are taken into consideration. Revenue is not

recognized for costs that are temporarily not progress-relevant, but these costs are presented as long-term projects in the

statement of financial position, under the inventories and work in process line item. Costs that are permanently not

progress-relevant are directly charged to the income statement without recognizing revenue.

Leases

Revenue from new finance leases entered into is recognized at the lease inception date at the fair value of the lease

installments to be received.

Interest income

Income is recognized as the interest accrues (using the effective interest method, i.e., the interest rate that discounts the

estimated future cash inflows during the expected useful life of the financial asset to the net carrying amount of the financial

asset).

-27-

(3.16) Income taxes

Current taxes

Current taxes receivable and payable for current and prior years are measured at the amount that is expected to be paid or

recovered within the tax group. The tax amount is calculated on the basis of the substantively enacted tax rates and tax

laws.

Deferred taxes

For deferred tax liabilities, provisions are recognized on the basis of the temporary differences as of the reporting date

between the tax bases of assets and liabilities and the carrying amounts recognized in these financial statements. Deferred

tax assets are recognized for all recoverable temporary differences, unused tax credits, and unused tax loss carry forwards,

to the extent that it is probable that taxable profit will be available to offset the recoverable temporary differences, and the

recoverable temporary differences, unused tax credits, and unused tax loss carry forwards can be utilized.

The carrying amount of deferred tax assets is assessed as of the reporting date and reduced to the extent that it is not

probable that sufficient tax profit will be available against which the temporary difference can be fully or partially utilized.

Unrecognized deferred tax assets are reassessed as of the reporting date and recognized to the extent that it is probable

that sufficient tax profit will be available in the future against which this deferred tax asset can be utilized Deferred tax

assets and liabilities are measured using the tax rates expected to be applicable to the period in which the asset is

recovered or the liability settled, on the basis of the enacted tax rates and tax laws.

Taxes on items directly recognized in equity are likewise recognized in equity instead of the income statement.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to settle tax assets and liabilities on a net

basis and the deferred tax amounts are levied by the same taxing authority on the same taxable entity.

Tax group

Siemens Nederland N.V. and other group companies form a tax group with its parent company in the Netherlands for the

levying of corporation tax. The Group forms a tax group with its parent company for the purpose of value added tax.

(3.17) Consolidated statement of cash flows

The consolidated statement of cash flows has been compiled using the indirect method. Bank overdrafts that can be drawn

directly and form an integral part of the companies' liquidity management are included under cash and cash equivalents in

the statement of cash flows. Any surplus of cash and cash equivalents is invested with financial institutions of the Siemens

Group. If there is any shortfall of cash and cash equivalents, it is borrowed from the same financial institutions. For this

reason, changes in financing receivables from and liabilities to group companies are reported in the statement of cash flows

not as changes in working capital, but on a net basis as cash flows from financing activities.

-28-

(3.18) Financial instruments

Siemens Nederland N.V. and its subsidiaries use financial instruments and derivatives in the normal course of business.

These instruments are recorded under assets and liabilities.

Non-derivative financial instruments

Non-derivative financial instruments include trade receivables, non-current receivables and other receivables, cash and

cash equivalents, borrowings and other financing liabilities, trade payables, and other items payable. Cash and cash

equivalents include cash and bank balances as well as other directly callable deposits. Non-derivative financial instruments

are initially recognized at fair value (including transaction costs) and subsequently measured at amortized cost using the

effective interest method, reduced by impairment losses.

Derivative financial instruments and hedging activities

Siemens Nederland N.V. and its subsidiaries use derivative financial instruments, such as forward currency contracts are

used, to hedge foreign currency risks. Such derivative financial instruments are initially recognized at fair value on the date

on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as

financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The purchase

contracts that meet the definition of a derivative under IAS 39 are recognized in the statement of profit and loss as cost of

sales. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss. The

Company applies hedge accounting, using the cash flow hedging method. When entering into a cash flow hedge, the

hedging relationship is designated and documented, as are the purpose and financial risk management strategy pursued in

entering into the hedging transaction. The documentation provides information about the hedging instrument, the hedged

item or transaction, the type of risk to be hedged, and how the Company will assess the effectiveness of the hedging

instrument in offsetting the risk of changes in the fair value of the hedged item or in the cash flows attributed to the hedged

risk. These types of hedges are expected to be highly effective in offsetting the changes in fair value or cash flows

attributable to the hedged risk; they are continually assessed to determine whether the hedge was substantially highly

effective during the reporting periods for which the hedge was intended. Under cash flow hedging any change in fair value

of the effective portion of the hedged item is recognized as an asset or liability and the corresponding gain or loss is

recognized in other comprehensive income.

(3.19) Subsidies

Subsidies reduce the costs in the line item to which the costs of the subsidized activities were charged. Subsidies are

recognized as soon as there is reasonable assurance that the subsidy will be paid. Main subsidies are from the “WBSO”.

Under this Act, a contribution is paid towards the wage costs of employees directly involved in R&D. The contribution is in

the form of the payroll tax reduction and social security contributions. Subsidies are only recognized in P&L when the actual

related costs are incurred.

(3.20) Share-based payment

The Company grants stock awards as a means for providing share-based compensation to members of the senior

management. Stock awards are subject to a restriction period of about four years and entitle the beneficiary to Siemens AG

shares without payment of consideration following the restriction period. Since fiscal 2012, the allocation of stock awards is

tied to corporate performance criteria. The target attainment for the performance criteria ranges between 0% and 200%.

Half of the annual target amount for stock awards is based on the average of earnings per share (EPS, basic) of the past

three fiscal years. The target attainment determines the number of stock awards upon allocation. Settlement of these stock

awards is in shares following the four-year restriction period. The other half of the annual target amount for stock awards is

based on the share price performance of Siemens shares relative to the share price performance of five important Siemens

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competitors (ABB, Alstom, General Electric, Rockwell and Schneider) during the four-year restriction period. The target

attainment is determined during the four-year restriction period for the stock awards and accordingly, determines the

number of Siemens shares ultimately transferred following the restriction period. If the target attainment is up to 100%,

settlement is in shares. If the target attainment exceeds 100% (up to 200%) an additional cash payment corresponding to

the outperformance results.

The Company decides each year whether or not to grant stock awards. The stock awards are granted once a year, within

30 days of the publication of the financial results. Siemens AG decides annually about the number of stock awards to be

granted to individual members of the Management Board and the total number of stock awards to be distributed to

members of the senior management. The Management Board decides annually about the distribution among the senior

management.

Another form of share-based payment are the Share Matching Plan (SMP) and the Monthly Investment Plan (MIP). The

SMP is for senior management, the MIP is accessible to all employees. Under the SMP, members of senior management

may invest a percentage of their annual variable compensation in this plan. The shares are purchased at the market price at

a predetermined date. SMP participants receive the right to 1 bonus share in Siemens AG for every 3 investment shares

continuously held over a period of at least 3 years. Every year, Siemens AG decides whether to extend the SMP plan by

another year. Under the MIP, employees may invest a percentage of their monthly compensation in this plan. Shares are

purchased at the market price at a predetermined date during the month. Unlike the SMP, the right to bonus shares is not

granted directly. Siemens AG decides once a year whether the shares bought by employees under the MIP plan will be

transferred to the SMP plan, after which they will be processed in accordance with the SMP plan.

In the previous year Siemens introduced another scheme, which is eligible to all employees except for senior management.

This Siemens Profit Sharing (SPS) constitutes a voluntary and discretionary, decided by the Siemens AG board, distribution

of a part of the yearly Siemens Profit to employees below Senior Management of up to EUR 400 million annually in

Siemens Profit Sharing pool. The related costs are accrued over the expected period and charged to all Siemens

companies. Since this scheme is at the sole discretion of the Siemens AG board, no actual shares are awarded but only

costs are accrued. Depending on Siemens AG, the amounts if paid, are settled in cash or shares of Siemens AG.

For all awards and bonus shares provided, rights forfeit if the beneficiary's employment with the Company terminates during

the restriction period. During the restriction period, beneficiaries are not entitled to dividends for the awards and bonus

shares. The awards and bonus shares may not be assigned, sold, or pledged.

The Company pays Siemens AG a consideration for the awards and bonus shares provided and will account for the

transaction as a cash-settled share-based payment. The cost of these cash-settled transactions is measured initially at fair

value at the grant date. This fair value is expensed over the period until the vesting date with recognition of a corresponding

liability. The liability is re-measured to fair value at each reporting date up to, and including the settlement date, with

changes in fair value recognized as expense. The fair value in each fiscal year is calculated by applying a valuation model.

Inputs to that model include an expected weighted volatility of Siemens shares and a market price per Siemens share.

Expected volatility was determined by reference to historic volatilities.

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(4) Fair value measurement

A number of policies and the Group's information provision requirements necessitate the determination of the fair values of

both financial and non-financial assets and liabilities. For measurement and information purposes, fair value has been

determined using the following methods. Where applicable, further information about the bases for determining fair value is

provided in the section of this note applicable specifically to the asset or liability concerned.

Property, plant and equipment

The fair value of property, plant and equipment acquired as a result of a business combination is based on market value.

The market value of real estate is the estimated value at which an item of immovable property can be exchanged in an

arm’s length transaction at the measurement date between a buyer and a seller who are knowledgeable, willing parties. The

market value of other plant, and equipment and inventories is based on quoted market prices for comparable assets and

items.

Intangible assets

The fair value of patents and trademarks acquired as a result of a business combination is determined on the basis of the

discounted estimated royalties avoided as a result of ownership of the patent or trademark.

The fair value of other intangible assets is based on the expected present value of the cash flows generated by using and

ultimately selling the asset.

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(5) Risk management

This section of the notes provides information on the exposure of Siemens Nederland N.V. to each of the risks itemized in

the paragraphs below, the purposes, policies, and procedures Siemens Nederland N.V. pursues to manage and measure

those risks, as well as on the capital management of Siemens Nederland N.V. In addition, these consolidated financial

statements include further quantitative disclosures.

The Management Board is ultimately responsible for establishing and supervising the risk management system of Siemens

Nederland N.V. To this end, the Management Board has established a risk management committee, which is responsible

for developing and monitoring the risk management policies of Siemens Nederland N.V. The committee regularly reports on

its activities to the Management Board.

The aim of the risk policies of Siemens Nederland N.V. is to map out and analyze the risks, determine appropriate risk limits

and controls, and to monitor the risks and compliance with the limits. The risk management policies and systems are

evaluated regularly and adjusted where necessary to changes in the market environment and the Group's activities.

Through training and development as well as on the basis of management standards and procedures, Siemens Nederland

N.V. aims to develop a disciplined and constructive climate in which all employees understand their roles and obligations.

The governance department of Siemens Nederland N.V. oversees management's monitoring of compliance with the

Group's risk management policies and procedures. In addition, the governance department deals with the adequacy of the

risk management system in relation to the risks to which Siemens Nederland N.V. is exposed. The governance department

together with the audit departments of Siemens AG conduct regular and ad hoc reviews of the risk management controls

and procedures and reports its findings to the Management Board.

(5.1) Financial risks

The use of financial instruments by Siemens Nederland N.V. and its subsidiaries means that they are exposed to the

following risks:

Credit risk;

Market risk.

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract,

leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables)

and from its financing activities.

Regarding trade receivable credit risk, the Company uses a risk management system of which credit risk monitoring and

control is a significant element. A credit check is performed on all customers requesting credit in excess of a specified

amount. Credit ratings are determined on the basis of internal and external sources, such as Dun & Bradstreet. The

Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in

several industries and operate in largely independent markets.

Siemens recognizes allowances for bad debt and doubtful accounts for the estimated credit risk, based on a combination of

the individual customer's credit rating and specific risks. Specific risks include, for example, a moratorium on payments, the

instigation of collection procedures, and payment arrangements made.

The Company is also exposed to credit risk as a result of lease agreements entered into with third parties. Siemens' credit

risk in such cases is higher because it involves contracts with several transactions over an extended period. It is Siemens

policy for new contracts by preference to transfer the lease relating to the equipment in full to an external party.

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Market risk

Market risk is the risk that the Group's revenue or the value of investments in financial instruments are adversely affected by

changes in market prices, such as exchange rates, interest rates, and share prices. Market risk management is aimed at

keeping the market risk exposure within acceptable limits while optimizing returns. For managing market risk, derivatives

are bought and sold and financial obligations are assumed. These types of transactions are carried out in accordance with

the guidelines specified by the risk management committee. In general, the Group uses hedge accounting to manage

volatility in the income statement.

Interest rate risks

Siemens Nederland N.V. has virtually no interest rate risk exposure for leases.

On average in 2017, the Company held EUR 366.4 million (2016: EUR 483.8 million) in short-term deposits or on current

account with the treasury department of Siemens AG. Following market conditions, interest is due on these amounts at

normal market rates. A change in the interest rate on the deposits of 10 basis points would lead to a change in interest

expense of EUR 0.4 million (2016: EUR 0.5 million) for the Company.

Currency risks

The Company is exposed to currency risks as a result of sales and purchases in currencies other than the functional

currency. The risk on virtually all sales and purchases denominated in foreign currency is hedged in full through forward

exchange contracts at the treasury department of Siemens AG. This approach has proved successful in the past in

managing these risks. The Company is responsible for its own administration, assessment, monitoring, and hedging of the

currency risks on sales and purchases.

(5.2) Liquidity risk

The Company manages its liquidity risk by managing the working capital and the deposits at its disposal, which are invested

within the Siemens Group, as well as cash and cash equivalents. In addition, Siemens Nederland N.V. manages its liquidity

risk by making use of the borrowing and deposit facilities within the Siemens Group.

(5.3) Capital management

The main purpose of capital management at Siemens Nederland N.V. and its subsidiaries is to maintain a good credit rating

and a healthy solvency ratio to support its activities and maximize shareholder value.

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(5.4) Operational risks

Professional project management is very important to Siemens, because a large proportion of its revenue is generated

through projects. Customers also expect that the projects are managed in an excellent, innovative, and responsible manner.

This applies in particular to major projects and turn-key projects.

To meet this expectation, Siemens has implemented a globally harmonized system: PM@Siemens.

This is a collective name given to a range of activities aimed at improving project management within Siemens. Examples

include process improvements, assessments, and training. PM@Siemens is not a ready-made working method, but a set of

guidelines through which we provide good project management guidance that is consistent on key points. The focus of this

guidance is on the use of best practices. The aim is to harmonize the standards for good project management and sponsor

them within the organization.

In addition to improved project management, another reason Siemens has launched PM@Siemens is to ensure a uniform

project management culture. Siemens has to act vis-à-vis customers as a partner with a recognizable mentality and

recognizable processes. This is part of the profile of expectations that customers have of us. It also helps determine

whether a customer will enter into an agreement with us.

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Notes to the consolidated statement of financial position

(6) Non-current intangible assets

Software and development

costs Goodwill Sales rights Total

Carrying amount as of September 30, 2015

Cost 35.1 11.7 50.0 96.8

Amortization -35.1 - -41.3 -76.4

- 11.7 8.7 20.4

Changes

Amortization charged to income - -1.8 -1.8

Divestment - - - -

- - -1.8 -1.8

Carrying amount as of September 30, 2016

Cost 35.1 11.7 50.0 96.8

Amortization -35.1 - -43.1 -78.2

- 11.7 6.9 18.6

Changes

Amortization charged to income - - -1.9 -1.9

Divestment - - - -

Reclass Held for Sale, Cost - -1.9 -50.0 -51.9

Reclass Held for Sale, Amortization - - 45.0 45.0

- -1.9 -6.9 -8.8

Carrying amount as of September 30, 2017

Cost 35.1 9.8 - 44.9

Amortization -35.1 - - -35.1

- 9.8 - 9.8

Software includes internally developed software. This software operates on the ERP system for the Company's own use

and for use by other corporate units.

Once a year, an impairment test is performed to establish whether the value of Goodwill is not overstated. The discounted

value of expected future cash flows is then compared with the net carrying amount of the asset. The test is performed at

Division level, which is the level to which income and expenses can be allocated independently. Amounts are discounted

using a Division-specific cost of capital after tax. No (fixed) growth rate is assumed, because this would provide skewed

figures for the Divisions that primarily deal in projects.

Division Goodwill WACC

Power and Gas 7.7 8.5

Energy Management 0.2 8.5

Building Technologies 0.1 8.0

Mobility 0.0 6.0

Digital Factory 1.1 8.5

Process Industries and Drives 0.7 7.5

9.8

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The discounted cash flows exceeded the net carrying amounts in all cases, which means that the amount in the Division's

statement of financial position is not overstated. As in previous years, there is no indication that goodwill has to be impaired

in the fiscal year under review. Reasonably possible changes in a key assumption would not cause the carrying amount to

exceed its recoverable amount and consequently no sensitivity analysis is disclosed. The goodwill recognized in the statement of financial position of Siemens Nederland N.V. consists primarily of goodwill that

arose during the acquisition of the sales department for The Netherlands of the former Siemens Industrial Turbomachinery

B.V. in Hengelo in fiscal year 2005-2006. This department has since been integrated into the Power and Gas Division of

Siemens Nederland N.V. There is no accumulated impairment on Goodwill.

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(7) Property, plant and equipment

Land and buildings

Machinery and

installations Inventories

Non-current operating assets in process Total

Carrying amount as of

September 30, 2015

Cost 11.2 36.5 19.7 3.7 71.1

Depreciation -5.6 -23.6 -17.4 - -46.6

5.6 12.9 2.3 3.7 24.5

Changes

Transfers, cost 0.1 - 0.5 -0.6 0.0

Transfers, depreciation - - 0.0 - 0.0

Investments 2.3 3.5 1.7 0.2 7.7

Depreciation charged to income -1.0 -3.9 -1.2 - -6.1

Divestments, cost - -1.1 -1.7 - -2.8

Divestments, depreciation - 1.1 1.7 - 2.8

Impairment - - 0.0 - 0.0

1.4 -0.4 1.0 -0.4 1.6

Carrying amount as of

September 30, 2016

Cost 13.5 38.9 20.3 3.3 76.0

Depreciation -6.5 -26.4 -17.0 - -49.9

7.0 12.5 3.3 3.3 26.1

Changes

Transfers, cost 2.3 2.1 1.9 -2.5 3.8

Transfers, depreciation -1.5 0.0 -1.4 - -2.9

Investments 1.7 1.4 1.4 1.6 6.1

Depreciation charged to income -1.0 -4.0 -1.5 - -6.5

Divestments, cost -2.3 -1.4 -2.2 - -5.9

Divestments, depreciation 1.5 1.4 2.0 - 4.9

Reclass Held for Sale, Cost - -15.4 -0.7 - -16.1 Reclass Held for Sale, Depreciation - 9.8 0.4 - 10.2

0.7 -6.1 -0.1 -0.9 -6.4

Carrying amount as of

September 30, 2017

Cost 15.2 25.6 20.7 2.4 63.9

Depreciation -7.5 -19.2 -17.5 - -44.2

7.7 6.4 3.2 2.4 19.7

The carrying amount of installations supplied under operating leases amounted to EUR 0.5 million as of September 30,

2017 (2016: EUR 8.0 million). The investments made in these assets during the year amounted to EUR 0.0 million (2016:

EUR 3.5 million).

The cost of property, plant and equipment still in use at September 30, 2017 was EUR 28.0 million (2016: EUR 29.1

million), which had been depreciated in full. The contractual obligations to acquire property, plant, and equipment amounted

to EUR 0.2 million as of September 30, 2017 (2016: EUR 1.5 million).

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(8) Investments in associates and joint ventures

In accordance with the exemption under IAS 28.17, the following equity investments are measured at historical cost.

Name Registered office

Percentage of issued capital

as of September 30, 2017

Percentage of issued capital

as of September 30, 2016

Infraspeed Maintenance B.V. Haarlem 50.0 50.0

The equity investment in Siemens Healthcare Diagnósticos S.A. has been reclassed to Held for Sale.

Siemens is partner in the Infraspeed consortium for provision and maintenance of the superstructure of the high-speed rail

link between Amsterdam and the Belgian border (called the Hogesnelheidslijn-Zuid (HSL-South)). The Company delivered

the power supply system, the ETCS (European Train Control System) signaling system, the GSM-R communication

systems and the ancillary equipment. After successful completion of the construction in 2006, a twenty-five year

maintenance period (2006-2031) started, for which Infraspeed Maintenance B.V. is responsible. Infraspeed Maintenance

B.V. receives payment from the Dutch State based on performance, which is determined on the basis of agreed levels of

daily availability performance, and independent of the level of traffic. The Contractor Consortium Members are jointly and

severally liable for the performance of the Agreement.

The amounts below are taken from the financial statements of the material associates.

Infraspeed Maintenance B.V. ( x EUR 1,000,000) as of December 31

Final financial statement

2016 2015

Non-current assets 9.1 9.1

Current assets 9.8 14.5

Total assets 18.9 23.6

Non-current liabilities 7.4 13.9

Current liabilities 6.9 6.0 Equity 4.6 3.7 Total liabilities and equity 18.9 23.6

Revenue 24.5 20.3

Net result 1.0 -4.3 Equity 4.6 3.7

% Share 50.0% 46.0% Share in equity 2.3 1.7

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(9) Non-current receivables

2017 2016

Finance lease receivables - 8.8

Loans 2.3 0.0

Unbilled revenue and prepayments 5.2 3.9

7.5 12.7

Loans consist of an interest bearing loan to joint venture Infraspeed Maintenance B.V. (see note 23) and an interest bearing

issued invoice for which an extended payment period is granted.

Unbilled revenue and prepayments mainly relates to the sublease of part of The Hague office, in which performance and

payment scheme differs.

Finance lease receivables are presented as follows in the statement of financial position:

Finance lease receivables related to the Healthcare Division, have been reclassified to assets held for sale.

2017 2016

Short-term finance lease receivables - 1.1

Long-term finance lease receivables - 8.8

- 9.8

The portion due within one year has been recognized under other financial receivables.

The minimum lease payments to be received under finance leases in the future are as follows:

2017 2016

To be settled in 1st subsequent year - 1.4 To be settled in 2nd subsequent year - 1.6 To be settled in 3rd subsequent year - 1.6 To be settled in 4th subsequent year - 1.6 To be settled in 5th subsequent year - 2.3 To be settled after 5th year - 3.2 Minimum lease payments to be received in the future - 11.7

The table below shows a reconciliation between the minimum lease payments and the gross and net lease investment to

the present value of the minimum lease payments:

2017 2016

Minimum lease payments - 11.7

plus: Unguaranteed residual value - -

Gross investment in leases - 11.7

less: Finance income received in advance (unearned interest) - -1.9

less: Allowance for doubtful accounts - -

plus: Amortization of unguaranteed residual value - -

plus: Initial direct cost - -

Net investment in leases - 9.8

less: Present value of unguaranteed residual value - -

less: Initial direct cost - -

Present value of minimum lease payments - 9.8

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The gross investment in leases and the present value of the minimum lease receivables mature as follows:

2017 2016

Gross lease investment - 11.7

within 1 year - 1.4

within 1 to 5 years - 7.1

after 5 years - 3.2

Present value of minimum lease payments - 9.8

within 1 year - 1.1

within 1 to 5 years - 5.9

after 5 years - 2.8

(10) Inventories

2017 2016

Merchandise and spare parts 4.4 4.0

4.4 4.0

As of September 30, 2017, a provision of EUR 6.1 million had been recognized for obsolescent inventories (2016: EUR 6.6

million).

(11) Projects in process on the instructions of third parties

2017 2016

Work in process on long-term projects (offset against advance payments) 223.4 194.6

223.4 194.6

Work in process on the instructions of third parties includes an amount of EUR 200.0 million (2016: EUR 170.1 million) for

assets relating to long-term projects accounted for using the percentage-of-completion method.

An amount of EUR 0.1 million (2016: EUR 2.1 million) for advance payments received has been deducted from the work in

process on long-term projects.

The aggregate amount of costs incurred and recognized profits (less recognized losses) to date on construction contracts in

process, is EUR 1,224.1 million (2016: EUR 1,147.8 million) as of September 30, 2017. The amount of advance payments

received for construction contracts in process is EUR 59.4 million (2016: EUR 150.9 million). Construction contract revenue

recognized for fiscal year 2017 amounted to EUR 359.1 million (2016: EUR 660.6 million).

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(12) Trade and other receivables

2017 2016

Trade receivables 107.7 146.3

Receivables from Siemens Group companies 419.1 508.7

Tax receivables - 0.2

Other receivables 4.9 4.7

531.7 659.9

Most of the receivables from companies that are part of the Siemens Group relate to receivables on funds temporarily

placed in interest-bearing deposits or current account within the Group. For more information, please refer to note 22 on

financial instruments.

The changes in allowances for uncollectible trade receivables were as follows:

2017 2016

At October 1 10.5 2.0

Realized losses -0.0 -0.1

Additions (withdraws) -2.2 8.6

At September 30

8.3 10.5

The credit and currency risks associated with trade and other receivables (excluding projects in process on the instructions

of third parties) are explained in note 22.

Ageing analyses of receivables

Overdue in days

  Total

receivables Not overdue <31 31-60 61-90 91-180 > 180

2017 107.7 56,7 4.0 10.6 1.4 9.7 25.3

2016 146.3 61.0 5.8 40.1 4.2 1.4 33.8

The amount in overdue receivables of >180 days is mainly caused by difficulties in money collection from clients based in Iran. Allowance

         2017 2016

         Receivables Allowance Receivables Allowance

With allowance 107.1 8.3 146.0 10.5

Without allowance 0.6 0.3

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(13) Other financial assets

2017 2016

Finance lease receivables - 1.1

Other 6.5 10.2

6.5 11.3

Other financial assets mainly consists of a pension receivable (note 19) and derivatives.

For information on finance lease receivables, please refer to note 9.

(14) Cash and cash equivalents

The Company invests its cash in interest-bearing accounts with financial institutions within the Siemens AG Group. These

amounts are reported under "Receivables from Siemens Group companies" (see note 12). External bank accounts are only

used for cash received or cash intended for use in the very short-term. The aim is to keep the outstanding amount of cash

to a minimum. The Company does not keep any cash on hand. An amount of EUR 1.6 million (2016: EUR 2.2 million) in

cash at bank is not at its free disposal.

2017 2016

Bank accounts (current accounts) 2.1 2.6

2.1 2.6

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(15) Assets held for sale Healthcare In the upcoming year the Company will sell its Healthcare subsidiary to a newly founded company, outside its

consolidation group. Selling price will exceed book value, but gain of the sale is yet unknown. The main components of

the Healthcare’s assets and liabilities classified as held for sale are stated below.

2017 2016

Non-current assets Non-current intangible assets 6.9 8.7

Property, plant, and equipment 5.9 7.2

Non-current financial assets 20.8 13.5

Total non-current assets 33.6 29.4

Current assets

Inventories 0.7 0.1

Receivables

Projects in process on the instructions of third parties 6.9 1.3

Trade and other receivables 63.5 55.1

Other financial assets 2.5 6.8

Cash and cash equivalents - 0.0

Total current assets 73.6 63.3

Total assets 107.2 92.7

Equity 43.8 36.1

Provisions 7.3 6.4

Non-current liabilities

Deferred tax liabilities -1.1 -1.7

Other financial liabilities 4.1 4.1

Total non-current liabilities 3.0 2.4

Current liabilities

Trade and other payables 50.9 46.0

Tax liabilities 2.2 1.8

Total current liabilities 53.1 47.8

Total equity and liabilities 107.2 92.7

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The income statement of Healthcare is shown below.

2017 2016

Revenue 122.7 115.6

Cost of sales 97.1 93.1

Selling expenses 12.8 12.5

General and administrative expenses 1.6 1.1

Other operating expenses 0.0 0.0

Operating income 11.2 8.9

Finance costs 0.7 2.6

Profit from discontinued operations, before tax 10.5 6.3

.

Tax related to pre-tax profit -2.8 -2.3

Profit from discontinued operations, after tax 7.7 4.0

The net cash flows of the held for sale Healthcare business is as follows: 2017 2016

Operating profit before tax 11.2 8.9

Adjustments to reconcile operating profit to net cash flow:

Depreciation, amortization, and impairment losses 4.6 6.8

Change in provisions 0.9 6.2

Working capital adjustments:

Change in receivables 0.7 -12.5

Change in inventories -0.6 0.2

Change in trade and other payables 5.9 45.8

Interest paid -0.7 -2.6

Tax payments (income taxes) -2.8 -11.3

Net cash flows from operating activities 19.2 41.5

Net cash flows from/used in investing activities -8.8 -4.9

Net cash flows from/used in financing activities 10.4 -36.6

Net cash flow 0.0 0.0

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Wind Power The Wind Power division has been sold on January 31st 2017 to Siemens Gamesa. Below statements therefore only reflect the first 4 months of fiscal year 2017. The main components of Wind Power’s assets and liabilities classified as held for sale are stated below 2017 2016

Property, plant, and equipment - 0.3 Current assets

Inventories - 0.8

Receivables

Projects in process on the instructions of third parties - 5.5

Trade and other receivables - 35.1

Total current assets - 41.4

Total assets - 41.7

Equity - 0.0

Provisions - 2.7

Trade and other payables - 39.0

Total liabilities - 41.7

Total equity and liabilities - 41.7

The income statement of Wind Power is shown below.

2017 2016

Revenue 60.8 820.3

Cost of sales 50.5 798.4

Selling expenses 0.7 3.3

General and administrative expenses 0.0 0.3

Other operating expenses - 0.0

Operating income 9.6 18.3

Finance costs 0.0 0.0

Profit from discontinued operations, before tax 9.6 18.3

Tax related to pre-tax profit -2.1 -4.6

Profit from discontinued operations, after tax 7.5 13.7

Gain on sale of business 113.0 -

Total profit from discontinued operations, after tax 120.5 13.7

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The net cash flows of the sold Wind Power business is as follows:

2017 2016

Operating profit before tax 9.7 18.3

Adjustments to reconcile operating profit to net cash flow:

Depreciation, amortization, and impairment losses 0.0 -

Change in provisions -2.7 -2.3

Working capital adjustments:

Change in receivables 7.3 -339.3

Change in inventories 0.9 0.6

Change in trade and other payables -39.0 383.0

Interest paid - -

Tax payments (income taxes) -2.2 -

Net cash flows from operating activities -26.0 60.3

Net cash flows from/used in investing activities 0.3 0.2

Net cash flows from/used in financing activities 33.3 -42.2

Net cash flow 7.6 18.3

Mechanical Drives (business unit of Division Process Industries and Drives)

In June Siemens announced that it will separate its global Business Unit for Mechanical Drives to a stand-alone company

under the Siemens umbrella. For the Company this also means that in the upcoming fiscal year, the Business Unit will be

separated as a stand-alone company and sold to (ultimately) Flender GmbH. For our P&L statements and Balance sheet,

the sale of the Business Unit has a low impact (Operating gain 0.5, Assets 5.3 and Liabilities 3.8) and is not considered as a

significant activity according to IFRS 5. Consequently these figures are not represented separately as discontinued

operations.

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(16) Equity

Issued capital

Share premium

Retained earnings

Cash flow hedge

Profit for the year Total

At September 30, 2015 36.3 150.9 4.1 0.0 72.6 263.9

Profit after tax - - - - 169.1 169.1

Other comprehensive income - - 2.2 -1.5 - 0.7

Total comprehensive income - - 2.2 -1.5 169.1 169.8

Dividends - - - - -72.6 -72.6

Allocations to reserves - - - - - -

At September 30, 2016 36.3 150.9 6.3 -1.5 169.1 361.1

Profit after tax - - - - 193.4 193.4

Other comprehensive income - - 0.1 1.5 - 1.6

Total comprehensive income - - 0.1 1.5 193.4 195.0

Dividends - - - - -169.1 -169.1

Allocations to reserves - - - - - -

At September 30, 2017 36.3 150.9 6.4 - 193.4 387.0

The reserves comprise balances of retained earnings from prior years which include cumulative actuarial gains and losses.

Issued capital

The Company's share capital amounts to EUR 100 million, divided into in 100,000 shares with a nominal amount of

EUR 1,000 each, 36,307 shares of the share capital have been issued and fully paid up.

Dividends

2017 2016

Declared and distributed during the year 169.1 72.6

2017 2016 Proposed for approval by the Annual General Meeting (not recognized as a liability as 193.4 169.1

of September 30)

-47-

(17) Deferred tax liabilities

   2017 Equity P&L Reclass

to HfS 2016 Equity P&L Add. 2015

Deferred tax assets:                     

Non-current intangible assets - - - -2.1 2.1 - -0.5 - 2.6

Property, plant, and equipment - - - - - - - - -

Pensions - - - - - - - - -

Provisions 0.1 - - - 0.1 - -0.3 - 0.4

Other - -0.5 - - 0.5 - 0.5 - 0.0

   0.1 -0.5 - -2.1 2.7 0.0 -0.3 0.0 3.0

Deferred tax liabilities:                     

Non-current intangible assets -1.9 - - 0.4 -2.3 - -0.1 - -2.2

Property, plant, and equipment -0.8 - 0.1 - -0.9 - 0.5 - -1.4

Pensions -0.8 - - - -0.8 -0.8 - - 0.0

Provisions -0.6 - 0.6 - -1.2 - 1.9 - -3.1

   -4.1 - 0.7 0.4 -5.2 -0.8 2.3 - -6.7

Net deferred tax liabilities -4.0 -0.5 0.7 -1.7 -2.5 -0.8 2.0 0.0 -3.7

All tax receivables and liabilities are recognized in the statement of financial position. There are no unused deferred tax

liabilities. For more information, please refer to note 27 on income taxes.

(18) Other financial obligations (included in non-current liabilities)

2017 2016

Finance lease and hire purchase liabilities 1.6 2.0

Other financial liabilities 1.9 4.1

3.5 6.1

Finance lease obligations are presented as follows in the statement of financial position:

2017 2016

Short-term finance lease payables 0.1 -

Long-term finance lease payables 1.6 -

1.7 -

The portion due within one year has been recognized under Trade and other payables.

The minimum lease payments to be made under finance leases and hire purchase agreements in the future are as follows:

2017 2016

To be settled in 1st subsequent year 0.2 - To be settled in 2nd subsequent year 0.2 - To be settled in 3rd subsequent year 0.2 - To be settled in 4th subsequent year 0.2 - To be settled in 5th subsequent year 0.2 - To be settled after 5th year 0.9 - Minimum lease payments to be received in the future 1.9 -

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The table below shows a reconciliation between the minimum lease payments and the gross and net lease investment to

the present value of the minimum lease payments:

2017 2016

Minimum lease payments 1.9 -

plus: Unguaranteed residual value - -

Gross investment in leases 1.9 -

less: Finance income received in advance (unearned interest) -0.2 -

less: Allowance for doubtful accounts - -

plus: Amortization of unguaranteed residual value - -

plus: Initial direct cost - -

Net investment in leases 1.7 -

less: Present value of unguaranteed residual value - -

less: Initial direct cost - -

Present value of minimum lease payments 1.7 -

The gross investment in leases and the present value of the minimum lease liabilities mature as follows:

2017 2016

Gross lease investment 1.9 -

within 1 year 0.2 -

within 1 to 5 years 0.8 -

after 5 years 0.9 -

Present value of minimum lease payments 1.7 -

within 1 year 0.1 -

within 1 to 5 years 0.7 -

after 5 years 0.9 -

The current finance lease relates to an office location in Breda.

-49-

(19) Provisions

Pension Warranty Order-related

Personnel-related

Other Total

Carrying amount as of Oct. 1, 2015 - 28.6 30.7 8.2 4.3 71.8

Additions during the year - 3.6 9.0 9.1 6.6 28.3

Utilization - -3.7 -10.3 -6.9 -3.8 -24.7

Reversals - - -0.3 -0.4 - -0.7

Change in scope of consolidation - - - -0.5 - -0.5

Transfer - - -0.3 -0.1 -0.4

Carrying amount as of Sept. 30, 2016 - 28.5 28.8 9.4 7.1 73.8

Additions during the year 1.0 0.7 14.3 2.7 0.2 18.9

Utilization - -4.1 -10.3 -4.1 -0.8 -19.3

Reversals - - -0.2 - - -0.2

Change in scope of consolidation - - - - - -

Held for sale -1.0 -1.3 -4.2 -0.8 - -7.3

Carrying amount as of Sept. 30, 2017 - 23.8 28.4 7.2 6.5 65.9

Current as of September 30, 2016 - 16.9 28.0 4.2 1.2 50.3

Non-current as of September 30, 2016 - 11.6 0.8 5.2 5.9 23.5

Carrying amount as of Sept. 30, 2016 - 28.5 28.8 9.4 7.1 73.8

Current as of September 30, 2017 - 15.9 26.1 2.2 1.5 45.7

Non-current as of September 30, 2017 - 7.9 2.3 5.0 5.0 20.2

Carrying amount as of Sept. 30, 2017 - 23.8 28.4 7.2 6.5 65.9

Pensions

As of April 1, 2011, the Company transferred the entire pension plan to the Pension Fund for the Mechanical and Electrical

Engineering Industry (PME), with the exception of the pension plan for senior management. The pension scheme is a

defined benefit agreement referred to as a conditional average earnings scheme. Employees build up 1,875% of the

pensionable earnings as pension, with a standard retirement age of 67 (68 as of 1st January 2018). The company accounts

for the defined benefit agreement as a defined contribution plan, because there is no reliable basis for allocating the

obligations, plan assets, and costs to the participating companies, since PME does not (or cannot) provide the information.

In accordance with the PME plan, Siemens only has an obligation to pay the contributions due annually. Since there is no

reliable basis for allocating the obligations, plan assets, and costs to the participating companies in PME, there is very likely

no obligation to make up any shortfalls in the plan. If the coverage of PME assets versus liabilities is not sufficient, the

deficit would likely be reflected as decrease of vested rights and/or increase of pension premium. For the upcoming 3 years

employers and employees (Social partners) have agreed to keep the pension premium equal to current year. The industry

fund has a coverage ratio of 101,6 % as at 30 September 2017 ( 2016: 92,4%).

The pension plan for senior management was a final salary scheme, increasing by 1.75% for each year of service but has

been discontinued as of January 1, 2015. All vested rights have been frozen as of this date. Indexation is decided annually,

but is limited to the indexation granted in the Pension Fund for the Mechanical and Electrical Engineering Industry (PME)

and conditional depending on plan assets. The administration of the pension plan for senior management has been

assigned to an insurer in accordance with section 2 (4) (B) of the Dutch Pensions and Savings Funds Act. No contributions

are due after discontinuation of the pension plan.

-50-

In addition to the pension plan, there is also an early retirement plan for employees born before 1950. This plan is managed

by the Pension Fund for the Mechanical and Electrical Engineering Industry. It is a defined benefit plan, but is accounted for

in the annual financial statements as a defined contribution plan, because there is no reliable basis for allocating the

obligations, plan assets, and costs to the participating companies within PME.

The early retirement plan for employees born after 1949 is granted conditionally in the collective bargaining agreement

(CBA). Each year, an assessment is made as to whether the benefits can be granted unconditionally to the employees of

the subsequent year of birth. Currently the benefits of the employees who were born in 1951 and who meet the plan criteria

have been granted unconditionally.

The numbers of pension plan members are as follows:

Number of members 2017 2016

Active members 0 0

Beneficiaries 8 8

Vested deferred members 1 1

Total 9 9

Pension obligations and funded status of Siemens Nederland N.V.

2017 2016

Projected obligations

Benefit obligation as of October 1 16.0 14.3

Current service cost: Increase in the present value of pension benefits granted 0.0 0.0

Interest expenses 0.2 0.4

Benefits paid -1.0 -1.0

Remeasurement: effect of changes in demographic assumptions -0.2 0.0

Remeasurement: effect of changes in financial assumptions -1.5 2.4

Remeasurement: effect of experience adjustments -0.0 -0.1

Obligation as of September 30 13.5 16.0

Plan assets 2017 2016

Fair value of plan assets as of October 1 19.0 14.3

Interest income 0.2 0.5

Employer contributions 0.0 0.0

Benefits paid -1.0 -1.0

Administrative expenses paid from plan assets 0.0 0.0

Remeasurement: return on plan assets (excluding interest income) -1.6 5.2

Fair value of plan assets as of September 30 16.6 19.0

Diversification of plan assets

2017 2016

Cash and cash equivalents 100% 100%

In recent years, the obligations and plan assets as of September 30 have changed as follows:

2017 2016 2015 2014 2013

Fair value of plan assets 16.6 19.0 14.3 14.7 13.9

Projected obligations -13.5 -16.0 -14.3 -14.8 -13.9

Value of plan assets less projected obligations 3.1 3.0 0.0 -0.1 0.0 Net periodic cost of pension plan

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2017 2016

Increase in the present value of pension agreements granted 0.0 0.0

Interest expenses on future pension obligation 0.2 0.4

Expected return on plan assets (income) -0.2 -0.5

Net periodic cost (income) 0.0 0.1

Changes in actuarial gains and losses recognized in equity

Changes in fiscal year 2017 2016

Actuarial gains (losses) 0.1 3.0

0.1 3.0

Deferred taxes on actuarial gains and losses -0.0 -0.8

-0.0 -0.8

Change in net accumulated equity component 0.1 2.2

Actuarial assumptions for calculating the discounted obligations and net periodic cost:

Assumptions of variables 2017 2016

Actuarial discount rate 2.09% 1.03%

Salary increase rates 0.00% 0.00%

Return on plan assets 2.0%** 1.03%**

Indexation 0.50% 0.50%

Mortality table Generation tables* Generation tables*

Age adjustment (women, men) - -

The discount rate applied in the calculation reflects the return as of the reporting date on prime-rated bonds with maturities

that approximate those of the Group's liabilities and are denominated in the same currency in which the benefits are

expected to be paid. The expected return is determined on the basis of past returns, the strategic diversification of plan

assets, and future expected returns on long-term investments.

* Assumptions about future mortality rates are based on the AG projections table 2016, published by the Dutch Association

of Actuaries (AG).

** This corresponds to the actuarial discount rate.

Contributions to the industry pension fund for the early retirement scheme

The employer contributions to the industry pension fund amounted to EUR 2.3 million (2016: EUR 2.6 million).

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Warranty provisions

Provisions are recognized for expected warranty claims on systems and installations sold in the past one to two years,

based on past experience with the volume of repairs and returns. Most of these costs are expected to be incurred in the

following fiscal year and all of them within two years of the reporting date. The assumptions made in calculating the

warranty provisions are based on current sales levels and information available on returns, on the basis of the standard

warranty period of one to two years on all products sold.

Order-related provisions

Order-related provisions are anticipated onerous contracts (contracts in which the expected costs are estimated to be

higher than the expected benefits), provisions for fines and compensation for late delivery and outstanding (project) costs

still to be received.

Personnel-related provisions

Personnel-related provisions are mainly severance payments and long-term service awards.

Other provisions

Other provisions comprise all provisions, which are not included in the provisions mentioned above. These include amongst

other record retention, under-utilization of real estate and other assets leased under an operating lease and specific other

minor provisions.

(20) Trade and other payables

2017 2016

Trade payables 69.7 64.7

Siemens Group companies 9.5 8.7

Advance payments received on orders 235.4 247.5

Taxes and social security contributions payable 31.6 37.9

Other liabilities and deferred income 35.7 75.4

Liabilities under forward exchange contracts 2.4 3.5

Pension contributions payable 1.5 2.5

385.8 440.2

The taxes and social security contributions payable have been offset against taxes and social security contributions

receivable, provided that they are payable to or receivable from the same party and a legal right to offset exists.

(21) Tax liabilities

2017 2016

Tax liabilities 3.1 51.1

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(22) Financial instruments

The table below shows the carrying amounts of all financial instruments recognized in the financial statements.

2017 2016

Financial assets

Non-current financial assets:

Non-current receivables:

Lease receivables - 8.8

Other receivables 7.5 3.9

Current receivables:

Trade and other receivables:

Receivables within the Siemens Group 419.1 508.7

Other trade receivables and other receivables 112.6 151.2

Other financial receivables:

Lease receivables - 1.1

Other financial receivables 6.5 10.2

Financial liabilities

Non-current liabilities:

Other financial liabilities:

Lease and hire purchase liabilities -1.6 -2.0

Other financial liabilities -1.9 -4.1

Current liabilities:

Trade and other payables -385.8 -440.2

Tax liabilities -3.1 -51.1

The fair values of cash and cash equivalents, (current) receivables, and current liabilities correspond to their carrying

amounts. This is due to the high level of liquidity and/or short maturities of the instruments.

On the basis of the value of the contracts running as of September 30, 2017, it was decided not to take out any financing to

match the lease receivables, because the impact of the interest rate risk is negligible for Siemens Nederland N.V.

Non-current receivables, such as the amount receivable on other investments and finance lease receivables, are assessed

by Siemens Nederland N.V. on the basis of interest rates, credit rating forecasts, and the financial risk of the underlying

projects. This assessment forms the basis for recognizing allowances for uncollectible receivables where necessary. At

September 30, 2016 and September 30, 2017, the carrying amounts of non-current receivables, net of provisions, were

comparable to their fair values.

-54-

Liquidity risk

The table below shows the contractual terms and repayment obligations of the financial assets and financial liabilities,

including estimated interest payments:

At September 30, 2017

Within 1

year 1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

After 5 years Total

Fixed-income financial assets

Finance lease and other receivables -

1.5

1.0

1.0

1.0 3.0 7.5

Variable-income financial assets

Receivables within the Siemens Group 419.1 - - - - - 419.1 Other trade receivables and other receivables 119.1 - - - - - 119.1

Variable-income financial liabilities Finance lease and hire purchase agreements - -0.2 -0.2 -0.2 -0.2 -0.8 -1.6

Other financial liabilities - -1.9 - - - - -1.9

Trade and other payables -385.8 - - - - - -385.8

Tax Liabilities -3.3 - - - - - -3.3

At September 30, 2016

Within 1

year 1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

After 5 years Total

Fixed-income financial assets

Finance lease and other receivables 1.5 1.6 1.6 1.6 2.3 3.2 11.7

Variable-income financial assets

Receivables within the Siemens Group 508.7 - - - - - 508.7 Other trade receivables and other receivables 151.2 - - - - - 151.2

Variable-income financial liabilities Finance lease and hire purchase agreements - - - - - -2.0 -2.0

Other financial liabilities - -4.1 - - - - -4.1

Trade and other payables -440.2 - - - - - -440.2

Tax Liabilities -51.1 - - - - - -51.1

The interest is fixed until the end of the loan term. The ongoing projects at Siemens Nederland N.V. as of September 30

were insignificant and did not impact the interest rate risk.

Interest rate risk

For an assessment of the risk in the subsequent year, please refer to note 5.

Credit risk

With regard to the trade receivables and lease receivables items, the Company has processes and control mechanisms in

place to keep the risks to a minimum. The Company's maximum risk exposure is theoretically equal to the total balance

outstanding. The Company regards its policies to manage this risk (see also note 5) as effective, since realized losses (see

note 12) have been low in recent years.

Currency risk

An exchange rate profit of EUR 0.2 million was generated (2016: loss of EUR 1.0 million).

-55-

Hedging activities As of September 30, 2016 and September 30, 2017, Siemens Nederland N.V. had entered into various forward exchange

contracts to hedge currency risks on expected future sales to customers and future deliveries from suppliers. The majority

of the contracts expire within one year. Cash flow hedge accounting is used, if all strict conditions are met.

The fair values recognized for these forward exchange contracts as of September 30 were as follows:

2017 2016

Derivatives not designated as hedging instruments

Foreign exchange forward contracts 1.6 -1.1

Embedded derivatives -1.4 0.3

Derivatives designated as hedging instruments

Foreign exchange forward contracts (fair value hedge) - -

Foreign exchange forward contracts (cash flow hedge) - -2.0

-56-

(23) Contingent liabilities

For certain projects, banks issue bank guarantees to third parties in which they stand surety for Siemens Nederland N.V.

meeting its obligations under the contracts. If a claim is made on a bank guarantee by third parties, the bank has the right of

recourse to Siemens Nederland N.V. On September 30, the following amounts of bank guarantees were outstanding:

2017 2016

Bank guarantees 97.9 132.0

In addition to the guarantees provided by banks, as disclosed above, the parent company Siemens AG or its wholly-owned

subsidiaries also stand surety vis-à-vis third parties for Siemens Nederland N.V. meeting its obligations under the contracts.

In 2017, the parent company Siemens AG or its wholly-owned subsidiaries provided surety in an amount of EUR 81.7

million (2016: EUR 254.0 million). The total guarantee amount for 2017 is therefore EUR 179.6 million (2016: EUR 386.0

million).

Lease obligations Operating asset obligations

2017 2016 2017 2016

To be settled in 1st subsequent year 13.0 13.1 5.4 7.6

To be settled in 2nd subsequent year 12.4 13.1 3.8 5.4

To be settled in 3rd subsequent year 12.1 12.9 2.3 3.4

To be settled in 4th subsequent year 10.7 12.3 0.9 1.5

To be settled in 5th subsequent year 9.0 12.2 0.2 0.4

Total obligation to be settled within 5 years 57.2 63.6 12.6 18.3

Total obligation to be settled after 5 years 26.8 46.4 - -

Total obligation as of the reporting date 84.0 110.0 12.6 18.3

In the current year, the Company has committed to a credit facility towards its joint venture Infraspeed Maintenance B.V.

This agreement entitles Infraspeed Maintenance B.V. to a maximum loan of 7.5, on which interest is due based on 3-month

Euribor (minimum 0,0%) with 1,75% mark-up fee. Repayment is due at 31 March 2025. As of closing date the utilized

amount is 1.3 (note 9).

Siemens Nederland N.V. has liabilities arising from long-term leases and operating assets. The liabilities arising from

operating assets are primarily related to obligations for leased vehicles. All companies belonging to either of these tax

groups are jointly and severally liable for the taxes payable by the respective tax group. Siemens International Holding B.V.

is the head of the tax group. Siemens Nederland N.V. is the taxpayer. All companies in the Group periodically settle the

account receivable or payable position with Siemens International Holding B.V. Since Siemens International Holding B.V. is

the head of the tax group, all current and deferred tax assets and liabilities of Siemens Nederland N.V. are positions vis-à-

vis the parent company.

Siemens Nederland N.V. is partner in the joint operation of GLT Plus VOF, and therefore jointly and severally liable. The

principal place of business for GLT Plus VOF is Sappemeer in Groningen. The contractual arrangement establishes the

allocation of revenues and expenses on the basis of the relative performance of each party to the joint arrangement.

However, the probability of the contingent liability is regarded as remote and therefore in accordance with IAS 37.86 no

liability is disclosed. Siemens considers the probability remote due to the business model used in the consortium. GLT Plus

VOF has liabilities towards other partners, but partners cannot claim against one another. In addition, GLT Plus VOF will

invoice the final customer NAM on the basis of work performed. All partners will only receive payment after the amount has

been received by GLT Plus VOF. No advances are given for work to be performed. Additionally, a significant portion of the

contingent liability relates to sales tax, for which GLT Plus VOF collects and pays the amount to the Tax Authority.

Decision making in GLT PLUS VOF is bound to strict limitations and allow day-to-day decisions related to the Scope of

work. Other decisions require unanimous approval from the partners.

-57-

Notes to the consolidated income statement

(24) Revenue

In accordance with section 2:380 of the Dutch Civil Code, the table below shows the distribution of revenue over

geographical areas and operating segments.

Geographical areas 2017 2017 2016 2016

Restated* Restated*

Third parties Related parties of

Siemens AG Third parties Related parties of

Siemens AG

The Netherlands 542.8 7.2 679.7 5.0

Middle East 108.6 6.8 192.0 3.9

Asia 48.1 5.2 96.8 5.1

Africa 26.7 2.7 50.9 32.2

Europe other 23.6 61.6 45.9 5.4

Americas 2.1 3.3 -0.7 10.2

Australia 1.9 3.5 -5.3 11.9

Total 753.8 90.3 1,059.3 73.7

Operating segments 2017 2017 2016 2016

Restated* Restated*

Third parties Related parties of

Siemens AG Third parties Related parties of

Siemens AG

Power and Gas 246.4 63.0 440.7 56.8

Process Industries and Drives 148.1 10.3 174.6 5.5

Building Technologies 108.2 0.5 113.5 -0.1

Digital Factory 105.2 0.3 98.6 0.3

Mobility 74.3 0.3 152.0 0.2

Energy Management 69.4 9.8 57.4 6.5

Real Estate 2.2 6.1 22.4 4.5

Corporate Managed Portfolio 0.0 - 0.1 0.0

Total 753.8 90.3 1,059.3 73.7

* Amounts shown here do not correspond to the 2016 financial statements and relate to adjustments made regarding

Healthcare (Refer to note 15).

(25) Other operating income

2017 2016

Sale of the Breda building (Real Estate) 0.5 -

0.5 -

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(26) Finance income and expenses

2017 2016

Interest and similar income 0.1 0.5

Interest and similar expenses -2.4 -4.8

-2.3 -4.3

Interest and similar income includes an amount of EUR 0.0 million (2016: EUR 0.0 million) from group companies. Other

interest and similar expenses includes an amount of EUR -2.0 million (2016: EUR -1.8 million) from group companies. For

more information, please refer to note 28 on related parties.

In addition interest and similar expenses includes an impairment amount of EUR 0.7 million from Company’s investment in

Siemens Healthcare Diagnósticos Ltda, determined applying a pre-tax discount rate of 12.5%. Triggering event was a sharp

decrease of business expectations and changing political and economical situation in the country.

(27) Tax on profit from continuing operations

The tax expense (income) recognized in the consolidated income statement breaks down as follows:

2017 2016

*restated

Income taxes for the current period from continued operations 23.8 47.8

Income taxes for the current period from discontinued operations 4.3 6.3

Total current tax 28.1 54.1

Deferred taxes for the current period from continued operations -0.7 1.4

Deferred taxes for the current period from discontinued operations 0.6 0.6

Total deferred tax -0.1 2.0

Total income tax for the current period 28.0 56.1

The reconciliation between the tax burden and the result of calculating the profit before tax, multiplied by the local tax rate,

is as follows:

2017 2016

Profit before tax (profit from continuing operations and profit from discontinued operations) 221.5 225.1

Tax at the locally applicable rate of 25,0% (2016: 25,0%) 55.4 56.3

Participation exemption regarding gain sale of Wind power -28.3 -

Participation exemption regarding impairment investment 0.2 -

True up related to prior years 0.3 -

Non deductible expenses for tax purposes 0.2 -

Other 0.2 -0.2

Tax burden 28.0 56.1

Siemens Nederland N.V. is part of a tax group headed by Siemens International Holding B.V. under which all parties are

jointly and severally liable for the tax position.

-59-

(28) Related parties

Transactions with managing directors and key management personnel

Siemens Nederland N.V. has not issued loans to or entered into transactions with managing directors or managers.

Other related party transactions

The values of transactions involving goods and services with companies included in the scope of consolidation of Siemens

AG were as follows:

Transaction values

2017 2016

Purchases 326.3 904.2

Sales 90.3 73.2

Interest Balance outstanding 2017 2016 2017 2016

Loans issued and interest income (expense*)

Siemens Financial Services (current) -1.9 -1.0 335.0 430.0

Loans received and interest expenses

Siemens Financial Services (non-current) - - - -

Cost of providing guarantees

Siemens Financial Services -0.1 -0.1 - -

Cost of assuming credit risk

Siemens Financial Services 0.0 -0.7 - -

The interest charged in the case of related parties is determined on an objective arm's length basis (EURIBOR plus a

margin) and is settled within a maximum of six months of the end of the year. No collateral has been pledged for any

balances.

The Company maintains a cash pool at the treasury department of Siemens AG, where balances are kept at market-related

interest rates and from which loans are issued and/or raised.

* Interest is due on loans issued

-60-

(29) Compensation of executive management and the Supervisory Board

Siemens Nederland N.V. pays salaries and emoluments to the members of the Management Board and of executive

management and contributes to pension plans on their behalf.

As of September 30, 2017, 12 executive managers (2016: 12) were members of the Executive Management Team, which

includes the Management Board. Fiscal year 2017 does contain expenses related to one management board member who

retired during the year and was given a post-retirement benefit. Their compensation breaks down as follows:

2017 2016

Management Board (2 members (2016: 3 members))

Short-term compensation 1.3 1.2

Pensions 0.1 0.0

Post-retirement benefits 0.5 0.0

Profit sharing and bonuses 0.6 0.7

Management Board total 2.4 1.9 Bonuses for the Management Board are subject to performance criteria.

Executive Management Team (9 members (2016: 9 members))

Short-term compensation 1.5 1.4

Pensions 0.1 0.1

Post-retirement benefits 0.0 0.3

Profit sharing and bonuses 0.3 0.4

Executive Management Team total 1.9 2.2

Total 4.1 4.1

The Supervisory Board had 4 members as of September 30, 2017 (2016: 4). They were paid compensation as follows:

2017 2016

Compensation 0.1 0.1

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(30) Rights to equity instruments

Stock awards

The expense recognized for employee services received during the year is shown in the following table:

2017 2016

Expenses arising from cash-settled share-based payment transactions 0.5 0.5

Total expense arising from share-based payment transactions 0.5 0.5

For the Company the equity-settled shares are settled in cash to Siemens AG. The stocks awarded in equity are then

fulfilled by Siemens AG.

In 2017, 7,154 (2016: 9,921) stock awards were granted to employees, of which 3,791 (2016: 4,404) to the Executive

Management Team (including the Management Board).

2017 2017 2016 2016 Awards in

absolute numbers Cumulative fair

value Awards in absolute

numbers Cumulative fair

value

At beginning of fiscal year 29,969 3.1 25,963 2.1

Granted provisionally 7,154 9,921

Awarded -7,580 -7,276

Forfeited/settled -929 1,361

At end of fiscal year 28,614 3.4 29,969 3.1

Fair value at the end of the fiscal year is calculated by multiplying the number of awards outstanding by the market value

per share at the end of the fiscal year. The market value of the shares granted was EUR 119.45 as of September 30, 2017

compared with EUR 104.20 as of September 30, 2016. (2015: 79.94). The number of awards attributable to discontinued

operations included in the number of awards at the end of the fiscal year was 2,973.

Share Matching Plan

The expenses recognized for employee services received during the year is shown in the following table:

2017 2016

Expenses arising from cash-settled share-based payment transactions 0.1 0.1

Total expenses arising from share-based payment transactions 0.1 0.1

For the Company the equity-settled shares are settled in cash to Siemens AG. The stocks awarded in equity are then

fulfilled by Siemens AG.

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In 2017, 1,990 (2016: 1,542) bonus shares were granted to employees, of which 90 (2016: 142) to the Executive

Management Team (including the Management Board).

2017 2017 2016 2016

Awards in

absolute numbers Cumulative fair

value Awards in

absolute numbers Cumulative fair

value

At beginning of fiscal year 3,926 0.4 3,524 0.3

Granted 1,990 1,542

Awarded -1,232 -1,025

Forfeited/settled -437 -115

At end of fiscal year 4,247 0.5 3,926 0.4

Fair value at the end of the fiscal year is calculated by multiplying the number of bonus shares by the market value per

share at the end of the fiscal year. The market value of the bonus shares issued was EUR 119.45 as of September 30,

2017 compared with EUR 104.20 as of September 30, 2016. The number of awards attributable to discontinued operations

included in the number of awards at the end of the fiscal year was 759.

Siemens Profit Sharing

This plan was introduced by Siemens worldwide in the prior fiscal year. The Siemens Profit Sharing (SPS) constitutes a

voluntary and discretionary, decided by the Siemens AG board, distribution of a part of the yearly Siemens Profit to

employees below Senior Management of up to EUR 400 million annually in Siemens Profit Sharing pool. The related costs

are accrued over the expected period and charged to all Siemens companies. Since this scheme is at the sole discretion of

the Siemens AG board, no actual shares are awarded but only costs are accrued. Depending on Siemens AG, the amounts

if paid, are settled in cash or shares of Siemens AG. For the Company equity-settled shares are settled in cash to Siemens

AG. The stocks awarded in equity are then fulfilled by Siemens AG.

The expense recognized for the profit sharing scheme during the year is shown in the following table:

2017 2016

Expenses arising from cash-settled share-based payment transactions 1.2 0.6

Total expense arising from share-based payment transactions 1.2 0.6

For Siemens Netherlands NV the equity-settled shares are settled in cash to Siemens AG. The stocks awarded in equity are

then fulfilled by Siemens AG.

(31) Employees

The number of employees, expressed as full-time equivalents, working for Siemens Nederland N.V. at year end was as

follows:

2017 2016

Sales divisions 1,879 1,955

Management and staff departments 180 180

Total 2,058 2,135

These employees were employed in The Netherlands. The number of employees decreased in part because of the sale of the Wind power business.

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(32) Depreciation, amortization, and impairment losses

2017 2016

Non-current intangible assets 1.9 1.8

Impairment 0.7 2.9

Property, plant, and equipment 6.5 6.1

Total 9.1 10.8

(33) Personnel costs

2017 2016

Wages and salaries 140.7 166.2

Pension costs 12.3 14.3

Other social security costs 18.4 20.1

Total 171.4 200.6

(34) Joint operations

A small part of the Company’s activities is carried out in joint arrangements classified as joint operations. The Group

participates in 2 joint operations (2016: 3). These collaborative arrangements remain in place until a project is finished, and

they are accordingly finite.

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Company statement of financial position as of September 30 (EUR million) before profit appropriation

Note 2017 2016

Non-current assets

Non-current intangible assets 3 9.8 9.8

Property, plant, and equipment 4 19.7 18.9

Non-current financial assets

Investments in group companies 5 0.4 36.5

Non-current receivables 6 7.5 3.9

Total non-current assets 37.4 69.1

Current assets

Inventories 7 4.4 3.9

Projects in process on the instructions of third parties 8 223.4 193.3

Receivables

Trade and other receivables 9 531.6 604.9

Other financial assets 10 6.5 4.4

Cash and cash equivalents 11 2.1 2.6

Total current assets 768.0 809.1

Assets held for sale 12 43.8 41.7

Total assets 849.2 919.9

Equity 13

Issued capital 36.3 36.3

Share premium 150.9 150.9

Retained earnings 6.4 6.3

Other components of Equity - -1.5

Profit for the year 193.4 169.1

Total equity 387.0 361.1

Provisions 14 65.9 67.4

Non-current liabilities

Deferred tax liabilities 15 4.0 4.2

Other financial liabilities 16 3.5 1.9

Total non-current liabilities 7.5 6.1

Current liabilities 17 388.8 443.6

Liabilities directly related with assets held for sale 12 - 41.7

Total liabilities 462.2 558.8

Total equity and liabilities 849.2 919.9

The notes are an integral part of these Parent Company financial statements.

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Company income statement

Fiscal year from October 1 through September 30 (EUR million)

2017 2016* Restated

Net income from subsidiaries and other equity investments, after tax - 4.0

Other expenses and income after tax, continued 65.1 165.1

Other expenses and income after tax, discontinued 128.3 -

Profit after tax 193.4 169.1

Last year’s income included an amount of EUR 132.4 million due to a one-off impact from the easing of sanctions on Iran.

In the fiscal years 2012 and 2013 these sanctions resulted in losses of 100.2 and 63.1 respectively, which for the greatest

part have been reversed.

Current year’s income, discontinued, includes an amount of EUR 113.0 million of the sale of our Wind Power division to

Siemens Gamesa.

With reference to the consolidated income statement, use has been made of the exemption pursuant to section 402, Title 9,

Book 2 of the Dutch Civil Code.

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Notes to the Company statement of financial position

(1) General

The shares in Siemens Nederland N.V. are indirectly held by Siemens AG, Berlin and Munich.

(2) Accounting policies

The Company financial statements have been prepared in accordance with the legal provisions for annual financial

statements as specified in Part 9, Book 2 of the Dutch Civil Code. In determining the accounting policies applied to

measuring assets and liabilities and determining profit or loss in its Parent Company financial statements, Siemens

Nederland N.V. makes use of the option provided in section 2:362 (8), Book 2 of the Dutch Civil Code. This entails that the

policies for measuring assets and liabilities and for determining profit or loss (hereinafter: accounting policies) of the Parent

Company financial statements of Siemens Nederland N.V. are the same as those for the consolidated EU IFRS financial

statements.

Those consolidated EU IFRS financial statements have been prepared in accordance with the standards published by the

International Accounting Standards Board and adopted by the European Union (IFRSs). Please refer to note 1 to the

consolidated financial statements for a descriptions of those policies.

Gains or losses on transactions involving the transfer of assets and liabilities between Siemens Nederland N.V. and its

equity investments and among equity investments have not been recognized where they cannot be deemed to have been

realized. Receivables from and liabilities to subsidiaries are initially recognized at fair value (including transaction costs) and

subsequently measured at amortized cost.

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(3) Non-current intangible assets

Software and

development costs Goodwill Total

Carrying amount as of October 1, 2015

Cost 35.1 9.8 44.9

Amortization -35.1 - -35.1

- 9.8 9.8

Changes

Amortization charged to income - - -

Divestment - - -

- - -

Carrying amount as of September 30, 2016

Cost 35.1 9.8 44.9

Amortization -35.1 - -35.1

- 9.8 9.8

Changes

Amortization charged to income - - -

Divestment - - -

- - -

Carrying amount as of September 30, 2017

Cost 35.1 9.8 44.9

Amortization -35.1 - -35.1

- 9.8 9.8

For more information, please refer to note 6 to the consolidated statement of financial position.

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(4) Property, plant, and equipment

Land and buildings

Machinery and installations Inventories

Non-current operating assets

in process Total

Carrying amount as of

October 1, 2015

Cost 8.8 25.9 19.6 3.7 58.0

Depreciation -4.1 -16.5 -17.3 - -37.9

4.7 9.4 2.3 3.7 20.1

Changes

Transfers, cost 0.1 0.0 0.5 -0.6 0.0

Transfers, depreciation 0.0 0.0 0.0 0.0 0.0

Investments 2.3 0.7 1.7 0.2 4.9

Depreciation charged to income -0.9 -1.9 -1.2 0.0 -4.0

Demerger Healthcare, cost 0.0 -2.2 -0.4 0.0 -2.6

Demerger Healthcare, depr. 0.0 0.1 0.4 0.0 0.5

Divestments, cost 0.0 -0.5 -1.5 0.0 -2.0

Divestments, depreciation 0.0 0.5 1.5 0.0 2.0

Impairment 0.0 0.0 0.0 0.0 0.0

1.5 -3.3 1.0 -0.4 -1.2

Carrying amount as of

September 30, 2016

Cost 11.2 23.9 19.9 3.3 58.3

Depreciation -5.0 -17.8 -16.6 0.0 -39.4

6.2 6.1 3.3 3.3 18.9

Changes

Transfers, cost 2.3 2.1 1.9 -2.5 3.8

Transfers, depreciation -1.5 - -1.4 - -2.9

Investments 1.7 0.2 1.0 1.6 4.6

Depreciation charged to income -1.0 -2.0 -1.4 - -4.5

Divestments, cost -0.1 -0.6 -2.1 0.0 -2.8

Divestments, depreciation 0.1 0.6 1.9 - 2.6

Impairment - - - - -

1.5 0.3 -0.1 -0.9 0.8

Carrying amount as of

September 30, 2017

Cost 15.2 25.6 20.7 2.4 63.9

Depreciation -7.5 -19.2 -17.5 - -44.2

7.7 6.4 3.2 2.4 19.7

The cost of property, plant, and equipment still in use at September 30, 2017 was EUR 28.0 million (2016: EUR 24.5

million), which had been depreciated in full. The contractual obligations to acquire property, plant, and equipment amounted

to EUR 0.2 million as of September 30, 2017 (2016: EUR 1.5 million).

The carrying amount of installations supplied under operating leases amounted to EUR 0.5 million as of September 30,

2017 (2016: EUR 1.5 million). The investments made during the year added up to EUR 0.0 million (2016: EUR - 1.4 million).

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(5) Investments in group companies

Subsidiaries

At September 30, 2015 32.1

Profit (loss) for the year 4.0

Increase of shares Infraspeed Maintenance B.V. 0.4

At September 30, 2016 36.5

Profit of the year of Healthcare investment 7.7

Reclass to held for sale of Healthcare investment -43.8

At September 30, 2017 0.4

For more information, please refer to note 8 on Investments in associates and joint ventures in the notes to the consolidated

statement of financial position. We refer to note 15 in the notes to the consolidated statement of financial position regarding

the reclassification of Healthcare to held for sale.

(6) Non-current receivables

2017 2016

Loans 2.3 -

Unbilled revenue and prepayments 5.2 3.9

7.5 3.9

Loans consist of an interest bearing loan to joint venture Infraspeed Maintenance B.V. (note 23 consolidated statements)

and an interest bearing issued invoice for which an extended payment period is granted.

Unbilled revenue and prepayments mainly relates to the sublease of part of The Hague office, in which performance and

payment scheme differs.

(7) Inventories

2017 2016

Merchandise and spare parts 4.4 3.9

4.4 3.9

As of September 30, 2017, a provision of EUR 6.1 million had been recognized for obsolescent inventories (2016: EUR 6.3

million).

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(8) Projects in process on the instructions of third parties

2017 2016

Work in process on long-term projects (offset against advance payments) 223.4 193.3

Work in process on the instructions of third parties includes an amount of EUR 200.0 million (2016: EUR 169.1 million) for

assets relating to long-term projects accounted for using the percentage-of-completion method.

An amount of EUR 0.1 million (2016: EUR 2.1 million) for advance payments received has been deducted from the work in

process on long-term projects.

The aggregate amount of costs incurred and recognized profits (less recognized losses) to date on construction contracts in

process, is EUR 1,224.1 million (2016: EUR 1,147.8 million) as of September 30, 2017. The amount of advance payments

received for construction contracts in process is EUR 59.4 million (2016: EUR 150.9 million). Construction contract revenue

recognized for fiscal year 2017 amounted to EUR 359.1 million (2016: EUR 660.5 million).

(9) Trade and other receivables

2017 2016

Trade receivables 107.7 139.0

Receivables from Siemens Group companies 419.0 461.2

Other receivables 4.9 4.7

531.6 604.9

Most of the receivables from companies that are part of the Siemens Group relate to receivables on funds temporarily

placed in interest-bearing investments within the Group.

(10) Other financial assets

2017 2016

Finance lease receivables - 0.0

Other 7.5 4.4

7.5 4.4

(11) Cash and cash equivalents

Siemens Nederland N.V. invests its cash in interest-bearing accounts with financial institutions within the Group. These

amounts are reported under "Receivables from Siemens Group companies" (see note 12). External bank accounts are only

used for cash received or cash intended for use in the very short-term. The aim is to keep the outstanding amount of cash

to a minimum. The Company does not keep any cash on hand. An amount of EUR 1.6 million (2016: EUR 2.2 million) in

cash at bank is not at the group’s free disposal.

2017 2016

Bank accounts (current accounts) 2.1 2.6

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(12) Assets held for sale

2017 2016

Assets held for sale 43.8 41.7

In the current fiscal year on January 31st the Wind division has been sold to Siemens Gamesa which was classified as held

for sale in 2016. We refer to note 15 in the notes to the consolidated statement of financial position regarding the

reclassification of Healthcare to held for sale.

(13) Equity

Issued capital

Share premium

Retained earnings

Cash flow hedge

Profit for the year Total

At September 30, 2015 36.3 150.9 4.1 0.0 72.6 263.9

Profit after tax - - - - 169.1 169.1

Other comprehensive income - - 2.2 -1.5 - 0.7

Total comprehensive income - - 2.2 -1.5 169.1 169.8

Dividends - - - - -72.6 -72.6

Allocations to reserves - - - - - -

At September 30, 2016 36.3 150.9 6.3 -1.5 169.1 361.1

Profit after tax - - - - 193.4 193.4

Other comprehensive income - - 0.1 1.5 - 1.6

Total comprehensive income - - 0.1 1.5 193.4 195.0

Dividends - - - - -169.1 -169.1

Allocations to reserves - - - - - -

At September 30, 2017 36.3 150.9 6.4 - 193.4 387.0

The reserves include balances of retained earnings from prior years and cumulative actuarial gains and losses.

Issued capital

As of September 30, 2017 and as of September 30, 2016, the Company's share capital amounted to EUR 100 million,

divided into 100,000 shares with a nominal amount of EUR 1,000 each. As of September 30, 2017 and as of September 30,

2016, 36,307 shares of the share capital had been issued and fully paid up.

Share premium

All share premium is considered as paid-up capital from a tax perspective.

Dividends

2017 2016

Declared and distributed during the year 169.1 72.6

2017 2016 Proposed for approval by the Annual General Meeting (not recognized as a liability as of 193.4 169.1 September 30)

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(14) Provisions

Pension Warranty Order-related

Personnel-related Other Total

Carrying amount as of Oct. 1, 2014 - 28.6 30.7 8.0 4.3 71.6

Additions during the year - 2.7 7.3 8.6 6.6 25.2

Usage - -3.1 -8.3 -6.6 -3.8 -21.8

Reversals - - -0.3 -0.3 - -0.6

Change in scope of consolidation - -1.5 -4.2 -0.9 - -6.6

Transfer - - -0.3 -0.1 - -0.4

Carrying amount as of Sept. 30, 2016 - 26.7 24.9 8.7 7.1 67.4

Additions during the year - - 10.5 2.5 0.2 13.2

Usage - -2.9 -6.8 -4.0 -0.8 -14.5

Reversals - - -0.2 - - -0.2

Change in scope of consolidation - - - - - -

Carrying amount as of Sept. 30, 2017 - 23.8 28.4 7.2 6.5 65.9

Current as of September 30, 2016 - 15.2 24.1 4.0 1.2 44.5

Non-current as of September 30, 2016 - 11.5 0.8 4.7 5.9 22.9

Carrying amount as of Sept. 30, 2016 - 26.7 24.9 8.7 7.1 67.4

Current as of September 30, 2017 - 15.9 26.1 2.2 1.5 45.7

Non-current as of September 30, 2017 - 7.9 2.3 5.0 5.0 20.2

Carrying amount as of Sept. 30, 2017 - 23.8 28.4 7.2 6.5 65.9

For more information on provisions, please refer to note 19 to the consolidated statement of financial position.

(15) Deferred tax liabilities

2017 Equity P&L Add. 2016 Equity P&L Add. 2015

Deferred tax assets:

Non-current intangible assets - - - - - - - - -

Property, plant, and equipment - - - - - - - - -

Pensions - - - - - - - -

Provisions 0.1 - 0.0 - 0.1 - -0.3 - 0.4

Other - -0.5 - - 0.5 - 0.5 - -

0.1 -0.5 0.0 - 0.6 - 0.2 - 0.4

Deferred tax liabilities:

Non-current intangible assets -1.9 - -0.0 - -1.9 - 0.0 - -1.9

Property, plant, and equipment -0.8 - 0.1 - -0.9 - 0.5 - -1.4

Pensions -0.8 - - - -0.8 -0.8 - - -0.0

Provisions -0.6 - 0.6 - -1.2 - 1.8 - -3.1

-4.1 - 0.7 - -4.8 -0.8 2.3 - -6.4

Net deferred tax liabilities -4.0 -0.5 0.7 - -4.2 -0.8 2.5 - -6.0

All tax receivables and liabilities are recognized in the statement of financial position.

Siemens Nederland N.V. is part of a tax group headed by Siemens International Holding B.V. under which all parties have

joint and several liability for the taxes payable by the tax group.

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(16) Other financial obligations (included in non-current liabilities)

2017 2016

Finance lease and hire purchase liabilities 1.6 -

Other financial liabilities 1.9 1.9

3.5 1.9

Finance lease receivables are presented as follows in the statement of financial position:

2017 2016

Short-term finance lease receivables 0.1 -

Long-term finance lease receivables 1.6 -

1.7 -

The portion due within one year has been recognized under Trade and other payables.

The minimum lease payments to be made under finance leases and hire purchase agreements in the future are as follows:

2017 2016

To be settled in 1st subsequent year 0.2 - To be settled in 2nd subsequent year 0.2 - To be settled in 3rd subsequent year 0.2 - To be settled in 4th subsequent year 0.2 - To be settled in 5th subsequent year 0.2 - To be settled after 5th year 0.9 - Minimum lease payments to be received in the future 1.9 -

The table below shows a reconciliation between the minimum lease payments and the gross and net lease investment to

the present value of the minimum lease payments:

2017 2016

Minimum lease payments 1.9 -

plus: Unguaranteed residual value - -

Gross investment in leases 1.9 -

less: Finance income received in advance (unearned interest) -0.2 -

less: Allowance for doubtful accounts - -

plus: Amortization of unguaranteed residual value - -

plus: Initial direct cost - -

Net investment in leases 1.7 -

less: Present value of unguaranteed residual value - -

less: Initial direct cost - -

Present value of minimum lease payments 1.7 -

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The gross investment in leases and the present value of the minimum lease liabilities mature as follows:

2017 2016

Gross lease investment 1.9 -

within 1 year 0.2 -

within 1 to 5 years 0.8 -

after 5 years 0.9 -

Present value of minimum lease payments 1.7 -

within 1 year 0.1 -

within 1 to 5 years 0.7 -

after 5 years 0.9 -

The current finance lease relates to an office location in Breda. (17) Current liabilities 2017 2016

Trade payables 69.7 59.3

Siemens Group companies 9.5 8.5

Advance payments received on orders 235.3 247.5

Taxes and social security contributions payable 31.6 31.6

Income tax liabilities 3.1 49.2

Other liabilities and deferred income 35.7 42.1

Liabilities under forward exchange contracts 2.4 3.5

Pension contributions payable 1.5 1.8

388.8 443.5

The taxes and social security contributions payable have been offset against taxes and social security contributions

receivable, provided that they are payable to or receivable from the same party and a legal right to offset exists.

(18) Contingent liabilities

The Company forms a tax group with its parent company and other group companies in the Netherlands for the levying of

corporation tax. The Company forms a tax group with its parent company for the purpose of value added tax. All companies

belonging to either of these tax groups are jointly and severally liable for the taxes payable by the respective tax group.

For quantitative information on non-current lease liabilities and liabilities arising from operating assets, please refer to note

23 to the consolidated statement of financial position.

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Notes to the Company income statement

(19) Related parties

Transactions with managing directors and key management personnel

Siemens Nederland N.V. has not issued loans to or entered into transactions with managing directors or managers.

Other related party transactions

The values of transactions involving goods and services with companies included in the scope of consolidation of Siemens

AG were as follows:

Transaction values

2017 2016

Purchases 326.3 849.6

Sales 90.3 73.1

Interest Balance outstanding 2017 2016 2017 2016

Loans issued and interest income (expense*)

Siemens Financial Services (current) -1.9 -1.0 335.0 430.0

Loans received and interest expenses

Siemens Financial Services (non-current) - - - -

Cost of providing guarantees

Siemens Financial Services -0.1 -0.1 - -

Cost of assuming credit risk

Siemens Financial Services 0.0 -0.4 - -

The interest charged in the case of related parties is determined on an objective arm's length basis (EURIBOR plus a

margin) and is settled within a maximum of six months of the end of the year. No collateral has been pledged for any

balances.

Siemens Nederland N.V. maintains a cash pool at the treasury department of Siemens AG, where balances are kept at

market-related interest rates and from which loans are issued and/or raised.

* Interest is due on loans issued

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(20) Financial instruments

The table below shows a summary of the carrying amounts of all financial instruments recognized in the financial

statements:

2017 2016

Financial assets

Non-current financial assets:

Non-current receivables 7.5 3.9

Receivables:

Trade and other receivables 531.6 604.9

Other financial assets 6.5 4.4

Financial liabilities

Non-current liabilities:

Other financial liabilities:

Finance lease and hire purchase liabilities -1.6 0.0

Other financial liabilities -1.9 -1.9

Current liabilities:

Current liabilities -388.8 -443.5

The fair values of current liabilities correspond to their carrying amounts. This is due to the high level of liquidity and/or short

maturities of the instruments.

Non-current receivables, such as the amount receivable on other investments and finance lease receivables, are assessed

by Siemens Nederland N.V. on the basis of interest rates, credit rating forecasts, and the financial risk of the underlying

projects. This assessment forms the basis for recognizing allowances for uncollectible receivables where necessary. At

September 30, 2017 and September 30, 2016, the carrying amounts of non-current receivables, net of provisions, were

comparable to their fair values.

(21) Employees

The number of employees, expressed as full-time equivalents, working for Siemens Nederland N.V. at year end was as

follows:

2017 2016

Sales divisions 1,668 1,746

Management and staff departments 175 174

Total 1,843 1,920

These employees are employed in The Netherlands. For information on the compensation of the Management Board and

the Supervisory Board, please refer to note 29 to the consolidated financial statements.

(22) Depreciation, amortization, and impairment losses

2017 2016

Non-current intangible assets - -

Property, plant, and equipment 4.5 4.0

Total 4.5 4.0

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(23) Personnel costs

2017 2016

Wages and salaries 140.7 148.4

Pension costs 12.3 12.7

Other social security costs 18.4 17.9

Total 171.4 179.0

(24) Audit fees

On the basis of Book 2 of the Dutch Civil Code, part 9 section 382a (3), Siemens Nederland N.V. opts not to disclose the

costs of the auditors, because Siemens AG includes these costs in its IFRS consolidated financial statements in

accordance with EU requirements.

(25) Compensation of the Board

We refer to note 29 of the consolidated income statement.

(26) Events after the reporting date

At the annual shareholder meeting of Siemens AG on November 10, it was announced that Siemens plans a public listing of

its healthcare business. It has not yet been indicated when the Healthineers IPO would take place, how much the company

would try to raise or where shares would be listed. However, Siemens AG’s CFO Ralf Thomas said the parent firm would

retain a majority stake in the healthcare business. Impact of the planned IPO on Siemens Nederland’s subsidiary Siemens

Healthcare Nederland B.V. is yet unknown.

On November 17, it was announced by Siemens AG will start a reorganization which will lead to a loss of approximately

6900 jobs worldwide. Outlook for this branch deteriorated significantly due to the rise of renewable energy and global

demand for large Gas Turbines is expected to level out at around 110 turbines a year, whereas global capacity is estimated

to be around 400. The site in Hengelo is in scope of this intentional reorganization and might be affected.

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The Hague, December 8, 2017

Management Board:

A.F. van der Touw (Chairman)

W.G. van der Poel

Supervisory Board:

C.D. Kaeser (Chairman)

M.P.H.-E.L. Pierer von Esch

A.H.G. Rinnooy Kan

G.A. Verbeet

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Other disclosures

Requirement in the Articles of Incorporation relating to the appropriation of profits

Article 22 (1) of the Articles of Incorporation reads as follows:

"The profit according to the approved income statement shall be at the disposal of the General Shareholders' Meeting."

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Independent auditor’s report

To: the general shareholders’ meeting and the supervisory board of Siemens Nederland N.V.

Report on the audit of the financial statements for the year ended September 30, 2017 included in the annual report

Our opinion We have audited the accompanying financial statements for the year ended September 30, 2017 of Siemens Nederland N.V., based in The Hague. In our opinion the accompanying financial statements give a true and fair view of the financial position of Siemens Nederland N.V. for the year ended September 30, 2017, and of its result and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code. The financial statements comprise: • The consolidated and company statement of financial position for the year ended September 30, 2017 • The following statements for the year ended: the consolidated and company income statement, the consolidated and company

statements of comprehensive income, changes in equity and cash flows • The notes comprising a summary of the significant accounting policies and other explanatory information

Basis for our opinion We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the “Our responsibilities for the audit of the financial statements” section of our report. We are independent of Siemens Nederland N.V. in accordance with the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics). We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Report on other legal and regulatory requirements In addition to the financial statements and our auditor’s report thereon, the annual report contains other information that consists of: • 2017 Supervisory Board Report • Managing Board Report • Other information pursuant to Part 9 of Book 2 of the Dutch Civil Code Based on the following procedures performed, we conclude that the other information: • Is consistent with the financial statements and does not contain material misstatements • Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements. By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our audit of the financial statements. Management is responsible for the preparation of the other information, including the management board’s report in accordance with Part 9 of Book 2 of the Dutch Civil Code and other information pursuant to Part 9 of Book 2 of the Dutch Civil Code.

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Description of responsibilities for the financial statements

Responsibilities of management and the Supervisory Board for the financial statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. As part of the preparation of the financial statements, management is responsible for assessing the company’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, management should prepare the financial statements using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. Management should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going concern in the financial statements. The Supervisory Board is responsible for overseeing the company’s financial reporting process.

Our responsibilities for the audit of the financial statements Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion. Our audit has been performed with a high, but not absolute, level of assurance, which means we may not have detected all material errors and fraud. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion. We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included e.g.,: • �Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing

and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control

• Obtaining an understanding of internal control relevant to the audit 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 company’s internal control

• Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management

• Concluding on the appropriateness of management’s use of the going concern basis of accounting, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company to cease to continue as a going concern

• �Evaluating the overall presentation, structure and content of the financial statements, including the disclosures • �Evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair

presentation Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities. Decisive were the size and/or the risk profile of the group entities or operations. On this basis, we selected group entities for which an audit or review had to be carried out on the complete set of financial information or specific items.

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We communicate with management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit. Rotterdam, December 8, 2017 Ernst & Young Accountants LLP W.P. de Pater

Siemens Nederland N.V.

Prinses Beatrixlaan 8002595 BN The HagueP.O. Box 160682500 BB The HagueThe Netherlands

Tel. +31 (0)70 333 3333Fax +31 (0)70 333 2917

www.siemens.nl