NANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST DECEMBER 2008

SERIES D EURO-DM SECURITIES LIMITED PINANCIA-MENTS

FOR THE YEAR ENr)ED 31- DECEMBER 2008.

Contents Page

Dtrectors' report

Independent Auditor's report

Balance sheet

Statement of comprehensive income

Statement of changes in equity

Statement of cash flows

Notes to the financial statements

SERIES D EURO-DM SECURITIES L I M m

OF THE DIRECTOM

The Dlrecbrs submlt their report and the audited finanaal statements for the year ended 3lst December 2008,

Series D EureDM !jeauitles Umlted (the "Company") was incorporated in J m y , Channel Islands, on 7th March 1986.

The Company holds a forty year Schuldschein issued by the State of Baden-WOrttemburg, Gemrany. The purchase of the Schuldscheln has been financed fmm the net pmceeds of the lssue of Z m p o n Deutsche Mark Bearer Bonds and the sale of a palion of the Interest receivable under the ScWdschein.

RESULTS

The results for the year are shown In the Statement of Comprehensive Income on page 7.

The D i r ~ t s do not ncommend the payment of a dlvldend In respect of the year (2007 NIL].

The Directm are responsible for preparing the flnanclal stdtements In aaordanae wlth app lkde law and International Rnanclal Reporting Standards (1FP.S").

Compank (Jersey) Law 1991 requlres the directws to prepare Rnancid statements for each flnandal year, which give a trw end fair vlew of the state of affilrs of the ampany and the profit and loss for that year.

In preparing those finandat statements the Directors stlarld:

* select suilable accounting policies and then apply them consistently; * make judgemas and estimates that are reasonable and prudent; * state whather applicable accounting standards have been followed, subject to any material

departures dwosed and explained in the flnanclal statements; and * prepare the financial statements on a gdng mncem basls unless H Is inappropriate to presume that

the Company will conUnw in business.

The Diredm eonflnn they have complied with all the above requlrernentr in preparing the financial statements.

The Illrectors are responstble for keeping proper amwntlng recordsl which disdose with reasonable accuracy at any time the Anandal p0slUon of the company and to enable them to ensure that the financial statements comply with h e Cmpanles (Jersey) Law 1991. They have general responslblllty for taWng such steps as are

. reasonably open to h to safeguard the assets of the company and to prevent and d e t . fraud and other irregularities.

So far as the Directors are aware, there is no relevant audit Information d whlch the tompany's auditors are unaware, and exh Olrectw has taken all the steps that he or she ought to haw taken as a Directar in order to make hlmself or W P aware of any relevant audt Informatlam and to establish that tha Company's auditors are aware of that information.

Sr fl With regard to Regulation 20041109IEC of the Ewopean Unlm (the "EU tiarqmmq Wrective"), the Directors d the Company conRnn to the bst of thar lanowledge that the Finandd !&temnb for the year end give a bue and fair view of the assets, lilliies, flnandal position and profit and loss Of the Company as rwred by the applicable accounting standards. The Report of the Directors gives a falr review of the development of the Company's business, Rnancld posltlon and the important events that have accutred during the financial year and thelr Impact on the Anandal Statements. The Prindpal risks and uncertainties faced by the Company are dlsdosed In the notes of these financial statements.

SERIES D EURO-DM SECURITIES UMITfB,

BEPORT OF l'HF DIRECTORS Gzmm!w

The Mrecton of the Company vho served durlng the year and subsequently were as follows:

R M Rlchards (resigned 31st July 2008) S P Harvey 3 P Le Malsbe D E Smlth (resigned 24th August 2010)

SECRETARY Lloyds TSB (Jersey) Management Limited acted as Secretary throughout t k year.

11 - 12 Esplanade, PO ,Box 63, St. Heller J-Y Channel Islands JE4 8W

EES Trustees Intematlonal Limited Queensway ~ouse Hilgrove Street st Helier JEl 1ES J-Y

PAYING AGENT

Cornmenbank AG Malnzer LandstraBe 151, 60327 Frankfurt am Maln Frankfurt Germany

PricewaterRovse Coopers CI U P acted as auditors during the year and have expressed their wllllngns to continue in office.

/uoyds TSB (Jersey) ~ansgknnn Limited

Dated ... !.&. .. ...k .. . .!!! .... I \

Page 4

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SERIES D EURO-DM SECURITIES LIMITED

Report on the financial statementsr We have audited the accompanying financial statements of Series D Euro-DM Securities Limited which comprise the balance sheet as of 31 December 2008 and the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes.

Directors' responsibility for the financial statements The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and with the requirements of Jersey law. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; seIecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors' responsibility Our responsibility is to express an opinion on these financia1 statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonabIe assurance whether the financial statements are free from material misstatement

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Company as of 31 December 2008, and of its financial performance and its cash flows for the year then ended in accordance with InternationaI Financial Reporting Standards and have been properly prepared in accordance with the requirements of the Companies Uersey) Law 1991.

Report on other legal and regulatory requirements We read the other information contained in the Annual Report and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. The other information comprises of only the directors' report.

In our opinion the information given in the directors' report is consistent with the financial statemenls.

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Article ii3.A of the Companies (Jersey) Law 1991 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other

'

person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

For and on behalf of PricewaterhouseCoopers CI LLP Chartered Accountants and Recognized Auditor Jersey, Channel Islands 18 November 2011

S S

v -.

(Expressed in Euro '00Oqunless othennrise stated)

Non-current absesta Held to rnaturlly finandal assets Prepaid expenses

Current assets Receivable from related party

TOTAL ASSETS

E Q W

Capital and remrves (attributabie to the company's equity holders) Ordlnaty share capital 6 5 5 Accumulated l~sses (194) (190)

TOTAL EQUITY (189) (185)

LIABILITIES

Nan-current llabliltles Financial llabillties at amortised cost

Current llabilltles Trade payable and accrued expenses

TOTAL L IABImEs

TOTAL EQUITY AND U A B I W E S 369,166

The financial statements on pages 6 to 18 were approved by the h a r d of directors on 2011 and are signed

Diredor .. .. &- ................,.. ...... ,.. ......... ,....

The notes on pages 10 to 18 form an Integral p&t of these flnanclal statements

Page 6

SERIES D ZURO-DM SECURITIES LIMITED

DATE- OF COMPRE-E INCOME

F_OR YEAR E m 31ST D E C E M W

(Expressed in Euro '000s unless otherwise stated)

INCOME

Interest income

ADMINISTRATION EXPENSES

Secretarial fee Amuntancy fee Audlt fee Exempt wrnpany fee

Less: Reimbursemefit

FINANCE COSTS

Amortisation charge Prepaid expenses

NIT LOSS FOR THE YEAR

The notes on pages 10 to 18 form an Integral part of these financial statements

SERIES D EURO-DM SECURITIES LIMITED

STATEMENT OF C H A N W I N E O U W

FOR THF YEAR ENDED 31ST DECEMBER

(Expressed In Euro '0008 unless otherwise stated)

Share Accumulated . Total Capltal Losses Equity

' Balance a t 1 January 2008 5 (190) (185)

Net loss for the year attllbutable to equity - (4) (4) holders

BaIame at 31 December 2008 S (194) Cl892,

Share Accumulated Total Capltal Loroes Equity

Balance at 1 January 2007 5 (183) (178)

Net loss for ME year attributable to equity - (7) (7) holders

Balank at 31 December 2007 (185)

The notes on pages 10 to 18 form an integral part af these financial statements

Page 8

SERIES 0 EURO-OM SECURITIES UMmED

R A V M E N T OF CASH FLOWS

FOR THE YEAR ENDED 31ST DECEMBER 2008

(Expressed in Euro '000s unless otherwise stated)

Cashflows from operating activitles Cash used in operations Interest received

Net cash generated from operating actlvttlea

Cashflows from financing actlvlties

Net cash used In flnandng actlvltles

Net increase in cash and cash equivalenb ;

Caah and cash equlvalenta at beginning of year

Cash and cash equivalents at end ofthe year

Loss before tax

Adjustments for:

N OF LOSS BFMRE TAX TO CASH USED IN OPERATIONS

Changes in working capital:

(Increase) /decrease In receivable from related party

Increase / (decrease) in trade payable and accrued expenses

k r e a s e In prepaid expenses

Interest income at effective Interest rate 3

Arnortlsation of dlscaunt on bearer bonds at effeclive Interest rate 5

Cash used in operations

The notes on pages LO to 18 form an Integral part of these financial statements

Page 9

FS TO THE FINANCIAL STATEMENT'

FOR ME YEAR ENDED 31ST DECEMBW 2008

GENERAL f NFORMATIOY

The pdndpal accountlng pollcles applled In the preparatlon of these flnanclal statements are set out below. These pdlcles have been applied consistently to all perlods presented unless otherwise stated.

1.1 Gdng Concern

Although bere is a negative equlty position as at 31 December 2008, In the Directors' opinlon the Company Is stlll consldered to be a going concern as the Company Is aMe to meet Its liabilities as they fall due for the next 12 monttls and In accordance with an undertaking dated 2nd July 1906, Cornmenbank AG as promoters of the Issue of Zero Coupon Deutsche Mark bearer bonds as described In note 5, have agreed to reimburse the Company for all expenses Incurred. The expenses and the conespondlng reimbursement are shown in the Statement of Comprehensive Income.

1.1.2 Basis of preparation These flnandal statements have been prepared under the historical cost oonventlon and in accordance wlth International Rnandal Reporting Standards (IFRS) as adopted by the European Unlon, issued by Intematlonal Accounting Standards Board (IASB) and Interpretations Issued by the Intematlonal Finandal Reporting Interpretation Committee (IFRIC).

The Company has acquired a Schuldscheln Issued by the State of Baden-~irttemburg, Germany from Comrnerzbank AG funded by the proceeds of the Zero coupon Deukhe Mark bearer bonds. The bonds are Issued with a maturlty date oorrespondlng to the payment date on the Schuldschein loan.

The Company neither has, nor will have, any other signlflcant assets or Ilabllities and has covenanted not to enter Into any other transactions except in connection wlth the Schuldscheln.

I t should be noted that the terms of issue of the Deutsche Mark bearer bonds and certaln of the agreements contain provisions that i f changes are made before the final redemptlon date of the Schuldscheln then the calculation of the amounts due Is on the bask set out In such terms.

These flnanclal statements have been prepared keeping in view that the transactions mentioned In the prevlous paragraphs are not separable. Total Income arising from the Schuldxheln and total expenses Incurred on the financial liabilities (excluding the expenses pertalnlng to redemptlon of such liabllitles) are recognised in the Income statement during the terms of the Schuldschdn and Deutsche Mark bearer bonds respectively so as to produce a constant rate of return over thelr term.

The preparatlon of flnandal statements In conformity with IFRS requires the use of certain crltical accountlng estimates. It also requlres management to exercise its judgment in the process of applying the'company's aaountlng policies. The areas invdvlng a higher degree of judgement or complexity, or areas where assumptions and estimates are slgniflcant to the flnanclal statements, are disclosed in nokl.2,

a) Standards, amendments and lnterpmtatlons effective I n 2008 IFRS 7, 'Flnanclal instruments: Disclosures', and the complementary amendment to IAS 1, 'Presentation of flnandal statements Capital dlsdosures', Introduces new disclosures relatlng to tlnandal instruments. The 'Company has adopted IFRS 7 and amendment to IAS 1 for the flnanclal period that commenced on 1 January 2008.

IFRXC 8, 'Scope of IFRS 2', requires conslderatfon of transactions invohrlng the issuance of equity insbuments, where the ldentlflable consideration received is less than falr value of the equity Instruments issued In order to establish whether or not they fall within smpe of IFRS 2. Thls standard does not have any impact on the Company's flnandal statements,

IFRIC 10, 'Iliterlm financial reporting and impalrment', pmhlblts the lmpalrment losses recognised in an interim perlod on goodwill and Investments In equity Instruments and In flnandal assets carrled at cost to be reversed at a subsequent balance st?eet date, Thls standard does not have any impact on the Company's financial statements.

Page 10

YOlES TO THF FYNANCIAJ STATEMENTS (continued)

FORTHE YEAR ENDED 31ST DECEMBER 2OOJl

1.1.2 Basis of pmparation (oontlnued)

b) Standards and Interpretations to existing standards that are not effective and have not been early adopted by the Company The Company has not early adopted any standards or Interpretations.

IAS 32 (Amendment), 'Flnanclal instruments: Presentatlon',(effectIve from 1 January 2009); IAS 39 (Amendment), 'Financial instruments: Recognition and measurement' (effectlve from 1 January 2009);

r IAS 1 (Revised), 'Premtatlon of financial statements' (effective from 1 January 2009); r IAS 1 (Amendment), 'Prentatlon of flnandal st~tetnenb' (effective from 1 January 2009);

IAS 23 (Amendment), 'Bomwlng costs' (effectlve from 1 January 2009); IFRS 8 'Operatlng segments1 (effectlve from 1 January 2009)' IFRS 8 replaces IAS 14 and allgns segment reporting wlth the requirements of the US standard SFAS 131, 'Disclosures about segments of an enterprise and related Information'.

c) Standards, amendments and interpratatibns &ctive In 2008 but not relevant The following standards, amendments and interpretatlons to published standards are mandatory far accounting periods beginnlng on or after 1 January 2007 but they are not relevant to the Company's operations:

r IFRIC 14, 'IAS 19 - The llmit on a deflned benefit aSSet, mlnlrnum funding requirments and k l r Interaction' (effective from I January 2008); IFRIC 11, 'IFRS 2 - Group and treasury share transactions' (effective from 1 January 2008);

r IFRIC 12, 'Servlce concession arrangements' (effedive from 1 January 2008).

Adoption of these standards, amendments and interpretatlons do not have an impact on Company's flnanclal statements.

d) Interpretatlons to a*irtlng standards that are not yet effective and not relevant for the Company's operations The following Interpretatlons to existlng standards have been published and are mandatory for the CompaWs accounting perlods beginnlng on or aRer 1 January 2008 or later perlods, but are not rdevant to the Company's operations.

IFRS 1 (Amendment), 'flrst time adoptlon of IFRS' and IAS 27, 'Consdldated and separate financial statements'(effective from 1 January 2009); IFRS 2 (Amendment), 'Share-based payment' (effectlve from 1 January 2009); IFRS 3 (Revised), 'Business combinations' (effectlve fmI 1 July 2009); IFRS 8, 'Operatlng segments' ( e f f ~ w turn 1 January 20091, which 1 not considered relevant, as the Fund is outslde the scope; IAS 23 (Amendment), 'Borrowing costs' (effectlve k0m 1 January 2009); IAS 27 (Revised), 'Consolidated and separate flnandal ~takments' (effectlve from 1 July 2009);

r IFRIC 13, 'Customer loyalty programmes' (effective from 1 July 2008); IFRIC 15, 'Agreements for constnrction of real estates' (effective from 1 January 2009); IFRIC 16, 'Hedges of a net Invesiment In a foreign operation' (effectlve from 1 October 2008); IFRS 5 (Amendment), Mon-current Assets Held for Sale and Dlsmtlnued Operations (and consequential amendments to IFRS 1,'Flrst time adoption') (ePfedive from 1 July 2009); IAS 16 (Amendment), Pro~~r ty , Plant and Equlpment (and consequential amendments to IAS 7 'statement of cash flows1) (effectlve from I January 2009); !

IAS 19 (Amendment), Employee Benefits (effective from 1 January 2009); s IAS 20 (Amendment), Accounting for Government Grants and Disdosure of Government Mstance

(effective from 1 January 2009); IAS 28 (Amendment), Investments in AssoClateS (and consequential amendments to IAS 32, Financial instruments:Presentatlon and IFRS 7, Financial Instrumenrs: Dlsdosures) (effectlve from 1 January 2009); IAS 29 (Amendment), Flnandal Reporting In Hyperlnflationary Economies (effectlve from 1 January 2009);

Page I I

SERIES D EURO-DM SECURZTIES U M m D

FOR THP YEAR ENDED 31ST DECEMBER 2008

IAS 31 (Amendmnt),Interests In Joint Ventures (and consequential amendments to IAS 32, Financial Insbuments:Presentation and IFRS 7, Financial Instruments: Disclosures) (effefectlve from 1 January 2009); IAS 34, Interlm Flnancial Reporting

a IAS 36 (Amendment), Impairment of Assets (effectlve from 1 January 2009); IAS 38 (Amendment), Intangible Assets (effectlve from 1 January 2009); IAS 40 (Amendment), Investment Property; IAS 41 (Amendment), Agriculture (effective from 1 January 2009).

1.2 Critical accounting eotmates and judgements

Estimates and Judgements are continually evaluated and are based on hlstorlcal experience a@ other factors including expecbtlons of future events that are believed to be reasonable under circumstances.

1.2.1 Crltlcal accountjng eotlmates and assumptions The Company makes estimates and assumptionsconcernlng the future. The resulting accounting estimates wlll, by deflnltion, seldom equal and the related actual results. .The estimates and assumptions that have a signincant rlsk of causing a materlal adjustment to the canylng amounts of assets and llabllitles wlthln the next flnanclal year are addressed below.

Amortlsed c a d Invesbnent in Schuldscheln and DeutPctre Mark bearer bands The akrtised cost of the Shuldscheln and Deutsche Mark bearer bonds are calculated using the estimated effective Interest rate. Eff@cUve Interest rate was calculated based throughout the life of the Shuldscheln and bearer bonds. The Company used Ib best judgement in estlmatlng on the estimated cash inflows and cash wfflows the cash flows for the calculation of effectlve Interest rate. The amrtlsed cost of the Schufdschdn and Deubche mark bearer bonds would be over or under &mated were the cash flows used to calculate the effective interest rate to dlffer from the management estimates.

1.2.2 Critlcal judgments In applylng the amunt lng polldeo

Xmpalnnent of held to maturlty flnandal assets

The Company follows the guidance of 1AS 39 to deterrnlne when a held to mabrlty financlal asset is Irnpalred.

The determination requires significant judgement. In rnaWng thls judgement, the Company evaluates, among other factors, the finandal health and business outlod: of the lnvestee Indudlng factors such as industry and sector performance, changes In the aperational and flnanclng cash flow.

In accordance with IAS 39, the Company assesses at each balance sheet date whether there k any objecUve evidence of impairment; the deterrninatlon requlres slgnlflcant judgement. I n making thls judgement, the Company evaluates, among other factors, the finandal health and business outlook of the Scuidscheln issuer (Land Baden-Wortternburg) including factors such as Industry and sector performance, changes In operational and flnanclng cashflow.

The Directors of the Company are of the opinion that State of Baden-Wiirttemburg is financially backed by the Federal Republic of Germany.

The Directors of the Company have a duty to review the impairment for year ended 31 December 2008 In accordance wlth Internatlonal Flnanclal RePorung Standards (IFRS), and to condude whether the Company would suffer an additional charge for impairment.

The Directors of the Company are of the opinlon that the investment is not currently impaired, although propose to continue to monitor the situation, given the current adverse economlc conditions.

Page 12

SERIES D EURO-DM SECURITIES UMIW

NOTES TO THIS FIN- STATEMENTS w n u e d )

FOR YEAR LNDED 3m DECEMBER 2000

1.3 Flnandal assets and llabllitleo held a t amortlsed cost

1.3.1 Classification

Held-to-matunty Investments are non-derivative financial assets with flxed or determinable payments and flxed maturltles that the management has the positlve.lntentlon and ablllty to hold to rnaturlty. The Company has deslgnated Its investment In the Schuldscheln as held-to-rnaturity investments, as the Company has the poslttve intention and abliily to hold the Investment In the Schuldschdn to its rnaturlty. Financial liabillties arise when company has a contractual obligation to deliver cash or other financial assets to another entity. The Deutsche Mark bearer bonds issued by the Company are designated as fli7andal llablllties carrled at amortised cost.

. 1.3.2 Recagnltlon and measurement IAS 39, FTnandal Instrurnenk: Remgnitlon and Measurement, requlres held-bmaturlty flnanclal assets and flnandal liabilitles at amortlsed cost to be measured on initial recognition at fair value plus transactlon msts that are directly attributable to the acquisition or Issue of the flnanclal asset. The invesbnent and financial liabilities of the Company are lnltlaily warded at cost. However, thls departure has no materlal effect on the cartying value of investment or the finandal liability as b e management estimates that the cost of the flnancial assets and flnanclal liabilitles approximated !n thelr falr values at the tlme of the initial recognition.

1.3.3 Derecognition of financia1 assets and financial IlabilMes Flnandal assets are derecognlsed when the rights to receive cash flows from the investments have explred or the Company has bansferred substantially all rl+s and rewards of ownershlp.

1.3.4 Fair value estimation

The falr value of flnanclal assets and liabllltles that are not ttaded In an active market (for example, over-the- counter derivatives) Is determined by uslng valuauon techniques. The Fund uses a varlety of methods and makes assumptions that are based on market condltlons existing at each balance sheet date. Valuation techniques used include the use of comparable recent arm's 1engt.h transactions, reference ta other Instruments that are subtantlally the same, discounted cash flow analysis, optlon priclng models and other valuatlon techniques cornmanly used by market partidpants maklng the maxlmum use of market inputs and rewng as IMe as possible on entity-speclflc inputs. See note 3 and note 5 for the falr value estimation.

1,4 Cash and cash equlvalenta Cash and cash equivalents lndudes cash In hand, deposlts held at call wlth banks, other short-term hlgHy llquld Investments wlth origlnai maturities of three months or less and bank overdrafts.

1.5 Forelgn currency translation

1.5.1 Functional and presentation currency The Company has adopted the Euro ("EUR") as its presentation and functional currency, as the Company's primary actlvlty is to Invest In Eum denomlnated securltles. The Company has no exposure to currency on Its Inveshnent, and only mlnlmal exposure to Pound Sterling ("GBP") and United States Dollar ("USD") on Its payable and receivables.

1.5.2 Transactions and balances Transactions denomlnated in currencies other than EUR have been translated to EUR at the exchange rate ruling at the date of the transactlon. Monetary items on the balam sheet have been translated to EUR at the exchange rate rullng at the year end. Forelgn currency gains and losses on such transactions and translation are recognised In the Statement of Comprehensive Income.

1.6 Income I n m , which includes Inteiest Income'and dlscount on the Schuldscheln, Is recognlsed In the Statement of Comprehensive Income using the effective interest rate method over the term of the Schuldschein.

1.7 Amortisation charge Discoont on Deutsche Mark bearer bonds is amoNsed through the Statement of Comprehensive,Income over the life of the total liablllty uslng the effective Interest rate method.

Page 13

SFRXES -0-DM SECURITIES LI-

m c m FOR THE YEAR ENDED 31- DECEMBER 2008

1 ACCOUNTING POUCIFS fcontinuep)

1.8 Issue costs

Costs necessarily incurred in relation to the Issue of the Deutsche Mark bearer bonds ate classified as transaction costs. These transadlon costs are subsequently amortlsd through the Statement of Comprehensive Income using the effective interest rate method over the llfe of the related liability. Any unamortlsed bansadlon costs are presented by way of netting from the related Ilablllh/ to which they pertaln.

1.9 OffsetWng finandal Instrument9 Financial assets and llabllities are offset and the net amount repoded In the balance sheet when there is a legally enforceable rlght to offset the recognised amounts and there is an Intention to settle on a net basls, or realise the asset and settle the liablllty simultaneously.

1.10 AdmlnistraHon expensea The Colnpany has engaged the services of 'Es Trwtees Intemational+BB6O Limited to provide admlnlstrative services for a fixed fee of $10,000 per annum and a fee of $3,000 for bookeeplng and.accounting servlces plus disbursements. Total secretarial and accounting fees for the year amounted to €9,000 (2007: &9,000).

1.11 Bond redemption expenses According to the terms of arrangement the dmerence between the interest instalrnents receivable on the Schuldxhein and the redemption value of the relevant Deutsche Mark bearer bonds will be utilised for payment of costs pertaining to redemption of the Deutsche Mark bearer bonds. Accordlngly, bond redemption expenses are recorded at the Urne when fhe bonds are actually reckrned. .

1.12 Share capltal Ordlnary shares am classified as equlty.

2 FINANCIAL RISK MANAGEMEW

The Company's activities expose It to a varlety of financial risks: a-edit risk, counter-party risk, market risk and liquldlty risk as explained below.

1.1 flnanclal risk factors

a) Market risk

I) Price risk and interest rate risk The overall positlon and therefore risk is governed by terms of the determined loan document under the Schuldscheln, and Is matched and funded by zero coupon Deutsche Mark bearer bonds. The interest rate on the Xhuidschein Is flxed and therefore Interest rate risk is minimal.

11) Currency risk The Company's presentation and functional reporting currency is the Euro and there is no exchange rate risk on income since the DM was converted to the Euro In 2002 at a fixed rate of 1.95583. There Is some limited exposure on expenses charged in Steding and USD currendes, however these expenses are fully reimbursed by the controlling company, Commerzbank AG.

ili) Sensitivity analysb

The Company has nor provided a sensitivity analysis, given that both interest rate risk and currency risk are fully hedged. Therefore in the Opinion of the Directors, no sensitivity analysls Is required to be dlsdosed.

Page 14

NOTES TO THE FIN- STATEMENTS (continue$l

R ENDED 32ST DECEMBER 2008

2 fW4NCXAL RZSK MANAGEMENT Iconlnued)

2.1 flnanclal rlsk facton (cantlnued)

b) Credlt rlsk and counter party rlsk

Credlt rlsk Is the rlsk that the counter-parties wlll be unable to pay amounts in full when due. The Company's slngle investment holdlng Is the Schuldsheln (as desnlbed In note 3), wlth an achral balane ouwandlng of € 368.9m as at 31 December 2008 (2007: E346.6m). The Company has convenanted not to enter into any other transactions except in connection to the Schuldscheln. An impalrment revlew was carrled out *In the business in respect of the Schuldscheln and based on such directors are of the vlew that no impairment provlslon Is required, as described below.

The Schuldscheln Investment continues to be government backed and the loan originates from an EU member state. Land Baden-Wiltttemberg ("LBW") as a state is among the most prosperous states In Germany and Is one of the wealthiest reglons in Europe. L6W Is one of the slxteen states which are partly soverelgn constituent states of the Federal Republlc of Germany.

LBW Is a key shareholder In landesbank Baden-Wuerttemberg ("LBBW")ho are of hlgh systemic importance to the Federal Republlc of Germany. LMW will contlnue to recelve exbaordhaty .Ifinancia! support from LBW If needed.

The only other asset subject to credlt rlsk Is the receivable fmm related party, Cornmenbank AG is the ultimate controlling party of the Company. Given that Commerzbank AG, Is a well regulated bank with a credit rating of A-1 the aedit risk of the receivable from related party is deemed to be rnlnimal.

The Directors have accepted on balance that there Is no evldence to Nggest that the Schuldschein I n m e n t had suffered a dedlne In falr value below the cost, or that any dedlne was prolonged or slgnlficant. The D i redm of the Company are therefare of the oplnlon that the Investment is mt currently Impaired, although they dld acknowledge that they will contlnue to monltor the sltwtlon, given the current adverse emomic condins.

c) Uquldlty rlsk Liquidity risk Is the risk that the company Is unable to meet the payment obllgations assodated wlth its financial liabllitles when they fall due.

The Company currently has mlnlmal exposure to Ilquidlty rlsk as its obllgations to meet Its llabllities are offset by the investment held In amrdance with the terms d the loan agreement. There have been no defaults or breaches to date, in relation to financial obliclations of the mrnoanv.

The maturity of the Company's Ilabilities are given tn the table below.

As at 31 December ZOO8

Less than 1 year Over 5 yean E ro'O

Trade payable and accrued expenses 12

Finandal Ilabllltles at amortlsed cost:

As at 31 December 2007

Less than 1 year Over 5 years

Eum' 000s 2 -5 years Euro' 0008 Trade payable and accrued expenses 16

Flnanclal liabllitles at amortlsed cost:

@ERIES b EURO-DM SECURITIES LIMITED

WTES TO THE FINANCIAL STAmENTS cont ti nu^

FOR THE YEA- 31s DECEMBER 2008

2 flNANQAL RXSK MANAGEMENT fc-

2.2 Capital rlsk management As of 31 December 2008, the Company has an ordlnary share capRal of e 5,000 (2007: e 5,000). The Company's main transaction, acqulsitlon of Schuldschein was funded through Issue of Deutsche Mark bearer bonds as described in note 5 to the finandal statements.

2.3 Urnfted recourse There Is'no llmtted recourse In place, as the flnanclal assets are not secured on any speclflc assets of the Issuer but are guaranteed by the Issuer for repayment.

3 wl D TO MATURlTY FINANCIAL A-

This represents an unllsted investment In a Schuldscheln issued by the State of Baden-WOrttemburg on 8 Aprll 1986. The Schuldsdleln, which has a f a e value of €322,641,499, was purchased at a cost of €307,642,326.

Between 8 Aprll 1986 and 7 April 1996, the Schuldschein yields inferest at a rate of 6.09 % p.a. due and payable annually. Subsequently, it bears interest In equal instalments of €264,727,350due on 8 April 2006 and 2016, and 6111,956,600due on 8 April 2011 and 2026. The principal amount of the Schuldschein is payable on 8 Aprli 2026.

This Investment Is recorded lnltially at cost and is subsequently measured at amotiied cost which is determined after taking into account Interest yleld, discount arnortlsed and receipts of interest lnstalments as they become due.

The Schuldscheln is used to provlde securlty for the Deutsche bearer bonds detailed In note 5.

The carrying amount of the Investment Is as Pollows: e oms

Amortised cost at beginning of the year 346,619 325,743 Interest income during the year at effective interest rate 22,306 20,876

Amortlsed cost at the end of the year 346,619

The effective rate of the Schuldschein is 6.42% p.a. The fair value of the Schuldscheln presented in the Balance Sheet is estimated to be €488,811,293 as at 31 December 2006.

Page 16

XES D EURO-DM SECURITIES U M m Q

TO THE FINANCIAL STATEMENTS (continues

FORTHE YEAR ENDED 31ST D- 2008

4 PREPAID EXP-

Thls represents advance payments made In respect of Trustees and Paying Agents fees and k arnortlkd through the income statement on a m i g h t line basls over the Ilfe of the Schuldschdn.

Canying cost at the beginning of the year Amortlsed durlng the year

Carrying cost a t the end of the year

As explained In note 3 to these financial statements, the Company lssued zero coupon bonds and sold its tights la receive interest due on the Schuldschein during the period 8 April 1986 to 7 Aprll 19% to finance the ~urchase of the Schuldschdn. These IlaMllties are recorded In the finandal statements at their arnortlsed cost whlch IS determined after taking into account dlscount and transamon cost amortlsatlon and payment of interest instalments to settle the llabillty arlslng on the sale of rights to recehre interest on the Schuldschein.

The bonds are fully securedon the Schuldsdein detailed in note 3.

The carrying value Is as follows : € 0001

Amortlsed cost at the beglnnlng of the year 347,046 326,176

Amortisatlon of dlscount at effective Interest rate 22,297 20,870

Amortlsed cost at the end of the year 369,343 347,046

The effective interest rate of the Deutsche Mark bearer bonds Is 6.41% p.a.

The contractual value at the maturity of the Deutsche Mark bearer bonds is € B11.2m (2007: E 811.21~1).

The falr value of the Deustche Mark Bearer Bonds presented In the Balance Sheet Is estimated to be €488,811,293 as at 31 December 2008.

6 ORDINARY S W E CAPXTU

Authorlsed 10,000 shares of E 1 each

issued and fully paid 3,509 shares of E 1 each

Converted to E at the exchange rate rullng at the date on which the DM ceased to be legal tender. a- 5 O- 5

The Issued share capltal is held In a nommlnee capacity by Uoyds TSB (Jersey) Services Limited and Lloyds TSB (Jersey) Management Umlted.

Page 17

SERIES D ELIRO-DM SECURITIES UMITEQ

NOTES TO W E FINAN- StwMENTS lcontlnueyU

FOR THE YEAR ENDED 3iST DECEMBER 2008

7 W E D X A l E AND UI TIMAV CONTROLUNG PARTY

The Immediate controlllng party of the Company Is Lloyds TSB Offshore Trust Company Ltd (formerly known as Hill Samuel Offshore Trust Company Umlted), as trustee of a charitable trust. In the winion of the trustee the ultimate controllins mrtv is Commerzbank AG, a resulated German bank.

The Company Is currently registered in Jersey as an exempt company. The States of Jersey Income Tax Authority has granted the Company exemption frM Jersey Income tax under the provision of Artlde 123A of the Income Tax (Jersey) Law 1961. The Company has been charged the annual exernptlon fee of £600.

Wlth effect from 1 January 2009, Jersey has abolished the exempt company regime for exlsting companies. At the same tlme the standard rate of lncome tax for mpanles has moved from 209'0 to 0%. Therefore some entitles previously exempt from tax under the above provision are now taxed at OOh.

In accordance with an undertaking dated 2nd July 1986, Commerzbank AG as promotets of the issue of Z m Coupon Deutsche Mark bearer bonds as described in note 5, have agreed to reimburse the Company for all expenses Incurred. The expenses and the corresponding reimbursement are shown In the lncome statement.

10 RELATED PARTY TMSACfIOP@

Partles are considered related if one party has ablllty to control the other party or exerdse influence over the party in maklng finandal or opemtianal decisions. The following are considered by the directors of the Company to be related parties:

Uoyds TSB Offshore Trust Company Ltd as immediate controlllng party of the Company, The d l rkors of Lloyds TSB Company Offshore Trust Company Ltd are also directors of the Company. Commerzbank AG as the ultimate controlling party and paying agent of the Company.

Lloyds TSB Offshore Trust Company Ltd provided administrative and acmuntanq services for a fee of €9,000 (2007: 62,OV) durlng the year. There are no outstanding fees at the year end.

Commenbenk AG has reimbursed the Company of all administrative expenses for the year of 612,000 (2007: €12,000).

The balance receivable from Cornmenbank AG at 31 December 2008 Is €16,000 (2007: €20,000).

11 EVENTS AFTER THE B A U C E SHEET DATE

No significant event's occurred between the balance sheet date and the date of signing the financial stdtements, which would require adjustments, or d l sdosu~ In, the financial statements.

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