Audited financial statements of Fresenius ProServe GmbH as at and for the year ending December 31, (German GAAP)

Transcription

1 Audited financial statements of Fresenius ProServe GmbH as at and for the year ending December 31, 2016 (German GAAP)

2 Fresenius ProServe GmbH, Bad Homburg v. d. Höhe Balance sheet as of December 31, 2016 Assets A. Fixed assets December 31, 2016 December 31, 2015 EUR EUR EUR EUR I. Tangible assets 1. Land, leasehold and buildings 8,854, ,135, Other fixtures and fittings, tools and equipment 144, ,999, , ,309, II. Financial assets 1. Shares in related parties 5,194,841, ,194,816, Loans to related parties 124,790, ,444, Participations ,319,631, ,468,260, ,328,631, ,477,570, B. Current assets Accounts receivable and other assets 1. Accounts receivable due 397,409, ,978, from related parties 2. Other assets 2, ,412, ,978, ,726,043, ,793,548,891.96

3 Liabilities and shareholders' equity A. Shareholders' equity December 31, 2016 December 31, 2015 EUR EUR I. Subscribed capital 40,000, ,000, II. Capital reserves 5,075,387, ,075,387, ,115,387, ,115,387, B. Accrued expense 1. Pensions and similar obligations 5,866, ,098, Other accruals 851, ,950, ,717, ,048, C. Liabilities 1. Trade accounts payable 99, , Liabilities to affiliated companies 603,838, ,946, Other liabilities 1, , ,938, ,113, ,726,043, ,793,548,891.96

4 Fresenius ProServe GmbH, Bad Homburg v. d. Höhe Profit and loss statement January 1 to December 31, EUR EUR 1. Income from participations 402,776, ,501, Sales 1,340, ,310, Other operating income 710, ,057, Cost of purchased materials and revenues 33, , Personnel expenses Social security and costs of retirement pensions and social assistance 31, , thereof amount of retirement pensions EUR 31, (prev. period. EUR -18,231.37)-- 6. Depreciation on property, plant and equipment 309, , Other operating expenses 1,776, ,965, Income from financial assets 3,740, ,134, Other interest and similar income 288, , thereof amount from affiliated companies EUR 288, (prev. period EUR 89,512.71) Interest and similiar expenses 1,631, ,828, thereof amount from affiliated companies EUR 1,385, (prev. period EUR 3,519,021.72) After Tax profit 405,074, ,976, Other tax Net income before profit transfer 405,074, ,976, Profit transfer due to profit and loss transfer agreement 405,074, ,976, Retained earnings

5 Fresenius ProServe GmbH, Bad Homburg v.d.h. NOTES for fiscal year 2016 GENERAL NOTES (1) Preliminary note Fresenius ProServe GmbH, Bad Homburg v.d.h., is a wholly-owned subsidiary of Fresenius SE & Co. KGaA, Bad Homburg v.d.h. The company. is listed under number HRB 7302 in the Commercial Register in Bad Homburg v.d.h. There is a profit transfer agreement between the Company and Fresenius SE & Co. KGaA. The financial statements of Fresenius ProServe GmbH are included in the consolidated financial statements of Fresenius SE & Co. KGaA, which are published in the electronic Bundesanzeiger (German Federal Gazette). Moreover as of December 31, 2016 direct control and a profit transfer agreement between Fresenius ProServe GmbH and its subsidiary HELIOS Kliniken GmbH, Berlin is in place. (2) Accounting principles and standards of valuation The financial statements of Fresenius ProServe GmbH for 2015 are prepared according to the regulations in the German Commercial Code (HGB) as well as complementing regulations for limited liability companies (GmbHG). Fresenius ProServe GmbH is a small corporation (kleine Kapitalgesellschaft) according to Section 267 (1) HGB. The nature of expense method according to Section 275 (2) HGB has been elected for preparing the profit and loss statement. The size related exemptions in Section 274 a HGB and Section 288 HGB are used in part. The value of investments in property, plant and equipment is stated at the cost of the assets less regular linear or degressive depreciation as far as the assets are depreciable. The following useful lives were used for calculating amortization: Office buildings Tools and equipment 40 years 3-10 years Low value fixed assets with purchase or manufacturing cost of up to are fully written off in the year of addition.

6 Depreciable movable non-current assets with a value of more than and less than 1, are grouped into a collective item which is dissolved through profit and loss by one fifth in the year of capitalization and the following four years each. Financial assets are valued at purchase price or, if the asset is other than temporarily impaired the lower market value. The lower value of non-current assets resulting from write-downs to fair value has to be reversed if the reasons for the extraordinary write-down no longer apply (Section 253 (5) HGB). Accounts receivable and other assets are stated at nominal value reduced by individual allowance if necessary. The pension obligation is determined according to actuarial principles on the basis of biometric probabilities as in the reference tables by Dr. Klaus Heubeck 2005 (RT 2005 G) using the Projected Unit Credit-Method. The company has no active employees. Future expected pension increases are taken into account in calculating the obligation. Pensions are currently adjusted by 1.50%. The company specific fluctuation rate that is also taken into consideration for the calculation has been 0%. The actuarial interest rate applicable to the pension obligation was 4.01%. This interest rate is based on the last-ten-year-average interest rate for an estimated remaining life of 15 years as determined and published by the German Federal Bank. (Actuarial interest rate of the Deutsche Bundesbank on December 31, 2016: 4.01%). In the previous years, a seven year-average interest rate was used for calculating the pension obligation. Other accruals are built for recognizable risks and uncertain liabilities at the amounts to be paid calculated on the basis of a reasonable commercial assessment. Long term accruals are discounted with the last-seven-year-average discount rate that corresponds to the remaining life of the accrual. Liabilities are valued at their settlement amounts. Foreign currency items are translated with the average foreign exchange rate at the time of origin or the hedging rate for hedging transactions. Assets and liabilities with a remaining life of up to a year and carried at foreign currencies are translated at the average closing spot rate according to Section 256a HGB. Assets and liabilities with a remaining life of over one year and carried at foreign currencies are basically translated at inception at the foreign currency exchange rate, while at the balance sheet date the lowest closing spot rate is used for translating assets and the highest closing spot rate is used for translating liabilities. Earnings and losses from translation to euro of items carried at foreign currencies are recognized in the statement of income under Other operating income or Other operating expenses.

7 Derivative financial instruments are contracted for hedging purposes only whereby foreign currency derivatives are used. Derivative financial instruments are measured at fair value at balance sheet date. According to German Commercial Law accounting principles and standards of valuation any remeasurement losses are recognized in earnings while remeasurement gains are not taken into account. When the conditions for hedge accounting are met, the underlying asset and the hedging instrument are considered together. In this case, effects on earnings of underlying transactions and hedging instruments are recognized in earnings (Durchbuchungsmethode). Income from profit transfer agreements is recorded in the same reporting period in which it arises given that earnings from affiliated companies are precise enough at the time of preparing the financial statements and is assured according to reasonable commercial assessment.

8 NOTES ON THE BALANCE SHEET (3) Fixed assets The breakdown of fixed assets and their development is presented in Exhibit 1 to the Notes. In 2016 Wittgensteiner Kliniken GmbH was merged into HELIOS Kliniken GmbH, both affiliated companies. The book value of the investment in Wittgensteiner Kliniken GmbH was transferred to the book value of HELIOS Kliniken GmbH without impacting income. In relation with this transaction, loans of 143,420 to Wittgensteiner Kliniken GmbH were redeemed. The additions to shares in related parties of 25 thousand consist of the acquisition of 100% of the shares in HELIOS International Holding GmbH, Berlin. Loans to related parties comprises loans in Swiss Francs. These loans are hedged against exchange rate fluctuations and bound in a hedging relationship. According to the Durchbuchungsmethode 379 thousand foreign exchange gains have been recognized as of December 31, This effect is shown as a write-up in the statement of changes in fixed assets. Moreover loans in Czech Koruna are included in loans to related parties. These loans are hedged against exchange rate fluctuations and bound in a hedging relationship as well. According to the Durchbuchungsmethode 195 thousand foreign exchange losses have been recognized as of December 31, This effect is shown as depreciation in the statement of changes in fixed assets. In the profit and loss statement, foreign exchange gains and losses are offset by gains and losses from corresponding hedging instruments in the same amount. (4) Accounts receivable from related parties Accounts receivable from related parties mainly consist of items against HELIOS Kliniken GmbH ( 393,769 thousand). The receivables from related parties mainly relate to profit transfers, loans and clearing accounts. All accounts receivable have a remaining term of up to one year. (5) Subscribed capital The capital stock at December 31, 2016 has a nominal value of 40,000,000 and is divided into three parts with nominal values of 25,000, 14,975,000 and 25,000,000. Fresenius SE & Co. KGaA is the sole stockholder. (6) Pension obligation With notarized deed of December 12, 2006 and an effective date of January 1, 2007, all shares in hospitalia international gmbh, Oberursel, where sold and transferred to VAMED Engineering GmbH & Co. KG, Vienna, Austria.

9 In the context of this sale, Fresenius ProServe GmbH and hospitalia international gmbh agreed in a collateral promise from December 12, 2006, that the Company will assume via the collateral promise with contractual undertaking the compensation payments to be made resulting from the pension obligation of hospitalia international gmbh against beneficiaries and former employees with vested pension rights. The value of these obligations in the balance sheet as of December 31, 2016 amounts to 5,857 thousand. Moreover 9 thousand accrued expenses from deferred compensation are included as of December 31, The pension obligation has been determined according to the method described under Note (2) Accounting principles and standards of valuation. Changing over to an actuarial interest rate based on the last ten year-average interest rate, in lieu of a seven year-average interest rate in the previous years resulted in a difference of 417 thousand, that according to Section 253 (6) HGB shall not be distributed. Due to the profit transfer agreement in place earnings where, nonetheless, transferred to the parent company in full. (7) Other accruals Other accruals mainly relate to audit and consulting fees as well as loss provisions from exchange rate losses. (8) Liabilities The summary of remaining terms of liabilities looks as follows: December 31, 2016 December 31, 2015 Total Remaining term of up to 1 year Remaining term of 1 year to 5 years Remaining term of over 5 years Total Remaining term of up to 1 year Remaining term of 1 year to 5 years Remaining term of over 5 years In thousands Trade accounts payable Liabilities to affiliated companies 603, , , , Other liabilities , , , , The liabilities displayed are not secured by charges on property or other similar rights. Accounts payable to related companies include liabilities against the shareholder Fresenius SE & Co. KGaA of 603,838 thousand (previous period,

10 669,867 thousand). Accounts payable to related companies mainly consist of loans and clearing accounts. (9) Other liabilities Other liabilities relate to obligations against tax authorities.

11 NOTES ON THE PROFIT AND LOSS STATEMENT The structure of the profit and loss statement has been adapted to the holding nature of Fresenius ProServe GmbH and begins with income from participations. The profit and loss statement has been expanded by the positions sales and cost of materials and services as required since January 1, 2016 by the Bilanzrichtlinie- Umsetzungsgesetz (BilRUG). Previous year figures have been adjusted. (10) Income from participations Income from participations comprises income of profit transfer agreements with HELIOS Kliniken GmbH of 393,768 thousand (previous year 311,707 thousand) as well as income from participations in related companies of 9,009 thousand (previous year 8,795 thousand). (11) Sales Sales comprise income from rental of office space to related companies. (12) Other operating income Other operating income mainly includes income from foreign currency translations of 459 thousand (previous year 3,601) and income from the reversal of accruals of 250 thousand. Income from other accounting periods was 252 thousand in 2016 (previous year: 26 thousand). (13) Cost of purchased materials and services Cost of purchased materials and services comprises repair and maintenance costs for rented or leased office space. (14) Personnel expenses in thousands Costs of retirement pensions Annual average number of employees: 0 0

12 (15) Other operating expenses Other operating expenses were primarily expenses from cost allocation and service level agreements within the Group of 253 thousand (previous year 3,674 thousand) as well as exchange rate losses and audit costs. (16) Income from financial assets Income in this item includes interest from long term loans to related companies. (17) Other interest and similar income This item includes interest income from related companies. (18) Interest and similar expenses This item mainly includes 1,386 thousand (previous year 3,519 thousand) of interests paid to related companies as well as 238 thousand of interests on accrued expenses (previous year 288 thousand). (19) Other tax This item includes motor vehicle tax.

13 OTHER DISCLOSURES (20) Management In 2016, following persons were appointed managing directors of Fresenius ProServe GmbH, Bad Homburg v.d.h.: Dr. Jürgen Götz, Lawyer, Bad Soden, Dr. Francesco De Meo, Lawyer, Petersberg, Joachim Weith, Dipl.-Sociologist and Dipl.-Business Administration, Wintzenbach (until December 6, 2016). The managing directors are simultaneously managing directors, members of the management board or senior executives in other Group companies and receive their compensation from these companies. (21) Contingent liabilities Contingencies from warranty agreements Fresenius Proserve GmbH and Fresenius Kabi AG jointly and severally guarantee the liabilities from the Senior Notes of Fresenius SE & Co. KGaA. The following table shows these obligations as of June 30, 2016: Issuer/ Transaction Notional amount Maturity Nominal interest rate Fresenius SE & Co. KGaA 2012/ million Apr. 15, ,25% Fresenius SE & Co. KGaA 2013/ million July 15, ,875% Fresenius SE & Co. KGaA 2014/ million Feb. 1, % Fresenius SE & Co. KGaA 2014/ million Feb. 1, % Fresenius SE & Co. KGaA 2014/ million Feb. 1, % Fresenius ProServe GmbH together with Fresenius Kabi AG and Fresenius SE & Co. KGaA jointly and severally guarantees the liabilities from the Senior Notes, which were issued by a subsidiary of which Fresenius SE & Co. KGaA hold 100%, in, 2014 and The following table shows these obligations as of December 31, 2016: Issuer/ Transaction Notional amount Maturity Nominal interest rate Fresenius US Finance II, Inc. 2014/2021 US$300 million Feb. 1, % Fresenius US Finance II, Inc. 2015/2023 US$300 million Jan. 15, %

14 Moreover Fresenius Proserve GmbH and Fresenius Kabi AG jointly and severally guarantee the liabilities from the 500 million equity-neutral convertible bond issued by Fresenius SE & Co. KGaA in On December 31, 2016 the guarantee had a fair value of 767 million. Further guarantee commitments of Fresenius ProServe GmbH together with Fresenius SE & Co. KGaA, Fresenius Kabi AG and selected subsidiaries exist in relation to the repayment of tranche of the syndicated credit agreement of the Fresenius SE & Co. KGaA, which was closed in December 2012 (Credit Agreement 2013). Obligations under the 2013 Senior Credit Agreement are secured by pledges of capital stock of certain material subsidiaries of Fresenius Kabi AG, and since funding of the incremental facilities in 2014 additionally secured by a pledge of the capital stock of HELIOS Kliniken GmbH, in favor of the lenders. As of December 31, 2016 credit lines and loans in the amount of 2,771 million existed, of which an amount of 1,589 million was utilized. Moreover Fresenius ProServe GmbH guarantees together with Fresenius Kabi AG the repayment of 1,188 million borrowed by Fresenius SE & Co. KGaA and its wholly owned affiliated company Fresenius US Finance II, Inc. under several Schuldschein loans as well as the related accrued interest. Moreover, Fresenius ProServe GmbH together with Fresenius Kabi AG and Fresenius SE & Co. KGaA jointly and severally guarantees the liabilities from a syndicated credit of USD150 million which Fresenius US Finance II, closed with a small group of banks in This credit matures in the year In January 2017 Fresenius SE & Co. KGaA issued 1 billion Schuldschein loans and 500 million convertible bonds, which are jointly and severally guaranteed by Fresenius Proserve GmbH and Fresenius Kabi AG. Also in January 2017, Fresenius Finance Ireland PLC, a wholly owned subsidiary of Fresenius SE & Co. KGaA,, issued Senior Notes with an aggregate volume of 2.6 billion with maturities of five, seven, ten and fifteen years. The resulting liability is jointly and severally guaranteed by Fresenius ProServe GmbH together with Fresenius SE & Co. KGaA and Fresenius Kabi AG. According to our judgment the affected companies can meet the underlying obligations in any case and assertion of the claim is currently not expected. Statement of subordination On December 31, 2016, the subsidiary hospitalia activhealth gmbh is overleveraged by about 7.2 million. To avoid legal accounting insolvency, Fresenius ProServe GmbH issued a statement of subordination in favor of the company for 8.7 million. On December 31, 2016, 7.3 million receivables are outstanding against hospitalia activhealth gmbh (of which 7.2 million have been writtendown). Option contracts There are two put and call option contracts with the current share owners of VAMED AG to acquire 10% and 13% of the shares in VAMED AG which expire on December 31, 2018 and June 30, 2020 respectively. These contracts are pending

15 transactions that are not shown in the financial statement of Fresenius ProServe GmbH. (22) Derivatives Fresenius ProServe GmbH uses derivative financial instruments to hedge against existing or highly probable future currency risks. Derivative financial instruments are contracted exclusively for hedging purposes. As the critical terms of the underlying transactions basically match those of the derivative financial instruments it can be assumed that hedges are highly effective. The Company has approved guidelines for assessing risks and to control the use of financial instruments. The guidelines require a clear separation between the execution function on the one side and the clearing, accounting and control on the other hand. Derivative financial instruments are used to reduce fluctuations in earnings and cash flows caused by changes in foreign currency exchange rates. Foreign exchange risk The company uses foreign exchange forward contracts to hedge foreign exchange risk. Fresenius ProServe GmbH entered into foreign exchange forward contracts with external partners to hedge foreign currency risks from accounts receivable and liabilities as well as highly probable forecasted transactions from its affiliates. On the balance sheet date, the Company had currency derivatives with a nominal value of 57,805 thousand and fair value of -254 thousand with a maximum maturity of eleven months. Standards of valuation The fair values of derivative financial instruments are valuated according to customary standards that take market information (market values) on the balance sheet date into account. In detail following principles are used: The fair value is based on the market value of a derivative that could be reached in voluntary transactions by independent parties without taking forced or liquidation sales into account. To determine the market value of foreign exchange forward contracts, the contracted forward rate is compared to the current forward rate for the remaining term of the contract as of the date of the balance sheet. The result is then discounted on the basis of the market interest rates prevailing at the date of the statement of financial position for the respective currency. The effectiveness of hedging relationships is measured with the Critical Term Match-Method.

16 (23) Parent company Fresenius SE & Co. KGaA, Bad Homburg v.d.h., is the sole shareholder of Fresenius ProServe GmbH. The company is part of a consolidated tax group with Fresenius SE & Co. KGaA (fiscal unity parent) for income, trade and corporate income tax. Fresenius ProServe GmbH is exempt from publishing consolidated financial statements and management report in accordance with Section 291 HGB given that Fresenius SE & Co. KGaA, Bad Homburg v.d.h., as parent company publishes consolidated financial statements and management report in accordance with International Financial Reporting Standards (IFRS) which are binding to be applied in the EU applying Section 315a HGB for the smallest group of consolidated companies. The consolidated financial statements of Fresenius SE & Co. KGaA are published in the electronic Bundesanzeiger (German Federal Gazette). Fresenius Management SE, Bad Homburg v.d.h., prepares and publishes the consolidated financial statements for the largest group of consolidated companies which is also published in the electronic Bundesanzeiger (German Federal Gazette). Fresenius ProServe GmbH will use the exemptions in Section 264 (3) HGB and will not make its financial statements for the year 2016 public. (24) Subsequent events In January and February 2017 Fresenius SE Co. KGaA has granted long term loans of 959 million to Fresenius ProServe GmbH. Simultaneously Fresenius ProServe GmbH contributed, according to Section 272 (2) Nr. 4 HGB, that same amount to the capital reserve of HELIOS International Holding GmbH, a wholly owned affiliated company. Other than the in Note 21 Contingent liabilities described guarantees that exist since January 2017, no other events of material importance on the assets and liabilities, financial position, and results of operations of the Group have occurred following the end of the fiscal year. Bad Homburg v.d.h., March 20, 2017 Fresenius ProServe GmbH Dr. Jürgen Götz Dr. Francesco De Meo

17 Exhibit to the Notes Fresenius ProServe GmbH, Bad Homburg v. d. Höhe Development of fixed assets during the fiscal year 2016 Acquisition costs As of Jan. 01, As of 2016 Additions Disposals Dec. 31, 2016 keur keur keur keur I. Tangible assets 1. Land, leasehold and buildings 12, , Other fixtures and fittings, tools and equipment , ,826 II. Financial assets 1. Shares in related parties 5,199, ,199, Loans to related parties 274,804 1, , , Participations ,474,720 1, ,615 5,325,907 5,487,546 1, ,615 5,338,733

18 Write-ups and depreciation Carrying amount As of Jan. 01, Depreciation of financial Write- ups of As of As of As of 2016 year financial year Dec. 31, 2016 Dec. 31, 2016 Dec. 31, 2015 keur keur keur keur keur keur 3, ,706 8,855 9, , ,827 8,999 9,309 5, ,100 5,194,841 5,194,816 1, , , , , ,275 5,319,632 5,468,261 9, ,102 5,328,631 5,477,570

19 Auditor s report To: Fresenius ProServe GmbH, Bad Homburg v. d. Höhe We have audited the annual financial statements, comprising the balance sheet, the income statement and the notes to the financial statements, together with the bookkeeping system, of Fresenius ProServe GmbH, Bad Homburg v. d. Höhe, for the financial year from January 1 to December 31, The maintenance of the books and records and the preparation of the annual financial statements in accordance with German commercial law are the responsibility of the Company s Management Board. Our responsibility is to express an opinion on the annual financial statements, together with the bookkeeping system, based on our audit. We conducted our audit of the annual financial statements in accordance with Section 317 of the German Commercial Code [HGB] and German generally accepted standards for the audit of financial statements promulgated by the German Institute of Public Auditors [IDW]. Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the annual financial statements in accordance with German principles of proper accounting are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Company and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the books and records and the annual financial statements are examined primarily on a test basis within the framework of the audit. The audit includes assessing the accounting principles used and significant estimates made by the Management Board, as well as evaluating the overall presentation of the annual financial statements. We believe that our audit provides a reasonable basis for our opinion. Our audit has not led to any reservations

20 In our opinion, based on the findings of our audit, the annual financial statements comply with the legal requirements and give a true and fair view of the net assets, financial position and results of operations of Fresenius ProServe GmbH in accordance with German principles of proper accounting. Frankfurt am Main, March 20, 2017 KPMG AG Wirtschaftsprüfungsgesellschaft [Original German version signed by:] Rohrbach Wirtschaftsprüfer [German Public Auditor] Walter Wirtschaftsprüfer [German Public Auditor]

21 Fresenius ProServe GmbH, Bad Homburg v. d. H Statement of Cash Flows for the fiscal year KEUR KEUR Net Income before profit and loss transfer 405, ,977 Depreciation and revaluation of non-current and financial assets Interest result 1,097 3,429 Income from investments -406, ,636 Decrease in pension liabilities Cash flow Increase/ decrease in other operating assets Decrease in other accrued expenses -1, Decrease/ increase in other operating liabilities Increase/decrease in working capital -1, Operating cash flow (cash used for operating activities) -1, Proceeds from disposal of financial assets 150,615 51,656 Payments for investments in financial assets -1,777-34,127 Payments for purchasing shares of affiliated companies and equity contributions to subsidiaries Interest received Dividends received 324, ,636 Cash provided by investing activities 473, ,255 Profit-transfer to shareholder -405, ,977 Change in financing activities with related parties 4,010 72,181 Interest paid -1,386-3,519 Cash used for financing activities -402, ,315 Change of cash and cash equivalents 69,659 89,485 Cash and cash equivalents at the beginning of the year 1-45, ,890 Cash and cash equivalents at the end of the period 24,254-45,405 1 Cash and Cash equivalents consist of Cash Pool-accounts with Fresenius SE & Co. KGaA

22 Auditor s Report ToFreseniusProServeGmbH,BadHomburgv.d.Höhe, WehaveauditedthestatementofCashFlowsforthefiscalyear2016derivedbythe companyfromtheannualfinancialstatementsforthefiscalyear2016aswellasthe underlyingbookkeepingsystem.thestatementofcashflowssupplementstheannual financialstatementsoffreseniusproservegmbh,badhomburgv.d.höhe,forthefiscal year2016thathavebeenpreparedonthebasisoftheprovisionsofgermancommerciallaw. Thepreparationofthestatementofcashflowsforthefiscalyear2016inaccordancewiththe provisionsofgermancommerciallawistheresponsibilityofthecompany smanagement. Ourresponsibilityistoexpressanopinion,basedonouraudit,astowhetherthestatementof CashFlowsforthefiscalyear2016hasbeenproperlyderivedfromtheannualfinancial statementsforthefiscalyear2016aswellastheunderlyingbookkeepingsystemin accordancewiththeprovisionsofgermancommerciallaw.thesubjectmatterofthis engagementdoesneitherincludetheauditoftheunderlyingannualfinancialstatementsnor oftheunderlyingbookkeepingsystem. WehaveplannedandperformedourauditinaccordancewiththeIDWAuditingPractice Statement:AuditofAdditionalElementsofFinancialStatements(IDWAuPS )insuch awaythatmaterialerrorsinthederivationofthestatementofcashflowsfromtheannual financialstatementsaswellastheunderlyingbookkeepingsystemaredetectedwith reasonableassurance. Inouropinion,basedonthefindingsofouraudit,thestatementofCashFlowsforthefiscal year2016hasbeenproperlyderivedfromtheannualfinancialstatementsforthefiscalyear 2016aswellastheunderlyingbookkeepingsysteminaccordancewiththeprovisionsof Germancommerciallaw. 1 FreseniusProServeGmbH Auditor sreport

23 WehaveprovidedtheservicesdescribedaboveonbehalfofFreseniusProServeGmbH.We havecarriedoutourengagementonthebasisofthegeneralengagementtermsfor WirtschaftsprüferandWirtschaftsprüfungsgesellschaftenintheversionofJanuary1,2017 (Appendix2).Bytakingnoteofandusingtheinformationcontainedinthiscommunication, eachrecipientconfirmstohavetakennoteofthetermsandconditionsstipulatedinthe aforementionedgeneralengagementterms(includingtheliabilitylimitationsofno.9 includedtherein)andacknowledgestheirvalidityinrelationtous. FrankfurtamMain,March16,2017 KPMGAG Wirtschaftsprüfungsgesellschaft Rohrbach Wirtschaftsprüfer [GermanPublicAuditor] Walter Wirtschaftsprüfer [GermanPublicAuditor] FreseniusProServeGmbH Auditor sreport