Elia Transmission Belgium 2020 annual results by Elia Group

ANNUAL REPORT 2020 Accelerating to a net-zero society Elia Transmission Belgium

Elia Transmission Belgium | Annual report2020 2 Table of Contents About this report 6 Introduction 6 Legal structure 11 1. Corporate governance statement 13 Composition of the management bodies........................................................................................................13 Board of Directors ............................................................................................................................................15 Diversitywithin theBoard ofDirectors ..........................................................................................................16 Audit Committee competencies.......................................................................................................................16 Diversitywithin theExecutive Board...............................................................................................................17 2. Risk management and uncertainties facing the company 18 Strategic/regulatoryrisks and responses provided.......................................................................................18 ChangingHR SustainabilityEarlyPandemicChanging/newneeds........................................................................................................................................18regulatoryconditions...............................................................................................................18risk(COVIDtype)...........................................................................................................................19terminationofTSOlicense....................................................................................................................19ofincomes................................................................................................................................20 Operational risks and responses provided.....................................................................................................20 HealthSupplier’sPermittingFailureClimateContingencyAdequacyBalancing........................................................................................................................................................20........................................................................................................................................................21events&businesscontinuitydisruption.....................................................................................22risks...................................................................................................................................................23ofinformationandcommunicationtechnology(ICT),datasecurity&protections...............................24risk.................................................................................................................................................24risk.................................................................................................................................................25andsafetyaccidents............................................................................................................................26 Financial risks and responses provided.........................................................................................................26 Negative changes infinancial markets ...........................................................................................................26 LegalCashflow.........................................................................................................................................................27disputesandliabilities...........................................................................................................................28 Contextual factors.............................................................................................................................................29 Covid19...........................................................................................................................................................29

Elia Transmission Belgium | Annual report2020 3 Preparingfor the energy transition..................................................................................................................29 Energy demand& energyefficiency...............................................................................................................29 Macroeconomic context..................................................................................................................................29 3. Features of the internal control and risk management systems 30 Control environment.........................................................................................................................................30 Risk MonitoringInformationControlmanagement..............................................................................................................................................32activities...............................................................................................................................................34andcommunication......................................................................................................................34..........................................................................................................................................................35 4. Elia Transmission Belgium Consolidated financial statements 36 Consolidated financial statement of profit or loss.........................................................................................36 Consolidated financial statement of profit or loss and comprehensive income.........................................37 Consolidated financial statement of financial position..................................................................................38 Consolidated financial statement of changes in equity.................................................................................39 Consolidated financial statement of profit or cash flows..............................................................................40 Notesto the consolidated financial statements.............................................................................................41 Reporting entity...............................................................................................................................................41 Basis of RegulatoryOtherGroupItemsItemsSegmentSignificantpreparation........................................................................................................................................42accountingpolicies........................................................................................................................45reporting..........................................................................................................................................56intheconsolidatedstatementofprofitorlossandothercomprehensiveincome.................................61intheconsolidatedstatementoffinancialposition................................................................................65structure...............................................................................................................................................86notes.....................................................................................................................................................87frameworksandtariffs..................................................................................................................92 Joint auditors report on theconsolidated financial statements...................................................................96 Information about the parent company...........................................................................................................97 Statement of financial position after distribution of profits..........................................................................98 Income Financialstatement..............................................................................................................................................99termsorAlternativePerformanceMeasures..................................................................................99

Elia Transmission Belgium | Annual report2020 5.4 Elia Transmission Belgium sustainability report 103 About thecompany.........................................................................................................................................103 Size of thecompany.....................................................................................................................................104 GuidingGrid...............................................................................................................................................................104principles.........................................................................................................................................105 Strategy............................................................................................................................................................117 Act Now – the EliaGroup sustainability initiative..........................................................................................117 Materiality and objectives..............................................................................................................................118 Energy –Market and integration ofrenewables...........................................................................................120 Installed capacity..........................................................................................................................................120 GridEnergyEnergyEvolution.......................................................................................................................................................120importandexport..............................................................................................................................121balance.............................................................................................................................................122losses....................................................................................................................................................122 Human resources............................................................................................................................................123 Management approach.................................................................................................................................123 Headcount...................................................................................................................................................124 SocialIncentiveRemunerationTrainingEmployeeWorkability....................................................................................................................................................125survey..........................................................................................................................................127.........................................................................................................................................................128policies..................................................................................................................................128systems.........................................................................................................................................129dialogueandcodetermination............................................................................................................129 Safety................................................................................................................................................................130 Management approach.................................................................................................................................130 H&S AccidentsInspectionstraining..................................................................................................................................................131....................................................................................................................................................132......................................................................................................................................................132 Supplier and human rights.............................................................................................................................134 Management approach.................................................................................................................................134 Suppliers andexpenditure in theEURO-zone..............................................................................................134 Human rights ................................................................................................................................................136 Stakeholder engagement................................................................................................................................136 Management approach.................................................................................................................................136 Community relations and public acceptance.................................................................................................137

Elia Transmission Belgium | Annual report2020 5 Stakeholder dialogues..................................................................................................................................139 Cooperationand innovation..........................................................................................................................141 Community engagement...............................................................................................................................142 Environmental aspects...................................................................................................................................144 Management approach.................................................................................................................................144 Emissions NaturalBiodiversity.....................................................................................................................................................145andlandscapeintegration..........................................................................................................150resources........................................................................................................................................154 COVID-19pandemic management.................................................................................................................155 GRI Content Index...........................................................................................................................................157 Joint auditors’ report to thegeneral meeting ofElia Transmission Belgium NV/SAfor the year ended 31 December 2020 ...............................................................................................................................................162

Introduction Shaping the Group

In 2019, Eliaimplemented aninternal reorganisation project toisolate and ring-fencethe regulated activities of Elia inBelgium from the non-regulated activities andregulated activities outside Belgium. This reorganisation aims to optimise Elia’s debt positions in view of the new Belgian tariff methodology for the regulatory period2020-2023. TheCommissionfor Electricity andGas Regulation (CREG) confirmed that such areorganisation wouldsignificantly reduce the risk of cross-subsidy between regulated and non-regulated activities or regulated activities outside Belgium. This new structure will therefore allow theElia groupto further developits existing and futureBelgian andEuropean activities (both regulatedand non-regulated) inthemost appropriate set-up to deliver on its growth strategy.

On 31December 2019, Elia Transmission Belgium SA/NV (‘ETB’- ‘Elia’) took over theBelgianregulatedactivities of former Elia System Operator SA/NV (‘ESO’) (now Elia Group), includingthe indebtedness related tothese activities. At that time, not all designations of ETB as national and regional/local Transmission System Operator (‘TSO’)

Transmission Belgium | Annual

The annual report explains who we areand what we do, the context inwhich we operate, andincludes the risks and opportunities. It outlines our strategy andthe progress we have madetowards achieving our goals. It also covers our approach to corporate governance andprovides an introductoryanalysis of our 2020results.

Elia report2020 About this report

Looking back at 20201

Some24 hours after the announcement of the first semi-lockdowninBelgium (March 2020), 95% of our employees were already teleworking and all project sites had been shut down. After ashort interruption of just afew days, Eliaenabled a gradual restart of constructionworks byapplyingmodifiedworkingmethods inclose collaboration

1 For further informationon theidentification of the assets & liabilities, important events afterthe end ofthe financialyear and the regulatory framework, please refer tothesectionGroup Structureonpage 85, section Subsequent Events on page 90 and section Regulatory Framework and Tariffs on page 91respectively of 4. EliaTransmission Belgium ConsolidatedFinancial Statements.

In a year markedbythe COVID-19 pandemic, EliaTransmissionBelgium proved to be aresilient organisation and capableof immediately responding tothecrisis.We focusedfully on ensuring business continuity. In order to supervise this process optimally, aninternal task force was set up spanning multiple departments. Maintaining security of supply and the health and safety of our employees and contractors were our main priorities. By consistently applying theannounced measures, we jointly assumed our full social responsibility. Inthis way, weprotected not only our families and ourselves, but alsoother vulnerable groups.

Elia Transmission Belgium | Annual report2020 77 were already obtained. For as long as ETB was awaiting the necessary designations, ESO subcontractedthe operation of thetransmissionsystem to ETB intheframework of a silent partnership between ESO, ETB and Elia Asset BeginningSA/NV.in2020, ETB was designatedthe national and regional/local TSO for the very high- and high-voltage electricity gridin Belgium and the subcontracting by ESO to ETB of the operation of thetransmissionsystem has beenended. EliaSystem Operator SA/NV is now renamed Elia GroupSA/NV andremains the listed parent company. EliaGroup EliaGroup acts as a holding companyowning Elia TransmissionBelgium (BelgianTSO), EurogridInternational (comprising the activities of 50Hertz, theGerman TSO) and EliaGrid International (the Group’s international consultancy branch). Its mainshareholder is themunicipal holdingPubli-T. EliaGroup has been listedon the regulatedmarket of Euronext Brussels, sinceJune 2005. EliaTransmission Belgium EliaTransmissionBelgium (ETB) is fully owned. ETB is theBelgian transmission system operator for high-voltage electricity (30,000–400,000volts). Its main activities include managing gridinfrastructure(maintaining and developinghigh voltagehigh-voltageinstallations) and electrical system (monitoringflows, maintainingthe balance between electricity consumption and generation 24/7, importing and exporting toand from neighbouringcountries) as well as facilitating themarket (developingservices andmechanisms witha view todeveloping the electricity market at national andEuropean level).

ChrisPeeters, CEO EliaGroup

2020 Supporthighlightsforanti-povertyfunds

In May, EliaTransmission Belgium entered thebondmarket for a second timesince theNemoLink dedicatedloan was converted into a general-purpose loanat the end of 2019. Elia Transmission Belgium successfully placed a €200million dual tranche8-year and24-year amortising bond with a fixed annual coupon of 1.56% under its €3 billion EMTN programme. €650million sustainable credit facilityfor Elia Transmission Belgium

In October, Elia Transmission Belgium signeda credit facilitywith pricingmechanism linkedtothree sustainable performance targets. The sustainabilityperformance targets that impact thecredit facility’spricing mechanism are relatedto thecompany’s efforts to fight climate change andits health andsafety performance. This is the first

€800million inaugural Eurobond issue for Elia Transmission Belgium

In April, EliaTransmission Belgium successfullylaunched an €800 million Eurobond under its new €3 billion EMTN2programmelistedon the Euro MTF of the LuxembourgStock Exchange. The €800 million senior unsecured bond 2Euro Medium Term note10withan annual fixed coupon of 0.875% will mature in 2030. Theproceeds will refinance a €496million shareholder loan whichmaturedin2020and finance the grid investment plan in Belgium. €200million privateplacement issuefor Elia Transmission Belgium

Elia Transmission Belgium | Annual report2020 8 with our contractors. After testing our methods out ona number of pilot projects, themore complexsites with multiplecontractors were ableto resumein May. By the end of the year, thesituation on our project sites was practically back to normal. Even complex projects were delivered ontime.

In April, EliaGroup donatedthe budget set asidefor the organisation of its Annual General Meetingtothree King BaudouinFoundation solidarity funds, even topping upthe amount so that it cameto total of €100,000. In May, the members of Elia's Executive Board unanimously decided tocontributetheir entire salary for that month to the King BaudouinFoundation in support of its COVID-19fundfor combattingpoverty. The Board of Directors and some company staff also decided to donate money tothe same fund, bringingthetotal donationto €255,000.

Looking back at 2020, I am particularly proud of the commitment and resilience of our employees and contractors and the way they immediately anticipated the COVID measures. Working under difficult circumstances, we delivered complex infrastructure projects and we continued our operational activities to ensure a reliable grid in the interest of society. Although no other event in recent history has hit the economy as hard as the coronavirus, we are optimistic about the future. Given Europe’s objective of becoming the first climate-neutral continent by 2050, the European Green Deal will likely serve as a compass in many recovery plans with a focus on the green economy and digitalisation, both of which are key components of our strategy. This will bring new opportunities and accelerate the development of our Group.

Elia's offshoreteam successfully tested the Hololens 2Remote Assist programme. These new-generation augmentedreality headsets enable remotetechnical support. Thanks to the headsets, experts in the office cansee throughthe eyes of thetechnicians in thefield. Viathe headset they can displaymanuals, technical drawings and navigation arrows in augmented reality. This new methodwas successfullydeployedwhen theNorwegiansupplier of the Modular Offshore Grid weather system hadtocancel planned repairs due to COVID-19restrictions. The Elia team was able to carry out maintenance itself withremote support from the supplier. Brabo-II: 380-kVloop around the portof Antwerp enters service

Elia Transmission Belgium | Annual report2020 9 transactionof its kind for Elia Transmission Belgium, demonstrating the importance of bolstering sustainability as a strategic lever for creating value for all stakeholders.

As Europe prepares for the largest vaccination campaign inits history, major economic stimulus plans are being prepared tobattle a deep economic recession. Complementing national efforts, the European Green Deal andthe 3EuropeanCommission’s recovery planwill likely serveas a compass, given Europe’s objectiveof becomingthe first climate-neutral continent by 2050. Sustainability will therefore be acornerstone of many COVID-19 recovery initiatives. In line with our missiontoservesociety, Elia Group has been working on a number of tangible recovery measures to support economic recovery and help combat climatechange. The proposals havebeendiscussed with certain critical stakeholders. In addition to decarbonising and digitalising the energy system, weareworking towards meeting the changing needs of residential and industrial customers who alsowishto go green.

Theconnection of the Seastar project markedthecompletion of theModular OffshoreGrid(MOG), Elia’s power hub inthe North Sea. Located 40 km off theBelgian coast, theswitching platform bundles the export cables from four offshore windfarms andtransports the generated energy tothe mainland via ashared transmission system. Offshore wind power is crucialto achievingBelgium's climate targets. In the meantime, the federal government has begun developing a second areafor offshore wind. To ensurethat the new concessions are connectedto the Belgian electricity system, Eliais developingthe MOG II project. MOG weather station restored viaaugmented reality

MOG fullyoperational - MOG II in preparation

ALEGrO, a vital linkin the construction of theintegrated European electricity system

In November 2020, Eliacommissionedthe second phase of the Brabo project. Alongthe A12 road betweenZandvliet and Lilloanexistingoverheadlinewas upgraded from 150 kV to380 kV, with 46pylons and conductors beingreplacedover 16kilometres. In the meantime, the permit procedure has started for the third phase. Elia’s Brabo project will increase the grid’s supply capacity, enabling it to cope with growing electricity consumption in the Port of Antwerp. At national and international level, the project will upgrade Belgium’s north-southaxis and bolster Europe’s network of international interconnections.

Accelerating towards the net-zero society

On 9November, Elia(Belgium) and Amprion(Germany) inaugurated the first electrical interconnector between Belgium and Germany. ALEGrO, which will enable Belgium and Germanyto exchange anadditional 1,000 MW of electricity, started operatingcommerciallyon18November 2020 (day-ahead market) and 8 December (intraday market). Theinterconnector will enhance bothcountries' security of supplyand contributetoprice convergence, as well as facilitating theenergy transition by enabling better integration of renewable energy.

Boucle du Hainaut project and permit procedure for Ventilus

Elia Transmission Belgium | Annual report2020 Horta-Avelgem10 project completed

In December 2020, new 15and 30-minute cross-border intraday products were launched on the biddingzone borders between Belgium, Germany, France and theNetherlands. Theoutcome of acollaboration betweentransmission system operators Amprion(Germany), Elia (Belgium), RTE (France) andTenneT (Netherlands), the new market products closelyreflect the real-time gridsituation andwill helpmarket players to optimise their balance responsibility.

Vision Zero for safety leadership and zero accidents

ACT NOW: Elia Group’s five sustainabilitylighthouse ambitions EliaGroup wants to be more ambitious and explicit withregardto its sustainability goals and as suchcontribute to the UN’s SustainableDevelopment Goals (SDGs). Under the project name, ACT NOW, Elia Group defined five key ambitions for sustainability: (1) to becomecarbon-neutral by 2040, (2) to integrate ecological designin all steps of our projects, (3) to ensurethat all our employees and everybodywecollaborate with arrive home safe and sound, (4) to promote diversity and inclusionand(5) toconduct our activities withintegrity.

New cross-border intradayproducts

Another upgradewas completed on the high-voltagelinebetween Zomergem and Avelgem. Over the past two years, 97 pylons and foundations have beenreinforced tosupport the new conductors. This has doubled transmission capacity to 6gigawatts. This will enableElia to exchangemore electricity with France and distribute energy from offshore wind farms further inland.

Safety is atop priority, as is evident from in-housecampaigns suchas Gofor Zero andGib8, as well as our ISO 45001 certification. But wewant to gofurther and embed safety even morefirmly inour corporate culture – which is why we are partnering with VisionZero. EliaGroup's Safety Leadership Culture will be further optimised. Everyone will becomea safety ambassador capable of inspiring others. Elia achieved level 3intheSafety CultureLadder (SCL) audit. This certificategives an indicationof thesafetyculture withina company. The audit focuses on safety behaviour and attitude, rather thanon written processes and procedures.

vital project for upgrading theBelgian electricity backbone. In 2020, the project followed the proposed planning process. The Ventilus project will contribute to the further integration of offshore wind andthe European interconnected energymarket.

In 2020, Eliacompleted aseries of information sessions for theBoucle-du-Hainaut project. The planned 380-kV line betweenAvelgem andCourcelles is amissing link inthe Belgian high-voltage grid. Stretchingsome 84kilometres in the Walloon province of Hainaut, the project will be one of Elia’s largest infrastructureprojects inthe coming years andwill connect to theVentilus project, currently under development in the neighbouring provinceof West VentilusFlanders.isanother

Notger Prizefor Elia Group CEO ChrisPeeters

Legal structure

EliaGroup CEO Chris Peeters receivedthe Notger Prize, whichis awardedby theGerman-Belgian Associationto apersonality, association or institution that contributes to good relations and tradecontacts betweenBelgium and Germany. Our CEO received the award in recognitionof the implementation of ALEGrO, the first interconnector betweenBelgium and Germany, and the good cooperative relationship with our German colleagues at 50Hertz.

Eliahas joinedthe newly established BelgianAlliancefor Climate Action (BACA), which wants to see agreater focus ondecarbonisation. By joining the alliance, Elia is demonstrating its commitment to meetingthe Paris climate targets andinspiring other companies todothe same. BACA is a coalition of 51 Belgian organisations and was founded by The Shift and WWF. Elianamed Top Employer again Eliawas named one of the best employers in Belgium for thethird year in arow. The Top Employer label is awardedtocompanies committedto providing an excellent working environment for their employees. Seventy-two Belgian companies received the distinction this year. Over the past year, Eliahas focused strongly on improving the digitalisation of theHR management process and developing its corporateculture. As well as being wonderful recognition for all its hardwork, the accoladewill also make the company more attractiveto new talent.

Elia Transmission Belgium | Annual report2020 Elia11joins Belgian Alliance for Climate Action

Elia Transmission Belgium | Annual report 2020 12 Elia Transmission Belgium is themainshareholder of :

— Enervalis, a start-up that develops innovative softwaresolutions to optimiseenergyconsumption ina context of increased flexibility between injections and withdrawals from the grid; — Elia Engineering, consultancy and engineering office active in the field of design and management of infrastructure projects relatedto the high-voltage and extra-high-voltage electricitynetwork. It works almost exclusively for EliaAsset; — Elia Re, a Luxembourg-based reinsurancecompany, establishedto optimiseinsurance policy

Duetothis restructuring of the group, a comparisonin the 2020 income statement to 2019is not a relevant analysis.

— Elia Asset is thecompany that owns all theinstallations on thehigh-voltage grid and is responsible for thefurther development andmaintenanceof this grid. Elia Asset and EliaTransmission Belgium form a singleeconomic entity and operate under the name Elia; The company inwhich Elia TransmissionBelgium SA has a holdingis thefollowing:

— Coreso: acoordinationcentre that enhances the security of transmissionnetworks inselectedEuropean regions by developing predictive analyses of electricity flows in the networks and by monitoring transmission networks continuously in real time;

— Nemo Link Limited. On27 February 2015, EliaSystem Operator entered into ajoint ventureagreement with National Gridto buildtheNemo Link Interconnector; eachshareholder owns 50% of Nemo Link Limited, aUKbasedcompany; The minority holdings are: — JAO (Joint Allocation Office): is responsible for daily, monthly and annual auctions of border capacityat 27 borders inEurope. JAO was founded in2015 through the merger of CAO Central Allocation Office GmbH and CASC.EU S.A.;

— HGRT a holdingcompany of several Europeantransmission system operators which holds a stake inthe French energy exchange Powernext;

— Kris Peeters, administrateur nommé sur proposition de Publi-T2

— ClaudeGrégoire, director appointedupon proposal of Publi-T

VICE-CHAIRPERSONS

ELIA TRANSMISSIONBELGIUM satisfies specific obligations interms of transparency, neutrality andnon-discrimination towards all stakeholders involved in its activities. At ELIA TRANSMISSIONBELGIUM, corporate governancein 2020 was based on its articles of association, the Code of Companies and Associations as well as the Act of 29 April 1999 on the organisation of theelectricitymarket (“Electricity Law”) andthe Royal Decree of 3 May 1999 onthe management of the electricity transmissionsystem.

— Dominique Offergeld, director appointed upon proposal of Publi-T

REPRESENTATIVES OF THE FEDERAL GOVERNMENT WITH AN ADVISORY ROLE

2 1KrisPeetersreplacedPhilipHeylenasof19May2020.HesubmittedhisresignationtotheBoardofDirectorswitheffectfromJanuary2021.TheBoardofDirectorsof9February2021hascooptedPieterDeCremtoreplaceKrisPeeters. 3 DirectorsNeleRoobrouckistherepresentativeoftheGovernmentfortheDutchlinguisticrole.ShehasanadvisoryroletotheBoardofofEliaTransmissionBelgiumandEliaAssetasprescribedintheElectricityLawof29April1999.

Elia Transmission Belgium | Annual report 2020 1313 1. Corporate Governance Statement

— Luc Hujoel, director appointed upon proposal of Publi-T — Roberte Kesteman, independent director — Jane Murphy, independent director

— Luc DeTemmerman, independent director — Frank Donck, independent director — CécileFlandre, director appointed upon proposal of Publi-T

4 setforSince8February2021,andbyMinisterialDecree,MaximeSaliezhasbeenappointedasrepresentativeoftheGovernmentthefrancophonelinguisticrole.HehasanadvisoryroletotheBoardofDirectorsofEliaTransmissionBelgiumandEliaAs-asprescribedintheElectricityLawof29April1999.

CHAIRPERSON — Bernard Gustin, independent director

— Geert Versnick, director appointed uponproposal of Publi-T

— NeleRoobrouck3 — Maxime Saliez4

Composition of the management bodies as at 31 December 2020

DIRECTORS — Michel Allé, independent director

— ClaudeGrégoire, director appointedupon proposal of Publi-T — Bernard Gustin, independent director

— Rudy Provoost, director appointed upon proposal of Publi-T — Saskia VanUffelen, independent director — Geert Versnick, director appointed uponproposal of Publi-T

Board of Directors

1KrisPeetersreplacedPhilipHeylenasof19May2020.HesubmittedhisresignationtotheBoardofDirectorswitheffectfromJanuary2021.TheBoardofDirectorsof9February2021hascooptedPieterDeCremtoreplaceKrisPeeters.

Elia Transmission Belgium | Annual report 2020 1414 Advisory Committees of theBoard of Directors CORPORATE GOVERNANCE COMMITTEE — Luc Hujoel, Chairman — Luc DeTemmerman — Frank Donck — Jane Murphy — Kris Peeters5 AUDIT COMMITTEE — Michel Allé, Chairman — Frank Donck — Roberte Kesteman — Dominique Offergeld — Rudy Provoost REMUNERATION COMMITTEE — Luc DeTemmerman, Chairman — Roberte Kesteman — Dominique Offergeld — Kris Peeters6 — Saskia VanUffelen 5

— KPMG BDO Réviseurs d’Entreprises SCRL, represented by FélixFank

SECRETARY GENERAL

— Pascale Fonck, Chief External Relations Officer

with provisions stipulated by legislation andthe articles of association, these Boards of Directors are supported by threecommittees –the Corporate Governance Committee, theAudit Committeeand theRemunerationCommittee –which are thesamefor EliaTransmission Belgium and EliaAsset. TheBoards of Directors ensure that these committees operateinanefficient manner.

— Ernst & Young Réviseurs d’Entreprises SCCRL, represented by Paul Eelen EXECUTIVE BOARD

— Peter Michiels, Chief Human Resources & Internal Communication Officer — Ilse Tant, Chief Community Relations Officer — CatherineVandenborre, Chief Financial Officer

— Siska Vanhoudenhoven Board of Directors

— Chris Peeters, Chairman and Chief ExecutiveOfficer — Markus Berger, Chief InfrastructureOfficer — Patrick DeLeener, Chief Customers, Market & System Officer

Elia Transmission Belgium | Annual report 2020 AUDITORS157

— Frédéric Dunon, Chief Assets Officer

The Boards of Directors of EliaTransmissionBelgium andEliaAsset consist of 14 members, none of whom perform an executive role withineither of those twocompanies. The same directors sit onthe Boards of bothcompanies.

Half of the directors are independent directors, satisfyingthe conditions set out in Article 7:87 of theBelgian Code of Companies andAssociations, Article2(30) of the Act of 29 April 1999 on the organisation of the electricity market and inthe articles of association, and having received a positiveopinion(“avis conforme”/”eensluidend advies”) by the CREG ontheir independence. The other half arenon-independent directors appointed bythe General Meeting in accordancewith the statutory provisions on proposal of Publi-T, as per the current shareholder Instructure.accordance

fromTheAuditCommitteewasre-electedattheGeneralShareholders'MeetingheldonMay19,2020,foratermofthreeyearsthatdateuntilthe2023GeneralShareholders'MeetingforthefinancialyearendingDecember31,2022.

Dominique Offergeld (non-executive non-independent director of Elia Group, Elia Transmission Belgium and Elia Asset)hasadegreeineconomicsandsocialscience(specialisation:publiceconomics)fromUniversitéNotreDame dela Paix inNamur. She has taken various extra-academic programmes, including the General Management Program at Cedep (INSEAD) in Fontainebleau (France). She started her career at Générale de Banque (now BNP Paribas Fortis)in the corporate financedepartment in 1988, and was subsequently appointed as specialist advisor tothe vice-president andminister for economicaffairs of the WalloonRegionin 1999.In2001 she becameadvisor to the Deputy Prime Minister and Minister for Foreign Affairs. Between 2004 and 2005, she was deputy director of theofficeoftheministerforenergy,subsequentlybecominggeneraladvisortotheSNCBholdingcompanyin2005. She was previously director of (among others) Publigas and government commissioner at Fluxys. She was also ChairwomanoftheBoardofDirectorsandtheAuditCommitteeofSNCB.Between2014and2016,shewasdirector of theMinisterforMobility’sStrategyUnit, with responsibilityfor Belgocontrol andtheSNCB. Shehas beenCFO of ORES since August 2016, a position she also heldbetween 2008 and 2014.

The experience of Michel Allé, Chairman of the Audit Committee, and Dominique Offergeld, member of the Audit Committee, is described indetail below.

TransmissionNumberofpeopleontheBoardofDirectorsofEliaBelgiumasat31December2020 Unité 2020 Men 35-54ans 1 ≥55ans 8 Women 35-54ans 2 ≥55ans 3

Elia Transmission Belgium | Annual report 2020 16 Diversity within the board of directors

In addition, thecomposition of theBoard of Directors is based on gender diversity and diversity ingeneral, as well as onthecomplementarity of skills, experienceand knowledge - in accordance withtheCode of Companies and Associations and the internal rules of theBoard of Directors.

Pursuant to article 3:6, §1, 9° of the Code of Companies and Associations, this report must contain justification of the independence and accounting and auditing competence of at least one member of the Audit Committee. The internal rules of procedure oftheAuditCommitteerequire, in thisrespect, that allmembers of theAudit Committee have the sufficient experience and expertise required to exercise the role of the Audit Committee, particularly in terms of accounting, auditing and finance. The internal rules of procedure of the Audit Committee provide that the professional experience of at least twomembers of theAudit Committeemust be detailed inthis report.

Michel Allé (non-executive independent director of Elia Group, Elia Transmission Belgium and Elia Asset since 17 May 2016 and Chairman of the Audit Committee) has degrees in physics civil engineering and economics (both from the Université Libre de Bruxelles (ULB)). Alongside his academic career as a professor of economics and finance (Solvay Brussels School, ULB’s École Polytechnique), he worked for many years as a Chief Financial Officer. In 1979, he beganhis career intheserviceof thePrime Minister, as an advisor in the SciencePolicy Department. He was appointed director of the National Energy R&D Programme in 1982 and then director in charge of InnovativeCompanies.In1987,hejoinedtheCobepagroup,whereheheldmanypositionsincludingVicePresident of Mosane from 1992to1995. From 1995to2000 hewas a member of the Cobepa group’s ExecutiveCommittee. He then served as Chief Financial Officer of BIAC between 2001 and 2005 and Chief Financial Officer of SNCB (Belgian Railways) between 2005 and 2015. He also has extensive experience as a director, including past and present roles at Telenet, Zetes, Eurvest (Nicols) and D’Ieteren. He has chaired the Zetes Audit Committee.

Audit Committeecompetencies

In accordancewith the Act of 29 April 1999 on the organisation of the electricity market, theCode of Companies andAssociations and the articles of associationof EliaTransmissionBelgium, at least onethird(1/3) of the Board members must be of theopposite gender tothe remainingtwo thirds. This one third ruleis applied proportionately to theindependent and non-independent directors.

for and appointing newmembers of the ExecutiveBoard,

Executive Boardis

attention is paidto diversity parameters in terms of age, gender and complementarity. Shareholder structureat the closing date Shares %Shares %Votingrights EliaGroupSA 206.071.930 100,00 100,00 Publi-TSC 1 0,00 0,00 Total 206.071.931 100,00 100,00 TransmissionNumberofpeopleontheExecutiveBoardofEliaBelgiumasat31December2020 Unité 2020 Men 35-54ans 2 ≥55ans 3 Women 35-54ans 3 ≥55ans 0

Elia Transmission Belgium | Annual report 2020 17 Diversity within the Executive Board

The composition of based on gender as well as onthe comsearching special

diversity and diversity ingeneral,

plementarity of skills, experienceand knowledge. When

The energy transition drives us to aconsumer centric model on which our strategyand ambitionis based. Toenablethis consumer-centric model ELIA TRANSMISSION BELGIUM cultureandplanned changes must be fully aligned with the ELIA TRANSMISSION BELGIUM’s strategy. Additionally, with regard to talent management we are aware that specific technical expertise (offshore, digitalization, IP...) will berequired inthefuture to support the achievement of the strategy.

Risk management and uncertainties facing the company

Strategic/regulatoryrisks & responses provided 2.1.1 Changing HRneeds

2.1

Targeted actionis takenin a timely manner toensurecompulsory homeworking requirements are met or alternatively that working conditions on premises are compliant. Supportedby an adequate set of tools & technologies employees can efficiently collaboratefrom home.

The Covid context also provides a momentum for driving a home working policychange in the frameof the New Way ofWorking initiative. In the future, it is expected that for somefunctions, homeworking will represent about half working time andwork at premises the other half. This will ensure ahealthy balance betweenvirtual & physical interactions, betweenwork life andprivate life while also supporting our sustainability ambitions by limiting transport-relatedCO2 emissions.

A reinforced focus on talent and cultureledtoseveral anticipatingactions to develop a talent management framework. Its streams include amongst other things, the further improvement of the process for identificationand sustainment of critical competencies, the implementation of risk management for critical functions and a career and development framework. Another strongfocus is onleadershipskills, with aculturechange project to achievethe alignment between cultureand strategy.

2.1.2 Changing/new regulatoryconditions

Responses HR initiatives, policies and processes aredesigned tosupport theimplementation of our strategy and objectives.

A specific task force continuously monitors the measures taken by thepublic authorities in the covid-19context.

Given thespecificities of its activities, ELIA TRANSMISSION BELGIUM is subject to extensiveEuropean, federal andregional legislation and regulation. Unplanned and/or inconvenient changes or misinterpretations in regulatory or policy mechanisms in Belgium couldconflict with ELIA TRANSMISSION BELGIUM’s existing and envisionedstrategy causing severe financial andorganizational impacts.

Responses In order to minimizeuncertainties, ELIA TRANSMISSION BELGIUM strives to proactively anticipate European legislation, new directives and regulations being prepared at EU level or awaitingtransposition into Belgian and Germanlaw, notablyas part of the “CleanEnergy Package” and the possibleevolution of the Transmission System Operator (TSO) role to a Regional Operational Centre (ROC) one. ELIATRANSMISSION BELGIUM is also foundingmembers of the EuropeanNetwork of Transmission System Operators for Electricity (ENTSO-E). Through participatinginthis network, thetransmission system operators provide advocacy for evolutions inline with their strategy.

Elia Transmission Belgium | Annual report 2020 18 2.

Responses A reorganization was performed by theend of 2019, which enables the ring-fencing of the Belgianregulatedactivities of ELIA TRANSMISSION BELGIUM from any other activities (German regulated activities or non regulated activities). This inturnlimits therisk of cross-subsidy between regulated activities or with non-regulated activities.

Elia Transmission Belgium | Annual report 2020 Further19 information In Belgium, theregulatory and legal framework entails risks withregard to the division of powers between federal andregional entities (for instance, contradictions between thevarious regulations, includingthe grid codes, could hinder the ability to perform ELIA TRANSMISSION BELGIUM’s activities). Political sensitivities are also emerging onthe impact of public policies on households andcompany energy bills, that couldmaterializein theform of legislation affectingthe adequate coverage of these costs. The further development of and changes totheseregulations may also impact the ELIA TRANSMISSIONBELGIUM’s liability in the event of a power outage on the grid or –in the context of areform of the State –the division of powers between federal and regional authorities, potentiallyincluding the power toapprovetransmissiontariffs. In order to minimizethose risks,ELIA TRANSMISSION BELGIUM also strives to anticipate proactively evolution brought to national or local legislations.

ELIA TRANSMISSIONBELGIUM has also undertaken a careful monitoringto ensure that its invoices are paid on time. 2.1.4

Pandemic risk (COVID type)

Early termination of TSO licence

ELIA TRANSMISSIONBELGIUM is affected by the COVID pandemic. This has animpact both on its abilityto carry out its activities and on its revenues. However ELIA TRANSMISSION BELGIUM manages tominimizethe impact of this crisis. Responses Business continuity plans are up to date. These include a resilience planningfor critical functions. For As explained in the HR risk description, ELIA TRANSMISSION BELGIUM has developed HR policies whichallow an effective homeworking for the administrative functions. ELIA TRANSMISSION BELGIUM has also integrated health-relatedactions for its personal working on thefield, to assure the maintenance andthe development of its Theinfrastructure.pandemic affects thevolumeof energyconsumedby its consumers (resultingfrom the current economic crisis). However, theimpact of this is limited because most of its tariffs are not based on thevolume of energybut onthe peak of power takenfrom the network, whichremains steady. For thetariffs that are related tothe volume of energy (e.a., mainly the public service obligations), the regulatory framework foresees the possibility to adapt the tariffs to the new expectations in term of volume of energy.

Toexecute its activities, ELIATRANSMISSIONBELGIUM has alicence, whichcan be revoked earlier if ELIA TRANSMISSIONBELGIUM does not have, inter alia, thehuman, technical and/or financial resources toguarantee the continuous andreliable operationof the gridin accordance with the applicable legislation, as well as the unbundling obligations as describedinArticle9 of the EU Electricity Directive. Such arevocationwould have an adverse material impact on ELIATRANSMISSION BELGIUM.

2.1.3

The remuneration of ELIA TRANSMISSION BELGIUM is almost entirely driven by the regulatory framework applicable. Changes tothe regulatory parameters could impact the profitability of ELIA TRANSMISSION BELGIUM. In addition, the realisation of certain parameters defined in the tariff methodologies are subject tospecific uncertainties that could affect ELIA TRANSMISSION BELGIUM’s financial position.

In thecontext of theEnergytransition, the development needs of transmission infrastructure inBelgium requires the implementation of ambitious investment programs, which indirectly contributes to increasing their regulatory asset base. ELIA TRANSMISSIONBELGIUM also endeavours toconsult with the CREG andto participate in consultations ontariff methodologies that takeaccount of thechanges resultingfrom the energy transition andthedecentralization of energy generation. Lastly, ELIATRANSMISSION BELGIUM seeks toact as efficiently as possiblein its investment andasset maintenance policies. This allowsconsumers to benefit from thescale effect of centralised grid management. Further information End 2019, CREG approved ELIA TRANSMISSIONBELGIUM's Tariff proposal for the 2020-2023 regulatory period. Recently CREG alsoapproved the actualizationof Surcharges’ level coveringthecosts of its Public service obligations, taking into account the expected effect of the pandemic onthe volume of energy (see above).

In particular, the remunerationof ELIATRANSMISSION BELGIUM depends inpart onits ability to realisethe needed projects and maintain therealised assets, as the current remunerationin Belgium is subject to theRegulatory Asset Base. This depends on its abilitytoobtain thenecessary permits and to manage potential environmental and public health risks and accommodatecity planning constraints without incurring significant costs. If ELIA TRANSMISSIONBELGIUM would not be able to realise or not timely/economically realiseits investment programme, this could havea negative impact onELIA TRANSMISSION BELGIUM’s futureprofits.

Elia Transmission Belgium | Annual report 2020 20 It thereby provides ELIA TRANSMISSION BELGIUM with a suitable framework for the further development of all activities. Further information Elia Transmission Belgium (ELIA TRANSMISSION BELGIUM) was confirmed as aBelgiantransmission system operator witheffect from December 31, 2019by different public entities (theFederal Government for aperiod of 20 years, the Brussel’s Government for a periodof 20 years, andtheFlemishregulator for a period of 4 years). The risks of early termination of theTSO licences are thereforelimitedin the short term. It is noted, however, that somediscussions around the interpretation to givetoCorporate Governance rules shall beconducted prior to the next renewal of the Flemishlicence.

Responses

2.1.5 Sustainabilityof incomes

2.2 Operational risks &responses provided 2.2.1 Balancing The production of electrical energy shouldbe equal to the demandat any time. The transmissionsystem operators usebalancingenergy to balance unplanned fluctuations in the productionof electricity or the energy load.

Elia Transmission Belgium | Annual report 2020 21 The growthinthe number of renewable energy units connectedtodistributionsystems across Europe and, the connection of large offshore windfarms, also creates new challenges for operational gridmanagement, particularlythrough increased volatility of energy flows on our network.

The federal government inplacehas a key role to playin ensuringthat enough capacityis available in its country to avoid the risk of an electricity shortage and problems of supply. ELIA TRANSMISSION BELGIUM, for its part, provides them withuseful information. As anexample, ELIA TRANSMISSIONBELGIUM performs, in accordance with thelaw, regular assessments of Belgium’s securityof supplysituationintheshort and longer term.

For theBelgium’s adequacy situation inthe short-term, ELIATRANSMISSION BELGIUM mainly assesses the adequacy between load projections and available generation (incl. Demand SideResponse, denoted DSR, load shifting…) inBelgium andthe surrounding countries against security of supplycriteria defined by law. If the study reveals that the latter criteria may not bemet, the Minister incharge of Energy canask ELIA TRANSMISSION BELGIUM toconstitute a Strategic Reserve. A Strategic Reserveis composed of assets sitting out of the market that canbe called uponin the event that the market cannot ensure security of supply.

OnNovember 30, ELIA TRANSMISSION BELGIUM has published its probabilistic analysis of Belgium’s adequacy situationfor thewinter 2021-22. Theresults of this study are available here: dia/project/elia/elia-site/public-consultations/2020/20201130_strategic-reserve-2021-22-v_final-1_en.pdfhttps://www.elia.be/-/me-

ELIA TRANSMISSIONBELGIUM also looks bi-annually at Belgium’s adequacy situation in the longer term. These studies assess the adequacy between load projections and anticipated availablecapacity (incl. DSR, load shifting, batteries…) in Belgium and thesurrounding countries. The anticipatedavailable capacity includes politicallyset objectives interms of renewable generation as well as an economic viability gap to assess if sufficiently

2.2.2 Adequacy

Responses Maintaining security of the grid with respect to balancing at reasonablecosts for thesociety relies ona mix of measures. These involveimproving the cooperationfor gridcontrol at both national and international levels, enhancing the quality of forecasts (consumption, offshore, etc.), as well as ensuring a market designthat incentivizes theBalancingResponsible Parties to manage their portfoliobalance, whilst at the same timeoffering them the market arrangements whichallow them to trade their imbalances as close as possible to real-time (e.g. intraday markets). Inaddition, market reforms have to beimplementedthat unlock as much flexibility as possible and that canbe called uponin real-timetokeep the grid balanced at the least cost. The latter market reforms are aimingto open the balancing markets to all technologies andall players, irrespective of the voltage level theyare connected to. As anillustration of theaforementionedmeasure, in the course of 2020 inBelgium, ELIA TRANSMISSIONBELGIUM movedfrom monthly procurement of mFRR (manual frequency restorationreserve) and weekly procurement of aFRR (automatic frequency restoration reserve) to a daily procurement of both reserves which, together with a shortening of thecapacitycontracting time unit to four hours, lowers the entry barrier for thereservemarket and allows the effective participation of moretechnologies. 2021 will be mainlydedicated to thefurther implementation of theEuropean platforms for the activationof balancing energy and to the preparation of theconnection of the Belgian market to theseplatforms in 2022.

This study concludedthat as a result of thenuclear phase-out, Belgium wouldface an adequacy gap by 2025 and that there are insufficient robust investment signals toexpect this gap to be filled up by the market without additional intervention. In 2020, ELIATRANSMISSION BELGIUM has launched together with therelevant authorities andCREG and involvingmarket parties the process for the next study (i.e. covering the period 2022-2032) that should becomeavailable no later than June 30, 2021. Following the aforementioned 2019study, in order to guarantee Belgium’s securityof supply inthe longer term, the Belgian Parliament adopted in April 2019 a modification of the Electricity Law inorder tointroduce a capacity remuneration mechanism (CRM). ELIA TRANSMISSION BELGIUM is assisting the government in designing and implementing this CRM mechanism. In2020ELIA TRANSMISSION BELGIUM has deliveredon all of its legal requirements for therollout of this new mechanism, includingformal proposals for several methodological aspects, for calibration of several parameter andfor detailed functioning rules. ELIATRANSMISSION BELGIUM has also started the necessary implementation actions (e.g. IT developments). The aforementioned study also indicated that Belgium might already face anadequacyissue between2022and 2025 (period during which somenuclear units will leavethe market). Whilethe study of November 30, 2020on the perspectives for next winter provides indications confirming the trend, particularly the study to be delivered by June 30, 2021will providefurther insights inthis matter. Also onthis aspect, ELIA TRANSMISSION BELGIUM continues toinform therelevant authorities and assists them in their works when calledupon.

Responses

The transmission systems operated by ELIA TRANSMISSION BELGIUM is veryreliable. Nonetheless, unforeseen events, such as unfavorable weather conditions, may occur and alter thesmooth operationof one or more infrastructurecomponents. Inmost cases, these will leadto a so-calledsinglecontingency event, and haveno impact onthe end customers’ power supply because of the meshedstructure of the grid operated by theELIA TRANSMISSIONBELGIUM. Indeed, electricity can oftenreach endcustomers viaa number of different connections in the system. However, inother cases, an incident intheelectricity system may lead to amultiple contingencies event that couldresult ina local or widespreadelectricityoutage provokingliability claims andlitigation which couldnegativelyimpact thefinancial positionof ELIA TRANSMISSION BELGIUM. There are causes other than unfavorable weather conditions for contingency events & business continuity disruption. Examples include human errors, malicious attacks, terrorism, equipment failures, etc. Offshoreequipment particularly has our full attention, ina context wherethere is less of a track recordwith thesetechnologies anda higher complexity for curative actions. The probability of the occurrence of one or moreof the above-mentioned events may increaseif the competent authorities do not approve the necessary operational procedures, investments or full timeequivalent (FTE) resources proposed by ELIA TRANSMISSIONBELGIUM.

There are several procedures in place to managetheserisks,goingfrom crisismanagement plans to operational procedures suchas defense plans and restoration plans. All of them areregularly trained for and tested with

ELIA TRANSMISSIONBELGIUM’s latest studyin this respect“Adequacy & Flexibility Study 2020-2030”, dates from June 28, 2019. It is available here: https://www.elia.be/en/publications/studies-and-reports

Elia Transmission Belgium | Annual report 2020 22 robust signals are available to trigger investments in themarket to close any potential adequacy gap as defined by the legal security of supply criteria

2.2.3

Contingency events & Business continuity disruption

Additionally, the design and operation of offshore as well as onshoretechnologies takes constraints relatedtorepair time, monitoring opportunities andgrid resilienceinto account.

Shouldunfavorable circumstances occur, ELIA TRANSMISSION BELGIUM may take any emergency measures it deems appropriate, suchas disconnecting someor all electricity exports, requesting electricity-generating companies toincrease or decrease their electricity production or requestinga reduction intheelectricityconsumption from the competent Minister in therelevant area to reducethe impact of the event.

ELIA TRANSMISSIONBELGIUM, the respective general terms and conditions of its contracts providefor appropriateliabilitycaps for ELIA TRANSMISSION BELGIUM, as thecase may be, to a reasonablelevel. Eachrelevant insurancepolicy is designedto limitsome of the financial repercussions if these risks were tooccur.

In Belgium, dueto resource bottlenecks, asset replacements and capital expenditures are generally subject to arbitration, whichcontributes tothe ageing of some asset fleets, complicates the asset management and may eventually affect the availability of some network components and theperformance of protection devices. In terms of security, thescreening of relevant profiles is applied andprojects to improvethe security of critical infrastructure are ongoing.

2.2.4

Responses

The assessment of climaterisks is integrated into amulti-disciplinary group-widerisk management process, whererisks areidentified, assessed, & high priority risks closely followed-up.

Elia Transmission Belgium | Annual report 2020 23 large-scaleexercises and simulator trainings so that our staff and transmission system operators, as the case may be, are ready todeal with the most unexpected and extreme situations. In the event of an error attributableto

Climaterisks

A framework for crisis management for managing all corporatecrisis situations such as community relations issues is under development. Further information

As a regulated entity, ELIA TRANSMISSION BELGIUM acts inaccordancewith the "network codes" applicable at European, federal and regional level, while network access contracts are approved by theregulator.

The risks associatedwith climate change are especially important for ELIA TRANSMISSION BELGIUM given our ambitiontodeliver theinfrastructure of the energy transition, whichhelps achieveclimate targets at thesame time. Climatechange & energy transition bring uncertainties & challenges toour TSO missions relatedto markets, system & infrastructure. These include, notably, changes in regulation, selection of technologies or informedinfrastructure management in light of physical risks. Indeed, the possibility of havingtemperaturepatterns, sea levels, the contours of flood prone areas, or even thefrequency and severity of extreme weather events modified may in turn lead to less favorable operating conditions for our assets or even damage them. Such circumstances may trigger risk factors for contingency events & business continuity disruption. Currently, the most important physical risk sources are extreme weather events causing damage to our outdoor infrastructure & flooding of substations.

ELIA TRANSMISSIONBELGIUM's exposureunder the regulatory framework andthesecontracts is limited to an acceptable amount. These risks are generallycovered by a "liability" insurancecontract for the appropriate amounts.

2.2.6

ELIA TRANSMISSIONBELGIUM also continuously adapts its processes andis putting in placenew processes to ensure compliance.

In addition to its efforts to implement the infrastructure of the energy transition, ELIA TRANSMISSION BELGIUM is takingpart in the initiative“Act Now for aSustainableWorld”. The 5sustainability lighthouses defined are a concrete expression of our determination to be among the best European TSOs interms of sustainability performance. The ambitionis to be transparent about what will be done in the comingyears interms of sustainability.

Failure of Information and Communication Technology(ICT), data security& protection.

Any suchevents couldimpair the ability of ELIA TRANSMISSIONBELGIUM to provide all or part of their services and generallymay result in a breachof its legal and/or contractual obligations. This could, in turn, result inlegal claims or proceedings, contractual liability, liability under any other data protection laws, criminal, civil and/or administrative sanctions, a disruption of the operations of ELIA TRANSMISSION BELGIUM, or damage its reputation, andin general could adversely affect the business of ELIA TRANSMISSION BELGIUM. Responses

ELIA TRANSMISSIONBELGIUM takes appropriate measures to revise, update and back upits ICT processes and hardware software and network protection (for example, failover mechanisms) on an ongoing basis tothe maximum extent permitted by technical and financial considerations.

| Annual report 2020

A failure of theICT systems and processes used by the ELIA TRANSMISSION BELGIUM or a breach of their security measures may result inlosses for customers and reduced revenues for ELIA TRANSMISSION BELGIUM. ELIA TRANSMISSIONBELGIUM also collects andstores sensitivedata, their own business data andthat of their suppliers and business partners. ELIA TRANSMISSIONBELGIUM is subject to several privacy and data protection rules and regulations, including, as of May 25, 2018, the General DataProtection Regulation(EU Regulation 2016/679 of April 27, 2016) as well as the NIS directive. Despiteall of the precautions taken, important system hardware andsoftware failures, failure of compliance processes, computer viruses, malware, cyber-attacks, accidents or security breaches could still occur.

Elia Transmission Belgium 24 For several years now, ELIA TRANSMISSION BELGIUM responds viaEliaGroup the Carbon DisclosureProject (CDP) questionnaire. In 2020, a B rating was received, which reflects continuous improvement inthe management of environmental impact, climate risks & opportunities.

Furthermore, data governance andclassification, as well as data protection and information security (ISO 27001) are applied and monitoring has started.

Permitting risk

The changing European energy market and largescale deployment of renewable-based generationtechnologies alsorequires the further development of the infrastructure of thetransmission system operator. Electricity grids are recognized as enablingtheenergy transition. The development of such infrastructure and interconnectors with other neighboring countries aredependent on securingpermits and approvals from local, regional, national and

2.2.5

In Belgium, some projects are particularly important tofacilitating the energy transition: theinterconnection projects, the reinforcement of the backbone(HTLS projects), the construction of new projects to reinforcethe backbone, such as Ventilus and BoucleduHainaut and finally the development of the second waveof offshorewindfarms. Despite the common interest for thesociety, they also require a great deal of effort to gain community acceptance duetolocal impact. Further information onthese projects is available in our Federal Development Plan 2020-2030: 2020-2030https://www.elia.be/fr/infrastructure-et-projets/plans-investissements/plan-de-developpement-federal2.2.7 Supplier’s risk

Responses

In order to manage uncertainties related to permitting, concrete and upfront stakeholder management takes place, as well as transparent communication to thecommunity.

ELIA TRANSMISSIONBELGIUM relies on a limited number of key suppliers to provide him with material and realise its investment projects. Giventhe complexity of the infrastructureworks, theincreasing demandin the market, andthefactories' full order books, ELIATRANSMISSION BELGIUM may not be able to find sufficient suppliers or supply capacity for its projects. These key suppliers also face the challenge of having enoughskilledHR profiles, so that thedesignof their products is adequate, their production capacity is sufficient, the quality of their supplies is goodandtheir work teams demonstrate adeeply embedded safety culture. Should they fail tohave enough skilled profiles, this might adversely impact our business, includingthe safety of our works. Inaddition, ELIA TRANSMISSIONBELGIUM is also exposedtothe risk of public procurement claims and that their respective suppliers, when facing financial difficulties, may not be able to comply with its contractual obligations. Covid19may place somesuppliers ina tight financial & supply chain situation (limitedstock of supplies). Any cancellation of or delay inthe completion of its infrastructureworks couldhave an adverse effect onthebusiness and reputation of ELIA TRANSMISSION BELGIUM. Responses

For instance, in spite of COVID circumstances, ELIA TRANSMISSION BELGIUM worked together with governments andlocal municipalities to develop and be able to go further with digital participation strategies. By having this proactiveandagile approach, we did not suffer from significant delays to progress and obtain the decisions we were waitingfor in 2020. Further information

Elia Transmission Belgium | Annual report 2020 25 international authorities. The need toobtain such approvals and permits within certain timeframes represents an important challenge to timely implementation. Moreover, theseapprovals and permits can becontested in therelevant courts.

Workinghands in hands with authorities on acommongoal (i.e. theintegration of renewables while ensuring the security of supply with affordable energy prices) helps to build sustainable relations and achieve grid projects withinthe timeframe of climate ambitions.

Financial risks &responses provided 2.3.1 Negative changes in financial markets

The safety and well-beingof individuals is a key priority anda daily concern for ELIA TRANSMISSION BELGIUM. A Health and Safety policy is in place. Safety analyses and promotionof asafety cultureare undertaken. Action takentowards a Just Culture and astrongsystem based H&S strategy enables ELIA TRANSMISSION BELGIUM to pursue these priorities ina sustainable manner.

The ability of ELIA TRANSMISSION BELGIUM to access global sources of financingtocover its financingneeds or repayment of its debt could beimpactedby the deterioration of financial markets.

2.2.8

Indeed, in order tofinanceits investments and toachieve its short andlong-term strategic goals, ELIA TRANSMISSION BELGIUM needs to access capital markets. Inthe current bank andcapital market environment characterized by low interest rates, ELIA TRANSMISSION BELGIUM has no constraints on the availability of funding.

Responses

Elia Transmission Belgium | Annual report 2020 26 ELIA TRANSMISSIONBELGIUM maintains ongoing dialogue with its suppliers and regularly performs predictive capacity analysis at market level in order to minimise supplier’s risk. Targetedmeasures are taken tomitigate specific risks. ELIA TRANSMISSIONBELGIUM also develops moreresilient purchasing strategies anddiversifies its supplier portfolio. TheHR initiatives aimingtoincreasethe internal technology knowhow and skillset with respect to critical technologies and tools also contribute tolimit the risk of dependencies with respect to EU & nonEUsuppliers.

The risks the ELIA TRANSMISSIONBELGIUM faces are identified and analyzed in order toestablishappropriate limits. ELIA TRANSMISSION BELGIUM controls andmonitors risks and compliancewith such limits. Tothis end, ELIA TRANSMISSIONBELGIUM has defined responsibilities and procedures specifically for thefinancial instruments to beused and the operating limits for managing them. These procedures and related systems arerevised

The allowedreturn on equity defined inthe regulatory schemes can alsobe adversely affected by the decrease of interest rates. Tofinanceits investments, ELIA TRANSMISSION BELGIUM is dependent onits ability toaccess the debt market inorder toraise the necessary funds to repay its existingindebtedness andmeet its financial needs for its future investments. Geopolitical issues linked to theexecution of theBREXIT as well as theroll-out of theBiden administration in the US andthe evolutionof the pandemic Covid-19could further impact the financial markets. All of thesemacroeconomic factors arereflected at market level by severe volatility, which could impact thefinancing of ELIA TRANSMISSIONBELGIUM.

ELIA TRANSMISSIONBELGIUM operates facilities where accidents, asset failure or external attacks may cause harm to people. As a result, ELIA TRANSMISSION BELGIUM may be exposedto potential liabilities that may have a material, negative impact on their financial position, requiresignificant financial and managerial resources, or possibly damageits reputation. Responses

Health& safetyaccidents

2.3

Fluctuations of interest rates may negatively influencethe financial situation of ELIA TRANSMISSION BELGIUM.

The fluctuation ininterest rates of the ELIA TRANSMISSION BELGIUM’s debt mentioned in the previous section canalso have animpact on theactual financial charges by causing atime differential (positive or negative) between the financial costs effectively incurred by ELIA TRANSMISSION BELGIUM and the forecast financial costs. This couldcause transitory effects on the cash positionof ELIA TRANSMISSION BELGIUM. Deviations betweenactual and budgetedvolumes of electricity transmitted and between effectively incurredand budgeted costs/revenues may have a negative short-term effect on the cashposition of ELIA TRANSMISSION BELGIUM. Covid-19 measures were leadingin 2020to adropinelectricity consumption. This downturn in electricity consumption had a substantial impact on the actual cash income to financethe different mechanism to support the development of renewable energy and public serviceobligations. However, thanks tothe current tariff structure, theimpact onour core business cash incomes was morelimited. In function of theevolutionof the economic activities, a wider negative mid-term impact may be expected. Further informationon the impact of support mechanismsis provided hereunder. The existing legal rules foresee that TSO public service obligations’ costs are coveredby tariffs (& tariff evolutions) which are approved by theregulators ona regular basis.

The short-term liquidity risk is managedon a daily basis withthe funding needs being fully covered throughthe availability of credit lines and a commercial paper program.

2.3.2 Cashflow

Elia Transmission Belgium | Annual report 2020 27 on a regular basis to reflect any changes in market conditions andthe activities of ELIA TRANSMISSION BELGIUM. Thefinancial impact of these risks is limited, as Elia Transmission Belgium operates under the Belgian regulatory framework. As part of the ELIA TRANSMISSIONBELGIUM’s efforts to mitigate the funding risk, ELIATRANSMISSIONBELGIUM aims todiversifyits financing sources in debt instruments and balances thematurity of it’s fundingtothe long-term lifetime of its assets. The refinancing risk is managed through developing strongrelationships witha groupof financial institutions, throughmaintaining arobust and prudent financial position over time andthrough diversification of funding sources. The short-term liquidity risk ismanaged on a daily basis with funding needs beingfully covered through the availability of credit lines (sustainability linked credit lines for ELIA TRANSMISSION BELGIUM) andthe Commercial Paper Program. Further information In Belgium, thefundingcosts linked to thefinancing of the regulated activities arequalified as “Non controllable elements” and potential deviations from budgetedfigures can be passed onin asubsequent regulatory tariff period (or inthesame periodinthe event of an exceptional change incharges). The regulated tariffs areset pursuant toforecasts of the interest rate.

In theframework of their respectivecompetences, national and regional governments have taken measures to support thefurther development of renewable energy by introducingdifferent support mechanisms. ELIA TRANSMISSION BELGIUM is entitled to several of these public serviceobligations mechanisms. This may have anindirect impact on ELIA TRANSMISSION BELGIUM’s cashflow: deviations from the number of sales of green certificates at a guaranteed minimum priceor deviations from the expected volumes of infeed of renewable energy and lower end user consumptioncould generate short-term & mid-term significant cash expenses.

Responses

The first vague of offshorewind turbine connections havebeen finalizedin theNorthSea in the course of 2020 and hint towards a potential growth once MOGII has been approved, generating greencertificates tobe sold to ELIA TRANSMISSIONBELGIUM. This offshore greencertificate public service obligation generates anincreasingly largecash outflow, compensatedby an equivalent cash inflow resulting from an increasingtariff to be approved by thegovernment in the comingyears.

In theperspectivetofinancethe further negativebalance between the actual tariff of 13.8159 €/MWhandthecost of GC sales toELIA TRANSMISSION BELGIUM in 2021, a new temporization operationis probablystill necessary in2021. As from 2022, the GC sales to ELIA TRANSMISSION BELGIUM should start declining andsolimitingthe risk onfurther financial imbalance on theWalloon GC public serviceObligation. In the sametime, the reservationmechanism by Solar Chest will stop by endof June 2022.

The outcomeof legal disputes and lawsuits may negativelyaffect the business operations and/ or the financial results. Responses

For what concerns the offshore green certificates public service obligation, theexisting legal rules foresee that this lack of fundingis addressed by anevolutionin tariffs, with a delay of about 2 years. Thetariff for 2021 has been approved bytheMinister of Energy.

The hightariff for public serviceobligations for financing the support measures for renewable energy inWallonia, which is establishedtocover the cost of sellinggreencertificates to ELIA TRANSMISSIONBELGIUM, was completedinlate 2017 by a new green certificatetemporization mechanism. In this context, the Walloon Region is entitledto buy appropriate quantities of GC from ELIA TRANSMISSIONBELGIUM and to resell these GC to the market ina few years.

With the advent of Belgianlaws andregulations governing decentralized or renewableenergy generation, notably via photovoltaic solar panels andwind turbines, the federal and regional governments organizedtheissuance of so-called ‘green certificates’ (GC), whichare usedas a financial support mechanism for renewable energy.

As a logical result of the responsedefinedto adequacyrisks described in the regulatory & risk sections, the financing mechanism of CRM remains to befinalized, as balancedas possible.

2.3.3

In terms of the regional public service obligations, ahistorical imbalanceexists since afew years but a gradual decline of this imbalance is expected to happen inthe future.

Further information

Legal disputes& liabilities

Elia Transmission Belgium | Annual report 2020 28 Other risk mitigationmeasures includebeing involvedin the design of public service obligation mechanisms aimingtosupport the development of renewable energy. Once thesemechanisms arein place, performing goodforecasts on end-user consumption, RES-infeed, market prices, the expected number of sales of green certificates at aguaranteedminimum price, as well as reporting andcommunicating issues to governments andregulators can contribute to keeping agood balance.

2.4.2

Elia Transmission Belgium | Annual report 2020 29 ELIA TRANSMISSIONBELGIUM carries out its activities insuch away as to reduce (as much as possible) the risk of legal disputes and, if necessary, the appropriate provisions areidentified andimplemented on a quarterly basis.

As outlinedin the risk description, in thecontext of nuclear phase-out, preparing theenergytransition requires additional generation units being available for ensuring both the network balancing and adequacy. This inturns requires a framework inwhich investors will feel confident enough to invest inthose generation units. This framework is not yet available. Additionally, preparing for the energy transition has a cost. Finding ways to finance them ina manner that is responsible for the future generations and in acontext of indebtedness is achallengeinitself.

Energydemand & energyefficiency

2.4.3 Macroeconomiccontext

The covid 19 pandemic andrestrictions imposedtocontainit have ledto a slowdown in economic activities worldwide. Uncertainty remains on the longer term impact of covid-19. Theresurgence of the virus inmany European countries intheautumn 2020 combined withtheneed to reintroducecontainment measures areplaying an adverserole on the economic momentum. Theemergence of vaccines is expected to play a leadingcounterbalancingrole. However, it can stilltake time until thethresholdvaccinationrate is reachedand herdimmunity is achieved. Preparingthe energytransition

Whileglobal energy demand had steadilyincreased over the past decades until the COVID pandemic, energy efficiency is also one of thekey measures outlined by the EU in respect of Union-wide CO2footprint reduction. Significant energy efficiency measures inBelgium canpotentiallyaffect power consumption andthus reduce the volumes of electricity transmitted via the ELIA TRANSMISSIONBELGIUM’s network. Thesame applies for a slowing down of theeconomicactivities of industrial clients and areduction of their consumption.

Contextual factors

2.4.1 Covid 19

2.4

2020 was characterized by a rather uncertainmacroeconomic climate, in particular dueto the covid-19 (see subsection above), to asharp increasein government debt combined with contraction episodes in gross domestic product and the prospect of a no-deal BREXIT (until a deal was agreedat the end of December). Theorganization of the elections inthe United States of America, and the possiblecontestation of its results, was also an element likelytoincreasemarket volatility. As well as this, interest rates remained very low in 2020, following the ECB’s highly accommodative monetary policy stance, but this situationmay changein the future.

Evolutions in long-term interest rates may affect the expected returnfor transmission system operators.

The Board has chargedtheAudit Committeewiththe task of monitoring: (i) the financial reportingprocedure; (ii) the effectiveness of internal control andcorporate risk management systems; (iii) the internal audit and its effectiveness; (iv) the statutory audit of annual and consolidated accounts, including the follow-upof anyissues raised or recommendations made by external auditors; (v) the independence of external auditors, (vi) examining accounts andcontrolling budgets.

3. Features of the internal control and risk management systems

The reference framework for internal control andrisk management, establishedby the Executive Board and approved by theELIA TRANSMISSION BELGIUM Board of Directors, is based on the COSO II framework. The framework has five closely linked basic components, providing anintegrated procedure for internal control and risk management systems: control environment, risk management, control activities, information andcommunication, andmonitoring. The use andinclusion of theseconcepts inELIA TRANSMISSION BELGIUM’s various procedures and activities enables the company to control its activities, improve the effectiveness of its operations, optimally deploy its resources, and ultimatelyachieveits objectives. The implementation of COSO II at ELIA TRANSMISSIONBELGIUM is described below.

The Audit Committeegenerally meets quarterlyto discuss the above points. The FinanceDepartment helps theExecutiveBoardby providing, in a timely manner, correct andreliable financial informationto aid not only decision-makingwitha view tomonitoring the profitability of activities, but also effective management of corporatefinancial services. External financial reporting –oneof ELIA TRANSMISSION BELGIUM’s duties – includes (i) statutory financial and taxreporting; (ii) consolidatedfinancial reporting; (iv) reporting obligations under the regulatory framework. The structured approach developed by ELIA TRANSMISSIONBELGIUM helps to ensure that financial data is both exhaustive and precise, taking into account the deadlines for activityreviews and the actions of key players so as toensureadequate control and accounting. Integrityand ethics

Pursuant tothe ELIA TRANSMISSION BELGIUM articles of association, theBoard of Directors has established various committees to help it fulfil its duties: the Executive Board, the Audit Committee, the RemunerationCommitteeand the Corporate GovernanceCommittee.

3.1 Control environment Organisation of internal control

The ExecutiveBoard and management regularly communicate about these principles inorder toclarifythe mutual rights and obligations of the company and its employees. These rules are disseminatedto all new employees, andcompliance with them is formally includedin employment contracts. The Code of Conduct also helps toprevent employees from breaching any Belgianlegislation ontheuse of privilegedinformationor market manipulation and suspicious activities.Management consistently ensures that employees comply with internal values and procedures and –whereapplicable – take any actions deemed necessary, as laiddownin the company regulations and employment contracts.

ELIA TRANSMISSIONBELGIUM’s integrity and ethics are a crucial aspect of its internal control environment.

Elia Transmission Belgium | Annual report 2020 30

Elia Transmission Belgium | Annual report 2020 31 The Ethical Code defines what is regarded as correct ethical conduct and sets out the policyand a number of principles onthe avoidance of conflicts of interests. Actinghonestly and independently with respect to all stakeholders is a key guiding principlefor all of our employees. The Ethical Codeexpressly states that bribery in any form, misuse of privilegedandmarket manipulation is prohibited. This is confirmed by theCode of Conduct. ELIA TRANSMISSIONBELGIUM andits employees do not use gifts or entertainment to gain competitive advantage. Facilitation payments are not permittedby ELIA TRANSMISSION BELGIUM. Disguising gifts or entertainment as charitable donations is also aviolation of theEthical Code. Moreover, theEthical Code prohibits all forms of racism and discrimination, promotes equal opportunities for all employees, andensures theprotection and confidential useof IT systems. All parties involved in procurement must abide by ELIA TRANSMISSION BELGIUM’s deontology as to purchasingand all associatedrules. ELIA TRANSMISSIONBELGIUM’s purchasing deontology is published internally and externally and is basedon four pillars: confidentiality, non-discriminatory treatment of suppliers, transparency, and avoidance of conflicts of interest. The management of the employees involved in the procurement and payment processes regularly provides opportunities for trainingandawareness-raising on these ELIAtopics.TRANSMISSION

BELGIUM offers its employees the opportunity toexpress their concern about an (alleged) breach of theethical code without fear of sanctions and/or unfair treatment. In additiontothe existingreporting channels, an external system for reporting breaches of professional integrity has been implemented. Internal employees canreport viathis platform their suspicions about possiblebreaches of the ELIA TRANSMISSION BELGIUM Code of Ethics whichmay harm ELIA TRANSMISSION BELGIUM's reputationand/or interests in a protectedmanner.

Any violations of these codes can bereportedtotheComplianceOfficer, who handles them objectively andconfidentially. The Compliance Officer declares that no suchviolations were reported by internal employees or external stakeholders in 2020.

By virtueof its legal status as a power transmissionsystem operator, ELIA TRANSMISSIONBELGIUM is subject to alarge number of statutory andregulatory rules setting out three fundamental principles: non-discriminatory conduct, confidential processing of information, and transparency towards all electricity market players as regards non-confidential market information. With a view to meetingthese specific obligations, ELIA TRANSMISSION BELGIUM has drawn upan Engagement Programme, whichhas been approved by theCorporate Governance Committee. TheCompliance Officer reports annually to the relevant regulatory bodies inthis regard.

Internal Audit’s annual programme includes a number of actions and verification audits designed to act as specific safeguards against fraud. Any findings aresystematically reportedtothe Audit Committee. In 2020, no relevant findings relating to financial fraud were reported in the audits making upthe annual audit planof 2020.

Roles and responsibilities ELIA TRANSMISSIONBELGIUM’s internal control system relies on clearly defined roles and responsibilities at all levels of the organisation. The roles and responsibilities of thevarious committees established within ELIA TRANSMISSIONBELGIUM areprimarily identified in thelegal framework applicable to ELIA TRANSMISSION BELGIUM and the articles of association. Under the supervision of the Chief Financial Officer, the AccountingDepartment is responsible for statutory financial and taxreporting andtheconsolidation of the EliaGroup’s various subsidiaries. TheControlling Department monitors analytical accountingand reporting andassumes responsibility

Competencies

ELIA TRANSMISSIONBELGIUM’s financial transactions. A detailed framework of tasks and responsibilities has been drawn up to identifythe main control duties andthe frequency with which tasks andcontrol duties areperAnformed.IFRS Accounting Manual is used by all entities withinthescope of consolidation as a referencefor accounting principles and procedures, thus ensuring consistency, comparability and accurate accounting and reporting within the TheGroup.FinanceDepartment has the appropriate means (including IT tools) to perform form its tasks; all entities withinthe scope of consolidation use the same ERP software, which has a range of integrated controls and supports task separation as appropriate. ELIA TRANSMISSION BELGIUM also clarifies the roles and responsibilities of all its employees by providing a description of eachjob inline withthe Business Process Excellencemethodology.

3.2 Risk management

Risk management is another internal control system that is crucial in helpingELIA TRANSMISSIONBELGIUM to achieveits strategic objectives as defined inits mission. The Audit Committee, the Board of Directors and the Risk Manager jointly and regularly identify, analyseandassess key risks. Therisks are assessed qualitatively and/or quantitatively dependingon their nature and potential effect. The Risk Manager then makes recommendations on how best to manage eachrisk consideringthe close interaction of ELIA TRANSMISSION BELGIUM’s entirerisk universe. Basedon this assessment, preventive, remedial and/or corrective actions are implemented, including thestrengthening of existing internal control activities where applicable.

As regards the financial reporting process, the tasks and responsibilities of all employees in the AccountingDepartment have been clearlydefinedwith a view toproducing financial results that accurately and honestly reflect

BELGIUM has drawn up a policy for the management of generic and specific competencies in linewiththe company’s values, and promotes training so as to enable all its employees to effectively perform the tasks allocatedto them. Requirements with regard to competencylevels are continually analysed by means of formal and informal self-assessments at various stages of an employee’s career. Training programmes onfinancial reporting areoffered to all employees involved directly or indirectly with that task. Thetraining emphasises the existing regulatory framework, accountingobligations andactual activities, with ahigh level of understanding enabling participants to address the appropriate issues.

Elia Transmission Belgium | Annual report 2020 32 for all financial reporting ina regulatory context. TheInvestor Relations Department is responsible for specific reporting applicabletocompanies having listed debt instruments.

With a view toensuringits various activities are performed reliably and effectively, ELIA TRANSMISSIONBELGIUM clearly spells out the vital importance of its employees’ competencies and expertise in its recruitment, training and retention procedures. The Human Resources Department has drawn up the appropriatepolicies and defined all jobs in order to identify the relevant roles andresponsibilities as well as the qualifications neededtofulfil

ELIAthem.TRANSMISSION

Top-down approach based on strategic risks

Employing a simultaneously top-down and bottom-up approach enables ELIA TRANSMISSIONBELGIUM to identify and, where possible, anticipate forthcoming events andreact to any incidents occurring inside or outside the organisation which might affect the attainment of objectives.

Continuousassessment

Operational management assesses the relevant risks and puts forward action plans. Any significant changes to assessment rules must be approved by the Boardof Directors, basedon arecommendation of theAudit Committee. Risk Management is instrumental for ELIA TRANSMISSIONBELGIUM to maintainits value for stakeholders

ELIA TRANSMISSIONBELGIUM’s strategic risk assessments are reviewed ona quarterly basis in the Audit Committee. Action plans or specific, theme-basedrisk assessments arecarried out whenever thereis a perception of potential threats or opportunities.

The activities undertaken byELIATRANSMISSION BELGIUM, as anelectricity transmissionsystem operator in relation to its physical installations, held by EliaAsset, contribute significantly to its financial results.

Therefore, appropriate procedures andcontrol systems have been established to ensure anexhaustive and realistic inventory of physical installations. Risk management is a company-wide activity, actively supported by the delegation of relevant responsibilities to all employees as part of their specific activities, as defined in the Policy.

Bottom-up approach with regard to business

With a view toidentifying new risks or evaluating changes in existingrisks, the Risk Manager and the Executive Boardremain in contact and look out for any changes that may call for the relevant risk assessment and associated action plans tobeamended. Various criteria are usedto determine the needto re-evaluatefinancial reporting procedures and associated risks.

Elia Transmission Belgium | Annual report 2020 33 As part of its responsibilities, ELIA TRANSMISSION BELGIUM’s ExecutiveBoardestablishes an effective internal control system to ensure, among other objectives, accurate financial reporting. It emphasises the importance of risk management in financial reporting by takinginto account, with the Audit Committee, a whole range of associated activities andrisks. It ensures that risks are truly reflectedin financial results and reports. Inaddition, Risk Management goes beyondthose risks known to ELIA TRANSMISSION BELGIUM and tries to anticipate the nature and characteristics of emergingrisks, whichmay impact ELIA TRANSMISSION BELGIUM’s objectives. Financial risk assessments primarily involve theidentification of: 1. significant financial reporting data andits purpose; 2. major risks involvedinthe attainment of objectives; 3. risk control mechanisms, where possible. Financial reporting objectives include (i) ensuringfinancial statements complywith generally accepted accounting principes ; (ii) ensuringthat theinformationpresentedin financial results is per bothtransparent andaccurate; (iii) using accounting principles appropriatetothesector and the company’s transactions; (iv) ensuring the accuracy andreliability of financial results.

Emphasis is put on risks associated with changes inthefinancial and regulatory context, industrial practices, accountingstandards and corporate developments suchas mergers andacquisitions.

Control activities

ELIA TRANSMISSIONBELGIUM has established internal control mechanisms at its various structural levels so as to ensure compliance with standards and internal procedures geared to theproper management of identified risks. These include:

Elia Transmission Belgium | Annual report 2020 34 andthe community, works with all departments with aview to optimisingELIA TRANSMISSION BELGIUM’s ability to achieve its strategic objectives, andadvises the company regardingthe nature and potential effects of future risks.

3.3

Main control activities

(i) clear task separation as part of procedures, preventing the sameperson from initiating, authorising andrecordinga transaction –policies havebeen drawn up regarding access to information systems andthe delegation of powers; (ii) integrated audit approach as part of internal procedures so as to link endresults with the transactions supporting them; (iii) data security and integrity through the appropriateallocation of rights; (iv) appropriate documentation of procedures through the use of the Business Process ExcellenceIntranet, which centralises policies and procedures. Departmental managers areresponsible for establishing activities to control the risks inherent totheir department.

In identifyingthoserisks that may affect the achievement of financial reporting objectives, the Executive Board takes into account the possibility of misreporting associated with fraud and takes appropriate action where internal control needs tobe strengthened. Internal Audit performs specific audits based on the risk assessment for potential fraud, with a view to avoiding and preventing any instances of fraud.

ELIA TRANSMISSIONBELGIUM communicates relevant information to its employees to enable them to fulfil their responsibilities andachievetheir objectives. Financial informationis needed for budgeting, forecasts and ensuringcompliancewith theregulatory framework. Operational information is also vital for the production of various reports, essential for the well-functioningof thecompany. As such, ELIA TRANSMISSION BELGIUM records recent and historical data neededfor corporate risk assessments. Multiplecommunicationchannels are used: manuals, memos, emails, bulletin boards and intranet applications. Financial results arereported internally and validated at different levels. The management responsiblefor financial reportingregularly meets other internal departments (operational and control departments) toidentify financial reporting data. It validates and documents the critical assumptions underpinningbookedreserves andthe company’s accounts.

Financial reporting procedure

For all significant financial reportingrisks, ELIA TRANSMISSION BELGIUM sets out appropriatecontrol mechanisms to minimise the probability of error. Roles andresponsibilities have been definedin connection withthe closingprocedurefor financial results. Measures have been established for the continuous follow-up of each stage, with a detailed agenda; control activities are performed to ensure quality andcompliancewith internal and external requirements andrecommendations. During the financial closing period, aspecific test is performed to ensure control over significantly unusual transactions, accounting checks and adjustments at the endof the relevant financial period, company transactions and critical estimates. The combination of these controls ensures the reliability of financial results. Regular internal and external audits also contribute to financial reportingquality.

3.4 Information andCommunication

Internal Audit also plays akey role inmonitoring activities by conductingindependent reviews of key financial and operational procedures in view of thevarious regulations applicable to ELIA TRANSMISSION BELGIUM. The findings of those reviews are reportedto the Audit Committeeto help it monitor internal control andrisk management systems and corporate financial reportingprocedures.

Elia Transmission Belgium | Annual report 2020 35 3.5 Monitoring

The group’s legal entities are also subject to external audits, which generally entail an evaluation of internal control andremarks on (annual and quarterly) statutory andconsolidated financial results. External auditors make recommendations for improvinginternal control systems. In entities that have an Audit Committee, therecommendations, actionplans and their implementationare reported annuallytothat Committee, which in turn reports to the Board of Directors ontheindependenceof the auditor or statutory audit firm and drafts a motion for a resolution on the appointment of external auditors.

ELIA TRANSMISSIONBELGIUM continuallyre-evaluates the adequacy of its risk management approach. Monitoringprocedures include acombination of monitoringactivities carried out as part of normal business operations, inadditiontospecific adhoc assessments on selected topics.

Rawmaterials,consumablesandgoodsforresale (5.2) (6.5) Otherincome (5.1) 66.9

Elia Transmission Belgium | Annual report 2020 36 4. Elia Transmission Belgium Consolidated Financial Statements Consolidated statement of profit or loss (in€million)−Yearended31December

Netincome(expense)fromsettlementmechanism (5.1) 89.1 Servicesandothergoods (5.2) (395.1) (0.1)

Earningsbeforeinterestandtax(EBIT) 243.6 (0.1)

Profitbeforeincometax 170.6 (0.1) Incometaxexpense (5.4) (44.1)

Profitfortheperiod 126.5 (0.1) 126.5 (0.1) Non-controllinginterest Profitfortheperiod 126.5 (0.1)

Depreciations,amortizationsandimpairments (5.2) (187.2)

Financeincome 2.3 Financecosts (75.3)

Shareofprofitofequityaccountedinvestees(netoftax) (6.5) 9.2

Earningspershare(in€)

Resultsfromoperatingactivities 234.4 (0.1)

variancesRoundingTheaccompanyingnotes(1-9)formanintegralpartoftheseconsolidatedfinancialstatements.–Ingeneral,allfiguresarerounded.Variancesarecalculatedfromthesourcedatabeforerounding,implyingthatsomemaynotaddup.

Basicearningspershare 0.62 (9.32) Dilutedearningspershare 0.62 (9.32)

Netfinancecosts (5.3) (73.0)

Changesinprovisions (5.2) (1.1) Otherexpenses (5.2) (22.1)

Notes 2020 2019 Revenue (5.1) 858.1

Profitattributableto:Equityholdersoftheparent

Personnelexpenses (5.2) (167.8)

ItemsOthercomprehensiveincome(OCI)thatmaybereclassifiedsubsequentlytoprofitorloss: Effectiveportionofchangesinfairvalueofcashflowhedges (5.6) 4.4 Relatedtax (1.1)

Elia Transmission Belgium | Annual report 2020 37

someRoundingTheaccompanyingnotes(1-9)formanintegralpartoftheseconsolidatedfinancialstatements.–Ingeneral,allfiguresarerounded.Variancesarecalculatedfromthesourcedatabeforerounding,implyingthatvariancesmaynotaddup.

Othercomprehensiveincomefortheperiod,netoftax 0.2 0.0

Totalcomprehensiveincomefortheperiod 126.7 (0.1)

Totalcomprehensiveincomeattributableto:Equityholdersofordinaryshares 126.7

Noncontrollinginterest 0.0

Consolidated statement of profit or loss and comprehensive income (inmillion€)Yearended31December Notes 2020 2019 Profitfortheperiod 126.5 (0.1)

Itemsthatwillnotbereclassifiedtoprofitorloss: Remeasurementsofpost employmentbenefitobligations (6.14) (4.2) Relatedtax 1.1

Tradeandotherpayables

Loansandborrowings

Currenttaxliabilities

Elia Transmission Belgium | Annual report 2020 38 Consolidated statement of financial position (in€million)−Yearended31December Notes 2020 2019 NON-CURRENTASSETSASSETS 6,564.4 6,417.1

Tradeandotherreceivables

NON-CURRENTLIABILITIES 3,879.5 2,943.2 Loansandborrowings (6.13) 3,624.7 2,704.6 Employeebenefits (6.14) 91.0 87.5 Derivatives (8.1) 0.0 4.4 (6.15) 38.5 33.0 (6.7) 24.1 22.8 (6.16) 101.2 90.9 1,101.1 1,555.3 (6.13) 77.9 593.0 (6.15) 1.8 2.5 (6.17) 519.5 384.3 (6.10) 8.6 1.6 (6.20) 493.3 573.9 6,696.6

Provisions

Deferredtaxliabilities

CURRENTLIABILITIES

Accrualsanddeferredincome

Provisions

Totalequityandliabilities 7,292.9

CURRENTASSETS 728.5 279.5 Inventories (6.8) 14.7 14.6 (6.9) 518.4 213.9 Currenttaxassets (6,10) 1.4 2.6

Otherfinancialassets(includingderivatives) (6.6) 61.0 60.3 Deferredtaxassets (6.7) 1.9 0.6

Noncontrollinginterest 0.0 0.0

Cashandcashequivalents (6.11) 188.6 42.0

Equityaccountedinvestees

Otherliabilities

EquityattributabletoownersoftheCompany (6.12) 2,312.3 2,198.1 Sharecapital 2,061.9 2,055.5 Sharepremium 0.0 0.0 Reserves 2.8 0.0 Hedgingreserve 0.0 (3.3) Retainedearnings 247.6 145.9

EQUITYEQUITYANDLIABILITIES

Intangibleassets

Property,plantandequipment (6.1) 4,427.5 4,268.4 Goodwill (6.3) 1,707.8 1,707.8 (6.2) 42.8 35.1 (6.4) 0.5 2.3 (6.5) 322.9 342.6

Tradeandotherreceivables

Deferredchargesandaccruedrevenues (6.9) 5.4 6.4 Totalassets 7,292.9 6,696.6 2,312.3 2,198.1

Contributions by and distributions to Owners Shares issued 0.2 0.2 0.2

Balance at 31 July 2019 Profit for the period (0.1) (0.1) (0.1)

Share-based payment expenses 1.4 1.4 1.4 Transfer to legalreserves 2.8 (2.8) Dividends (18.9) (18.9) (18.9)

Balance at 1 January 2020 2,055.5 (3.3) 145.9 2,198.1 2,198.1 Profit for the period 126.5 126.5 126.5 Other comprehensive income 3.3 (3.2) 0.2 0.2

Transactions with owners, recorded directly in equity

(in € million)

Total comprehensive income for the period (0.1) (0.1) (0.1)

capitalShareSharepremiumHedgingreserveReservesRetainedearningsofownerstoattributableEquitythecompanyinterests-controllingNonequityTotal

Totalcontributions and distributions 2,055.5 (3.3) 146.0 2,198.1 2,198.1

Contributions by and distributions to Owners Shares issued 5.0 5.0 5.0

Balance at 31December2020 2,061.9 2.8 247.5 2,312.3 2,312.3

Totalcontributions and distributions 6.4 2.8 (21.6) (12.5) (12.5)

Transactions with owners, recorded directly in equity

Total comprehensive income for the period 3.3 123.4 126.7 126.7

Elia Transmission Belgium | Annual report 2020 39

Consolidated statement of changes in equity

Balance at 31December2019 2,055.5 (3.3) 145.9 2,198.1 2,198.1

Acquisition business combinations under common control 2,055.3 (3.3) 146.0 2,198.0 2,198.0

ancesRoundingTheaccompanyingnotes(1-9)formanintegralpartoftheseconsolidatedfinancialstatements.–Ingeneral,allfiguresarerounded.Variancesarecalculatedfromthesourcedatabeforerounding,implyingthatsomevari-maynotaddup.

Changeinothercurrentliabilities (89.6)

Cash&Cashequivalentsat1January 42.0 0.0

Cash&Cashequivalentsat31December 188.6 42.0 Netvariationsincash&cashequivalents 146.6 42.0

Profitorlossofequityaccountedinvestees,netoftax (9.2)

Cashflowfromoperatingactivities 427.0 (0.1) Changeininventories (0.3)

Proceedsfromwithdrawalofborrowings(+) (6.13) 1,219.4

Netcashflowfrom(usedin)financingactivities 391.3 42.1

(in€million)Yearended31December Notes 2020 2019

Changeintradeandotherpayables 143.6

Netincrease(decrease)incashandcashequivalents 146.6 42.0

Acquisitionofproperty,plantandequipment (6.1) (333.4)

Othernon-cashitems 1.4

Depreciationofproperty,plantandequipmentandamortisationofintangibleassets (5.2) 187.0

ProfitCashflowsfromoperatingactivitiesfortheperiod 126.5 (0.1)

Interestpaid (6.13) (76.8) Interestreceived (5.3) 2.3 Incometaxpaid (34.5)

Netcashfromoperatingactivities 73.4 (0.1)

Proceedsfromsaleofproperty,plantandequipment 2.6

Proceedsfromsalesofassociate 1.6

Proceedsfromcapitaldecreasefromequityaccountedinvestees (6.5) 15.3 Dividendreceived 13.8

Impairmentlossesofcurrentassets 0.3 Changeinprovisions (2.9) Changeindeferredtaxes (0.1)

Changesinworkingcapital (244.6)

Netcashusedininvestingactivities (318.1)

Proceedsfromtheissueofsharecapital (6.12) 5.0 0.2

Changeinothercurrentassets 4.5

Currentincometaxexpense (5.4) 44.2

Changeintradeandotherreceivables (302.9)

Elia Transmission Belgium | Annual report 2020 40 Consolidated statement of cash flows

Repaymentofborrowings(-) (6.13) (814.1)

Lossonsaleofproperty,plantandequipmentandintangibleassets 6.8

Acquisitionbusinesscombinationsundercommoncontrol 41.9 Dividendspaid(-) (6.12) (18.9)

NetAdjustmentsfor:financecosts (5,3) 72.9

Acquisitionofintangibleassets (6.2) (17.5)

Acquisitionofequity-accountedinvestees (0.4)

CONSOLIDATED

Elia Transmission Belgium | Annual report 2020 41

1. Reporting entity

Backgroundinformation Group")ofOnceingnaldesignation)EliamidnightTransmissionTheitstheinternalEliatemasEliaTransmissionBelgiumSA/NV,(‘Company’or‘Elia’or‘EliaTransmissionBelgium’)isanewcompany,incorporatedon31July2019apubliclimitedcompanybyEliaSystemOperatorSA/NVandPubli-TSCRLinthecontextoftheplannedreorganisationofEliaSys-OperatorNV/SA.GroupNV/SA,formerlyEliaSystemOperatorNV/SA,theholdingcompanyaboveEliaTransmissionBelgiumNV/SA,carriedoutanreorganisationattheendof2019withaviewtoseparateitsregulatedactivitiesinBelgium,i.e.theownershipandoperationofhigh-andveryhigh-voltagetransmissionnetworkinBelgium(includingitsstakeinNemoLink),fromitsnon-regulatedactivitiesandregulatedactivitiesoutsideBelgium.transferoftheregulatedbusiness(assetsandliabilitieslinkedtotheregulatedactivities)fromEliaSystemOperatorNV/SAtoEliaBelgiumNV/SAwascompletedandthenewsharesweretransferredtoEliaGroupNV/SAwitheffectfromjustbefore31December2019.TransmissionBelgiumNV/SAhasbeendesignatedasBelgianTSOatfederalandregionallevelon31December2019(retroactiveandshouldcomplywiththeregulatoryframework/legislationapplicablefortheTSO.(seesection9).Asresultoftheinter-reorganisation,EliaTransmissionBelgiumwillstartit’soperationsasTSOasfrom1stJanuary2020.In2019therewerenooperat-activities,sotheconsolidatedstatementofprofitorlossincludedsomeminorsetupcosts,butnooperatingresults.thesedesignationswereobtained,thearticlesofassociationofEliaSystemOperatorNV/SAwereamendedtochangethenametheentitytoEliaGroupNV/SA.Asaresultofthisreorganization,EliaGroupNV/SAwastransformedintoaholdingcompany("Eliaon31December2019,holdingamajoritystakeinitssubsidiaryEliaTransmissionBelgiumNV/SA.

InformationonReportingentity sources.isoperatorsconnectionsEliationsknownTheEliaderThetopany'sEstablishedinBelgium,EliaTransmissionBelgiumhasitsregisteredofficeatBoulevarddel’Empereur20,B1000Brussels.TheCom-consolidatedfinancialstatementsforthefinancialyear2020includethoseoftheCompanyanditssubsidiaries(togetherreferredasthe'Group'or'EliaTransmissionBelgiumGroup')andtheGroup'sinterestinjointventuresandassociates.CompanyisalimitedliabilitycompanyandisasubsidiaryofEliaGroupSA/NV,whichsharesarelistedonEuronextBrussels,un-thesymbolELI.TransmissionBelgiumistheelectricitytransmissionsystemoperator(“TSO”)inBelgium.Groupalsohasa50%stakeinNemoLinkLtd,whichhasconstructedanelectricalinterconnectorbetweentheUKandBelgiumastheNemoLinkinterconnector.NemoLinkisajointventurewithNationalGridVentures(UK)andbegancommercialopera-on30January2019,withatransfercapacityof1000MW.TransmissionBelgiumGrouphasaround2,500employeesandatransmissiongridcomprisingsome19,000kmofhigh-voltageserving30millionconsumers.Itefficiently,reliablyandsecurelytransmitselectricityfromgeneratorstodistributionsystemandmajorindustrialconsumers,whilealsoimportingandexportingelectricityfromandtoneighbouringcountries.TheGroupadrivingforcebehindthedevelopmentoftheEuropeanelectricitymarketandtheintegrationofenergygeneratedfromrenewable

NOTES TO THE FINANCIAL STATEMENTS

Belgium | Annual report 2020 42

AmendmentstoIFRS9,IAS39andIFRS7,regardingtheinterestratebenchmarkreform.

Therevisedconceptualframeworkismore disclosures.comprehensiveinordertocoverallaspectsofstandardsettingfromtheobjectiveoffinancialreporting,topresentationand



Thefollowing standards,amendmentsandinterpretations hadnotyettakeneffectin2020.Thechangesinthebelowstandards, moreamendmentsandinterpretationsarenotexpectedtohaveamaterialimpactontheannualaccountsandarethereforenotsetoutindetail:  IFRS17:InsuranceContracts;  AmendmentstoIFRS10andIAS28:SaleorContributionofAssetsbetweenanInvestoranditsAssociateorJointVenture;  AmendmentstoIAS1:regardingtheclassificationofliabilitiesascurrentornon-current;  AmendmentstoIFRS9,IAS39,IFRS7,IFRS4andIFRS16:interestratebenchmarkreform(phase2);  AmendmentstoIAS37:Onerouscontracts,costoffulfillingacontract;  AnnualimprovementstoIFRSstandards2018-2020;  AmendmenttoIAS16:property,plantandequipment:proceedsbeforeintendeduse;  AmendmentstoIFRS3:referencetotheconceptualframework;

Elia Transmission Basis of preparation Statement of compliance

.Theamendmentclarifiesthedefinitionofabusinesstomakeiteasierto understand.  AmendmentstoReferencestoConceptualFrameworkinIFRSStandards.

Thefollowingstandards,amendmentsandinterpretationscameineffectin2020withonlylimitedornoimpactfortheGroup:  AmendmentstoIAS1andIAS8,regardingthedefinitionofmateriality.

hundredTheconsolidatedfinancialstatementsarepresentedinmillioneuro(thefunctionalcurrencyoftheCompany),roundedtothenearestthousand,unlessstatedotherwise. Basis of measurement fromIngeneral,theconsolidatedfinancialstatementshavebeenpreparedonahistorical-costbasis.However,followingcategoriesdeviatethisgeneralrules:-Equityaccountedinvestees:equitymethodisappliedtodeterminethevalueofaparticipationinwhichtheGrouphasasig-nificantinfluence.-Othershareholdings:entitiesinwhichtheGrouphasaparticipationwithouthavingasignificantinfluencearevaluedatfairvaluethroughOCI.-Currentandnon-currentreceivablesarevaluedatthelowestofthecarryingamountandtherecoverableamount.-Employeebenefitsarevaluedatthepresentvalueofthedefinedbenefitobligations,lessthefairvalueoftheplanassets(seealsonote6.14).-DerivativefinancialinstrumentsaremeasuredatfairvaluethroughOCIorP&L,dependingonwhetherthederivativecanbedesignatedashedginginstrumentornot(seealsonote8.1).-Decommissioningprovisionsarevaluedatpresentvalue.

Functional and presentation currency



Theamendmenthasthepurposetoclarifythe definitionofmateriality,makingiteasiertounderstand.Theconceptofmaterialityhasnotbeenaltered.

Theamendmenthasbeen issuedtoaddressuncertaintiesrelatedtotheongoingreformofinterbankofferedrates(IBOR).  AmendmenttoIFRS16,COVID-19-RelatedRentConcessions(effective1June2020).

AmendmentstoIFRS3:DefinitionofaBusiness

Newandamendedstandardsandinterpretations

plicableadoptedTheconsolidatedfinancialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS),asbytheEuropeanUnion.TheGrouphasappliedallnewandrevisedstandardsandinterpretationspublishedbyIASBandap-totheGroup’sactivitieswhichareeffectiveforfinancialyearsstartingon1January2020.

Thisamendmenthasbeendrafted meettoallowlesseesnottoaccountforrentconcessionsasleasemodificationsiftheyareadirectconsequenceofCOVID-19andcertainconditions.



Elia Transmission Belgium | Annual report 2020 43 Use of estimates and judgements

ThetotalallowedremunerationforitsroleasTransmissionSystemOperator(TSO)in by calculation methods set by,respectively, the Belgian federal regulator, theCommission for Electricity and Gas Regulation ('CREG'). Inthiscontexttherecognitionofdeferralregulatoryaccountsisalsobasedonthedifferentregulatoryschemes.For certaincalculations,alevelofjudgementisneeded.MoredisclosuresaretobefoundinNotes6.20,9.1.4and9.2.3.

Provisions for environmental remediation costs: at each year-end, an estimate is made of future expenses in respect of soil includingremediation,basedontheadviceofanexpert.Theextentofremediationcostsisdependentonalimitednumberofuncertainties,newlyidentifiedcasesofsoilcontamination(seeNote6.15).  ofOtherprovisionsarebasedonthevalueoftheclaimsfiledorontheestimatedamountoftheriskexposure.Theexpectedtimingtherelatedcashoutflowdependsontheprogressandthedurationoftheassociatedprocess/procedures(seeNote6.15).

 In determining theappropriate discount rate todiscount thefuture dismantling obligation,management considers the interest tolatedratesofcorporatebondsineurowithatleastanAAratingoraboveassetbyatleastonedominantratingagencyandextrapo-alongtheyieldcurvetocorrespondwiththeexpectedtermofthedismantlingobligation.Asensitivityanalysisisperformedmeasuretheimpactofadiscountratethatwoulddiffer.

 toequipmentTheusefullifeofthefixedassetsisdefinedtoreflecttherealdepreciationofeachasset.Thedepreciationofproperty,plantandismainlycalculatedbasedontheusefullivesdeterminedbytheregulatoryframeworkinBelgium,whichisconsideredbethebestpossibleapproximationofactualeventsintermsofeconomicutilisation.(seeNote3.3.1and6.1)



Entities inwhich theGroup holdslessthan 20% ofthe voting rightsbut has significant influenceareaccountedfor underthe periodthereforeequitymethod.FollowingtheguidanceinIAS28,theGroupassesseswhetherithassignificantinfluenceoveritsassociatesandneedstoaccountforthemundertheequitymethod(ratherthanapplyingIFRS9)andreassessesthisineachreporting(seealsoNote6.5).

mentCreditriskrelatedtocustomers:managementcloselyreviewstheoutstandingtradereceivables,alsoconsideringageing,pay-historyandcreditriskcoverage(seeNote8.1).

theBelgiansegmentismainlydetermined



Employeebenefitsincludingreimbursementrights–seeNote6.14:



Goodwill impairment testing: the Group performs impairment tests on goodwill and on cash-generating units (CGUs) at the marketanalysisreportingdate,andwheneverthereareindicatorsthatthecarryingamountmightbehigherthantherecoverableamount.Thisisbasedonassumptionssuchasestimatedinvestmentplans,remunerationdefinedintheregulatoryframeworks,evolution,marketshare,marginevolutionanddiscountrates(seeNote6.3).



policiesTheriodaccountingresultscumstances,underlyingmatesThepreparationoftheconsolidatedfinancialstatementsinaccordancewithIFRSrequiresmanagementtomakejudgements,esti-andassumptionsthatcouldaffectthereportedamountsofassetsandliabilitiesandrevenueandexpenses.Theestimatesandassumptionsarebasedonhistoricalexperienceandvariousotherfactorsthatarebelievedtobereasonableunderthecir-theresultsofwhichformthebasisformakingjudgementsregardingthecarryingamountsofassetsandliabilities.Actualcoulddifferfromtheseestimates.Theestimatesandunderlyingassumptionsarereviewedonanongoingbasis.Revisionstoestimatesarerecognisedintheperiodinwhichtheestimateisrevisediftherevisiononlyaffectsthisperiod,orinthepe-inwhichtheestimateisrevisedandfutureperiodsiftherevisionaffectsbothcurrentandfutureperiods.followingnotesincludeinformationaboutsignificantareasofestimationuncertaintyandcriticaljudgementsinapplyingaccountingthathavethemostsignificanteffectontheamountsrecognisedintheconsolidatedfinancialstatements:

hedgeinstrumentisvaluationstatementFairvaluemeasurementoffinancialinstruments:whenthefairvaluesoffinancialassetsandfinancialliabilitiesrecordedintheoffinancialpositioncannotbemeasuredbasedonquotedpricesinactivemarkets,theirfairvalueismeasuredusingtechniques.Theinputsforthesevaluationtechniquesaretakenfromobservablemarketswherepossible.Wherethisnotfeasible,alevelofjudgementisrequiredinestablishingfairvalues.Changesinthefairvalueofthederivativehedgingdesignatedasacashflowhedgearerecogniseddirectlyinothercomprehensiveincome(OCI)totheextentthattheiseffective.Totheextentthatthehedgeisineffective,changesinfairvaluearerecognisedinprofitorloss(seeNote6.18).

assumedrates,theliabilitiesTheGrouphasdefined-benefitplansanddefined-contributionplanswhicharedisclosedinNote6.14.Thecalculationoftheorassetsrelatedtotheseplansisbasedonactuarialandstatisticalassumptions.Forexample,thisisthecaseforpresentvalueoffuturepensionliabilities.Thepresentvalueis,amongotherfactors,impactedbychangesindiscountandfinancialassumptionssuchasfutureincreasesinsalary.Inaddition,demographicassumptions,suchasaverageretirementage,alsoimpactthepresentvalueoffuturepensionliabilities; o benefitleastsistentIndeterminingtheappropriatediscountrate,managementconsiderstheinterestratesofcorporatebondsincurrenciescon-withcurrenciesofthepost-employmentbenefitobligation,i.e.euro,withatleastanAAratingorabove,assetbyatonedominantratingagencyandextrapolatedalongtheyieldcurvetocorrespondwiththeexpectedtermofthedefinedobligation.Higherandloweryieldingbondsareexcludedindevelopingtheappropriateyieldcurve;



o Each plan's projected cash flow is matched to the spot rates of the yield curve to calculate an associated present value. Asingle equivalent discount rateis then determined that producesthat same presentvalue.Hence,the resulting discount ratereflectsboththecurrentinterestrateenvironmentandtheplan'sdistinctliabilitycharacteristics.

(seeitsthatDeferredtaxassetsarerecognisedforthecarry-forwardofunusedtaxlossesandunusedtaxcreditsinsofarasitisprobablefuturetaxableprofitwillbeavailableagainstwhichtheunusedtaxlossesandunusedtaxcreditscanbeutilised.Inmakingjudgement,managementtakesintoaccountelementssuchaslong-termbusinessstrategyandtaxplanningopportunitiesNote6.7).

similarinterestborrowingtoTheGroupappliesasinglediscountratepergroupofcontracts,summarisedpertheirduration.Thoseleaseswereassumedhavesimilarcharacteristics.ThediscountrateusedistheGroup'sbestestimationfortheweightedaverageincrementalrate.Eachleasecontractisclassifiedinadurationbucket(<5years,between5and10years,…)forwhichanrateisderivedequaltotheinterestrateofatradedbondwiththesameratingastheGroupinthesamesectorwithduration.Theinterestrateissetfixedoverthelifetimeoftheleasecontract.

TheseconsolidatedfinancialstatementswereauthorisedforpublicationbytheBoardofDirectorson25March2021.

TheimpactofCOVID-19 has beentakenintoaccountforthe potential assessment ofits effects inElia’sfinancial performance.In general,asEliaisactingunderregulatoryframeworkinBelgium,theprofitabilityassuch hasnotbeenaffected.Werefertonote have4formoredetailedinformationineachsegment.However,effectsonmacro-economicmetrics,e.g.intrestrate,discountrate…beentakenintoaccount.Werefertothefollowingnotesformoreinformation:6.3,6.19and8.1.

Approval by the Board of Directors

TheGroupmadeuseofpracticalexpedientswhenapplyingIFRS16Leasing:

o disposes.rentbyTheGroupassessedthenon-cancellableperiodofeachofthecontractsinscopeofIFRS16.Thisincludestheperiodcoveredanoptiontoextendthelease,ifthelesseeisreasonablecertaintoexercisethatoption.Certainlywhereitrelatestoofficecontracts,theGroup’smadeitsbestestimationofthenon-cancellableperiodbasedonallinformationonwhichtheGroup(seenote6.19)

Elia Transmission Belgium | Annual report 2020 44 

Non-controllinginterestsaremeasuredattheirproportionateshareoftheacquiree'sidentifiablenetassetsattheacquisitiondate.

lossaLossesthisstatementsreturnsAsubsidiaryisanentitythatiscontrolledbytheCompany.TheGroupcontrolsanentitywhenitisexposed,orhasrights,tovariablefromitsinvolvementwiththeentityandhastheabilitytoaffectthosereturnsthroughitspowerovertheentity.Thefinancialofsubsidiariesareincludedintheconsolidatedfinancialstatementsfromthedatethatcontrolcommencesuntilthedatethatceases.TheaccountingpoliciesofsubsidiariesarechangedwhennecessarytoalignthemwiththepoliciesadoptedbytheGroup.applicabletothenon-controllinginterestsinasubsidiaryareallocatedtothenon-controllinginterestsevenifdoingsoresultsindeficitbalanceofthenon-controllinginterests.ChangesintheGroup'sinterestinanon-wholly-ownedsubsidiarythatdonotresultinaofcontrolareaccountedforasequitytransactions ASSOCIATES mentsfurtherinfluenceciate.sitionTheypolicies.AssociatesarethosecompaniesinwhichtheCompanyexertssignificantinfluence,butnotcontrol,overthefinancialandoperatingInvestmentsinassociatesareaccountedforintheconsolidatedfinancialstatementsinaccordancewiththeequitymethod.arerecognisedinitiallyintheconsolidatedstatementoffinancialpositionatcost,withalltransactioncostsincurredwiththeacqui-included,andadjustedthereaftertorecognisetheGroup’sshareoftheprofitorlossandothercomprehensiveincomeoftheasso-Thisaccountingundertheequitymethodisdonefromthedatethatsignificantinfluencecommencesuntilthedatethatsignificantceases.WhentheGroup'sshareofthelossesexceedsitsinterestinanassociate,itscarryingamountisreducedtonilandlossesarenotrecognisedexcepttotheextentthattheGrouphasincurredlegalorconstructiveobligationsorhasmadepay-onbehalfofanassociate.

ELIMINATIONOF INTRA-GROUP TRANSACTIONS areUnrealisedwhenIntra-Groupbalancesandanyunrealisedgainsorlossesorincomeandexpensesarisingfromintra-Grouptransactionsareeliminatedpreparingtheconsolidatedfinancialstatements.gainsfromtransactionswithassociatesareeliminatedtotheextentoftheGroup'sinterestintheentity.Unrealisedlosseseliminatedinthesamewayasunrealisedgains,butonlytotheextentthatthereisnoevidenceofimpairment.

ThenetGoodwillarisesontheacquisitionofsubsidiariesrepresentstheexcessoftheconsiderationtransferredovertheGroup'sinterestinthefairvalueofthenetidentifiableassets,liabilitiesandcontingentliabilitiesoftheacquiree.Groupmeasuresgoodwillattheacquisitiondateas:thefairvalueoftheconsiderationtransferred;plus

BUSINESS COMBINATIONS AND GOODWILL

NON-CONTROLLING INTERESTS

LOSS OF CONTROL ofcontrolincomponentsUponthelossofcontrol,theGroupderecognisestheassetsandliabilitiesofthesubsidiary,anynon-controllinginterestsandtheotherofothercomprehensiveincomerelatedtothesubsidiary.Anysurplusordeficitarisingonthelossofcontrolisrecognisedprofitorloss.IftheGroupretainsanyinterestintheformersubsidiary,thensuchinterestismeasuredatfairvalueatthedatethatislost.Subsequently,itisaccountedforasanequity-accountedinvesteeorasafairvaluefinancialassetdependingonthelevelinfluenceretained.

INTERESTS IN JOINT VENTURES

mentsfurtherjointnisedacquisitionturesment,AjointventureisanarrangementinwhichtheGrouphasjointcontrol,wherebytheGrouphasrightstothenetassetsofthearrange-asopposedtojointoperationswherebytheGrouphasrightstoitsassetsandobligationsforitsliabilities.Interestsinjointven-areaccountedforusingtheequitymethod.Theyarerecognisedinitiallyatcostprice,withalltransactioncostsincurredwiththeincluded.Subsequenttoinitialrecognition,theconsolidatedfinancialstatementsincludetheGroup'sshareofthetotalrecog-profitsandlossesofjointventuresonthebasisoftheequitymethod,fromthedatethatjointcontrolcommencesuntilthedatethatcontrolceases.WhentheGroup'sshareofthelossesexceedsitsinterestinjointventures,itscarryingamountisreducedtonilandlossesarenotrecognisedexcepttotheextentthattheGrouphasincurredlegalorconstructiveobligationsorhasmadepay-onbehalfofajointventure.

SUBSIDIARIES

 therecognisedamountofanynon-controllinginterestintheacquiree;plus  ifthebusinesscombinationiscompletedinstages,thefairvalueofthepre-existingequityinterestintheacquiree;less  thefairvalueoftheidentifiableassetsacquiredandliabilitiesatacquisitiondate.

contingentequity,AnyorTransactionsallyTheWhentheexcessisnegative,againonabargainpurchaseisrecognisedimmediatelyinprofitorloss.considerationtransferreddoesnotincludeamountsrelatedtothesettlementofpre-existingrelationships.Suchamountsaregener-recognisedinprofitorloss.costsincurredbytheGroupinconnectionwithabusinesscombination,otherthanthoseassociatedwiththeissueofdebtequitysecurities,areexpensedasincurred.contingentconsiderationpayableismeasuredatfairvalueattheacquisitiondate.Ifthecontingentconsiderationisclassifiedasthenitisnotremeasuredandsettlementisaccountedforwithinequity.Otherwise,subsequentchangesinthefairvalueoftheconsiderationarerecognisedinprofitorloss.

Elia Transmission Belgium | Annual report 2020 45 Significant accounting policies Basis of consolidation

 assetsandliabilitiesaretranslatedattheexchangerateatthereportingdate; 

theysetsprisesdepreciationItemsofproperty,plantandequipmentarestatedatcost(includingthedirectlyallocatedcostssuchasfinancecosts),lessaccumulatedandimpairmentlosses(seethesection3.3.7.'Impairmentofnon-financialassets').Thecostofself-producedassetscom-thecostofmaterials,ofdirectlabourand,whererelevant,oftheinitialestimateofthecostsofdismantlingandremovingtheas-andrestoringthesitewheretheassetswerelocated.Ifpartsofanitemofproperty,plantandequipmenthavedifferentusefullives,areaccountedforasseparateitemsofproperty,plantandequipment. Subsequent costs orGroupanTheGrouprecognisesinthecarryingamountofanitemofproperty,plantandequipmentthesubsequentcostsofreplacingpartofsuchitemwhenthatcostisincurred,butonlywhenitisprobablethatthefutureeconomicbenefitsembodiedintheitemwillflowtotheandthecostoftheitemcanbemeasuredreliably.Allothercosts,suchasrepairandmaintenancecosts,arerecognisedinprofitlossasandwhentheyareincurred. Depreciation prospectivelyDepreciationerty,Depreciationisrecognisedinprofitorlossonastraight-linebasisovertheestimatedusefullifeofeachcomponentofanitemofprop-plantandequipment.Landisnotdepreciated.Theapplieddepreciationpercentagescanbefoundinthetablebelow.methods,remainingusefullivesandresidualvaluesoftheproperty,plantandequipmentarereassessedannuallyandareadjustedastheoccasionarises.

Statement of financial position

FOREIGN OPERATIONS

latedTheactivitiesAforeignoperationisanentitythatisasubsidiary,anassociate,aninterestinajointventureorabranchofthereportingentity,whosearebasedorconductedinacountryorcurrencyotherthanthoseofthereportingentity.financialstatementsofallGroupentitiesthathaveafunctionalcurrencydifferentfromtheGroup'spresentationcurrencyaretrans-intothepresentationcurrencyasfollows: turesatExchangeincomeandexpensesaretranslatedattheaverageexchangerateoftheyear.differencesarisingfromthetranslationofthenetinvestmentinforeignsubsidiaries,interestsinjointventuresandassociatesclosingexchangeratesareincludedinshareholder'sequityunderOCI.Uponthe(partial)disposalofforeignsubsidiaries,jointven-andassociates,(partof)cumulativetranslationadjustmentsarerecognisedintheprofitorlossaspartofthegain/lossofthesale.

exchangeNon-monetarychangetheTransactionsinforeigncurrenciesareconvertedintothefunctionalcurrencyoftheCompanyattheforeignexchangerateonthedateoftransaction.Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesonthereportingdateareconvertedattheforeignex-rateonthatdate.Foreignexchangedifferencesarisingonconversionarerecognisedinprofitorloss.assetsandliabilitiesdenominatedinforeigncurrenciesthatarevaluedintermsofhistoricalcostareconvertedattherateonthedateofthetransaction.

Property,plantandequipment

Owned assets

Elia Transmission Belgium | Annual report 2020 46 Foreign-currency translation FOREIGN-CURRENCY TRANSACTIONS AND BALANCES

 Administrativebuildings 1.67%–2.00%  Industrialbuildings 2.00–4.00%  Overheadlines 2.00–4.00%  Undergroundcables 2.00–5.00%  Substations(facilitiesandmachines) 2.50–6.67%  Remotecontrol 3.00–12.50%  Dispatching 4.00–10.00%  OtherPPE(fittingoutrentedbuildings) contractualperiod  Vehicles 6.67–20.00%  Toolsandofficefurniture 6.67–20.00%  Hardware 25.00–33.00%  Rightofuseassets contractualperiod Decommissioning asset Theestimatedproperty,ChangesoriginalAnProvisionismadefordecommissioningandenvironmentalcosts,basedonfutureestimatedexpenditure,discountedtopresentvalues.initialestimateofdecommissioningandenvironmentalcostsattributabletoproperty,plantandequipmentisrecordedaspartofthecostoftherelatedproperty,plantandequipment.intheprovisionarisingfromrevisedestimatesordiscountratesorchangesintheexpectedtimingofexpenditurerelatingtoplantorequipmentarerecordedasadjustmentstotheircarryingvalueanddepreciatedprospectivelyovertheirremainingeconomicusefullives;otherwisesuchchangesarerecognisedintheprofitorloss.unwindingofthediscountisrecordedintheprofitorlossasafinancingcharge.

Contract assets Revenuearisingfrom3rd partyservices(seenote3.4.1.)andassociatedcostsarerecognisedovertimeaswehavetherighttoconsidissuesjectTheerationforworkperformedbutnotbilled.Progressisdeterminedbasedonthecostsincurred.contractassetsprimarilyrelatetotheGroup’srightstoconsiderationforworkcompletedbutnotbilledatthereportingdateonpro-work.Thecontractassetsaretransferredtoreceivableswhentherightsbecomeunconditional.ThisusuallyoccurswhentheGroupaninvoicetothecustomer.Contractassetsareincludedintradeandotherreceivables. Tradeand other receivables unrecoverable.Tradereceivablesandotherreceivablesaremeasuredatamortisedcostminustheappropriateallowanceforamountsregardedas Impairment

expenditureExpendituresectionSoftwarelicencesacquiredbytheGrouparestatedatcost,lessaccumulatedamortisation(seebelow)andimpairmentlosses(seethe3.3.7.'Impairment').onresearchactivitiesundertakenwiththepurposeofdevelopingsoftwarewithintheGroupisrecognisedinprofitorlossasasincurred.ExpenditureonthedevelopmentphaseofsoftwaredevelopedwithintheGroupiscapitalisedif:

 Licences

Elia Derecognition47 whichproceedsdisposal.AnassetisnolongerrecognisedwhentheassetissubjecttodisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseorGainsorlossesarisingfromthederecognitionoftheasset(whichisdeterminedasthedifferencebetweenthenetdisposalandthecarryingamountoftheasset)areincludedinprofitorloss,underotherincomeorotherexpenses,duringtheyearintheassetwasderecognised.

Transmission Belgium | Annual report 2020

 Concessions

Computer software

Intangibleassets



Tradeandotherreceivables

thecostsofdevelopmentcanbemeasuredreliably; thesoftwareistechnicallyandcommerciallyfeasibleandfutureeconomicbenefitsareprobable; theGroupplans–andhassufficientresources–tocompletedevelopment; theGroupplanstousethesoftware. theThecapitalisedexpenditureincludescostofmaterial,directlabourcostsandoverheadcoststhataredirectlyattributabletopreparingsoftwareforitsuse.Othercostsarerecognisedinprofitorlossasincurred. Licences, patents and similar rights contractualExpenditureonacquiredlicences,patents,trademarksandsimilarrightsarecapitalisedandamortisedonastraight-linebasisovertheperiod,ifany,ortheestimatedusefullife. Subsequent expenditure theSubsequentexpenditureoncapitalisedintangibleassetsiscapitalisedonlywhenitincreasesthefutureeconomicbenefitsembodiedinspecificassettowhichitrelates.Allotherexpenditureisrecognisedinprofitorlossasexpenditureasincurred. Amortisation reportinglifeAmortisationisrecognisedinprofitorlossonastraight-linebasisovertheestimatedusefullifeofintangibleassets,unlesstheusefulisindefinite.Goodwillandintangibleassetswithindefiniteusefullivesaretestedsystematicallyforimpairmentoneachendoftheperiod.Softwareisamortisedfromthedateitbecomesavailableforuse.Theestimatedusefullivesareasfollows: 20.00% contractualperiod  Computersoftware 20.00–25.00% adjustedDepreciationmethods,remainingusefullivesandresidualvaluesofintangibleassetsarereassessedannuallyandareprospectivelyastheoccasionarises. Goodwill amounttestedGoodwillisstatedatcost,lessaccumulatedimpairmentlosses.Goodwillisallocatedtocash-generatingunitsandisnotamortisedbutannuallyforimpairment(seethesection3.3.7'Impairmentofnon-financialassets').Inthecaseofassociates,thecarryingofgoodwillisincludedinthecarryingamountoftheinvestmentintheassociates.



Impairmentofnon-financialassets

Financialassets

ReferfutureportingTheFortradereceivablesandcontractassets,theGroupappliesasimplifiedapproachincalculatingtheExpectedCreditLosses(ECLs).Groupthereforedoesnottrackchangesincreditrisk,butinsteadrecognisesalossallowancebasedonlifetimeECLsateachre-date.TheGrouphasestablishedaprovisionmatrixthatisbasedonitshistoricalcreditlossexperience,asitsbestproxyforcreditlossestobeincurred.toNote8.1,‘Creditrisk’,foradetaileddescriptionofthemodel Inventories

cashOverdraftsCashandcashequivalentscomprisecashbalances,bankbalances,commercialpaperanddepositsthatcanbewithdrawnondemand.thatarerepayableondemandformanintegralpartoftheGroup'scashmanagementandareincludedasacomponentofandcashequivalentsforthepurposeofthestatementofcashflows.

administersminedThepre-taxofTherecoverableamountofintangibleassetsandproperty,plantandequipmentisdeterminedasthehigheroftheirfairvaluelesscostsdisposal,ortheirvalueinuse.Inassessingvalueinuse,theexpectedfuturecashflowsarediscountedtotheirpresentvalueusingadiscountratethatreflectsboththecurrentmarketassessmentofthetimevalueofmoneyandtherisksspecifictotheasset.Group'sassetsdonotgeneratecashflowsthatareindependentfromotherassets.Therecoverableamountisthereforedeter-forthecash-generatingunit(i.e.theentirehigh-voltagegrid)towhichtheassetbelongs.ThisisalsothelevelatwhichtheGroupitsgoodwillandgathertheeconomicbenefitsofacquiredgoodwill. Reversals of impairment beenAnestimatesAnimpairmentlossinrespectofgoodwillisnotreversed.Impairmentlossonotherassetsisreversediftherehavebeenchangesintheusedtodeterminetherecoverableamount.impairmentlossisreversedonlytotheextentthattheasset'scarryingamountdoesnotexceedthecarryingamountthatwouldhavedetermined,netofdepreciationoramortisation,ifnoimpairmentlosshadbeenrecognised.

Cashandcashequivalents

Afterthecatedamount.AnuseTheiseachThecarryingamountoftheGroup'sassets,excludinginventoriesanddeferredtaxes,isreviewedattheendofthereportingperiodforassettodeterminewhetherthereisanyindicationofimpairment.Ifanysuchindicationexists,therecoverableamountoftheassetestimated.recoverableamountofgoodwillandintangibleassetswithanindefiniteusefullifeandintangibleassetsthatarenotyetavailableforisestimatedattheendofeachreportingperiod.impairmentlossisrecognisedwheneverthecarryingamountofsuchassetoritscash-generatingunitexceedsitsrecoverableImpairmentlossesarerecognisedinprofitorloss.Recognisedimpairmentlossesrelatingtocash-generatingunitsareallo-firsttoreducethecarryingamountofanygoodwillallocatedtocash-generatingunitsandthentoreducethecarryingamountofotherassetsintheunitsonapro-ratabasis.recognitionofimpairmentlosses,thedepreciationcostsfortheassetwillbeprospectivelyadjusted.

Write-downsthemThetheInventories(spareparts)arestatedatthelowerofcostandnetrealisablevalue.Netrealisablevalueistheestimatedsellingpriceminusestimatedcostsofcompletionandsellingexpenses.Thecostofinventoriesisbasedontheweighted-average-cost-pricemethod.costincludestheexpenditureincurredinacquiringtheinventoriesandthedirectcostsofbringingthemtotheirlocationandmakingoperational.ofinventoriestonetrealisablevaluearerecognisedintheperiodinwhichthewrite-offsoccurred.

Calculation of the recoverable amount

Initial recognition and measurement Group’sTheclassificationoffinancialassetsatinitialrecognitiondependsonthefinancialasset’scontractualcashflowcharacteristicsandthebusinessmodelformanagingthem.TheGroupinitiallymeasuresafinancialassetatitsfairvalueplustransactioncosts. Subsequent measurement Forpurposesofsubsequentmeasurement,financialassetsareclassifiedinthreecategories:

Elia Transmission Belgium | Annual report 2020 48

ofGroup.theTheresultingatelyDerivativementsfinancialfromTheGroupsometimesusesderivativefinancialinstrumentstohedgeitsexposuretoforeign-exchangeandinterest-raterisksarisingoperating,financingandinvestmentactivities.Inaccordancewithitstreasurypolicy,theGroupneitherholdsnorissuesderivativeinstrumentsfortradingpurposes.However,derivativesthatdonotqualifyforhedgeaccountingareaccountedforasinstru-heldfortradingpurposes.financialinstrumentsareinitiallyrecognisedatfairvalue.Anygainorlossresultingfromchangesinthefairvalueisimmedi-bookedinthestatementofprofitorloss.Wherederivativefinancialinstrumentsqualifyforhedgeaccounting,thereflectionofanygainorlossdependsonthenatureoftheitembeinghedged.fairvalueofinterest-rateswapsistheestimatedamountthattheGroupwouldreceiveorpaytoterminatetheswapattheendofreportingperiod,takingintoaccountthecurrentinterestratesandthecurrentcreditworthinessoftheswapcounterpartiesandtheThefairvalueofforwardexchangecontractsistheirquotedmarketpriceattheendofthereportingperiod,i.e.thepresentvaluethequotedforwardprice.

AllfinancialassetsnotclassifiedasmeasuredatamortisedcostorFVOCIasdescribedabovearemeasuredatFVTPL Impairment of financial assets

Cash-flow hedges removedtionWhenitemamountoccurs.ingIfingTheognisedhensiveChangesinthefairvalueofthederivativehedginginstrumentdesignatedasacash-flowhedgearerecogniseddirectlyinothercompre-income(OCI)totheextentthatthehedgeiseffective.Totheextentthatthehedgeisineffective,changesinfairvaluearerec-inprofitorloss.Groupdesignatesonlythespotelementofforwardcontractsasahedgedrisk.Theforwardelementisconsideredascostofhedg-andisrecognisedinOCIandaccumulatedinaseparatecomponentofthestatementoffinancialpositionunderhedgingreserves.thehedginginstrumentnolongermeetsthecriteriaforhedgeaccounting,expiresorissold,terminatedorexercised,hedgeaccount-isprospectivelydiscontinued.ThecumulativegainorlosspreviouslyrecognisedinOCIremainsthereuntiltheforecasttransactionWhenthehedgeditemisanon-financialasset,theamountrecognisedinOCIistransferred,wherejustified,tothecarryingoftheasset.Inothercases,theamountrecognisedinOCIistransferredtoprofitorlossinthesameperiodthatthehedgedaffectsprofitorloss.aderivativeorhedgerelationshipisterminated,cumulativegainsorlossesstillremaininOCIprovidedthatthehedgedtransac-isstillexpectedtooccur.Ifthehedgedtransactionisnolongerexpectedtotakeplace,thecumulativeunrealisedgainorlossisfromOCIandisimmediatelyrecognisedinprofitorloss.

Financial assets measured at fair value through OCI (equity instruments)

Derivatives used ashedging instruments

Hedging of monetary assets and liabilities

Derivativefinancialinstrumentsandhedgeaccounting

descriptionTheGrouprecognisesanallowanceforexpectedcreditlosses(ECLs)foritsdebtinstruments.SeeNote8.1,‘Creditrisk’,foradetailedoftheapproach.

Financial assets measured at fair value through profit and loss

Derivative financial instruments

Thement.FinancialcialFinancialassetsatamortisedcostaremanagedwithaviewtoholdingthemtomaturityandcollectingcontractualcashflows.Thefinan-assetsgiverisetocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding.assetsatamortisedcostaresubsequentlymeasuredusingtheEffectiveInterestRate(EIR)methodandaresubjecttoimpair-Gainsandlossesarerecognisedinprofitorlosswhentheassetisderecognised,modifiedorimpaired.Group’sfinancialassetsatamortisedcostincludeloanstothirdparties.

Elia Transmission Belgium | Annual report 2020 49  financialassetsatamortisedcost(debtinstruments)  financialassetsmeasuredatfairvaluethroughOCI(equityinstruments)  financialassetsmeasuredatfairvaluethroughprofitandloss

Financial assets at amortised cost

thisThevalueerymentGainsstrument-by-instrumentwhenUponinitialrecognition,theGroupirrevocablyclassifiesitsequityinvestmentsasequityinstrumentsmeasuredatfairvaluethroughOCItheGroupdoesnothavesignificantinfluenceandtheassetsarenotheldfortrading.Thisclassificationisdeterminedonanin-basis.andlossesonthesefinancialassetsareneverrecycledtoprofitorloss.Dividendsarerecognisedasotherincomeinthestate-ofprofitorlosswhentherightofpaymenthasbeenestablished,exceptwhentheGroupbenefitsfromsuchproceedsasarecov-ofpartofthecostofthefinancialasset,inwhichcaseanysuchgainsarerecordedinOCI.EquityinstrumentsmeasuredatfairthroughOCIarenotsubjecttoimpairmentassessment.Grouphaselectedtoirrevocablyclassifynon-listedequityinvestmentsoverwhichtheGroupdoesnothavesignificantinfluenceincategory.

Transactioncostsinrespectoftheissuingofcapitalaredeductedfromthecapitalreceived. Dividends

Equity Share capital – transaction costs

Belgium | Annual report 2020

eignHedgeaccountingisnotappliedtoderivativeinstrumentsthateconomicallyhedgemonetaryassetsandliabilitiesdenominatedinfor-currencies.Changesinthefairvalueofsuchderivativesarerecognisedinprofitorlossasforeign-currencygainsandlosses.

Employeebenefits Defined-contribution plans

The(ifTheany).FortheployeeThebeforeAs01/01/2016,onAsforBeforedefined-benefitInBelgium,contribution-basedpromises,calleddefined-contributionpensionplansunderBelgianpensionlegislation,areclassifiedasplansforaccountingpurposesduetothelegalminimumreturntobeguaranteedbytheemployer.01/01/2016,thelegalminimumreturnwas3.75%ontheemployeecontributions,3.25%ontheemployercontributionsand0%thedeferreds.from01/01/2016,thelegalminimumreturnisavariableratebetween1.75%and3.75%.TheinterestrateisautomaticallyadaptedJanuary1stofeachyearbasedontheaveragereturnOLO10yearsover24months,with1.75%asaminimum.Asfromthelegalminimumreturnis1.75%onemployeeandemployercontributionsand0%forthedeferreds.theplansarefundedviaapensionfund,theverticalapproachisapplied,meaningthat1.75%isappliedonallthereserves(even2016).employerneedstofinancethedeficitsrelatedtotheLSP(“LawonSupplementaryPensions)guaranteeatanytimefortheem-contractandatthemomentthevestedreservesaretransferredincaseofdeparture,retirementorliquidationofthepensionforemployercontract.eachplan,thefairvalueofassetsequalsthesumoftheaccruedindividualreserves(ifany)andthevalueofthecollectivefund(s)(ifDefined-BenefitObligation(DBO)wasdeterminedfollowingtheProjectedUnitcredit(PUC)method.Dependingontheplanformulatheplanisbackloadedornot),thepremiumsareprojectedornot.calculationisperformedbyanaccreditedactuary.

Defined-benefit plans expenseWhentheinterestprevioustheFordefined-benefitplansthepensionexpensesforeachplanareassessedseparatelyonanannualbasisbyaccreditedactuariesusingprojectedunitcreditmethod.Theestimatedfuturebenefitthatemployeeshaveearnedinreturnfortheirserviceinthecurrentandperiodsisdiscountedtodetermineitspresentvalue,andthefairvalueofanyplanassetsisdeducted.Thediscountrateistherate,attheendofthereportingperiodonhigh-qualitybondsthathavematuritydatesapproximatelyequivalenttothetermsofGroup'sobligationsandthataredenominatedinthecurrencyinwhichthebenefitsareexpectedtobepaid.thebenefitsofaplanareimproved,theportionoftheincreasedbenefitrelatingtopastservicebyemployeesisrecognisedasaninprofitorlossattheearlierofthefollowingdates: whentheentityrecognisesrelatedrestructuringcostsunderIAS37orterminationbenefits.

OCIity)theRemeasurementstheWherethecalculationresultsinabenefittotheGroup,therecognisedassetislimitedtothepresentvalueofanyfuturerefundsfromplanorreductionsinfuturecontributionstotheplan.–comprisingactuarialgainsandlosses,theeffectoftheassetceiling(excludingamountsincludedinnetinterestonnetdefinedbenefitliability)andthereturnonplanassets(excludingamountsincludedinnetinterestonthenetdefinedbenefitliabil-–arerecognisedimmediatelyinthestatementoffinancialpositionwithacorrespondingdebitorcredittoretainedearningsthroughintheperiodinwhichtheyoccur.Remeasurementsarenotreclassifiedtoprofitorlossinsubsequentperiods.

Dividendsarerecognisedasaliabilityintheperiodinwhichtheyaredeclared(seenote6.12.1)

 whentheplanamendmentorcurtailmentoccurs;or 

Reimbursement rights (Belgium) fined-benefitrentsomeReimbursementrightsarerecognisedasaseparateassetwhen,andonlywhen,itisvirtuallycertainthatanotherpartywillreimburseoralloftheexpenditurerequiredtosettlethecorrespondingbenefitobligation.Reimbursementrightsarepresentedasnon-cur-assetsunderotherfinancialassetsandaremeasuredatfairvalue.Theserightsarehandledthesameasthecorrespondingde-obligation.Whenthechangesintheperiodresultfromchangesinfinancialassumptionsorfromexperienceadjustmentsor

Financialliabilities

andifferencetransactionFinancialliabilitiesconsistofinterest-bearingloansandborrowingsintheGroup.Theyareinitiallyrecognisedatfairvalue,lessrelatedcosts.Subsequenttoinitialrecognition,interest-bearingloansandborrowingsarestatedatamortisedcostpricewithanybetweenamountatinitialrecognitionandredemptionvaluebeingrecognisedinprofitorlossovertheperiodoftheloansoneffectiveinterestbasis.

Elia Transmission 50

Elia Transmission 2020 51 nisedchangesindemographicassumptions,thentheassetisadjustedthroughOCI.Thecomponentsofthedefined-benefitcostarerecog-netofamountsrelatingtochangesinthecarryingamountoftherightstoreimbursement.

Contract liabilities – Last mile connection asset.Theconsiderationofthelastmileconnectionispaidupfront,whilsttherevenuesarerecogniasedoverthelifetimeoftheunderlyingTheamountstobereleasedinfuturearereflectedinthissection.Seealsonote3.4.1.. Leases conveysconveysAtinceptionofacontract,theGroupassesseswhetheracontractis,orcontains,alease.Acontractis,orcontains,aleaseifthecontracttherighttocontroltheuseofanidentifiedassetforaperiodoftimeinexchangeforconsideration.Toassesswhetheracontracttherighttocontroltheuseofanidentifiedasset,theGroupusesthedefinitionofaleaseinIFRS16.

otherthosesupport,authorities/regulationInitsroleasTSO,EliaissubjecttovariouspublicserviceobligationsimposedbyGovernmentand/orregulationmechanisms.Publicmechanismsidentifypublicserviceobligationsinvariousfields(suchaspromotionofrenewableenergy,socialfeesfortheuseofthepublicdomain,offshoreliability)tobeexecutedbyTSOs.Costsincurredbygridoperatorsinrespectofobligationsarefullycoveredbytariff‘levies’asapprovedbytheregulator.Theamountsoutstandingarereportedasatradeandreceivable.Seealsonote9.1.14

Othernon-currentliabilities

Other long-term employee benefits

estimated.constructiverecognisedShort-termemployeebenefitsaremeasuredonanundiscountedbasisandareexpensedastherelatedserviceisprovided.Aliabilityisfortheamountexpectedtobepaidoutunderashort-termcashbonusorprofit-sharingplansiftheGrouphasalegalorobligationtopaythisamountasaresultofthepastserviceprovidedbytheemployeeandtheobligationcanbereliably Provisions financeforpreciatedThemarketIfandAprovisionisrecognisedinthebalancesheetwhentheGrouphasacurrentlegalorconstructiveobligationasaresultofapasteventitislikelythatanoutflowofeconomicbenefits–ofwhichareliableestimatecanbemade–willberequiredtosettletheobligation.theeffectismaterial,provisionsaredeterminedbydiscountingtheexpectedfuturecashflowsatapre-taxratethatreflectsthecurrentassessmentofthetimevalueofmoneyand,whereappropriate,oftherisksspecifictotheliability.totalestimatedcostofdismantlinganddisposalofanassetis,ifapplicable,recognisedasproperty,plantandequipmentandde-overtheasset'sentireusefullife.Thetotalestimatedcostofdismantlingandofdisposaloftheassetispostedasprovisionsthediscountedcurrentvalue.Iftheamountisdiscounted,theincreaseintheprovisionduetothepassageoftimeisclassifiedasexpenses.

Levies

TheGroup asa lessee similarborrowingareTheGrouprecognisesaright-of-useassetandaleaseliabilityattheleasecommencementdate.AssetsandliabilitiesarisingfromaleaseinitiallymeasuredonapresentvaluebasisanddiscountedusingtheGroup'sbestestimatefortheweightedaverageincrementalrate,incasetherateimplicitintheleasecannotbereadilydetermined.TheGroupappliesasinglediscountratepergroupofcontracts,summarisedpertheirduration.

Belgium | Annual report

Government grants incomeprofitsystematicwillGovernmentgrantsarerecognisedwhenitisreasonablycertainthattheGroupwillreceivethegrantandthatallunderlyingconditionsbemet.Grantsrelatedtoanassetarepresentedunderotherliabilitiesandwillberecognisedinthestatementofprofitorlossonabasisovertheexpectedusefullifeoftherelatedasset.Grantsrelatedtoexpenseitemsarerecognisedinthestatementoforlossinthesameperiodastheexpensesforwhichthegrantwasreceived.Governmentgrantsarepresentedasotheroperatinginthestatementofprofitorloss.

Tradeandotherpayables Tradeandotherpayablesarestatedatamortisedcost.

Short-term employeebenefits

benefitsmaturityvaluehaveitedTheGroup'snetobligationinrespectoflong-termservicebenefitsotherthanpensionplansisassessedonanannualbasisbyaccred-actuaries.Thenetobligationiscalculatedusingtheprojectedunitcreditmethodandistheamountoffuturebenefitthatemployeesearnedinreturnfortheirserviceinthecurrentandpreviousperiods.Theobligationisdiscountedtoitspresentvalue,andthefairofanyrelatedassetsisdeducted.Thediscountrateistheyield,attheendofthereportingperiod,onhigh-qualitybondsthathavedatesapproximatelyequivalenttothetermsoftheGroup'sobligationsandthataredenominatedinthecurrencyinwhichtheareexpectedtobepaid.



Elia Transmission Belgium | Annual report 2020 52 Lease payments included in the measurement of the lease liability comprise fixed payments, including in-substance fixed payments.

revenuesallowedofaliabilityisrecognizedinthestatementoffinancialpositionandpresentedaspartof“accrualsanddeferredincome””inrespecttheGroup’sobligationtodeductanamountfromthetariffstobechargedtocustomersinfutureperiodsbecausethetotalcompensationforgoodsorservicesalreadysuppliedislowerthantheamountalreadychargedtocustomers,orexcesshasbeengeneratedduetohighervolumesthaninitiallyestimated.(regulatoryliability);

TheGroupoperatesinaregulatedenvironmentinwhichtariffsaremeanttorealisetotalrevenue/incomeconsistingof:areasonablereturnoninvestedcapital;  allreasonablecostswhichareincurredbytheGroup.

TheGroup asa lessor straight-lineleases.AllLeasesthatsubstantiallytransferalltherisksandrewardsincidentaltoownershipofanunderlyingassetarerecognisedasfinanceleases.otherleasesthatdonottransferalltherisksandrewardsincidentaltoownershipofanunderlyingassetarerecognisedasoperatingTheGroupasalessorhasonlyoperatingleasecontracts.Theseleasepaymentsreceivedarerecognisedasotherincomeonabasisovertheleaseterm.

Rate-regulatedrequirementsInregulatoryTheferralpublicIfableshouldSincethetariffsarebasedonestimates,thereisalwaysadifferencebetweenthetariffsthatareactuallychargedandthetariffsthathavebeencharged(tariffsettingagreedwithregulator)tocoverallreasonablecostsofthesystemoperatorincludingareason-profitmarginfortheshareholders.theappliedtariffsresultinasurplusoradeficitattheendoftheyear,thismeansthatthetariffschargedtoconsumers/thegeneralshouldhavebeenrespectivelylowerorhigher(andviceversa).Thissurplusordeficitisthereforereportedintheregulatoryde-account.releaseoftheregulatorydeferralaccountwillimpactfuturetariffs:incurredregulatoryliabilitieswilldecreasefuturetariffs,incurredassetswillincreasefuturetariffs.theabsenceofanIFRSspecificallyapplyingtothetreatmenttheseregulatorydeferralaccounts,EliamanagementreferredtotheofIFRS14andtheConceptualFrameworkforFinancialReportingalongsidethelatestevolutionsoftheIASBprojectonActivitiestodevelopthefollowingaccountingpolicyinthatrespect:



overincludingTheandThereasonablyexpectedwhenTheovercosttheremeasurementThenents.Variableleasepaymentsareexpensedasincurred.Aspracticalexpedient,nodistinctionismadebetweenleaseandnon-leasecompo-Componentsthatdonottransferanygoodsorservice(initialdirectcosts,prepayments)areexcludedfromtheleaseprice.rightofuseassetsissubsequentlyreducedbyaccumulateddepreciation,impairmentlossesandanyadjustmentsresultingfromtheoftheleaseliability.Theright-of-useassetisdepreciatedusingthestraight-linemethodfromthecommencementdatetoendoftheleaseterm,unlesstheleasetransfersownershipoftheunderlyingassettotheGroupbytheendoftheleasetermortheoftheright-of-useassetreflectsthattheGroupwillexerciseapurchaseoption.Inthatcasetheright-of-useassetwillbedepreciatedtheusefullifeoftheunderlyingasset,whichisdeterminedonthesamebasisasthoseofpropertyandequipment.leaseliabilityissubsequentlyincreasedbytheinterestcostontheleaseliabilityandreducedbyleasepaymentmade.Itisremeasuredthereisachangeinfutureleasepaymentsarisingfromachangeinanindexorrate,achangeintheestimateoftheamounttobepayableunderaresidualvalueguarantee,orachangeinthereassessmentofwhetherapurchaseorextensionoptioniscertaintobeexercisedoraterminationoptionnottobeexercised.Grouppresentsright-of-useassetswithin“property,plantandequipment”andleaseliabilitieswithin“loansandborrowings”(currentnon-current)inthestatementoffinancialposition.Grouphaselectednottorecogniseright-of-useassetsandleaseliabilitiesforleasesoflow-valueassetsandshort-termleases,ITequipment.TheGrouprecognisestheleasepaymentsassociatedwiththeseleasesasanexpenseonastraight-linebasistheleaseterm.

whichinmechanismTheTheamountintheregulatorydeferralaccountsisyearlyreportedandassessedbytheregulator.sumofrevenuefromcontractswithcustomers(asdefinedinIFRS15),otherincomeandthenetincome(expense)fromsettlementisalsopresentedasasubtotalheaded“Revenue,otherincomeandnetincome(expense)fromsettlementmechanism”,assubstanceitrepresentstherevenuethatiseconomicallyearnedduringtheperiodtakingintoaccounttheregulatedenvironmentintheGroupoperates.Theeffectofdiscountingisreflectedinthefinancialresult.Seenote9. statement of profit or loss

Items in the



Regulatorydeferralaccounts

anassetisrecognizedinthestatementoffinancialpositioninrespectofthe Group’srighttoaddanamounttothetariffstobe charged to customers in future periods because the total allowed compensation for the goods or services already supplied exceeds the amount already charged to customers or shortage in revenues has been occurred due to lower volumes than initiallyestimated(regulatoryasset);and the net movement in the regulatory deferral accounts for the period is presented separately in the statement of profit or loss withinthelineitem“netregulatoryincome(expense)”.

Regulatoryframeworkandtariffs. risedTheforandareHowever,ForConsideringship).variable.(unitFortheregulatedbusiness,eachserviceisbasedonastandardcontractwiththecustomer,withmostlyapredefinedregulatedtariffpricemultipliedwiththevolume(injectionorofftake)orthereservedcapacity(dependingonthetypeofservice),sopricingisnotHence,theallocationofthetransactionpriceoverthedifferentperformanceobligationsisstraightforward(one-to-onerelation-Mostofthesecontractsareconcludedforanindefiniteperiodwithgeneralpaymenttermsof15-30days.thebusinessoftheGroup,therearenorelevantright-of-returnsandwarrantyobligations.allservicesprovidedbytheGroup,Eliaisthesolelyandprimarypartyresponsibleforexecutingtheserviceandsotheprincipal.EliainitsroleasTSO,somepublicserviceobligationsareimposedbyGovernment/regulationmechanismTheseobligationsmainlyrelatedtofinancialsupportforthedevelopmentofrenewableenergy.Fortheseactivities,theTSO’sareactingasanagentastheexpense/incomestreamsarefullycoveredbytariffsthereisnoimpactinthestatementofprofitandloss.Wereferto3.3.14moreinformationontheaccountingtreatment.Group’smainperformanceobligations/typeofcontracts,theirpricingandrevenuerecognitionmethodfor2019canbesumma-asfollows:

This component of the grid connection/ grid usercontract is presented separately (not part of the grid connection/ revenues from revenue cap) as from regulatory perspective the tariff setting is very specific.

RevenuebycategoryforEliaTransmissionBelgium:

Standardcontract approved by regulator, but the price setting is based on the budget of realisation of the connection.

Contract and tariff approved by FixedRegulator.amount per type of study Last mile connection is a componentof the grid connection contract. At the request of a future grid user, Elia constructs/adjusts a dedicated/ physical connection, a so called last-mile connection, to connect the customers’ facility to Elia’s grid. Although thecontrolof the asset is not transferred as such to the grid user,the grid user obtains direct access to the high voltage grid. This access right transferred by Elia is valuable to the grid user, which is the reason why the grid user is compensating Elia in Ascash.thegrid

This component of the access contractsigned with access holders/DSOs, covers the development and management of the grid with a viewto meeting capacity needs and satisfying demand for electricity transmission..

Contract and tariff approved by TariffRegulator.isset per type of asset (bay, km cable, ..) Managementand developmentof grid infrastructure

Revenue is recognised over time as providing sufficient capacity and a resilient grid is a service performed continuously throughout the contractualterm.

Revenue is recognised over time as this service is a continuous performance throughout the contractual term.

Revenue is recognised at thepoint in time when the study is delivered.

Fees charged to grid users/ distribution system operators (DSOs) cover the maintenance and operating costs related to the dedicated connection facilities

Contract and tariff approved by EURRegulator.perkW/KVA for yearly/monthly peak and power available at access point Management of the electrical system

Elia Transmission Belgium | Annual report 2020 53 Income Revenues factualThetonisedIFRS15establishesafive-stepmodeltoaccountforrevenuearisingfromcontractswithcustomersandrequiresthatrevenueberecog-atanamountthatreflectstheconsiderationtowhichanentityexpectstobeentitledinexchangefortransferringgoodsorservicesacustomer.Thesearethefivestepstoconsiderforeachcustomercontract:1.Identifythecontract(s)withacustomer;2.Identifytheperformanceobligationsinthecontract(s);3.Determinethetransactionprice;4.Allocatethetransactionpricetotheperformanceobligations;5.Recogniserevenuewhenperformanceobligationsaresatisfied,orwhencontrolofgoodsorservicesistransferredtothecus-tomer.Group’smainrevenuesarerealisedbyTransmissionSystemOperators(TSOs),actingunderaregulatoryframeworkandhavinga/legalmonopoly.TheapplicableframeworksinthemaincountriesaredetailedinNote9

Contract and tariff approved by EURRegulator.perkW/ kVArh at access point

Revenue is recognised over time as these services areperformedcontinuously throughout the contractual term.

The total amountof revenue recognised for this single performance obligation, which includes grid connectionservices, is recognised over the life of the assets, as the contract has no specific end date.

user enterssimultaneously into a grid connection contract both activities (access right and the grid connection services) arenot distinctand constitute a single performance obligation and interdependence between thesecontracts.

This component of the access contractsigned with access holders/DSOs, covers the management and operation of the electricity system and the offtake of additionalreactive energy related to Elia’s grid (different from the connection assets).

Revenue stream Nature, customer and timing of satisfaction of performance obligations Contract Price setting Grid revenuesGridconnection

Technical studies conducted at the requestof grid users, directly connected to the grid, to get a new oran alteration of an existing connection.

Expenses

Contract and tariff/mechanism approved by Regulator. Based on market prices,EUR per kW imbalance at access point International revenues

Other expenses

mechanismever,Propertytaxesaredirectlyrecognisedinfullassoonasownershipiscertain(generallyasof1Januaryoftheyearinquestion).How-thesecosts,qualifiedasnon-controllablecostsintheregulatoryframework,arerecordedasrevenuethroughthesettlementforthesameamount,resultinginzeroimpactintermsofprofitorloss.

Other revenuesOthers

profitBorrowingmethodFinancetradingments,ties,Financeexpensescompriseinterestpayableonborrowings(calculatedusingtheeffectiveinterestratemethod),interestonleaseliabili-foreign-exchangelosses,gainsoncurrencyhedginginstrumentsoffsettingcurrencylosses,resultsoninterest-ratehedginginstru-lossesonhedginginstrumentsthatarenotpartofahedgeaccountingrelationship,lossesonfinancialassetsclassifiedasforpurposesandimpairmentlossesonfinancialassetsaswellasanylossesfromhedgeineffectiveness.incomeincludesinterestreceivablesonbankdeposits,whicharerecognisedinprofitorlossusingtheeffectiveinterestrateastheyaccrue.coststhatarenotdirectlyattributabletotheacquisition,constructionorproductionofaqualifyingassetarerecognisedinorlossusingtheeffectiveinterestmethod.

Compensation of imbalances

tainConsequently,allrevenuecomponentscontainrevenuefromcontractswithcustomers,i.e.partiesthathavecontractedwithEliatoob-servicesresultingfromElia’sordinaryactivitiesinexchangeforaconsideration.

Other income

This component is part of the access contract signed with access holders/DSOs,covering (i) services to facilitate the energymarket: to (ii) develop and enhance integration of an effective and efficient electricity market, (iii) the management of interconnections and the coordination with neighbouringcountries and the European authorities, and (iv) the publication of data as required by transparency obligations. Revenue is recognised over time as these services areperformedcontinuously throughout the contractual term. Contract and tariff approved by EURRegulator.perkW at access point

Finance incomeand expenses

Otherincomeisrecognisedwhentherelatedserviceisperformedandnofurtherperformanceobligationswillarise

The useof the grid on individual borders is organised through, half-yearly, quarterly, monthly, weekly, weekend, daily and intra-day auctions. Elia and Regulators decide which auctions are conducted on individual borders. Auctions are organisedvia an auction office, which acts as an agent. The auction office collects the revenues paid by the European energy traders, which are finally shared between neighbouring TSOs based on thevolumes imported/exported on the border.

Revenue stream Nature and timing of satisfaction of performance obligations

As defined in the BRP contract, the BRP (Balance Responsible Party) has a commitment to ensure a perfect balance between offtake and injection in the grid. In the eventof an imbalance by the BRP, Elia has to activate theancillary services which are to be invoiced to the BRP. Revenue is recognised at thepoint in time when an imbalance occurs.

Contract Price setting

The revenue is recognised at the point in time whenan import/export activity occurs. Framework agreement with parties and auction office. Price setting is based on price difference in cross bordermarket prices. Otherrevenues

Elia Transmission Belgium | Annual report 2020 54 Market integration

Revenue is recognised at thepoint in time the service is complete.

Net regulatoryincome(expense) from settlement mechanism

statementassets,ThefrompublicIfableshouldSincethetariffsarebasedonestimates,thereisalwaysadifferencebetweenthetariffsthatareactuallychargedandthetariffsthathavebeencharged(tariffsettingagreedwithregulator)tocoverallreasonablecostsofthesystemoperatorincludingareason-profitmarginfortheshareholders.theappliedtariffsresultinasurplusoradeficitattheendoftheyear,thismeansthatthetariffschargedtoconsumers/thegeneralcouldhavebeenrespectivelylowerorhigher(andviceversa).Thissurplusordeficitisthereforereportedinthedeferralaccountsettlementmechanism.releaseofthisdeferralaccountwillimpactfuturetariffs,incurredregulatoryliabilitieswilldecreasefuturetariffs,incurredregulatorywillincreasefuturetariffs.Thenetmovementintheregulatorydeferralaccountsfortheperiodispresentedseparatelyintheofprofitorlosswithintheline“netincome(expense)fromsettlementmechanism”.Wealsorefertonote3.3.17.

Principally includes other services (than describedhere above)

AstheofThestatementofcomprehensiveincomepresentsanoverviewofallrevenuesandexpensesrecognisedintheconsolidatedstatementprofitorlossandintheconsolidatedstatementofchangesinequity.TheGrouphaselectedtopresentcomprehensiveincomeusingtwo-statementapproach,i.e.thestatementofprofitorlossimmediatelyfollowedbythestatementofothercomprehensiveincome.aresultofthispresentation,thecontentofthestatementofchangesinequityisrestrictedtoowner-relatedchanges.

Elia Transmission Belgium | Annual report 2020 Income55 taxes dividend.AdditionalcanAliabilitiestaxestiesarerecognitionnotneitheringandDeferredtheCurrenttherecognisedIncometaxescomprisecurrentanddeferredtax.Income-taxexpenseisrecognisedinprofitorloss,exceptwhereitrelatestoitemsdirectlyinequity.Taxesonhybridcouponisrecognizedinthestatementofprofitandlossasitisataxonprofitswhereashybridcouponitselfisrecognizeddirectlyinequity.taxistheexpectedtaxpayableontaxableincomefortheyear,usingtaxratesenactedorsubstantivelyenactedattheendofreportingperiod,andanyadjustmentstotaxpayableinrespectofpreviousyears.taxisrecognised,usingthebalance-sheetmethod,ontemporarydifferencesarisingbetweenthecarryingamountsofassetsliabilitiesforfinancialreportingpurposesandtheamountsusedfortaxationpurposes.Deferredtaxisnotrecognisedforthefollow-temporarydifferences:theinitialrecognitionofassetsorliabilitiesinatransactionthatisnotabusinesscombinationandthataffectsaccountingnortaxableprofit;anddifferencesrelatingtoinvestmentsinsubsidiariesandjointventureswherethesewillprobablybereversedintheforeseeablefuture.Inaddition,deferredtaxisnotrecognisedfortaxabletemporarydifferencesarisingfrominitialofgoodwill.Deferredtaxismeasuredatthetaxratesthatareexpectedtobeappliedtothetemporarydifferenceswhentheyreversed,basedonthelawsthathavebeenenactedorsubstantivelyenactedbythereportingdate.Deferredtaxassetsandliabili-areoffsetifthereisalegallyenforceablerighttooffsetcurrenttaxliabilitiesandassetsandthedeferreditemsrelatetoincomeleviedbythesametaxauthorityonthesametaxableentityorondifferenttaxentities,buttheyareintendedtosettlecurrenttaxandassetsonanetbasisortheirtaxassetsandliabilitieswillberealisedsimultaneously.deferredtaxassetisrecognisedonlytotheextentthatitislikelythatfuturetaxableprofitswillbeavailableagainstwhichtheassetbeutilised.Deferredtaxassetsarereducedtotheextentthatitisnolongerlikelythattherelatedtaxbenefitwillberealised.incometaxesthatarisefromthedistributionofdividendsarerecognisedatthesametimeastheliabilitytopaytherelated

Statement of comprehensive income and statement of changes in equity

PursuanttransparentChiefThisTheGrouphasoptedforasegmentreportinginconformitywiththedifferentregulatoryframeworkscurrentlyexistingwithintheGroup.reportingapproachcloselyreflectstheGroup’soperationalactivitiesandisalsoinlinewiththeGroup’sinternalreportingtotheOperatingDecisionMaker(CODM),enablingtheCODMtobetterevaluateandassesstheGroup’sperformanceandactivitiesinaway.toIFRS8,theGrouphasidentifiedthefollowingoperatingsegmentsbasedontheaforementionedcriteria:EliaTransmission(Belgium),whichcomprisestheactivitiesbasedontheBelgianregulatoryframework:theregulatedactivitiesofEliaTransmissionBelgiumNV/SA,EliaAssetNV/SA,EliaEngineeringNV/SA,EliaReSA,HGRTSAS,CoresoNV/SA,andEnervalisNV,whoseactivitiesaredirectlylinkedtotheroleofBelgiantransmissionsystemoperatorandaresubjecttotheregulatoryframeworkapplicableinBelgium–seeSection9.1.

Thetablebelowshowsthe2020consolidatedresultsofEliaTransmission(Belgium) ResultsEliaTransmission(in€million)-Periodended31December 2020

Revenues

Non-regulatedactivitiesandNemoLink,comprising:

whichandtheholdingactivitiesinNemoLinkLtd.ThiscompanycomprisesandmanagestheNemoproject,whichconnectstheUKBelgiumusinghigh-voltageelectricitycables,enablingpowertobeexchangedbetweenthetwocountriesandforaspecificregulatoryframeworkhasbeensetup.SeeSection9.2formoredetails o arethenon-regulatedactivitiesoftheEliaTransmission(Belgium)segment.’Non-regulatedactivities’referstoactivitieswhichnotdirectlyrelatedtotheroleofTSO(seeSection9.1). (Belgium) 2019 nismRevenue,otherincomeandnetincome(expense)fromsettlementmecha- 1,004.7 0.0 858.1 0.0 Otherincome 57.5 0.0 Netincome(expense)fromsettlementmechanism 89.1 0.0 Depreciation,amortization,impairmentandchangesinprovisions (188.3) 0.0 Resultsfromoperatingactivities 235.7 (0.1) Equityaccountedinvestees 1.9 0.0 Earningsbeforeinterestandtax(EBIT) 237.5 (0.1) Adjusteditems 0.0 AdjustedEBIT 237.5 0.0 Earningsbeforedepreciations,amortizations,interestandtax(EBITDA) 425.8 (0.1) Financeincome 2.3 0.0 Financecosts (68.7) 0.0 Incometaxexpenses (46.3) 0.0 ProfitNet 124.8 (0.1) Adjusteditems 0.0 0.0 Adjusted net profit 124.8 (0.1) Consolidatedstatementoffinancialposition(in€million) 31December2020 31December2019 Difference(%)



Totalassets 6,990.9 6,384.4 9.5% Capitalexpenditures 365.6 0.0 n.r. Netfinancialdebt 3,305.6 3,024.8 9.3% irrelevantWeforThetariffmethodologyapprovedbytheregulatorCREGon7November2019cameintoforcein2020.Themethodologyisapplicableafour-yearperiod(2020–2023).SeeNote9.1formoreinformationaboutthenewregulatedframework.refertonote1,theassessmentofthefinancialperformancecomparedto2019intheelementsofthestatementofprofitorlossisastheCompanystarteditsactivitiesasTSOper31.12.2019atmidnight.

TheperiodicallyTheCODMhasbeenidentifiedbytheGroupastheBoardsofDirectors,CEOsandExecutiveBoardsofeachsegment.TheCODMreviewstheperformanceoftheGroup'ssegmentsusingvariousindicatorssuchasrevenue,EBITDAandoperatingprofit.informationpresentedtotheCODMfollowstheGroup'sIFRSaccountingpolicies,sonoreconcilingitemshavetobedisclosed. Elia Transmission

Elia Transmission Belgium | Annual report 2020 56 2. Segment reporting Basis for segment reporting

EBIT amountsto€237.5million,afbase.thefectedbydepreciationsofintangibleassetsacquiredinthepastandactivatedunderIFRSwhiledirectlyexpensedandcoveredthroughtariffsduringthepreviousregulatoryperiod.Underthenewtariffmethodology,intangibleassetsareactivatedintheregulatedassetThecontributionofequity-accountedinvestments(HGRTandCoreso)remainedflatat€1.9million. Netfinancecost of€68.7millionincludestheinterestcostsoftheloans/bondstransferredtoEliaTransmissionBelgiumattheendof 2019.In2020,Eliatookadvantageofsupportivemarketconditionstomanageitsliquiditypositionandtappedthedebtcapitalmarket 8 noInconformitywiththeregulatoryframework,variationsinvolumeareneutralizedwithinthesettlementmechanismandassuchhaveimpactontheprofitabilityofcompany.

Lastmileconnectionrevenue

The settlementmechanism (€89.1million)encompassesbothdeviationsinthecurrentyearfromthebudgetapprovedbytheregulator lion).isin(+€21.6million)andthesettlementofnetsurplusesfromtheprevioustariffperiod(+€67.5million).Theoperatingdeficit(+€21.6million),relationtothebudgetedcostsandrevenueauthorisedbytheregulator,canberecoveredfromconsumersinafuturetariffperiodandprimarilytheresultofadropincross-borderrevenue(€20.9million),higherfinancialcosts(€5.8million)andhighertaxes(€6.4mil-Thiswaspartlyoffsetbylowerdepreciations(€5.0million)andlowercostsforancillaryservices(€4.5million).

EliaFinancialTransmission'srevenueamountto €1,004.7million. Thetablebelowprovidesmoredetailsofchangesinthevariousrevenueandotherincomecomponents: (in€million) 2020 Gridrevenue: 848.2 Gridconnection 46.4 Managementanddevelopmentofgridinfrastructure 484.8 Managementoftheelectricalsystem 129.6 131.2 Marketintegration 22.1 34.2 Lastmileconnection 2.8 Otherrevenue 7.1 Subtotalrevenue 858.1 Otherincome 57.5 Netincome(expense)fromsettlementmechanism 89.1 Totalrevenueandotherincome 1,004.7

Elia Transmission Belgium | Annual report 2020 57

Gridconnectionrevenue was€46.4millionandwasaffectedbythetariffssetbytheCREGasfrom2020.

Revenuefrom managementanddevelopmentofgridinfrastructure

.Thisrevenueof€131.2millionwaslargelyaffectedbythetariffdecreaseformanagementofpower

Compensationforimbalances

Revenuefrom managementoftheelectricalsystem

amountsto€129.6millionresultingofatariffincreaseasfrom2020,anincrease Servicesinadditionalreactiveofftakeenergyandtheintroductionofthetariffforinjectionofadditionalreactiveenergy.renderedinthecontextofenergymanagementandindividualbalancingofbalancinggroupsarepaidwithintherevenuefrom compensationforimbalances

amountto €484.8million(+1.1%)andwereimpactedbyan monthlyincreaseintheyearlypeaktariff,aslightincreaseintherevenuefromDSOsforpowerputattheirdisposal,offsetbyadropinthepeaktariffandadecreaseindirectcustomermonthlypeakvolumeasaresultoftheCOVID-19 8 measures.

EBITDA roseto€425.8milliondrivenbytheregulatednetprofit,depreciationslinkedtothegrowingassetbase,thefinancialcosts(excludingtheeffectfromcapitalisedborrowingcosts)thatareallpassedthroughintorevenue.The

Internationalrevenue

amountsto€2.8millionand otherrevenue (€7.1million)includestheworksdeliveredtothirdparties.

Internationalrevenue equalledto€34.2million,resultingfromalowercongestionincomeduringasofterwinterperiodandlessofftake TheduetotheCOVID-19measuresin2020,withsufficientinjectionpoweravailabilityleadingtolesspowerexchangewiththeCWEregion.absenceofhighpricedifferenceswithneighbouringcountriesin2020reinforcedthisdecrease.

Finally,balancereservesandblack-startbasedonofftakeandinjection.Revenuefromcompensationforimbalancesincludethehighrevenueandim-situationsgeneratedbywindforecastonseveraldaysinthesecondhalfof2020.thelastsectionoftariffrevenueencompassestheservicesEliaTransmissionBelgiumprovideswithinthecontextof market integration wasaffectedbyatariffdecreaseasfrom2020anddropinenergyvolumeofftakeduetotheCOVID-19measures.

hascostone-offconsumers’financewithan€800millionEurobond.Theproceedsofthenewissuewereusedtofinancetheongoinginvestmentprogrammeandtore-a€496millionshareholderloanthatwasrepaidearlyJune.Thisnewissuereducedtheaveragecostofdebtsignificantly–tobenefitfrom2.16%attheendof2019to1.93%attheendof2020.However,thetotalnetfinancecostswasaffectedbytheunwindingofaninterestrateswaplinkedtotherepaymentoftheshareholderloan(-€4.5million),alowercapitalisedborrowinglinkedtomajorcommissioningsin2019,partiallyoffsetbythesaleofElia’sstakeinAmpacimon(+€1.0million).EliaTransmissionawell-balanceddebtmaturityprofilewithnoupcomingnear-termmaterialmaturities.

Transmission Belgium | Annual report 2020 58

Totalassets 302.0 312.2 (3.3%) Capitalexpenditures 0.0 0.0 n.r. Netfinancialdebt 208.4 230.8 (9.7%)

 Incentives (€27.6million),reflectingastrongoperationalperformanceunderthenewincentiveremuneration,primarilywithrenectionspecttoincentiveslinkedtointerconnectioncapacity,timelycommissioningofprojectsandthehighavailabilityoftheoffshorecon-“MOG”,andoffsetbyalowerperformanceontheinnovationincentiveandalowerefficiencygain.

Totalassets roseby€606.5millionto€6,990.9million,mainlyduetotheinvestmentprogrammeandahigherliquidity. Netfinancial debtincreasedto€3,305.6million(+9.3%),asElia’sCAPEXprogrammewasmainlyfinancedbycashflowsfromoperatingactivities endtainability-linkedandthebondissue.In2020,EliareimbursedtheRevolvingCreditFacility(RCF)(drawnattheendof2019(€75million)).Anewsus-RCF(€650million)andanewcommercialpaperprogramme(€300million)wasputinplace,bothfullyundrawnattheof2020. Non-regulated activities and Nemo Link

Thetablebelowshowsthe2020consolidatedresultsofthe‘Non-regulatedactivitiesandNemoLink’segment: endedResultsNemoLinkandnonregulatedactivities(in€million)Period31December 7.3 0.0 Earningsbeforeinterestandtax(EBIT) 6.0 Earningsbeforedepreciations,amortizations,interestandtax(EBITDA) 6.0 0.0 Financeincome 0.0 0.0 Financecosts (6.5) 0.0 Incometaxexpenses 2.2 0.0 ProfitattributabletotheOwnersoftheCompany 1.7 0.0 Consolidatedstatementoffinancialposition(in€million) 31December2019 Difference(%)

Adjustednetprofit of€124.8millionconsistsof:

Otheritems for(-€1.3million)mainlylinkedtoIFRSprovisionsforIAS19andotherprovision(+€3.1million)mainlydrivenbya employeesogyassetsbenefitpositivecontributionfromemployeebenefitsresultingfromlowerinterest/servicecost,aone-offchangeinplanassetsofadefinedplanandthereversalofataxprovision;whichweremainlyoffsetby(-€4.6million)relatedtothedepreciationofintangibleacquiredpriorto2020andactivatedunderIFRSwhilefullyexpensedandcoveredunderthepreviousregulatorymethodol-(-€9,2million),borrowingcosts(+€5.9million)andfinallycostincurredforthecapitalincrease(-€1.4million)realisedfortheofthegroup

Theotherincome(+€9.4million) coversmainlyrevenuesthatcoverscoststhatarerecoverablewithothercompaniesoftheElia Group(e.g.50Hertz,EliaGridInternational,EliaGroupNV/SA,..).



31December2020

Equity-accountedinvestments contributed€7.3milliontotheGroup’sresult,whichisalmostentirelyattributableto NemoLink.Nemo thelowerandandcemberofLinkended2020withanavailabilityrateof99.17%continuingtobeoneofthehighestperformingassetsofitskindintheworld.InviewGreatBritain’sdeparturefromtheEU’sInternalEnergyMarket,operationalsystemsandprocedureswereupgradedandon31De-2020,NemoLinksuccessfullyranitsfirstexplicitdayaheadauction,ensuringpowercontinuedtoflowbetweenGreatBritainBelgiumwithoutanyinterruptioninthenewtradingarrangement.ThefirsthalfoftheyearsawhigherpricespreadsbetweentheUKBelgiumfrommid-MarchtotheendofMayandanarrowingofthespreadinJunefollowingagradualrecoveryinpowerdemand,windoutputandoutagesatBelgianandFrenchnuclearreactors,whichdroveupBelgianpowerprices.Inthesecondhalf,duetoreturnofnuclearavailabilityinBelgiumandFranceandrisinggaspricesinthethirdquarterandcertainlythelastquarter,NemoLink

 Fairremuneration (€98.5million)duetothehigherreturnonequityresultingfromthenewtariffmethodology(fixedrisk-freerate of2.4%),andthegearingratioslightlyhigherthan40%

2020 2019 Revenues 0.0 0.0 Otherincome 9.4 0.0 Depreciation,amortization,impairmentandchangesinprovisions 0.0 Resultsfromoperatingactivities (1.3) 0.0 Shareofprofitofequityaccountedinvestees(netofincometax)

Elia

Earningsbeforedepreciations,amortizations,interestandtax(EBITDA) 425.8 6.0 431.8 Financeincome 2.3 0.0 2.3 Financecosts (68.7) (6.5) (75.2) Incometaxexpenses (46.3) 2.2 (44.1)

Earningsbeforedepreciations,amortizations,interestandtax(EBITDA) (0.1) 0.0 (0.1) Financeincome 0.0 0.0 0.0 Financecosts 0.0 0.0 0.0 Incometaxexpenses 0.0 0.0 0.0

Netfinancecost of€6.5millionprimarilycomprisestheregulatorysettlementsfor2019(€3.4million)andthecostlinkedtoNemoLink privateplacement.NemoLinkisfinancedaccordingtotheregulatoryframework(40%equity/60%debt). Netprofitamountedto €1.7millionmainlydrivenbythepositivecontributionofNemolinkasequityaccountedinvestee,offsetbythe othercostsincurredrelatedtotheregulatoryreviewandinterestcostslinkedtoNemolinkandpositivelyaffectedbytherevenuescomingfromcompaniesoftheGroup.

YearConsolidatedresults(in€million)-ended31December

Reconciliation on

reportable segments to IFRS amounts YearConsolidatedresults(in€million)-ended31December 2020 2020 2020 TransmissionElia non-regulatedNemoLinkandac-tivities EliaTransmissionBelgiumGroup (a) (b) (a)+(b)

Resultsfromoperatingactivities 235.7 (1.3) 234.4 Shareofprofitofequityaccountedinvestees,netoftax 1.9 7.3 9.2 Earningsbeforeinterestandtax(EBIT) 237.5 6.0 243.5

31Dec2020 31Dec2020 31Dec2020

Consolidatedstatementoffinancialposition(in€million)

Totalrevenues 0.0 0.0 0.0 Otherincome 0.0 0.0 0.0 Depreciation,amortization,impairmentandchangesinprovisions 0.0 0.0 0.0 Resultsfromoperatingactivities (0.1) 0.0 (0.1)

(a) (b) (a)+(b)

Profitattributabletotheownersofthecompany 124.8 1.7 126.5

Totalassets 6,990.9 302.0 7,292.9 Capitalexpenditures 365.6 0.0 365.6 Netfinancialdebt 3,305.6 208.4 3,514.0

2019 2019 2019 TransmissionElia non-regulatedNemoLinkandac-tivities EliaTransmissionBelgiumGroup

Totalassets droppedslightly(-3.3%)to€302,0millionand netfinancialdebt decreasedby9.7%duetocapitalrepaymentslinkedto thefinancingofNemoLink.

Totalrevenues 858.1 0.0 858.1 Otherincome 57.5 9.4 66.9 Netincome(expense)fromsettlementmechanism 89.1 0.0 89.1 Depreciation,amortization,impairmentandchangesinprovisions (188.3) 0.0 (188.3)

of information

Shareofprofitofequityaccountedinvestees,netoftax 0.0 0.0 0.0 Earningsbeforeinterestandtax(EBIT) (0.1) 0.0 (0.1)

Elia Transmission Belgium | Annual report 2020 59 amountingperformedstrongly,leadingtoatotalnetprofitof€15.1millionfor2020andincludingone-offtaxadjustmentsrelatedtoprioryearsto€6.6million.ThetotalcontributionofNemoLinktotheGroupnetprofitamountsto€7.4million.

Elia Transmission Belgium | Annual report 2020 60 Profitattributabletotheownersofthecompany (0.1) 0.0 (0.1) Consolidatedstatementoffinancialposition(in€million) 31Dec2019 31Dec2019 31Dec2019 Totalassets 6,384.4 312.2 6,696.6 Capitalexpenditures 0.0 0.0 0.0 Netfinancialdebt 3,024.8 230.8 3,255.6 TheTherearenosignificantintersegmenttransactions.Grouphasnoconcentrationofcustomersineitheroftheoperatingsegments.

Elia Transmission Belgium | Annual report 2020 61

TheThemillion.segment(Belgium)WerefertothesegmentreportingforadetailedanalysisoftheGroup’srecognisedrevenuesatsegmentlevel.TheEliaTransmissionsegmentreportedrevenuesandotherincomeof€1,004.7million(Note4.2)andthe‘Non-regulatedactivitiesandNemoLink’reportedrevenuesandotherincomeof€9.4million(Note4.3).Thereportedrevenuesandotherincomeamountsto€1,014.1potentialimpactofCovid-19ontherevenueshasbeendisclosedinthesegmentreporting.(Note4)Group’sownproductionrelatestotimespentoninvestmentprojectsbyGroupemployees.

Items

Operating expenses COST OF MATERIALS, SERVICES AND OTHER GOODS (in€million) 2020 2019 Rawmaterials,consumablesandgoodsforresale 6.5 0.0 Purchaseofancillaryservices 153.5 0.0 Servicesandothergoods(excl.purchaseofancillaryservices) 241.6 0.1 Total 401.7 0.1 ‘Servicesconstant‘Purchaseofancillaryservices’includesthecostsforserviceswhichenabletheGrouptobalancegenerationwithdemand,maintainvoltagelevelsandmanagecongestiononitsgrids.andothergoods’relatestomaintenanceofthegrid,servicesprovidedbythirdparties,insuranceandconsultancy,andothers. PERSONNEL EXPENSES (in€million) 2020 Salariesandwages 113.2 Socialsecuritycontributions 29.4 Pensioncosts 21.0 Otherpersonnelexpenses 4.4 Sharebasedpaymentsexpenses 1.4 Employeebenefits(excl.pensions) (1.6) Total 167.8 sharecreationInDecember2020,thefirsttrancheofthe2020capitalincreaseforEliaemployeeswascompleted.Thecapitalincreaseresultedintheof499,640additionalshareswithoutnominalvalue.TheGroup'semployeesweregranteda16.66%reductiononthequotedprice,whichresultedina€1.4millionreductionoverall.

in the consolidated statement of profit or loss and other comprehensive income mentsBesidestheadoptionofIFRS16asfrom1January2019,therewerenochangesinthebasisofpreparationandthereforenorestate-offiguresfrompreviousyearswererequired. Revenue, net income (expense) from settlement mechanism and other income (in€million) 2020 Revenue 858.1 Gridrevenue: 848.2 Lastmileconnection 2.8 Otherrevenue 7.1 Netincome(expense)fromsettlementmechanism 89.1 Otherincome 66.9 Servicesandtechnicalexpertise (1.5) Ownproduction 21.6 Optimaluseofassets 14.5 Other 31.6 GainonsalePPE 0.6

OTHER EXPENSES (in€million) 2020 Taxesotherthanincometax 12.7

ForcountedTotal2020personnelexpensesforEliaTransmission(Belgium)amountedto€162.3.Thenon-regulatedactivitiesandNemoLinkac-for€5.4million.moreinformationaboutpensioncostsandemployeebenefits,seeNote6.14,‘Employeebenefits’ (in€million) 2020

Interestexpenseonderivatives (5.2) Interestcostonleasing (0.7) Otherfinancialcosts (11.4) Netfinancecosts (72.9)

Forincurred.settledTheSeenote6.13formoredetailsregardingtheloansoutstandingandtheinterestpaidin2020.interestrateswapsrelatedtootherloans(aloanwithSynatomfor€453.6million)andtheloanwithPubli-Part(€42.1million)wereendofJune2020withtherepaymentofbothloans.Withthesettlement,aninterestexpenseonderivativesof€4.4millionwasmoredetailsofnetdebtandloans,seeNote6.13.

DEPRECIATION, AMORTISATION, IMPAIRMENT AND CHANGES IN PROVISIONS

Income taxes

Elia Transmission Belgium | Annual report 2020 62

Amortisationofintangibleassets 9.6 Depreciationofproperty,plantandequipment 177.4

TheTaxesotherthanincometaxmainlyconsistofpropertytaxes.amountofimpairmentontradereceivablesisexplainedinNote8.1,‘Financialriskandderivativemanagement’.

Net finance costs (in€million) 2020 Financeincome 2.3 Interestincomeoncashandcashequivalentsandgrantedloans (0.0) Otherfinancialincome 2.3 Financecosts (75.3)

Lossondisposal/saleofproperty,plantandequipment 9.0 Impairmentonreceivables 0.1 Other 0.2 Total 22.1

Totaldepreciationandamortisation 187.1

Impairmentofinventoriesandtradereceivables 0.1 Totalimpairment 0.1 Environmentalprovisions (0.4) Changesinprovisions 1.1 Total 188.3 equipment'Adetaileddescriptionandmovementscheduleisprovidedinothersectionsfor'Intangibleassets'(seeNote6.2),'Property,plantand(seeNote6.1)and'Provisions'(seeNote6.15).

Interestexpenseoneurobondsandotherbankborrowings (58.0)

DeferredwhichTheincometaxexpenseishigherthanthetheorethicalincometaxexpense(calculatedusingthenominaltaxrate)duetoexpensesfortaxdeductionisdisallowed.incometaxesarediscussedfurtherinNote6.7. per share (EPS) theBasicearningspersharearecalculatedbydividingthenetprofitattributabletotheshareholdersoftheCompany(afteradjustmentfordistributiononhybridsecurities)(€250.1million)bytheweightedaveragenumberofordinarysharesoutstandingduringtheyear.

IN PROFIT OR LOSS

Originationfromandreversaloftemporarydifferences (0.1)

Totalcurrentincometaxexpenses 44.2

Weightedaveragenumberofordinaryshares 2020 2019 Ordinarysharesissuedon1January 205,572,291 OrdinarysharesissuedinJuly2019 8,384 OrdinaryIncorporationofEliaSystemOperator(31December2019)sharesissuedinDecember2020 13,689 Weightedaveragenumberofshareson31December 205,585,980 8,384 Withtheincorporation oftheactivities of Elia SystemOperator NV/SA inElia Transmission Belgium NV/SA, 205,585,980 shares were created.Asthisoccurredon31December2019,theweightedaverageofthisoperationin2019wasequalto0. DILUTED EPS DilutediblenumberDilutedearningspersharearedeterminedbyadjustingtheprofitorlossattributabletoordinaryshareholdersandtheweightedaverageofordinarysharesoutstandingfortheeffectsofalldilutivepotentialordinaryshares,whichcompriseshareoptionsandconvert-bonds.earningspershareareequaltobasicearningspershare,sincetherearenoshareoptionsorconvertiblebonds. Share capital and reserves per share endSharecapitalandreservespersharetotalled€11.2pershareon31December2020,comparedwithavalueof€10.74pershareattheof2019.

Belgium | Annual report 2020

Totalincometaxesanddeferredtaxesrecognisedinprofitandloss 44.1

RECONCILIATION OF THE EFFECTIVE TAX RATE

Shareofprofitofequity-accountedinvestees (2.3)

Theconsolidatedincomestatementincludesthefollowingtaxes: (in€million) 2020 Currentyear 42.6 Adjustmentsforprioryears 1.5

Totaldeferredtaxesexpenses (0.1)

2.1. Earnings

Non-deductibleexpenses 2.2 Adjustmentsforprioryears 1.5 Taxshelterinvestments (0.4) Other 0.4 Incometaxexpense 44.1

BASIC EPS

Elia Transmission 63RECOGNISED

applicableThetaxontheGroup'sprofit(loss)beforetaxdiffersfromthetheoreticalamountthatwouldariseusingtheBelgianstatutorytaxratetoprofits(losses)oftheconsolidatedcompanies: (in€million) 2020 Profitbeforeincometax 170.6 Incometaxexpense 44.1 Incometax,usingthedomesticcorporatetaxrate 42.7 Domesticcorporateincometax 25.00%

TheTheothercomprehensiveincomeonpost-employmentobligationshadanegativeimpactof€4.2million.SeeNote6.14formoredetails.relatedtaxonthesetwoelementsbalancedeachotherout,resultinginatotalothercomprehensiveincomeof€0.2million.

Remeasurementsofpost-employmentbenefitobligations

ThereportedincomeTotalcomprehensiveincomeincludesboththeresultoftheperiodrecognisedinthestatementofprofitorlossandothercomprehensiverecognisedinequity.‘Othercomprehensiveincome’includesallchangesinequityotherthanowner-relatedchanges,whichareinthestatementofchangesinequity.totalothercomprehensiveincomefor2020amountsto€0.2millionpositiveimpact. Cashflowhedges valueswapsThefairvaluechangeofthecashflowhedgeshadapositiveimpactof€4.4milliononothercomprehensiveincome.TheinterestraterelatedtotheloanwithPubli-Partandotherloansoutstandingatyear-end2019weresettledendofJune2020.Thenegativefairof€4.4millionwasrecycledintheprofitorloss.

Elia Transmission Belgium | Annual report 2020 64 2.2.

Other comprehensive income

Balanceat31December2019 211.3 6,179.1 191.2 26.9 50.7 686.27,345.5 Balanceat1January2020 211.3 6,179.1 191.2 26.9 50.7 686.27,345.5

Property, plant (in€million) buildingsLandand andMachineryequip-ment andFurniturevehiclesOthertan-gibleas-setsLeasingandsimilarrightsAssetsundercon-struc-tion Total

BalanceACCUMULATEDDEPRECIATIONANDIMPAIRMENTat31July20190.0 0.0 0.0 0.0 0.0 0.0 0.0

Balanceat31December2020 183.4

BalanceACQUISITIONVALUEat31July2019 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Elia Transmission Belgium | Annual report 2020 65 Items in the consolidated statement of financial position

Balanceat31December2019 (27.1) (2,864.3) (149.3) (24.5) (11.9) 0.0(3,077.1)

derAcquisitionbusinesscombinationsun-commoncontrol 211.3 6,179.1 191.2 26.9 50.7 686.2 7,345.5

derAcquisitionbusinesscombinationsun-commoncontrol (27.1) (2,864.3) (149.3) (24.5) (11.9) 0.0 (3,077.1)

Balanceat1January2020 (27.1) (2,864.3) (149.3) (24.5) (11.9) 0.0(3,077.1)

Transfersfromoneheadingtoanother 0.0 3.0 0.0 (3.0) 0.0 0.0 Balanceat31December2020 (29.1) (2,987.0) (157.2) (29.1) (21.0) 0.0(3,223.4) CARRYINGAMOUNT Balanceat31July2019 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Balanceat31December2019 184.2 3,314.8 41.9 2.5 38.8 686.2 4,268.4 Balanceat1January2020 184.2 3,314.8 41.9 2.5 38.8 686.2 4,268.4 3,788.6 2.3 32.4 377.9 4,427.5 OutstandingThereDuringBelgiumconnectionmentsEliationtheDespitethecontinuingpublichealthcrisis,theGroupdeliveredonitsinvestmentplansin2020.Whilethelockdownmeasuresaffectedroll-outoftheinvestmentprogrammeinthefirsthalfof2020,Eliasucceededinmakingupforthedelaysincurredonsomeconstruc-sitesinthesecondhalfoftheyear.Transmissionmadeinvestmentsofintotal€347.6millionovernumerousprojects.Investmentstobehighlightedincludetheinvest-linkedtotheBraboIIprojectmarkingthecompletionofthenew380-kVlooparoundtheportofAntwerp(€25million)andtheofthelasttwooffshorewindfarmsontotheMOGplatform(€4.0million).ALEGrO,thefirstelectricityinterconnectorbetweenandGermany,enteredcommercialoperationandwassuccessfullyenergised.2020,€7.8millionofborrowingcostswerecapitalisedonassetsunderconstruction,basedonanaverageinterestrateof2.03%.werenomortgages,pledgesorsimilarsecuritiesonPP&Erelatingtoloans.capitalexpenditurecommitmentsaredescribedinNote8.2.

Additionsandremeasurements 0.7 157.3 12.3 0.2 3.1 173.9 347.6 Disposals (0.6) (36.9) (3.4) 0.0 (0.4) (0.9) (42.2)

Balanceat31December2020 212.5 6,775.6 200.1 31.3 53.4 377.97,650.9

and equipment

42.9

Depreciation (2.0) (153.3) (11.2) (1.6) (9.3) (177.5) Disposals 0.0 27.6 3.4 0.0 0.1 31.2

Transfersfromoneheadingtoanother 1.1 476.1 0.0 4.2 0.0 (481.4) 0.0

Balanceat31December2020 136.5 7.4 0.0 143.9

CARRYINGAMOUNT Balanceat31July2019 0.0 0.0 0.0 0.0 Balanceat31December2019 33.8 1.3 0.0 35.1 Balanceat1January2020 33.8 1.3 0.0 35.1 39.0 3.8 0.0 42.8

Balanceat31December2020

Duringoperations.SoftwarecomprisesbothITapplicationsdevelopedbytheCompanyforoperatingthegridandsoftwarefortheGroup'snormalbusiness2020,€0.2millioninborrowingcostswerecapitalisedonsoftwareindevelopment,basedonanaverageinterestrateof2.03% Goodwill (in€million) Goodwill ACQUISITIONVALUE Balanceat31July2019 0.0 Acquiredbybusinesscombinations 1,707.8 Balanceat31December2019 1,707.8 Balanceat1January2020 1,707.8 Balanceat31December2020 1,707.8

Balanceat31December2019 (88.4) (3.0) 0.0 (91.4)

Elia Transmission Belgium | Annual report 2020 66 Intangible assets (in€million) costsDevelopmentofsoftwareLicenses/concessions Otherintangibleassets Total BalanceACQUISITIONVALUEat31July2019 0.0 0.0 0.0 0.0

Balanceat31December2019 122.2 4.3 0.0 126.5 Balanceat1January2020 122.2 4.3 0.0 126.5 Additions 14.3 3.1 0.0 17.4 Disposals (0.0) (0.0) 0.0 (0.0) Transfers 0.0 0.0 0.0 0.0

BalanceACCUMULATEDDEPRECIATIONANDIMPAIRMENTat31July20190.0 0.0 0.0 0.0

derAcquisitionbusinesscombinationsun-commoncontrol (88.4) (3.0) 0.0 (91.4)

derAcquisitionbusinesscombinationsun-commoncontrol 122.2 4.3 0.0 126.5

Balanceat1January2020 (88.4) (3.0) 0.0 (91.4) Depreciation (9.0) (0.6) 0.0 (9.6) Disposals 0.0 0.0 0.0 0.0 Transfers 0.0 0.0 0.0 0.0 Balanceat31December2020 (97.4) (3.6) 0.0 (101.0)

ThecashtorythatremunerationNoteofFuture(DDM),valuationTheimpairmentAsactivity,catedcountingthedifferenceparentAtknow-how.gridyearsamountlion.In2002,theacquisitionofEliaAssetbytheCompanyfor€3,304.1millionresultedinapositiveconsolidationdifferenceof€1,700.1mil-Thispositiveconsolidationdifferencewastheresultofthedifferencebetweentheacquisitionvalueofthisentityandthecarryingofitsassets.Thisdifferenceconsistsofvariousaspectssuchasthefactthat(i)EliawasappointedasaTSOforaperiodof20(ii)EliahaduniqueresourcesinBelgiumasEliaownsthewholeofthevery-high-voltagegridandowns94%ofthehigh-voltage(orhastherighttousethis),andhenceonlyEliaisentitledtoputforwardadevelopmentplanand(iii)EliahadtherelevantTSOthedateofacquisition,thedescriptionorthequantificationineurosoftheseaspectscouldnotbeperformedonanobjective,trans-andreliablebasisandtherefore,thedifferencecouldnotbeallocatedtospecificassetsandwasconsideredunallocated.ThishasthereforebeenrecognisedasgoodwillsincetheinitialadoptionofIFRSin2005.Theregulatoryframework,inparticularoffsettinginthetariffsofthedecommissioningoffixedassets,applicablefrom2008onwards,didnothaveanimpactonthisac-treatment.ThegoodwilldescribedaboveandthegoodwillresultingfromtheacquisitionofEliaEngineeringin2004wereallo-tothesinglecash-generatingunitfortheimpairmenttestdetermined,sincetheincomeandexpensesweregeneratedbyonespecifically'regulatedactivityinBelgium',whichwillalsobeconsideredtobeonecash-generatingunit.aresult,theCompanyassignedthecarryingamountofthegoodwilltooneunit,theregulatedactivityinBelgium.Since2004,annualtestshavebeenconductedandhavenotresultedinrecognitionofanyimpairmentlosses.impairmenttestwasconductedbyanindependentexpert.Thisimpairmenttestisbasedonthevalueinuseandusestwomainmethodstoestimatetherecoverableamount,1)adiscountedcashflowsmethod(DCF)and2)adividenddiscountmodelbothofwhicharefurtherdetachedinvaluationvariantsdependingontheterminalvaluecalculation.cashflowsandfuturedividendsarebasedonabusinessplanfortheperiod2020-2029.AstheassetbaseoftheGroupconsistsassetswithlongusefullifes,thebusinessplan’sprojectionperiodhasbeensettoencompassthecomingtworegulatoryperiods.thattheregulatoryframeworkwithinwhichEliaoperatesischaracterisedbyanallowedrevenuesbasisstructuredaround1)afairoftheregulatoryassetbaseand2)incentivestoguaranteethecontinuityofsupplyandimproveefficiency.Consideringtheregulatorwillallowafairremunerationoftheregulatoryassetbaseconsistentwithmarketexpectations,theestimatedregula-assetbaseforthelastforecastyearcanbeconsideredanindicationoftheterminalvalue.Thisapproachdoesnotcapturepotentialflowsfrommeetingorbeatingfutureefficiencytargets.valuationmethodsaresubjecttodifferentassumptions,mostimportantly:1.Discountingoffuturecashflows(DCF-models):Discountrate:

Acquisition of Elia Asset and EliaEngineering

Elia Transmission Belgium | Annual report 2020 67 CARRYINGAMOUNT Balanceat1January2019 0.0 Balanceat31December2019 1,707.8 Balanceat1January2020 1,707.8 Balanceat31December2020 1,707.8 AssetThegoodwillrelatestothefollowingbusinesscombinationsandisallocatedtotheCGUEliaTransmissionfortheacquisitionofEliaandEliaEngineering: (in€million) 2020 2019 AcquisitionEliaAsset–2002 1,700.1 1,700.1 AcquisitionEliaEngineering–2004 7.7 7.7 Total 1,707.8 1,707.8 IMPAIRMENT TEST FOR CASH-GENERATING UNITS CONTAINING GOODWILL withCash-generatingevent.AccordingtoIFRSrules,goodwillshouldbetestedforimpairmentatleastonanannualbasisorupontheoccurrenceofatriggeringGoodwillisallocatedtothecashgeneratingunits(CGUs)EliaTransmissionand50HertzTransmissionforimpairmenttesting.unitstowhichgoodwillhasbeenallocatedaretestedforimpairmentatleastannuallybycomparingthecarryingvalueitsrecoverableamountwhichisthehigheroftheirfairvaluelesscoststosellorvalue-in-use.

o CostofEquityof6.5%;  Risk-free-rate:-0.3%  Beta0.8  Equitymarketriskpremium5.5%  Countryriskpremium0.5%  Smallfirmpremium1.8% o Pre-taxCostofDebtof1.1%; o Corporatetaxrateof25%; o Targetgearing(D/(D+E)):60%; o Post-taxWACC:3.1%. Terminalvaluebasedonthreevariants: o Terminalvaluebasedona1.18xRABmultiplein2029

Equity-accounted investees

o Terminal value based on a value driver approach, assuming any new CAPEX after 2029 will generate a return equaltotheWACCof3.1%.ThismeansthatCAPEXintheterminalvaluewillneithercreatenordestroyvalue. o theTerminalvaluebasedonaperpetualgrowthrateof1.0%reflectingthelong-terminflationexpectationreportedbyInternationalMonetaryFund(IMF).

Conclusion:

Jointventures NemoLinkLtd withThetheseNemoonToThereliabilitysubstationbetweenOn27February2015,EliaSystemOperatorandNationalGridsignedajointventureagreementtobuildtheNemoLinkInterconnectorBelgiumandtheUK.Thisprojectconsistsofsubseaandundergroundcablesconnectedtoaconverterstationandanelectricityineachcountry,allowselectricitytoflowineitherdirectionbetweenthetwocountriesandgivetheUKandBelgiumimprovedandaccesstoelectricityandsustainablegeneration.Eachshareholderholdsa50%stakeinNemoLinkLtd,aUKcompany.interconnectionwascommissionedinlateJanuary2019.financetheprojectbothshareholdershaveprovidedfundingtoNemoLinkLtdsince2016viaequitycontributionsandloans(divideda50/50basis).InJune2019,theloanswereincorporatedinthesharecapital(loanswaptoequity).LinkLtdhasreducedits’sharecapitalinJuneandDecember2020,byrespectively€17.3millionand€13.2million.Inadditiontocapitalreductionrounds,dividendswerepaidouttohisshareholdersforatotalof€24.0million.followingtablesummarisesthefinancialinformationofthejointventure,basedonitsIFRSfinancialstatementsandreconciliationthecarryingamountfortheGroup'sinterestintheconsolidatedfinancialstatements.

plannedprofitsistsTerminalvaluebasedonaperpetualgrowthrateof1.0%.Thisapproachassumesthattheresidualvaluecon-ofprofitaftertaxlessinvestmentsandconsidersnetborrowings(inrelationtotheinvestments).However,andthusdividendpaymentsinFY29ismostlikelynotyetcapturingthe(positive)impactoftheinvestmentsinFY25-FY29.

o CostofEquityof6.5%

ThepotentialimpactofCovid-19istakenintoaccountintheDCFModelespeciallyinthecreditspreadthatisusedtocalculatethecostsofdebtintheWACCisbasedonareducedcreditratingthatcapturestheimpactofCovid-19.

DiscountDiscountingoffuturedividends(DDM-models):rate:

Terminalvaluebasedontwovariants:

NB:assuch,theRABitselfdoesnotcapturethecontributionoftheincentiveremunerationtothevaluecreationprocess. o

(in€million) 2020 2019 Percentageownershipinterest 50.0% 50.0%

NB:assuch,theRABitselfdoesnotcapturethecontributionoftheincentiveremunerationtothevaluecreationprocess.

jointTheGrouphasareceivableoutstandingtoathirdpartyforanamountof€0.5million.ThisreceivablewasgrantedforthefinancingofaprojectwithElia.€1.8millionwasreimbursedduringthecourseof2020.

AsTheindependentanalysis,basedona(€3,323million)midpointofthedifferentvaluationapproachesandvariantsused,andsensi-tivityanalysisdidnotresultintheidentificationofanimpairmentofgoodwillinthefinancialyear2020.Moreover,marketmulti-ples(basedoncurrententerprisevaluesandcurrent/forecastedEBITDA)wereappliedforplausibility.themedianandtheaverageofthedifferentmethodspresentedabovewererelativelyfarapart(€2.394millionand€3.275millionrespectively),mainlyduetodifferencesinassumptionsintheterminalvalue,theexpertbaseditsmid-pointon75%oftheme-dianand25%oftheaverage,bearinginmind,amongotherfactors,thatthemedianalonemightnotappropriatelyreflecttheimpactoftheincentiveremunerationintheterminalvalue(seeaboveformoredetails).

Elia Transmission Belgium | Annual report 2020 68

o Terminalvaluebasedon1.18xRABmultiplein2029.

Non-current trade and other receivables (in€million) 2020 2019 Loanstothirdparties 0.5 2.3 Total 0.5 2.3

spectiveTheNoneequityberstakeSwitzerland,HGRTtheThesystemsInGroupinfluencetheplayersTheTheGrouphasfourassociates,allofwhichareequity-accountedinvestees.Grouphasa16.5%stakeinEnervalisNV,astart-upthatdevelopsinnovativesoftware-as-a-servicesolutionsthatwillallowmarkettooptimisetheirenergybillswhilehelpingtomeetthegrowingneedforflexibilityintheelectricitysystem.ArepresentativeofGrouphasbeenappointedamemberofEnervalis'sBoardofDirectors.TheGroupthereforeconsidersitselfashavingasignificantandEnervalisis,assuch,accountedforusingtheequitymethod.ThepercentageownershipinterestdilutedslightlyasthedidnotfullyparticipatedinanewcapitalroundinitiatedbyEnervalisNV.August2020,theGrouphassoldits20.5%stakeinAmpacimonSA,aBelgiancompanyworkingondevelopinginnovativemonitoringforTSOsanddistributionsystemoperators(DSOs).Grouphasa15.8%stakeinCoresoNV/SA.CoresoNV/SAisacompanythatprovidescoordinationservicesaimedatfacilitatingsecureoperationofthehigh-voltageelectricitysysteminseveralEuropeancountries.SASisaFrenchcompanywitha49.0%stakeinEpexSpot,theexchangeforpowerspottradinginGermany,France,Austria,Luxembourgand(throughits100%associateAPX)theUK,NetherlandsandBelgium.TheGroupitselfholdsa17.0%inHGRT.AsoneofthefoundingpartnersofHGRT,theGrouphasa'goldenshare',enablingtheGrouptohaveaminimumnum-ofrepresentativesontheBoardofDirectors.ThisconstitutesasignificantinfluenceandthereforeHGRTisaccountedforusingthemethod.In2020,theGroupreceivedadividendof€1.7millionfromHGRT(€2.6millionin2019).ofthesecompaniesarelistedonanypublicexchange.followingtableillustratesthesummarisedfinancialinformationoftheGroup'sinvestmentinthesecompanies,basedontheirre-financialstatementspreparedinaccordancewithIFRS.

(in€million) Enervalis Ampacimon Coreso HGRT 2020 2020 2020 2020 Percentageownershipinterest 16.5% 0.0% 15.8% 17.0% Non-currentassets 0.0 9.0 94.3 Currentassets 9.1 4.4 1.0 Currentliabilities 0.0 9.7 0.0 Equity 9.1 3.7 95.3 Group'scarryingamountfortheinterest 1.5 0.0 0.6 16.2 Revenuesandotherincome 0.0 0.0 20.1 0.0 Profitbeforeincometax 0.0 0.0 0.9 11.1 Incometaxexpense 0.0 0.0 (0.3) (0.1) Profitfortheyear 0.0 0.0 0.1 11.0 Totalcomprehensiveincomefortheyear 0.0 0.0 0.1 11.0

Elia Transmission Belgium | Annual report 2020 69 Non-currentassets 643.3 660.8 Currentassets 27.5 33.9 Non-currentliabilities 42.3 30.9 Currentliabilities 19.2 14.8 Equity 609.2 649.0 Group'scarryingamountfortheinterest 304.6 324.5 Revenuesandotherincome 69.2 Totaldepreciationandamortisation (27.0) Netfinancecosts (0.2) Profitbeforeincometax 27.9 Incometaxexpense (12.7) Profitfortheyear 14.7 Totalcomprehensiveincomefortheyear 14.7 Group'sshareofprofitfortheyear 7.4 DividendsreceivedbytheGroup 12.0 Associates

Otheritems 0.2 (7.4) 0.2

Elia Transmission Belgium | Annual report 2020 70 Group'sshareofprofitfortheyear 0.0 0.0 0.0 1.9 (in€million) Enervalis Ampacimon Coreso HGRT 2019 2019 2019 2019 Percentageownershipinterest 17.4% 20.5% 15.8% 17.0% Non-currentassets 0.0 0.0 7.9 93.3 Currentassets 6.0 2.6 3.6 1.0 Currentliabilities 0.0 0.0 8.4 0.0 Equity 6.0 2.6 3.2 94.3 Group'scarryingamountfortheinterest 1.0 0.5 0.5 16.0 Other financial assets (in€million) 2020 2019 Immediatelyclaimabledeposits 7.0 7.0 Othershareholdings 0.2 0.2 Reimbursementrights 53.8 53.1 Total 61.0 60.3

thisregulator'SchemereimbursementunfundedTheImmediatelyclaimabledepositsaremeasuredatfairvalue.TheriskprofileoftheseinvestmentsisdiscussedinNote8.1.reimbursementrightsarelinkedtotheobligationsfor(i)theretiredemployeesfallingunderspecificbenefitschemes(SchemeB-plan)andfor(ii)themedicalplanandplanfortariffbenefitsforretiredstaffmembers.SeeNote6.14:‘Employeebenefits’.Therightsarerecoverablethroughtheregulatedtariffs.Thefollowingprincipleapplies:allincurredpensioncostsforB'retiredemployeesandthecostslinkedtohealthcareandtariffbenefitsforretiredEliastaffmembersaredefinedbythe(CREG)asnon-controllableexpensesthatarerecoverablethroughtheregulatorytariffs.TheincreaseinthecarryingvalueofassetisdisclosedinNote6.14:‘Employeebenefits’. (0.1) (7.4)

Deferred tax assets and liabilities RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES (in€million) 2020 2019 Assets Liability Assets Liability Property,plantandequipment 1.4 (53.9) 1.4 (50.8) Intangibleassets 0.0 (6.3) 0.0 (8.6) Interestbearingloansandothernoncurrentfinancialliabilities 8.2 (2.5) 10.9 (2.4) Employeebenefits 22.6 (13.5) 22.1 (13.3) Provisions 5.6 0.0 5.1 0.0 Deferredrevenue 24.5 0.0 21.8 0.0 Deferredtaxoninvestmentgrants 0.0 (1.1) 0.0 (1.1) Lossescarriedforward 0.0 0.0 0.0

Taxasset/liabilitybeforeoffsetting 62.5 (84.7) 61.5 (83.7)

Deferredtaxoninvestmentgrants (1.1) 0.0 0.0 (1.1) Otheritems (7.2) 0.1 0.0 (7.1) Total (22.2) 0.1 (0.1) (22.2)

AND LIABILITIES

CHANGES ASSETS RESULTING FROM MOVEMENTS INTEMPORARY DURING THE FINANCIAL YEAR 2020 Property,plantandequipment (49.4) (3.1) 0.0 (52.5) Intangibleassets (8.6) 2.3 0.0 (6.3) Interest-bearingloansandothernon-currentfinancialliabilities 8.5 (1.7) (1.1) 5.7 Employeebenefits 8.8 (0.7) 1.1 9.2 Provisions 5.1 0.5 0.0 5.6 Deferredrevenue 21.8 2.6 0.0 24.4 Lossescarriedforward (0.1) 0.1 0.0 0.0

Thedeferred taxliabilityonright-of-useassets from IFRS 16 leases is shown underproperty,plant and equipment, the deferredtax assetonfinanceleaseliabilityisshownunder’Interest-bearingloansandothernon-currentfinancialliabilities’. UNRECOGNISED

Thechangesindeferredtaxassetsandliabilitiescanbepresentedasfollows:

DEFERRED TAX ASSETS ORLIABILITIES

Elia Transmission Belgium | Annual report 2020 71 Offsettingoftax (60.5) 60.5 (60.9) 60.9 Nettaxasset/(liability) 2.0 (24.2) 0.6 (22.8)

DIFFERENCES

IN DEFERRED TAX

Therearenounrecogniseddeferredtaxassetsorliabilitiesat31December2020. Inventories (in€million) 2020 2019 Rawmaterialsandconsumables 30.0 29.9 Write-downs (15.3) (15.2) Total 14.7 14.6 inWrite-downsoverheadThewarehouseprimarilystoresreplacementandsparepartsformaintenanceandrepairworkontheGroup'shigh-voltagesubstations,linesandundergroundcables.arerecordedfollowingthenon-utilisationofstockitemsbasedontheirunderlyingrotation.Thesewereslightlyhigherthan2019. Current trade and other receivables, deferred charges and accrued revenues (in€million) 2020 2019 Contractassets 0.2 1.1 Tradeandotherreceivablesandadvancepayments 349.2 158.0 Levies 144.3 2.3 VATandothertaxes 20.7 3.2 Other 4.0 49.3 Deferredchargesandaccruedrevenues 5.4 6.4

2020.relatesTaxreceivablesdecreasedcomparedwiththepreviousyear.The€1.4millioninincometaxreceivablesat31December2020mainlyto2020advancesoncorporationtaxtoberecoveredinfinancialyear2021.Incometaxliabilitiesincreasedto€8.6millionin 20.5 159.6 21.5 Total 188.6 42.0

(in€million) 2020 2019 Notpastdue

Pastdue0-30days

Elia Transmission Belgium | Annual report 2020 72 Total 523.9 220.3

Total(excl.impairment)

Doubtfulamounts

AtTheNewoperations.ContractTradereceivablesarenon-interest-bearingandgenerallyhavepaymenttermsof15to30days.assetsdecreasedfrom€1.1millioninthepreviousyearto€0.2millionatyear-endandarerelatedtothetransmissionsystemtariffsfor‘Levies’(€144.3million)havebeenapproved,themostimportantamountswillberecoveredin2021and2022.Group'sexposuretocreditandcurrencyrisks,andimpairmentlossesrelatedtotradeandotherreceivablesareshowninNote8.1.31December,theageinganalysisoftradeandotherreceivablesandadvancepaymentsisasfollows: 326.9 147.0 19.7 12.0 Pastdue3160days 0.3 0.2 Pastdue61days oneyear 1.3 1.7 Pastdueoneyear twoyears 1.4 0.3 349.6 161.2 3.9 1.0 Amountswriteoffs (3.4) (3.4) (0.9) (0.8) Total 349.2 158.0 SeeNote8.1foradetailedanalysisofthecreditriskincurredinconnectionwiththesetradereceivables.

Cash and cash equivalents (in€million) 2020 2019 Short termdeposits 29.0

Balanceatbank

TheBank-accountmonths),Short-termternalCashandcashequivalentsincreasedcomparedtopreviousyearasaresultofapositivecashinflowintheoperatingactivitiesandex-financingwhichexceededtheinvestingactivitiesin2020.depositsareinvestedforperiodsvaryingfromafewdaysandafewweekstoseveralmonths(generallynotexceedingthreedependingonimmediatecashrequirements,andearninterestinaccordancewiththeinterestratesfortheshort-termdeposits.balancesearnorpayinterestinlinewiththevariableratesofinterestonthebasisofdailybankdepositinterestrates.Group'sinterestrateriskandthesensitivityanalysisforfinancialassetsandliabilitiesarediscussedinNote8.2.

Allowanceforexpectedcreditlosses

Current tax assets and liabilities (in€million) 2020 2019 Taxreceivables 1.4 2.6 Taxliabilities (8.6) (1.6) Nettaxasset/(liability) (7.2) 1.0

Elia Transmission Belgium | Annual report 2020 73 millionThecashandcashequivalentsdisclosedaboveandinthestatementofcashflowsinclude€31.7millionheldbyEliaREofwhich€1.0isrestrictedinuse. Shareholders’ equity SHARE CAPITAL ANDSHARE PREMIUM Numberofshares 2020 2019 Outstandingon1January 205,572,291 Issuedagainstcashpayment 499,640 20,000 Acquiredbybusinesscombinations 205,552,291 Numberofshares(endofperiod) 206,071,931 205,572,291

RESERVES

holderscarriedThereserveInlinewithBelgianlegislation,5%oftheCompany'sstatutorynetprofitmustbetransferredtothelegalreserveeachyearuntilthelegalrepresents10%ofthecapital.Fromthestatutorynetprofitof2019,€2.8millionwastransferredtothelegalreservein2020.BoardofDirectorscanproposethepayoutofadividendtoshareholdersuptoamaximumoftheavailablereservesplustheprofitforwardfromtheCompany’spreviousfinancialyears,includingtheprofitforthefinancialyearended31December2020.Share-mustapprovethedividendpaymentattheAnnualGeneralMeetingofShareholders. HEDGING RESERVE profitregardThehedgingreservecomprisestheeffectiveportionofthecumulativenetchangeinfairvalueofcash-flowhedginginstrumentswithtohedgedtransactionsthathavenotyetoccurred.In2020,thehedgingreservewithafairvalueof€3.3millionwasrecycledinorlosswiththesettlementoftheoutstandingthreeinterestrateswaps.Seenote8.1formoredetails.

tionemployees.maximumThesionthisOncash.EliaTransmissionBelgiumNV/SAwasestablishedon31July2019withasharecapitalof€0.2millionfor20,000shares,fullypaidin31December2019,EliaTransmissionBelgiumNV/SAincorporatedtheregulatedactivitiesofEliaSystemOperatorNV/SA.Withtransaction205,552,291newshareswerecreatedtoreflecttheequitytransferfromEliaSystemOperatorNV/SAtoEliaTransmis-BelgiumNV/SA.Therewasnocashconsideration.extraordinaryshareholders'meetingof19May2020decidedtoexecuteacapitalincreaseintwosteps/periods(onein2020foraof€5.0millionandtheotherin2021foramaximumof€1.0million),foratotalmaximumamountof€6.0millionforitsBelgianThefirsttrancheofthiscapitalincreaseforemployeestookplaceinDecember2020.Thetransactionresultedinthecrea-of499,640newsharesforatotalamountof€5.0million,forthetotalamountconsistingofcapitalincrease.

DIVIDEND Afterthereportingdate,theBoardofDirectorswillputforwardthedividendproposalindicatedbelow.

Interest-bearing loans, borrowings and lease liabilities (in€million) 2020 2019 Noncurrentborrowings 3,599.5 2,674.1 Leaseliabilities noncurrent 25.2 30.5 Subtotalnon-currentborrowings 3,624.7 2,704.6 Currentborrowings 22.3 542.6 Leaseliabilities current 7.7 8.6 Accruedinterest 47.9 41.8

ThetheshareholdersTheshare,AttheGeneralMeetingofShareholderson19May2020,theBoardofDirectorsproposedthepayoutofagrossdividendof€0.09peryieldingatotalamountof€18.9million.BoardofDirectors'meetingof2March2021proposedagrossdividendof€0.03pershare.ThisdividendissubjecttoapprovalbyattheAnnualGeneralMeetingon18May2021andisnotincludedasaliabilityintheconsolidatedfinancialstatementsofGroup.totaldividend,calculatedbasedonthenumberofsharesoutstandingon2March2021correspondstoatotalof€6.0million.

Dividend(in€) 2020 2019 Perordinaryshareentitledtodividend 0.03 0.09

InterestrateCurrentpro-portion-fixed

Eurobondissues2014/15years 2029 346.9 3.00% 100.00%

Eurobondissues2017/10years 2027 247.9 1.38% 100.00%

MaturityAmount

InformationwithMovementsthemillionInTheGrouphasissuedaEurobondof€800.0millionwithmaturitydate2030andaninterestratesof0.88%.addition,thejointventureinNemoLinkhasbeenrefinancedbyissuinganamortisingbondintwotranches,€66.6millionand€133.4withmaturitydate2028and2044,ataninterestrateof1.56%.TherefinancingaimsatbetteralignthefinancingstructurewithlifetimeoftheNemoLinkinterconnector.in'Other'inthefinancialyear2020mainlyrelatestoreclassificationsoflong-termdebttoshort-termdebtinaccordancewheninstrumentsbecomeduein2021.onthetermsandconditionsoftheoutstandinginterest-bearingloansandborrowingsisgivenbelow: (in€million)

Eurobondissues2019/7years 2026 498.3 1.38% 100.00%

Elia Transmission Belgium | Annual report 2020 74 Subtotalcurrentloansandborrowings 77.9 593.0 Total 3,702.6 3,297.6 cashThetablesbelowdisclosethechangesintheGroup'sliabilitiesarisingfromfinancingactivities,includingbothchangesarisingfromflowsandnon-cashchanges. (in€million) Currentinterst-bearingloansandborrowingsNon-currentinterst-bearingloansandborrowings Total Balanceat1January2020 593.0 2,704.6 3,297.6 Cashflow:interestpaid (76.8) 0.0 (76.8) Cashflow:repaymentofborrowings (567.6) (246.5) (814.1) Cashflow:proceedsfromwithdrawalborrowings 25.0 1,194.4 1,219.4 Interestaccruals 47.9 0.0 47.9 Other 56.5 (27.8) 28.8 Balanceat31December2020 77.9 3,624.7 3,702.6

Eurobondissues2015/8.5years 2024 498.6 1.38% 100.00%

Eurobondissues2013/15years 2028 547.3 3.25% 100.00%

Eurobondissues2020/10years 2030 788.5 0.88% 100.00% Amortisingtermloan 2033 195.7 1.80% 100.00% Amortisingbond-7,7years 2028 67.1 1.56% 100.00%

Amortisingbond-23,7years 2044 132.3 1.56% 100.00% EuropeanInvestmentBank 2025 100.0 1.08% 100.00% Total 3,621.8 100.00% stituteTheabove€3,621.8millionistobeincreasedwith€47.9millionofinterestaccrualsand€32.9millionoffinanceleaseliabilitiestorecon-theoveralldebtof€3,702.6million. Employee benefits TheGrouphasvariouslegalandconstructivedefinedbenefitobligationslinkedtoitsBelgianoperations.Thetotalnetliabilityforemployee-benefitobligationsisasfollows: (in€million) 2020 2019

Eurobondissues2013/20years 2033 199.2 3.50% 100.00%

Elia Transmission Belgium | Annual report 2020 75 Definedbenefitplans 17.6 20.5 Post employmentbenefitsotherthanpensions 73.4 67.0 Totalprovisionsforemployeebenefits 91.0 87.5 BELGIUM

DEFINED-CONTRIBUTIONPLANS

OTHERPERSONNELOBLIGATIONS

DEFINED-BENEFITPLANS

EMPLOYEE BENEFIT OBLIGATIONS AT GROUP LEVEL TheGroup’snetliabilityforemployeebenefitobligationsisasfollows: (in€million) Pensions Other 2020 2019 2020 2019 Presentvalueoffundeddefined-benefitobligation (257.1) (249.7) (77.4) (71.2) Fairvalueofplanassets 239.5 229.3 4.0 4.1 Netemployeebenefitliability (17.6) (20.4) (73.4) (67.1)

thesebursementEliaTransmission(Belgium)hasalsograntedstaffcertainearly-retirementschemesandotherpost-employmentbenefitssuchasreim-ofmedicalexpensesandacontributiontoenergyprices,aswellasotherlong-termbenefits(senioritypayments).Notallofbenefitsarefundedand,inaccordancewithIAS19,thesepost-employmentbenefitsareclassifiedasdefined-benefitplans.

fromBothreserves2016.Eliavaluedloaded,henceplan,employer,sionAsployer’sForleastcontributionThe1999Employeesremuneratedbasedonasalaryscaleandrecruitedafter1June2002,aswellasmanagementstaffrecruitedafter1Mayarecoveredbytwodefined-contributionpensionplans(PowerbelandEnerbel):TheEnerbelplanisaplanforsalariedemployeeshiredafter1June2002,towhichtheemployeeandtheemployercontributebasedonpredefinedformula.ThePowerbelplanisaplanformanagershiredafter1May1999.Thecontributionsoftheemployeeandemployerarebasedonafixedpercentageoftheemployee’ssalary.newlawonoccupationalpensionplans,publishedattheendof2015,madevariouschangestotheguaranteedreturnondefined-plans.Forpaymentsmadeafter1January2016,thelawrequiresemployerstoguaranteeanaverageannualreturnofat1.75%(upto3.75%dependingonwhocontributes)overthecourseofthecareer.insuredplanstheminimumguaranteedreturnuntil31December2015stillneedstobeequivalenttoatleast3.25%fortheem-contributionand3.75%fortheemployee'scontribution,withanyshortfallbeingcoveredbytheemployer.aresultoftheabovechangeandasmentionedintheaccountingpolicies,alldefined-contributionpensionplansunderBelgianpen-legislationareclassifiedasdefined-benefitplansforaccountingpurposesduetothelegalminimumreturntobeguaranteedbythewhichrepresentsaplanamendment.TheyareaccountedforwiththeProjectedUnitCreditmethod(PUC-method).Foreachthefairvalueofassetsequalsthesumoftheaccruedindividualreserves(ifany)andthevalueofthecollectivefund(s)(ifany),noapplicationofIAS19§115.Inaddition,withtheexceptionofEnerbel,thedefined-contributions(DC)plansarenotback-assuchtheseplansarevaluedwithoutprojectionoffuturecontributions.TheEnerbelDCplanisbackloadedandthisplaniswithprojectionoffuturecontributions.TransmissionBelgiumhastransferredcertainacquiredreservesguaranteedbytheinsurersto'Cashbalance–bestoff'planssinceThemainobjectiveoftheseplansistoguaranteeforeverysubscriberaminimumguaranteedreturnof3.25%ontheacquireduntilretirementage.employee'andemployer'contributionsarepaidonamonthlybasisforthebaseplans.Theemployee'contributionisdeductedthesalaryandpaidtotheinsurerbytheemployer.Theamountoffuturecashflowsdependsonwagegrowth. fromBoth–AsgasclosedtiveThethatfitssalaryForaclosedpopulation,collectiveagreementsintheelectricityandgasindustriesprovide‘pensionsupplements’basedontheannualandanemployee’scareerwithinacompany(partiallyrevertibletotheinheritorincaseofearlydeathoftheemployee).Thebene-grantedarelinkedtoElia’soperatingresult.Thereisnoexternalpensionfundorgroupinsurancefortheseliabilities,whichmeansnoreservesareconstitutedwiththirdparties.Theobligationsareclassifiedasadefinedbenefit.collectiveagreementdeterminesthatactivestaffhiredbetween1January1993and31December2001andallmanagerial/execu-staffhiredpriorto1May1999willbegrantedthesameguaranteesviaadefined-benefitpensionscheme(ElgabelandPensiobel–plans).Obligationsunderthesedefined-benefitpensionplansarefundedbyanumberofpensionfundsfortheelectricityandindustriesandbyinsurancecompanies.mentionedabove,EliaTransmissionBelgiumhastransferredcertainacquiredreservesguaranteedbytheinsurersto'Cashbalancebestoff'planssince2016.Asthisguaranteeisanobligationbytheemployer,theseplansrepresentdefined-benefitplans.employees'andemployers'contributionsarepaidonamonthlybasisforthebaseplans.Theemployee'scontributionisdeductedthesalaryandpaidtotheinsurerbytheemployer.

Definedbenefitcostsrecognisedinprofitorloss (9.8) (6.8)

Elia Transmission Belgium | Annual report 2020 76 limitAdditionally,leasedmentInprovisiontion,TheThenetemployeebenefitliabilityincreasedintotalby€3.5million.increaseismainlyexplainedbyaplanamendmenttoaligntheDefinedBenefitpensionplanwithnewlegislation.Thenewlegisla-applicableasofJune2018,prohibitsanticipativebenefitsinthesepensionplans.InJune2018,theGrouphassetupanIAS37of€8.5milliontorecognisetheimpactofthisnewlegislation.October2020,anewCollectiveLabourAgreement(CLA)wasagreedtoaligntheDBpensionplanstothenewlegislation.Thealign-resultedinanincreaseindefinedbenefitobligationof€14.8million.Togetherwiththealignment,theIAS37provisionwasre-tosetoffpartlytheimpact,resultinginanetpastservicecostof€6.3million.theCLAagreedtouseafundthatwasoverfundedby€2.4million,andwhichdidnothaveanyeconomicvaluebefore,totheimpactfortheemployer. Movementinthepresentvalueofthedefinedbenefitobligation Pensions Other (in€million) 2020 2020 Atthebeginningoftheperiod (249.7) (71.2) Currentservicecost (9.7) (2.1) Interestcost/income (1.8) (0.7) Contributionsfromplanparticipants (1.2) 0.0 loss,Includingremeasurementgains/(losses)inOCIandinStatementofprofitorarisingfrom

1)Changesindemographicassumptions (1.1) (0.7)

· Changesindemographicassumptions (1.1) (1.1) Changesinfinancialassumptions (8.4) (3.8) Changesfromexperienceadjustments 6.6 (0.9) Pastservicecost 0.0 (6.3) Paymentsfromtheplan 14.1 2.6 Transfers (6.0) 6.0 Attheendoftheperiod (257.1) (77.4)

2)Changesinfinancialassumptions (8.4) (3.4)

3)Changesfromexperienceadjustments 6.6 (1.2)

Amountsrecognizedincomprehensiveincome Pensions Other (in€million) 2020 2020 Servicecost Currentservicecost (9.7) (2.1) Pastservicecost 0.0 (6.3)

Interestcostondefinedbenefitobligation (1.8) (0.7) Interestincomeonplanassets 1.7 0.0 Other 0.0 2.2

Pensions Other (in€million) 2020 2020 Atthebeginningoftheperiod 229.3 4.1 Interestincome 1.7 0.0 ReturnRemeasurementgains/lossesinOCIarisingfrom:ofplanassets(excludinginterestincomeonplanassets) (0.0) 2.5 Contributionsfromemployer 19.0 2.6 Contributionsfromplanparticipants 1.2 0.0 Benefitpayments (14.1) (2.6) Transfers 2.6 (2.6) Attheendoftheperiod 239.5 4.0

Netinterestonthenetdefined-benefitliability/(asset) (0.1) (0.6)

Movementinthefairvalueoftheplanassets

Actuarialgains(/losses)ondefinedobligationsarisingfrom:

Breakdownofdefined-benefitobligationbytypeofplanparticipants (334.5) (320.9)

Terminatedplanparticipantswithdef.benefitentitlements (21.4) (18.1)

Otherpost-employmentbenefits (56.6) (44.5)

Investment risk (OCI).TheThepresentvalueofthedefined-benefitplanliabilityiscalculatedusingadiscountratedeterminedbasedonhigh-qualitycorporatebonds.differencebetweentheactualreturnonassetsandtheinterestincomeonplanassetsisincludedintheremeasurementscomponentCurrentlytheplanhasarelativelybalancedrangeofinvestments,asshownbelow: (in€million) 2020 2019 Investmentsquotedinanactivemarket 80.03% 79.97% Shares Eurozone 15.47% 14.90% Shares outsideEurozone 20.27% 20.87% Governmentbonds Eurozone 1.38% 1.59% Otherbonds Eurozone 28.42% 28.43% Otherbonds outsideEurozone 14.50% 14.17% Unquotedinvestments 19.97% 20.03% Property 2.66% 2.56% Cashandcashequivalents 3.01% 3.39% Other 14.30% 14.08% Total(in%) 100.00% 100.00% equityDuetothelong-termnatureoftheplanliabilities,itisconsideredappropriatethatareasonableportionoftheplanassetsbeinvestedinsecuritiestoleveragethereturngeneratedbythefund. Interest risk

Retirementanddeathbenefits (262.2) (262.7)

Senioritypayments (15.7) (13.8)

Breakdownofdefined-benefitobligationbytypeofbenefits (334.5) (320.9)

Returnonplanassets(excludinginterestincomeonplanassets) (0.0) (0.1) comprehensiveRemeasurementsofnetdefinedbenefit(liability)/assetrecognisedinotherincome(OCI) (2.9) (5.4) Total (12.7) (12.3) (in€million) 2020 2019

TheoutstandingExceptionalinterestbenefittheonaccountfinancingofTheTheabilitiesAratingtheWhendeterminingtheappropriatediscountrate,theGroupconsiderstheinterestratesofcorporatebondsincurrenciesconsistentwithcurrenciesofthepost-employmentbenefitobligationwithatleastan'AA'ratingorabove,assetbyaninternationallyacknowledgedagency,andextrapolatedasneededalongtheyieldcurvetocorrespondwiththeexpectedtermofthedefined-benefitobligation.stresstestisperformedannually.Thistestverifiesthattheminimumfundingrequirementsarecoveredtodealwith'shocks'withprob-ofoccurrenceof0.5%.members(mostly)contributetothefinancingoftheretirementbenefitsbypayingapersonalcontribution.annualbalanceofthedefined-benefitlumpsumisfinancedbytheemployerthrougharecurrentallowanceexpressedasapercentagethetotalpayrolloftheparticipants.Thispercentageisdefinedbytheaggregatecostmethodandisreviewedannually.Thismethodofinvolvessmoothingfuturecostsovertheremainingperiodoftheplan.Thecostsareestimatedonaprojectedbasis(takingintosalarygrowthandinflation).Theassumptionsrelatedtosalaryincrease,inflation,employeeturnoverandagetermaredefinedthebasisofhistoricaldatafromtheCompany.Themortalitytablesusedarethosecorrespondingtotheobservedexperiencewithinfinancingvehicleandtakeintoconsiderationexpectedchangesinmortality.TheGroupcalculatesthenetinterestonthenetdefined-liability(asset)usingthesamehigh-qualitybonddiscountrate(seeabove)usedtomeasurethedefined-benefitobligation(netapproach).Theseassumptionsarechallengedonaregularbasis.events(suchasmodificationoftheplan,changeofassumptionsandoverlyshortcoverageterms)caneventuallyleadtopaymentsfromthesponsor.defined-benefitplansexposetheCompanytoactuarialriskssuchasinvestmentrisk,interest-raterisk,longevityriskandsalaryrisk.

Elia Transmission Belgium | Annual report 2020 77

Activeplanparticipants (251.2) (248.8)

Retiredplanparticipantsandbeneficiaries (61.9) (54.0)

Elia Transmission Belgium | Annual report 2020 78 plan’sAdecreaseinthebondinterestratewillincreasetheplanliability.However,thiswillbepartiallyoffsetbyanincreaseinthereturnontheassets,ofwhichapproximately95%isnowinvestedinpensionfundswithanexpectedreturnof3.3%.

Expectedincreaseintariffadvantages

AverageassumedretirementageEmployee 63 63 Manager 65 65 Lifeexpectancyinyearsofapensionerretiringatage65atclosingdate:* Lifeexpectancyfora65yearoldmale 19.9 19.9 Lifeexpectancyfora65yearoldfemale 23.6 23.6 *Mortality tables used: IABE in Belgium (inyears) 2020 2019 Weightedaveragedurationofthedefinedbenefitobligation 8.8 9.0 Weightedaveragedurationofthedefinedcontributionplans 9.7 9.7 Weightedaveragedurationofthepost-employmentbenefitsotherthanpensions 13.4 13.5 BelowTheactualreturnonplanassetsin%for2020wasintherangeof0.9%to2.8%(comparedwitharangeof3.0%to19.0%in2019).isanoverviewoftheexpectedcashoutflowsfortheDBplans: Futureexpectedcashoutflows <12months 1-5years 6-10years Pensions

(15.1) (14.6) Other (2.8) (13.2) (15.3) Total(in€million) (6.0) (28.3) (29.9) Thereissomedegreeofuncertaintylinkedtotheaboveexpectedcashoutflowswhichcanbeexplainedbythefollowingfactors:Differencesbetweenassumptionsandactualdatacanoccur,e.g.retirementageandfuturesalaryincrease;Theexpectedcashoutflowsshownabovearebasedonaclosedpopulationandthereforedonotincorporatefuturenewhires;Futurepremiumsarecalculatedbasedonthelastknownaggregatecostrate,whichisreviewedonanannualbasisandvariesdependingonthereturnonplanassets,theactualsalaryincreaseasopposedtotheassumptions,andunexpectedchangesinthepopulation.

ACTUARIAL ASSUMPTIONS (in%andyears) 2020 2019 DiscountratePensionsdefinedbenefitplansandcashbalance bestoffplans 0.36% 0.64% Pensions definedcontributionplans 0.66% 1.02% -Other 0.70% 1.04% Expectedaveragesalaryincrease(excludinginflation) 1.00% 1.00% Expectedinflation 1.75% 1.75% Expectedincreaseinhealthbenefits(includinginflation)

Longevityrisk Thepresentvalue of thedefined-benefitplanliabilityiscalculatedbasedonthebestestimateofthemortalityofplanparticipantsboth tiveduringandaftertheiremployment.Anincreaseinthelifeexpectancyoftheplanparticipantswillincreasetheplan'sliability.Theprospec-mortalitytablesfromtheIA/BEhavebeenusedinBelgium. Salaryrisk inThepresentvalueofthedefined-benefitplanliabilityiscalculatedbasedonthefuturesalariesofplanparticipants.Assuch,anincreasethesalaryoftheplanparticipantswillincreasetheplan’sliability. 2.75% 2.75% 1.75% 1.75% (3.2)

Balanceat31December2019 9.6 3.3 20.5 2.2 35.5 Longtermportion 7.1 3.3 20.5 2.2 33.0 Shorttermportion 2.5 0.0 0.0 0.0 2.5

Elia Transmission Belgium | Annual report 2020 79SENSITIVITY ANALYSIS (inEffectondefined-benefitobligation€million) Increase(+)/Decrease(-) Impactonthenetdefined-benefitobligationofanincreasein: Discountrate(0.5%movement) (17.2) Averagesalaryincrease excl.inflation(0.5%movement) 26.7 Inflation(0.25%movement) 5.3 Increaseofhealthcarecarebenefits(1.0%movement) 5.2 Lifeexpectancyofpensions(1year) 3.3 REIMBURSEMENT RIGHTS(BELGIUM) Theassets.employees.benefitAsdescribedinNote6.6,anon-currentasset(withinotherfinancialassets)isrecognisedasreimbursementrightslinkedtothedefined-obligationforthepopulationbenefittingfromtheinterestschemeandmedicalplanliabilitiesandtariffbenefitsforretiredEliaEachchangeintheseliabilitiesequallyaffectsthecorrespondingreimbursementrightsundernon-currentotherfinancialchangeinreimbursementrightsispresentedbelow: Movementinthepresentvalueofthereimbursementrights Pensions Other (in€million) 2020 2020 Atthebeginningoftheperiod (23.1) (30.0) InterestCurrentservicecostscost/income (0.1) (0.3) Actuarialgains(/losses)ondefinedobligationsarisingfrom: 1)Changesindemographicassumptions 0.0 0.0 2)Changesinfinancialassumptions (0.5) (1.8) 3)Changesfromexperienceadjustments (1.6) (0.2) Paymentsfromtheplan 2.8 1.1 Attheendoftheperiod (22.6) (31.2) million),ThesumofPensions(€22.6million)andOther(€31.2million)reimbursementrightsamountedto€53.8millionin2020(2019:€53.1whichreconcileswiththereimbursementrightslistedinNote6.6. Provisions (in€million) Environment EliaRe DismantlingObligations Other Total Balanceat31July2019 0.0 0.0 0.0 0.0 0.0 commonAcquisitionbusinesscombinationsundercontrol 9.6 3.3 20.5 2.2 35.5

Balanceat1January2020 9.6 3.3 20.5 2.2 35.5 Increase 1.4 6.8 3.7 1.2 13.1 Reversals (1.0) (2.7) (1.0) (1.0) (5.7) Utilisation (0.8) (2.0) 0.0 (0.1) (2.8)

Discountingofprovisions 0.0 0.0 0.2 0.0 0.2 Balanceat31December2020 9.2 5.4 23.4 2.3 40.3 Long-termportion 7.5 5.4 23.4 2.3 38.5 Short termportion 1.8 0.0 0.0 0.0 1.8

Other NociatedtheGroup'consistsofvariousprovisionsforlitigationtocoverlikelypaymentwherelegalproceedingshavebeeninstitutedagainstthebyathirdpartyorwheretheGroupisinvolvedinlegalproceedings.Theseestimatesarebasedonthevalueofclaimsfiledoronestimatedlevelofriskexposure.Theexpectedtimingoftherelatedcashoutflowdependsontheprogressanddurationoftheasso-proceedings.assetshavebeenrecognisedinconnectionwiththerecoveryofcertainprovisions. mile2020,OtherThegrantsarereleasedinprofitandlosswhenentitlementtothemisacquired.non-currentliabilitiesremainedstableThedeferredincomerelatestoupfrontpaymentforthelastmileconnection,.Attheendofaliabilityof€97.8millionwasrecognisedwithintheGroup.Theincomeisreleasedoverthelifetimeoftheassetwherethelastconnectionrelatesto.

Trade and other payables (in€million) 2020 2019 Tradedebts 358.8 279.2 VATandothertaxes 12.8 3.0 Remunerationandsocialsecurity 29.6 31.9 Levies 54.6 57.2 Other 63.8 13.0 Total 519.5 384.3

EliaRe:Anamount of€5.4millionisincludedatyear-endforEliaRe,acaptivereinsurancecompany.€0.9millionofthisislinkedto progressclaimsforoverheadlines,and€4.5milliontoelectricalinstallations.Theexpectedtimingoftherelatedcashoutflowdependsontheanddurationoftherespectiveprocedures. Dismantlingprovisions: AspartoftheGroup’sCAPEXprogramme,theGroupisexposedtodecommissioningobligations;mostof ‘fortheTheapproachlion.andwhicharerelatedtooffshoreprojects.Theseprovisionstakeintoaccounttheeffectofdiscountingandtheexpectedcostofdismantlingremovingtheequipmentfromsitesorfromthesea.Thecarryingamountoftheprovisionasat31December2020was€116.3mil-Theincreaseismainlyduetoadropinthediscountratefordiscountingoftheprovisions.TheGrouphasappliedacase-by-casetoestimatethecashoutflowneededtosettletheliability.Groupusescorporatebondrates(minimumAArating)andsetsthemouttomatchthelifetimeoftheprovisionsinordertodiscountdismantlingprovisions.Incasethediscountrateisbelow0%,therateisflooredat0%.Thediscountratesusedin2020was0.87%thedismantlingprovisionoutstanding.Shouldthediscountratefallto0%thedismantlingprovisionswouldincreaseby€6.7million.

TheGrouphasrecognisedprovisionsforthefollowing:

Other non-current liabilities (in€million) 2020 2019 Investmentgrants 3.4 3.6 Non-currentdeferredincome 97.8 87.3 Total 101.2 90.9

Elia Transmission Belgium | Annual report 2020 80

Environment: Theenvironmentalprovisionprovidesforexistingexposurewithrespecttolanddecontamination.TherewerenosignifimentniquesEnvironmentalbleplotsandhistoricalagreementsMorecantmovementsintheenvironmentalprovisionsin2020.specificallyfortheBelgiansegment,Eliahasconductedsoilsurveysonover200sitesinFlandersinaccordancewithcontractualandFlemishlegislation.Significantsoilcontaminationwasfoundonanumberofsites,withthisbeingmainlyattributabletopollutionarisingfromearlierornearbyindustrialactivities(gasplants,incinerators,chemicals,etc.).IntheBrussels-CapitalWalloonRegions,Eliaalsocarriedoutanalysesandstudiestodetectcontaminationatanumberofsubstationsandanumberofoccupiedbypylonsforoverheadpowerlines.Basedontheanalysesandstudiesitconducted,Eliahasmadeprovisionsforpossi-futuresoilremediationcostsinlinewiththerelevantlegislation.provisionsarerecognisedandmeasuredbasedonanexpertappraisalbearinginmindBATNEEC(BestAvailableTech-NotEntailingExcessiveCosts)aswellasonthecircumstancesknownattheendofthereportingperiod.Thetimingofthesettle-isunclearbutforthepremiseswhereutilisationsoccur,theunderlyingprovisionisclassifiedasashort-termprovision.

Elia Transmission Belgium | Annual report 2020 81 ernmentTheleviesincludefederallevies,whichtotalled€24.3millionat31December2020(€41.3millionin2019).LeviesfortheWalloongov-haveincreasedto€26.3million(€20.9millionin2019).Theremainingbalanceconsistsofstrategicreserves(€2.2million). Financial instruments – fair values hierarchy.Thefollowingtableshowsthecarryingamountsandfairvaluesoffinancialassetsandliabilities,includingtheirlevelsinthefairvalue Carryingamount Fairvalue (in€million) fairatDesignatedvalueFairvaluethroughOCIAmortisedcostOtherfinancialliabili-tiesatamortisedcostTotalLevel1Level2Level3Total

OtherBalanceat31December2019financialassets 216.2 (4.4) (4.4) (4.4) (4.4)

Tradeandotherpayables (384.3) (384.3) Total 7.0(4.2)258.2(3,601.0)(3,340.1) n.r. n.r.n.r. n.r.

 Level2:

Cashandcashequivalents

 Level3:

Unsecuredfinancialbankloansandotherloans (880.5) (880.5) (880.5) (880.5) (2,336.2) (2,336.2) (2,689.8) (2,689.8)

Unsecuredbondissues

OtherBalanceat31December2020financialassets 7.0 0.2 0.0 0.0 7.2 7.0 0.0 0.2 7.2 Tradeandotherreceivables 0.0 0.0 518.9 0.0 518.9 0.0 0.0 0.0 0.0 0.0 0.0 188.6 0.0 188.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (296.0) (296.0) 0.0 296.0 0.0 296.0 Unsecuredbondissues 0.0 0.0 0.0 (3,325.8) (3,325.8) 0.0 3,739.4 0.0 3,739.4 The fairvalueofafinancialinstrumentthat istraded inanactivemarketis measured basedon quoted(unadjusted) occurringexchange,pricesforidenticalassetsorliabilities.Amarketisconsideredactiveifquotedpricesarereadilyandregularlyavailablefromandealer,broker,industrygroup,pricingserviceorregulatoryagency,andthosepricesrepresentactualandregularlymarkettransactionsonanarm’s-lengthbasis. Thefairvalueoffinancialinstrumentsthatarenottradedinanactivemarketisdeterminedusingvaluationtechniques. These maximisetheuseofobservablemarketdatawhereitisavailableandrelyaslittleaspossibleonentity-specificestimates. (i.e.Ifallsignificantinputsrequiredtoassessthefairvalueofaninstrumentareobservable,eitherdirectly(i.e.asprices)orindirectlyderivedfromprices),theinstrumentisincludedinlevel2. Ifoneormoreofthesignificantinputsusedinapplyingthevaluationtechniqueisnotbasedonobservablemarketdata,

7.0 0.2 7.2 7.0 0.2 7.2 Tradeandotherreceivables 216.2

Unsecuredfinancialbankloansandotherloans

Tradeandotherpayables 0.0 0.0 0.0 (519.5) (519.5) 0.0 0.0 0.0 0.0 Total 7.0 0.2707.5(4,141.3)(3,426.6) n.r. n.r.n.r. n.r. measurementamortisedfinancialFairfaircashTheabovetablesdonotincludefairvalueinformationforfinancialassetsandliabilitiesnotmeasuredatfairvalue,suchascashandequivalents,tradeandotherreceivables,andtradeandotherpayables,astheircarryingamountisareasonableapproximationofvalue.Thefairvalueoffinanceleaseliabilitiesisnotrequiredtobedisclosed.valueistheamountforwhichanassetcouldbeexchangedoraliabilitysettledinanarm's-lengthtransaction.IFRS7requires,forinstrumentsthataremeasuredinthestatementoffinancialpositionatfairvalueandforfinancialinstrumentsmeasuredatcostforwhichthefairvaluehasbeendisclosed,thedisclosureoffairvaluemeasurementsbylevelinthefollowingfairvaluehierarchy:  Level1:

Cashandcashequivalents 42.0 42.0 Assetsheldtohedgelong-termborrowings

Derivatives toclosecounterpartiesvaluationBrokers'statementsareusedforvaluationsoftheinterest-rateandforeign-currencyrateswaps.Thestatementsarecontrolledusingmodelsortechniquesbasedondiscountedcashflows.Themodelsincorporatevariousinputsincludingthecreditqualityofandinterest-ratecurvesattheendofthereportingperiod.Asat31December2019,thecounterpartyriskisconsideredtozeroasaresultofthenegativemarketvalueoftheIRS.TheGroup’sownnon-performanceriskhasbeenestimatedtobeclosezeroaswell. Interest-bearing loans

ESTIMATE OF FAIR VALUE

Right-of-useassets leaseRight-of-useassetsarepresentedseparatelywithin‘Property,plantandequipmentandbreakdownasfollows,withthediscountedliabilityforcomparison.Additionally,thesplitbetweencurrentandnon-currentleaseliabilitiesisgiven: (in€million) UseoflandandoverheadlinesRentofbuild-ings/offices CarsOp-ticalfi-bersOther Total Balanceat31July2019 0.0 0.0 0.00.0 0.0 0.0 Acquisitionbusinesscombinationsundercommoncontrol 2.0 23.0 7.7 6.0 0.1 38.8 Asof31December2019 2.0 23.0 7.76.0 0.1 38.8 (in€million) UseoflandandoverheadlinesRentofbuild-ings/offices CarsOp-ticalfi-bersOther Total Asof1January2020 2.0 23.0 7.76.0 0.1 38.8 Additionsandremeasurements (0.0) 0.0 4.4 0.0 0.0 4.4 Depreciations (0.0) (2.1) (3.4) (3.7) (0.0) (9.3) Derecognitionofrightof useassets 0.0 (1.3) (0.2) 0.0 0.0 (1.5) Asof31December2020 2.0 19.7 8.52.3 0.0 32.4 Theright-of-useassetsarebrieflydescribedbelow:

FAIR VALUE HIERARCHY

bybythefinancialinstrumentisincludedinlevel3.Thefairvalueamountincludedunder‘Otherfinancialassets’hasbeendeterminedreferringtoeither(i)recenttransactionprices,knownbytheGroup,forsimilarfinancialassetsor(ii)valuationreportsissuedthirdparties.

Thefairvalueiscalculatedonthebasisofthediscountedfutureredemptionsandinterestpayments.

niquesuedpricesTheThefairvalueof'sicavs'fallsintolevel1,i.e.valuationisbasedonthelistedmarketpriceonanactivemarketforidenticalinstruments.fairvalueofinterest-rateswaps,loansandbondissuesfallsintolevel2,whichentailsvaluationbeingbasedoninputfromotherthanthestatedprices,wheretheseotherpricescanbeobservedforassetsorliabilities.Thiscategoryincludesinstrumentsval-onthebasisoflistedpricesforidenticalorsimilarinstrumentsonmarketsthataredeemedlessthanactive;orothervaluationtech-arisingdirectlyorindirectlyfromobservablemarketdata.

Leasing THEGROUP AS ALESSEE

Elia Transmission Belgium report 2020 82

The Group mainly leases buildings, cars and optical fibers. It has also some rights to use (portions) of land and overhead lines. The InformationassessmentCovid-19Allthecontract,valuationperiodusedisaccordingtothecontractualterm.Wherenofixedtermhasbeensetandanongoingextensionissubjecttothetherelevantdepartmenthasassumedaterminationdate.Intheeventthattheleasecontractcontainsaleaseextensionoption,Groupassesseswhetheritisreasonablycertainofexercisingtheoptionandmakesitsbestestimateoftheterminationdate.leasecontractswerepreviouslyclassifiedasoperatingleasesunderIAS17.pandemicdidnotaffectedthecontractualclausesoftheGroup’sleasecontractsandtherewerenoindicatorstochangethe,usedinpreviousreportingperiod,ontheextensionofthecontracts.aboutleasesforwhichtheGroupisalesseeispresentedbelow.

largelyThefairvalueoffinancialassetsandliabilities,otherthanthosepresentedintheabovetable,approximatestotheircarryingamountsduetotheshort-termmaturitiesoftheseinstruments.

| Annual

Elia Transmission Belgium | Annual report 2020 83 

TheGroupleasesbuildingsandofficesinwhichcorporatefunctionsareperformed. TheGrouphascarleasingcontractswhichareusedbytheemployeesforbusinessandprivateactivities.

TheGroup



significantsignificantnotTheliability.ablyThesummarisedandThediscountrateusedtodiscounttheleaseliabilitiesistheGroup’sbestestimatefortheweightedaverageincrementalborrowingraterangesfrom0.26%to2.94%.TheGroupmadeuseofthepracticalexpedients,i.e.asinglediscountratepergroupofcontracts,pertheirduration.Grouphasassessedtheextensionoptionsconcludedintheleasecontractsandconsidersthattheseextensionoptionsarereason-certaintobeexecuted.Therefore,theGrouphasconsideredtheleasecontractasiftheextensionoptionisexercisedintheleaseGrouphasnoleasecontractswithvariablepaymentsnorresidualvalueguarantees.TheGroupdidnotcommittoanyleasethatisyetcommenced.TheGrouphasnocontractswhichincludecontingentrentalpayments,andnopurchaseoptionswereagreedintheleasecontracts.Furthermore,thesesignificantleasecontractsdonotincludeanyescalationclausesorrestrictionsthataretotheuseoftherespectiveasset.

TheGroupleasesopticalfibrestotransmitdata.Onlycablesthatarewellidentifiedareinscope.



has onlyleasecontracts withfixedleasepayments and assesses whetherit isreasonablethataleasecontract will be extended.Ifso,theleasecontractisvaluedasiftheextensionwouldbeexercised. Lease liabilities Informationconcerningthematurityofthecontractualundiscountedcashflowsisgivenbelow: (inMaturityanalysis-contractualundiscountedcashflows€million) 2020 2019 <1year 7.9 9.0 15years 16.2 17.2 >5years 14.6 16.9 Totalundiscountedleaseliabilitiesat31December 38.8 43.1 Leaseliabilitiesinthestatementoffinancialpositionat31December 33.0 39.1 Current 7.7 8.6 Noncurrent 25.2 30.5

Amountsrecognised in profit and loss Thefollowingamountswererecognisedinprofitandlossforthefinancialyear: (in€million) 2020 Depreciationexpenseofrightof useassets (9.3) Interestonleaseliabilities (0.7) Variableleasepaymentsnotincludedinthemeasurementofleaseliabilities 0.0 Expensesrelatingtoshorttermleases 0.1 Expensesrelatingtolowvalueassets 0.0 Totalrecognisedinprofitandloss (9.9) TheAtotalof€9.9millioninleaseexpenseswasrecognisedinthestatementofprofitorlossin2020.totalcashoutflowforleasesamountedto€9.9millionin2020. THEGROUPASALESSOR toobtainContractsbusiness.TheGroupleasesoutopticalfibers,landandbuildingspresentedaspartof‘Property,plantandequipment’.LeasingisonlyanancillaryRentalincomeispresentedunder‘Otherincome’.thatdonotrelatetoseparatelyidentifiableassetsorunderwhichthecustomercannotdirectlytheuseoftheassetordoesnotsubstantiallyalltheeconomicbenefitsassociatedwiththeuseoftheassetdonotconstitutealease.Thenewleasedefinitionledtheexclusionofsometelecommunicationequipment



hasOtherleasecontracts:printerleasecontractsandstrategicreservescontracts.StrategicreservesarecontractswheretheGrouptherighttocontroltheuseofapowerplanttokeepthebalanceintheelectricitynetwork



scope.onTheuse(portions)oflandandoverheadlinesconstitutesarightfortheGrouptouseawellidentifiedpieceoflandtoconstructsomeone’sproperty.OnlythecontractswheretheGrouphasthefullrighttocontroltheuseoftheidentifiedassetarein

Elia Transmission Belgium | Annual report 2020 84 reportingThetheTheGrouphasclassifiedtheseleasesasoperatingleasesastheydonottransfersubstantiallyalltherisksandrewardsincidentaltoownershipoftheassets.followingtablesetsoutamaturityanalysisofleasepayments,showingtheundiscountedleasepaymentstobereceivedafterthedateandconsideringthebestestimateofthecontractualterm: (in€million) <1year 1-5years >5years Telecom 14.5 1.3 0.0 Landandbuildings 0.0 0.0 0.0 Balanceat31December2019 14.5 1.3 0.0 Telecom 13.2 0.1 0.0 Landandbuildings 0.0 0.0 0.0 Balanceat31December2020 27.7 1.4 0.0 Covid-19 pandemicdidnotaffectedthecontractualclausesoftheGroup’scontractsasalessorandtherewerenoindicatorstochange Thethecashflowsasmentionedhereabove.Grouprecognised€14.8millioninrentalincomein2020. (in€million) 2020 Telecom 14.5 Landandbuildings 0.3 Total 14.8 Accruals and deferred income (in€million) 2020 2019 Accrualsanddeferredincome 19.3 14.6 DeferralaccountfromsettlementmechanismBelgianregulatoryframework 474.0 559.3 Total 493.3 573.9 Themovementsindeferralaccountfromsettlementmechanismareasfollows: (in€million) Regulatoryclaims Regulatoryobliga-tions Total Balanceat1January2020 18.6 (577.8) (559.3) Increase 33.0 (15.4) 17.6 Reversals (7.9) 11.9 4.0 Utilisation 0.0 67.5 67.5 Other(e.g.discounting) 0.0 (4.0) (4.0) Balanceat31December2020 43.8 (517.8) (474.0)

yearlyThehigherhigherwhichlator,settlement(-€21.2inThedeferralaccountfromsettlementmechanism(€474.0million)decreasedcomparedtoyearend2019(€559.3million).Thedecreasedeferralaccountfromsettlementmechanismencompassesdeviationsinthecurrentyearfromthebudgetapprovedbytheregulatormillion),thesettlementofnetsurplusesfrompriortariffperiod(-€67.5million)andthereviewoftheregulatoronpreviousyear’mechanism(+€3.5million).Theoperatingexcess,inrelationtothebudgetofthecostsandrevenuesauthorisedbytheregu-needstobereturnedtotheconsumersandthereforedoesnotformpartoftherevenues.In2020,therewasanoperationaldeficit,isoffsetagainsttheoutstandingregulatoryobligation.Theoperatingdeficitcomparedtothebudgetisprimarilyaresultoftheregulatednetprofit(€11.8million),decreasedcross-borderrevenues(€20.9million),lowerfinancialcharges(€5.8million)andtaxes(€6.4million).Thiswaspartlyoffsetbylowerdepreciationscomparedtothebudget(€13.9million).releaseofthedeferralaccountisdeterminedinthetariffsettingprocess.Theamountsonthedeferralaccountarerecognisedonabasisandthereleasedependsonthesourceofthedeferral,somearereleasedinT+1,otherinT+2andsomeinalongerperiod.

363.8

110.2 Totalregulatorydeferralaccount 474.0 *Belgium: from 2020 to 2023

(in€million) Belgianregulatoryframework

Toberefundedtothetariffsinthecurrentregulatoryperiod*

Toberefundedtothetariffsinthenextregulatoryperiod(orafter)

Elia Transmission Belgium | Annual report 2020 85

cemberThefuturereleaseofdeferralaccountfromsettlementmechanismtothefuturetariffsissetoutinthetablebelow(situationat31De-2020):

AllTheEliaTransmissionBelgiumNV/SAhasdirectandindirectcontrolofthesubsidiarieslistedbelow.participationinAmpacimon,whooffersgrid-monitoringsolutions,wassoldinAugust2020.theentitieskeeptheiraccountsineurosandhavethesamereportingdateasEliaTransmissionBelgiumNV/SA. Countryofes-tablishment Headquarters 2020Stake%2019

NemoLinkLtd. UnitedKingdom Strand1-3,LondonWC2N5EH 50.00 50.00 theInvestmentsaccountedforusingequity-method–Associates H.G.R.TS.A.S. France 1TerrasseBellini,92919LaDéfenseCedex 17.00 17.00 CoresoNV/SA Belgium AvenuedeCortenbergh71,1000Brussels 15.84 15.84 AmpacimonSA Belgium RuedeWallonie11,4460Grâce-Hollogne 20.54 EnervalisNV Belgium Centrum-Zuid1111,3530Houthalen-Helchteren 16.52 17.36 IFRS9Investmentsaccountedforusing-othershareholdings

JAOSA Luxembourg 2,RuedeBitbourg,1273LuxembourgHamm 4.00 4.00

Name

Subsidiaries EliaAssetNV/SA Belgium Bddel’Empereur20,1000Brussels 99.99 99.99 EliaEngineeringNV/SA Belgium Bddel’Empereur20,1000Brussels 100.00 100.00 EliaReSA Luxembourg RuedeMerl65,2146Luxembourg 100.00 100.00 theInvestmentsaccountedforusingequity-method–JointVentures

Elia Transmission Belgium | Annual report 2020 86 3. Group structure Subsidiaries, joint ventures and associates OVERVIEW OF GROUP STRUCTURE SUBSIDIARIES

Balanceat1January2020

Changesduringtheyear

CREDIT RISK amountAtthetomer’stiesinCreditriskencompassesallformsofcounterpartyexposure,i.e.wherecounterpartiesmaydefaultontheirobligationstotheCompanyrelationtolending,hedging,settlementandotherfinancialactivities.TheCompanyisexposedtocreditriskfromitsoperatingactivi-andtreasuryactivities.Asregardsitsoperatingactivities,theGrouphasacreditpolicyinplace,whichtakesintoaccountcus-riskprofiles.Theexposuretocreditriskismonitoredonanongoingbasis,resultinginarequesttoissuebankguarantiesfromcounterpartyforsomemajorcontracts.theendofthereportingperiodtherewerenosignificantconcentrationsofcreditrisks.Themaximumcreditriskisthecarryingforeachfinancialasset,includingderivativefinancialinstruments. (3.4) (2.4) 1.0 (3.4) (2.4) 1.0 (3.4) (2.4) 2.9 (0.0) 2.9 3.9 (3.4) 0.5 Group’s2020Thecommercialterns.ratesAnforTheIFRStradeiourTheGroupbelievesthattheunimpairedamountsoverduebymorethan30daysarestillcollectible,basedonhistoricalpaymentbehav-andextensiveanalysisofcustomercreditrisk,includingunderlyingcustomers'creditratings,whenavailable.Thecreditqualityofandotherreceivablesisassessedbasedonacreditpolicy.9requirestheGrouptoimpairfinancialassetsbasedonaforward-lookingexpectedcreditloss(ECL)approach.GroupappliestheIFRS9simplifiedapproachtomeasuringexpectedcreditlosseswhichusesalifetimeexpectedlossallowancealltradereceivables.impairmentanalysisisperformedateachreportingdateusingaprovisionmatrixtomeasureexpectedcreditlosses.Theprovisionarebasedondayspastdueforallcustomers.Nosegmentationofcustomersisperformedasallcustomersshowsimilarlosspat-Intercompanytradereceivablesareexcludedasthereisnocreditrisk.Inaddition,tradereceivablesconnectedwithapendingdisputeareexcludedtoavoiddoubleprovisioning(provisionforrisksandcharges).provisionratesarebasedonthepaymentprofilesofsalesoveraperiodof36monthsbefore31December2019or31Decemberrespectivelyandthecorrespondinghistoricalcreditlossesexperiencedwithinthisperiod.Asthesalesandpaymentprofileofthecustomershasremainedverystableovertheyears,theGroupconsidershistoricalcreditlossestobeagoodproxyforfuture

settledonarereportingtheTheTheGroupaimstoidentifyeachriskandsetoutstrategiestocontroltheeconomicimpactontheGroup'sresults.RiskManagementDepartmentdefinestherisk-managementstrategy,monitorstheriskanalysisandreportstomanagementandAuditCommittee.Thefinancialriskpolicyisimplementedbydeterminingappropriatepoliciesandsettingupeffectivecontrolandprocedures.Selectedderivativehedginginstrumentsareuseddependingontheassessmentoftheriskinvolved.Derivativesusedexclusivelyashedginginstruments.TheregulatoryframeworkinwhichtheGroupoperatessignificantlyrestrictstheireffectsprofitorloss(seethesection'Regulatoryframeworkandtariffs').Themajorimpactofincreasedinterestrates,creditrisk,etc.canbeinthetariffs,inaccordancewiththeapplicablelegislation.

PRINCIPLES OF FINANCIAL RISK MANAGEMENT

Elia Transmission Belgium | Annual report 2020 87 Other notes Financial risk and derivative management

Balanceat31December2019

Balanceat31December2020

(in€million) 2020 2019 Loansandreceivables longterm 0.5 2.3 Loansandreceivables shortterm 518.4 213.9 Cashandcashequivalents 188.6 42.0 Immediatelyclaimabledeposits 7.0 7.0 Interest-rateswapsusedforhedging: Liabilities 0.0 (4.4) Total 714.5 260.8 Themovementintheallowanceforimpairmentinrespectofloansandreceivablesduringtheyearwasasfollows: (in€million) Baddebtors Impairmentlosses Remainingbalance Balanceat1January2019 0.0 0.0 0.0 Changesduringtheyear 1.0

Foreigncurrencyrateswapsusedforhedging

Unsecuredbondissues 2,350.0 2,336.0 (2,787.1) (52.6) 0.0 (52.6) (653.6) (2,028.3)

n.r. 4.4 (4.4) (4.4) 0.0 0.0 0.0 0.0

Totalat31December2019 3,615.13,686.2(4,044.0)(897.0) (5.0)(57.8)(710.6)(2,373.6)

n.r. 4.4 (4.4) (4.4) 0.0 0.0 0.0 0.0

valueFair ingClos-bal-ance pectedEx-cashout-flows

Tradeandotherpayables 384.3 384.3 (384.3) (384.3) 0.0 0.0 0.0 0.0

months6 months6-12 years1-2 years2-5 years>5

Elia Transmission Belgium | Annual report 2020 88

ceivablesCarryingamount-tradere-

Derivativefinancialliabilities

0.8 349.6 Lossgivendefault 84.1% 84.1% 84.1% 84.1% 84.1% 84.1% Lossallowance 0.0 0.0 0.0 0.0 0.2 0.6 0.9 CURRENCY RISK

Total 0.0% 0.2% 0.5% 4.1% 39.7% 94.0% 326.9 19.7 0.3 1.3 0.6

(in€million)

(in€million) valueFair ingClos-bal-ance pectedEx-cashout-flows months6 months6-12 years1-2 years2-5 years>5 Non-derivativefinancialliabilities

Onmultipliedguarantee.TheSubsequently,quence(expected)creditlosses.Also,theGroupdidnotseeanychangesinpaymentbehaviour,noranincreaseinbaddebtorsasaconse-oftheCOVID-19crisisin2020anddoesnotexpectanymajorimpactintheupcomingyears.alossgivendefaultiscalculatedasthepercentageoftheamountoftradereceivablesthatisnotcoveredbyabanktotaloutstandingamountoftradereceivablescoveredbyabankguaranteetotals€30.6million.Thelossgivendefaultisbytheoutstandingtradereceivables.thatbasis,thelossallowanceat31December2019and2020wasdeterminedasfollowsfortradereceivables:

Expectedlossrate(%)

2019Balanceat31December

Unsecuredfinancialbankloansandinterestaccruals 880.8 961.6 (868.3) (455.7) (5.0) (5.2) (57.0) (345.3)

sinceTheGroupisnotexposedtoanysignificantcurrencyrisk,eitherfromtransactionsorfromexchangingforeigncurrenciesintoeuro,ithasnomaterialforeigninvestmentsoractivitiesandlessthan1%ofitscostsareexpressedincurrenciesotherthantheeuro. LIQUIDITY RISK cessBondcountprofileunconfirmedThecashLiquidityriskistheriskthattheGroupmaybeunabletomeetitsfinancialobligations.TheGrouplimitsthisriskbyconstantlymonitoringflowsandensuringthattherearealwayssufficientcredit-linefacilitiesavailable.Group'sobjectiveistomaintainabalancebetweencontinuityoffundingandflexibilitythroughtheuseofbankloans,confirmedandcreditfacilities,commercialpaperprograms,etc.Formedium-tolong-termfunding,theGroupusesbonds.Thematurityofthedebtportfolioisspreadoverseveralyears.TheGroupTreasuryfrequentlyassessesitsfundingresourcestakingintoac-itsowncreditratingandgeneralmarketconditions.issuancesrealisedin2020andloancontractssignedwithEIBandotherbanksinpreviousyears,provesthattheGrouphasac-todifferentsourcesoffunding. 3,615.13,681.8(4,039.6)(892.6) (5.0)(57.8)(710.6)(2,373.6)

NotpastduePastdue0-30daysPastdue31-60daysPastdue61days-oneyearPastdueoneyear-twoyearsPastduemorethantwoyears

Total Expectedlossrate(%) 0.0% 0.6% 8.2% 12.3% 67.9% 100.0% ceivablesCarryingamount-tradere- 195.9 14.9 1.1 3.5 0.6 0.2 216.2 Lossgivendefault 92.2% 92.2% 92.2% 92.2% 92.2% 92.2% Lossallowance 0.0 0.0 0.0 0.1 0.4 0.2 0.8 2020Balanceat31December

Seeloans.thefloatinginterestInterestrateriskistheriskthatthefairvalueorfuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinmarketrates.TheGroup'sexposuretotheriskofchangesinmarketinterestratesrelatesprimarilytoitslong-termdebtobligationswithinterestrates.Asat31December2020,nointerest-rateswapswereoutstanding.Theinterest-rateswapsontheotherloanandloanwithPubli-Parttocoveranominaldebtamountof€300millionweresettledinJune2020,togetherwiththerepaymentofthenote6.13forasummaryoftheloansoutstandingwiththeirrespectiveinterestrates.

TheGrouphadnoderivativesnotdesignatedashedginginstruments.

Tradeandotherpayables

Derivatives not designated ashedging instruments

Maturity AvailableamountAveragebasicinterestAmountusedAmountnotused SustainableRevolvingCreditFacility

curred.JuneTheAsat31December2020,theGrouphasnoderivativesdesignatedashedginginstrumentsoutstandinganymore.interestrateswapsontheotherloanandtheloanwithPubli-Parttocoveranominaldebtamountof€300millionweresettledin2020,togetherwiththerepaymentoftheloans.Withthesettlement,aninterestexpenseonderivativesof€4.4millionwasinCAPITAL RISK MANAGEMENT Thestrategy.carryThecloseThepurposeoftheGroup'scapital-structuremanagementistomaintainthedebtandequityratiosrelatedtotheregulatedactivitiesasaspossibletotherecommendedlevelsetbytherelevantregulatoryframeworks.Company'sdividendguidelinesinvolveoptimisingdividendpaymentswhilebearinginmindthatself-financingcapacityisneededtooutitslegalmissionastransmissionsystemoperator,financefutureCAPEXprojectsand,moregenerally,implementtheGroup’sCompanyoffersitsemployeestheopportunitytosubscribetocapitalincreasesthatareexclusivelyreservedforthem.

CAPITAL-EXPENDITURECOMMITMENT

4,165.54,141.3(4,682.7)(607.1)

Detailsoftheusedandunusedback-upcreditfacilitiesaresetoutbelow: (in€million) 10/12/2023 650.0 Euribor+0.325% 0.0 650.0 Total 650.0 0.0 650.0 forback-upIn2020,theGroupincurredincreasedcurrentoutstandingreceivablesrelatedtolevies(seenote6.9)whichwerefinancedusingthefacilitiesmentionedhereabove.NeverthelesstheCovid-19pandemic,theGroupmanagedtosetupasustainablecreditfacility€650millionfor3years,withapotentialrenewalof2times1year. RATE RISK

Elia Transmission Belgium | Annual report 2020 89

Totalat31December2020 4,165.54,141.3(4,682.7)(607.1)

SENSITIVITY ANALYSIS

INTEREST

Derivatives designated as hedging instruments

Astherewerenoderivativesoutstandinganymoreat31December2020,nosensitivityanalysisneedstobeperformed.

Commitments and contingencies

Non-derivativefinancialliabilities (1.1)(89.2)(854.5)(3,130.9)

installationAsat31December2020,theGrouphadacommitmentof€412.4million(€433.3millionin2019)relatingtopurchasecontractsfortheofproperty,plantandequipmentforfurthergridextensions.

accountingimpactAllmentsTheGroupisexposedtocertainrisksrelatingtoitsongoingbusinessoperations.Theprimaryriskmanagedusingderivativeinstru-isinterestraterisk.financialderivativesenteredintobytheGrouprelatetoanunderlyingtransactionorforecastexposure,dependingontheexpectedonthestatementofprofitorloss,andiftheIFRS9criteriaaremet,theGroupdecidesonacase-by-casebasiswhetherhedgewillbeapplied.

HEDGING ACTIVITIES AND DERIVATIVES

Unsecuredbondissues 3,350.0 3,325.8 (3,835.3) (70.0) 0.0 (70.9) (700.9) (2,993.5)

Unsecuredfinancialbankloansandinterestaccruals 296.0 296.0 (327.9) (17.5) (1.1) (18.4) (153.6) (137.4) 519.5 519.5 (519.5) (519.5) 0.0 0.0 0.0 0.0 (1.1)(89.2)(854.5)(3,130.9)

Related parties

Elia Transmission Belgium | Annual report 2020 OTHER90 CONTINGENCIES AND COMMITMENTS 2020.fromcashInthroughcommitmentsheldintoAgencyrelatingleadingInpany'sbeEliaElia.AtinggreensevenoflarHavingeralAsat31December2020,theGrouphadacommitmentof€200.4million(€171.5millionin2019)relatingtopurchasecontractsforgen-expenses,maintenanceandrepaircosts.receivedapprovalfromtheWalloongovernmentandfromtheCREG,on22June2015EliaenteredintoanagreementwithSo-ChestforthesaleofWalloongreencertificateswithatotalvalueof€275million,ofwhich€221millionwassettledin2015andatotal€48millionwassettledin2016.SolarChest'smissionistobuy,holdandsellWalloongreencertificatesforperiodsoffive,sixandyears.Inaccordancewithlegislation,SolarChestconductedanauctioninSeptember2019.Thisresultedinthesaleof615.400certificatestodifferentmarketparticipantsandgeneratedrevenueof€40million.In2020,twoadditionalauctionswereheld,sell-959,246certificatesandgeneratingrevenueof€62.3million.theendofeachperiod(30June2020,30June2021and30June2022respectively),anyunsoldcertificateswillbeboughtbackbyDuetotheseauctions,EliadidnothavetobuybackanycertificatesattheendofJune2020.CREGconfirmedandguaranteedtothatattheendofeachreservationperiod,thecostofandanyexpenseincurredbyrepurchasingnon-marketablecertificatesmayrecoveredfullythroughthetariffsforlevies,andasaconsequencethepotentialrepurchasebyEliawillhavenoimpactontheCom-financialperformance.September2017,Eliasold2.8milliongreencertificatestotheWalloonRegion(i.e.theWalloonAgencyforAirandClimate,orAwAC)toanetcashinflowof€176.2million.ThiswasaresultoftheDecreeof29June2017amendingtheDecreeof12April2011totheorganisationoftheregionalelectricitymarketandtheDecreeof5March2008relatingtothecreationoftheWalloonforAirandClimate.ThegreencertificatestransferredbyEliacanbegraduallyresoldbytheAwACfrom2022onwards,takingaccountthemarketconditionsthatexistforgreencertificatesatthattime.ThelegislationalsoenvisagesthegreencertificatesbeingbytheAwACforaperiodofuptonineyears,afterwhichEliaisrequiredtobuybackanyunsoldcertificates.TheserepurchasewillhavenoimpactonElia'sfinancialperformance,asthecostandexpensefortherepurchasewillbefullyrecoveredthetariffsforlevies.November2018,Eliasoldanother€0.7millioningreencertificatestotheWalloonRegion(i.e.theAwAC)whichresultedinanetinflowof€43.3million.AswiththetransactioninSeptember2017,Eliamightberequiredtobuybacksomeofthecertificatessold2023onwards.Anyrepurchasewillbecoveredthroughthetariffsforlevies.TherewerenotransactionswiththeAwACin2019or

Key management personnel include Elia Transmission Belgium's Board of Directors and its Executive Board. Both have a significant

KeyinThedetailedTheinfluenceacrosstheGroup.membersofEliaTransmissionBelgiums’BoardofDirectorsarenotemployeesoftheGroup.TheremunerationfortheirmandateisintheCorporateGovernanceStatementformingpartofthisannualreport.othermembersofkeymanagementpersonnelarehiredasemployees.Thenamesofthekeymanagementpersonnelareincludedthecorporategovernancereport.Thecomponentsoftheirremunerationaredetailedbelow.managementpersonneldidnotreceivestockoptions,specialloansorotheradvancesfromtheGroupduringtheyear.

(seeThecoreshareholderofEliaTransmissionBelgiumisEliaGroupNV/SA.Otherthantheyearlydividendpaymentandthecapitalincreasenote6.12),nomaterialtransactionsoccurredwiththecoreshareholderin2020.

CONTROLLING ENTITIES

TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL

(in€million) 2020 Short-termemployeebenefits 3.0 Basicremuneration 1.8 Variableremuneration 1.2 Post-employmentbenefits 0.4 Othervariableremuneration 0.2 Totalgrossremuneration 3.7 Numberofpersons(inunits) 7 Averagegrossremunerationperperson 0.5 Numberofshares(inunits) 21,846 TRANSACTIONS WITH JOINT VENTURES AND ASSOCIATES withTransactionsrecognisedTransactionsbetweentheCompanyandsubsidiariesthatarerelatedpartieswereeliminatedduringconsolidationandthereforearenotinthisnote.withjointventuresandassociates(asdefinedinsection7.1.)werenoteliminated,andthereforedetailsoftransactionsotherrelatedpartiesareshownbelow: (in€million) 2020 Transactionswithjointventuresandassociates (2.1) Salesofgoods 2.4

financialTheEliamissionErnstTheGeneralMeetingofShareholdersappointedasjointauditorsBDOBedrijfsrevisorenCVBA(representedbyMr.FelixFank)and&YoungBedrijfsrevisorenBV(representedbyMr.PaulEelen)fortheauditoftheconsolidatedfinancialstatementsofEliaTrans-BelgiumNV/SAandtheauditofthestatutoryfinancialstatementsofEliaTransmissionBelgiumNV/SA,EliaAssetNV/SAandEngineeringNV/SA.followingtablesetsoutthefeesofthejointauditorsandtheirassociatesinconnectionwithservicesdeliveredwithrespecttotheyear2020:

Tradedebts (0.4)

Tradedebtors 0.6

2020.TheGroupalsohadanoutstandingloanwithitsshareholderPubliPartforanamountof€42.1millionwhichwaspaidbackendofJuneWerefertoNote6.13formoredetails.

position.€0.7milliontheThereDirectorsInaddition,Elia'sExecutiveBoardalsoassessedwhethertransactionsoccurredwithentitiesinwhichtheyormembersoftheBoardofexerciseasignificantinfluence(e.g.positionsasCEO,CFO,vice-presidentsoftheExecutiveBoard,etc.).weresomesignificanttransactionsin2020withvariousdistributionsystemoperators(Sibelga,Eandis),whicharecustomersofGroup.AllthesetransactionstookplaceinthenormalcourseofElia’sbusinessactivities.Thetotalvalueofrealisedsaleswas€10.1andrelatedtoregulatedsalescontractswithapredefinedpricebytheregulator.Thetotalvalueofexpensesamountedtomillion.Asat31December2020,therewasanoutstandingtrade-receivablepositionof€9.9millionandnooutstandingtrade-debt

Purchasesofgoods (4.4)

OtherdutiesmechanismNemoThethefutureOnImpactoftheUnitedKingdomleavingtheEuropeanUnion30December2020,theEuropeanUnionandtheUKsignedaTradeandCooperationAgreementthatregulatesthetermsofthecooperationbetweenbothpartiesaftertheBrexitasof1January2021.Inthisagreement,itisdecidedthattheUKwouldleaveInternalEnergyMarket(IEM).GroupperformedananalysisandconcludedthatNemoLinkLtdispreparedforthenewsituation.TheoverallconclusionisthatLinkremainsoperationalasbefore.Profitabilityontheinvestmentwouldalsoremainlargelyunaffectedduetothecapandfloor(seeNote9.3),whichprovidescertaintyregardingthecompany’scashflowsovera25-yearspan.Also,therearenoimportonthetransportofelectricity.thantheriskidentifiedabove,theGroupexpectsBrexittohaveaverylimitedeffectontheconsolidatedfinancialstatements.

Belgium | Annual report 2020

Services provided bythe auditors

in€ Belgium Statutoryaudit 141.300 Auditrelated 71.370 Indirecttax 18.906 Total 231.576

0.2

NV/SAaTheIn2020,entitiesoftheGrouphadtransactionswithNemoLinkLtd.,CoresoNV/SAandAmpacimonSA(untilsalebeginningofAugust).saleofgoodsrelatestocorporateservices(SLAs)renderedbyEliatoNemoLinkLtdandCoresoSA/NV.NemoLinkLtd.alsorentsbuilding(Herdersbrug)fromEliaAssetSA/NV(seealsonote6.19).PurchasesofgoodsmostlyrelatestoservicesrenderedbyCoresototheGroup.

Outstandingbalanceswithjointventuresandassociates

Elia Transmission 91

TRANSACTIONS WITH SHAREHOLDERS

Subsequent events Therearenosignificanteventstoreportafter31December2020. Miscellaneous

TRANSACTIONS WITH RELATED PARTIES

AsrequiredbyEUlaw,theBelgianelectricitymarketismonitoredandcontrolledbyindependentregulators.

low.EliageneraltheOn28June2018,theCREGissuedadecisionfixingthetariffmethodologyfortheelectricitytransmissiongrid(includingoffshore)andelectricitygridswhichhaveatransmissionfunctiontheregulatoryperiod2020-2023(Decision(Z)1109/10).Thismethodologyistheframeworkonwhichtransmissiontariffsaresetforthesefouryears.hasprepareditstariffproposalfortheregulatoryperiodcommencingon1January2020basedonthemethodologydescribedbe-ThisproposalwasapprovedbytheCREGon7November2019(Decision(B)658E/62).

Regionallegislation

(CREG)theAnumberofroyaldecreesprovidemoredetailsoftheregulatoryframeworkapplyingtothetransmissionsystemoperator,particularlyRoyalDecreeontheFederalGridCode.Similarly,thedecisionspassedbytheCommissionforElectricityandGasRegulationsupplementtheseprovisionstoformtheregulatoryframeworkwithinwhichEliaoperatesatfederallevel.

FEDERAL REGULATOR TheCREGisthefederalregulator,anditspowerswithregardtoEliainclude:  theapprovingthestandardisedtermsinthethreemaincontractsusedbythecompanyatthefederallevel:theconnectioncontract,accesscontractandtheARPcontract;  approvingthecapacityallocationsystematthebordersbetweenBelgiumandneighbouringcountries;  approvingtheappointmentoftheindependentmembersoftheBoardofDirectors;  determiningthetariffmethodologytobeobservedbythegridoperatorwhencalculatingthevarioustariffsapplyingtogridusers;  dependencecertifyingthatthegridoperatoractuallyownstheinfrastructureitoperatesandthatitmeetstheregulatoryrequirementsforin-fromgeneratorsandsuppliers.

Regulatoryagencies

regulationsprovisionsThesettingtheirBelgium'sthreeregionsareprimarilyresponsibleforthelocaltransmissionofelectricitythroughgridswithavoltageof70kVorlessonrespectiveterritory.Theregionalregulatorsareinchargeofthenon-tariffaspectsoflocaltransmission-systemregulation,whileandmonitoringtariffsfallsunderfederaljurisdiction.FlemishRegion,theBrussels-CapitalRegionandtheWalloonRegionhavealsotransposedintotheirlegislativeframeworktheofthe3rdEuropeanpackageapplyingtothem.Theregionaldecreeshavebeensupplementedbyvariousotherrulesandonmatterssuchaspublicserviceobligations,renewableenergyandauthorisationproceduresforsuppliers.

transmissiononthemOperationofelectricitygridswithvoltagesof70kVandlessfallsunderthejurisdictionoftherespectiveregionalregulators.Eachofmayrequireanyoperator(includingEliaifitoperatessuchgrids)toabidebyanyspecificprovisionoftheregionalelectricityrulespainofadministrativefinesorothersanctions.However,theregionalregulatorsdonothavethepowertosettariffsforelectricitysystems,astariffsettingfallswithintheexclusiveremitoftheCREGforthesegrids. Tariffsetting (2020-2023).Sincethebeginningof2020,anewtariffmethodologycameintoforce.Thismethodologyisagainapplicableforaperiodof4years

TARIFF REGULATIONS

Federallegislation

Regulatoryframework in Belgium

Elia Transmission Belgium | Annual report 2020 92 REGULATORY FRAMEWORK AND TARIFFS

changesThisasTheElectricityAct,whichformsthegeneralbasis,laysdownthecoreprinciplesoftheregulatoryframeworkgoverningElia’sactivitiesatransmissionsystemoperatorinBelgium.Actwasheavilyamendedon8January2012bythetranspositionatfederallevelofthe3rdpackageofEuropeandirectives.TheseensurethattheElectricityAct:  setsouttheunbundlingoftransmissionoperationsfromgeneration,distributionandsupplyactivities;  setsoutingreaterdetailtherulesforoperatingandaccessingthetransmissionsystem;  jurisdiction;redefinesthetransmissionsystemoperator'slegalmission,mainlybyexpandingittotheoffshoreareasoverwhichBelgiumhasand  strengthenstheroleoftheregulatoryauthority,particularlyasregardsdeterminingtransmissiontariffs.

REGIONAL REGULATORS



Elia Transmission Belgium | Annual report 2020 TARIFF93 REGULATIONS APPLYING IN BELGIUM non-controllablefuturelablesubdividedamountsTheaccordancevolumesbasedThefour-yearadvanceinAstheoperatorofgridsperformingatransmissionfunction(coveringthetransmissiongridandthelocalandregionaltransmissiongridsBelgium),Eliamakesmostofitsincomefromtheregulatedtariffschargedforuseofthesegrids(tariffincome),whichareapprovedinbyCREG.Asof1January2008,theprevailingtariffregulationmechanismshaveprovidedforapprovedtariffsbeingsetforperiods,barringspecificcircumstances.tariffmechanismisbasedonamountsrecognisedinaccordancewithBelgianaccountingregulations(BEGAAP).Thetariffsareonbudgetedcostsminusanumberofsourcesofnon-tariffincome.Thesecostsarethendividedbasedonanestimateoftheofelectricitytakenoffthegridand,inthecaseofsomecosts,basedonestimatedvolumesofelectricityinjectedintothegrid,inwiththetermsofthetariffmethodologydrawnupbytheCREG.coststakenintoaccountincludetheforecastvalueoftheauthorisedremunerationoftheinvestedcapital,anestimateoftheallocatedtoEliaintheformofperformanceincentivesandthepredictedvaluesofvariouscostcategories.Thesecostsareintothreegroups:controllablecosts,forwhichEliaisofferedafinancialincentivetoimproveitsefficiencylevels;non-control-costs,overwhichEliahasnoinfluenceandforwhichthedeviationsfromthebudgetarecompletelyallocatedtothecalculationoftariffs;andinfluenceablecosts,towhichahybridruleapplies(seetheinformationprovidedbelowwithregardtocontrollableandcostsandincomeandinfluenceablecosts). FAIR REMUNERATION FairremunerationisthereturnoncapitalinvestedinthegridbasedontheCapitalAssetPricingModel(“CAPM”).Itisbasedonthe

ThisAssetsrelatedtotheMOGarelinkedtotheRABMOG,forwhichapremiumremunerationisapplicableinadditiontotheabove.isbasedonthefollowingformula:[S(lessthanorequalto40percent.)xaverageRABMOGx1.4%].

Whereby:B:plusA:Theditions,portantOLOOLOAsments,averageannualvalueoftheregulatoryassetbase(RAB),whichiscalculatedannually,takingintoaccountnewinvestments,divest-depreciationsandchangesinworkingcapital.of1January2020,theformulahaschangedcomparedtotheprevioustariffmethodologyasregardsthelevelofleverageandtheinterestrateforriskfreeinvestment:(i)theregulatoryleveragehasbeenincreasedfrom33percent.to40percent.,and(ii)thehasbeensetat2.4percent.fortheperiod2020-2023,insteadoftakingtheaverageoftheyear,eachyear.Incaseofanim-changeoftheBelgianmacro-economicsituationand/orthemarketcircumstancescomparedtotheexpectedsituationandcon-theCREGandtheEliacanagreeamodificationofthefixedOLOrate.formulaforthecalculationoffairremunerationisasfollows:[S(iflessthanorequalto40percent.)xaverageRABx[(1+α)x[(OLO(n)+(βxriskpremium)]]][(S(ifabove40percent.)–40percent.)xaverageRABx(OLO(n)+70basepoints)] (subjectOLO(n)hasbeenfixedat2.4percent.andisnolongertheaveragerateofBelgianten-yearlinearbondsfortheyearinquestiontomodificationagreedbetweentheCREGandtheIssuerassetoutabove); need;RAB(n)=RAB(n-1)+investments(n)-depreciation(n)-divestments(n)-decommissioning(n)+/-changeinworkingcapital S=theconsolidatedaveragecapitalandreserves/averageRAB,inaccordancewithBelgianGAAP; Alpha(α)=theilliquiditypremiumsetat10percent.; thisBeta(β)=calculatedoverahistoricalthree-yearperiod,takingintoaccountavailableinformationontheIssuer'ssharepriceinperiod,comparedwiththeBel20indexoverthesameperiod.Thevalueofthebetacannotbelowerthan0.53; Riskpremiumremainsat3.5percent.;

confirmed.oftionimposedforTherevenues,anThecategoryofcostsandrevenuesthatareoutsideElia'sdirectcontrolarenotsubjecttoincentivemechanismsbytheCREG,andareintegralpartofthecostsandrevenuesusedtodeterminethetariffs.Thetariffsaresetbasedonforecastvaluesforthesecostsandandthedifferencefromtheactualvaluesisallocatedexposttothetariffcalculationforthesubsequentperiod.mostimportantnon-controllablecostsconsistofthefollowingitems:depreciationoftangiblefixedassets,ancillaryservices(exceptthereservationcostsofancillaryservicesexcludingblackstart,whichqualifyasinfluence-ablecosts),costsrelatedtolinerelocationbyapublicauthority,andtaxes,partiallycompensatedbyrevenuesfromnon-tariffactivities(forexamplecrossborderconges-revenues).Inthisnewtariffperiod,certainexceptionalcostsspecifictooffshoreassets(e.g.theMOG)havebeenaddedtothelistnon-controllablecosts.Thisalsoincludesfinancialcharges/revenuesforwhichtheprincipleoffinancialembeddeddebthasbeenAsaconsequence,allactualandreasonablefinancecostsrelatedtodebtfinancingareincludedinthetariffs.



Controllablecostsandrevenues

period.renting(adjusted)perjectThecostsandrevenuesoverwhichEliahasdirectcontrolaresubjecttoanincentiveregulationmechanism,meaningthattheyaresub-toasharingruleofproductivityandefficiencyimprovementwhichmayoccurduringtheregulatoryperiod.Thesharingfactoris50cent.Therefore,Eliaisencouragedtocontroladefinedcategoryofitscostsandrevenue.AnysavingswithrespecttotheallowedbudgetpositivelyimpactsthenetprofitoftheEliaby50percent.oftheamount(beforetax)and,accordingly,anyoverspend-negativelyaffectsitsprofit.Therehavebeennochangescomparedtotheprevioustariffmethodology,exceptforcertainnon-recur-butcontrollablecostsspecifictooffshoreassets(e.g.theMOG)thatcanbeaddedtothecostsallowanceforagivenregulatory



Non-controllablecostsandrevenues

capitaltoweightedtheInrespectofA:Therateofremuneration(inpercent.)assetbytheCREGforyear"n"isequaltothesumoftherisk-freerate,i.e.averagerateofBelgianten-yearlinearbondsfortheyearinquestion(OLO(n))andapremiumformarketriskforshares,usingtheapplicablebetafactor.Tariffregulationsetstheriskpremiumat3.5percent.TheCREGencouragestheEliakeepitsactualcapitalandreservesascloseaspossibleto40percent.,thisratiobeingusedtocalculateareferencevalueofandreserves;andbalancedInrespectofB:IftheElia'sactualcapitalandreservesarehigherthanthereferencecapitalandreserves,thesurplusamountisoutwithareducedrateofremunerationcalculatedusingthefollowingformula:[(OLO(n)+70basepoints)].



Thisincentiveisbroadenedandisrelatedtothreeincentives:(i)thelevelofclientsatisfacmillion.theleveltionrelatedtothere-alisationofnewgridconnectionswhichcangenerateaprofitfortheEliaofEUR0toEUR1.35million,(ii)theofclientsatisfactionforthefullclientbasewhichwouldcontributewithEUR0toEUR2.53milliontotheElia’sprofitand(iii)dataqualitythattheEliapublishesonaregularbasis,whichcangenerateare-munerationfortheEliaofEUR0toEUR5

uity/debtbasedthelevelthemiumaboutsultationTheCREGamendedthe2016-2019tariffmethodologytocreatespecificrulesapplicabletotheinvestmentintheMOG.Aformalcon-tookplaceinthefirstweeksof2018betweentheCREGandtheElia,andtheCREGtookadecisionon6December2018thenewparameterstobeintroducedinthetariffmethodology.Themainfeaturesofsaidparametersare(i)aspecificriskpre-tobeappliedtothisinvestment(resultinginanadditionalnetreturnof1.4percent.),(ii)aspecialdepreciationrateapplicabletoMOGassets,(iii)certaincostsspecifictotheMOGtobearanotherqualificationcomparedtothecostsforonshoreactivities,(iv)theofthecoststobedefinedbasedonthecharacteristicsoftheMOGassetsand(v)dedicatedincentiveslinkedtotheavailabilityofoffshoreassets.Forthetariffperiod2020-2023,theregulatoryframeworkfortheMOGhasbeenincludedinthetariffmethodology,onthefeaturesdescribedhereabove,exceptfortheriskpremiumwhichhasbeenappliedsince1January2020onatargeteq-ratioof40/60.

Costandrevenueallocationbetweenregulatedandnon-regulatedactivities

Innovationandgrants:

RegulatoryframeworkfortheModularOffshoreGrid

Ifthetransmittedvolumesare unsuccessful,tariffsmentswhetherregulatedelements,sequentfromhigher(orlower)thanthoseforecast,thedeviationisbookedtoanaccrualaccountduringtheyearinwhichitoccurs.Thesedeviationsbudgetedvalues(aregulatorydebtoraregulatoryreceivable)areaccumulated,andwillbeincludedinthetariffsettingforthesub-tariffperiod.Regardlessofdeviationsbetweentheforecastparametersfortariffssetting(Fairremuneration,Non-controllableControllableelements,Influencablecosts,Incentivecomponents,Costandrevenueallocationbetweenregulatedandnon-activities)andeffectiveincurredcostsorrevenuesrelatedtotheseparameters,theCREGtakesyearlyafinaldecisionastotheincurredcosts/revenuearedeemedreasonabletobebornebythetariffs.Thisdecisionmayresultintherejectionofele-incurredand,intheeventthatsuchelementsincurredarerejected,theamountwillnotbetakenintoaccountforthesettingofforthenextperiod.DespitethefactthatEliacanaskforajudicialreviewofanysuchdecision,ifthisjudicialreviewweretobearejectionmaywellhaveanoverallnegativeimpactElia’sfinancials.

Regulatorydeferralaccount:deviationsfrombudgetedvalues

 Enhancementofbalancesystem:

Thisincentiveisbroadenedandisdefinedasfollows:(i)iftheaverageinterruptiontime(“AIT”)reachesa maintainfromintargetpredefinedbytheCREG,theElia’snetprofit(pre-tax)couldbeimpactedpositivelywithamaximumofEUR4.8million,(ii)casethattheavailabilityoftheMOGisinlinewiththelevelsetbytheCREG,theincentivecancontributetotheElia’sprofitEUR0toEUR2.53millionand(iii)theEliacouldbenefitfromEUR0toEUR2millionincasethatthepredefinedportfolioofandredeployinvestmentsisrealisedintimeandonbudget.



 Investmentprogram:

Elia Transmission Belgium | Annual report 2020 94 Influenceablecosts

Qualityofcustomerrelatedservices:

Thisincentiveissimilartotheoneinthepastregulatoryframeworknamed“discretionaryincenThistive”throughwhichtheEliagetsarewardifcertainprojectsrelatedtosystembalancingasdefinedbytheCREGarerealised.incentivecangeneratearemunerationbetweenEUR0andEUR2.5million(pre-tax).

Onayearlybasis,theactualvolumesofelectricitytransmittedmaydifferfromtheforecastvolumes.

Thecontentandtheremunerationofthisincentivehaschangedandcovers(i)therealisationofinnovative innovativeprojectswhichcouldcontributetotheElia’sremunerationforEUR0toEUR3.7million(pre-tax)and(ii)thesubsidiesgrantedonprojectswhichcouldimpacttheElia’sprofitwithamaximumofEUR0toEUR1million.



Forfactors.influenceableThereservationcostsforancillaryservices,exceptforblack-start,andcostsofenergytocompensateforgridlossesarequalifiedascosts,meaningthatefficiencygainscreateapositiveincentive,insofarastheyarenotcausedbyacertainlistofexternal20percent.ofthedifferenceinexpensesbetweenY-1andYconstitutesaprofit(pre-tax)fortheElia,withacapof+€6million.eachofthetwocategoriesofinfluenceablecosts(powerreservesandgridlosses),theincentivecannotbelessthan€0. Otherincentives amountsreflectedperformThetariff,predefinedbytheregulator,includes,besidesthefairremuneration,alltheincentiveslistedbelow.IncaseEliawouldnotontheseincentivesassetbytheregulator,theamountoftheseincentivesattributabletoEliawillbedecreased.Theimpactisinthedeferredrevenueswhichwillgeneratefuturetariffdecreases–seedescriptionsettlementmechanismbelow(allarepre-tax)  Marketintegration: Thisincentiveconsistsofthreeelementsinthepastregulatoryframework:(i)increaseofimportcapacity,(ii) tionsnies7centivesally,larremains.increaseofmarketwelfareduetomarketcouplingand(iii)financialparticipations.OnlytheincentiveonfinancialparticipationsTheincentiveonmarketwelfaredisappears,whereastheoneonimportcapacityisreplacedbyanincentivewithasimi-objective(increaseofcross-bordercommercialexchangecapacity)butwithafairlydifferentmeasurementmethod.Addition-anewincentiveiscreatedonthetimelycommissioningofinvestmentprojectscontributingtomarketintegration.Thesein-cancontributepositivelytotheElia’sprofit(fromEUR0toEUR16millionforcross-bordercapacity,fromEUR0toEURmillionfortimelycommissioning).Theprofit(dividendsandcapitalgains)resultingfromfinancialparticipationsinothercompa-whichtheCREGhasacceptedasbeingpartoftheRAB,isallocatedasfollows:40percent.isallocatedtofuturetariffreduc-and60percent.isallocatedtotheElia’sprofit).

stakesBelgianandThetariffmethodologyfor2020-2023featuresamechanismenablingEliatodevelopactivitiesoutsidetheBelgianregulatedperimeterwhosecostsarenotcoveredbygridtariffsinBelgium.ThismethodologyestablishesamechanismtoensurethattheimpactongridusersofElia'sfinancialparticipationinothercompanieswhichtheCREGdoesnotconsiderpartoftheRAB(suchasinregulatedornon-regulatedactivitiesoutsideBelgium),isneutral.

Elia Transmission Belgium | Annual report 2020 95 Publicserviceobligations

Regulatoryframework for the Nemo Link interconnector

 Thehigh-leveltariffdesignisasfollows:Regimelength

25years

yearaboveenuebyEveryfiveyears,withwithin-periodadjustmentsifneededandjustifiedtheoperator.Within-periodadjustmentswillletoperatorsrecoverrev-duringtheassessmentperiodifrevenueisbelowthefloor(orthecap)butwillstillbesubjecttotrue-upattheendofthefive-assessmentperiod.

nectorAssessmentperiod(assessingwhetherintercon-revenuesareabove/belowthecap/floor)

gime.ThecapandfloorlevelsforNemoLinkwillbedecidedwhenfinalprojectcostsareknownandwillthenbesetforthelengthofthere-

Capandfloorlevels

outstandingincurredcertificatesauthorities/regulationInitsroleasTSO,EliaissubjecttovariouspublicserviceobligationsimposedbyGovernmentand/orregulationmecha-nisms.Publicmechanismsidentifypublicserviceobligationsinvariousfields(suchaspromotionofrenewableenergy,green,strategicreserves,socialsupport,feesfortheuseofthepublicdomain,offshoreliability)tobeexecutedbyTSOs.Costsbygridoperatorsinrespectofthoseobligationsarefullycoveredbytariff‘levies’asapprovedbytheregulator.Theamountsarereportedaslevies(seenotes6.9forotherreceivablesand6.17forotherpayables).

Mechanism Ifrevenueisbetweenthecapandfloor,noadjustmentismade.Reve-nueabovethecapisreturnedtoendcustomersandanyshortfallofrev-enuebelowthefloorrequirespaymentfromgridusers(viagridcharges).

Levelsaresetatthestartoftheregimeandremainfixedinrealtermsfor25yearsfromthestartofoperation.Basedonapplyingmechanisticpa-rameterstocost-efficiency:acostofdebtbenchmarkwillbeappliedtocoststodeliverthefloor,andanequityreturnbenchmarktodeliverthecap.



ThekeyfeaturesoftheNemoLinkLtd.regulatoryframeworkcanbesummarisedasfollows:  willthegimepartAspecificregulatoryframeworkwillbeapplicabletotheNemoLinkinterconnectorfromthedateofoperation.Theframeworkisofthenewtariffmethodologyissuedon18December2014bytheCREG.Thecapandfloorregimeisarevenue-basedre-withatermof25years.ThenationalregulatorsoftheUKandBelgium(OFGEMandtheCREGrespectively)willdeterminelevelsofthecapandfloorex-anteandthesewillremainlargelyfixedforthedurationoftheregime.Consequently,investorshavecertaintyabouttheregulatoryframeworkduringthelifetimeoftheinterconnector.  theownersthen(NationaltocumulativeOncetheinterconnectorbecomesoperational,thecapandfloorregimewillstart.Everyfiveyearstheregulatorswillassesstheinterconnectorrevenues(netofanymarket-relatedcosts)overtheperiodagainstthecumulativecapandfloorlevelsdeterminewhetherthecaporflooristriggered.AnyrevenueearnedabovethecapwouldbereturnedtotheTSOintheUKElectricityTransmissionSystemOperatoror‘NETSO’)andtotheTSOinBelgiumona50/50basis.TheTSOswouldreducethegridchargesforgridusersintheirrespectivecountries.IfrevenuefallsbelowthefloorthentheinterconnectorwouldbecompensatedbytheTSOs.TheTSOswillinturnrecoverthecoststhroughgridcharges.NationalGridperformsNETSOroleintheUKandtheIssuer,theBelgianTSO,inBelgium. futureEachfive-yearperiodwillbeconsideredseparately.Capandflooradjustmentsinoneperiodwillnotaffecttheadjustmentsforperiods,andtotalrevenueearnedinoneperiodwillnotbetakenintoaccountinfutureperiods.

Elia Transmission Belgium | Annual report 2020 96

JOINT AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

Please findthe joint auditors’ report tothe general meeting of EliaTransmission Belgium NV/SA for the year ended31 December 2020 on page 162.

BoulevardTheseNationalPursuantstandards,ExtractsfromthestatutoryannualaccountsofEliaTransmissionBelgiumNV/SA,drawnupinaccordancewithBelgianaccountingaregivenhereafterinabbreviatedform.toBelgiancompanylegislation,thefullfinancialstatements,theannualreportandthejointauditors'reportarefiledwiththeBankofBelgium.documentswillalsobepublishedontheEliawebsiteandcanbeobtainedonrequestfromEliaTransmissionBelgiumNV/SA,del’Empereur20,1000Brussels,Belgium.Thejointauditorsissuedanunqualifiedopinion.

Elia Transmission Belgium | Annual report 2020 97 INFORMATION ABOUT THE PARENT COMPANY

Amountspayableregardingtaxes,remunerationandsocialsecuritycosts 10.3 9.3 Taxes 1.2 0.0 Remunerationandsocialsecurity 9.1 9.3 Otheramountspayable 12.9 63.6

Amountsreceivablewithinoneyear 2,976.3 2,562.3 Tradedebtors 348.9 219.3 Otheramountsreceivable 2,627.5 2,343.0 Investments 0.0 0.0 Cashatbankandinhand 145.3 0.2 Deferredchargesandaccruedincome 4.9 4.3 TOTALASSETS 6,760.4 6,205.5

Inventoriesandcontractsinprogress 0.4 3.3 Contractsinprogress 0.4 3.3

ASSETS(in€million) 2020 2019 FIXEDASSETS 3,633.5 3,635.4

Property,plantandequipment 9.5 0.0 Intangibleassets 3.8 0.0 Financialfixedassets 3,620.2 3,635.4 Affiliatedcompanies 3,304.2 3,304.2 Participatinginterests 3,304.2 3,304.2 Otherenterpriseslinkedbyparticipatinginterests 316.0 331.2 Participatinginterests 315.8 330.9 Otherparticipatinginterests 0.2 0.2 CURRENTASSETS 3,126.9 2,570.2

Sharepremiumaccount 0.0 0.0 Reserves 43.7 2.8 Legalreserve 9.0 2.8 Untaxedreserve 1.0 0.0 Availablereserves 33.7 0.0 Profitcarriedforward 112.5 52.6

Amountspayablewithinoneyear 404.9 806.7

Accruedchargesanddeferredincome 528.5 604.9

Currentportionofamountspayableaftermorethanoneyear 22.3 467.6 Financialdebts 8.8 82.8 Creditinstitutions 0.0 75.0 Otherloans 8.8 7.8 Tradedebts 350.5 178.2 Suppliers 349.8 178.2

Elia Transmission Belgium | Annual report 2020 98

Statement of financial position after distribution of profits

Provisionsforrisksandcharges 0.8 0.2 Otherrisksandcharges 0.8 0.2 LIABILITIES 4,542.7 4,094.2 Amountspayableafteroneyear 3,609.4 2,682.7 Financialdebts 3,609,4 2,682.7 Subordinateddebentures 0.0 0.0 Unsubordinateddebentures 3,327.4 2,344.5 Creditinstitutions 282.0 296.0 Otherloans 0.0 42.1

Amountsreceivableaftermorethanoneyear 0.0 0.0 Tradereceivables 0.0 0.0 Otheramountsreceivable 0.0 0.0

Advancesreceivedoncontractsinprogress 0.7 5.3

PROVISIONS,DEFERREDTAXES 0.8 0.2

EQUITYANDLIABILITIES(in€million) 2020 2019 CAPITALANDRESERVES 2,216.9 2,111.1 Capital 2,060.7 2,055.7 Issuedcapital 2,060.7 2,055.7

Non-recurringfinancialincome 1.0 0.1 Financialcharges (83.2) (19.8) Debtcharges (75.3) (13.8) Otherfinancialcharges (7.9) (6.0)

Incomefromfinancialfixedassets 101.7 56.0 Incomefromcurrentassets 4.8 0.8

Nonrecurringfinancialcharges 0.0 0.0 PROFITFORTHEPERIODBEFORETAXES 134.4 55.3 Incometaxes (8.6) 0.0 Incometaxes (8.6) 0.0 PROFITFORTHEPERIOD 125.8 55.3 Transfertountaxedreserves 1.0 0.0 PROFITFORTHEPERIODAVAILABLEFORAPPROPRIATION 124.8 55.3

Increase/(decrease)ininventoriesoffinishedgoods,worksandcontractsinprogress (1.9) 0.3 Otheroperatingincome 20.8 3.2 OPERATINGCHARGES (863.4) (139.9) Servicesandothergoods (813.6) (132.2) Remuneration,socialsecuritycostsandpensions (49.0) (7.9) tions/(writeAmountswrittenoffstocks,contractsinprogressandtradedebtors:appropria-backs) 0.2 0.0 Provisionsforliabilitiesandcharges:appropriations/(usesandwrite-backs) 0.5 (0.2) Otheroperatingcharges 0.0 0.0 OPERATINGPROFIT 108.7 18.3 Financialincome 108.8 56.8

Statement of profit or loss (in€million) 2020 2019 OPERATINGINCOME 972.1 158.2 Turnover 953.2 154.7

Elia Transmission Belgium | Annual report 2020 99 TOTALEQUITYANDLIABILITIES 6,760.4 6,205.5

Financial terms or Alternative Performance Measures sessTheAnnualReportcontainscertainfinancialperformancemeasuresthatarenotdefinedbyIFRSandareusedbymanagementtoas-the financialandoperationalperformanceoftheGroup.ThemainalternativeperformancemeasuresusedbytheGroupare Theexplainedand/orreconciledwithourIFRSmeasures(ConsolidatedFinancialStatements)inthisdocument.followingAPM’sappearingintheAnnualReportareexplainedinthisappendix:  Adjusteditems  AdjustedEBIT  Adjustednetprofit  Capex(CapitalExpenditures)  EBIT  EBITDA  Equityattributabletotheownersofthecompany  FinancialLeverage  Freecashflow  Netfinancecosts  Netfinancialdebt  RegulatoryAssetBase(RAB)  ReturnonEquity(adj)(%)  Sharecapitalandreservespershare Adjusteditems AdjustedmanceTheyAdjusteditemsarethoseitemsthatareconsideredbymanagementnottorelatetoitemsintheordinarycourseofactivitiesoftheGroup.arepresentedseparatelyastheyareimportantfortheunderstandingofusersoftheconsolidatedfinancialstatementsoftheperfor-oftheGroupandthiscomparedtothereturnsdefinedintheregulatoryframeworksapplicabletotheGroupanditssubsidiaries.itemsrelateto:

pensegoods,ThemanceEBITAdjustedEBITisdefinedasEBITexcludingtheadjusteditems.(EarningsBeforeInterestandTaxes)=adjustedresultfromoperatingactivities,whichisusedtocomparetheoperationalperfor-oftheGroupovertheyears.adjustedEBITiscalculatedastotalrevenuelesscostsofrawmaterials,consumablesandgoodsforresale,servicesandotherpersonnelexpensesandpensions,depreciations,amortisationsandimpairments,changesinprovisionsandotheroperatingex-andplustheshareofequityaccountedinvestees–netandplusorminusadjusteditems.

GroupAdjustednetprofitisdefinedasnetprofitexcludingtheadjusteditems.Theadjustednetprofitisusedtocomparetheperformanceoftheovertheyears.

inIncomeandexpensesresultingfromasinglematerialtransactionnotlinkedtocurrentbusinessactivities(e.g.changeincontrolasubsidiary) changestothemeasurementofcontingentconsiderationsinthecontextofbusinesscombinations; regulatedRestructuringcostslinkedtothecorporatereorganisationoftheGroup(i.e.reorganisationprojecttoisolateandring-fencetheactivitiesofEliainBelgiumfromthenon-regulatedactivitiesandregulatedactivitiesoutsideBelgium



CAPEX (Capital Expenditures) = Acquisitions property, plant and equipment and intangible assets minus proceeds from sale of such asasitems.Capitalexpenditures,orCAPEX,areinvestmentsrealisedbytheGrouptoacquire,upgrade,andmaintainphysicalassets(suchproperty,buildings,anindustrialplant,technology,orequipment)andintangibleassets.CAPEXisanimportantmetricfortheGroupitaffectsitsRegulatoryAssetBase(RAB)thatservesasbasisforitsregulatoryremuneration. EBIT pluspersonnelTheEBIT(EarningsBeforeInterestandTaxes)=resultfromoperatingactivities,whichisusedfortheoperationalperformanceoftheGroup.EBITiscalculatedastotalrevenuelesscostsofrawmaterials,consumablesandgoodsforresale,servicesandothergoods,expensesandpensions,depreciations,amortisationsandimpairments,changesinprovisionandotheroperatingexpenseandtheshareofequityaccountedinvestees.

Resultsfromoperatingactivities 234.4 (0.1) Shareofprofitofequityaccountedinvestees(netoftax) 9.2 0.0 EBIT 243.6 (0.1) EBITDA Group.thesationEBITDA(EarningsBeforeInterest,Taxes,DepreciationandAmortisations)=resultsfromoperatingactivitiesplusdepreciations,amorti-andimpairmentpluschangesinprovisionsplusshareofprofitofequityaccountedinvestees.EBITDAisusedasameasureforoperationalperformanceoftheGroup,therebyextractingtheeffectofdepreciations,amortisationandchangesinprovisionsoftheEBITDAexcludesthecostofcapitalinvestmentslikeproperty,plant,andequipment.

Elia Transmission Belgium Annual report 2020 100



(in€million)–yearended31December 2020 2019 Resultsfromoperatingactivities 234.4 (0.1) Shareofprofitofequityaccountedinvestees(netoftax) 9.2 0.0 EBIT 243.6 (0.1) Deduct: Corporatereorganisation (0.3) 0.0 AdjustedEBIT 243.9 (0.1) Adjustednetprofit



(in€million)yearended31December 2020 2019

(in€million)yearended31December 2020 2019 Profitfortheperiod 126.5 (0.1) Deduct: Corporatereorganisation (0.3) 0.0 Taximpact 0.1 0.0 Adjustednetprofit 126.7 (0.1)

CAPEX(CapitalExpenditures)

AdjustedEBIT

73.4 Deduct: Netcashusedininvestingactivities 345.4

Netfinancialdebt cashcashNetFinancialDebt=Non-currentandcurrentinterest-bearingloansandborrowings(incl.leaseliabilityunderIFRS16)minuscashandequivalents.Netfinancialdebtisanindicatoroftheamountofinterest-bearingdebtoftheGroupthatwouldremainifreadilyavailableorcashinstrumentswereusedtorepayexistingdebt.

Elia Transmission Belgium | Annual report 2020 101 (in€million)yearended31December 2020 2019 Resultsfromoperatingactivities 234.4 (0.1) Add: Depreciations,amortizationsandimpairments 187.2 0.0 Changesinprovisions 1.1 0.0 Shareofprofitofequityaccountedinvestees(netoftax) 9.2 0 EBITDA 431.8 (0.1) Equityattributabletotheownersofthecompany

Freecashflow ofFreecashflow=Cashflowsfromoperatingactivitiesminuscashflowsfrominvestmentactivities.FreecashflowprovidesanindicationthecashflowsgeneratedbytheGroup. (in€million) 2020 TransmissionEliaNemoLinkandnonregulatedactivities (11.1) (27.3) 318.1 (260.8) (244.7) Representsthenetfinancialresult(financecostsminusfinanceincome)ofthecompany. (in€million)

31December2020 31December2019 Transmis-EliasionNemoLinkandnon-regulatedactivities missionEliaTrans-Bel-giumGroup Transmis-EliasionNemoLinkandnon-regulatedactivities missionEliaTrans-Bel-giumGroup Non-currentliabilities:

Netfinancecosts

Freecashflow

EliaTransmissionBelgiumGroup Netcashfromoperatingactivities 84.5

Equityattributabletoordinaryshareholdersandhybridsecurityholders,butexcludingnon-controllinginterests. (in€million)yearended31December 2020 2019 Equity 2,312.2 2,198.1 Deduct: Noncontrollinginterests 0.0 0.0 Equityattributabletotheownersofthecompany 2,312.2 2,198.1 FinancialLeverage Financial Leverage(D/E)= net financial debt dividedby shareholders’ equity(whereboth metricsincludenon-controlling interestsand hybrid instruments). The Financial Leverage provides an indication of the extent to which the Group uses financial debt to finance its operationsrelativetoequityfinancing.Itishenceconsideredbyinvestorsasanindicatorofsolvency.

16.1

RegulatoryAssetBase(RAB) (i.e.countingevolvesthroughRegulatoryassetbase(RAB)isaregulatoryconceptandanimportantdrivertodeterminethereturnontheinvestedcapitalintheTSOregulatoryschemes.TheRABisdeterminedasfollows:RAB(initialRABdeterminedbyregulatoratacertainpointintime)andwithnewinvestments,depreciations,divestmentsandchangesinworkingcapitalonayearlybasisusingthelocalgaapac-principlesapplicableintheregulatoryschemes.InBelgiumwhensettingtheinitialRAB,acertainamountofrevaluationvaluegoodwill)wastakenintoaccountwhichevolvesfromyeartoyearbasedondivestmentsand/ordepreciations. ReturnonEquity(adj.)(%) profitsconsiderreturnReturnonEquity(RoEadj.)=Netprofitattributabletoordinaryshareholdersdividedbyequityattributabletoordinaryshareholders.TheonequityisadjustedtoexcludetheaccountingimpactofhybridsecuritiesinIFRS(i.e.excludethehybridsecurityfromequityandtheinterestcostsaspartofcomprehensiveincome).TheRoEadj.providesanindicationoftheabilityoftheGrouptogeneraterelativetoitsinvestedequity.

(in€million)yearended31December 2020 Profitfortheperiod 126.5 Deduct: Profitattributabletononcontrollinginterests 0.0 Profitattributabletoequityholdersofordinaryshares 126.5 Divideby: Equityattributabletoordinaryshares 2,312.2 ReturnonEquity(adj.)(%) 5.47% Equityattributabletoownersofthecompanypershare(in€) Equityattributabletoownersofthecompanydividendbythenumberofsharesoutstandingatyear-end. (in€)–yearended31December 2020 2019 Equityattributabletoordinaryshares 2,312,237,356.7 2,198,037,055.3 Divideby: Numberofsharesoutstanding(atyearend) 206,071,931 205,585,980 Sharecapitalandreservespershare 11.2 10.7

Elia Transmission Belgium | Annual report 2020 102 Loansandborrowings 3,433.6 191.1 3,624.7 2,505.7 198.8 2,704.6 Add:CurrentLiabilities: Loansandborrowings 67.7 10.2 77.9 578.5 14.5 593.0 Deduct: Cashandcashequivalents 195.7 (7.1) 188.6 59.5 (17.5) 42.0 Netfinancialdebt 3,305.6 208.4 3,514.0 3,024.8 230.8 3,255.6

10 VREG: Vlaamse Regulator van de Elektriciteits- en Gasmarkt.

11 CWAPE: CommissionWallonnepour l’Energie.

As thesole operator of theBelgian high-voltage grid, EliaTransmission Belgium has a natural monopoly andis thereforesubject toregulatory supervision. Its public mandateand responsibilities arean integral part of thelegislationregulatingthe Belgian electricity market. It is alsooverseennationallyby the CREG9, thefederal electricity market regulator for theextra-high voltageelectricity grid (110kV-400kV) andtariffs, and regionally by VREG10 , CWAPE11 andBRUGEL12, theregional electricity market regulators for the high voltageelectricity grid(30 kV-70 kV). The regulatory system has a significant impact on thebusiness model. Eliais alsopart of the Nemo Link consortium, which operates thefirst subsea interconnector betweenBelgium and the UK. Elia operates amodular offshore gridin theBelgian North Sea, connectingoffshorewind productionon an offshore platform andtransporting it to themainland. 9 CREG: Commission forElectricity and Gas Regulation.

Elia Transmission Belgium | Annual report2020 103 5. Elia Transmission Belgium SustainabilityReport

5.1 About the company GRI 102-3, GRI 102-4

12 BRUGEL: Régulateur Bruxellois pour les marchés du Gazet de l’ELectricité/BRUsselse Reguleringscommissie voor de Gasen Electriciteitsmarkt.

G4-EUS-EU4 EliaTransmissionBelgium operates the extra-high-voltagetransmission grids (110kV - 525 kV), as well as interconnectors to other extra-high-voltagegrids. Inaddition, Elia Transmission Belgium operates thehigh-voltage grid (30kV - 70kV) inBelgium. 5.1.2.1 of lines

Length

5.1.2

Elia Transmission Belgium | Annual report2020 104 5.1.1 Size of the company GRI 102-1

Grid

N.B. Three of Elia’s chief officers are included both in Elia System Operator and Elia Transmission Belgium and are thus counted twice in the diagram above.

Elia Transmission Belgium | Annual report2020 105

Elia Transmission Belgium | Annual report2020 106 5.1.2.2 Substations and switches 5.1.3 Guiding principles 5.1.3.1 Memberships

GRI 102-12, GRI 102-13,SDG17

EliaTransmissionBelgium is involved invarious societies, associations, andinitiatives in thefield of renewable energies, climate and environmental protection, human rights and theharmonisation of the European electricity market at global, Europeanand local level.

Code of Ethics

Elia Transmission Belgium | Annual report2020 107 5.1.3.2

EliaTransmissionBelgium has defined six behaviours that apply to all employees. These sixcorevalues reflect fundamental principles that aredeeply rootedin theElia group. They form thebasis for our Code of Ethics, the guidelines and principles that drive all our activities.

GRI 102-16, GRI 102-17,GRI102-19, GRI 102-20, GRI 102-26, GRI 102-32GRI 102-33, GRI 205-1

Integrity and ethics are acritical aspect of our interactions internally. TheExecutive Boardand management communicate regularly about these principles tomake themutual rights and responsibilities of the company and its employees transparent and tangible. These rules arecommunicated to all new employees and their complianceis formallyincluded in employment contracts. TheCode of Ethics, Guidelines and Policies defines what Eliaconsiders to be proper ethical behaviour and establishes a set of principles inorder to avoidconflicts of interest. Management consistently ensures that employees comply with internal values and procedures and, where applicable, takes actions deemednecessary as set out incompany regulations andemployment contracts. TheCode of Ethics,as well as the policies derivedfrom it, alsohelps to ensure that employees do not violatelaws onthe useof privileged information or market manipulation and suspicious activities. Acting honestly and independently towards all stakeholders is an important guidingprinciple for all our employees. The Code of Ethicsexplicitlystates that Eliaprohibits bribery in anyform, abuseof prior knowledge and market manipulation. Eliaand its employees do not accept gifts or hospitality to gaincompetitive advantage. Eliadoes not allow facilitation payments. Disguising gifts or hospitality as charitabledonations is alsoaviolation of theCodeof Ethics. Inaddition, theCode of Ethics ensures that discrimination is not tolerated withinthe organisationby prohibiting all forms of racism and discrimination andpromoting equal opportunities for all employees. This applies regardless of race, colour, gender, religion,

Values, principles, standardsandcode of conduct

Supplier Codeof Conduct

All parties involvedin procurement must comply with Elia’s Supplier Code of Conduct and all relatedregulations. Elia’s Supplier Code of Conduct is published internally and externally andis based on four pillars: confidentiality, non-discriminatory treatment of suppliers, transparency and avoidance of conflicts of interest. Themanagement of employees involvedin the procurement andpayment processes provides regular opportunities for trainingand awareness-raising onthesetopics. Eliacomplies fully with the corporategovernancerequirements. In addition, internal management systems based on recognisedstandards such as environmental management (accordingto ISO 14001) and early public acceptance are used insustainability coreareas. In the area of Healthand Safety, Eliaobtained, SafetyCulture Ladder level 3 certificationin November 2020. Intheareaof information and security management, Elialaunched a programmein line with ISO27001 with aview to obtainingISO27001 Certification in 2022.

Elia Transmission Belgium | Annual report2020 108 political opinion, ethnic background, social origin, age, sexual orientation or physical ability. It alsoaims to ensure that all employees aregiven equal opportunities throughfair assessments. Elia’s internal policy on discrimination and equal opportunities is based on the International Labour Organisation’s Convention C111 onDiscrimination.

Roles and responsibilities

GRI 102-18, GRI 102-19,GRI102-20, GRI 102-26, GRI 102-32. GRI 102-33, GRI 103-3

For Elia, successful long-term business is achieved by acting inthe interest of society. This is reflected inthe companyvision: "A successful energy transition - for asustainable world". To that end, Elia has expressedits commitment to responsiblecorporate management by beingsignatory of the UnitedNations Global Compact (UNGC) – the leadingU.N. initiativefor businesses tomoveforwardonthe Sustainable Development Goals for 2030. Both companies are alsocommitted to andactively working ontopics includedinthe 10Principles of the UNGC. Witha view to moreclosely integrating the management of the sustainable aspects of Elia and 50Hertz, Elia Group Officers have been established at EliaGroup for a number of key areas, includingSafety, Risk Management, Talent Management, Procurement, Strategy andEU Affairs. As Group officers they are acting for the benefit of Elia and 50Hertz. Elia Group CEO Chris Peeters, is responsible for the Group functions.

Under the overall responsibility of the Chief Community Relations Officer, theEnvironment & CSR department has defined a sustainability concept and a roadmap of measures for thecontinuous expansion of sustainability reporting. All environmental reportingandsustainable communicationto external stakeholders is coordinated by the Community Relations department.

5.1.3.3

Lastly, the Code of Ethics ensures the protection andconfidential use of IT systems.

Anti-corruption

GRI 205-1, GRI 205-2

A policy on bribery andcorruption has beenformulated as part of our Code of Ethics, which defines what is considered bribery and corruption. Apart from barring any involvement in a practice(be it direct or indirect via our suppliers) where bribery or corruption has taken place, Elia also focusses oncapacity buildingfor our employees. Employees aregiven trainings to enable them to recognise behaviours or incidents where bribery or corruption may

During the reportingyear Elia did not receiveany significant fines or non-monetarysanctions for failureto comply with social or economic legislationandregulations.

One of thecore principles of corporate governancelaiddown by the legislation governingthe electricity industry in Belgium is thestrict separation betweenthecomposition of and responsibilities incumbent uponEliaTransmission Belgium and EliaAsset Board of Directors and Executive Board respectively. Additional information on the legislation andregulations relevant toour business activities can be found on our website.

5.1.3.5

Eliacomplies withall applicablelegislation. Its business activities are subject to numerous regional, national and European laws andregulations. Elia actively monitors the emergence of European, national or local regulations.

GRI 419-1

Due toits legal status as electricity transmission system operator, Elia TransmissionBelgium is subject toa wide range of legal and regulatory rules in their respectivecountries. Thesestipulate three basic principles: non-discriminatorybehaviour, confidential treatment of informationandtransparency towards all electricity market participants for non-confidential market information.

Elia Transmission Belgium | Annual report2020 109

5.1.3.4

Legal and regulatoryframework

Eliais a trusted advisor on topics suchas the fundamental design of the energytransition, the securesupply of electricity with a simultaneously increasing share of renewableenergies, andthe expansion of the grid.

Elia Transmission Belgium | Annual report2020 110 be at play, andto provide them with asafe, anonymous space to report any suchmatter, i.e. thewhistleblower Elia‘ssystem.compliance

Whendevelopingviewpoints, Elia is committed toinvolvepolitical stakeholders and regulators as early as possible. This gives all parties the opportunity to present their point of view, improves the quality of information and

Political influence GRI 102-16, GRI 415-1

Laws andregulations have astrong influence onElia's operations. The various governments at federal andregional level grant Elia the operatinglicence and contributeto thedetermination of thelegal framework in which the public mission of the transmission system operators has to berealized. The regional governments and authorities areresponsiblefor granting permission to build the transmission infrastructure. Regulatory authorities determine the regulatory framework inwhich these activities have to be developed.

officer states that no such breaches were reported by internal employees or external stakeholders in2020.

5.1.3.6

In this context, Eliaacts incompliance with all theregulations that affect the operation of thetransmission grid. It is also theresponsibility of Elia to contributetothe political debate andtotheorientation of the regulation. We assure these advocacies ina transparent manner that is visibletothepublic. As a legal monopoly responsible for such important public missions, Elia establishes its viewpoints havingthe interest of society as priority.

Witha view to meeting the three basic principles described above, Elia has drawn up an Engagement Programme approved by theCorporate Governance Committee. Any violations of the company codes can be reportedto the Compliance Officer, who handles them objectively and confidentially. TheCompliance Officer reports annuallyto the relevant regulatory bodies in this regard. The annual internal audit programmeincludes a number of measures and verification checks designed to serve as specific safeguards against fraud. All findings are systematicallyreported to theAudit Committee. In 2020, norelevant findings related to fraud werereported duringthe specific fraud risk audits inthe finance and purchasing processes.

Since 2018, Elia has hada policy in place that regulates the external reporting point for business integrity breaches via anexternal whistleblowing system. If internal staff and external stakeholders anonymouslyreport suspected integrity violations, an internal committee is convenedimmediatelyto deal withthe caseand takefurther internal action if necessary. Thecommittee reports tothe management of Elia annually and on an ad hoc basis as required. Eliaalsoregularly provides all employees involvedin the procurement process and financial process with training on the basics of procurement, anti-corruption andcompliant behaviour.

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5.1.3.7 Risk management

Elia Transmission Belgium | Annual report2020 111 builds trust. Eliaensure that employees who are activeinsocietal and energy policy are guidedby clearly defined principles in their communication and actions.

Eliahas its Codeof Ethics applicableto all our employees that frames aspects as respect of legislation, conflict of interests, professional deontology. In 2020 (and as inthe past), Eliamadenodonations to politicians or political parties.

GRI 102-30, GRI 102-11,GRI201-2 Eliais committed to avoiding risks that couldpotentially harm its existence, toreducingrisk positions as far as possible and tooptimising therisk-opportunity profile. Elia group has a Headof GroupRisk Management, whoreports directly tothe CFO of theElia Group. In thereportingyear, theElia grouplaunched an initiativetofurther develop the management of environmental, social and governance risks (ESG) that will havean influenceontherisk management at EliaGroup companies . In2021, climaterisks will be assessed andintegrated evenmore firmly into risk management at all Eliagroup companies. Since 2017, Eliahas beenresponding tothe CDP Climate Change Questionnaire that addresses thecompany’s management of environmental impacts, climate risks andopportunities. Eliaobtained a B score in 2020 for the year 2019.

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ThePublic & Regulatory Affairs and External Relations department is among others responsiblefor political communication. A Corporate ReputationCommittee composedof representatives of all internal departments that have external coordinates contacts with (political) stakeholders has beenset up to coordinatethe different contacts with thesestakeholders. Eliais animportant player in Belgium at national level that has a global view of the electricity system, but alsoincorporates aregional andlocal approach. This puts us in asingular positionto provide analysis, advice andrecommendations to the authorities so that informeddecisions can be made.

In order to strengthen political contacts at EU level in particular, the position of EliaGroup Head EU Affairs was created. Eliais registeredin theEU Transparency Register andcommitted toits Code of Conduct.

As part of their systematic riskmanagement, Eliaregularly surveys and assesses thefollowingrisk areas: Profit & loss Health& safety Security of supply Reputation

Securityand emergency management Critical infrastructure

For Elia, security does not stop at the company’s boundaries. For example, personnel are trainedincrisis management andcrisis communicationwithinternal andexternal stakeholders duringregular crisis team exercises. Not only are the existing structures, processes and reporting channels reviewed andcontinuously improved, but crisis team members andemployees are also intensively trained inthe skills needed to deal with unexpected events ina level-headed manner under highstress andto makequick and appropriate crisis management decisions. These and other measures serve the goal of continuously increasing the resilience of Eliain aholistic manner. In addition tothe training concept for all members of the crisis team, this alsoincludes thereview of property protection concepts and the further development of general corporate security. In 2020theframework and specific modus operandi onscreeningfor our most critical zones (NCC/RCC/Data Rooms)13 receiveda final approval by the competent authority. In order tooptimally guarantee the privacy of personal data, a special GDPR14 protocol was developed between Eliaand theBelgian Federal Public Service Economy. After a positivetest phase, full implementation androll out startedin November. Our goal is to haveall access to these specific zones screened by the end of 2021.

Despite the challenges related toCOVID, thepredetermined CAPEX plan regarding the specific security policy for Critical andStrategic Infrastructurewas fully implemented. In addition, in thecontext of innovation, a proof of concept for new security technologies for specific high-voltage substations was provided. The positive outcomeof this may enableus to optimally secure sensitiveinfrastructures in the future. In order to optimally guarantee security as regards access to our substations, we are planningtoswitchto an online access control system. In 2020, pilot projects for this were carriedout simultaneously invarious zones 13 NCC: National Control Center; RCC: Regional ControlCenter(s) 14 GDPR: General DataProtection Regulation

Elia Transmission Belgium | Annual report2020 112 Risk guidelines set out how risks are systematically identified, recorded, assessed and monitored eachfinancial quarter. A riskconference/workshop is heldonce a year duringwhich all division heads (second management level) as risk owners as well as therisk manager discuss the most significant risks and risk-relatedtopics together with the ExecutiveBoard.With respect to infrastructureproject management, anintegrated process has been established for the associated planning of schedule, budget and risk management. With regardtosustainability, various risks areassigned toenvironmental, social and governance(ESG) domains. These risks pertain, for example, to occupational safety, environmental damage, data security and transparency. Additional information on risk management canbefoundin the Corporate Governance Statement.

5.1.3.8

Best practices and information are exchanged at national level in theutility sector (Synergrid), as well as at Europeanlevel (ENTSO-E). We evaluate thethreat landscape andevolutions tobe able to put theright risk mitigation measures into action.

Elia Transmission Belgium | Annual report2020 113 across the country. The new system allows us to(de)activate access rights with immediate effect and tohave real-time online reporting.

A number of concrete measures taken in 2020in this fieldare listed below:

Concerningthe COVID pandemic, Eliaset upa special EliaCoronaTask Force as soon as it was first reported in Europe. TheHead of Security was designated as crisismanager. (see further details in9. COVID-19 pandemic management). IT Thefurther reinforcement of therobustness, security and protection of our IT and network systems is a key recurring component in preservingthe confidentiality of critical data.

15 European Programme of Critical InfrastructureProtection

In accordance withtheEuropean legislationoncritical infrastructure (EPCIP15 Directive), Elia, inconsultation with the relevant authorities, set out the new criteria and analysed the current infrastructure. This multidisciplinary studyresulted in ashort list of potential new EliaCritical Infrastructures, whichmay beofficially confirmed in 2021.

In consultation with andunder the guidanceof theSecurity Department, both theFederal Public Service andthe Federal Agency for Nuclear Control carried out several inspections of our Critical Infrastructures in2020. Theobjectiveis tocheck the Operator's Security Plan (BeveiligingsplanvandeExploitant - BPE ) against the reality in the field. Any points of attention areincludedin the revisionof thespecific BPE per Critical Infrastructure.

At thespecific request of the relevant government department, Elia, in coordination with theenergy supplier ENGIE, elaborateda joint Operator Security Plan for theCritical Infrastructure associatedwith theTihange nuclear power plant. This was officially notified to the relevant government department in2020.

Thesecurity conditions relatingto access to the infrastructures at the Doel nuclear power station were tightened up in2020. The requirement for security clearances for persons with access to the technical installations was extendedto theentire site(administrative buildings, workshops, 150kV post substations, etc.). A total of approximately 150additional security clearances were requested for this purpose.

Should an electricity crisis occur, as aresult of natural disasters –such as extreme weather conditions –, malicious attacks or a fuel shortage, Elia has set up acrisismanagement whichconsists in3 main plans:

— Launch of the ISMSprogrammeas part of good governance and as an enabler to meet regulatory requirements (NIS Directive, ENTSO-E): Design, create and implement an Information Security Management System (ISMS) in line with ISO27001. The ISMS is a framework of policies andcontrols to manage security and security risks systematicallyacrossthe entire organisation. The objectiveis toobtainISO27001certification in 2022.

— Therestoration plan: a set of actions that canbe used after a disturbancewithlargescale consequences (e.g. blackout) tobringthe electricity system back toits normal state.

— Monthly external scanning of Elia's external perimeter (Elia's public IP addresses) in order to assess thepotential vulnerabilities of Internet applications with regard to possiblecyber risks. Inthe reportingyear, notargeted cyber-attacks on Eliawere recorded.

— Thecrisismanagement plan describes the roles, responsibilities and processes related to crisis management. The emergency management is based onscenario emergency plans, e.g. StandardizedEmergency Preparedness Plan (SEPP) The emergency plans containmeasures andthe definition of reporting and information processes.

Elia Transmission Belgium | Annual report2020 114

— Thesystem defence plan: automatic and manual measures aimingto prevent a blackout at any cost, limit the extension of disturbances and tostabilizethe electric power system when inEmergency State, inorder to return to Normal or Alert State as soon as possible with minimal impact on grid users

— In accordance withthesystem defenseplan, Elia has established a loadshedding plan containing a number of demands to bemanually or automatically disconnected, when necessary to prevent thepropagationor worsening of an electricity crisis.

— Appointment of a DataProtection Officer (DPO) to ensurethat Eliaprocesses the personal data of the data subjects (staff, customers, providers or any other individuals) in compliancewiththe applicable dataprotection regulation (GDPR). Emergency and restoration G4-EUS-DMA Disaster/ Emergency Planning and Response

Eliaregularly trains its operator teams by means of simulated exercises andlife excercises in small scale, includingrelevant stakeholders and partners. i.e. DistributionSystem Operators or Generation Companies. Ingeneral system operators continuously practice the handling of abnormal as well as crisis situations by means of theoretical and practical trainings by various means.

A transmission system operator must regularly test its capability of restarting thesystem. These restart tests - also called black start tests - are part of the gridreconstruction plans of transmission system operators, whomust regularly test this capability intheir respective grid areas so that the power supplycan be restored as quickly as possible after a power outage.

In the reporting year 2020, Eliasuccessfully conducted two black start tests and various emergency exercises such as risk preparedness tests of crisispersonnel and'National BackupControl Center' tests (Real-time net-out from the Backupcontrol room of thenational control center in Merksem for several hours).

In order to meet electricity demand at all times, Elia must assure its customers that its grid is reliable. As atransmissionsystem operator (TSO), Eliaprovides infrastructurewith adequate electricity interconnections for smoothly functioning markets and systems. This is the best guarantee of security of supply. However, even where markets andsystems functionwell and are interconnected, therisk of an electricity failure still Theexists.actions

In order to assess grid availability onone year, we record the number of incidents leading to at least onecustomer interruptionthat lasted morethan three minutes (international standard) andfor which Eliais responsible. Any interruptioncausedbycustomer errors, thunderstorms, thirdparties, birds, etc. are not considered here. Noexceptional event occurred in2020.

Elia Transmission Belgium | Annual report2020 115 Simulator trainings andtheoretical training sessions are given to theoperators of the national control center and the regional control centers on the application of the emergency and restorationplans.

established tocopewith a large-scale electricity failurecaused by an exceptional event are described inthe previous section. Gridavailabilityand interruptions

5.1.3.9 Grid reliability G4 EUS Securityof Supply

During several virtual consultation moments in 2020, the crisis organization was prepared to adequately respond to a crisissituation duringthe Covid-19 Pandemic.

Elia Transmission Belgium | Annual report2020 116 Most interruptions take place on the local transmission grid(< 150kV) as most customers areconnected to the local (regional) transmissiongrid rather thanthe federal transmission grid. Whendiscussing gridinterruptions, the averageinterruption time (AIT) is also considered. This represents the equivalent interruptiontimeif all thecustomers connectedto the gridhad beeninterrupted thesame way (i.e. during the sametime) duringthe observation andis calculated as Energy Not Supplied / Yearly AveragePower. The maximum interruption timeis the referencevalue used for calculating theAverage InterruptionTime(AIT) Incentiverelating tocontinuity of supply by CREG, theBelgianfederal regulator. For the period 2020-2022, its valueis 2.1 minutes.

Energy not supplied(ENS) refers to all energy not supplied to our customers during outages of more than three minutes caused by Elia’s internal problems. However, it does not take into account theimpact of major events.

Elia Transmission Belgium | Annual report2020 117

The ENS score achieved is higher than last year due to several technical failures i.a. as consequences of a series of storms in January and February 2020.

In 2020, onshore availabilityin Belgium remained at a veryhighlevel (above0.99999).

Gridavailability

Onshoreavailability represents theavailability of the interface points between theElia grid andthecustomer’s grid. It takes into account all the interruptions caused by intrinsic risks (weather, thirdparties, animals outside building, etc.) or by internal Elia problems (e.g. material failure, human error) which lasted morethan three minutes, but excludes interruptions directly caused by Elia's customers.

Elia Transmission Belgium | Annual report2020 118 5.2 Strategy GRI 102-15, 102-29,GRI201-2 5.2.1 Act Now – theElia group SustainabilityInitiative In 2020, the Elia group launched "Act Now", its sustainability initiative. This ambition has beentranslatedinto sustainability goals infivekey areas (or lighthouses): These five lighthouses are linkedto theUnitedNations’s global Sustainable Development Goals (SDGs). The 17 global SDGs are intended to be a "blueprint" andmake explicit the contributions towards a better andmoresustainable futurefor all - to be achieved by 2030. Under Act Now, weare defininglong-term goals inthe areas of carbon neutrality, biodiversity and eco-designof our assets, health and safety, diversityandinclusion, ethical values andgovernance. Sustainability will become a stronger compass toguide business plan decisions in order to reach a level sufficiently ambitious for our projects and activities.

Weconsolidated our material economic, environmental and social topics at EliaGrouplevel back in 2019. As a result, 15 material topics of high and very high importance wereidentified, which determine Eliagroup’s guidelines for reporting and stakeholder dialogues. These topics areshownin themateriality matrixbelow.

Materialityand objectives

Elia Transmission Belgium | Annual report2020 119 Withregardto climatechange, the electricity sector has major potential for decarbonisation. Electricity as an energy carrier is already themost cost-efficient solution in most sectors. Accordingly, further electrification based on renewable energy integrationis the most efficient way to realise the energy transition. The Eliagroup is positioned at the verycentreof the energy system and thus well placed toidentifythe levers for decarbonizingthesystem. In additionto developingthe necessary gridinfrastructure to integrate and transport additional volumes of renewable energy, theElia groupis identifying thenecessary sources of flexibility to cope with the variability of renewable energy andis preparing the market andsystem tooperatein a100% renewable energy context. Collaboration has been established with withseveral other TSOs (Terna, RTE, Tennet, Amprion, Red Electrica, Swissgridand APG) to identify the main levers for decarbonising the energysystem. A paper will be publishedby Themid-2021.Eliagroupcompanies, includingElia Transmission Belgium supports theEuropeanGreen Deal in its core business. The demand-driven grid development and our innovation programmes enablethe continually increasing integration of renewable energies, and the operation of interconnectors enables barrier-free European electricity trading.We cover thehigh investments requiredfor this - where this makes economic sense - throughgreen bonds that we placeintheEuropean andinternational financial markets.We are thereforecommittedto the efforts of the EU taxonomyto make this market more transparent.

5.2.2

GRI 102-15, GRI 102-46,GRI102-47, GRI 103-1, GRI 102-29

Elia Transmission Belgium | Annual report2020 120

5.3 Energy– Market and integration of renewables GRI

Elia Transmission Belgium | Annual report2020 121 ESG criteria

SDG7 5.3.1 Installed capacity 5.3.2 Evolution

TheElia grouptransparently documents theimplementation of its consistently sustainable business orientation. ESG (Environmental, Social, Governance) criteriaareincreasingly becoming driving factors ininvestors' capital decisions. The Eliagroup alsorelies on greenfinancing, i.e. green bonds, for the highfinancing costs that are necessary tofinance the expansion of the grid andthus theenergy transition. This is why we have constantly expanded and improved our sustainability reportingin recent years. This isbeingrewarded andis subsequently reflectedinthe good and ever higher ratings that theElia Groupreceives from internationally recognisedrating agencies, such as Sustainalytics, MSCI and Vigeo Eiris. In the reporting year, Eliasigned a €650million revolvingcredit facility (RCF) agreement witha pricing mechanism linked to three of Elia’s sustainability performance targets. 302-2,

Energy import and export

ALEGrO, the first interconnector between Belgium and Germany, was inaugurated inNovember 2020. The connection will enablethe two countries to exchange 1,000 MW (1 GW) of additional electricity (approximately equivalent to the electricity consumption of a city with a population of onemillion).

Elia Transmission Belgium | Annual report2020 122 5.3.3

GRI 102-6, GRI 302-2

G4-EUS-EU12

Grid losses arethe difference between the amount of electricity entering the grid andthe amount of electricity supplied. Theyare unavoidablewhentransmitting electricity and depend on voltage and length, among other factors. They take the form of current heat losses in transmission lines, transformers andother system elements as well as leak andcorona losses.

The high-voltagedirect current (HVDC) technology usedfor interconnectors is more suitable than conventional three-phase alternating-current technology for transmitting large quantities of electricity withlow grid losses and optimal control over long distances. Whenassessing thecarbon footprint of aTSO following the GHG Protocol, gridlosses are accounted for in its Indirect emissions (Scope 2). For further details on our Carbonassessment, seeSection 8.2.1. Emissions – GHG InEmissions.Belgium, there is a distinction betweentwo categories of gridlosses:

— Losses on the gridmonitored at federal level (> 150kV) compensated with kind inaccordancewith federal legislation; — Losses on the gridmonitored at regional level (< 150kV)

— In 2020 the grid losses of Elia totalled1.3TWh.

Elia Transmission Belgium | Annual report2020 123 5.3.4 Energybalance

Grid losses

5.3.5

Elia Transmission Belgium | Annual report2020 124

Eliais committed to promoting diversity out of convictionand inaccordancewithILO Convention 111 and strictly condemns any discriminatory actionin all work-related situations. All employees are equal regardless of their ethnic origin, age and gender, sexual identity, religious affiliation, political views, national or social originor other factors. Elia is committedtovaluing all employees and their abilities equally - regardless of their individual identity. There were no cases of discriminationin2020. As part of the Group’s sustainability initiative"Act Now", wehave a Group Diversity andInclusion charter. In 2021, wewill launch a Diversity & Inclusion Scan tobetter understandwherewe standtodayin relationtotheseareas of action. This will lead us toaspecific roadmap towork on our improvement.Wealsopursue our efforts in "occupational health and safety". The maintenance and further development of ours values-based corporate cultureis one of the top goals for thecompany and the strategic basis for all personnel-relateddecisions. Withinthe management team, responsibility for personnel strategy issues lies withthe Group Chief Alignment Officer andthe Group Talent Management Officer.

Thelosses are calculated usingthe EMS StateEstimator. TheEMS models the entireBelgian network, listing eachnetwork element. The State Estimator will estimate the state of each network element onthe basis of measurements taken inreal timeandthe system modelling parameters.

5.4 Human resources

GRI 102-7, GRI 102-8, GRI 401-2, GRI 401-3, GRI 405-1,SDG5, SDG8, GRI 103-2 5.4.1 Management approach

GRI 102-41 Eliaowes its success entirelytothesuccess of its employees. It is the company’s responsibility tohelp them developtheir skills, foster their health andcommitment, involve them in decisions and guarantee equal opportunities for all. Eliacomplies with international guidelines extending beyondits collectiveagreements and company agreements, such as thecorelabour standards of theInternational Labour Organisation(ILO: C87, C98 andC135) and the worker’s rights set out inthe UN Global Compact.

Elia Transmission Belgium | Annual report2020 125 In 2020, Eliareceived the Top Employer label for the thirdtime in arow. Accordingtothe jury's report, Eliais particularly successful in therecruitment and selection of new talent. Efforts promoting corporate cultureandthe values andbehaviours we want todevelopwerealsorewarded with the highest score. Other HR policy strengths highlighted inthe report are theprogress made inthe areas of employer branding, thepolicyfor onboardingnew employees andthe integration of sustainability into our HR policy.

The proportionof women in Elia’s overall workforce is 19.59%. As of 31 December 2020, the share of women in the first andsecond management levels among the extended management was 20.93%, in the third management level 22.8%, intheBoardof Directors 35.71% andinthe ExecutiveCommittee37.5%.

The average age of employees at Eliais 42.4 years, whichis stablecompared to the previous years. 5.4.2 Headcount GRI 102-8, GRI 102-41, GRI 405-1, GRI102-7 (subsidiaries included: ESO, ETB, EE, EA, EGI and Eurogrid International)

GRI 401-1, GRI 401-2 Eliaemployees benefit from a family-friendly work environment and the opportunity to strikea work-life balance. The early recognition and prevention of work-related illnesses andthe ability to remainemployableare also integral parts of occupational health andsafetyat Elia . Inorder to achievethese goals, Elia guarantees sufficient occupational medical precautions, thefocus of whichis on individual protection andindividual preventionof health risks. In addition, Eliaregularly provides company medical consultations, vaccinations and advice on workplace ergonomics for all employees.

In order to improve our HR environment continuously, there is always an exit interview for leavers to better understandthe reasons of departure. New hires and turnover (subsidiaries included: ESO, ETB, EE, EA, EGI and Eurogrid International)

A qualified counsellingservice is availableto employees at all times inconfidenceinthe event of individual stress, conflicts or problems of addiction. Employees can also take part in various public sporting events.

Elia Transmission Belgium | Annual report2020 126 5.4.3 Workability

New hires include all new employees within the planned budget and all the employees that were recruited as adtoditionstheoriginal budget. Changes in positions arenot included. - The number of leavers is determined based on all employees leaving the company as a result of dismissal, retirement resignationor from 1 January to 31 December of the year concerned

-127

Elia Transmission Belgium | Annual report2020

Employee survey

In 2020, for the first time, theemployeesurvey was organisedat grouplevel usingthe samequestionnaire and approach. For the first time, questions onthe topic of diversity were asked in a section oncorporate culture. 87% of Elia Groupemployees answered the questionnaire, showinga great level of interest. Theresults of thesurvey were alsopositive. The commitment index is around 70, whichis above the average of other companies that conducted asimilar survey and demonstrate the high engagement of our workforce.

In Belgium, every worker has theright to takefour months of parental leave (either fulltimeor fractional).

Retirement G4-EUS-EU15 5.4.4

NOTE: It is not possible to report on the total number of employees within Elia Transmission Belgium who are entitled to this type of leave as they may have already taken this leave while working at another company.

Elia Transmission Belgium | Annual report2020 128 Parental leave GRI 401-3

GRI 102-35 – GRI 102-38, GRI-102-41, GRI 405-2 Elia’s remuneration policy focuses on attracting and retaining our best talents, rewardingperformance and supporting theculture of feedback andcontinuous development when possible.

GRI 404-1

In addition, managers cantake specific training modules to developtheir ownleadershipskills. In 2020, 8 students joined Elia in thecontext of internships or theses and 34“internal consultants” (whofollow the 24-monthtrainee program) wereemployed at the company. The average number of hours for training and further education, excluding regular safety instructions, was 22 hours per male employee and 11 hours per female employee inthe reporting year.

5.4.6

Eliaattracts qualified young talent via its own in-house training, via a24-month traineeprogramme and viathe supervision of internships as well as diploma, bachelor's andmaster's theses incooperation with universities and universities of applied sciences.

Training

Elia Transmission Belgium | Annual report2020 129

AnEliaGroup talent programmewas launchedinthe thirdquarter of 2020 to complement the existingprogrammes. Talent@EliaGroup is one of the top projects inthe EliaGroupBusiness Plan. Against the backdrop of an ever-changingenvironment and digital transformation, the project team will develop acommon- andsustainable- integrated and comprehensiveframework for group-wide talent andcompetency management.

Remuneration policies

5.4.5

To realise our vision and master thechallenges of tomorrow, Elianeeds motivated employees, since theyare a key success factor in times of constant change. In addition to trainingontechnical andsafety skills required to perform tasks specific to our core business, Eliaemployees are offered individually tailored further training and relevant additional qualifications. Systematic succession planning ensures that sufficient numbers of potentially suitable employees are availablefor all management positions and that vacancies can befilled internally wherever possible. Tothis end, talent is identified and promoted- for example through programmes for "young professionals" that are jointly developed and offeredwithin EliaGroup. Programmes for upgradingemployeeskills andcareer transition assistance programmes (including innovation, “intrapreunership”, leading the changeand external education programmes).

The detailed results will bediscussed across the organisationand throughout the hierarchy. In a follow-upprocess starting in the first quarter of 2021, company-wide fields of action and measures for theindividual teams will be derived.

5.4.7

Theremuneration of employees includes success and performance-related elements that provide an incentiveto achieve our commoncorporate objectives as well as theindividual objectives derivedfrom them. All employees receive regular performance and career development reviews. Some collectiveobjectives also relateto theenvironment of sustainable corporate governance, such as compliance with occupational health and safety..

Elianegotiates collective agreements for the‘non-exempt population’ together withthe energy sector. For the ‘exempt population’, our remunerationpracticeis based on internal equity combinedwith market competitiveness, maturity in the role, respect for corporatevalues and safety leadership, and performance – all irrespectiveof genEliader.is willing todisclose its annual total compensationratio. Weareworking internally onthe calculation method and making every effort to achieve this soon.

5.4.8

Social dialogueand codetermination GRI 402-1 Eliais committed tofreedom of association, collective bargaining andthe protection of employeerepresentatives. Particular emphasis is placed on trust and constant cooperation with all trade-unions. Ona local level of Eliaa works council with representatives of employer and employees is already since years in place. A cross-company dialoguetakes placein Elia Group’s EuropeanWorks Council with representatives of Eliaand 50Hertz.

In addition, withtheElia group share programme, employees havethe opportunity toparticipate in the success of the previous financial year. For the eighth timein 2020, every employeewas offered shares at apreferential price.

Elia Transmission Belgium | Annual report2020 130 Remunerationis inlinewith requirements and performance, regardless of gender, andis supplemented by extensive social benefits and acompany pension scheme.

Incentive systems

Eliatransparently discloses the total remuneration of the management team in theconsolidatedfinancial statements and shows thefixed and variabletotal remuneration as well as company pensions and other benefits for management. Thebasic features of the remuneration system are explained and detailed inthecorporate governancestatement.

Social consultation at Eliainvolves information provision, dialogueand negotiationviathestatutory consultative bodies, suchas theworks council, thecommittee for prevention and protection at work and the trade union delegation. These bodies consist of a representation of the employeeand of the employer. Each body has anadvisory missionfor certain matters and a decision-makingmission for certain matters.

5.5.1 Management approach

Employees’ personal ProtectiveEquipment (PPE) is always kept upto date, new PPE is tested by wearingit and the catalogue is adaptedto requirements. As part of our commitment to safety, Eliais continuouslyworking towards a zero accident rate for all types of workrelated accidents, not just electrical risks. Accordingly, occupational healthand safety andinjuryandillness preventionareintegrated intoour corporate strategy and are part of thegroup’s Act Nowsustainability programme.

Every employee is instructed toconsciouslyrecognise hazards, report them immediately, andsubmit suggestions for promotingsafe and healthy working conditions.

TheElia groupapplies the highest safety standards for its employees, contractors andeveryonecominginto contact with its infrastructure. An EliaGroup Safety Officer position has beenestablished.

In the year under review, the Elia groupcompanies joinedthe European Union’s Vision Zero health andsafety initiativeto actively promote benchmarking and peer learning.

The early detection andpreventionof work-relatedillnesses and the preservationof employability arealsofixed components of occupational healthand safety at Elia. To achieve these goals, Eliaensures appropriateoccupational health care, which focuses on individual protection and the prevention of health hazards. Inaddition, Elia provides regular company medical consultations, protective vaccinations andadviceonergonomics at theworkplacefor all employees. Qualified external counselling is available to employees in confidence at any time inthe event of individual stress, conflicts or addiction problems. Employees can alsotake part invarious public sports events.

5.5 Safety GRI 403-1, GRI 403-2, GRI 403-3, GRI 103-2

As a high-voltage electricitytransmission operator, Eliaoperates facilities where accidents, asset failure or external attacks may cause harm to people. The safety and welfareof all individuals (Elia’s staff,thestaff of contractors and third parties) is a key priority and adaily preoccupation for the company andthe relevant subcontractors. Elia has implemented a Health and Safety policyandtheyundertake safety analyses and promote asafety culture.

Elia Transmission Belgium | Annual report2020 131 In addition to these legal bodies, weinvolve our social partners insocial consultation and dialogue viainvolvement inworkgroups to jointlypreparethe implementation of our strategy.

For Elia, it was important to measure our safety culture –the way safety is experienced at Elia–to know where we are andwhat we canstill improve. In November 2020, Eliaobtained"Safety CultureLadder" level 3certification. Wewere awarded this certification followingan audit of our company inSeptember 2020 by the external organisation KIWA. TheSafety Culture Ladder measures the maturity level of a company’s safety culture. This exercise shows that wemust continue to strengthen our security management tools, inlinewiththe Go4zero project. This audit will beused toidentify our priorities andestablish our global prevention planfor 2020-2025.

TheGO FOR ZERO safety programme (started in 2015) aims to embedthe safety culture withinElia andwith contractors; it includes all projects.

Eliahas alsosigned a two-year-partnershipwith VIAS, theBelgianroad safety Institute, in order to promote road safety among its employees and raisetheir awareness of risks and good practices as road users (motorists, cyclists and pedestrians) in their professional and private travel.

Elia Transmission Belgium | Annual report2020 132

In addition to thesector-specific risks, wealso address risks relatedto thewellbeing of our employees with the Care4Energy programmethat ensures their wellbeing by targeting their mental, physical, emotional and personal Pulsedevelopment.checksurveys:

inthe new and difficult context of the Covid-19 pandemic (and subsequent lockdowns), Elia regularly invitedits employees tofill insurveys inorder to better understand how they were copingwiththe situation andto determine what could be done to better support them. Online relaxationsessions were also organised.

Eliacontinuously trains its staff. Thereis a compulsory training path for all fieldemployees that is updated periodically. All employees are regularly instructed about workplace-specific hazards andmeasures toavoid them. In addition to therefresher trainings for our operational teams, wealso ensurethat they are continually informed about the evolution of procedures and working methods, and that theyare able tolearn from our experience feedSafetyback. flashes are also sent out to our ownstaff andcontractors on anadhoc basis when Eliaidentifies specific risks associated with working with specific tools or reminders of our goodpractices.

5.5.2 H&S training GRI 403-5

Elia Transmission Belgium | Annual report2020 133

GRI 403-9

5.5.3

Our goal is zero accidents, not only for our own employees, but alsofor our contractors, distributionsystem operators and anyoneelse near our facilities.

5.5.4

Accidents

Within thecontext of the Safety Culture Ladder certification trajectory (see above), external auditors visited some of our administrative sites, made sixsite visits and organised 25interviews with management and49with employees andcontractors. These audits will be used to identify our priorities andestablishour global preventionplanfor 2020-2025.

Occupational health and safety protection is not limited toour own employees. Elias stringent standards also apply to external contractors working onElia sites. Duringthe contracting process and later, every effort is made to ensurethat suppliers comply with Elia’s strict safety requirements. Both thesafety team and management carry out inspections on aregular basis.

Operational managers andthe Safety team regularlygoout into thefieldto observehow activities are organized and carried out, both for our own teams and those of our contractors.

Inspections

GRI 403-2

Safety-related visits toworkplaces andworker behavior are an essential part of the dynamic risk management system. Listeningtoand observing management allows adaptations of methods or equipment, management coaching allows a better adherenceof the staff to thecompany's methods and behaviors. Wehave adapted our safety visitsystem tobetter put this approachinto practice, withtheaim of promotingspecific behaviors that characterizea proactivesafety culture throughout thecompany: Transparency and theWillingness to Learn. In the reporting year, 1142 construction sites visits were carried out.

Elia Transmission Belgium | Annual report2020 134

Thekey indicators show very goodperformance in 2020. The Covid-19pandemic didnot slow downour activities for guaranteeing gridreliability. Our entiremaintenanceand investment programme was executed as plannedwith aremarkably low number of accidents. Safetyis always Elia’s number-one priority; therefore we provided figures for both employees andcontractors.

In order to deploy this set of principles as a lever for a positive supply chainimpact, weset up arisk-based approach. For all purchasing categories weassess risks based on traditional supply chainrisks andsupply chain sustainability risks. A matrix is drawn up to prioritise supplier engagement activities. Torationaliseresource and impact management we aim tofocus on those suppliers, who are most relevant from that risk perspective. Westarted theroll-out of an in-house, SustainabilitySupplier Self-Assessment questionnaire aimed at high-risk suppliers and some hand-picked, medium-risk suppliers to understand their level of engagement interms of ethical conduct, social aspects, health andsafety and environment.

In a joint statement entitled The Greener Choice, high-voltagegrid operators from Austria, Belgium, France, Germany, Italy, theNetherlands, Spain andSwitzerland announcedthat they want to help stimulate an ever greener economy as soon as possible by makingtheir purchasing more “green” and thus sustainable– a reference tothe European GreenDeal.

TheElia groupis committed to incorporate its strong ethical principles in the procurement process, and to having a positiveimpact on its wider environment viathe purchases performed. It alsoaims toavoid risks arisingfrom noncompliance with certain rules and norms withinthesupplychain. The position of Head of GroupProcurement was established inorder to enhance this process.

In 2018, Elia drafted aSupplier Code of Conduct containing internationally recognised principles regarding ethical conduct, healthand safety, the environment andsocial aspects. This code now applies tothe entire EliaGroup andis systematically included inthe documents for Europeanprocurement procedures.

SDG 12, GRI 102-9, GRI 204-1, GRI 308-1, GRI 308-2, GRI 414-1,GRI 103-2

5.6.1 Management approach

Elia Transmission Belgium | Annual report2020 135 5.6

Suppliers and human rights

5.6.2 Suppliers and expenditure inthe EURO-Zone GRI 204-1 Procurement outside theEURO-zonecountries is very limited (below 5%) andthe large majority of it is IT andconsultancy related. The environmental impact is also consideredinthe awarding criteria. Eliacomplies with the high EU or Belgian standards in terms of environment, social responsibility and worker wellbeing. A specific evaluationof the safety aspects is carried out separately since it is crucial for Eliatohavesuppliers on board that sharethe same values whenit comes to the importance of safety.

EliaGroup is required to comply with Europeantenderingrules. The applicationof theserules and other internal guidelines ensure that every supplier receives the same non-discriminatory and transparent treatment and that the informationsent is treatedconfidentially. The processes for selecting suppliers and signing new contracts are based on an evaluation of multiplecriteria. Elements relating to sustainability areintegratedin the tenderingcontract and the general purchasingterms andconditions, which aresignedbythesuppliers.

Elia Transmission Belgium | Annual report2020 136

Eliaacknowledges its responsibility to respect humanrights and naturally respects therights toprivacy, personal safety, freedom of expression and property rights of employees, residents and customers. Elia alsotakes responsibility for compliancewithsocial standards in thesupply chain. For this reason, Elia is not only member of the UnitedNations Global Compact, but is also committedtothe core labour standards of theInternational Labour Organisation (ILO). In order to ensurethat business partners also comply with internationally validrules on humanrights - such as the ban onforced labour andchild labour - sustainability and ethics areessential components of thesupplier and serviceprovider evaluation. Elia suppliers commit toacommon, binding Codeof Conduct intheir cooperation. This is an integral part of all Elia ‘s supplier contracts. Inaddition, bothraise awareness of sustainable action inregular discussions and thus convey anunderstanding of compliance with ethical principles and guidelines for sustainable development. All orders are placed centrally inBelgium. In this respect, all Eliabusiness locations are screened for humanrights due diligence issues and anti-corruption.

GRI 102-40, GRI 102-42,GRI102-43, GRI 103-2

5.7.1

Human rights

Management approach

5.7

Involving stakeholders upstream helps to improve their understandingof the needfor gridin benefit for the society and canoptimise the associated processes, Eliaregularlycontacts and exchanges information with various stakeholder groups. Elia’s stakeholder environment is continuouslyanalyzed and defined. Depending on the specific strategic topics, Eliahas contacts with public authorities and administrations, political parties, local citizens, civil society (associations representing environmental, economic, andagricultural or other interests) or clients directly connectedto their grid. GRI 102-42, GRI 413-1

Eliahas many stakeholders’ initiatives. Themethod and frequency of engagement for each stakeholder group and the link tothe material topics are summarised inthe tablebelow:

GRI 414-1

Elia Transmission Belgium | Annual report2020 137

Within Elia, aCorporate Reputation Committee has been created, presided over by the Chief External Relations Officer inorder to follow up, for selected issues, on thevarious stakeholder contacts organisedby therelevant departments in Elia.

Stakeholder engagement

5.6.3

Against the backdrop of the Covid-19 pandemic, we also adaptedhowweinform the citizens andthelocal authorities using more digital communication tools.Weset upvarious information and consultation formats rangingfrom digital formats to one to one consultations. This approach gave us the possibility tomaintaincontacts with the stakeholders while complying with the restrictions and rules in effect duringthis difficult period.

Communityrelations and public acceptance

Elia Transmission Belgium | Annual report2020 138

GRI 102-21, GRI 102-29,GRI102-43, GRI 102-44, G4 EUS Stakeholder Participation

Dialogue with therelevant stakeholders begins at a very early stage of project planning. In theconcept phase of our projects, wearemainly workingwithcivil society, local municipalities andacademics. Thereis also a public consultation on the grid development plan. In alater phase, when projects aremoreconcrete, an intensive dialogueis set up with thecitizens.

5.7.2

Eliais convincedthat early involvement with all stakeholders is vital to thesuccess of the energy transition andthe hugeprojects needed in order to achieve asustainable gridexpansion. Our approach is tocontact and inform all parties for havingtheir point of view, inorder to improvethe exchange and dialogueand builduptrust.

A transparent and consistent approach aimed at meetingsocietal requirements and community expectations as far as possiblewill significantly improvethe acceptance of projects.Furthermore, this approach must be clearly communicated to thevarious stakeholders from the outset of projects so that many concerns and anxieties can be reduced quickly. To achievethis objective, theCommunity Relations department developed an integratedcommunication and public acceptance methodology, integrating stakeholders and communication actions ina systematic way inthegrid development in order not only to control therisk of costs and timing but also to be able to realize the best project intheinterest of society.

16 Flanders Research Institute for Agriculture, Fisheries and Food

Elia Transmission Belgium | Annual report2020 139 For thetwomost important projects inWallonia andFlanders, Eliastarted an early participation process withcivil society and some regional experts. The objective was to define the best project (respondingto environment, economic and agricultural interests) and collect their opinion based ontheir different expertise. These processes are still ongoing and includenow more representative parties and organizations. Specific reports ontechnology options for the project were delivered. For the Flanders project, a participative approach was set upwitha project facilitator, a group of independent experts, representatives of citizens, municipalities andcivil society inorder to answer all questions and scenario’s proposed bythe local communities. Eliacommunicates and cooperates transparently throughout the entire development process. In additiontothe legally requiredpreliminary public information meetings inthe context of the development of this type of project, weorganize a series of “info-markets”,whichareinformation sessions for local residents. During 2020, 8 information sessions linked tothe official permit process were organisedtoinform more than 11,000people. These informationmoments weresupported by several communication tools: invitation letters, citizen’s information pack, brochures, flyers androll-ups for the paper part; Press conferences and press releases; digital newsletters, Facebook posts, didactic videos; telephone hotlines with or without appointment and mailboxprovision. In 2020, Eliacollaboratedwith theUniversity of Liège andthe ILVO16 andthe Belgian professional associations of farmers on aliterature review study to better understandthe impact of highvoltageinfrastructure on agriculture. Moreover, we developed apublic reference framework to mitigate the impact of therealization of new infrastructure projects.

Eliaregularlymeasures the customer satisfactionlevel of its key stakeholders (distribution system operators, grid users, producers, access responsible parties, Users’ Group, etc.). The main objective of thesesurveys is to provide an overviewof theKey Performance Indicators (KPIs) relatedtoservice quality and their evolution over time. In 2020, customer surveys were conductedwithinElia . 250 stakeholders took part in the biennial survey. TheKPIs measured by the EliaSatisfaction Indexreflect how stakeholders evaluate theElia’s products and services in general. The Customer Effort Score reflects the easeof doingbusiness with Elia, the customer satisfactionregards account management andimage, etc. The overall aim is to identify our strengths andweaknesses among the different stakeholders in order to further optimize the customer relationship. Eliascored 69% for the SatisfactionIndex, reflectingthe high quality of products andservices. Themajority of the stakeholders stilldescribecollaborationwith Elia as “easy”.

Elia Transmission Belgium Users’ Group

Elia Transmission Belgium | Annual report2020 140 5.7.3 Stakeholder dialogues GRI 102-21, GRI 102-44 Communication events

Customer satisfactionsurvey

Despite the special circumstances in2020, the dialogue between the Elia group andthegroup’sstakeholders continued. Communication options wereexpanded to include virtual andhybrid events, and hygiene guidelines were established for the various occasions. TheElia GroupStakeholder Day was heldfor the first time as ahybrid, with simultaneous events inBerlin and Brussels. Theprogramme included panel discussions andpresentations.

Eliaregularlyorganises Users’ Groupmeetings and working groups. TheUsers’ Groupprovides a platform that allows Eliatomaintain an ongoing dialoguewithits main customers and partners. Every year, about four Users’ Group plenary meetings are scheduled to inform market participants and stakeholders about important andstrategic topics relatedto our business.

Themost important event was held on Monday 9November, system operators Eliaand Amprioninaugurated ALEGrO, the first electricity interconnector betweenBelgium and Germany. The livestreamed event took placein the City Hall of the Germancityof Aachen and was attended, either in personor digitally, by German Chancellor Angela Merkel, Belgian Prime Minister Alexander De Croo, NorthRhine-WestphaliaMinister- President Armin Laschet and Belgian Energy Minister Tinne Van der Straeten. Additionallytothis main event, another nine events were held duringthis particular year: stakeholder’s events, press conferences and participation to fairs. Some were physical or digital andother werea hybridversion.

Around 300guests from Germany andBelgium took part virtually.

Elia Transmission Belgium | Annual report2020 141 In support of these plenary meetings, there arethree working groups, whichusually meet four times per year (moreif necessary). Under theWG Balancingthere are two task forces. Thetask forces areset upon an adhoc basis tohandlespecific issues whennecessary. Currently, two task forces are active: Contact centres Elia’s twoContact Centres receiveand handlerequests for informationfrom various sources: local residents, contractors, engineering firms, public authorities, utilities and project developers, to namejust a few. Becauseof the specific risks involved inworking near ahigh-voltagefacility, anybody wishing to carry out work close to high-voltage lines, high-voltagepylons, underground electricity cables or high-voltagesubstations is requiredto report theseworks to Elia. Wecan then providethem with maps of the relevant facilities andinstructions about the safety measures to takewhileworking near them. There arestatutory timeframes withinwhich Eliahas toanswer the requests (7 workingdays from receipt).

Elia Transmission Belgium | Annual report2020 142 In 2020, our contact centers received 70,567 requests, 99.97% of these wereansweredwithinthe set times. Upon request viathe Contact Centre or any communication channel, Eliaoffers informationand free electromagnetic field measurements to the owners of land and buildings located near Eliafacilities. In2020, weperformed108 measurements.

For Elia, active leadmanagement and participationin researchand development projects are anintegral part of innovation management. In diverse cooperations with academicandindustry partners, the focus is mainly on activities inthe areas of new technology and digitalisation, energymarkets andsystem security, theintegration of renewable energies andthe required development of the electrical system as well as on supporting the industry in decarbonising its processes.

5.7.4 Cooperationand innovation SDG 11, GRI 203-2

In light of the increasing electrification, decentralisation andintegration of thecontinuously growingshare of renewable energies, theEliagroup launchedits ownincubator inMay 2020: “The Nest”. Theaim is topromote digital transformation projects in an agilemanner and overcome the increased complexity of various processes. Furthermore, the company strives to develop new business models in this interdisciplinary space and enhancethe quality and efficiency of its activities and internal processes at all levels. Eliaand 50Hertz, alongwith 18 other organizations signed a joint declaration of intent, the Offshore Coalition, an initiative of the RGI (Renewables-Grid-Initiative) members. The Elia group was one of thefounding members of this initiativethat promotes the integration of 100% renewably-generated electricity into the European grid. TSOs

The 2020 Challengefocused on thedevelopment of digital solutions promoting moresecure gridand datamanagement. Every year, thecompetition allows the Elia group to innovate faster inspecificsectors by creating synergies with start-ups andSMEs (small and medium-sizedcompanies).

In its visionpaper “Acceleratingto net-zero: redefining energy and mobility”, publishedin November 2020, the Elia group describes how better alignment betweenthe power andmobility sectors can deliver societal benefits and pushelectricmobility to widespread adoption. However, successful convergence between the power andmobility sectors canonly be achievedif current barriers are removed and additional valuestreams are unlocked and developed.

Eliais committed tocreating a sustainablefuturefor all stakeholders. This alsomeans that wetake our social responsibilityseriously.

In October 2020, the Eliagrouplaunchedre.alto, its own corporate start-up to accelerate digitalisation of theenergy sector. Theaim of the re.alto marketplaceis tomake energy data easy to access andintegrate, enablingthe industry to takea giant digital stride towards more widespreadadoption of Energy-as-a-Service business models and ultimately drive alow carbon energyfuture.

Since 2017, Elia has been collaboratingwiththe BePlanet Foundationto develop and support local citizen initiatives promotingecological transition. Elia has establisheda structural partnershipwith the public utility foundation BePlanet to develop andsupport ecological transitioninitiatives by citizens inmunicipalities whereElia infrastructure projects are underway.

Belgium’s energy system operators teamed up with 60 companies, public bodies and academic institutions ina collaborative innovation initiative, IO.Energy, launched inFebruary2019to bridgethe gap between digitalisation and sustainability and to promote innovation in the energy sector. It aims to developnew services throughthe exchange of data betweenall sector players. Thefocus is on end users, whowill be abletotailor their generation and consumptionto gridneeds using a digital communicationplatform. InOctober 2020, thefirst sandboxingof the Internet of Energy (IO. Energy) project cameto an end. Eight Belgian pilot projects werecompleted.

5.7.5 Communityengagement

Local added value/ Supporting local initiatives

In January 2020, the Eliagrouplaunchedits fourth OpenInnovation Challenge. The competition invites start-ups from aroundtheworldto present solutions toany of the many challenges system operators face.

Elia Transmission Belgium | Annual report2020 143 and NGOs joinforces inRGI tosupport thebuild-up of asufficient gridinfrastructurein Europe for both decentralised andlarge-scale renewableenergy sources.

Elia Transmission Belgium | Annual report2020 144 Through this collaborationwe aresetting up afund anda methodology (call for citizen projects) to compensate municipalities for the impact of an overheadline.

Therole of the Be Planet Public Benefit Foundationis toensure that the general objective of thefund and the selectioncriteria for citizen projects are respected.Within this framework, each project supportedmust have apositiveimpact on ecological transitionand must contribute to sustainable development. The ecological engineeringconsultant, Ecofirst, is our partner intheimplementation of various biodiversity measures (for further details, see 8.3. Biodiversity andLandscapeintegration).

The employee participation to thecompany survey enabled us todonate €5,920totheCOVID-19 Fund for the fight against poverty of the KingBaudouin Foundation.

In 2020, 2.9 tonnes of our hardware (laptops, dockingstations, printers, screens and carrying cases) received a second life when, they were donated toschools or non-profit organisations.

Donations

A series of donations weremade inthe context of the Covid-19 pandemic (Seesection 9. Covid-19 pandemic management).

There are also binding laws determining emissions thresholds (amongothers noise, EMF) takeninto account in the permittingphase.

Ecological andsocial sustainability as well as a clear commitment to environmental and climate protection and resource conservation areintegral parts of the corporate strategy. Under Act Now, the Group’s sustainability initiative, Eliahaw set itself clear ambitions for action on climate protection as well as the biodiversity and eco-design of its Whenassets.developingand building our grid, wealways strive for socially acceptable andeconomically efficient solutions. To this end, we try to limit theconstructionof new infrastructure andprefer to optimize and improve existing infrastructurewherever possible.

The planning, operation, maintenance and environmentally compatible conversionand expansion of thetransmission gridin Belgium is basedon national andEuropean framework conditions and regulations. These environmental requirements are implemented and constantly updatedand adapted.

Moreover, we adopt the precautionary principle to reduceand avoidpossible negativeimpacts by conducting studies (e.g. studies in EMF), by calculating our carbon footprint , implementing mitigationmeasures andincluding climate risks into the regular risk management process. TheEliasupplier code of conduct contains additional principles on environmental protection andresource conservation.

Our goal is to keepthe impact of our corporate and construction sites and other activities on people and natural habitats as low as possible.

In the geographical areas wherewe operate, an environmental impact assessment (EIA) makes part of the permitting requests andis conducted in the early stages of infrastructureprojects. It allows the identification, prediction and analyseof the potential impacts on the physical environment, as well as social, cultural, and health impacts during boththe construction and operation phases.

Elia Transmission Belgium | Annual report2020 145 5.8 Environmental aspects 5.8.1 Management approach

GRI 102-11, GRI 103-2 High-voltagetransmission grids play an essential rolein the energy transitionandthedecarbonisationof society and industry. That is why Elia is developingits transmission gridwith an eyeon the longterm and inlinewithdemand. Tothat end, Elia is investing large sums inthe development of the onshore andoffshore high-voltagegrid inorder todrivetheintegration of renewable energies, and in the construction of interconnectors to enable theintegration of the Europeanenergy market. One of the biggest challenges weface is maintaining and expanding this grid while ensuring a sustainable approach to environmental impacts.

Thetransmissionof electricity does not release effluents or emitsignificant amounts of gases suchas SOx and NOx. Elia has been assessingits Scope1 and Scope2 Greenhouse Gas (GHG) emissions since2018.

Greenhouse gas emissions

Eliafalls under the loss rateto which SF6 producers and users have voluntarily committed(0.6%).

As part of Act Now, we have reflected on the different ways to integrate sustainability inthe management of our assets, Elia is goingto put the focus on energy efficiency of our substations, eco-designand the enhancement of biodiversity in and around them (avoidance of herbicides).

As two new overhead highvoltagelines are planned, Eliarealized a comparative study on the type of pylons that could be used to reduceenvironmental impact (visibility, EMF) alsolookingat technical feasibility andcosts. The results of the comparative study confirmed that the current use of the compact tower is most favourable but also adding the possibility touse another pylon type –theWintrack pylon - from an environmental perspective.

5.8.2 Emissions SDG 13, SDG7, GRI 201-2, GRI 305-1 – GRI 305-2 –GRI 305-3

Weapply theavoid-reduce-offset approachdescribedin5.7.2. Community Relations and Public Acceptance with the least impact onenvironment inmind. TheCommunity Relations department is responsible for the appropriate handling and implementation of all tasks relatingto environmental and nature conservation issues, quality management and the management of related tasks.Withinthis department, theEnvironment & CSR team provides advice on process control and ensures the stringent implementation of theenvironmental and quality strategy and legal compliance.

Elia Transmission Belgium | Annual report2020 146

Scope 1- Direct emissions of greenhouse gases from ownedor controlled sources These are mainly due to SF6 gas losses from our installations and natural gas consumption for heating.

A team member is involvedin multi-functional teams for the procurement processes for specific goods andservices (e.g. waste management, transformers). The Policies relatedto all types of compensations are available on our Employeeswebsite.are trainedintheenvironmentally friendly operation of our systems We also work onthe awareness of our contractors on sustainable aspects (environment and mobility) during construction phase by working on guidelines and specifications detailing thequality expected byElia on its construction sites.

5.8.2.1

Furthermore, the Elia groupis committedto the Greener Choice Initiative(seesection 6.1.) of theleading Europeantransmission system operators.

Elia Transmission Belgium | Annual report2020 147 Sulphur hexafluoride (SF6) is now used as insulation andswitching gas for gas-insulated high-voltage switchgear. It has great electrical properties, is non-toxic and is alsovery stable in the chemical sense. However, thegreenhouse potential per unit of SF6 is 23,000times higher than CO2. Thus, SF6 is usedina closecircuit inswitchgears, as a result of which emissions intothe environment arealmost fully eliminated. The pressure vessels are always under technical monitoring for potential leakage. Despite all of these protectivemeasures, someleakage due to the seal technology and the necessary gas handlingcannot be avoided entirely.

Thetotal volume of SF6 gas installed on theElia grid(36 kV to 380kV inclusive, excluding theNEMO substation) in2020 was 134.89 tonnes. Consumption of SF6 gas (as a replacement and as atop-up in the event of a leak) is closelymonitored usinga system that tracks each cylinder of SF6. The SF6 leak rate for all Elia facilities was “< 0.25%” in2020. Research onSF6-free highvoltage equipment (switching gear/circuit breakers) is supported by integrating aseries of proof-of-concepts in new framework agreements with manufacturers tobe installed inthe coming years

For thereporting year, the full CO2 emissions from air travel were offset andthe (small amount of) SF6 losses were offset via service provider Atmosfair,EliaGroup supports the EU’s carbon reductiontargets as well as those of the Belgianand German governments toreduce CO2 emissions, mainlybyintegrating large volumes of renewable energy via the development of its grid.

Scope 3- All other indirect emissions of greenhouse gases (not included inscope 2) that occur in the value chain (outsidethe company), including both upstream anddownstream emissions by buying goods and services, employeecommuting, business travel, etc.Weare currently inthe process of reviewing our scope 3 emissions at the Eliagrouplevel. Works and materials were identified as the maincategories, possiblemeasures will be identified within the Act Now programme.

Thescope of Elia’s carbon assessment is emissions by Elia Transmission Belgium, EliaAsset and EliaEngineerEliaing.has developed an investment and maintenance policy tominimise the risk of SF6 leakage. Manufacturers are obligatedtoguarantee a very stringent maximum percentage of SF6 loss throughout thelifetime of thefacilities. Our maintenance policy aims to maintain operations involving compartments filled with SF6 toa minimum.

Scope 2- Indirect emissions of greenhousegases resulting from the generationof purchased or acquiredenergy consumed by the organisation These are mainly due to gridlosses that are unavoidable whentransmitting electricity and over whichElia has no direct influence.

Thecalculated value of the carbonfootprint corresponds to 1.65tonnes of CO2 equivalents per TWh transmitted including gridlosses and 0.34 tonnes of CO2 equivalents per TWhtransmittedexcluding gridlosses (basis: 69.937TWh).

— This new planaims to transform our employees' idea of mobility and change their behaviour accordingly. It is in line withthe Group's efforts to promote further soft mobility, encompassing measures to promotetheuseof public transport, cycling, facilitate teleworking, and expandthe electrification of our vehicle fleet.

— Wewill offset the remainingCO2 emissions produced by our vehicle fleet (approximately 2,000 tonnes of CO2 per year) by contributing to projects aimed at promoting the development of renewable energy.

— Withregardto our fleet of vehicles for technical interventions (small vans and trucks), as technology is not mature yet, we provided in our procurement contracts, the possibility to buy and test upcoming alternatives.

Since 2017, Elia has taken part in theCDP initiative, an international, nonprofit organisation providinga global disclosure system for companies, investors andcities.Weanswered the climate changequestionnaire inwhich a company has todescribe how climate-relatedrisks andopportunities arehandled anddiscloseits carbonfootprint.

Elia Transmission Belgium | Annual report2020 148 In order to mitigate emissions from the commuting of our personnel, inthe context of theAct now programme, a new mobility andcommuting programmehas been set up called Orange is the New Green:

— Under the new plan, 75% of commutes by Groupstaff will below carbon (i.e. madevia public transport, bicycle, electric vehicleor some form of shared mobility, or otherwiseavoided altogether as staff will beworking remotely) by 2025 and in 2030, all the company car fleet will be electric.

*result of an estimate based onmetering data from a sample of 60 stations

Audits have beenconducted inother buildings in order to identify optimisation potentials inlinewith the BATNEEC principles (Best AvailableTechnology Not EntailingExcessiveCosts). These measures are thengradually impleElia’smented.two

Elia Transmission Belgium | Annual report2020 149 5.8.2.2

most recently built administrative centres, Monnoyer in Brussels andCrealys inWallonia, are BREEAM certified. As required by Belgianregional regulations, energy audits wereconducted on our administrativebuildings andservicecentres.

N.B. the electricity consumption of our substations is based oninternally calculated assumptions 5.8.2.3 EMF SDG 3, GRI 416-1

Energyconsumption

• Non-core: energyused by support services, administrative centres.

Electricity consumptionrepresents thebiggest share (~96%) of consumption. Our morerecent administrative centers are built following internationally recognised energy-efficiency standards.

• Core: energy used by all theinfrastructure directly related to its business model e.g. all substations.

GRI 302-1, SDG7, SDG13

The energy consumption of Eliacan besubdivided into twocategories:

Elia Transmission Belgium | Annual report2020 150 Electrical transmission and distribution systems in Europeare mainly operatedwith alternating voltage at a frequency of 50 Hz. Hence, they create electric andmagnetic fields (EMFs) of Extremely Low Frequency, as is also the casefor all applications of electricity, including domestic appliances. Although nocausal link can be established between magnetic fieldexposurefrom electricity transmission infrastructures and human health, Elia takes this issue very seriously lookingat each project on the electricity gridand also supporting scientific studies that improve the knowledge onthe subject. Eliacontinues to contribute, yearly €370,000, to support scientific research onthe subject. Inthat regard, it supports the Belgian BioElectroMagnetics Group(BBEMG) whose scientific independenceis enshrinedin a cooperation agreement. At international level, Elia concluded a research contract with the Electric Power ResearchInstitute(EPRI - a nonprofit organisationthat conducts research in energy and the environment), anagreement granting Elia access to the results of international researchstudies in this field. To communicate transparently onthe subject, Elia provides various tools: a dedicatedwebsite, information sheets, abrochure, newsletters, information sessions (with the possiblepresence of an independent expert) and, at the request of local residents, carries out free measurements of electric andmagnetic fields via its Contact Centre. Thestudy of magnetic fields is also one of thecriteria analysedfor each project developed by Elia. In accordance with the precautionary policy establishedin Flanders and Brussels, Eliaassesses futureexposuretomagnetic fields by means of specific calculations (modelling) and mitigation/reductionmeasures are applied where necesInsary.2020, Eliacollaboratedwith theUniversity of Liège andthe ILVO17 andthe Belgian professional associations of farmers on aliterature review study to better understandthe impact of highvoltageinfrastructure on agriculture (includingEMF).

17 Flanders Research Institutefor Agriculture, Fisheries and Food

5.8.2.4 Noise SDG 3 Noise canbecausedby transformers in high-voltage substations, high-voltage lines, pylons and other equipment. Undergroundlines do not cause any noise. Strict guideline values apply (no noise/acoustic pollution).

Whenplanning projects, not only are economic efficiency, the concerns of local residents andthetechnology takeninto account duringthe approval procedures, but soare theprotection of flora and fauna. In the run-up to such procedures, environmental impact assessments arecarried out to minimise natureconservation conflicts at an earlystage. A corridor is then identifiedfor the exact route of the electrical lineanddefinedin a subsequent step. At the same time, protection and compensation measures are identified. All these investigations are carried out together withexternal environmental planners, routing experts and, if necessary, other science and nature conservation experts. Nature requirements are includedinthecontractual requirements of the infrastructure proThejects.use of windat sea to generate electricity is enormously important and indispensable for climate protection. At the same time, the of offshore wind energy and thesubmarine cables on the seabed neededtotransport the electricity require interventioninthe natural environment. In addition to theMarine GridDeclaration co-signed by Elia and 50Hertz - withwhich Renewables GridInitiative (RGI) members set thestandards for the earlyinvolvement of stakeholders andfor nature andspecies protection in offshore grid expansion beyond the legal requirements in

SDG 14 GRI 304-1 –GRI 304-2 – GRI 304-3,G4-EUS-EN12

5.8.3 Biodiversityand landscape integration

Elia Transmission Belgium | Annual report2020 151 Eliaalways carries out soundscape studies prior to therealizationof its infrastructure projects toensurethat acoustic standards are not exceeded. Elia alsoconducts noisestudies intheevent of complaints (see alsoContact Centres).

GRI304-2Ifpreventiveorcorrectivemeasurescannotpreventcertainenvironmentalimpacts,thenmitigationandcompensa-torymeasuresareapplied.Thesecanbeeithervoluntaryorlegallyrequiredinordertoobtainallthelegalauthori-sationsneededpriortheexecutionofaproject.Earlier,asetofmeasureswasdevelopedadhocforeachproject.In2020,wedecidedtohaveclearandstruc-turedpoliciesrelatedtocompensationstransparentlyavailableonourwebsite.Dependingontheimpactstomitigateorcompensate,thereisawiderangeofexistingmeasures:

5.8.3.1Mitigationandcompensationmeasures

wasshore2019–EliaGroupiscommittedtogrowingresponsibilityinthissensitiveenvironmentasaco-signatoryoftheOff-Coalitiondeclarationofintent.ThetotallengthofourutilitieslocatedinNatura2000areas(onlandandsea)665kminMarch2020.

EliaTransmissionBelgium|Annualreport2020 152

5.8.3.2

Eliahas already for a while been developing ecological aisles management initiatives that areinline withthe EU biodiversity strategy. Thestrategy, which has been officially adopted inMay 2020, considers theintegration of ecological corridors tobepart of areal trans-European natureprotection network and, thus, a key obligationto improvebiodiversity.

Ecological isle management

GRI 304-3 Until recently, thestandard maintenance policy for overheadlines involved ensuring that a corridor measuringapproximately 50meters wide below the lines was kept clear of all vegetationwith a rotary slasher every eight years.18

To buildan overhead line inforest areas, aisles are usually created. The conductor cables need sufficient clearanceto the sides andtothegroundbecause of the necessary safety distances, whichmeans, trees have to be removed insections and at regular intervals onthe aisles. However, trees andshrubs provide habitats for numerous animals and plants. Therefore, the goal is to impair thesenatural areas as little as possible inthe longterm and to increase biodiversity under power lines.

For our offshore projects, mitigationmeasures were implemented principally during thework phase with the objectivetoreduce theimpacts on marine mammals e.g. duringthe installationof the foundationpiles of our Offshore Switchyard(OSY) platform (a.o. mitigation of theacoustic nuisance, acoustic deterrent).

Elia Transmission Belgium | Annual report2020 153 — landscapeintegration: plantations of shrubs, hedges or trees (green screens), morecompact types of pylons, infrastructure grouping, architectural integration — species protection: birdmarkers and nests — forestry: restoration and specific management measures

Since 2012, Elia has been a forerunner inthe implementation of a seven-year LIFE project that was completedin 2017. Our project partner inthis is the ecological engineering consultant, Ecofirst.

Thefirst “EliaLIFE” project, for which Eliajoinedforcewith theFrenchTSO RTE, was partly funded by theEuropeanCommission and theWalloonRegion. It hadthe aim of creatinggreen corridors to enhance biodiversity under overhead electrical lines in woodedareas. Eliarestoredin this way 430 ha stable natural environments below the lines (using peat bogs, bushes and grasslands managed by grazing).

18 This obligation canbe indirectly beneficialto specific ecosystems of great ecological value, for example themoors (present in the HighFens nature reserve,inthe eastern part of Belgium)are better protectedinthecorridors under the overhead lines crossingthem, becausetherest ofthe moors were planted with trees for wood production and by draining theseareas.

Eliais installingbird markers – in order to makethelines more visiblefor the avifauna andthus more easilyavoidable – and nests –to reduce these negative impacts and protect someendangered species.

Elia Transmission Belgium | Annual report2020 154 Eliadecidedin2018to pursue this actionfor another five years without subsidies under the name “Life2” by addingmore green corridors (122 ha). In addition to this, the other objectiveof this project was to further monitor the evolution of these areas and their maintenance in order to assess the impact on biodiversity. The results are highly encouraging, with 98% of evaluated sites showingconclusive outcomes. (Further information on these projects canbefound on http://www.life-elia.eu/ )

5.8.3.3 Bird protection G4 EUS EN12 High-voltagelines can harm birdlife. Hence Elia alsomakes a huge effort to protect birds and minimisenegative Forimpacts.thisreason,

Eliahas again appliedtothe European Life program for thecontinuation of this project, the focus beingset this timeon electrical lines locatedin Natura 2000 zones.

Withthe helpof Belgium's leadingenvironmental associations, Eliahas identifiedthe 130 sections of its network that pose thegreatest hazard tobirdlife. Measuring 200 km in total, they are gradually being fitted with bird anticollision devices over a 10 year-period(startingin 2016). If a project is due to take place on these sections, markers will be installedimmediately.

Eliais currently studying how to develop our internal geographical grid database inorder to integrate all the areas wherethesespecific management measures have been put inplace.

For sections without projects, wewill seize theopportunity of scheduledinterventions to fit markers on conductors or earth connections.

Eliadid alsoapply together withvarious partners (TSOs RTE and REN and other nature andbirdprotectionorganizations) to theEuropeanLIFE programme with a project “Safelines4Birds” targetingspecific endangeredbirdspecies considered as “prioritary”.

Eliahas established a waste management policy for collecting, sorting and handling its waste in our local technical sites (servicecentres).

part of theBelgian soils is historically polluted as a direct result of nearby or in situ(prior use) industrial activities or backfillingwithpolluted soil. Eliahas mappedthe soil condition of its own landin order to schedule intervention priorities. Several remediation actions have beenlaunched on our sites. In2020, EUR 1,4 million has been paidfor surveys, follow up andthe realization of remediationworks.

All types of waste generated duringthe maintenance of assets inthis geographical zone arestored incontainer parks guaranteeing optimal storagein dedicated locations. They are eventually removed periodically or upon request by authorised collectors specialisedin thecollection, transport and recycling of hazardous andnon-hazardous waste. On our constructionsites, contractors must comply with environmental legislationas well and organise the sorting of theconstruction site waste they produce during the execution of their contract.

5.8.4.2

In the accidental event of aleakageof hazardous substances, Eliahas developed processes to immediatelycope with the potential impacts on the environment and the employees aretrained to detect early signs of this types of Aevents.significant

Elia Transmission Belgium | Annual report2020 155 5.8.4 Natural resources GRI 306-5, SDG14 5.8.4.1

Water and soil Eliais committed to an effectivewater and soil conservation. Since the company’s business activities do not result insignificant water consumption or regular releases of process-linked effluents, our corporate responsibility is not somuchtoreduce water consumption, but rather to pay special attention to water retention inthe ground ingrid and substationprojects andto prevent water and soil pollution by hazardous substances. Eliahas installed special safety systems ininstallations containing oil. Containment systems equipped with coalescencefilters areinstalled beneathtransformers in substations to prevent drips from leaking into the ground.Installations are regularly checked by maintenancestaff andrenovated or renewed if necessary.

Waste GRI 306-2 Whendealingwith wastethat cannot be avoided, the motto is reuse - recycle- recover - dispose. Maintenance work and infrastructureprojects areour coreactivities that generate most waste flows. If facilities are newly built, converted or dismantled, specific elements (e.g. transformers that have a very long lifetime) are storedin order to be reusedeither in refurbished stations or in newly built ones. Those parts that are nolonger needed are disposed of in aresource-conservingmanner and specific elements arerecycled (e.g. metals from thecables and oil).

Thecoronavirus pandemic has confrontedsocietywithfundamental changes and new challenges. For Elia as a transmission system operator inBelgium, this meant analysing comprehensively, adapting pandemic plans and acting prudently. This enables us to guaranteesystem stability and security of supply at all times. Thanks toa "COVID-19Task Force" set up early on, Elia was abletoreact appropriately and flexibly tothe new challenges. In avery short time, our colleagues on thetask forcedeveloped a broad concept for measures for all Elia locations and communicated recommendations for action transparently and continuously toall employees. Thanks to continuous coordination and communication, bothwith internal and external partners, a flexible package of measures developed at an early stage, whichcould be adapted to the changing conditions again and againover thecourse of the months, Elia was ableto maintain its efficiency even in this extremesituation, operate and maintainthe grid safelyand even expand it further for the energy transition. Theimpact onprojects was reducedto an absolute minimum and Eliawas able to guarantee security of supply at all times.

Amongst other things, this was possible due to thefact that Eliawas alreadyfullyprepared for digital work before the Thepandemic.mainobjective

Within theframework of the COVID-19 pandemic, inaddition to theexistingrisk assessments, additional dedicated hygieneconcepts andoccupational safety regulations wereimplementedinthe area of occupational health and

Thewaste disposal contractor provides Eliawith information on thewaste disposal method (and certificates), as legally requiredin Belgium. Depending on the region, Eliais also required to report tothe authorities the yearly quantities of specific waste types.

COVID19 pandemic management

of this stillexisting Task Forceis to limitcontamination on the work floor by providing effective and efficient security measures. This is done by providing effectiveand efficient preventive measures, resources, testing, tracingand preparationfor vaccination.

5.9

Elia Transmission Belgium | Annual report2020 156 For consistency’s sake, Elia has decidedtostandardisethe sorting rules andprocedures whichareidentical throughout Belgium, regardless of the site even if theregulations might differ slightly depending on the region wherethe site is located. Wasteis determinedto be hazardous onthe basis of its wastecode from the European List ofWaste.

A series of donations weremade inthe context of the Covid-19 pandemic inBelgium:

Despite the special circumstances in2020, Eliawas abletosuccessfullycontinuethe dialogue withits stakeholders: The existing communication options were expanded to include digital and hybridformats and additional hygieneguidelines wereestablishedfor thevery limitedinstances of personal contact. The early involvement of all stakeholders inthe planning and implementation of gridexpansion projects was particularly important to Elia, even in times of lock-down and contact restrictions. That is why we increasingly implemented digital formats for informal public participation at the beginning of the year. Communication formats for internal communicationwere alsofurther digitalised. In particular, large participation formats for employees, such as management information events, wereconducted as hybridevents - i.e. live witha small audience plus a livestream transmission for the entireworkforce. Regular dialogue events were planned and implemented fully digitally.

— All the members of Elia's Executive Board have decided to contributetheir entiresalary for the month of Mayto the KingBaudouinFoundation tofinance aspecial fund to fight poverty inthe current context of the coronavirus pandemic.Withcontributions of the employees, thetotal amount raised was €255,000.

During the pandemic, Elia has proven to be a resilient organisation thanks tothe commitment anddedication of our employees. Despite the difficult circumstances, we have continued our activities and delivered astable and a secure electricity system inthe interest of society.

Elia Transmission Belgium | Annual report2020 157 safety. In addition, greater emphasis was placedonsocial aspects andpotential psychosocial consequences of the coronavirus crisis.

— In April 2020, Elia decidedtocontribute the budget set aside for the organisation of theAnnual General Meeting(the amount was even increased to atotal contribution of €100,000) to three King BaudouinFoundation Solidarity Funds. Dueto the coronavirus measures, this year's Annual General Meeting was held inwriting.

Right from thestart, Elia has been providing new employees withdigital onboarding from home. Introductory events andintroductions to the various divisions took place digitally without any problems. Likewise, digital, informal appointments for open discussions intheteams also offered new opportunities to get to know each other.

Elia Transmission Belgium | Annual report2020 158 GRI content Index GRI 102-55 GRI 102: General Disclosures Organisational profile 102-1Nameoftheorganisation p.104 102-3 Location of headquarters p.103 102-4 Location of operations p.103 102-6 Markets served p.121 102-7 Scaleofthe organisation p.123 &124 102-8 Information on employees andotherworkers p.123 &124 102-9Supplychain p.134 102-11 Precautionary Principleorapproach p.110&144 102-12 Externalinitiatives p.105 102-13 Membershipofassociations p.105 Strategy 102-15 Key impacts,risks,andopportunities p.117&118 Ethicsand 102-16 integrity Values,principles,standards, andnorms of behaviour p.106&109 102-17Mechanismsforadviceandconcernsaboutethics p.106 Governance 102-18 Governancestructure p.107 102-19Delegatingauthority p.106&109 102-20 Executive-levelresponsability for economic, environmental,and socialtopics p.106&109 102-21 Consultingstakeholders on economic,environmentalandsocial p.137 & 139 102-26 Role ofthe highest governance body in settingpurpose,values andstrategy p.106&109 102-29Identifyingandmanagingeconomic,environmentalandsocialimpactsp.117,118&137 102-30 Effectiveness ofrisk managementprocessess p.110 102-32 Highestgovernance body's rolein sustainability reporting p.106 & 109 102-33 Communicatingcriticalconcerns p.106 & 09 102-38 Annualtotalcompensation ratio p.128 Stakeholder engagement 102-40 Listofstakeholder groups p.136 102-41Collectivebargainingagreements p.123,124&128

GRI 204: Procurement practices 204-1Proportionofspendingonlocalsuppliers p.134

GRI 305: Emissions 305-1 Direct greenhouse gas (GHG)emissions (Scope 1) p.145 305-2Energyindirectgreenhousegas(GHG)emissions(Scope2)p.145

Elia Transmission Belgium | Annual report2020 159 102-42 Identifyingandselectingstakeholders p.136 102-43 Approach to stakeholderengagement p.136 & 137 102-44 Key topics andconcerns raised p.136&137 Reporting principles 102-46 Defining report contentand topic Boundaries p.118 102-47Listofmaterialtopics p.118 102-55 GRIcontent index p.157

GRI 103: identified material aspects and boundaries 103-1 Explanation ofthe materialtopic andits Boundary p.118 103-2Themanagementapproachanditscomponents 144p.123,130,134,136& 103-3 Evaluationof themanagementapproach p.107

GRI 201: Economicperformance 201-2Financialimplicationsandotherrisksandopportunitiesfortheorganisation'sactivitiesduetoclimatechangep.110,117&145

GRI 205: Anti-corruption 205-1 Operations assessedfor risks relatedto corruption p.106&108 205-2Communicationandtrainingonanticorruptionpoliciesandproceduresp.108

GRI 302: Energy 302-1 Energy consumption within theorganisation p.148 GRI 304: Biodiversity 304-1 Operational sites owned,leased,managedin, oradjacentto protectedareas andareas ofhigh biodiversity valueoutside protectedareas p.150 304-3304-2Significantimpactsofactivities,products,andservicesonbio-diversityp.150&151Habitatsprotectedorrestoredp.150&152

GRI 308: Supplier environmental assessment 308-1 New suppliers thatwere screened usingenvironmentalcriteria p.134 308-2Significantactualandpotentialnegativeenvironmentalim-pactsinthesupplychainandactionstakenp.134

GRI 414: Supplier social assessment 414-1 New suppliers thatwere screened usingsocial criteria p.134&136

GRI 405: Diversityand equal opportunities 405-1 Diversity ofgovernance bodies andemployees p.123&124

GRI 404: Training and education 404-1 Averagehours oftraining peryearperemployeeby gender, and by employee category p.128

GRI 416: Customer health and safety 416-1 Assessment ofthehealth andsafety impacts ofproduct andservicecategories p.148

GRI 413: Local communities 413-1 Operations with localcommunity engagement,impactassessments,and developmentprogrammes p.136

Elia Transmission Belgium | Annual report2020 160 305-3Otherindirectgreenhousegas(GHG)emissions(Scope3)p.145 GRI 306: Effluents and waste 306-2 Wasteby typeand disposalmethod p.154

GRI 401: Employment 401-1 Totalnumberand rates ofnewemployee hires andemployee turnover p.125 401-3Parentalleave p.123&127

GRI 402: Labour/management relations(MA) 402-1 Social Consultation andDialogue - Co-Determination p.129 GRI 403: Occupational health and safety 403-1 Occupationalhealthandsafety managementsystem p.130 403-3Occupationalhealthservices p.130 403-9403-5Workertrainingonoccupationalhealthandsafetyp.131Work-relatedinjuriesp.132

DMADMADemand-sidemanagementprogrammesincludingresidential,commercial,institutionalandindustrialprogrammesp.114Disaster/EmergencyPlanningandResponsep.113

EU12EU4Lengthofaboveandundergroundtransmissionanddistribu-tionlinesbyregulatoryregimep.104Transmissionanddistributionlossesasapercentageoftotalenergyp.122

Demand management approach

Lines and losses and qualityof service

Environment EN12 Description ofsignificant impacts ofactivites,products,andservices on biodiversity inprotectedareas andareas ofhigh biodiversity value outside protectedareas p.150&153

Health and safety & Human resources

Elia Transmission Belgium | Annual report2020 G4161- ElectricUtilities Specific (EUS)

EU15Percentageofemployeeseligibletoretireinthenext5and10yearsbrokendownbyjobcategoryandbyregionp.127

DMA Managementapproach toensure short andlong-term electricity availability andreliability p.113

WehaveauditedtheConsolidatedFinancialStatements ofEliaTransmissionBelgiumNV/SA,whichconsists oftheconsolidatedstatementofthefinancialpositionas at31December2020,theconsolidatedstatementof profitorloss,theconsolidatedstatementofprofitorloss andcomprehensiveincome,theconsolidatedstatement ofchangesinequityandtheconsolidatedstatementof cashflowsfortheyearended31December2020and thenotes,whichshowaconsolidatedbalancesheettotal of € 7,292.9millionandofwhichtheconsolidated incomestatementshowsaprofitfortheperiodof € 126.5million. InouropiniontheConsolidatedFinancialStatementsof theGroupgiveatrueandfairviewoftheconsolidated netequityandfinancialpositionasat31December 2020,aswellasitsconsolidatedresultsandits consolidatedcashflowsfortheperiodthenendedin accordancewiththeInternationalFinancialReporting StandardsasadoptedbytheEuropeanUnion(“IFRS”) andwithapplicablelegalandregulatoryrequirementsin Belgium.

Wehavecompliedwithallethicalrequirementsthatare relevanttoourauditoftheConsolidatedFinancial StatementsinBelgium,includingthosewithrespectto independence. WehaveobtainedfromtheBoardofDirectorsandthe officialsoftheCompanytheexplanationsand informationnecessaryfortheperformanceofouraudit andwebelievethattheauditevidencewehaveobtained issufficientandappropriatetoprovideabasisforour opinion. Keyauditmatters

Wehavebeenappointedasjointstatutoryauditorsbytheshareholdersmeetingof19May2020,inaccordancewith thepropositionbytheBoardofDirectorsfollowingrecommendationoftheAuditCommitteeandon recommendationoftheworkers’council.Ourmandateexpiresattheshareholdersmeetingthatwilldeliberateonthe annualaccountsfortheyearending31December2022.TheauditoftheConsolidatedFinancialStatementsofthe Groupwasperformedduringrespectively1yearforBDOBedrijfsrevisorenCVBAand2consecutiveyearsfor EYBedrijfsrevisorenBV.

Calculationofnetresult Description Asdescribedinthenotes3.3.17.‘Regulatorydeferral accounts’,6.20‘Accrualsanddeferredincome’and 9.1.4‘TariffSetting’oftheConsolidatedFinancial Statements,thenetresultoftheGroupisdeterminedby applyingcalculationmethodssetbytheBelgianfederal regulator,theCommissionforElectricityandGas Regulation(the“CREG”)(the“TariffMechanism”).

WeconductedourauditinaccordancewithInternational StandardsonAuditing(“ISAs”).Ourresponsibilities underthosestandardsarefurtherdescribedinthe“Our responsibilitiesfortheauditoftheConsolidated FinancialStatements”sectionofourreport.

BDOBedrijfsrevisorenCVBAEYBedrijfsrevisorenBV TheCorporateVillageDeKleetlaan2 DaVincilaan9–BoxE.61831Diegem ElsinoreBuildingBelgium 1930Zaventem Belgium Jointauditors’reporttothegeneralmeetingofEliaTransmissionBelgiumNV/SA fortheyearended31December2020

Thesetworeportsareconsideredasonereportandareinseparable.

Asrequiredbylaw,wereporttoyouasjointstatutoryauditorsofEliaTransmissionBelgiumNV/SA(the “Company”)anditssubsidiaries(togetherthe“Group”).Thisreportincludesouropinionontheconsolidated statementoffinancialpositionasat31December2020,theconsolidatedstatementofprofitorloss,theconsolidated statementofprofitorlossandcomprehensiveincome,theconsolidatedstatementofchangesinequityandthe consolidatedstatementofcashflowsfortheyearended31December2020andthenotes(allelementstogetherthe “ConsolidatedFinancialStatements”)andincludesaswellourreportonotherlegalandregulatoryrequirements.

ReportontheauditoftheConsolidatedFinancialStatements

Basisfortheunqualifiedopinion

Keyauditmattersarethosemattersthat,inour professionaljudgment,wereofmostsignificanceinour auditoftheConsolidatedFinancialStatementsofthe currentreportingperiod. Thesematterswereaddressedinthecontextofouraudit oftheConsolidatedFinancialStatementsasawholeand informingouropinionthereon,andconsequentlywedo notprovideaseparateopiniononthesematters.

Unqualifiedopinion

• Performingindependentmathematical recalculationsoftheregulatedresultsbasedon underlyinginternaldocumentationandexternal information,andtakingintoaccounttheformulas asdescribedintheTariffMechanism;

• Assessingthedesignandevaluatingtheoperating effectivenessofkeycontrols,including managementreviewcontrols,over(i)the appropriateauthorizationofcapitalization,(ii)the complianceofcapitalizationcriteriausedwiththe accountingpoliciesand(iii)thecorrect classificationofexpenditureasCAPEXorOPEX;

Thistariffmechanismisbasedoncalculationmethods thatarecomplexandrequiretheuseofparameters(the BetaofElia’sshare,returnonequity,...),and accountingdataoftheregulatedactivities(the RegulatedAssetBase,theregulatedequity,capital expenditure(“CAPEX”),subsidiesreceived).

Grouphasverysignificantinvestmentprojectsongoing toconnectthesenewproductionssitesontheGroup’s network.Thetimelyandon-budgetprogressofthese investmentprojectsisoneofthekeyperformancegoals formanagementassetbytheBoardofDirectors.The progressofthesenetworkprojectsisequallyakey performanceindicatorforinvestorsasakeydriverof theirreturnoninvestmentisthemaintenanceand expansionofthenetwork.Itisalsoanimportant quantitativeandqualitativemeasurefortheregulators. ThisisfurtherexplainedandevidencedinNote6.1 ‘PPE’andinNote4‘Segmentreporting’ofthe ConsolidatedFinancialStatements. TheseassetsareclassifiedasProperty,Plantand Equipment(“PP&E”),withatotalcapitalexpenditureof € 347.6millionin2020andanetbookvalueof € 4,427.5millionasat31December2020or60.7%of totalbalancesheet.

ofEliaTransmissionBelgiumNV/SAasofand fortheyearended31December2020(continued)

• Assessingtheadequacyofnotes3.3.17,6.20and 9.1.4oftheConsolidatedFinancialStatements.

Therefore,thecalculationmethodsoftheGroup’snet resultarecomplexandrequirejudgementfrom management,moreparticularlyrelatedtotheuseof correctaccountingdata,operatingdata,andparameters imposedbytheregulator.Theuseofincorrect accountingandoperatingdata,anddeviationsinused assumptions,canhaveamaterialimpactontheGroup’s netresult.

TheTariffMechanismmakesadistinctionbetween incomeandexpensesbasedonthecontrolthatthe Grouphasovertheexpensesandincome.Thefirsttype arethenon-controllableelementsforwhichdeviations arefullypassedontofuturetariffs.Thesecondtypeare thecontrollableelementsthattheGroupcancontrol, andforwhichunder-andoverspendingis(partly) attributabletotheshareholders.

Howthematterwasaddressedinouraudit

• Readingandevaluatingtheaccountingimplications ofcommunicationsanddecisionstakenbythe CREG;

Giventhecurrentevolutionintheelectricity environmenttowardsgreenenergyproduction,the

Theaccountingpoliciesdescribethatallmaintenance expensesareconsideredtobeoperatingexpenses (“OPEX”)andallnewprojectorreplacement investmentsareconsideredcapitalexpenditure “CAPEX”.Asnetworkprojectscanincludeboth maintenanceandinvestments,theclassificationaseither OPEXorCAPEXrequiresjudgementfrom management.Giventhisjudgement,theimportanceof theamountofPP&Eonthetotalbalancesheet,andits relevancetotheusersofthefinancialstatementsaswell astheprominenceintheGroup’scommunicationin pressreleasesandininvestorpresentationsonthe progressonnewprojects,thismatterisconsideredakey auditmatter. Howthematterwasaddressedinouraudit

Capitalizationofproperty,plantandequipment Description

• Assessingthedesignandevaluatingtheoperating effectivenessofkeycontrolsrelatingtothe calculationofthenetresult,includingthoserelated to(i)thecompletenessandaccuracyofthe underlyingdatausedinthecalculationand(ii) managementreviewcontrols;

• Evaluatingtheadequateandconsistent classificationofincomeandexpensesbynature (controllableandnon-controllable)asdescribedin theTariffMechanism;

Amongstothers,wehaveperformedthefollowing procedures:

• AssessingrelevantITapplicationcontrolswiththe supportofourITspecialists; • Performingsubstantiveanalyticalprocedureson CAPEXandOPEXbycomparingcurrentyear figureswiththebudgetedfiguresasapprovedby theregulatoratthelevelofassetclassesand projects;

Auditreportdated14April2021ontheConsolidatedFinancialStatements

Amongstothers,wehaveperformedthefollowing procedures:

Aspartofanaudit,inaccordancewithISAs,we exerciseprofessionaljudgmentandwemaintain professionalscepticismthroughouttheaudit.Wealso performthefollowingtasks:

TestingaselectionofadditionstoPP&E,including thoseunderconstruction,andassessingwhetherthe expendituremetthecriteriaforcapitalizationunder IFRSasadoptedbytheEuropeanUnionandthe Group’saccountingpoliciesandwhetherthe CAPEXwereallocatedtothecorrectprojects, includingtheassessmentofmanagementjudgement incaseofaprojectincludingbothmaintenanceand investments;

• Evaluatingtheselectedandappliedaccounting policies,andevaluatingthereasonabilityofthe accountingestimatesandrelateddisclosuresmadeby theBoardofDirectorsaswellastheunderlying informationgivenbytheBoardofDirectors;

• Evaluatingtheoverallpresentation,structureand contentoftheConsolidatedFinancialStatements, andofwhetherthesefinancialstatementsreflectthe underlyingtransactionsandeventsinatrueandfair view;and

• Obtainsufficientappropriateauditevidence regardingthefinancialinformationoftheentitiesor businessactivitieswithintheGrouptoexpressan opinionontheconsolidatedfinancialstatements.We areresponsibleforthedirection,supervisionand performanceofthegroupaudit.Weremainsolely responsibleforourauditopinion.

• Assessingtheadequacyofnote4and6.1ofthe ConsolidatedFinancialStatements.

ResponsibilitiesoftheBoardofDirectorsfor thepreparationoftheConsolidatedFinancial Statements

•

ofEliaTransmissionBelgiumNV/SAasofand fortheyearended31December2020(continued)

• Obtaininginsightinthesystemofinternalcontrols thatarerelevantfortheauditandwiththeobjective todesignauditproceduresthatareappropriateinthe circumstances,butnotforthepurposeofexpressing anopinionontheeffectivenessoftheGroup’s internalcontrol;

Ourobjectivesaretoobtainreasonableassuranceabout whethertheConsolidatedFinancialStatementsarefree frommaterialmisstatement,whetherduetofraudor error,toexpressanopinionontheseConsolidated FinancialStatementsbasedonouraudit.Reasonable assuranceisahighlevelofassurance,butnota guaranteethatanauditconductedinaccordancewith theISAswillalwaysdetectamaterialmisstatement whenitexists.Misstatementscanarisefromfraudor errorandareconsideredtobematerialif,individually orintheaggregate,theycouldreasonablybeexpected toinfluencetheeconomicdecisionsofuserstakenon thebasisoftheseConsolidatedFinancialStatements.

AspartofthepreparationoftheConsolidatedFinancial Statements,theBoardofDirectorsisresponsiblefor assessingtheCompany’sabilitytocontinueasagoing concern,andprovide,ifapplicable,informationon mattersimpactinggoingconcern,TheBoardof Directorsshouldpreparethefinancialstatementsusing thegoingconcernbasisofaccounting,unlesstheBoard ofDirectorseitherintendstoliquidatetheCompanyor toceasebusinessoperations,orhasnorealistic alternativebuttodoso.

TheBoardofDirectorsisresponsibleforthe preparationoftheConsolidatedFinancialStatements thatgiveatrueandfairviewinaccordancewithIFRS andwithapplicablelegalandregulatoryrequirementsin Belgiumaswellasinternalcontrolsrelevanttothe preparationoftheConsolidatedFinancialStatements thatarefreefrommaterialmisstatement,whetherdueto fraudorerror.

• Identificationandassessmentoftherisksofmaterial misstatementoftheConsolidatedFinancial Statements,whetherduetofraudorerror,the planningandexecutionofauditproceduresto respondtotheserisksandobtainauditevidence whichissufficientandappropriatetoprovideabasis forouropinion.Theriskofnotdetectingmaterial misstatementsislargerwhenthesemisstatementsare duetofraud,sincefraudmayinvolvecollusion, forgery,intentionalomissions,misrepresentations,or theoverrideofinternalcontrol;

• ConcludeontheappropriatenessofBoardof Director’suseofthegoing-concernbasisof accounting,andbasedontheauditevidence obtained,whetheramaterialuncertaintyexists relatedtoeventorconditionsthatmaycast significantdoubtontheCompanyorGroup’sability tocontinueasagoingconcern.Ifweconcludethata materialuncertaintyexists,wearerequiredtodraw attentioninourauditor’sreporttotherelated disclosuresintheConsolidatedFinancialStatements or,ifsuchdisclosuresareinadequate,tomodifyour opinion.Ourconclusionsarebasedonauditevidence obtaineduptothedateoftheauditor’sreport. However,futureeventsorconditionsmaycausethe CompanyorGrouptoceasetocontinueasagoingconcern;

Auditreportdated14April2021ontheConsolidatedFinancialStatements

Ourresponsibilitiesfortheauditofthe ConsolidatedFinancialStatements

non-financialinformationhasbeenpreparedin accordancewiththeGlobalReportingInitiative Standardsmentionedintheboardofdirectors’annual reportontheconsolidatedfinancialstatements. Independencematters We,andourrespectivenetworks,havenotperformed anyservicesthatarenotcompatiblewiththeauditofthe ConsolidatedFinancialStatementsandwehave remainedindependentoftheCompanyandtheGroup duringthecourseofourmandate. Thefeesforadditionalservicesthatarecompatiblewith theauditoftheConsolidatedFinancialStatements intendedbyarticle3:65oftheCodeofcompaniesand associationshavebeencorrectlydisclosedanddetailed inthedisclosurestotheConsolidatedFinancial Statements.

Reportonotherlegalandregulatoryrequirements

ResponsibilitiesoftheBoardofDirectors

TheBoardofDirectorsisresponsibleforthe preparationandthecontentoftheBoardofDirector’s reportandotherinformationincludedintheannual report. Responsibilitiesofthejointauditors

Inouropinion,basedonspecificworkperformedonthe BoardofDirector’sreport,theBoardofDirector’s reportisconsistentwiththeConsolidatedFinancial Statementsforthesamefinancialyearandhasbeen preparedinaccordancewitharticle3:32oftheCodeof companiesandassociations.

ofEliaTransmissionBelgiumNV/SAasofand fortheyearended31December2020(continued)

Thenon-financialinformationrequiredbyarticle3:32 §2oftheCodeofcompaniesandassociationsis includedinthechapterSustainabilityreportingofthe annualreport.TheGrouphaspreparedthisnonfinancialinformationbasedontheGlobalReporting InitiativeStandards(“GRI”).Inaccordancewithart 3:80§1,1stparagraph,5°oftheCompanies’and Associations’Code,wedonotcommentonwhetherthis

WeprovidetheAuditCommitteewithintheBoardof Directorswithastatementthatwehavecompliedwith relevantethicalrequirementsregardingindependence, andtocommunicatewiththemallrelationshipsand othermattersthatmayreasonablybethoughttobearon

AspectsrelatingtoBoardofDirector’sreport andotherinformationincludedintheannual report

Inthecontextofourmandateandinaccordancewith theadditionalstandardtotheISAsapplicablein Belgium,itisourresponsibilitytoverify,inallmaterial respects,theBoardofDirector’sreportandother informationincludedintheannualreport,aswellasto reportonthesematters.

Auditreportdated14April2021ontheConsolidatedFinancialStatements

WecommunicatewiththeAuditCommitteewithinthe BoardofDirectorsregarding,amongothermatters,the plannedscopeandtimingoftheauditandsignificant auditfindings,includinganysignificantdeficienciesin internalcontrolthatweidentifyduringouraudit.

ourindependence,andwhereapplicable,related safeguards. FromthematterscommunicatedtotheAuditCommittee withintheBoardofDirectors,wedeterminethose mattersthatwereofmostsignificanceintheauditofthe ConsolidatedFinancialStatementsofthecurrentperiod andarethereforethekeyauditmatters.Wedescribe thesemattersinourreport,unlessthelaworregulations prohibitthis.

InthecontextofourauditoftheConsolidatedFinancial Statements,wearealsoresponsibletoconsiderwhether, basedontheinformationthatwebecameawareof duringtheperformanceofouraudit,theBoardof Directors’reportcontainanymaterialinconsistenciesor containsinformationthatisinaccurateorotherwise misleading.Inlightoftheworkperformed,thereareno materialinconsistenciestobereported.

Auditreportdated14April2021ontheConsolidatedFinancialStatements

Othercommunications

Thisreportisconsistentwithouradditionalreportto theAuditCommitteeasspecifiedinarticle11ofthe regulation(EU)nr.537/2014.

Thejointstatutoryauditors

*ActingonbehalfofaBV

Brussels,14April2021

EYBedrijfsrevisorenBV representedby PaulEelen* Partner

ofEliaTransmissionBelgiumNV/SAasofand fortheyearended31December2020(continued)

•

BDOBedrijfsrevisorenCVBA representedby FelixFank* Partner *ActingonbehalfofaBV

Elia Transmission Belgium 2020 annual results

Articles inside

Biodiversity and landscape integration

Emissions

Natural resources

Community engagement

COVID-19 pandemic management

Community relations and public acceptance

Stakeholder dialogues

Cooperation and innovation

H&S training

Energy import and export

Employee survey

Workability

Materiality and objectives

Head count

Guiding principles

Information about the parent company

Joint auditors report on the consolidated financial statements

Group structure

Regulatory frameworks and tariffs

Significant accounting policies

Risk management

Items in the consolidated statement of profit or loss and other comprehensive income

Monitoring

Basis of preparation

Joint auditors’ report to the general meeting of Elia Transmission Belgium NV/SA for the year ended

Board of Directors

Cashflow

Climate risks

Adequacy

Contingency events & business continuity disruption

Legal disputes and liabilities

Supplier’s risk

Legal structure