Annual Report 2006 - KU Leuven...THIEULAIN LIGNE WATTINES SNCB GAURAIN ANTOING THUILLIES JAMIOLLE...

Concept and editorial staffElia, Communication departement

Graphic design and coordinationConcerto

Photos : EliaexceptedPhotos on cover, pages 8,14,20,26,30,36: Guy Van HooveldHorns Rev page 17 : Elsam A/SWind mills page 39 : belpress

EditorJacques Vandermeiren

Head Offi ceEliaBoulevard de l’Empereur, 20B-1000 BruxellesTel: +32 2 546 70 11Fax: +32 2 546 70 10

website: www.elia.bee-mail: [email protected]

ContactsLise Mulpas, tel: +32 2 546 73 75Erik De Leye, tel: +32 2 546 72 11e n e r g y o n t h e r i g h t t r a c k

Ce document est également disponible en françaisDit document is ook beschikbaar in het Nederlands

April 2007

An

nu

al R

ep

ort

20

06

“We are a team of dedicated professionals, accountable for keeping the lights on, by serving our customers and the communityin an effi cient way”

e n e r g y o n t h e r i g h t t r a c k

Annual Report 2006









April 2007

An

nu

al R

ep

ort

20

06



Annual Report 2006

Profi le

Elia, the operator of Belgium’s electricity transmission system, ensures the transmission of electricity from generators to distribution system operators and large industrial consumers. Elia’s grid forms a key link not only between electricity markets in southern and northern Europe but also between Belgian power generators and consumers. The company holds a legal monopoly granted by the Belgian federal government in a 20-year renewable licence for the 380 kV to 150 kV grid, which was awarded in 2002. Belgium’s three regions have also awarded Elia licences for the 70 kV to 30 kV networks on their respective territories.

Tariffs for use of the electricity transmission system are approved by the federal regulator, the Commission for Electricity and Gas Regulation (CREG). Tariffs include a regulated fair remuneration for Elia shareholders. The fair remuneration provides return on the capital invested in the grid and is calculated based on the regulated asset base (RAB). Each year, the RAB is adjusted to take into account investments, depreciations and changes in working-capital requirements.

Key fi gures

(1) EBITDA = Operating income - cost of goods and services - personnel costs - provisions - write-downs(2) Calculated in accordance with Belgian accounting regulations (Belgian GAAP)

Consolidated IFRS results (in million €, results per share in €) 2006 20052004

Operating income 711.5 714.2

EBITDA (1) 292.5 295.9

Net profi t 75.9 76.5

Net profi t per share 1.58 1.60

Dividend per share 1.28 1.27

Regulated asset base (RAB) (2) 3,444.0 3,443.1

Average RAB (2) 3,443.5 3,371.0

Number of employees (31/12) 1,227 1,221

Geographical length of the grid in km (31/12) 8,367 8,344

Alzette

Moselle

Our

Sûre

Vierre

Semois

Lesse

Ourthe

Sambre

Warche

Amblève

Gileppe

Vesdr

e

Meu

se

Maas

Demer

Grote Nete

Ourthe

Vesdre

Meuse

Dijle

Dyle

Rupel

Dender

Dendre

Schelde

Leie

Escaut

IJzer

Meu

se

Sambre

Eau

d’Heu

re

Echelle Schaal

0 10 20 30 km

1 : 1 000 000Situation au

stand op1-1-2007

Institut Géographique National Nationaal Geografisch Instituut

COURS D’EAU WATERLOPEN

Rivières et canaux Rivieren en kanalen

CENTRALESCENTRALES

centrale nucléaire

centrale hydraulique

centrale de pompage

kerncentrale

thermische centrale

waterkrachtcentrale

pompcentrale

POSTES STATIONS

existants

en projet

bestaande

in ontwerp

380 kV

220-150 kV

70 kV

380 kV

220-150 kV

70 kV

MERCATOR

MOLENBEEK

Herbaimont

centrale thermique

LIGNES AERIENNES BOVENGRONDSE LIJNEN

Tension d’exploitation

380 kV

220 kV

150 kV

70 kV

Uitbatingsspanning

380 kV

220 kV

150 kV

70 kV

Nombre de ternes

prévus installés

1 1

2 1

2 2

> 2

(avec numéro de référence dansle tableau des compositions)

Aantal draadstellen

voorzien uitgerust

(met referentienummer inde samenstellingstabel)

1 1

2 1

2 2

> 2

en construction ou en projet

lijn met 2 draadstellenvan verschillende spanningen

uitbatingsspanning lagerdan de constructiespanning

lignes à 2 ternes detensions différentes

tension d’exploitation inférieureà la tension de construction

Tableau des compositions deslignes à plus de 2 ternes:

Samenstellingtabel van de lijnenmet meer dan 2 draadstellen:

10

123456

789

1112

131415161718

2 x 150 + 1 x 70(3 x 150)

4 x 150

1 x 150 + 2 x 70(3 x 150)

1 x 150 + 3 x 70(4 x 150)

2 x 150 + 2 x 70(4 x 150)

2 x 150(2 x 380 + 2 x 150)

3 x 380(4 x 380)

3 x 70

2 x 150(4 x 150)

1 x 150 + 1 x 70(2 x 150 + 1 x 70)

4 x 70

3 x 150

1 x 70(4 x 150)

1 x 220 + 2 x 70

3 x 150(4 x 150)

3 x 150 + 1 x 70(4 x 150)

3 x 220

1 x 380 + 2 x 150(2 x 380 + 2 x 150)

150 + 70

70(150)

4

2e terne en construction ou en projet 2de draadstel in aanbouw of in ontwerp

in aanbouw of in ontwerp

CABLES SOUTERRAINS ONDERGRONDSE KABELS

150 kV

70 kV

parallele kabels

150 kV

70 kV

câbles en parallèle 22

MARCHE-LEZ-ECAUSSINNES

PETROCHIM

FELUY

BAUDOURAIR

LIQUIDE

TERTRE

Elouges

QUAREGNON

GHLIN

OBOURG

HARMIGNIESCiply

VILLE/HAINE

GOUY

LA CROYERE

BASCOUP

TRIVIERES

PERONNES

BINCHE

COURCELLES

GOSSELIES

FLEURUS

AMERCŒUR

DAMPREMY

MONCEAUMONTIGNIES

ST-AMAND

TERGNEE

AUVELAIS

FARCIENNES

JEMEPPE-SOLVAY

Gembloux

JEMAPPES

Boussu

MonsBOEL

LL

BOEL HFBOEL TCC

BOELFOUR

(SNCB)

Fontaine

MALFALISE

CARALFOC

CS MARCINELLE

Marchienne

F. DE FERBLANCHISSERIE

Charleroi

Gilly

LA PRAYE

PONT-de-LOUP

Fosses-la-Ville

Sombreffe

Marbais(SNCB)

Chassart

Heppigniessud

Liberchies

Jumet

BUISSERET

Seneffe

S ambre

(30)

380 + 150

70+30(150)

70(150)

70(150)

70(150)

150 + 70

70(150)15

0+

70 70(150)

70(150)

150

+70 150 + 70

150 +70150 + 7070(150)

70(150)

150+70

150 + 30

150 + 70

30(150)

70(1

50)

70(150)

150 + 70

70(150)

16

12

4

2

2LA PRAYE

FOUR

70(150)

CHAMP-DE-COURRIERE

AMERCŒUR

MPREMYY

UMON

NEN

F

CARALFOC

CS MARCINELLE

Marchienne


Charleroi

Gilly

LALAA PRAYP

Ju70(150)

0(150)

70(150)15

0+

70 70(150)4

2LA PRAYEAYEA E

FOURFOUFO

LA CROYERE

LLL

BOELB HFBOEL TCC

BOELLFOURFOUR

EGNON

u

Mons

)

70(150))

150+70

s

1: 500 000

Pâturages

Maisières

La Louvière

Piéton

l’Evêque

Keumiée

ZANDVLIET

DOEL

BAYER

FINA

EKEREN7e HAVENDOK

MERKSEMSCHELDELAAN

KALLO

ZURENBORG

BURCHT

ZWIJNDRECHT

WOMMELGEM

OELEGEM

BEVEREN

MORTSEL

SCHELLE DORP

ST-PAUWELS

St-Niklaas

HEIMOLEN

Temse

LIER

LINT

OORDEREN

C. ZWIJNDRECHT

OeverBelliardstr.

Hovenierstr.Tabakvest

Moonstr.Berchem (NMBS)

WilrijkMHO

Hoboken

Aartselaar Kontich

WAARLOOS

150+

70

150

+36

150+

36

9

7

2

2

2

3

380+

150

DAMPLEIN

2

2

PETROL

WALGOED

2

NOORDERDOKKEN (NMBS)

1: 500 000L

BASF

SOLVAY

LILLO

BAYER

EKEREN7e HAVENDOK

MERKSEM

ZURENBORG

WOMMELGEM

OELEGEM

MORTSEL

T

t

HEIMOLEN

LIER

LINT

OORDEREN

rBelliardstr.



WilrijkMHO

Hoboken

Aartselaar Kontich

WAARLOOS

150

+36

150+

36

9

7

2

2

2

3

380+

150

DAMPLEIN

2

2

2

NOORDERDOKKEN (NMBS)KETENISSE

MERCATOR

SCHELLE

RIMIERETIHANGE

GRAMME

Hte SARTE

Croix-Chabot

AWIRS

CLERMONT

Ivoz-Ramet

LA TROQUE

SERAING

Fooz

ROMSEE

BRESSOUX

JUPILLE

BERNEAU

LIXHE

Saives

Ampsin-Neuville

CBR

Visé(SNCB)

Voroux(SNCB)

Hollogne

Ans

Alleur

Glain

Vottem

FN Vottem

Montegnée

Tilleur

Ougrée Sclessin

Sart-Tilman

Angleur

Jemeppe

Profondval

FlémalleLE VAL

Grivegnée

Chenée

Magotteaux

BELLAIRE

Monsin

FNCHERATTE

Herstal

EheinHermalle

s/Huy

Abée-Scry

MARCHIN

Poulseur

Esneux

Rivage(SNCB)

Ourthe

Vesdre

Meu

se

150

+70

70(1

50)

70 (150)

70 (150)70(220)

220

+15

0

380

+15

0

8

17

14

16

16

164

3

13

Anthisnes

70 (150)

Ramet

1 : 500 000

150+70

Pouplin

Ivoz-Ramet

LA TROQUOQO EEE

SERAINGAING RRROMSEE

BRESSOUX

JUPILLLE

gne

Ans

Alleur

GlaiGG n

ttem

Montegnéee

Tilleur

OugréeOugO Sclessinles

n

AngleurA

Jemepppppe

fondvalo

FlémalleF ééLE VAL

Grivegnéer

ChenéeC

tteaux

BEBB

Monsinn

FNCH

rstal

70(1

7

70 (150)0)0

70 (150)(

70(220)

0+

150

8

171

141

16

16

164

3

RaR

150+70

Pouplin

CHERTAL

70 kV 70 kV


Tension d’exploitation Uitbatingsspanning

2

2

2

3

2

2

2

2

2

2

2

2

2

2

2

2

2

2

1

3

2

2

3

2

2

2

2

2

150 kV 150 kV



220 kV 220 kV




380 kV 380 kV


Blandain

Noordschote

Gavere

ST-Denijs - Boekel

Zottegem

Geraardsbergen

Deux-Acren

Ronse

Bekaert

Kortrijk- NMBS

K.Oost

Bas-Warneton

Bornem Willebroek

Tisselt

Rijkevorsel

Turnhout

Ravels

HerentalsOlen

Herenthout

Geel/Oevel

Nijlen

Lummen

Hechtel Gerdingen

St-Huibrechts-Lille

Maaseik

Opglabbeek

Bekaert

Maasmechelen

Bilzen

Paalsteenstr.

Hasselt

(NMBS)

Alken

Halen

Kersbeek

AarschotDorenberg

Kessel-lo

PellenbergLeuven(NMBS)

HeverleeGasthuisberg

Duffel

Muizen

Langveld

Baasrode

Lokeren

Lanaken

Tongeren

BorgloonSt-Truiden

Landen

Jodoigne

Glatigny

Aische-en-Refail

Sauvenière

Court-St-Et.

Ottignies (SNCB)

Baulers

Ronquières

Enghien (SNCB)

Braine-le-C.

Soignies

Hoves

Meslin

Ath(SNCB)

Quevaucamps

Carrièredu Milieu

Tournai

Harchies

Lobbes

Clermont

Renlies

Beaumont

Solre St-Géry

Thy-le-Château

MomigniesLes Forges Baileux

Fourmies

Couvin

Romedenne

Pondrôme

Monceau-en-Ardennes

Fays-les-Veneurs

Orgeo

Hatrival

Recogne

Neufchâteau

Vierre

Longlier (SNCB)

Marbehan(SNCB)

Respelt

Villers-s/SemoisChiny Bonnert

Arlon

Differd.Arbed

Belv. Arbed

Bure

Schif.

Herbaimont

Sankt-Vith[Saint-Vith]

Cierreux

Trois-Ponts

Bronrome

Bevercé

SpaTuron

Heid-de-Goreux

Amel

[Butgenbach]

Comblain

Bomal

Soy

Andenne

Statte(SNCB)

MiécretFlorée

Ciney

Sart-Bernard(SNCB)

Grands-Malades

Dorinne

Yvoir(SNCB)

Warnant

Namur

Marche-les-Dames

Waret

Gerpinnes

Hanzinelle

Leuze

Croix-Chabot

Ivoz

FoozMonsin

Pepinster

Battice

Gileppe

Stembert

Welkenraedt (SNCB)

Les Plenesses

Henri-Chapelle

Montzen(SNCB)

Saives

Hogne(SNCB) Marche-en-

Famenne

CharneuxOn

Forrières(SNCB)

Dinant

Sommière

Hastière

Herfelingen

Appelterre

Welle EsseneDenderleeuw

(NMBS)

Kalmthout

St-Niklaas

Hamme

Temse

Elouges Ciply

PâturagesBois-de-Villers

St-Servais

GemblouxLens

Hannut

Soiron

Dowchemical

Ceroux

Stephanshof

Wierde

Amylum

Buissonville

Vesdre

[Edingen (NMBS)]

[Renaix]

[Neerwaasten]

Bütgenbach

[Amblève]

Wanze

Croix-Chabot

Ivoz-Ramet

Fooz

Saives

Ampsin-Neuville

CBR

Visé(SNCB)

Voroux(SNCB)

Hollogne

Ans

Alleur

Glain

Vottem

FN Vottem

Montegnée

Tilleur

Ougrée Sclessin

Sart-Tilman

Angleur

Jemeppe

Profondval

Flémalle

Grivegnée

Chenée

Magotteaux

Monsin

FN

Herstal

EheinHermalle

s/Huy

Abée-ScryPoulseur

Esneux

Rivage(SNCB)

Anthisnes

Ramet

Pouplin

St-Niklaas

Temse

OeverBelliardstr.



WilrijkMHO

Hoboken

Aartselaar Kontich

t

rBelliardstr.



WilrijkMHO

Hoboken

Aartselaar Kontich

Elouges

Ciply

Gembloux

Boussu

Mons

(SNCB)

Fontaine

Marchienne

Charleroi

Gilly

Fosses-la-Ville

Sombreffe

Marbais(SNCB)

Chassart

Heppigniessud

Liberchies

Jumet

Seneffe

Pâturages

Maisières

La Louvière

Piéton

l’Evêque

Keumiée

MARQUAIN

MACHELEN

HOENDERVELD

WESPELAAR

KOKSIJDE

BEERST

STADEN

SLIJKENS

ZEEBRUGGE

BRUGGE

ZEDELGEM

AALTER

EEKLO

LANGERBRUGGESADACEM

RINGVAART

SIDMAR

NIEUWEVAARTHAM

FLORA

DRONGEN

KENNEDYLAAN

DEINZE

ST-BAAFS-VIJVE

WORTEGEM

RUIEN

OUDENAARDE

MOEN

PITTEM

TIELT

MUIZELAAR

BEVEREN

RUMBEKE

OOSTROZEBEKE

DESSELGEM

HARELBEKE

HEULE

ZWEVEGEMWEVELGEM

PEKKE

MOUSCRON

KUURNE

DOTTIGNIES

MENENWEST

IEPER

IEPER NOORD

WESTROZEBEKE

MALDEREN

LEEST

MALLE

BEERSE

POEDERLEE

HEZE

AMOCO

ESSOCHEM

HERCULES

TESSENDERLO

BERINGEN

MOL

BALEN

DIEST

VIEILLEMONTAGNE

LOMMELOVERPELT

HOUTHALEN

(I.E.)

MHO

EISDEN

KNP

ZUTENDAAL

STALEN

GENK-LANGERLO

GODSHEIDE

SIKELWIJGMAAL

WILSELE

WOLUWE-ST-L.ST-L. WOLUWE

GRIMBERGEN

RELEGEM

TERLINDEN

KOBBEGEM

SCHAARBEEK

MOLENBEEK

DILBEEK HELIPORT WIERTZ

DHANISQ. DEMETS K.

ZUID/MIDI

IXELLESELSENEFOREST

VORST

LABORELEC

ST-GENESIUS-RODE[RHODE-ST-GENÈSE]

BUIZINGEN

EIZERINGEN

SIDAL

PUTTEMECHELEN

NMBS KRUISBAAN

HEIST/BERG

TIP

ZELE

ST-GILLIS-DENDERMONDE

HERDERENBRUSTEM

NMBS

TIENEN

CORBAIS

LE CHENOI

WATERLOO

BRAINE-L’ALLEUD

BAISY-THY

VIEUXGENAPPESNCB

NIVELLES

CLABECQ

OISQUERCQ

SNCB

LIGNETHIEULAIN

WATTINESGAURAINSNCB

ANTOING

THUILLIES

JAMIOLLE

NEUVILLEPLATE-TAILLE

CHOOZ

VIREUX

LUMES

HEINSCH

SNCB

LATOUR

ROUVROY

St-MARD

HERSERANGE

OXYLUX

LANDRES

BELVAL SCHIFFLANGE

BERTRANGE

HEISDORF

TRIERROOST

FLEBOUR

VIANDENS.E.O. BAULER

NIEDERSTEDEM

VILLEROUX

MONT-LEZ-HOUFFALIZE

Hte SARTE

SEILLES

SNCB

SNCB

AWIRS

CLERMONTLE VAL

LA TROQUE

SERAINGROMSEE

BRESSOUXJUPILLE

CHERTAL

BERNEAU

EUPEN

PT-RECHAIN

MARCOURT

NINOVE

MERCHTEMAALST NOORD

AALST

BASF

SOLVAYLILLO

BAYER

FINAKETENISSE

EKEREN

7e HAVENDOK

MERKSEMSCHELDE-

LAANKALLO

ZURENBORGBURCHT

ZWIJNDRECHT

WOMMELGEM

OELEGEMBEVEREN

MORTSEL

SCHELLE

-DORP

ST-PAUWELS

HEIMOLEN

St-JOB

LIER


PETROCHIM

FELUY

BAUDOUR

AIR LIQ.

TERTRE

QUAREGNON

GHLIN OBOURG

HARMIGNIES

V/HAINELA CROYERE

BASCOUP

TRIVIERES

PERONNES

BINCHE

GOSSELIES

FLEURUS

AMERCŒUR

DAMPREMY

MONCEAU MONTIGNIES

AUVELAIS

FARCIENNES

JEMEPPE-SOLVAY

SNCB

GARNSTOCK

ZONHOVEN

ZAVENTEM

BLAUWE TORENHERDERSBRUG

MONT ST.MARTIN

DAMPLEIN

HARENHEIDE

ESCH-SUR-ALZETTE

LA PRAYEFOUR

PETROL

WALGOED

NOORDERDOKKEN(NMBS)

[MOESKROEN]

[DOTTENIJS]

CHAMP-DE-COURRIERE

Hte SARTE

AWIRS

CLERMONT

LA TROQUE

SERAING ROMSEE

BRESSOUX

JUPILLE

BERNEAU

CBR

LE VAL

BELLAIRE

CHERATTE

MARCHIN

CHERTAL

BAYER

FINA

EKEREN7e HAVENDOK

MERKSEMSCHELDELAAN

KALLO

ZURENBORG

BURCHT

ZWIJNDRECHT

WOMMELGEM

OELEGEM

BEVEREN

MORTSEL

SCHELLE DORP

ST-PAUWELS

HEIMOLEN

LIER

OORDEREN

C. ZWIJNDRECHT

Kontich

WAARLOOS

DAMPLEIN

PETROL

WALGOED


BASF

SOLVAY

LILLO

BAYER

EKEREN7e HAVENDOK

MERKSEM

ZURENBORG

WOMMELGEM

OELEGEM

MORTSEL

T

HEIMOLEN

LIER

OORDEREN

Kontich

WAARLOOS

DAMPLEIN


SCHELLE


PETROCHIM

FELUY

BAUDOURAIR

LIQUIDE

TERTRE

QUAREGNON

GHLIN

OBOURG

HARMIGNIES

VILLE/HAINE

LA CROYERE

BASCOUP

TRIVIERES

PERONNES

BINCHE

GOSSELIES

FLEURUS

AMERCŒUR

DAMPREMY

MONCEAUMONTIGNIES

TERGNEE

AUVELAIS

FARCIENNES

JEMEPPE-SOLVAY

JEMAPPES

BOELLL

BOEL HFBOEL TCC

BOELFOUR

MALFALISE

CARALFOC

CS MARCINELLE


LA PRAYE

PONT-de-LOUP

BUISSERET

LA PRAYEFOUR

CHAMP-DE-COURRIERE

GOUY

COURCELLES ST-AMAND

TERGNEE

ZANDVLIET

DOEL

MERCATOR

LINT

RIMIERETIHANGE

GRAMME

LIXHE

AVELGEM

MASTAING

RODENHUIZE

ZOMERGEM

WARANDE

AVELIN

CHEVALET

VERBRANDE BRUG

EEKLO NOORD

IZEGEM

GEERTRUIDENBERG

KREEKRAKBORSSELE

BUGGENHOUT

MASSENHOVEN

DODEWAARD

EINDHOVEN

MAASBRACHT

OBERZIER

BRUEGEL

DROGENBOS

MEKINGEN

MEERHOUT

AVERNAS

CHIEVRES

REVIN

MAZURES

LONNY

VESLE

AUBANGE

MOULAINE

VIGY

BRUMECOO

RIMIERETIHANGE

GRAMMECOGNELEE

CHAMPION

LIXHE

ACHENE

ZANDVLIET

DOEL

MERCATOR

LINT

GOUY

COURCELLES ST-AMAND

TERGNEE

REPPEL

VAN EYCK

High-Voltage Networks-Belgium

ELIA - ANNUAL REPORT 2006 [1]

ContentsForeword by the chairman of the board of directors* ...................................................... 2

Foreword by the chairman of the management committee .......................................... 3

Key events* ...................................................................................................................................................... 4

Important post-balance sheet events* .......................................................................................... 6

Prospects ............................................................................................................................................................ 7

Reliable Consumption ....................................................................................................... 10

Imports and exports ....................................................................................... 10

Available border capacity ........................................................................... 11

Border capacity auctions ............................................................................. 12

Balance ...................................................................................................................... 12 Security of supply ............................................................................................. 13

Forward-thinking Belpex ....................................................................................................................... 16

Market coupling ................................................................................................. 16

Research & development* ........................................................................... 17

Development plans* ........................................................................................ 17

Planned investments*..................................................................................... 18

Professional Engineering ........................................................................................................... 22

Commissioning .................................................................................................... 22

Maintenance ......................................................................................................... 24

Staff ............................................................................................................................. 24

Knowledge management ............................................................................ 25

Effi cient Tariffs ......................................................................................................................... 28

Procurement policy .......................................................................................... 28

Customers ............................................................................................................... 28

Transparent Information provision ..................................................................................... 32

Company visits ..................................................................................................... 32

Infocentre ............................................................................................................... 32

Sponsoring ............................................................................................................. 33

Considerate Environment.......................................................................................................... 38

Safety ......................................................................................................................... 40

Information for shareholders............................................................................................................. 41

Corporate governance* ......................................................................................................................... 44

Consolidated annual accounts (IFRS) ............................................................................................ 50

Notes ................................................................................................................................................................... 54

Risks* ................................................................................................................................................................... 80

Regulatory framework and tariffs* ............................................................................................... 82

Auditors’ report ........................................................................................................................................... 86

Abreviated fi nancial statements of Elia System Operator SA ..................................... 88

* These chapters form the annual report cf. art 119 of the Belgian company code

[2] ELIA - ANNUAL REPORT 2006

Over the past year, Elia’s efforts to improve the operation of the wholesale elec-tricity market have borne considerable fruit, with the simultaneous launch of the day-ahead trade of electricity on Belpex (the Belgian power exchange) with next day delivery and the market coupling of Belpex, APX and Powernext.

However, buoyed by the positive results of this initiative for Belgian society, we must not forget that it was investments made earlier in transmission capacity at the borders with neighbouring countries and in Belgium that laid the founda-tion for this success. Belgium’s central location in Western Europe is a key asset on which it can capitalise. This is possible by expanding Elia’s system into a hub for the Western European electricity market.

Such a programme of investing in new interconnections with neighbouring countries and bolstering interconnections with our neighbours to the South and North is, of course, very positive for the Belgian market, since the larger offering consequently provided on the Belgian market means better prices on the wholesale electricity market and opens up opportunities for Belgian genera-tors to optimise their portfolio of generating units. It took just a few months for the Belgian grid users to recover Elia’s 13 million investment to double the capacity of the Avelgem – Avelin interconnection to France, thanks to the fall in electricity wholesale prices in Belgium.

Investments in new infrastructure also give Belgium an excellent opportunity to exploit its know-how and expertise abroad. Moreover, an effi cient high-voltage system is undoubtedly an asset for industry, services and homes, and therefore for the prosperity of each and every one of us.

Two conditions must be met to make this possible. The fi rst is to create a stable legal framework with a decent return on investment (by international standards) and the second is to ease cumbersome authorisation procedures so that it becomes possible to install new connections within a reasonable timeframe. Since it currently takes 10 to 15 years to build new lines, not only is society as a whole falling hopelessly behind, but it is also missing out on opportunities to create prosperity.

Ronnie BelmansChairman of the board of directors

Foreword by the chairman of the board of directors


The major investment and maintenance programme planned for 2006 was successfully completed thanks to the dedicated efforts of all Elia Group employees and suppliers. These tireless efforts year after year aim to provide an optimal grid - both in technical and economic terms - that takes account of our customers’ and society’s changing needs. A grid needs to be constantly adjusted and improved in order to, amongst other things, respond to increases in imports and consumption in Belgium, bring it into line with changes in the locations of generating units, such as the planned large wind farms off the coast or the planned shutdown of nuclear power stations. These efforts are re-quired to ensure that daily operation of the high-voltage grid continues to offer a high-quality electricity supply in Belgium in both the short and long term.

Additional efforts were also required for our large industrial customers in order to make new connections between their sites and the grid serviceable as quickly as possible. In doing so, Elia helps support Belgian industry in an ever more competitive international environment.

In addition to operating, maintenance and grid development activities, which could be described as the ‘hardware’, the Elia Group also worked hard to improve the way in which the wholesale market operates. The development of

trading and competition on the electricity market is, after all, only possible with a well-developed and effi ciently managed infrastructure.

In 2006, Elia was once again able to improve the operation of the electricity wholesale market in Belgium signifi cantly with a range of initiatives. The two most notable developments were the simultaneous launch of trading on the Belgian power exchange Belpex - for trading in electricity to be supplied the following day - and the market coupling of Belpex with the Dutch and French power exchanges APX and Powernext. This successful international cooperation was deservedly described by the European Commission as an example for Europe as a whole. It is thanks to the enhanced interconnection capacity at the French border, available from the end of 2005, which also increased transmission capacity at the Dutch bor-der, that market coupling works so well with these two countries. This has led to price convergence in the three countries, which benefi ts all Belgian consumers.

There were also several less obvious but by no means less important improvements, such as the implementation of new market-compliant regulations at the start of 2006 for allocation of transmission capacity at the southern border. Transmis-sion capacity at the southern border is auctioned through a system that distributes capacity between the market parties that have the greatest economic use of it. Capacity auctioning, therefore, does not aim to maximise profi ts, as in a stand-ard auction procedure, but rather to distribute the capacity in an economically responsible manner.

All consumers in Belgium benefi t from the auctions in two ways. Firstly, all profi ts from the auction are used to reduce transmission tariffs and, secondly, the auctions ensure that capacity at the border is better used with the result that supplies on the Belgian market increase and prices on the electricity wholesale market fall.

Foreword by the chairman of the management committee


Elia also improved its information provision services to refl ect developments on the electricity market. The Group website was given a com-plete overhaul to make it easier to use and went online in mid-January 2006. Special effort went into working with the Federation of Bel-gian Electricity and Gas Companies (FEBEG) to include injection data and generation forecasts for Belgian power stations on the website.

A new system was introduced at the start of 2006 to help balance responsible parties maintain balance on the grid. The new system makes it easier for newcomers to gain a foothold in the market, which will, in turn, also be advantageous for supplies in Belgium. The new system was, moreover, only introduced following extensive consultation with market parties.

Investments in both ‘hardware’ and ‘software’ can only be implemented by competent employees who have extensive skills and expertise. Their know-how covers a wide range of areas, such as high-voltage infrastructure design and engineering, operation of the Belgian elec-tricity system within a European framework 24 hours a day, 365 days a year, the development of econometric models and mathematical algorithms for market coupling and complex legal aspects of the electricity market in Belgium and neighbouring countries.

All of these achievements in 2006 illustrate Elia’s keen desire to exceed expectations. Elia constantly strives to remain one of the best in Eu-rope so that its customers, Belgian society as a whole and its shareholders can rest assured that the high-voltage grid and electricity market are in safe hands.

Daniel DobbeniChairman of the management committee


Belpex

21 November 2006 saw the launch of day-ahead trading on the Belgian power exchange Belpex. Belpex offers Belgium a necessary - and hitherto lacking - instrument that enhances the economic performance of the electricity market. It provides an alternative to short-term, bilateral contracts for the purchase and sale of electricity in Belgium and creates a transparent price reference for wholesale electricity.

Market coupling

The coupling of the Belgian, French and Dutch electricity markets began at the same time as Belpex on 21 November 2006. Under the market coupling system, the highest priced purchase orders and the lowest priced sales orders on the three countries’ power exchanges are combined, regardless of the country where the orders were placed. It optimises the use of daily capacity on the borders between the three countries and enhances liquidity on the three exchanges. The introduction of market coupling brings an end to auctions for daily transmission capacity on Belgium’s borders, while monthly and annual auctions will continue.

Secondary market capacity on the southern border

Together with French system operator RTE, Elia suggested to the regulatory bodies that a secondary market be organised for trans-mission capacities on the Belgian-French border, on which capacity procured on this market may be returned to the market by market players. The regulatory bodies authorised Elia and RTE to launch this secondary market on 3 January 2007. A similar system for transmission capacity with the Netherlands was already in place.

Balance

On 1 January 2006, Elia introduced with balance responsible parties a new settling system while concerning imbalances between power injections and offtakes by their customers. The tariff encourages them to maintain as much balance as possible in their perimeter at all times. The new system was introduced following extensive market consultation in 2005.

Key events in 2006

Reinforcement of interconnection with France

A 220 kV phase shifter was delivered to the Monceau station in November 2006. The transformer not only boosts the injection of energy at Monceau but also improves distribution and manage-ment of cross-border energy fl ows, which enables interconnection capacity to be optimised. The transformer was commissioned in early 2007, and the connection between Monceau and Chooz (in France) has been running at a voltage of 220 kV since then.

Reinforcement of connections on the Belgian coast

In May, the underground 150 kV section between the Koksijde and Slijkens (near Ostend) high-voltage substations was commis-sioned. The new connection is the key component of the so-called “coastal loop” between Ostend, Bruges, Izegem and Koksijde, and considerably improves security of supply in much of West Flanders, meets increasing demand and enables the fi rst offshore wind farm to be connected to the high-voltage grid.

Replacement of high-voltage line between Beerse, Turnhout and Mol

During the second half of 2006, Elia began to replace the 70 kV connection between Beerse, Turnhout and Mol. The old lattice towers will be replaced with tubular towers by mid-2007.

Appointment as regional transmission system operator

On 13 July 2006, the government of the Brussels-Capital Region appointed Elia regional transmission system operator for a period of 20 years. The Brussels government also approved the grid code and Elia’s investment plan for the regional transmission grid for 2007-2014.


The 150 kV bay of the Koksijde high-voltage substation

Energy policy agreement

Elia, pure Flemish distribution system operators Inter-energa, WVEM and IVEG as well as Eandis, the company that performs op-erational tasks for the mixed Flemish distribution system operators, signed an energy policy agreement on Wednesday 12 April 2006 with the Flemish Minister for the Environment and Energy, in which they took the engagement to purchase all green power certifi cates offered to them at the minimum prices specifi ed by decree. This agreement helps limit the risks of green power investment and also contributes to the achievement of Flemish government targets regarding power generation from renewable sources.

European black-out averted

On Saturday 4 November 2006, much of Europe was spared a blackout thanks to the coordinated actions of the continent’s trans-mission system operators. Belgium played its part in preventing a breakdown on the entire European power grid with the help of its automatic frequency relays and by activating Elia’s outage plan.

Transparency

During the past year, Elia has considerably expanded the infor-mation available on its website, including Belgian power station generation data, physical cross-border fl ows and an overview of nominations of cross-border interconnection capacity.

Purchase of 70 kV infrastructure from AIESH

Elia has purchased 70 kV infrastructure components from Walloon distribution system operator AIESH for € 1 million. The compo-nents in question are two 70/15 kV transformers and their switch bays at the Solre Saint-Géry HV station (south Hainaut) and the 70 kV connection linking Renlies with Solre Saint-Géry and the Clermont substation, a distance of 8.7 km. The operation is in line with Elia’s policy to purchase 30 to 70 kV networks not yet in its possession.

Important post-balance sheet events

There were no important post-balance sheet events.

Signing the energy policy agreement

Shipping the phase shifter to Monceau

Press conference on the launch of Belpex

Installing new conductors between Beerse and Turnhout


Multi-annual tariffs

The royal decrees for implementing the new system of multi-annual tariffs, as provided for under the 2005 and 2006 amended Electric-ity Act, had not been published by the start of 2007. In July 2006 the Electricity Act was again amended, the main change being to postpone introduction of the multi-annual tariffs until 1 January 2008. CREG’s management committee forwarded a proposal for an implementing decree to the minister concerned in September 2006, but by the start of 2007 the government had still not given its opinion. Until this implementing decree has been published the multi-annual tariffs cannot be introduced.

Fair remuneration margin in 2007

The predicted regulated asset base (RAB) for 2007 is € 3,536.6 million. Barring unexpected circumstances and on the basis of the proposed tariffs for 2007, Elia estimates a fair remuneration for 2007 of around € 63.6 million (based on Belgian accounting rules).

Voltage increase on Aubange-Moulaine 220 kV interconnection

In September 2006, RTE and Elia submitted a proposal to the French and Belgian energy ministers to install a second conductor set on the interconnection between Aubange in southern Belgium and Moulaine in Lorraine, France. The project will increase the interconnection capacity by 10-15% on the Belgian-French border but has yet to receive the necessary permits from the authorities in the two countries. Completion is expected by 2010.

Phase shifters on the northern border

The fi rst of the two 380 kV phase shifters at the new Van Eyck high-voltage substation at Kinrooi will be commissioned towards the end of this year and the other at the beginning of 2008. The commissioning of the phase shifter at the 380 kV Zandvliet station is scheduled for early 2008. As from this commissioning, Elia will be better equipped to optimise the use of the cross border capacity.

Prospects



Belgium enjoys a reliable power supply thanks to its well-developed

transmission system, for which Elia is responsible 24 hours a day, 365

days a year. From its central position as transmission system operator,

Elia also coordinates the wholesale electricity market, enabling it to

operate effectively. The Belpex power exchange is the most obvious

but certainly not the only example of this. Elia’s market facilitator

role contributes to the smooth running of the electricity market and

ultimately benefi ts the whole of society.

Reliable

Consumption ..............................................................................10

Imports and exports .......................................................10

Available border capacity ......................................11

Border capacity auctions .........................................12

Balance .................................................................................................12

Security of supply ...............................................................13

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Jan Feb March April May June July Aug Sept Oct Nov Dec

GWh/month

2005 2006


Consumption

In 2006, the consumption indicator1 showed a 2.9% increase compared with 2005. Electricity consumption in the Elia’s control area increased from 86,944 GWh to 89,492 GWh. Much of this increase is attributable to increased industrial activity, higher offtake by residential customers and more extreme weather conditions in 2006. The fi rst few months of 2006 were colder than those of 2005 and July 2006 was the hottest month in Belgium since records began in 1838. Consumption in July was markedly higher than normal, mainly due to increased power offtake for cooling systems and air conditioning.

Consumption peaked at 13,702 MW between 6.15 and 6.30 p.m. on 2 February 2006. The lowest level recorded was 6,520 MW between 6.30 and 6.45 a.m. on 6 August 2006. In 2005, these fi gures were 13,303 MW (5.45 to 6 p.m. on 13 December) and 6,168 MW (6.30 to 6.45 a.m. on 24 July) respectively.

Reliable

Consumption/month1

1 The consumption indicator is calculated on the basis of net generation by power stations, which inject at a voltage of at least 30 kV and the ratio of imports to exports, but minus con-sumption of pumps. It takes account of local generation in the Elia grid. It only takes account of generation from renewable sources connected to the distribution grids if a net injection is measured at the points where the distribution systems takes power off from the Elia grid.

2 This is the total net offtake of electricity measured at all access points on the Elia grid in Belgium, not including the energy used for pumped storage power stations.

The net offtake2 of electricity from the Elia grid in Belgium in-creased by 0.8% compared with 2005, to 79,557 GWh. The slower increase in net offtake compared with consumption is due to increased local production, cogeneration, and power generation from renewable sources such as wind.When customers’ own local generating units begin operating, the net offtake from the Elia grid by these customers automatically de-creases by the amount of power their units generate. In such cases, the net offtake measured no longer corresponds to their sites’ actual electricity consumption. However, the net amount gener-ated by the units on their premises is included in the consumption indicator.Following commissioning of a number of new wind farms, the amount of energy generated from wind in Belgium increased. Almost all Belgian wind farms inject the electricity they generate into the grids of the distribution system operators at a voltage of less than 30 kV. Here too, net offtake from the Elia grid by the distribution system operators decreases by the amount generated by the wind turbines. This evolution will lead to slightly increased transmission tariffs, as Elia has to invest in the adaption of its grid while net offtake will only barely increase.

Net offtake peaked on 18 December 2006 between 5.30 p.m. and 5.45 p.m. (12,343 MW) and troughed on 6 August 2006 at 5,418 MW between 6.15 a.m. and 6.30 a.m.

Imports and exports

Physical exchanges of electricity with neighbouring countries via the Elia grid reached 27,414.4 GWh last year, which means an increase of 23.4% compared with 2005.

In 2006, exports of electricity from Belgium increased by 8.4% to 8,695.8 GWh, and imports by 31.9% to 18,718.6 GWh. Belgium’s net imports therefore increased by 62.5% from 6,166.7 GWh to 10,022.8 GWh.

The increase in exchange activities with neighbouring countries was made possible by the capacity increase on the Avelgem - Avelin (France) section at the end of 2005. This had a positive impact on capacity on both the southern and northern borders (see “Avail-able border capacity”). The available capacity was also used more effi ciently further to a change in the regulations concerning capac-ity allocation on the French border, i.e. the introduction of explicit auctioning of the cross-border capacity as of 1 January 2006 (see “Border capacity auctions”).


Jan

Feb

Marc

h

April

May Ju

neJu

lyAug Se

ptOct Nov Dec

Avera

ge/ y

ear

1.01.52.02.53.03.54.0

GW

1.0

1.2

1.4GW

2005 2006

Jan

Feb

Marc

h

April

May Ju

neJu

lyAug Se

ptOct Nov Dec

Avera

ge/ y

ear

Jan

Feb

Marc

hApr

ilM

ay June

July Aug Se

ptOct Nov Dec

-2,000

-1,500

-1,000

-500

0

500

1,000

GWh

Imports from France

Exports to France

Imports from the Netherlands

Exports to the Netherlands

Net volume imports and exports

2006


Market players made effective use of the extra border capacity available to them in 2006, resulting in a better dynamic on the wholesale market. This ultimately benefi ts all power consumers in Belgium since cheaper imports can replace more expensive electric-ity generated at home.

Imports and exports

(GWh) 2005 2006 Evolution

France

Import 6,750.3 10,636.2 57.57%

Export 2,220.6 1,981.1 -10.79%

Netherlands

Import 5,073.8 5,603.6 10.44%

Export 4,430.1 5,017.8 13.27%

Luxemburg

Import 2,366.4 2,478.8 4.75%

Export 1,373.2 1,696.9 23.57%

The 220kV interconnection line be-tween Monceau and Chooz (France)

Working on a high-voltage line above the Deurganckdok

The Van Eyck high-voltage substation under construction

The Namur regional control centre

Imports and exports volumes per month

Available border capacity

On the French border, the capacity available for cross-border com-mercial import and export transactions was higher in 2006 than in 2005, thanks to the commissioning of the second conductor set between Avelgem and Avelin (France) on 26 November 2005. This investment also improved transmission capacity between Belgium and the Netherlands, in both directions. The available capacity was well used by market players.

Available import capacity from France (average)

Available import capacity from the Netherlands (average)

-30,000

-20,000

-10,000

0

10,000

20,000

30,000

MWh/month

Jan Feb March April May June July Aug Sept Oct Nov Dec

Positive Negative


Border capacity auctions

Since 1 January 2006, capacity on the border between Belgium and France has been allocated using a coordinated auction system. This system, which operates in accordance with market principles, replaces the old system of ‘fi rst come, fi rst served’. Capacity on the Dutch border has been auctioned since 2001. Border capacity auctions take place in collaboration with trans-mission system operators in the neighbouring countries. The capacity on each border is divided up into yearly, monthly and daily capacity in each direction.

In accordance with European regulations, transparent and non-discriminatory market systems are used, enabling capacity to be allocated to market operators in a collective and coordinated way on the basis of the greatest economic benefi t.

In 2006, the allocation mechanism was refi ned with the introduc-tion of trilateral market coupling between Belgium, France and the Netherlands. Following the start of trading on Belpex and the introduction of market coupling on 21 November 2006, daily capacity on the northern and southern borders is no longer allocated by auction but implicitly using the market coupling mechanism, thereby optimising use of available daily capacity on the interconnections between the Elia, RTE and TenneT grids. As cheaper generation in one country can cover more valuable demand in another country, the economic benefi t for all parties is optimised.

Monthly and annual capacity on the northern and southern bor-der will continue to be auctioned at the lowest marginal price. If auctioned capacity outstrips demand, it is allocated for free.More options are available on the southern border thanks to the introduction on 3 January 2007 of a secondary market for capac-ity. This allows market operators that have acquired capacity to sell all or part of this capacity by auction or to transfer it to a third party, up to two or three days ahead. A secondary market for capacity already existed on the northern border.

Balance

On 1 January 2006, Elia introduced a new tariff system for set-tling imbalances between injections of electricity and offtakes by suppliers. The tariffs encourage them to keep their portfolio of injections and offtakes as balanced as possible at all times.

To maintain the quarter-hourly balance between injections and offtakes on its grid, Elia must be able to increase or decrease the amount of electricity injected into its grid over different time-frames. The power it requires to do this is contracted from sup-pliers with generating units, large industrial consumers known as “sheddable” consumers or from neighbouring system operators. Following a European call for tenders, a choice of offer is made based on the price offered and on control requirements, moving from the most advantageous to the least advantageous offer and taking into account operational safety constraints. The imbalance tariff must, at the very least, offset the costs resulting to Elia from maintaining balance in the Belgian area.

When the imbalance of the balance responsible party (ARP) is of the same nature (i.e. positive or negative) as the area imbalance, compensation prices for quarter-hourly imbalances (i.e. charges for energy shortfalls and excesses) are based on the average cost of the control capacity activated by Elia. In the opposite case, the compensation prices for quarter-hourly imbalances are calculated based on the market reference price. If the imbalance exceeds

Activiated balance volumes

“A reliable power supplythanks to a well-developed transmission system”


An Average Interruption Frequency of 0.13 is equivalent to an average of one interruption per customer every 7.5 years. An AIT per customer of 5 minutes and 14 seconds equates to an average reliability of 99.999%.

These indicators take into account offtake points on the Elia grid at all voltage levels, from 30 kV to 380 kV. In line with international recommendations, the statistics on continuity of power supply only take account of interruptions lasting longer than 3 minutes. The two most important incidents causing power interruptions in 2006, accounted for more then half of the average interruption time.

The power outages in Western Europe on 4 November 2006, resulting from an overload on several very high-voltage lines in Germany, led to an AIT of 3 minutes and 29 seconds. Outages were necessary in order to avoid a wide-scale black-out. This AIT has not been included in Elia’s reliability statistics since the cause of the interruptions was external to the Elia grid.

The Schaerbeek regional control centre

a certain level (450 MW), the compensation prices for quarter-hourly imbalances are based on the marginal costs of activating the generating units started up at Elia’s request. This mechanism determines a single price for an energy shortfall and excess for every quarter-hour period.

These compensation prices for quarter-hourly imbalances together with the average and marginal activation prices are posted in almost real time on Elia’s website. Information on the control volumes available for the following day and the predicted marginal activation prices for particular volumes are also available on Elia’s website.

Security of supply

Ensuring an uninterrupted power supply to its customers (i.e. distri-bution system operators and consumers directly connected to the grid) is Elia’s number one priority and its maintenance, investment and operating policy is geared to this objective. All incidents on the Elia grid, even those not resulting in an interruption to supply, are closely analysed and measures taken where necessary or useful. In most cases, the meshed structure of the network prevents these incidents from causing power outages.Security of supply remained high in 2006. • The average number of interruptions per customer on the

Elia network (known as the Average Interruption Frequency) was 0.13.

• The average duration of interruptions was 41 minutes and 23 seconds.

• Spread over all customers, the Average Interruption Time (AIT) in 2006 was 5 minutes and 14 seconds per customer.



If we are to go on offering our customers top quality service in

the future, we need to look ahead and anticipate developments

in the long term and beyond. Elia is actively involved in a number

of European research programmes to ensure that it is prepared for

the energy technologies of the future. By developing smarter grids

and helping to incorporate large wind farms into grid management

processes, we can make a major contribution to the sustainability

of our society. Looking ahead and anticipating are also watchwords

when planning investments in the grid. This is all part of Elia’s strategy

to solve potential problems before they occur.

Forward-thinking

Belpex ....................................................................................................16

Market coupling ...................................................................16

Research & development .......................................17

Development plans ..........................................................17

Planned investments .....................................................18


Belpex

The Belgian power exchange Belpex opened its order book for the fi rst time on 20 November at 6 p.m., with the fi rst prices and volumes fi xed at 11 a.m. on 21 November. The traded volume of 24,098.2 MWh was delivered on to the Belgian hub on 22 November. The launch of Belpex marks the climax of an ambitious, international project in line with EU directives 1996/92/EC and 2003/54/EC.

Belpex provides a platform for day-ahead electricity trading in which market operators buy and sell electricity anonymously. The operators submit purchase and sales orders (taking into ac-count certain price and volume restrictions) for each hour of the following day.

From its inception, Belpex had 13 members, demonstrating the high level of international interest in this innovative project. By the end of the year, the number of members had increased to 18.

Belpex offers Belgium a necessary - and hitherto lacking - instrument for electricity market liberalisation, which also boosts its economic effi ciency. The power exchange provides an alternative to short-term, bilateral contracts for the purchase and sale of electricity in Belgium and creates a transparent reference for wholesale electricity prices. It encourages the opening up of the Belgian electricity market and enhances the economic effi ciency of market operators by bringing together the demand with the highest added value and the generation with the lowest marginal costs.

In 2006, the average daily volume traded on Belpex was 13,312 MWh and the average price of electricity (Belix) 45.69 €/MWh. The average Belix peak price (from 8 a.m. to 8 p.m.) was 59.19 /MWh and the average Belix off-peak price was 32.19 €/MWh. During 2006, the volumes on Belpex showed a small rising trend.

Since 1 January 2006, Belpex has also been mandated by Elec-trabel to register and qualify players taking part in the generation auctions known as Virtual Power Plants (VPPs). In addition, Belpex supplies a number of services related to implementation of VPP contracts, such as nomination and invoicing, and is responsible for all contacts with interested parties, registered parties and qualifi ed bidders and buyers, taking care to guarantee due confi -dentiality so that these parties remain anonymous to Electrabel.

Elia holds a 60% stake in Belpex. The other shareholders are APX, Powernext, RTE and TenneT, who hold 10% each.

Forward-thinking

Market coupling

Trilateral market coupling between Belpex, the Dutch power exchange APX and the French power exchange Powernext began at the same time as trading on Belpex. Market coupling is an important step towards an integrated European electricity market and is in line with the European Commission’s aim to facilitate the creation of this integrated market.

Market coupling optimises daily capacity use on the borders with France and the Netherlands, whilst also bolstering liquidity on the three exchanges. In addition, the system makes it possible to net out energy fl owing between countries in opposite directions, resulting in better use of capacity. Since market coupling was introduced, daily capacity auctions have been replaced with a system of implicit allocation by the market coupling mechanism. The monthly and yearly auctions continue as normal.

Market coupling enables the purchase orders with the highest price and the sales orders with the lowest price to be bundled on the energy exchanges of all three countries, regardless of the the country where they were submitted, but taking into account the available daily capacity on the interconnections. This means that a demand is met by the cheapest supply bid, irrespective of the country from which the bid originates. Whether demand in one country can be fulfi lled with an offer from another country depends on the available daily capacity at the interconnections. If the capacity is suffi cient, the price is the same on Belpex, APX and Powernext. In 2006, this applied for 52% of the number of hours. During 17% of the hours, the prices on Belpex were the same as the French prices, and the same as the Dutch prices dur-ing 29% of the hours. Only during 2% of the number of hours was there congestion on the northern and southern borders. With market coupling, the daily average volume of exports for 2006 was 2,437.97 MWh and the daily average volume of im-ports was 2,896.04 MWh.

The launch of Belpex and market coupling was preceded by a lengthy round of legal and regulatory procedures. In January 2006, the federal government approved the market rules and rec-ognised Belpex as the Belgian market operator for the exchange of power blocks. Before market coupling on the borders could be introduced, the regulatory bodies in Belgium (CREG), France (CRE) and the Netherlands (Dte) also had to approve the rules govern-ing capacity auctions. On 7 December 2005, they published the Roadmap for the regional integration of the electricity markets of Belgium, France and the Netherlands. The market coupling part was completed when Dte approved the amended grid code on 14 November 2006. CREG approved market coupling on 25 August 2006.


Research & development

As part of its effective R&D policy, Elia is actively involved in a number of electricity sector R&D initiatives backed by the European Commission.

For example, Elia closely monitors the work of the integrated EU-DEEP project, which aims to examine the most suitable technical, economic and regulatory means of fostering the development of decentralised generation on the existing grids. For Elia, the most important aspects relate to impact on the development and ef-fi cient operation of transmission systems.

Elia is a full partner in the coordinated RELIANCE project and par-ticipates actively in its work. The aim of the project is to establish a common R&D programme for Europe’s electricity transmission system operators, and to propose a mode of organisation and fi nancing to meet the objectives set. By the end of the fi rst year (October 2006), the consortium was able to put forward a proposal which will be opened up to discussion with all stakeholders in the second year of the project.

The European Commission has also set up a European technol-ogy platform called SmartGrids to advise it on objectives and R&D priorities for the whole electricity sector (generation, transmission, distribution and supply) and so guide it in its management of the 7th Framework Programme. Elia contributed to two of the four working groups, those on network assets and network operations.

Elia is also the coordinator for an ETSO/UCTE study called EWIS, which aims to study the integration of large-scale wind generation at European level by identifying all the challenges to be met and developing potential solutions. The consortium has applied to the European Commission for funding for the project.

Similarly, Elia is involved in another UCTE project known as UPS/IPS, which is looking into the possibilities and challenges associated with an interconnection between UCTE’s Western Europe network and that of the Commonwealth of Independent States (CIS).

Aside from its involvement in these projects, Elia keeps a close eye on all potentially relevant R&D activities launched by the European Commission. For example, it took part in workshops relating to the integrated ERMInE (Electricity Research Road Map in Europe) project and to a study into mechanisms, fi ndings and good prac-tices - in terms of innovation and the transfer of energy research fi ndings - derived from national and EU programmes.

Development plans

In accordance with statutory requirements, Elia compiles develop-ment plans for Belgium’s various governments, which explain how expected changes in the market over coming years are likely to impact on the grid. In 2006, Elia presented two such plans, namely the annual investment plans for the Brussels Capital Region and the Flemish Region. The Brussels government approved the 2007-2014 investment plan for the Brussels Capital Region on 30 November 2006.As regards the Walloon and federal development plans, those sub-mitted in 2005 are the reference documents until 2007 and 2008 respectively, although amendments may still be made if necessary. Naturally, the four plans are interdependent and aim to produce the best results for the entire grid from 30 to 380 kV. They take ac-count of technical, economic and environmental criteria as well as the goals of market liberalisation and federal and regional energy policy. All four plans can be found on Elia’s website.

Press conference on the fi rst day’s trading on Belpex, with the federal energy minister

Horns Rev, Europe’s largest offshore windfarm

Maintenance work on a high-voltage substation

Replacement of the 70 kV line be-tween Beerse and Turnhout


Planned investments

InterconnectionsNorthern borderIn 2007, Elia will be installing two 380 kV phase shifters at the new Van Eyck high-voltage substation at Kinrooi to optimise intercon-nection capacity utilisation and increase grid reliability. The fi rst of these transformers will be commissioned towards the end of this year and the other at the beginning of 2008. The commissioning of the phase shifter at the 380 kV Zandvliet substation is planned for early 2008.

Southern borderIn September 2006, RTE and Elia submitted a proposal to the French and Belgian energy ministers to install a second set of conductors on the interconnection between Aubange in southern Belgium and Moulaine in Lorraine, France. The conductors on the fi rst transmission line will also be upgraded. The project, to be realised by 2010, will boost interconnection capacity on the Belgian-French border by 10-15%. Permits for this project have not yet been issued by the relevant authority in either country.

Capacitor batteriesOver the next few years, Elia will be commissioning capacitor batteries for controlling voltage levels at a number of existing substations, in order to maintain the quality of supply in the event of a rise in imports. Given current import trends, Elia plans to install a further six capacitor batteries in addition to the six scheduled for 2006.Besides enhancing the quality of supply, these investments also help to make the grid less dependent on the location of generating sites. This is key element in a liberalised market.

Integration of European electricity marketsElia will make a number of investments to increase the grid’s import capacity: • Installing a second 380/150 kV transformer at Avelgem high-volt-

age (380 kV) substation, which will be connected to the Ruien substation (150 kV).

• To increase the exchange capacity of the grid and improve per-formance on joint borders, Elia, together with the transmission system operators of neighbouring countries (the Netherlands, Luxemburg, Germany and the UK ), is performing or updating exploratory studies. A study concerning an interconnection be-tween Belgium and the United Kingdom is currently under way.

Connection of new generating facilitiesIn addition, Elia plans to reinforce the grid to enable new generat-ing units to be connected to the Belgian grid, notably in the regions of Antwerp (port), Ghent, Beringen and Seneffe.

Distribution supplyBesides the projects to increase medium-voltage supply in 2006, a number of projects to increase distribution supply are also planned. Additional transformers are planned at the following substations: Gouy (150/10 kV), Woluwé and Bruges-Waggelwater (150/11 kV), Mol and Beerse (150/15 kV), Steense Dijk (36/12 kV) and Lokeren Heirbrug (36/11 kV). Other transformers will be replaced by more powerful models, including those at the substations of Basse-Wavre, Wingene and Ottenburg (36/11 kV), Lens (70/15 kV) and Liberchies (70/12 kV).

Other investment projectsAntwerp South Besides the new 150/15 kV Petrol transformer station at Antwerp South (commissioning scheduled for early 2008), the Port of Antwerp network will require new developments if it is to meet the major demands generated by the increase in industrial consump-tion on both banks of the river Scheldt. Elia plans to build a 380 kV substation at Lillo, amongst other projects.

Antwerp Mobility Masterplan Elia is to modify a number of its facilities as part of the Mobility Masterplan for Antwerp. This will involve raising lines and moving underground cables.

Sigma Plan fl ood areas A number of Elia facilities will also be modifi ed as part of the Sigma Plan. In particular, pylon foundations will be reinforced in inunda-tion areas.

“To look ahead and anticipatedevelopments in the long term and beyond”


Improved network for Brussels Capital RegionAn additional 36 kV cable laid between the high-voltage substa-tions of Centenaire and Schaerbeek will provide the capacity needed for the mutual support of two 36 kV subnetworks with two transformers, namely Relegem - Schaerbeek and Héliport - Molenbeek. The project is an alternative to transferring consump-tion from the 36 kV to the 150 kV network, which is not feasible at the Centenaire substation due to urban planning constraints.

Elia personnel carry out maintenance workon one of the high-voltage lines above the Deurganckdok



Elia’s specialists work around the clock to ensure the reliability of

Belgium’s power supply and are responsible for the professional

operation and maintenance of the high-voltage grid. However,

their duties extend much further. They include: ongoing research

to fi nd better maintenance methods and ways of applying the best

technology to the design of new facilities and connections, training up

new personnel and offering additional training for staff in a specially

developed education centre, and optimising procedures for taking

connections and facilities out of service for maintenance or upgrades.

Professional

Engineering ..................................................................................22

Commissioning ........................................................................22

Maintenance ...............................................................................24

Personnel ..........................................................................................24

Knowledge management .....................................25


Engineering

Reliable equipment begins with good design. Elia’s engineering subsidiary Bel Engineering is responsible for realising investment projects from the study phase to implementation. Its tasks range from ensuring design quality, standardising monitoring apparatus and high-voltage components to obtain the best quality for the best price, thoroughly preparing permit applications and submitting them with due care and effectively managing and monitoring re-placements, upgrades and extensions of high-voltage infrastructure right through to completion checks. With its specialist knowledge, Bel Engineering’s procurement department purchases material and equipment on behalf of the whole Elia group.More hands-on activities are partially outsourced in order to achieve greater fl exibility with respect to the volume of investments. Sup-pliers follow training programmes to ensure the quality of this outsourced work. In 2006, Elia launched a training programme for fi ve external project managers, focusing on building up knowledge and experience.

Commissioning

Interconnections220 kV line between Monceau and ChoozEarly in 2007, Elia commissioned a 220 kV phase shifter at its Mon-ceau substation. The connection between Monceau and Jamiolle now operates at 220 kV instead of 150 kV. The existing conductors on the 150 kV line were replaced by higher capacity units. The 220/150 kV Jamiolle transformer station will be dismantled. This investment will optimise available capacity on the interconnection line between Monceau and Chooz (France) and hence overall avail-able capacity on the interconnection with France.

Net 150kVConnection of Essent generating unit in ZwijndrechtEssent has built a new power plant on the Ineos site in Zwijndrecht, consisting of two gas turbine generators (44 MW each) and a steam turbine generator (48 MW). To connect this plant to the Elia grid required Ineos’ connection to be converted. The investment in-cludes installing and equipping two 150 kV bays at the Zwijndrecht high-voltage substation and modifying the overhead lines to Ineos to incorporate a new connection for Essent.

Connection between Koksijde and SlijkensThe new 150 kV high-voltage connection between the high-volt-age substations of Koksijde and Slijkens was offi cially commis-sioned in August by Flemish Minister-President Yves Leterme. The underground connection is part of the coastal loop project, com-

Professional

prising the electrical connections between the Ostend - Bruges - Izegem and Koksijde - Izegem axes. The aim of these investments is to improve power supply reliability in a large part of West Flanders and to provide a strong and robust network available to receive the energy generated at offshore wind farms and transport it inland.

Connection between Avelgem and RuienThe 150 kV Avelgem - Ruien line was built in order to enable the connection of a second 380/150 kV transformer at Avelgem to the Ruien substation. The line links this additional transformer to the existing one. The existing line does no longer meet requierements and will be dismantled.

Reinforcing the grid in East and West Flanders The 150 kV Langerbrugge – Ruien line supplies the city of Ghent as well as a series of substations including Drongen, Deinze and Oudenaarde. It also enables mutual backup of the generating cen-tres of Rodenhuize - Langerbrugge and Ruien. To meet the increase in consumption, two additional conductor sets (3rd and 4th) have been installed between Wondelgem and the 150 kV Nieuwe Vaart substation in Ghent.

Reinforcing supply to the Eupen regionAn additional 150/70 kV transformer was installed in Eupen to meet the increase in power consumption in the Eupen region. It is part of the project to boost 150 kV supply to the whole of eastern Belgium (Verviers and Eupen) from the Lixhe substation: the new 150 kV cable planned between Lixhe and Battice will be extended to Eupen using a 70 kV conductor set on the Battice - Eupen line, which will be increased to 150 kV.

Increased grid reliability and security in the Brussels Capital RegionFor reasons of operating reliability and security, the network of the Brussels Capital Region, originally divided into sections supplied by two transformers, is being gradually restructured into sections sup-plied by three transformers.

Reinforcing the grid in Flemish BrabantNew 150/15 kV and 150/36 kV transformers at Harenheide and Zaventem were commissioned to meet the increase in consumption in the area of Evere - Zaventem.The extra 150/36 kV transformer at Zaventem forms part of a pocket of three 125-MVA transformers, two of which are located at the 150 kV Woluwé substation and one at the 150 kV Zaven-tem substation. This transformer is supplied via a 150 kV cable laid between the substations of Verbrande Brug, Harenheide and Zaventem.The new Harenheide transformer was connected, at Harenheide, to the aforementioned 150 kV cable running between Verbrande


Brug and Zaventem.Reinforcing supply to medium-voltage networksA number of changes to improve medium-voltage transformation were implemented in response to increased consumption at the following existing high-voltage substations:• Oisquercq: an additional 150/15 kV transformer (50 MVA) and

a second MV substation were installed to meet requirements as-sociated with the development of new industrial activities.

• Nivelles: an additional 150/15 kV transformer was installed in Nivelles to meet the increase in local consumption.

• Oostrozebeke: the Oostrozebeke substation is using the new 150 kV connection between Izegem and Sint-Baafs-Vijve to sup-ply an additional 150/10 kV transformer; the transformer trans-fers the region’s rapidly rising consumption from 70 kV to 150 kV.

• Oelegem: 150/15 kV transformation at the Oelegem substation was also boosted to offset rising local consumption.

70-36-30 kV networkFacilitating the connection of renewable generating units to the MV gridThe 70 kV Chassart substation was modifi ed to take account of the addition of a wind farm to the underlying medium-voltage networks.

Restructuring the 70 kV networksThe newly commissioned 70 kV cable between Farciennes and Fleurus (Hainaut) will help the decoupling of the 70 kV networks in the provinces of Hainaut and Namur.

The 70 kV line between Awirs and Montegnée (Liège) was modi-fi ed following the laying of a 70 kV cable between Awirs and Ivoz-Ramet. A conductor set on the existing overhead line between Awirs and Ivoz-Ramet has been used to strengthen security of sup-ply to the Montegnée substation by means of direct support from the Awirs substation. This investment has also helped to ease the Montegnée - Tilleur line, which supplies Liège city centre.

Reinforcing supply to the medium-voltage networks A number of changes to improve medium-voltage transformation were implemented in response to increased consumption at the following existing substations:• Tournai: transformation at Tournai needed to be enhanced due to

an increase in local demand; this is being implemented in agree-ment with the distribution system operator:- Elia is installing a second 70/15 kV transformer (40 MVA) to

replace the 70/6 kV transformer.- Distribution system operator IEH is installing a second 15/6 kV

transformer (20 MVA).

• Gembloux: a 70/12 kV transformer (40 MVA) was installed at the Gembloux substation to replace a 30-MVA transformer which reached the end of its life cycle; the substation now has two 70/12 kV transformers (40 MVA).

• Kwatrecht: a new 36/12 kV transformer at the Kwatrecht substation and a new cable between Kwatrecht and Flora were commissioned; the Kwatrecht substation relieves the 36 kV con-nection between Flora, Kwatrecht, Wetteren and Laarne, and the supply cables on the second conductor set at Wetteren.

Inspection at a high-voltage substation

Elia personnel take a training course The Van Eyck 380 kV high-voltage substation under construction

An Elia employee performs maintenance on a transformer


Restructuring the 36 kV networks in East and West FlandersThe 36 kV connection between Monsanto and Sint-Denijs-Westrem will be decommissioned. A new 36 kV cable from Flora has been commissioned to supply the Monsanto substation.

Length of the Elia grid on 1 January 2007 (in kilometres)

Voltage Overhead lines (1)

Underground cables (2)

Total

380kV 891 891

220kV 297 297

150kV 2,012 390 2,402

70kV 2,415 271 2,686

36kV 8 1,915 1,923

30kV 27 141 168

Totaal 5,650 2,717 8,367(1) Geographical length

(2) Electrical length

These fi gures do not include networks not belonging to Elia. Some of the differences between the 2006 and 2007 fi gures are due to an increased accuracy of the geographi-cal network database.

Maintenance

The high-voltage infrastructure operates 24 hours a day, 365 days a year, to ensure that electricity is available at all times and in all plac-es. For this the infrastructure needs to be robust, making a careful replacement and maintenance programme vital. In the interests of our customers and the country as a whole, this programme needs to be reasonably priced. Taking facilities out of service for main-tenance and connecting new facilities must be done safely with no negative impact on power supply. Accordingly, interventions for maintenance, projects and the commissioning of new facilities are carefully planned. In 2006 a new planning process was drawn up. To minimise the risks of power supply being affected during the temporary removal from service of heavily used facilities and connections, Elia uses its own arbitration model to strike a balance between economic costs and risk. Over 2,500 maintenance actions were carried out in 2006.

“Ongoing researchto improve”

Personnel

To carry out its mission effectively, Elia requires the services of high-quality, highly professional staff who have been properly trained in the jobs they do. The additional work resulting from new activities to facilitate electricity market liberalisation, such as Belpex, has to be performed by competent personnel. At the same time, Elia’s productivity – through age-related departures – needs to increase constantly in order to offset the steady decline in staff numbers.

Recruitment has a key role to play in this respect. For although the combined experience, skills and grid knowledge of Elia staff is con-siderable, the system operator must ensure that all this is passed on to future generations. It must also attract the best professionals in the types of jobs that have emerged since market liberalisation, in the wake of which system operation has become a much more complex task.

A large number of initiatives were launched in 2006, and not without success given that 111 new employees were recruited dur-ing the year. These initiatives include developing ties with schools, organising targeted recruitment days and taking part in job fairs and Meet@Speed events with potential candidates.

Considerable effort is also being made on the selection process for new employees, which takes place internally in collaboration with department heads specially trained for the purpose.

Recruitment and staff numbersAs at 31 December 2006, the Elia Group employed 1,227 staff: 215 at Elia System Operator, 833 at Elia Asset and 179 at Bel Engineering. In 2006, Elia hired 91 people on permanent contracts and a further 20 on temporary contracts. The company has 110 job vacancies for 2007.

Staff composition of the Elia Group on 31 December 2006

Men Women Total Full-time equivalents

Management 7 0 7 7

Supervisory staff

267 47 314 311,2

Employees 757 149 906 891,4

Total 1,031 196 1,227 1,209,6


Knowledge management

For Elia, ensuring that the impressive pool of knowledge and expe-rience present within the company is passed on to younger genera-tions is crucial, especially given the lifetime of its facilities. With this in mind, it has set up a programme to identify critical knowledge areas and develop processes to capture this knowledge and pass it on to younger generations.

Training programmes are also being developed for the company’s various target groups. One example is Campus Elia, which aims to give young people with one or two years’ experience at Elia an in-depth vision and understanding of what the company does, how it operates and the challenges currently facing it. The training, which is based on interaction and participation, ends with participants developing a business case. It also encourages the development of interpersonal networks, which form the basis for teamwork. Mean-while, the middle management training launched in 2004 was opened up to all supervisory staff in 2006. The programme includes a number of modules designed to develop technical, economic and managerial competences as well as team coaching and project management skills.

In addition, the Knowledge Management Department cultivates an active policy of collaboration with universities and other higher education institutions.

TrainingThroughout their career, Elia offers its employees a wide array of training options to develop their skills as effectively as possible based on the needs of the company and their own career path. These range from technical and on-the-job training in the specifi c disciplines involved in grid operation to training in people skills, through language and specialist skills courses.

In recent years, Elia has recruited large numbers of young techni-cians to replace retiring employees. The company is also doing more to give younger employees the training they need and last year set up an Education Centre at its Schaerbeek site. Here, expe-rienced internal educators provide technical training relating to the maintenance of various facilities: high-voltage apparatus at substa-tions, low-voltage equipment and overground and underground high-voltage connections. A safe (neutral) 150 kV high-voltage substation is being built at the Centre for training purposes.

Satisfaction surveyA satisfaction survey has been conducted among Elia personnel to identify how committed employees are to their work and how sat-isfi ed they are with Elia as an employer. A similar survey was organ-ised for the fi rst time in 2004. The 2006 results showed another slight rise in staff satisfaction levels. No doubt the measures taken in recent years, including in the wake of the last satisfaction survey, were partly responsible for this. Compared with similar sectors such as banking, telecom operators, public services, insurance and ICT, Elia scores very highly on staff satisfaction and is one of the leading companies in this respect. The survey fi ndings will be used to draw up an action plan for 2007 and 2008.



Offering an effi cient service to its customers and the community is

one of Elia’s principal aims in its day-to-day activities. In particular, it

is keen to offer services and products that allow grid users maximum

fl exibility in the way they interact with the electricity market. A

smoothly operating market is in everybody’s interests, after all.

Internationally, too, Elia’s effi ciency is making its mark, with the

company ranking as one of Europe’s top transmission system operators

in terms of transmission costs and maintaining effective balance

between generation and consumption.

Efficient

Tariffs ......................................................................................................28

Procurement policy ..........................................................28

Customers ........................................................................................28

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ing maintenance costs and its effect on the quality, reliability and security of power supply are taken into consideration.

However, optimisation is not confi ned to costs alone. Building and maintaining good, sustainable working relationships with suppliers is key when it comes to implementing the procurement strategy. A Suppliers’ Day was held in 2006, at which suppliers were in-formed in detail about Elia’s procurement policy and the company’s specifi c requirements. The initiative helped the 120 participating suppliers to bring the products they offer more into line with Elia’s needs and thereby to boost effi ciency.

Customers

Elia runs a number of initiatives to bring it closer to its customers, including the annual Customer Day (with a turn-out of 130 this year) and the Users’ Group, which meets four times a year. In ad-dition, it has a number of specifi c information channels such as a monthly newsletter, Elia News, and its new-look website. Custom-ers can also contact their account manager for information and support at any time. After all, good dialogue is key to reaching effective and appropriate solutions.


Tariffs

Elia’s transmission tariffs are competitive compared with those of other European countries. This is according to a comparative over-view of 2005 tariffs undertaken by ETSO in which Belgium emerges as the fi fth lowest-priced of the 23 countries examined. Taking into account additional costs such as levies and surcharges, Belgium ranks eighth.The ETSO comparison3 relates to very high-voltage tariffs, applied to a profi le of 5,000 hours’ use per year and a maximum offtake of 40 MW. Overall, the 2007 tariffs are 9% lower than the previ-ous year’s, which were in turn lower than those of 2005. Much of this tariff reduction is due to revenue from the auctions of border transmission capacity, which is deducted from the tariffs, and to the consumption-driven increase in the volumes of transported electric-ity charged for.

Procurement policy

Elia’s procurement policy is geared towards optimising purchases for the investment projects, goods and services needed for the system operator’s work. Its procurement strategy is based on the total cost of ownership. In other words, all costs associated with a purchase, throughout the lifetime of the purchased item, includ-

Efficiënt

3 If not all transmission costs are covered by the offi cial tariff, the country concerned estimates the missing amount as accurately as possible and adds it to the offi cial tariff.

Comparison transmission tariffs by ETSO

Costs connected to transmission system operators activities: infrastructure (capital and all operation charges), losses, system services, congestion.

Other burdens not directly related to transmission costs: stranded costs, public interest contribution, renewable energy and other.


“Offering an effi cient serviceto its customers and the community”

Adjustments to the Nieuwevaart 150 kV substation



Electricity is vitally important to our society. As transmission system

operator, therefore, Elia plays a major social role since the country’s

power supply depends on the smooth running of the electricity

market. Consequently, Elia takes care to ensure that all market

parties have access to the same high-quality information. Of equal

concern to the company are investments in infrastructure. Elia always

informs local residents and local authorities in detail as to why a

project is necessary and how it will be running it, in order to minimise

inconvenience to local people.

Transparent

Information provision .................................................32

Company visits .........................................................................32

Elia Infocentre ..........................................................................32

Sponsoring .....................................................................................33


Information provision

2006 saw a considerable increase in the amount of information available on the Elia website www.elia.be. The new-look website went live on 16 January and more information has been added almost every month since, in the form of existing data and new and updated indicators.This additional information includes real energy fl ows on the borders, diagrams of nominated yearly, monthly and daily border capacity, the updated consumption indicator including predicted consumption, an overview of the energy generated by facilities for which measurements are available, the balance in the Elia control area, the imbalance prices, the upward and downward regulation volumes that can be activated within 15 minutes and the marginal prices for activating set volumes for all types of reserve.

Complementing this information are the results of day-ahead trading on the Belpex power exchange, as published on the Belpex website (www.belpex.be).

Elia is also involved in the ETSOVista data platform, which was launched on 28 November 2006. This is a website run by the ETSO (European Transmission System Operators) federation, which aims to facilitate access to information by all market participants and stakeholders and promote the transparency goals of the integrated European electricity market. Access to ETSOVista’s core market information services is free of charge and open to anybody who has a legitimate interest in Europe’s evolving wholesale electricity market. This initial phase of the platform’s development makes available, for the fi rst time, key operational and congestion man-agement information for Europe’s high-voltage electricity trans-mission interconnectors. ETSO’s continuing aim and commitment to the ETSOVista project is to facilitate open access to the widest possible range of market related data for the integrated European electricity market.

Transparent

Company visits

Company visits are a way for schools and other visitor groups to gain an active insight into Elia and its various activities. Amongst other things, visitors can see how Elia operates the electrical system from its control centres or enjoy a guided tour of a transformer station looking at high-voltage infrastructure and how it is main-tained.A company visit is an ideal opportunity to look behind the scenes and gain a better understanding of the complex nature of the system operator’s activities.For the dozens of school, college and university parties hosted by Elia each year, the company visit is both an exciting practical supplement to the curriculum and also their fi rst meeting with a potential future employer.

Company Open Day As in 2005, Elia opened the doors of its Brussels site to the public for the 2006 Company Open Day (Open Bedrijvendag/Journée Dé-couverte Entreprises), held as usual on the fi rst Sunday of October. Thanks to the voluntary efforts of staff, visitors had an exciting ex-perience including striking and educational demonstrations at the training centre and a guided tour of the control centre and the Elia Infocentre. Elia also used the Company Open Day to inform visitors of the broad and varied range of jobs on offer at the company. At the job information desk, a recruiter was present at all times to inform visitors about Elia’s working conditions. If they wished to, they could have an initial job interview there and then.

Elia Infocentre

The Elia Infocentre in Schaerbeek, Brussels, allows visitors to learn about electricity, the high-voltage grid, the electricity market and Elia’s activities in an interactive way.Located on the fully renovated 2nd fl oor of the dispatching build-ing, the Infocenter is designed to let schools and other visitor groups fi nd out about Elia and what it does in a very 21st century way. The center features an interactive programme allowing students (and other visitors) to learn about electricity, the role of the high-voltage grid, the electrical system, the electricity market and safety and environmental aspects at Elia. Visitors can then put their newly acquired knowledge to the test in a multiple-choice quiz, pitting themselves against previous groups.


Besides the Infocentre, Schaerbeek is also home to the Education Centre, which dispenses technical training and boasts a wide range of educational facilities. Increasingly, then, this site in suburban Brussels is the hub from which Elia builds its relations with the world of education. By offering a broad array of exciting and fun educational experiences, Elia encourages young people to get to know the company better with a view, potentially, to future employment.

Sponsoring

Created in the same year as the company itself, the Elia Fund is the mainstay of Elia’s policy of sponsorship and self-promotion as a listed company. Since 2002, the Fund has been supporting projects that promote access to recreational activities and heritage sites for reduced-mobility individuals. The work of the Elia Fund can be seen as a social interpretation of Elia’s mission as the operator of Belgium’s high-voltage grid, namely to ensure access for all users in a transparent and non-discriminatory way. The commitment of the thousands of volunteers supported by the Fund also echoes the commitment of Elia staff who oversee secu-rity of the country’s power supply around the clock.

The Elia Fund was created in collaboration with the King Baudouin Foundation, a body specialising in this area which guarantees independence and transparency in the project selection process: independence and transparency also being two of Elia’s core values.

Besides illustrating Elia’s social commitment, the Fund aims to raise the company’s profi le among its various target groups: customers and grid users, investors, the labour market and the general public.

Indeed, Elia is faced with a paradoxical situation: although it occu-pies an important place in the Belgian landscape – its infrastructure, overhead lines, underground cables and high-voltage substations are dotted all over the country – and plays an essential role in the country’s economy, Elia only has dealings with a very limited group of partners, in a “business to business” environment, its custom-ers being large industrial consumers, distribution system operators, traders, etc.

As a publicly listed company, Elia is duty bound to adopt a transpar-ent profi le towards the investor community. The Elia Fund also allows the company to develop a positive image among the general public and to portray itself as a dynamic and so-cially responsible employer on the labour market, in order to attract

potential candidates from which to recruit future employees.This initiative received offi cial recognition in October 2006 when Elia was awarded the Prix de la Solidarité (Solidarity Prize) by the RTBF and CAP 48, in collaboration with Régie Média Belge and Trends/Tendances. This Prix de l’Entreprise citoyenne (Social Enterprize Prize), awarded for the fi rst time in 2006, rewards social actions undertaken by companies in three areas: employment, accessibility and solidarity. Elia was delighted and proud to be able to share its prize with all the volunteers involved in the projects sup-ported by the Elia Fund.

Projects 2006The 2006 Elia Fund boasts a particularly fi ne crop of original, innovative projects that can serve as models for other projects in other places. In 2004, the Fund’s Management Committee decided to shift the focus slightly to the theme of “Discovery and Amaze-ment” and original leisure activities for all. This has been taken very much on board by project developers. Of the 113 projects submit-ted to the jury, 29 were selected.

Dutch-language projects

• Anvasport non-profi t association - Melle: Monoski for the seriously disabled (enabling individuals who have lost the use of their legs to learn to ski on their own)

• Spinnaker Sportvereniging Antwerp: Petrafi ets project (walking bike specially designed to allow disabled people to take part in races)

• ‘t Sneukelwiel non-profi t association - Wortegem-Petegem: “de Sneukelfi ets” (maps out an adapted biking route on which its adapted bikes can be used)

• Psylos, Flemish Federation for Sport and Recreation in Men-tal Health Care - Leuven: Step by step, hand in hand towards healthy and active recreation (Nordic walking, Kin-ball and circus techniques)

• University of Ghent, Zoophysiology Laboratory: Beekeeping for mobility-impaired individuals and people with other physical problems

• Zorg-Inzicht non-profi t association - Kortrijk: Transport in sight! (interactive training package with DVD for drivers: dealing with disabled people in transport situations)

In 2006, Elia took part in Company Open Day

An Elia staff member explains how the transmission system is operated to Infocentre visitors

Visitors at the Infocentre Elia wins the Solidarity Prize in 2006


• Mentor non-profi t association - Kortrijk: “No more obstacles to the stage” (shows accessible to all)

• Antwerp Social Welfare Centre: “Story box” (stimulating the senses of elderly people in order to bring back past memories)

• Puurs Arboretum - Speeltuin Sint-Pietersburcht non-profi t associa-tion: Making Puurs nature accessible (use of wheelchairs in the arboretum, nature reserve, playground and fort)

• Mariënstede: discovering and moving about in nature, now for wheelchair users too

• Sporta Vakantie non-profi t association - Westerlo: sporting and social activities pushing back boundaries and taking up chal-lenges at the Sporta - To Walk Again Centre

• Nationaal Werk voor het Gehandicapte Kind non-profi t associa-tion - Maasmechelen: “Wereldmand” (installing large, enclosed swings in the centre’s woods)

• Duklo Duiksportvrienden Commissie Wet Wheels non-profi t as-sociation – Kessel-Lo: Wet Wheeling – Diving without borders!

• Municipal sport council of Gooik: routes adapted for handbikes and bicycles (paths for handbikes, tandems, two-wheelers and three-wheelers)

• Recreas non-profi t association: Springplank, fun swimming les-sons for disabled and able-bodied children

• Espero: Cultural opportunities for vulnerable children (giving vul-nerable children the opportunity to explore culture, both actively and passively)

French-language projects

• Cap Eau d’Heure non-profi t association - Gosselies: “Sailing against the current” (teaching young people with impaired vision how to operate a dinghy)

• C-Paje non-profi t association - Liège: RAVeLissimo (training, crea-tion and an artistic walk along a part of RAVeL, with able-bodied children and mobility-impaired individuals)

• City of Mouscron: Estrelléa, integration in the vegetable garden at Estrelléa municipal garden

• Heureux Abri non-profi t association - Momignies: construction of a minigolf course accessible to wheelchair users

• Sel Bleu, non-profi t association organised by the City of Liège: “Move along, there’s nothing to see here!” (raising awareness and training tourism and culture operators to the issues faced by visually impaired individuals)

• Aviron Royal Club Nautique Sambre et Meuse 1862: Making the rowing club open and accessible to people with a disability

• Natagora non-profi t association - Namur: “Nature for all” (na-ture-related activities and campaigns accessible to all)

• Guides Catholiques de Belgique - Domaine de Mozet - Gesves: Four seasons, fi ve senses (allowing people to explore nature us-ing their fi ve senses at the Domaine de Mozet castle-farm)

• Fédération wallonne du Sport Adapté - Philippeville: specially de-signed hot-air balloon and rides accessible to disabled individuals, mobility-impaired individuals, senior citizens and the able-bodied alike

• Les Sens Ciel non-profi t association - La Bruyère: Les éOles-Tems (open–air exhibition of sensory totem sculptures accessible to people with a range of disabilities)

• Passe-Muraille non-profi t association - Frameries: show entitled “You see what I mean” (focusing on communication between two worlds: the world of the deaf and the world of the blind)

German-language projects

• Behindertenstätten Kelmis und Umgebung non-profi t association - Hergenrath: “Tierhof Alte Kirche” (creating an activity farm spe-cially designed for mobility-impaired individuals)

• Municipality of Bütgenbach: walk around Bütgenbach lake ac-cessible to mobility-impaired individuals


Representatives of selected projects by the jury of the Elia Fund at the offi cial ceremony on 12 December 2006



Elia’s activities are based on a considerate and respectful attitude

towards people and the environment. The safety of its own

employees, those of contractors and third parties, local residents

and the community as a whole is key in this respect, as is the safety

and security of its facilities, since these form the essential link

between electricity producers, both in Belgium and abroad, and

customers. However, Elia’s concern for the environment is not limited

to its operating activities: the company makes an ongoing positive

contribution to the natural world.

Considerate

Environment ...............................................................................38

Safety ......................................................................................................40


Environment

Elia takes care to perform its industrial activities with maximum respect for the environment and nature. Its environmental policy is geared towards limiting the environmental risks associated with its activities and always striving to achieve sustainable development that fosters wellbeing whilst helping to improve our environment. In particular, the company makes major efforts to prevent pollution in order to minimise the impact of its activities on the environment and health (i.e. people, water, air, soil, natural resources, fauna, fl ora and the interaction between these elements).

Elia also tries to achieve a constructive dialogue with the authori-ties, environmental institutions and organisations, grid users and the general public. Regular information and communication, both internal and external, regarding the environmental policy, the results of measures taken and the company’s performance in this area helps to foster this dialogue.

Accidental pollutionMaintenance teams in 2006 were issued with “spill kits” to ensure that cases of accidental pollution during maintenance work on facilities are always dealt with rapidly and effi ciently. Both Elia per-sonnel and specialised companies are used to clean up accidental pollution. In 2006 a total of 31 such interventions took place. Most of these incidents resulted from illegal dumping by third parties. Elia maintenance staff have also been given environmental training so that they are better equipped to prevent and deal with cases of accidental pollution.

Eliminating PCBsThe programme to eliminate facilities with a concentration of poly-chlorobiphenyls (PCB’s) exceeding 500 ppm, in accordance with le-gal obligations, was completed in late 2005. In 2006, as a proactive measure, six transformers in the Brussels Capital Region with lower PCB concentrations were also decontaminated. For the remain-ing transformers of this kind an elimination programme has been launched under which a certain number will be decontaminated each year. The programme has been budgeted for until 2015.

Soil rehabilitationFlandersAs part of the transfer of Electrabel/CPTE facilities to Elia that began in June 2001, six clean-ups are under way, four exploratory soil surveys are still ongoing and one, where no rehabilitation was required, has been completed.

Considerate

Brussels Capital-RegionElia submitted already one soil survey fi le about a site in the Brus-sels Capital-Region and completed soil surveys. There is no clean-up obligation for the submitted fi le.

WalloniaUnlike Flanders, the Walloon Region still has no decrees requiring a soil survey prior to the transfer of ground. To gain a better idea of the soil condition at Elia sites in Wallonia, the company decided to launch 23 voluntary soil surveys. These are currently ongoing.

Electric and magnetic fi eldsElectric and magnetic fi elds occur naturally in all forms of light, lightning, etc. but are also created as a result of human activity. Radios, TVs, microwaves, mobile phones, computers and sunbeds all produce electric and magnetic fi elds. The same is true of power transmission and electrical applications. However, these magnetic fi elds have a very low frequency (50 Hz).

Despite countless international studies, including that of the American National Institute of Environmental Health Sciences and the National Radiological Protection Board, absolutely no scientifi c proof has so far been found for a link between electric and mag-netic fi elds and effects on health. In July 2001, the IARC (Inter-national Agency for Research on Cancer) placed electromagnetic fi elds in Category 2b (“possibly carcinogenic”), based exclusively on epidemiological studies of this kind. No biological mechanism has yet been found to explain the statistical link between electromag-netic fi elds and cancer. The IARC clearly indicates that other factors could well be to blame.

Elia has signed a cooperation agreement with eight research centres, grouped together in the Belgian BioElectroMagnetic Group (BBEMG). The BBEMG primarily studies the effects of electric and magnetic induction fi elds created by the transmission and use of electrical energy in daily life and in the workplace (50 Hz). Its task is, through research, to gain a better insight into the interac-tions between electromagnetic fi elds and biological activity and to contribute to the development and dissemination of scientifi c knowledge regarding possible health effects. Specialists accepted this task on the express condition that they be allowed to work and express their opinion in complete independence. Cooperation with the BBEMG continued last year, the agreement having been extended for a further four years in 2005. Elia has a similar agree-ment with the international institute EPRI.

Elia also measures the strength of electric and magnetic fi elds at the request of people living near high-voltage facilities. It handles each of these requests in a spirit of open dialogue and neighbourli-ness.


Focusing on nature Elia works continually with specialist nature conservation bodies to minimise the impact of its activities on the environment and nature and where possible takes positive steps to protect biodiversity. 2006 saw a number of additional measures implemented and the exist-ing projects continued.

Vegetation managementThe ground beneath high-voltage facilities at substations must be completely weed-free for safety reasons. Elia has compiled guide-lines for the sustainable use of herbicides in collaboration with the Centre Wallon de Recherches Agronomiques (CRA-W). In addition, a trial project has been launched at the Mercator high-voltage substation to turn 3 hectares of fi eld into ecologically managed meadowland.

Green stepping stonesElia has created a new “green stepping stone” in partnership with Flemish conservation body Natuurpunt. Located in agricultural ar-eas, these small plots of land are so called because they connect up larger nature areas located some distance apart. They offer plants and animals a fresh opportunity to migrate whilst also providing shelter.

Nest boxesFor years, Elia has had a policy of fi tting nesting boxes to high-volt-age towers in suitable locations for use by birds that have diffi culty fi nding nesting sites. The boxes offer kestrels, peregrine falcons and other threatened birds of prey with a safe nest in which to raise their young. Hundreds of baby kestrels have so far been born in Elia boxes. In 2006, fewer kestrels than usual were born in the existing nest boxes, possibly due to the unusual weather conditions.Elia is committed to expanding the scheme wherever possible and 2006 was no exception. Ten new nest boxes were fi tted on high-voltage towers in the Tienen area, in consultation with Vogelwerk-groep Oost-Brabant.

Green certifi catesThe federal and Flemish governments have set up a scheme whereby system operators are required to buy green energy certifi cates at a fi xed minimum price. Elia sells these certifi cates on to the market, giving suppliers the chance to purchase the certifi cates they lack. Green certifi cates are issued by the govern-ment and represent written proof that 1 MWh of electricity has been generated from renewable sources such as water, wind and solar energy.

In 2006, Elia sold green certifi cates in two sales rounds. In the fi rst, 100 certifi cates were sold at a record price of €120.85 each, 100 certifi cates at €117.93 each, 25 at €117.15 each and 33 at €116.00 each. In the second, Elia sold 225 certifi cates at €118.31 each, 225 at €117.22 each and 222 at €116.88 each. The average sale price in 2006 was €117.82 per green certifi cate, an all-time record.If the sale prices of certifi cates are lower than the statutory prices at which Elia is obliged to buy them, the difference may be passed on in the tariffs.

Rational use of energyTo meet its public service obligations in Flanders, Elia implements an annual Rational Use of Energy (RUE) action plan. Resources are mobilised in a bid to achieve a 1% reduction in primary energy consumption - per kWh supplied - among customers connected to its grid in Flanders at a voltage of 70 kV or lower.The 2006 target was a saving of 19.2 GWh of electricity. The RUE action plan consists of subsidising energy advice (launched prior to July 2006) and energy-saving measures. The initial results for 2006 show that Elia achieved a saving of 27.2 GWh, considerably more than the legally prescribed mini-mum. In all, 33 projects were completed and six advice packages concluded. In 2006, 40 customers pledged to invest in an energy-saving project or implement advice partially subsidised by Elia.

Safety

The safety results from 2006 are in line with those of the previous year, most accidents having little to do with Elia’s core activities. For the sixth year in a row no internal electrical current accident4 occurred. The severity of work-related accidents remains very low, showing that the ongoing efforts to improve both the intrinsic safe-ty of facilities and also working procedures and methods continue to pay off.

In addition to strict compliance with safety procedures and instruc-tions, thorough staff training and education and constant attention to facility safety, Elia has also launched a campaign entitled “Safety as second nature” to raise the awareness of its employees about safety issues. Ultimately, this learning process will create an instinc-tive safety refl ex in each staff member, in all types of circumstances, from complex technical activities to simple day-to-day operations at facilities, on worksites, in traffi c, in the offi ce and so forth.

The nature reserve at the Koksijde high-voltage substation

Windmills in Wallonia Rare dog’s tail grass still grows in the nature reserve at the Koksijde high-voltage substation

A pair of kestrels in a nesting box

4 Work-related accident caused by intrinsic electricity risks

Objective 2004 Objective 2005 Objective 2006

2006

2003 2002 2004

2005

20012000

1994

1996

1995

1999

1998

1997

Freq

uen

cy r

ate

Severity rate


Frequency rate Severity rate

2003 2004 2005 2006 2003 2004 2005 2006

Elia 3.3 3.3 10.0 8.0 0.14 0.01 0.10 0.18

Head-quarters

3.9 2.5 1.4 2.6 0.26 0.00 0.00 0.05

Service Area North

0.0 5.5 8.7 14.6 0.00 0.02 0.08 0.26

Service Area South

5.4 2.7 30.9 17.5 0.03 0.02 0.31 0.53

Bel Engineering

2.6 3.6 6.8 3.3 0.01 0.05 0.13 0.01

The frequency rate indicates the number of accidents per millions hours worked. The se-verity rate indicates the number of days of work incapacity per thousands hours worked.

In addition, 132 on-site safety reviews were carried out in 2006. All safety-related topics are dealt with during these site visits. Besides checks on the intrinsic safety of facilities, the teams working on the site are examined in a constructive and informative way. This involves testing their knowledge and understanding of the relevant safety procedures and whether these procedures are actually ap-plied. In addition, the reviewers examine where improvements can be made. Each review results in a detailed report, which is then gone through with the individuals concerned. In most cases, a number of improvements are made based on the review.

Intervention servicesRisk awareness is important not only for Elia staff and subcontrac-tors but for anybody entering the vicinity of a high-voltage facility. For this reason, Elia attended a study day organised by the Flemish fi refi ghting association BrandweerVereniging Vlaanderen (BVV) where it alerted fi refi ghters to the specifi c risks and safety meas-ures associated with emergency interventions near high-voltage facilities. It also agreed with the federal government department responsible for fi refi ghter training to examine further cooperation opportunities.

Frequency and severity rate

CICC/KLIMElia’s contribution to the Federal Cable and Pipeline Information Database (CICC/KLIM) stems from the same concern. CICC/KLIM is a free, easy-to-use website (www.klim-cicc.be) where contractors can check for the presence of facilities belonging to system opera-tors in the vicinity of their works. The scheme is a joint initiative by Elia and Fetrapi, the federation representing pipeline transmission companies, which has 18 members including Fluxys.Contractors can use the website to report the location of intended works, thereby fulfi lling their legal obligation to inform the parties involved with the CICC/KLIM website. They then receive an email informing them whether a facility belonging to one of the partici-pating system operators is located nearby. The aim of this simplifi ed procedure is to reduce the number of instances in which safety distances are not respected.The CICC/KLIM website supplements the existing service pro-vided by Elia’s technical secretariats. The number of inquiries from contractors and local residents handled by the three technical secretariats rose to 49,078 in 2006, from 41,127 in 2005.

ContractorsDespite imposing the same tough safety requirements on its contractors as on its own personnel, Elia had to deal with two seri-ous accidents involving contractors’ staff, both of which related to recently constructed aerial lifts. The necessary lessons were learnt from each incident and the relevant processes adjusted. Elia had taken the appropriate safety measures in both instances and was not therefore liable for the incidents.

27.50

28.00

28.50

29.00

29.50

30.00

30.50

31.00

31.50

32.00

32.50

Price ( ) volume (thousand)

Jan Feb March April May June July Aug Sept Oct Nov Dec0

50

100

150

200

250

300

350

400

450


The Elia share in 20062006 was Elia’s fi rst full year on the stock exchange and threw up a number of challenges. Following a new amendment to the Electric-ity Act in July 2006, the introduction of the system of multi-annual tariffs for using the transmission system in Belgium was postponed until 1 January 2008.

As a result, many investors looked on 2006 as a transition year for the Elia share. On the one hand, the company’s organisational operation was further optimised and made more professional; on the other hand, there was uncertainty regarding the royal decrees which, from 2008 onwards, will determine Elia’s multi-annual tariffs and therefore its future results.

Given all this, the Elia share remained extremely stable in 2006, both before and after the 24 May dividend payout. However, the postponing of the multi-annual tariffs in July 2006 impacted nega-tively on the share’s liquidity, as shown in the diagram below.

Information for shareholders

Overview of the monthly statistics for the Elia share on Euronext Brussels in 2006

Month Volume(daily average)

Closing price Highest price Lowest price Free-fl oat turnover rate

Market capitalisation (in € millions)

January 32,962 30.82 31.98 30.65 3.84% 1,476

February 54,568 31.30 31.40 30.35 5.77% 1,499

March 55,009 31.17 31.83 30.75 6.69% 1,493

April 38,670 31.22 31.45 31.01 3.68% 1,495

May 28,051 30.00 32.10 28.47 3.27% 1,437

June 42,796 30.29 30.30 29.10 4.98% 1,451

July 11,081 30.05 30.28 29.50 1.23% 1,439

August 9,570 29.62 30.28 29.50 1.16% 1,419

September 7,766 29.47 30.00 29.30 0.86% 1,412

October 14,494 29.85 29.94 29.10 1.69% 1,430

November 21,075 29.99 30.60 29.48 2.45% 1,436

December 37,573 29.92 30.90 29.42 3.78% 1,433

2006 29,326 29.92 32.10 28.47 39.41% 1,433

Price and volume evolution in 2006


The Elia share fi nished 2005 at a price of €31.50. The closing price at the end of 2006 was €29.92, representing a drop of 5.02%.

The lowest price in 2006 was €28.47, recorded on 24 May 2006 (the day of the dividend payout), while the peak price of €32.10 occurred on 10 May 2006.

With 47,898,052 issued shares, the company’s market capitalisa-tion at the end of December 2006 stood at €1,433,109,716.

In 2006 a total of 7,448,742 Elia shares were traded on Euronext Brussels equating to an average of 29,326 per day.

The Elia share and its codes

Elia share on the stock exchange

Stock exchange Euronext Brussels

Index BEL MID

Ticker ELI

ISIN BE 0003822393

Bloomberg code ELI BB

Reuters code ELI BR

Elia strips on the stock exchange

Stock exchange Euronext Brussels

Ticker ELIS

ISIN BE 0005597688

Bloomberg code ELIS BB

Reuters code ELIS BR

Share indexesOn 31 December 2006 Elia shares entered the Bel Mid index and the Euronext Top 150. Elia’s weight on that date was 2.953% in the Bel Mid Index and 0.673% in the Euronext Top 150, ranking it 13th and 69th respectively.

Investor relations In 2006 roadshows were held in Europe’s major fi nancial centres, giving investors and analysts of all kinds a chance to talk to the company’s top management either in person or by videoconfer-ence. Elia also attended fi ve national and international investment conferences.

In addition, Elia devoted considerable attention to private investors, taking part in the annual event organised by the Vlaamse Federatie van Beleggingsclubs en Beleggers (VFB), the annual Cash & Trends event and the new Finance Avenue event held by the newspapers De Tijd and l’Echo. Elia was also present at a fi nancial cocktail party organised by Euronext and others, besides arranging a number of company visits.

Transparency regulations and reporting of interestsUnder the Belgian Transparency Act, stakes of at least 5% (or a multiple of 5%) of total share capital must be reported to the Belgian Banking Finance and Insurance Commission (CBFA) and the company itself.

Personnel Free fl oat Publi-T Electrabel Publipart

HGRT Elia Re Bel Engineering Belpex

Elia SystemOperator

Elia Asset

0.54% 39.46% 30% 27.45% 2.55%

99.99%

22.17% 100% 100% 60%

Economic unit

Shareholder and group structure

Elia System Operator and its subsidiary Elia Asset operate as single economic unit under the name of Elia.Bel Engineering is Elia’s engineering subsidiary and Elia Re is Elia’s reinsurance business.Belpex is the Belgian energy exchange where day-ahead electricity is traded anonymously and a transparent reference price for the wholesale electricity market is set. HGRT is a holding company constituted by different European transmission system operators which holds a share in French energy exchange Powernext.


In 2006, the following occurrence gave rise to a reporting procedure:

Reporting

Reporting date Name of shareholder

Number of shares

Percentage stake

2 May 2006 Groep Arco 2,058,585 4.3% (1)

(1) In addition, 480,000 put options have been written which could increase

the stake to 5.3%]

The shareholder structure of Elia System Operator on 31 December 2006

Shareholders Shares % shares % voting rights

Publi-T 14,369,433 30.00% 30.00%

Electrabel 13,148,028 27.45% 27.45%

Groep Arco 2,058,585 4.30% 4.30%

Publipart 1,221,405 2.55% 2.55%

Personnel 258,035 0.54% 0.54%

Free fl oat 16,842,566 35.16% 35.16%

Total 47,898,052 100.00% 100.00%

DividendOn 15 February 2007, Elia System Operators board of directors decided to propose the following dividend payments for sharehold-ers at the general meeting of 8 May 2007:

In accordance with dividend policy and on the condition that the annual general meeting gives its approval, a normal dividend of €61.31 million, or €1.28 per share (gross), is proposed. This gives a net result of €0.96 per share without VVPR strip or €1.088 per share with VVPR strip.

The following paying agents will pay out dividends to shareholders: Fortis Bank, ING Belgium, KBC Bank and Dexia Bank. Dividend pay-outs for shares held in a stock account will be settled automatically by the bank or stockbroker. Elia will pay out dividends on registered shares directly to shareholders listed on the company’s register. Dividend policy Elia System Operator is obliged by its articles of association to pay out at least 85% of profi t gained, after having retained a 5% reserve in accordance with provisions, representing a payout of 81% recorded profi t. Taking into account the fi nancial market and regulations, Elia’s board of directors decided in 2006 to increase the payout level to around 90% as a recurrent objective.

Besides the rules laid out in articles of association, article 10 of the shareholders’ agreement specifi es that all profi ts, following deduc-tion of the statutory reserve, must be paid out to shareholders as dividends, unless this would signifi cantly infringe the ratio of capital and reserves to debt capital recommended by the regulator.

Financial calendar• 8 May 2007 General meeting of shareholders (10 a.m.)• 23 May 2007 Payment of dividend for 2006 (coupon No. 2)• 31 August 2007 Publication of half-yearly fi gures for 2007

(before trading on the stock exchange begins)

InvestorsFor any questions regarding Elia and the Elia share, please contact:

EliaInvestor RelationsBoulevard de l’Empereur 201000 BrusselsBelgiumTel.: +32 2 546 72 39Fax: +32 2 546 71 80Email: [email protected]

Information about the company can be found on the Elia website www.elia.be (press releases, annual reports, share prices, etc.).

Elia’s fi nancial newsletter Investor News provides investors with up-to-date information about the company. One can subscribe to the email alert.


Corporate governance

Management and supervisory bodies

Board of directorsCapacity

ChairmanRonnie Belmans - Appointed as chairman for three years on 24 May 2005 Electrabel

Vice-chairmenFrancis Vermeiren - Appointed as vice-chairman for three years on 30 June 2005 Publi-TThierry Willemarck - Appointed as vice-chairman for three years on 30 June 2005 Independent

DirectorsWilly Bosmans ElectrabelClement De Meersman IndependentJohan De Roo Publi-TJacques de Smet IndependentClaude Grégoire Publi-TJean-Marie Laurent Josi IndependentIngrid Lieten IndependentWalter Peeraer ElectrabelLuc Van Nevel Independent

Standing, from left to right:Jacques de Smet, Walter Peeraer, Jean-Marie Laurent Josi, Johan De Roo, Claude Grégoire, Willy Bosmans, Clement De Meersman, Francis Vermeiren, Thierry Willemarck

Sitting, from left to right:Luc Van Nevel, Ronnie Belmans, Ingrid Lieten


Corporate governance committee

• Thierry Willemarck (chairman)• Luc Van Nevel• Ingrid Lieten

Audit committee

• Clement De Meersman (chairman)• Johan De Roo• Jacques de Smet

Remuneration committee

• Jean-Marie Laurent Josi (chairman)• Willy Bosmans• Jacques de Smet

Auditors

• Klynveld Peat Marwick Goerdeler Réviseurs d’Entreprises, repre-sented by Erik Clinck

• Ernst & Young Réviseurs d’Entreprises, represented by Jacques Vandernoot

Management committee

• Chairman and Chief Executive Offi cer - Daniel Dobbeni• Vice-chairman and Chief Corporate Offi cer -

Jacques Vandermeiren• Chief Offi cer Grid Services - Markus Berger• Chief Financial Offi cer - Jan Gesquière• Chief Executive Offi cer Bel Engineering - Roel Goethals• Chief Offi cer Transmission - Hubert Lemmens• Chief Offi cer Customers & Market - Frank Vandenberghe

Standing from left to right:Roel Goethals, Jan Gesquière, Daniel Dobbeni,

Jacques Vandermeiren, Markus Berger

Sitting from left to right:Frank Vandenberghe, Hubert Lemmens


Board of directors

The boards of directors of Elia System Operator and Elia Asset each have 12 members. The same members sit on both boards. These members do not have a management function within either Elia System Operator or Elia Asset. Half of the members are inde-pendent directors, appointed by the general meeting and having received a positive unanimous opinion by CREG on their independ-ence.In accordance with provisions stipulated by legislation and the articles of association, the board of directors of Elia System Opera-tor and Elia Asset are supported by three committees: a corporate governance committee, an audit committee and a remuneration committee. A management committee was also set up on 29 July 2003, under article 524a of the Belgian company code.

Appointment of directors

The general meeting of 10 May 2005 appointed six non-independ-ent directors and six dependent directors. In most cases these were renewed directorships, with the exception of one appointment, that of independent director Jacques de Smet. Following CREG’s positive unanimous opinion on her independence, issued on 14 February 2006, Ingrid Lieten’s appointment as an independent director was confi rmed by the general meeting of shareholders on 9 May 2006. She replaced Hilde Laga.

All these directorships will expire at the end of the 2011 general meeting. This six-year period diverges from the period stipulated in the Lippens code, which recommends that directors be appointed for four years. This approach was taken to ensure that the com-pany’s management was stable enough to carry out the complex and technical, fi nancial and legal tasks required of the transmission system operator.

It should be remembered that specifi c corporate governance rules exist regarding the appointment of the independent and non-in-dependent members of the board of directors and its committees, as well as the tasks of the latter, of Elia System Operator and Elia Asset. The procedures for appointing are contained in the law of 29 April 1999 on the organisation of the electricity market, as amended by the law of 1 June 2005.

In practice, non-independent directors are appointed after having been nominated by shareholders. Independent directors are ap-pointed in accordance with a procedure established by the law of 29 April 1999 concerning organisation of the electricity market and the articles of association. The corporate governance commit-tee presents a list of candidates; for each candidate, the Com-mittee takes into account an up-to-date CV and a signed formal declaration outlining the criteria for independence as stipulated by legislation applying to Elia and the articles of association. No decision can be taken without the independent directors having their say. The board always tries to reach a consensus as far as possible. In any case, no important decision may be taken without being approved by a majority of the independent directors and a majority of the non-independent directors. The general meeting then appoints the independent directors. These appointments are submitted to CREG for its opinion concerning the independence of each independent director.

A similar procedure applies if a director is co-opted onto the board of directors. One of the corporate governance committee’s tasks is therefore to appoint the independent directors. The articles of as-sociation outline a specifi c procedure for the appointment of non-independent directors. The procedure for appointing independent and non-independent directors as well as the role of the corporate governance committee are laid down by and implemented in ac-cordance with the provisions of the law of 29 April 1999 concern-ing organisation of the electricity market.

Appointment of committee members

The current committees supporting the board of directors were elected at the meeting of 30 June 2005 for a three-year period (which may be extended) until the 2008 general meeting.The vacancy created by Hilde Laga’s resignation was fi lled when Ingrid Lieten was co-opted onto the board on 22 December 2005. Subsequently, at its meeting on 9 February 2006, the board of directors appointed Ingrid Lieten to the corporate governance committee as a replacement for Hilde Laga.

Auditors

At the general meeting of 10 May 2005, Ernst & Young Réviseurs d’Entreprises, represented by Jacques Vandernoot, and Klynveld Peat Marwick Goerdeler Réviseurs d’Entreprises, represented by Erik Clinck, were appointed as auditors.Remuneration for each was fi xed at €72,500 for each fi nancial year for Elia System Operator, Elia Asset and Bel Engineering. The auditors were appointed for a period of three years. Their mandate is therefore due to expire at the end of the ordinary general meet-ing in 2008.

Board of directors’ activity report

Under the law of 29 April 1999, the board of directors:• defi nes the company’s general policy;• exercises the powers attributed to it by the Belgian company

code or in accordance with this code with the exception of pow-ers attributed or delegated to the management committee;

• exercises general control over the transmission system operator’s management committee as regards access to commercial and other confi dential information relating to grid users and the processing thereof;

• exercises powers attributed to it by the articles of association.


The board of directors met fi ve times during 2006. The following members were absent at one or more meetings:

• Ingrid Lieten (21 March)• Thierry Willemarck (9 May)• Walter Peeraer (21 March, 9 May and 30 November)• Luc Van Nevel (9 May and 14 September)

Members who are unable to attend are usually represented by another member. Under the provisions of the articles of association, an absent director may authorise another member to represent him or her by giving prior written permission. No member may represent more than two directors.

Signifi cant events in 2006

Approval of the Corporate Governance CharterThe Elia Corporate Governance Charter was approved by the board of directors on 9 February 2006, in accordance with the recom-mendations of the Lippens code. It was updated by the corporate governance committee on 15 June 2006 to include the changes to the articles of association dating from 9 May 2006. The Charter, which is available on the company’s website www.elia.be, explains how Elia implements the provisions of the Lippens code whilst taking account of the specifi c legal requirements for the electricity sector and for Elia in particular concerning corporate governance, transparency and non-discrimination.

Changes to the articles of associationIn the light of the new electricity legislation (law of 1 June 2005 amending the law of 29 April 1999 concerning the organisation of the electricity market) and the corporate governance code, Elia System Operator and Elia Asset had to modify a number of their articles of association to bring them into line with these new regu-lations. The amendments were made at the companies’ extraordi-nary general meetings on 9 May 2006. Besides changes to wording and structure, the amendments relate mainly to:• the defi nition, conditions and rules of appointment and co-opt-

ing of independent directors;• the rule whereby the board of directors is comprised solely of

non-executive directors; • the composition of the board of directors. At least one third of

the board must be members of the least represented sex. For the fi rst time, this new article will apply when renewing all or some of the mandates of the board of directors;

• the composition and powers of the audit, remuneration and corporate governance committee;

• the appointment of members of the management committee; • the rule whereby, when renewing the mandates of management

committee members, care must be taken to achieve and maintain linguistic balance;

• the powers and meetings of the board of directors (organisation, individuals acting in an advisory capacity, advance communication of information, etc.);

• general meetings (time of ordinary general meeting, adding items to the agenda, date of registration, etc.);

• removing the need for a prior unanimous opinion or approval from CREG on certain issues.

Creation of an electronic register of registered securitiesThe ordinary general meetings for shareholders of Elia System Operator and Elia Asset on 9 May 2006 decided to create an electronic register of registered securities for each company in ac-cordance with article 463 of the Belgian company code.

Remuneration Directors’ remuneration was modifi ed by the companies’ ordinary general meetings of shareholders on 9 May 2006. Details of the remuneration can be found on page 48.

Remuneration committeeIn addition to its usual support role to the board of directors and in accordance with the law of 29 April 1999, the remuneration committee is required to make recommendations to the board of directors with regard to remuneration of the management commit-tee. The remuneration committee met on three occasions and each meeting was attended by all members.The company evaluates its management staff on a yearly basis in accordance with management performance policy. This policy also applies to members of the management committee. The remuner-ation committee evaluates the members of the management com-mittee on the basis of a series of collective and individual objectives, of a qualitative and a quantitative nature. At the end of December 2006, the remuneration committee then evaluated the extent to which these objectives had been achieved.

The committee proposed to the general meeting of 9 May 2006 that directors’ remuneration should be modifi ed in the wake of changes to electricity legislation and the company’s IPO.

The committee also took note of the new classifi cation of manage-rial functions based on the Hay method. The aims are twofold: to bring remuneration more into line with function and to enable more effective cost control.

Audit committeeIn addition to its usual support role to the board of directors and in accordance with the law of 29 April 1999, the audit commit-tee examines the accounts, ensures that the budget is control-led, monitors audit activities, evaluates the reliability of fi nancial information, organises and oversees internal control and checks the effectiveness of internal risk management systems. The audit com-mittee may investigate any matter that falls within the scope of its activities. It is given the resources it needs to perform this task, has access to all information (with the exception of commercial data concerning network users) and can call on internal and external experts for advice.

The audit committee met on fi ve occasions in 2006 and each meeting was attended by all three directors on the committee. It examined the annual accounts for 2005 drawn up in accordance with both Belgian GAAP and IFRS. The committee also analysed the company’s quarterly results, stated on 31 March 2006 and drawn up in accordance with Belgian GAAP, the half-yearly results stated on 30 June 2006 and the fi gures for the fi rst three quarters, stated on 30 September 2006, drawn up in accordance with Belgian


GAAP and IFRS standards.

The committee took note of the insurance policy and audits relat-ing to Bel Engineering, the budgetary process, cash and credit control, pruning work and the stability of data transmission. The committee also took note of the company’s risk management methods and outcomes. A quality assurance review was conducted by an external agency on the internal audit and enterprise risk management department. An action plan was compiled for each of these audits to improve the quality, application and communication of procedures.The committee examined the follow-up to action plans resulting from earlier audits and concluded that the action plans were being implemented properly and within the agreed timeframes.

Corporate governance committeeIn addition to its usual support role to the board of directors and in accordance with the law of 29 April 1999, the corporate govern-ance committee puts forward candidates to be appointed as independent directors, gives prior approval for the appointment of members of the management committee, and, at the request of any independent director, the chairman of the management com-mittee or CREG, examines all cases of confl icts of interests between the transmission system operator and a dominant shareholder or company associated with a dominant shareholder in order to report to the board of directors. This latter task aims to strengthen the directors’ independence above and beyond the procedure stipu-lated under article 524 of the Belgian company code, which is also applied by the company. The committee is also expected to give an opinion in cases of incompatibility between members of the man-agement and personnel, to ensure that the provisions contained under articles 9 and 9b of the law of 29 April 1999 concerning the organisation of the electricity market are applied, evaluate how effectively they have been applied in terms of fulfi lling the objec-tives of operating the transmission system in an independent and impartial manner and submit an annual report to CREG.

The committee met fi ve times in 2006. All members attended all the meetings. The committee regained its full complement of members from 9 February 2006, when Hilde Laga was replaced by Ingrid Lieten. The committee oversaw completion of the Elia Corporate Govern-ance Charter, in line with the recommendations of the Lippens code. It monitored practical implementation of Elia’s confi dentiality policy by the compliance offi cer, the principal instrument of which is a confi dentiality charter applying to all company personnel. The committee was kept informed by the management committee of progress on the major issues affecting Elia, i.e. the purchase of ancillary services for 2006 and 2007, implementation of the multi-annual tariffs and the expected changes to legislation in this area. It met representatives of electricity market players, producers and large consumers, and analysed the information received with the management committee. The committee also monitored the design and implementation of Elia’s investment plans, both federal and regional.

RemunerationRemuneration policy for directors was agreed upon at the general meeting of shareholders. Total remuneration paid to the 12 Elia di-rectors in 2006 was €416,626 (€208,313 for Elia System Operator

and €208,313 for Elia Asset), including indexing. The table below lists the individual gross sums paid to each director:

• Ronnie Belmans € 40,464• Willy Bosmans € 33,450• Clement De Meersman € 35,178• Johan De Roo € 35,178• Claude Grégoire € 26,976• Ingrid Lieten € 35,178• Jean-Marie Laurent Josi € 33,450• Walter Peeraer € 26,976• Luc Van Nevel € 35,178• Francis Vermeiren € 32,372• Jacques de Smet € 41,652• Thierry Willemarck € 40,574

These fi gures were calculated on the basis of fi ve meetings in 2006. They are gross sums and include social security costs and other necessary deductions.Remuneration for directors is calculated from a basic remunera-tion of €25,000 per year (€12,500 for Elia System Operator and €12,500 for Elia Asset) with an additional €800 (€400 for Elia System Operator and €400 for Elia Asset) for each meeting after the 8th board meeting during the year, including meetings with regulators. These two fi gures are increased by 50% for the chair-man and 20% for each vice-chairman.An additional fi xed remuneration of €6,000 per year per commit-tee (€3,000 for Elia System Operator and €3,000 for Elia Asset) is also paid to directors who sit on a support committee, with an ad-ditional remuneration of €800 (€400 for Elia System Operator and €400 for Elia Asset) for each additional committee meeting (i.e. each meeting after the three covered by the basic remuneration), including meetings with regulators.This remuneration covers all costs and is included in the compa-ny’s operating costs. It is indexed annually in accordance with the consumer price index. All remunerations are paid on a pro rata temporis basis during the director’s term of offi ce.Directors receive an advance on their annual remuneration at the end of the fi rst, second and third quarters. The advance is calculated on the basis of the basic indexed fee and on a pro rata temporis basis in relation to the duration of the directorship during the quarter in question.A detailed account is prepared during the month of December for the fi nancial year. This account takes into consideration all ad-ditional remuneration that supplements basic remuneration.Directors do not receive any other benefi ts in kind, stock options, special loans or advances.

EvaluationThe company does not currently have a formal procedure for evalu-ating directors. The board of directors has mandated its chairman to propose an evaluation procedure for the committees and board in 2007.

Management committeeIn accordance with the law on 29 April 1999, the transmission system operator’s management committee manages the electricity grid and the transmission system operator on a day-to-day basis and exercises other powers delegated to it by the board of directors and the articles of association.The management committee usually meets formally once a month. Members also attend informal weekly meetings. The management


committee met 11 times in 2006.

The following members were absent from one or more committee meetings:• Hubert Lemmens (23 March and 14 July)• Markus Berger (14 July)Members who are unable to attend usually have a representative. In accordance with the committee’s internal rules of procedure, an absent director may authorise another member to represent him or her by giving prior written permission. No member may represent more than two directors.

Each quarter, the management committee reports to the board of directors on the company’s fi nancial situation (in particular on the balance between the budget and the results stated). It also reports on transmission system operation at each board meeting.As regards transmission system operation, the committee updated the board on developments in legislation and case law affecting Elia, progress on drafting the new royal decree on tariffs, regula-tors’ decisions, incidents and the implementation of Belpex.

Remuneration

Basic and variable remunerationIn 2006, remuneration for the chairman of the management com-mittee, which is paid by Elia System Operator, totalled €438,460.26, of which 31.40% was variable pay.

Remuneration paid by Elia to the other members of the manage-ment committee in 2006 totalled €1,359,691.54 (€705,911.03 for Elia System Operator and €653,780.50 for Elia Asset), of which 21.73% was variable pay. A total of €1,798,151.80 was therefore paid to members of the management committee.

SharesAs part of Elia System Operator’s IPO and the accompanying capital increase for staff, Elia offered its employees the opportunity to purchase a certain number of shares.

The number of shares acquired by the chairman of the manage-ment committee during this capital increase was 2,297; the other members of the management committee acquired a total of 8,389 shares. Elia has yet to implement a long-term share allotment policy.

Other elements of remunerationPension costs for the chairman of the management committee are covered by Elia System Operator and totalled €135,868.65 in 2006. Total contributions for the other members were €381,854.33 (€196,248.66 for Elia System Operator and €185,605.67 for Elia Asset).Other benefi ts awarded to members of the management commit-tee, such as guaranteed income in the event of long-term illness or an accident, health-care and hospitalisation insurance, invalidity insurance, life insurance, tariff benefi ts and company car are in line with the regulations applying to all company managers.

Provisions of employment contractsThe terms contained in the employment contracts for members of the management committee, including the chairman, do not con-tain any specifi c provisions as regards notice of dismissal.

Code of conductElia has a code of conduct that all employees likely to have access to privileged information on the group (i.e. insiders) must comply with. The code of conduct lays down a series of regulations for stock ex-change transactions by insiders, in accordance with the provisions of Directive 2003/6/EC on insider trading and market manipulation and the law of 2 August 2002 on monitoring of the fi nancial sector and other fi nancial services. The board of directors approved the code of conduct on 22 December 2005. The secretary general ensures that the code of conduct is applied correctly and updated.


Consolidated fi nancial statements IFRSConsolidated income statement IFRS

(in million €) Notes 2006 2005 Evolution (%)

Operating income (3) 711.5 714.2 -0.4

Turnover 695.9 694.3 0.2

Other operating income 15.6 19.9 -21.6

Operating charges (4) -507.5 -502.4 1.0

Cost of materials (4.1) -7.0 -6.2 12.9

Services and other goods (4.1) -277.0 -276.7 0.1

Personnel expenses and pensions (4.2) -116.5 -117.2 -0.6

Depreciation, write-offs and amortisation expenses, changes in provisions

(4.3) -88.5 -84.1 5.2

Other operating charges (4.4) -18.5 -18.2 1.6

Operating result 204.0 211.8 -3.7

Financial result (5) -98.3 -93.8 4.8

Financial income 3.1 1.9 63.2

Financial charges -101.4 -95.7 6.0

Profi t before taxes 105.7 118.0 -10.4

Income taxes (6) -29.8 -41.5 -28.2

Profi t after taxes 75.9 76.5 -0.8

Share of the minority interests 0.1 -

Share of the shareholders of the parent company 75.9 76.4 -0.7

Per share information (€)Earnings per share 1.58 1.60 -1.3

Shareholders’ equity per share 27.32 26.80 1.9

-: irrelevant


Consolidated balance sheet IFRS

(in million €) Notes 2006 2005

Assets

Fixed assets 3,683.4 3,635.4

Tangible fi xed assets (7) 1,943.3 1,891.3

Intangible fi xed assets (8) 1,718.3 1,713.4

Investments in associates (9) 0.5 0.5

Deferred tax assets (20) 21.3 30.2

Current assets 214.7 220.4

Inventories (10) 12.9 12.6

Trade and other receivables (11) 106.0 93.8

Recoverable tax assets 0.2 5.8

Cash and cash equivalents (12) 45.0 49.4

Deferred charges and accrued income (13) 50.6 58.8

Total assets 3,898.1 3,855.8

Equity & liabilities

Shareholders’ equity 1,308.6 1,282.7

Shareholders’ equity imputable to the holders of equity instruments of the parent company

(14) 1,307.5 1,281.6

Issued share capital 1,196.9 1,196.9

Share premium account 8.5 8.5

Reserves 14.6 11.2

Hedging reserve -1.5 -12.3

Retained earnings 89.0 77.3

Conversion difference

Minority interest 1.1 1.1

Minority interest 1.1 1.1

Non-current liabilities 2,302.5 2,335.3

Long-term borrowings (15) 2,119.8 2,129.5

Employee benefi ts (16) 172.0 179.2

Hedging instruments (22) 2.3 18.7

Provisions for risks and charges (17) 3.1 3.2

Deferred tax liabilities (20) 4.6 4.0

Various long term liabilities 0.7 0.7

Current liabilities 287.0 237.8

Short-term borrowings

Provisions for risks and charges (17) 10.9 11.2

Trade and other payables (18) 116.6 79.4

Income tax liabilities 0.5 0.9

Accrued charges and deferred income (19) 159.0 146.3

Total equity & liabilities 3,898.1 3,855.8


Consolidated cash-fl ow statement IFRS

(in million €) 2006 2005

Operating activities

Profi t for the year 75.9 76.5

Interest expenses 101.1 93.8

Income taxes 25.8 37.4

Adjustments for:

Depreciation/ amortisation of tangible and intangible assets 88.3 83.2

Results on disposals on tangible assets 2.9 4.1

Write offs of current assets 0.4 0.9

Increase (decrease) in provisions -7.6 -6.9

Valuation towards the fair value of fi nancial instruments 0.2 0.6

Increase (decrease) in deferred taxes 4.0 3.4

Other non cash adjustments 1.6

Cash fl ow from operating activities 291.0 294.6

Changes in:

Inventories -0.7

Trade and other receivables -12.2 -10.8

Deferred charges and accrued income 8.1 25.3

Trade and other payables 37.7 -37.2

Accrued charges and deferred income 9.0 -37.9

Changes in working capital 41.9 -60.6

Interest paid -97.4 -93.6

(Paid) reimbursed income tax -21.0 -25.5

Net total cash flow from operating activities 214.5 114.9

New investments in (in)tangible fi xed assets -148.1 -185.4

New investments in associates

Total cash flow from investing activities -148.1 -185.4

Change in capital (+) of (-) 155.7

Costs linked to capital increase -1.4

Dividends paid (-) -60.8

Reimbursements of loans (-) -50.0 -344.6

New loans (+) 40.0 250.0

Minority interest 1.1

Total cash flow from financing activities -70.8 60.8

Cash flow variations -4.4 -9.7

Cash & cash equivalents at the beginning of the year 49.4 59.1

Cash & cash equivalents at the end of the year 45.0 49.4

Net variations in cash & cash equivalents -4.4 -9.7


Changes in shareholders’ equity IFRS

(in million €)

Sharecapital

Share premium

Hedging reserve

Legalreserves

Retained earnings

Total Minority interests

Total equity

Balance at 1 January 2005 1,049.5 -16.4 8.1 3.9 1,045.1 1,045.1

Increase reserves 3.1 -3.1

Net income of the year 6.1 76.5 82.6 1.1 83.7

Deferred taxes -2.1 -2.1 -2.1

Shares issued 147.2 8.5 155.7 155.7

Issuance cost 0.2 0.2 0.2

Dividends to shareholders

Balance at 31 December 2005 1,196.9 8.5 -12.3 11.2 77.3 1,281.6 1.1 1,282.7

Balance at 1 January 2006 1,196.9 8.5 -12.3 11.2 77.3 1,281.6 1.1 1,282.7

Increase reserves 3.4 -3.4 0.0

Net income of the year 16.4 75.9 92.3 92.3

Deferred taxes -5.6 -5.6 -5.6

Dividends to shareholders -60.8 -60.8 -60.8

Balance at 31 December 2006 1,196.9 8.5 -1.5 14.6 89.0 1,307.5 1.1 1,308.6


1. Consolidation scope

The Group’s consolidated fi nancial statements include the four subsidiaries of Elia System Operator SA, i.e. Elia Asset SA, Bel Engineering SA, Belpex SA and Elia Re SA and also an associated company HGRT (see note 9).

2. Important accounting principles for fi nancial reporting under IFRS

(a) Statement of compliance Elia System Operator SA is established in Belgium. The company’s consolidated fi nancial statements for the 2005 fi nancial year include the company and its subsidiaries (the ‘Group’) and the Group’s share in associated companies.

The consolidated fi nancial statements for the year ending 31 December 2006 presented in this annual report were prepared under the supervision of the board of directors and established by the board of directors on 15 February 2007 subject to the shareholders’ approval of the statutory non-consolidated fi nancial statements at the annual general meeting due to take place on 8 May 2007. In accordance with Belgian legislation, the consolidated accounts will also be presented to Group shareholders at the annual general meeting. The consolidated fi nancial statements are not subject to change unless they are modifi ed following a decision taken by the shareholders concerning the statutory non-consolidated fi nancial statements that has an impact on the consolidated fi nancial statements.

The consolidated fi nancial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and the interpretations of IFRS that are established by the International Accounting Standards Board (IASB) as adopted for use in the European Union. The Group has applied all new and revised standards and interpretations published by the IASB and applicable to its activities which are in force for fi nancial years starting on or after 1 January 2006. The application of these new and revised standards and interpretations did not result in changes to the valuation rules used by the Group. The Group did not opt for early application of the following new standards and interpretations that were published on the date upon which the annual accounts were approved but which had not entered into force on the balance sheet date:

IFRS 7: (IAS 32 1 IAS 30) Financial instruments – disclosuresIAS 1: Amendments to capital disclosuresIFRS 8: Operating segmentsIFRIC 7: Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinfl ationary EconomiesIFRIC 8: Scope of IFRS 2 IFRIC 9: Interpretation Reassessment of Embedded Derivatives IFRIC 10: Interim fi nancial reporting and impairmentIFRIC 11: IFRS 2 : Group and treasury share transactionsIFRIC 12: Service concession arrangements

(b) Basis of preparation The fi nancial statements are presented in million euro, rounded-off to the nearest hundred thousand, unless stated otherwise. The fi nancial statements have been prepared on the historical cost basis, except for the derivative fi nancial instruments, which are valued at fair value.

Non-current assets and assets groups held for sale are valued at the lowest of book value and fair value less cost to sell.

The preparation of fi nancial statements in accordance with IFRS requires management to make judgements, estimates and assumptions that could affect the reported amounts of assets and liabilities and income and expenses. The estimates and underlying assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making the judgments regarding the carrying amounts of assets and liabilities. Actual results could differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going basis.

Revisions to accounting estimates are refl ected in the period in which the estimate is revised, if the revision only affects this period, or in the period in which the estimate is revised and future periods, if the revision affects both current and future periods.

Judgements and estimates that have a signifi cant effect on the fi nancial statements are discussed in the notes.

The accounting principles set out below have been applied consistently for all the periods presented in this fi nancial report. The accounting principles have been applied by all Group entities.

Notes to the financial statements


(c) Basis of consolidation

(i) Subsidiaries A subsidiary is an entity that is controlled by the company. Control exists when the company has the power to, directly or indirectly, govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The fi nancial statements of subsidiaries are included in the consolidated fi nancial statements from the date that control commences until the date that control ceases.

(ii) Associated companies Associated companies are those companies in which the company has signifi cant infl uence, but not control, over the fi nancial and operating policies. The consolidated fi nancial statements include the Group’s share of the total recognised profi ts and losses of associated companies on an equity basis of accounting, from the date that signifi cant infl uence commences until the date that signifi cant infl uence ceases. When the Group’s share of the losses exceeds its interest in an associated company, the Group’s carrying amount is reduced to nil and further losses are not refl ected except to the extent that the Group has incurred legal or constructive obligation or has made payments on behalf of an associated company.

(iii) Elimination of intra-Group transactions Elimination of intra-Group transactions and any unrealised gains or losses or income and expenses arising from intra-Group transactions, are eliminated when preparing the consolidated fi nancial statements.

Unrealised gains from transactions with associated companies are eliminated to the extent of the Group’s interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence for impairment.

(d) Foreign currencies Transactions in foreign currencies are converted into euro at the foreign exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies on the balance sheet date are converted into euro at the foreign exchange rate prevailing on that date. Foreign exchange differences arising on conversion are refl ected in the income statement.

Non-monetary assets and liabilities denominated in foreign currencies that are valued in terms of historical cost are converted at the exchange rate prevailing on the date of the transaction.

(e) Derivative fi nancial instrumentsThe Group sometimes uses derivative fi nancial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operating, fi nancing and investment activities. In accordance with its treasury policy the Group neither holds nor issues derivative fi nancial instruments for trading purposes.Derivatives that do not qualify for hedge accounting are, however, accounted for as trading instruments.

Derivative fi nancial instruments are posted initially at cost price. Subsequent to initial posting, derivative fi nancial instruments are refl ected at fair value. The gain or loss on remeasurement to fair value is recognised immediately as gain or loss. Where, however, derivative fi nancial instruments qualify for hedge accounting, refl ection of any resultant gain or loss depends on the nature of the item being hedged (see accounting principle f). The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap on the balance sheet date, taking into account the current interest rates and the current credit worthiness of the swap counterparties. The fair value of forward exchange contracts is their quoted market price on the balance sheet date, i.e. the present value of the quoted forward price.

(f) Hedging

(i) Cash fl ow hedgesIf a derivative fi nancial instrument is designated as a hedge against the variability in the cash fl ows of a recognised asset, a liability, a fi rm commitment not included on the balance sheet or a forecasted transaction, the effective part of the gain or loss on the derivative fi nancial instrument is directly posted in equity.

If the fi rm commitment not included on the balance sheet or forecasted transaction subsequently results in the inclusion of an asset or liability on the balance sheet, the cumulative gain or loss is also included in the acquisition cost or carrying amount of the asset or liability in question. In other cases, the cumulative gain or loss on the hedging instrument is booked in the income statement at the time when the hedged transaction actually affects the result.

The ineffective part of any gain or loss is refl ected immediately in the income statement.

When a derivative or hedge relationship terminates, cumulative gains or losses still remain in equity provided that the hedged transaction is still expected to occur. If the hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss is removed from equity and is immediately refl ected in the income statement.

(ii) Hedging of monetary assets and liabilitiesWhen a derivative fi nancial instrument is used to hedge economically the exposure to the foreign exchange risk of a recognised monetary asset or liability, the gain or loss on the hedging instrument is refl ected in the income statement.


(g) Property, plant and equipment

(i) Owned assets Items of property, plant and equipment are stated at cost price (including the directly allocated costs) less accumulated depreciation and impairment losses (see accounting principle m). The cost of self-produced assets comprises the cost of materials, of direct labour and, where relevant, of the initial estimate of the costs of dismantling and removing the assets and restoring the site at which the assets were located. If parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

(ii) Leased assets Leases under the terms of which the Group assumes virtually all the risks and rewards of ownership are classifi ed as fi nance leases. Fixed assets used and acquired by way of fi nance lease are stated at an amount equal to the lower of fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation (see below) and impairment losses (see accounting principle m). Lease payments are accounted for as described in accounting principle u.

(iii) Subsequent costs The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefi ts embodied in the item will fl ow to the Group and the cost of the item can be assessed reliably. All other costs are refl ected in the income statement as and when they are incurred.

(iv) Depreciation Depreciation is charged to the income statement on a straight-line basis over the estimated useful life of each component of an item of property, plant and equipment. Land is not depreciated. The applied depreciation percentages are as follows:

Administrative buildings 2.00%

Industrial buildings 3.00%

Overhead lines 2.00%

Underground cables 2.00%

Substations (facilities & equipment) 3.00%

Remote control 10.00%

Dispatching 10.00%

Other property, plants and equipment 20.00%

Vehicles 20.00%

Tools and offi ce furniture 10.00%

Hardware 33.00%

Unless it is signifi cant, the residual value is assessed annually.

(v) DerecognitionAn asset is no longer recognised on the balance sheet on disposal or when no future economic benefi ts are expected from its use or disposal. Gains or losses arising from the derecognition of the asset on the balance sheet (which is determined as the difference between the net disposal proceeds and the carrying amount of the asset) are included in the income statement during the year in which the asset was derecognised from the balance sheet.

(h) Intangible assets

(i) Business combinations and goodwill All business combinations are accounted for by applying the purchase method. Goodwill represents amounts arising on the acquisition of subsidiaries and associated companies.

In the case of acquisitions that have occurred since 1 January 2004, goodwill represents the difference between the cost of the acquisition and the net fair value of the acquired identifi able assets. In the case of acquisitions that occurred before the above date (i.e. Elia Asset), goodwill is included on the basis of the assumed cost price, which is equal to the value allocated to under the previously applied Be Gaap. The classifi cation and accounting treatment of business combinations that occurred before 1 January 2004 have not been reconsidered when preparing the Group’s opening IFRS balance sheet at 1 January 2004. Goodwill is stated at cost less any accumulated impairment loss.

Goodwill is allocated cash generating units and is not amortised but tested annually for impairment (see accounting principle m). In the case of associated companies, the carrying amount of goodwill is included in the carrying amount of the investment in the associated company.

Negative goodwill arising on an acquisition is refl ected directly in the income statement.

(ii) Software Software licences acquired by the Group are stated at cost less accumulated amortisation (see below) and impairment losses (see accounting principle m). Expenditure for research activities undertaken with the prospect of developing software within the Group is refl ected in the income statement as expenditure as incurred.

Expenditure for the development phase of software developed within the Group is capitalised if all conditions of IAS 38§57 are met.

1 BE gaap : Belgian Gaap ( Generally accepted accounting principles)


(k) Inventories Inventories (spare parts) are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price less the estimated costs of completion and selling expenses. The cost of inventories is based on the weighted average costs principle.

The costs comprise the expenditure incurred in acquiring the inventories and bringing them to their existing location as well as other charges and transport costs that can be directly attributed to the acquisition of the inventories. Reduction in value to inventories’ net realisable value are booked in the period in which the reduction occurred.

(l) Cash and cash equivalentsCash and cash equivalents comprise cash balances and deposits that can be withdrawn on demand. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash fl ow.

(m) Impairment The carrying amount of the Group’s assets, excluding inventories (see accounting principle k) and deferred taxes (see accounting principle v) are reviewed on each assets balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated (see accounting principle m(i)).

The recoverable amount of goodwill and intangible assets that are not yet available for use is estimated on each balance sheet date. An impairment loss is refl ected whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are refl ected in the income statement. Impairment losses refl ected in respect of cash generating units are allocated fi rst to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of the other assets in the unit on a proportional basis.

After posting an impairment loss, the depreciation costs for the asset are adjusted for future periods in order to post the revised book value of the asset throughout its remained useful life.

(iii) Subsequent expenditure Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefi ts embodied in the specifi c asset to which it relates. All other expenditure is posted as expenditure as and when the expense is incurred.

(iv) Amortisation Amortisation is charged to the income statement on a straight-line basis over the estimated useful life of intangible assets, unless the useful life is indefi nite. Goodwill and intangible assets are tested systematically for impairment on each balance sheet date. Software is amortised from the date it is available for use. The estimated useful lives are as follows:

Licences 5 years

Internally developed software 5 years

(i) Investments (i) Investments in equity securities Investments in equity securities held by the Group are classifi ed as available for sale and are stated at fair value, with any resultant gain or loss refl ected directly in equity, except for impairment losses. When these investments cease to be refl ected on the balance sheet, the cumulative gain or loss previously refl ected directly in equity is refl ected in the income statement.

(j) Trade and other receivables

(i) Construction work in progress Construction work in progress is stated at cost plus profi t recognised to date, less a provision for foreseeable losses and less progress billing. Cost comprises all expenditure directly related to specifi c projects, plus an allocation of fi xed and variable overheads incurred during the Group’s contract activities based on normal operating capacity.

(ii) Lease receivables Receivables from fi nancial leasing agreements are stated at an amount equal to the current value of the future net lease payments at the inception of the contract. The values of the receivables are reduced during the course of the leasing agreement by the amount of the lease payments associated with the reimbursement of the principle amount.

(iii) Trade and other receivablesTrade and other receivables are stated at nominal value less impairment losses (see accounting principle m).


(i) Calculation of recoverable amount The recoverable amount of intangible assets in property, plant and equipment is the greater of their fair value less selling price or value in use. In assessing value in use the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects both the current market assessment of the time value of money and the risks specifi c to the asset.

The Group’s assets do not generate independent cash infl ow and the recoverable amount is therefore determined for the cash-generating unit (i.e. the entire high-voltage network) to which the asset belongs. This is also the level at which the Group administers its goodwill and receives the economic advantages of acquired goodwill.

(ii) Reversals of impairment An impairment loss in respect of goodwill is not reversed.

In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been refl ected.

(n) Share capital

(i) Transaction costs Transaction costs in respect of the issuing of capital are deducted from the capital received.

(ii) Dividends Dividends are recognised as a liability in the period in which they are declared.

(o) Interest-bearing loans Interest-bearing loans are posted initially at cost less attributable transaction costs. Subsequent to initial posting, interest-bearing loans are stated at amortised cost with any difference between cost and redemption value being refl ected in the income statement over the period of the loans on an effective interest basis.

(p) Employee benefi ts (i) Defi ned contribution plans Obligations related to contributions to defi ned contribution pension plans are posted as an expense in the income statement as incurred.

(ii) Defi ned benefi t plans The Group’s net obligation in respect of defi ned benefi t pension plans is calculated separately for each plan by estimating the amount of future benefi t that employees have earned in return for their service in the current and prior periods; that benefi t is discounted to determine its present value, and the fair value of any plan assets is deducted. The discount rate is the yield at the balance sheet date on AAA credit rated bonds that have maturity dates approximate to the terms of the Group’s obligations.

When the benefi ts of a plan are improved, the portion of the increased benefi t relating to past service by employees is posted as an expense in the income statement on a straight-line basis over the average period until the benefi ts become vested. To the extent that the benefi ts are vested immediately, the expense is refl ected immediately in the income statement.

All actuarial gains and losses as at 1 January 2004, the date of transition to IFRS, were posted in the opening reserves. In respect of actuarial gains and losses that have arisen since 1 January 2004 in calculating the Group’s obligation in respect of a plan, to the extent that any cumulative unrecognised actuarial gain or loss exceeds 10% of the greater of the current value of the defi ned benefi t obligation and the fair value of plan assets, that portion is refl ected in the income statement over the expected average remaining working lives of the employees participating in the plan. Otherwise, the actuarial gain or loss is not refl ected. Where the calculation results in a benefi t to the Group, the recognised asset is limited to the net total of any unrecognised actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

(iii) Long-term service benefi ts The Group’s net obligation in respect of long-term service benefi ts, other than pension plans, is the amount of future benefi t that employees have earned in return for their service in the current and prior periods. The obligation is discounted to its present value and the fair value of any related assets is deducted. The discount rate is the yield on the balance sheet date on AAA credit rated bonds that have maturity dates approximate to the terms of the Group’s obligations.


(q) Provisions A provision is refl ected in the balance sheet when the Group has a current legal or constructive obligation as a result of a past event and it is probable that an outfl ow of economic benefi ts will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash fl ows at a pre-tax rate that refl ects the current market assessment of the time value of money and, where appropriate, of the risks specifi c to the liability.

If the Group expects to receive compensation for some or all of the provisions, for example pursuant to an insurance contract, the compensation is only included as a separate asset if it is virtually certain that the compensation will be awarded. The cost connected to a provision is included in the income statement net of any compensation.

(r) Trade and other payables Trade and other payables are stated at cost.

(s) Capital subsidiesCapital subsidies are related to tangible fi xed assets and are classifi ed as other amounts payable. These amounts payable are included in the result in accordance with the expected useful life of the asset in question.

(t) Revenue

(i) Goods sold and services renderedRevenue from services and the sale of goods is refl ected in the income statement when the signifi cant risks and rewards of ownership have been transferred to the buyer.

(ii) Construction contracts in progress As soon as the outcome of a construction contract can be estimated reliably, contract revenue and expenses are refl ected in the income statement in proportion to the stage of completion of the contract. An expected loss on a contract is refl ected immediately in the income statement.

(u) Expenses

(i) Operating lease payments Payments made under operating leases are refl ected in the income statement on a straight-line basis over the term of the lease. Lease incentives received to conclude the leasing agreement are refl ected in the income statement as an integral part of the total lease expense.

(ii) Finance lease payments Payments made under fi nance lease payments are apportioned between the fi nancing charge and the reduction of the outstanding liability. The fi nance charge is allocated to each period of the total lease term so as to produce a constant periodic rate of interest over the remaining balance of the liability.

(iii) Net fi nancing expenses Net fi nancing expenses comprise interest payable on borrowings calculated using the effective interest rate method and foreign currency exchange rate gains and losses.

(v) Income tax Income tax on the gain or loss for the year comprises current and deferred tax. Income tax is refl ected in the income statement, except to the extent that it relates to items refl ected directly in equity.

Current tax is the expected tax payable on the taxable income for the year, calculated using tax rates enacted or substantially enacted on the balance sheet date, and any adjustments to tax payable in respect of previous years.

The provision for deferred tax liabilities is formed using the balance sheet liability method, whereby a provision is formed for temporary differences between the carrying amounts of assets and liabilities for fi nancial reporting purposes and the amounts used for taxation purposes. No provision is formed for the following temporary differences: goodwill not deductible for tax purposes, the initial posting of assets or liabilities that affect neither accounting nor taxable profi t, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of the provision for deferred tax is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantially enacted on the balance sheet date.


A deferred tax asset is recognised only to the extent that it is probable that future taxable profi ts will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefi t will be realised.

Additional income taxes that arise from the distribution of dividends are refl ected at the same time as the liability to pay the related dividend.

(w) Segment reporting A segment is a clearly distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment) and which is subject to risks and rewards that are different from those of other segments.

The company does not use segment reporting since the Group is a company that generates revenue from one activity, i.e. federal electricity transmission system operator in Belgium. Furthermore, the Group only operates in one geographical area (Belgium) where there are no differences between the different Regions as regards risks and returns.


3. Operating income

(in million €) 2006 2005

Connection revenues 29.4 28.5

Grid use revenues 513.0 506.9

Ancillary services revenues 134.8 150.3

International revenues 62.7 29.4

Other revenues 31.6 33.8

Subtotal operating income 771.5 748.9

Deviations from approved budget (settlement mechanism) -60.0 -34.7

Total operating income 711.5 714.2

The total consolidated operating income (€ 711.5 million) was similar to that for 2005 (€ 714.2 million).

Income from connections to the grid increased slightly (+3.2%) due to a number of new connections for large industrial users in 2006.

Income from use of the grid remained more or less the same despite the greater volume of electricity (+ 0.8%) transmitted through the grid, following a decrease of the transmission tariffs by approximately 4% compared with 2005.Both household and professional consumption increased. This can be partly explained by unusual weather conditions (the fi rst months of 2006 were colder than usual and the following months hotter than usual).

The income from ancillary services fell (-10.3%) in line with decreased purchases in 2006 as compared to 2005 (note 4.1).

International income increased sharply (+113.3%) as explicit capacity auctioning began on the south border in 2006 (and the capacity itself was increased by 700 to 1000 MW at the end of 2005). In 2006, auctioning generated € 30.8 million more income than had been forecast.

The other operating income decreased (-6.5%) and contain the following items:

(in million €) 2006 2005

Own production 11.6 12.4

Bonus previous year 2.3 3.6

Optimal use of assets 8.3 7.8

Services and technical expertise 5.3 1.6

Other 4.1 8.4

Total various revenues 31.6 33.8

The “Deviations from approved budget” (settlement mechanism) item refers to surplus income generated by operations above the budget approved by the regulator. This € 60 million surplus will be returned in the form of a future reduction in transmission tariffs.

Income was € 46.7 million higher than forecast in the budget (mainly due to surplus income generated by capacity auctions at the borders, higher volume of transmission via the grid than originally forecast, and a number of adjustments with respect

to 2005). Expenditure was € 13.3 million lower than budgetted (mainly due to lower taxation, personnel and services costs, and various goods).

€ 3.8 million of the 2006 surplus has already been deducted from the 2007 transmission tariffs with the consent of the federal regulator CREG.


(in million €) 2006 2005

SOURCES

1. Source of differences in the fi nancial year

Surplus income from grid access 11.6 7.3

Surplus in international income 34.5 9.2

Surplus in other income 0.6 4.1

Total difference in income at the end of the fi nancial year 46.7 20.6

Amount saved on budget for purchase of ancillary services 12.9 7.4

Amount saved on budget for sundry operating charges -1.3 -4.6

Amount saved on budget for fi nancial expenses -1.6 10.9

Total difference in operating charges 10.0 13.7

Exceptional result 0.5 1.3

Total adjustment of regulated profi t 2.8 -0.9

Total difference income 60.0 34.7

2. CREG decision

Rejected costs 2005 0.7

Allocation of 50% of the 2005 bonus to Elia -2.3

Decrease RAB - working capital 4.4

Charges 2005 incorporated in 2006 3.8

Total impact of the CREG decision 6.6

Federal levy 4th quarter 2005 -7.4

TOTAL OF DIFFERENCES IN RESULTS 60.0 33.9

USE

3. Allocation to future tariffs

Allocation of 50% of the 2005 bonus for tariff reduction 2007 2.3

Tariff reduction 2007 31.6

Tariff reduction 2008




TOTAL OF FUTURE ALLOCATIONS 33.9

The table below provides information about the ‘Settlement mechanism’:

CREG’s fi nal decision on 7 November 2006 concerning the balance for the 2005 settlement mechanism resulted in the allocation of € 33.9 million for tariff reductions in 2007.

CREG’s decision covered the following:

• additional charges for fi nancial year 2005 of € 0.7 million before taxes, to be borne by Elia during fi nancial year 2006;

• a reduction in the fair remuneration in 2005 of € 2.8 million after taxes because CREG included a € 250-million long-term loan in the working capital, which consequently was also deducted from the RAB;

• a bonus of € 4.5 million for fi nancial year 2005, 50% of which, i.e. € 2.25 million before taxes, was awarded to Elia in 2006 and the remaining 50%, or € 2.25 million, will be deducted from tariffs in 2007;

• the remaining surplus for 2005 of € 31.6 million will be used for a one-off tariff reduction in 2007.

As a result of CREG’s decision, the average value of the Regulated Asset Base is down from € 3,371 million in 2005 to € 3,246.

Taking all of the above-mentioned elements into account, the negative impact on the net profi t for 2006 totals € 1.8 million.Elia has lodged an appeal against this decision with the Brussels Court of Appeal.


4. Operating charges

4.1. Cost of materials, services and other goods

(in million €) 2006 2005

Purchase of ancillary services 137.8 138.9

Raw materials, consumables and goods for resale 7.0 6.2

Services and other goods (excl. purchase of ancillary services) 139.2 137.8

Total 284.0 282.9

Notwithstanding rising electricity prices, Elia’s optimum management process and effi cient procurement policy allowed the company to save €1.1 million in the purchase of ancillary services. The other items show a normal increase of 1.5%, primarily due to an increase in ETSO costs.

4.2. Personnel expenses

(in million €) 2006 2005

Wages 76.2 75.0

Social security costs 23.1 21.8

Increase of the obligation for the defi ned benefi t plans 7.1 7.7

Contribution to the defi ned benefi t plans and other liabilities 7.3 8.6

Other social liabilities 0.0 0.9

Other social security expenses 2.8 3.2

Total

Full-time equivalents average 1,215 1,213.4

Personnel costs are in line with the previous fi nancial year.Due to the natural discharge of a signifi cant population, concerted efforts were made to keep the number of full-time equivalents in line with the target organisation structure despite the shortage on the labour market.

4.3. Depreciation, reductions in value and changes in provisions

(in million €) 2006 2005

Depreciations tangible fi xed assets 86.4 82.4

Depreciations intangible fi xed assets 1.9 0.8

Amounts written off stock and trade debtors 0.7 0.9

Provision litigation 1.5 1.2

Provision environment -1.6 -1.2

Other provisions -0.4 0.0

Total 88.5 84.1

Depreciations in tangible fi xed assets increased by 6.1% due to close monitoring of the commissioning of technical installations.

A brief description of the provisions and underlying fl uctuations is provided under Note 17.


6. Income taxes

Included in the income statements

The consolidated income statement includes the following taxes:

(in million €) 2006 2005

Current year’s tax expense 27.7 38.2

Adjustments prior years -1.9 -0.1

Total tax expenses 25.8 38.1

Deferred taxe expense

Origination and reversal of temporary differences 4.0 3.4

Total deferred taxe expense 4.0 3.4

Total income taxes in income statement 29.8 41.5

The €10.5 million decrease under ‘Current year’s tax expense’ is primarily due to the deduction of notional interest that, under certain conditions, makes it possible to reduce the taxable result. This resulted in a saving of € 6.3 million for the Group.

4.4. Other operating charges

(in million €) 2006 2005

Taxes other than income taxes 11.1 13.1

Capital loss on disposal of fi xed assets 2.5 2.5

Bonus-malus settlement previous year 4.9 2.6

Total 18.5 18.2

Other operating charges are in line with the previous fi nancial year, the variation under ‘Bonus-malus settlement previous year’ is due to the application of the settlement mechanism as described in the chapter on Regulation and Tariffs.

5. Financial result

(in million €) 2006 2005

Financial income 3.1 1.9

Interest income 3.1 1.7

Other fi nancial income 0.2

Financial charges 101.4 95.7

Interest revenu 101.1 93.8

Other fi nancial charges 0.3 1.9

Total fi nancial result -98.3 -93.8

Financial income is up €1.2 million due to the interest earned from temporary cash surpluses invested with fi nancial institutions.

Financial charges of € 101.4 million mainly include interest connected with long-term loans. The € 5.7 million increase is primarily due to rising interest rates on loans with variable rates of interests.


Reconciliation of effective tax rateReconciliation of the tax burden with the profi t before taxes against the statutory tax rate for taxes on profi t against the actual tax rate for the Group for the years ending on 31 December is as follows:

(in million €) 2006 2005

Profi t before taxes 105.7 117.9

Income tax using in the domestic corporation tax rate 33.99% 35.9 33.99% 40.1

Expenses disallowed for tax purposes 1.4 1.0

Other tax free income mainly related to intercompany dividend 0.2 0.2

Effect of the foreign tax rate -0.1 -0.2

Adjustments prior years -1.9 -0.1

Tax losses 0.1

Use of notional interest charge -6.3

Others 0.6 0.4

Total income taxe expenses in income statement 29.8 41.5

Deferred tax assets recognised through equity

(in million €) 2006 2005

Concerning derivatives 5.6 2.1

Total 5.6 2.1

7. Tangible fi xed assets

(in million €) 2006 2005

High-voltage substations and transformers 1,044.0 1,011.2

Lines and cables 765.2 748.5

Land on which substations, lines and cables are located 58.1 56.6

Facilities used for network operation 32.6 35.0

Administrative buildings, furnishings and vehicles 43.4 40.0

Total tangible fi xed assets 1,943.3 1,891.3

95.3% of the additional € 141.4 million invested in 2006 were allocated to new projects to enhance and replace parts of the Elia grid, and the acquisition of the 70-kV facilities from AIESH at a total cost of € 1.2 million. The remaining 4.7% was primarily spent on furnishings, hardware and vehicles.

Tangible fi xed assets under constructionTangible fi xed assets under construction totalled € 181.9 million as at 31 December 2006, compared to € 194.1 million as at 31 December 2005 and are presented in next table.


Movements in the fi scal year

(in million €)Land and buildings

Machinery and

equipment

Furniture and vehicules

Other tangible assets

Assets under construction

Total

Acquisition value

Balance at 1 January 2005 91.1 3,224.9 148.3 8.2 274.3 3,746.8

Acquired by business combinations

Other acquisition 5.2 37.5 2.1 0.5 152.1 197.4

Disposals -0.9 -9.4 -32.8 -43.1

Transfers from one heading to another 4.8 228.0 -0.5 -232.3

Other changes

Exchange gains/losses

Balance at 31 December 2005 100.2 3,481.0 117.1 8.7 194.1 3,901.1

Balance at 1 January 2006 100.2 3,481.0 117.1 8.7 194.1 3,901.1


Other acquisition 1.5 9.4 3.1 1.3 127.8 143.1

Disposals 0.0 -13.9 -3.7 -17.6

Transfers from one heading to another 0.4 139.6 -140.0

Other changes

Exchange gains/losses

Balance at 31 December 2006 102.1 3,616.1 116.5 10.0 181.9 4,026.6

Depreciation and impairment

Balance at 1 January 2005 -15.7 -1,786.4 -142.3 -4.7 -0.4 -1,949.5

Dépreciation of the period -0.8 -78.7 -1.7 -1.2 -82.4


Other acquisitions -17.1 -17.1

Disposals 0.2 6.2 32.7 39.1

Transfers from one heading to another -1.8 0.9 0.5 0.4

Other changes 0.1 0.1

Exchange rate difference

Balance at 31 December 2005 -18.1 -1,875.0 -110.8 -5.9 -2,009.8

Balance at 1 January 2006 -18.1 -1,875.0 -110.8 -5.9 -2,009.8

Dépreciation of the period -0.9 -82.3 -1.9 -1.3 -86.4

Acquisitions from third parties -1.8 -1.8

Written down and disposals 11.0 3.7 14.7

Transfers from one heading to another

Other changes

Exchange rate difference

Balance at 31 December 2006 -19.0 -1,948.1 -109.0 -7.2 -2,083.3

Book valueAt 1 January 2005 75.4 1,438.5 6.0 3.5 273.9 1,797.3

At 31 December 2005 82.1 1,606.0 6.3 2.8 194.1 1,891.3

At 1 January 2006 82.1 1,606.0 6.3 2.8 194.1 1,891.3

At 31 December 2006 83.1 1,668.1 7.5 2.8 181.9 1,943.3


8. Intangible fi xed assets

(in million €) Goodwill Software Total

Acquisition cost 1,707.8 1.7 1,709.5

Balance at 1 January 2005 1,707.8 1.7 1,709.5

Obtained by business combinations

Acquired, others - own construction capitalised 5.0 5.0

Balance at 31 December 2005 1,707.8 6.7 1,714.5

Balance at 1 January 2006 1,707.8 6.7 1,714.5

Obtained by business combinations

Acquired, others - own construction capitalised 6.7 6.7

Balance at 31 December 2006 1,707.8 13.4 1,721.2

Depreciation and amounts written offBalance at 1 January 2005 -0.2 -0.2

Depreciation fi scal year -0.8 -0.8

Balance at 31 December 2005 -1.0 -1.0 -1.0

Balance at 1 January 2006 -1.0 -1.0 -1.0

Depreciation -1.9 -1.9

Balance at 31 December 2006 -2.9 -2.9

Book valueAt 1 January 2005 1,707.8 1.5 1,709.3

At 31 December 2005 1,707.8 5.7 1,713.4

At 1 January 2006 1,707.8 5.7 1,713.4

At 31 December 2006 1,707.8 10.5 1,718.3

Impairment test for cash-generating units containing goodwillThe goodwill generated by the acquisition of Elia Asset by Elia System Operator in 2002 and the goodwill generated by the acquisition of Bel Engineering in 2004 were classifi ed as one cash-fl ow generating unit for the impairment test, since the income and charges were generated by one activity.The impairment test was conducted by an independent organisation and was based on four different valuation methods:

1. Discounting of future cash fl ows.2. Discounting of future dividends.3. Comparison between previously mentioned impairment

methods and those used by some comparable Western European listed companies, such as Fluxys, Terna, National Grid, Red Electrica España, Enagas and Snam Rete Gas.

4. Market valuation based on Elia’s share price.

The independent analysis didn’t result in an impairment loss on goodwill in 2006.


9. Investments in associates

Investments in associated companiesThe Group has a 22.17% stake (€ 0.5 million) in HGRT. Elia’s share in HGRT’s loss for the 2005 fi scal year totalled € 1,330.2.

10. Inventories

(in million €) 2006 2005

Raw materials and consumables 22.0 24.1

Amounts written off -9.1 -11.5

Total 12.9 12.6

The warehouse primarily stores replacement and spare parts for Elia facilities; the total value of these parts is in line with the value of parts for the previous fi nancial year.

11. Trade and other receivables

(in million €) 2006 2005

Projects for third parties 0.2 0.8

Other amounts receivables and advance payments

96.9 84.0

Levies

VAT, other taxes 2.8 2.0

Others 6.1 7.0

Total 106.0 93.8

A sharp fall in the number of open customer invoices together with the increase resulting from the inclusion of € 20.9 million in «invoices to be drawn up», in connection with the new market coupling mechanism launched in 2006, led to an increase of € 12.2 million under amounts receivable.

Amounts receivable are recorded after impairment losses have been deducted. No transfers or reversals of impairments were posted during fi nancial year 2006.

12. Cash and cash equivalents

(in million €) 2006 2005

Balance at bank 2.3 3.2

Immediatly claimables deposits 42.7 46.2

Total 45.0 49.4

Short-term deposits are invested for periods ranging from one to three months depending on the Group’s immediate cash requirements and earn interest in accordance with the interest rates for the short-term deposits. Bank accounts earn interest in line with the variable rates of interest on the basis of daily bank deposit interest.

13. Deferred charges and accrued income

(in million €) 2006 2005

Revenue use of the grid, to be charged next year

47.4 55.5

Other revenues - to be charged next year 0.2

Costs to be charged next year 3.2 3.1

Total 50.6 58.8


14. Shareholders’ equity

Capital and share premiumsOn 31 December 2006, Elia System Operator SA’s capital was € 1.2 billion (fully paid up) and comprised of 47,898,052 no par value shares.

Shares 2006 2005

Outstanding on 1 January 47,898,052 41,979,640

Issued against cash payment 5,918,412

Outstanding on 31 December - paid 47,898,052 47,898,052

Retained earnings In accordance with Belgian legislation, 5% of the parent company’s statutory net profi t must be transferred to a legal reserve each year until the legal reserve represents 10% of the capital. On 31 December 2006 and 31 December 2005, the Group’s legal reserve totalled € 14.6 million and € 11.2 million respectively, and was posted under revenue reserves. This reserve cannot usually be distributed to shareholders, the only exception being liquidation.The board of directors can propose the payment of a dividend to shareholders up to a maximum of the available reserves and the profi t carried forward from previous fi nancial years for the parent company, including the profi t from the fi nancial year closed. Shareholders must approve the dividend payment during the annual general meeting for shareholders.

Hedging reserveThe hedging reserve comprises the effective portion of the cumulative net movement in the fair value of cash fl ow hedging instruments in respect of hedged transactions that have not yet occurred.

DividendAfter the balance sheet date, the board of directors puts forward the dividend proposal stated below.

(in million €) 2006 2005

Per ordinary share entitled to dividend 1.28 1.27

On 9 May 2006, the shareholders approved a gross dividend of € 1.27 per share (€ 0.95 per share without VVPR strip or € 1.08 per share with VVPR strip after the deduction of 25% Belgian withholding tax), giving a total gross dividend of € 60.83 million.

This year, the board of directors will propose on 8 May 2007 a gross dividend per share of € 1.28. This dividend is subject to approval by shareholders at the annual general meeting on 8 May 2007 and was not included as an liability in the consolidated fi nancial statements for the Elia Group prepared under IFRS.

The dividend is included in the statutory annual accounts under Belgian accounting standards. The total dividend will, on the basis of the number of shares issued on 15 February 2007, total € 61.3 million.

15. Financial debts

Elia manages its debts and general fi nancing strategy through a combination of short, medium and long-term debts and interest rate swaps. The Group fi nances its daily working capital requirement, if necessary, via various allocated or non-allocated credit lines. Medium-term loans usually have an interest rate that is based on the inter-bank interest rate on the date on which they are taken out increased by a prior-arranged margin.

Long term fi nancial debts 2006 2005

Shareholders’ loan tranche A 495.8 495.8

Shareholders’ loan tranche B2

Shareholders’ loan tranche B3 387.7 387.7

Other shareholders loans

Financial institutions 200.0 250.0

Eurobond issues (1) 996.3 996.0

European Investment Bank 40.0

Total 2,119.8 2,129.5

(1) Actual book value of Eurobond issue consisting of two tranches, with a aggregate nominal value of € 1,000 million.

Long-term fi nancial debts total € 2,119.8 million and fell by € 10 million. The average duration of long-term debts is 10 years and, until now, these have been taken out in euro which means that there are no fi nancial exchange rate risks.

In June 2006, the € 250-million loan from a fi nancial institute was replaced with a € 200-million long-term loan and an initial tranche of € 40 million was also drawn down on the credit facility already granted by the European Investment Bank (EIB) in 2005 for a period of 10 years.

The table below lists the maturity dates and conditions for the loans concerned:


Current proportion of the interest

(in million €)

Maturity Amount Interest rate before

hedging

Interest rate after

hedging

Fixed Variable

Shareholders Loan tranche A 2022 495.8 4.16% 5.33% 100.00%

Shareholders Loan tranche B3 2009 387.7 3.65% 3.79% 12.90% 87.10%

Eurobond issues (1) 2014 498.0 4.75% 4.75% 100.00%

Eurobond issues (1) 2019 498.3 5.25% 5.25% 100.00%

Financial institution 2008 200.0 3.06% 3.06% 100.00%

European Investment Bank 2016 40.0 4.27% 4.27% 100.00%

Total 2,119.8 72.40% 27.60%

(1) Actual book value of Eurobond issue consisting of two tranches, with a aggregate nominal value of € 1,000 million.

Credit line facilities

Amount

(in million €)Maturity Available

amountAverage basic interest used not used

European Investment Bank 2008 125 Euribor + 0.05 % 40 85

Uncommitted credit line facility 570Euribor + margin when

closing the deal570

Total 695 40 655

16. Employee benefi ts

Description of the various employee benefi t plans

Defi ned benefi t pension: 1. By virtue of a collective agreement of 2 May 1952, staffs

receives specifi c benefi ts, called pension supplements, under which, as retired persons, they are entitled (following a full career) to overall funds equal to 75% of their annual income, in accordance with the relevant legal provisions. The supplements are partially revertible to the widow or widower and, where necessary, can be supplemented by orphan benefi t. If the individual dies while at work, the additional survivors’ supplements are transferred to the benefi ciaries.

In accordance with the terms of the above-mentioned collective agreement, the benefi ts must meet the following three criteria: - individuals only become entitled to a pension supplement upon

reaching retirement age; - they are booked in operating charges in the same way as

salaries;- the benefi ts granted are linked to Elia’s operating result.

There is neither an external pension fund, nor group insurance for these liabilities, which means that no reserves are constituted with third parties.

2. “Defi ned benefi t” pension scheme Operating staff hired since 1 January 1993 and all managerial/executive staff hired prior to 1 May 1999, are granted the same guarantees via a ‘defi ned benefi t’ pension scheme, which is funded by individual and employer contributions as set out in the Belgian law. Staff employed prior to 1993 has since been given the option of signing up to the scheme, more than 90% of the active staff members participated in this pension scheme by 1997.

The amounts are paid to Elgabel, Pensiobel and to the insurance company Contassur. The three entities work together as the pension fund for the electricity and gas sector.

Early retirement: If certain conditions are met, employees may leave Elia before they are 60 years old.

Other employee benefi ts: In addition to the pension schemes described above, employee benefi ts also include other non-statutory benefi ts, such as:

- a jubilee premium paid to workers who have been with the company for 25, 30 and 35 years;

- cover of medical costs and hospitalisation;- Reduction on gas and electricity consumption.

Other provisions Other benefi ts consist of a provision for restructuring, which plans for future expenses for career breaks and time credits.


Overview of employee benefi ts

(in million €) 2006 2005

Defi ned benefi t plans 107.0 115.1

Early retirement plan 17.8 17.7

Other employee benefi ts 43.7 42.8

Subtotal 168.5 175.6

Others (restructuring) 3.5 3.6

Total provisions for employee benefi ts 172.0 179.2

Change in benefi t obligation

Projected benefi t obligation at beginning of period -325.7 -310.1

Service cost -7.8 -7.2

Interest cost -12.5 -14.0

Plan participants contributions -0.8 -0.8

Special termination benefi ts 0.8

Actuarial gain (loss) 5.2 -16.5

Benefi ts paid 18.4 22.9

Projected benefi t obligation at end of period -322.4 -325.7

Change in plan assets

Fair value of plan assets at beginning of period 127.1 122.9

Expected (not actual) return on plan assets 6.6 6.4

Company contributions 20.2 20.9

Plan participants contributions 0.8 0.8

Actuarial gain (loss) 6.8 -1.0

Benefi ts paid -18.4 -22.9

Fair value of plan assets at end of period 143.1 127.1

Funded status

Funded status of the plan -179.3 -198.6

Unrecognized actuarial gain and loss 10.9 23.0

Net amount recognized (accrued) / prepaid -168.5 -175.6

Net amount recognized (accrued) -169.7 -176.8

Net amount recognized prepaid 1.2 1.2

Net periodic pension cost

Service cost -7.8 -7.2

Interest cost -12.5 -14.0

Plan participants contributions -0.8 -0.8

Expected return on plan assets 6.6 6.4

Amortization of actuarial net gain (loss) -0.2 1.6

Special termination benefi ts 0.8

Net periodic benefi t cost -13.9 -14.1

Minimum liability adjustment

(Accrued) prepaid benefi t cost -168.5 -175.6

(Accrued) benefi t cost -169.7 -176.8

Prepaid benefi t cost 1.2 1.2


Actuarial assumptions

(in million €) 2006 2005

Infl ation rate 1.90% 1.90%

Interest rate (not including infl ation) 4.10% 1.90%

Salary increase rate (not including infl ation) 2.00% 0.02%

Yield rate on deposits (not including infl ation) 5.00% 3.10%

Interest appreciation rate (not including infl ation) 0.00% 0.00%

Length of future services 16 16

Rate of increase of health benefi ts (retirement and current) 2.60% 2.90%

Inclusion in future tariffs Elia has specifi c obligations as regards employee benefi ts and similar commitments. In accordance with a study report issued by CREG, it is virtually certain that some of the € 91.2 million total employee benefi ts will be accepted by CREG as reasonable charges and will therefore be passed on in future tariffs. Since this amount can be recovered by Elia from third parties, in accordance with IFRS

principles (IAS 19), it will be classifi ed as an asset item. The amount is included under accrued charges and deferred income on the liabilities side (see note 19).

17. Provisions for risks, liabilities and charges

(in million €) Environment Litigation Other Total

Balance at 1 January 2005 12.2 2.0 0.3 14.5

During fi nancial year: increase in provisions 1.4 1.4

During fi nancial year: usage of provisions -1.1 -0.2 -1.3

During fi nancial year: reversals of provisions -0.2 -0.2

Balance at 31 December 2005 10.9 3.2 0.3 14.4

Balance at 1 January 2006 10.9 3.2 0.3 14.4

During fi nancial year: increase in provisions 0.2 1.4 0.0 1.6

During fi nancial year: usage of provisions -0.9 -0.1 -0.3 -1.3

During fi nancial year: reversals of provisions -0.7 -0.7

Balance at 31 December 2006 9.5 4.5 14.0

Long term portion 3.1 3.1

Short term portion 9.5 1.4 10.9


Environmental obligations include sites located in the Flanders Region, where, in addition to a decontamination obligation, Elia also bears ultimate responsibility for decontamination costs under previous ownership transfers. Estimates include costs for setting up the decontamination project, monitoring and the actual decontamination costs. During 2006, provisions fell by € 0.5 million, primarily as a result of spending on works carried out.

For sites located in the Brussels Capital Region, Elia has already submitted soil fi les and carried out spot soil checks. The results did not lead to the posting of additional provisions.

No implementing decisions are available for the Region of Wallonia. As a result, it is not possible to reliably estimate any future clean-up costs for potentially polluted areas concerned in an objective and transparent manner (Environment chapter).

Besides, at the end of 2005 this environmental provision also included costs to remove PCBs from technical facilities and the cost of relaying the site after a facility has been dismantled, as enforced by local authorities. This provision was used for a cost of € 1 million in 2006.

The provision for litigation is based on the management’s best estimate for probable charges incurred as a result of cases pending in which legal proceedings have been instituted against Elia by a third party or in which Elia is involved in a legal dispute.

Provisions for ‘other’ included the requirement to return buildings to the state described in the initial inventory at the end of a rental contract and was used completely during fi nancial year 2006.The expected timing of the related cash outfl ow depends on the progress and duration of the associated procedures.

18. Trade and other payables

(in million €) 2006 2005

Other trade debts 89.8 51.9

VAT, other taxes 7.4 6.6

Renumeration and social security 15.6 18.1

Dividend 0.5

Levies 1.2 1.4

Other 2.1 1.4

Total 116.6 79.4

Fluctuation of € 37,2 million is basically a consequence of the start of market coupling in 2006 which resulted in the booking of € 20.3 million ‘invoices to be received’.

19. Accrued charges and deferred income

(in million €) 2006 2005

Accrued charges: fi nancial debts 36.0 32.2

Other accrued charges and deferred income 6.7 8.6

Balance settlement mechanism 116.3 105.5

Total accrued charges and deferred income 159.0 146.3


Detail settlement mechanism

(in million €) 2006 2005

Balance fi nancial year 2003 36.4 72.9



Balance fi nancial year 2006 56.2

Discount future tariffs 207.5 194.7

Amount receivable as a result of the application of IAS 19 -91.2 -89.2

Balance settlement mechanism 116.3 105.5

A detailed description of this mechanism can be found in the chapter Regulatory framework and tariffs.

On 31 December 2006, the accrued charges and deferred income totalled € 159 million and, in addition to the normal costs to be calculated and profi t to be carried over (€ 42.7 million), included the remaining balance of € 147.5 million from the settlement mechanism for 2003, 2004 and 2005 that still needs to be applied for future tariffs as well as the € 3.8 million surplus in 2006 that,

with the approval of federal regulator CREG, was deducted from transmission tariffs for 2007, as well as the sum that resulted in receivables under the application of IAS 19 (see Note 16). When the CREG takes its fi nal decision, expected in 2007, it will decide what should be done with the remaining € 56.2 million surplus from 2006.

20. Deferred tax assets and liabilities

Deferred tax assets and liabilities refl ected in the balance sheet

Assets Liabilities

(in million €) 2006 2005 2006 2005

Tangible fi xed assets -0.3 -0.5

Intangible fi xed assets -3.1 -1.9

Inventories -0.9 -1.1

Interest bearing loans and other long term fi nancial liabilities

0.3 5.8

Employee benefi ts 55.6 57.7

Government grants, paid in advance

Provisions 0.1

Other items -30.3 -29.9 4.6 4.0

Tax receivables / payables

Balance of the tax reveivables and payables

Net tax receivables (-) / payables 21.3 30.2 4.6 4.0


(in million €) 1 January 2005 Refl ected in results

Refl ected in shareholders’

equity

31 December 2005

Tangible fi xed assets -0.6 0.1 -0.5

Intangible fi xed assets -0.5 -1.4 -1.9

Other fi nancial assets 0.0

Inventories -1.4 0.4 -1.0

Interest bearing loans and otherlong term fi nancial liabilities

-0.6 6.3 5.7

Employee benefi ts 60.4 -2.6 57.8

Provisions -0.1 0.1

Other items -33.9 -33.9

Total 23.3 -3.4 6.3 26.2

(in million €) 1 January 2006 Refl ected in results

Refl ected in shareholders’

equity

31 December 2006

Tangible fi xed assets -0.5 0.3 -0.2

Intangible fi xed assets -1.9 -1.2 -3.1

Other fi nancial assets

Inventories -1.0 0.1 -0.9

Interest bearing loans and otherlong term fi nancial liabilities

5.7 -5.6 0.2

Employee benefi ts 57.8 -2.2 55.6

Provisions -0.1 -0.1

Other items -33.9 -0.9 -34.8

Total 26.2 -4.0 -5.6 16.7

21. Share-based payments

Discounted share purchase plansIn 2005 the Group launched a discounted share purchase plan.As a result of this plan, Elia sold 258,035 shares to its personnel, discounted at 16.66% compared to subscription price at the stock exchange market introduction (€ 26.50 per share).

There was no discounted share purchase plan for Elia personnel in 2006.

22. Financial instruments

RisksIn the context of normal business operations, the Group faces credit, interest and foreign currency exchange rate risks. The risk of fl uctuations in foreign exchange rates is virtually non existent for Elia. The risk of fl uctuations in interest rates is hedged using derivative fi nancial instruments.

Credit riskCredit risk is the risk that one of the parties to a contract fails to meet its obligations as regards the fi nancial instrument, thereby resulting in a potential loss for the other party. The Group does not ask for any guarantees concerning fi nancial assets.

The management has established a credit policy. Credit risk is continually monitored and consequently for certain contracts appropriate bank guarantees must be submitted.

On the balance sheet date there were no substantial concentrations of credit risks. The maximum credit risk is the balance sheet total of each fi nancial asset, including derivate fi nancial instruments.

Foreign currency exchange rate risksThe Group is not exposed to any signifi cant foreign currency exchange rate risk, neither from transactions nor from changing foreign currencies into euro, since it has no foreign investments or activities and since less than 1% of its costs are expressed in currencies other than the euro.

Changes in temporary differences during the fi nancial year


Interest-rate riskHedgingThe objective of the Group’s policy is to ensure that between 40% and 70% of the interest rate risk on borrowings are based on a fi xed interest rate. The Group has undertaken interest rate swaps in euro in order to, within the Group’s policy, achieve a good balance between the exposure to a fi xed interest rate and a variable interest rate. The swaps will expire in the next few years, which means their terms match the loans to which they are linked. The latter have a swap rate, which varies between 4.05% and 4.37%. On 31 December 2006, the Group had interest rate swaps with a contracted reference amount of € 545.8 million.

The Group classifi es interest rate swaps as cash fl ow hedging and states them at fair value. As at 1 January 2005, the fair value of the swaps was corrected by adjusting the opening balance of the hedging reserve on this date.

The net fair value of the swaps as at 31 December 2006 totalled € 2.3 million and was entirely composed of liabilities. The amounts are included as derivates at fair value.

Sensitivity analysisIn its management of the interest rate risk, the Group endeavours to limit the effect of short-term fl uctuations on the Group result. In the longer term however, persistent changes in the interest rates will affect the consolidated result.

Derivative fi nancial instruments In accordance with the Belgian GAAP, derivatives are not included by the Group. Under IFRS, derivative fi nancial instruments are to be included at fair value.

Fair valueThe summary below shows the fair values and carrying amounts of the fi nancial instruments.

Nominal or contractual

amount

Fair value Nominal or contractual

amount

Fair value

(in million €)2006 2006 2005 2005

Interest rate swaps 545.8 2.3 545.8 18.7

Assets

Liabilities 545.8 2.3 545.8 18.7

Total 545.8 2.3 545.8 18.7

Estimate of fair value

DerivativesBrokers’ statements are used for interest rate swaps. The statements are controlled using valuation models or techniques based on discounted cash fl ow.

Interest bearing loansThe fair value is calculated on the basis of the discounted future redemptions and interest payments.

Finance lease obligationsThe fair value is estimated at the present value of future cash fl ows, discounted against the interest rate for uniform lease contracts. The estimated fair value refl ects interest rate changes.

Trade and other receivables/trade liabilities and other items payableFor receivables and liabilities due within one year the nominal value is deemed to refl ect the fair value. All other receivables and liabilities are discounted in order to determine the fair value.


(in million €)<1 year 1–5 year >5 years

Buildings 3.4 10.4 7.8

IT material 1.1 1.6 0.0

Cars and others 2.1 2.1 0.0

Total at 31 December 2005 6.6 14.1 7.8

Buildings 3.4 18.8 12.0

IT material 1.5 0.5 0.0

Vehicles and others 3.6 2.3 0.0


23. Operating lease contracts

Lease contracts whereby the company is the lessee

The Group currently has lease contracts with a term of one or several years for IT equipment, buildings and vehicles.The amounts due for these operating lease contracts are shown below:

(in million €)<1 year 1–5 year >5 years

Telecom 7.7 16.1 7.6


Telecom 8.0 42.3 36.2


Lease contracts whereby the Group is the lessorThe Group leases sites and high-voltage towers to telecommunications operators on the basis of operating leases.The future minimum lease payments in respect to the lease contracts are as follows:

24. Investments and other liabilities

As at 31 December 2006, Elia had investment liabilities totalling €106.4 million for the purchase and installation of tangible fi xed assets to further extend its network.

25. Contingent liabilities and uncertainties

Settlement mechanism• Calculation of the amount is presented under the chapter

Regulatory framework and tariffs

• Application of IFRSElia now operates under a cost plus system in a regulated context which states that Elia tariffs must make it possible to realise a total revenue consisting of:

1. a reasonable return on invested capital and;2. all costs that are not unreasonable incurred by Elia.

Since the tariffs are based on estimated fi gures, there is always a difference between the tariffs that are actually charged and the tariffs that should have been charged to cover all reasonable costs of the system operator and to provide shareholders with a reasonable profi t margin on their investment.


If the applied tariffs result in a surplus at the end of the year, this means that the tariffs charged to consumers/the general public could have been lower (and vice versa). Based on IAS 18, Elia is convinced that the surplus arising from the settlement mechanism may not be classifi ed as revenue nor as an item under shareholders’ equity.

It can be argued that the public has made an advance payment for its future use of the network. As such, the surplus is not a commission for a future loss of income but instead a passive debt to consumers. On the basis of the Electricity Act, Elia believes that the surplus does not represent a revenue. Consequently, Elia booked this amount in the IFRS fi nancial statements as income to be carried forward, which refl ects the reduction in future tariffs that must be approved by the regulator.

Following the same logic, Elia also decided to book certain pension expenses as recoverable costs since the Federal regulator deemed such expenses to be reasonable charges. Elia is convinced that it can compensate for these expenses in the future tariffs and consequently, they were booked as an asset.

For the purpose of presentation of the consolidated fi nancial statements, both the ‘income to be carried forward’ and the ‘recoverable costs’ arising from the pension obligations are converted to their net values, which means that only a net debt is displayed.

At present, there are no specifi c IFRS guidelines on the calculation of the settlement mechanism in a regulated context.If the calculation turns out not to be in accordance with future IFRS guidelines, Elia’s results and shareholders’ equity will have to be adjusted.

26. Disclosure about related parties

Transactions with directors Remuneration policy for directors was agreed upon at the general meeting of shareholders. Total remuneration paid to the 12 Elia directors in 2006 was € 416,626 (€ 208,313 for Elia System Operator and € 208,313 for Elia Asset), including indexing.Directors do not receive any other benefi ts in kind, stock options, special loans or advances.

Transactions with members of the management committeeBasic and variable remunerationIn 2006, remuneration for the chairman of the management committee, which is paid by Elia System Operator, totalled € 438,460.26, of which 31.40% was variable pay. Remuneration paid by Elia to the other members of the management committee in 2006 totalled € 1,359,691.54 (€ 705,911.03 for Elia System Operator and € 653,780.50 for Elia Asset), of which 21.73% was variable pay. A total of € 1,798,151.80 was therefore paid in 2006 to members of the management committee.

SharesAs part of Elia System Operator’s IPO and the accompanying capital increase for staff, Elia offered its employees the opportunity to purchase a certain number of shares.The number of shares acquired by the chairman of the management committee during this capital increase was 2,297; the other members of the management committee acquired a total of 8,389 shares.

Elia has yet to implement a long-term share allotment policy.

Other elements of remunerationPension costs for the chairman of the management committee are covered by Elia System Operator and totalled € 135,868.65 in 2006. Total contributions for the other members were € 381,854.33 (€ 196,248.66 for Elia System Operator and € 185,605.67 for Elia Asset).Other benefi ts awarded to members of the management committee, such as guaranteed income in the event of long-term illness or an accident, health-care and hospitalisation insurance, invalidity insurance, life insurance, tariff benefi ts and company car are in line with the regulations applying to all company managers.

Provisions of employment contractsThe terms contained in the employment contracts for members of the management committee, including the chairman, do not contain any specifi c provisions as regards notice of dismissal.

Relations with shareholders The Group has various contracts with Electrabel, both customer/ supplier and supplier/customer. Such commercial transactions are all subject to market conditions which are no more advantageous than those applicable to other customers or suppliers.

Associated companiesIn the 2006 and 2005 fi scal years, there were no transactions between Elia and HGRT.


27. Group entities

Elia System Operator SA has direct and indirect control of the subsidiaries listed below:

Name Country established Headquarter Enterprise number Average staff Stake (%)

2006 2005

Elia Asset SA BelgiumBd de l’Empereur 201000 Brussels

0475 028 202 832.4 99.99 99.99

Bel Engineering SA BelgiumBd de l’Empereur 201000 Brussels

0471 869 861 175.5 100.0 100.0

Belpex SA BelgiumBd de l’Empereur 201000 Brussels

0874 978 602 _ 60.0 60.0

Elia Re SA LuxembourgRue du Merl 652146 Luxembourg

- _ 100.0 100.0

On 7 July 2005, Elia and the APX and Powernext power exchanges, together with Dutch system operator TenneT, set up Belpex with a capital of € 3 million. Elia initially took a 70% stake, while the other three shareholders each took 10%. On 15 December 2005, French system operator RTE acquired a 10% stake in Belpex from Elia.

All the entities keep their accounts in euro and have the same closing date as Elia System Operator.

28. Business combinations

Elia’s consolidation scope was not subjected to any changes during the fi nancial years 2005 and 2006.

Weighted average number of ordinary shares

(in million €) 2006 2005

Issued ordinary shares as at 1 january 47,898,052 41,979,640

Effect of own shares held

Effect of issued shares in June 2005 2,962,005

Effect of issued shares in July 2005 119,474

Weighted average number of ordinary shares on 31 December 47,898,052 45,061,119

Diluted earnings per shareDiluted earnings per share are calculated by dividing the net profi t from the year to be paid out to the holders of ordinary shares by the weighted average number of ordinary shares outstanding, corrected for potential dilution.The diluted profi t is equal to the ordinary profi t per share.

30. Non-audit tasks carried out by the auditors

In addition to standard audit tasks, Elia also asked the auditors Klynveld Peat Marwick Goerdeler Réviseurs d’Entreprises,

represented by Erik Clinck, and Ernst & Young Réviseurs d’Entreprises, represented by Jacques Vandernoot, to carry out the following tasks:

• IFRS: additional activities and consultancy; • corporate governance: monitoring of activities and consultancy;• various consultancy tasks.

For these tasks Elia took a total cost of € 76,500 into the accounts.

Ernst & Young Tax Consultants advised Elia on various fi scal matters. A total of € 49,050 excl. VAT was invoiced for these services.

29. Basic earnings per share

The basic earnings per share are calculated by dividing the net profi t of € 75.9 million (2005: € 76.4 million) from the year which can be paid out to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year (47,898,052).


Description of the risks and uncertainties facing the companyRisk ManagementIn coordination with the company’s management and executives, the internal audit & enterprise risk management department, which works under the supervision of the audit committee, has identifi ed and classifi ed the risks to which Elia may be exposed. Its work resulted in the following overview6 of major risks and uncertainties.

1. Regulatory and income risks

The legal framework was established when the 1st European electricity directive was implemented by the Belgian Electricity Act of 29 April 1999. Within this framework, the company’s net profi t is largely determined by the legally prescribed fair remuneration (see chapter Regulatory framework and tariffs). However, CREG can infl uence this remuneration when it approves, or otherwise rejects, Elia’s annual tariff proposals and also during the associated annual settlement mechanism (the so-called bonus-malusprocedure) (see Settlement mechanism, note 19). If CREG has made its defi nitive decision before the annual general meeting of shareholders on 8 May 2007 and this decision has a signifi cant negative impact on the fair remuneration, it can be decided during the meeting on 8 May 2007 to adapt the fi gures, where appropriate.

This system will be retained for the fi nancial year ending 31 December 2007 but thereafter may be modifi ed by the introduction of multi-annual tariffs, as prescribed by the amended Electricity Act of 1 June 2005. The introduction of multi-annual tariffs is an uncertain factor of which consequences cannot yet be gauged.

Regionally, too, the regulatory and legislative framework involves risks. For example, contradictions between different sets of regulations, including the grid codes, may hinder the company in its activities. The further development and changes in this framework may impact the liability of the company when there are power outages.

2. Financial risks

Interest riskAn unfavourable interest rate trend may impact on fi nancial expenses. To minimise this, Elia’s board of directors has approved a fi nancing policy that strives to achieve an optimal ratio of fi xed and variable interest rates. In addition, appropriate fi nancial instruments are used to further offset potential risks.

A fi nancing policy that seeks to bring the term of loans more into line with the lifetime of assets helps to ensure a successful fi nancial policy.

Liquidity and Counterparty riskLike all companies, Elia can face problems of liquidity shortage. Credit lines can be used to avoid short-term defi cits.

Elia’s standard contracts contain the necessary guarantees to limit the risk of non-payment.

Tax audit riskAlthough tax rules are applied in a spirit of accuracy and precision, it may be that the company’s own interpretation does not correspond to that of the relevant tax authorities.

3. Operational risks

Power outagesWith an average interruption time (AIT) of under 0.001%, Elia’s high-voltage grid is one of the most reliable in Europe. Nonetheless, as in any complex technical system, incidents may occur on the grid that may entail the interruption of electricity transmission.

In most instances, these incidents have no impact on power supply because the grid’s meshed structure means that connected grid users can be reached in a number of different ways.

6 Elia is aware that other risks may exist of which the company is not currently aware. Further, it is possible that risks which it considers limited may prove to be more substantial.


In extreme cases, the electrical system may fail completely (known as a blackout). Such outages may be caused by natural phenomena, unforeseen incidents or operational problems.

Elia seeks to limit these risks by including adequate reserve capacity in its operational and investment planning criteria. The company uses risk models to underpin technical decisions and performs regular crisis simulations.

The general terms and conditions of its standard contracts limit the company’s liability to a reasonable level while its insurance policy is designed to offset the fi nancial repercussions of risks even further.

IT-riskDefects in the IT system and processes used to manage the electrical system may harm the latter’s performance.

Elia takes the necessary measures to back up and improve its IT processes, but major shortcomings in components of the IT system are impossible to rule out. When defects do occur, every effort is made to minimise their impact.

Environmental riskElia’s results may be affected by outgoings needed to keep up with environmental legislation, including costs associated with implementing preventive or curative measures or settling third-party claims.

The company’s environmental policy is developed and monitored in such a way as to manage these risks. Where Elia is in any way liable for decontamination, the appropriate provisions are set aside.

Future amendments to laws or regulations may mean that Elia has to set aside additional provisions.

Risk of legal disputes and lawsuitsIn the course of its activities the company may become involved in legal disputes. Where necessary, the appropriate provisions are laid aside for this.

Safety riskThe safety of individuals (both Elia staff and third parties) is a key priority and a daily preoccupation for Elia and considerable resources are deployed to safeguard it. Each year, a safety plan is approved and implemented based on the development in safety fi gures.

Risks associated with ineffi cient internal control mechanismsInternal processes can all have their own impact on the company’s operating result. Under the future multi-annual tariff mechanism, more emphasis will be placed on internal effi ciency. It is therefore extremely important that internal processes are properly monitored.

This is overseen by the audit committee that controls the work of the internal audit & enterprise risk management department.

4. Factors linked to the national and international environment

The main risks generated by the national and international environment are to a large degree limited by law. Thus, there are statutory safeguards to offset volume risk (changes to transported volumes and thus to income) and price risk (purchase of capacity and energy for system services). Aside from these statutory safeguards, Elia tries to tackle these and other risks arising from environmental factors in a proactive way.

Another macro-economic risk stems from international energy fl ows, which have changed considerably in recent years due to energy market liberalisation. Guaranteeing market players the import and export capacity volumes they need is high on the agenda, partly in light of the recent launch of Belpex and trilateral coupling. Exchanging and coordinating information with other transmission system operators and installing phase shifters on the borders to better distribute energy fl ows over the available interconnection capacity are ways of helping to achieve this.


Regulated tariffs Most of Elia’s income is generated from the regulated tariffs charged for use of the electricity transmission system (tariff income). The tariff mechanism is based on accounts stated in accordance with Belgian accounting regulations (Be GAAP).

The tariffs are based on budgeted costs reduced by a number of sources of non-tariff income7 and based on the estimated volumes of electricity offtaken from the grid. They must be approved each year in advance by CREG. Only the accepted real costs relating to transmission system operation are covered by the tariffs.

Tariff income is generated on the basis of a regulated consolidated8 “cost plus” system, including the fair remuneration margin. The amendments to the Electricity Act in June 2005 and July 2006 introduced a system of multi-annual tariffs which is due to take effect on 1 January 2008 (see below).

Fair remunerationThe fair remuneration is the return on capital invested in the network. The return on capital invested is called the regulated asset base (RAB). The RAB is the sum of the value of the grid and the working capital required. The RAB is adjusted annually, taking into account new investment, depreciations and changes in working capital required.

The following formula is used to calculate the fair remuneration:

A: [33% x RAB average x [(OLO Belgian 10 year n-2 )+(Beta relevered x risk premium)]] minus

B: [((1-D9) - 67%) x RAB average x (1-t tax rate ) x (OLO n-2 + 70 base points)] minus

C: correction for the higher depreciation percentages in the past

Regulatory framework and tariffs

Part AThe rate of return (%) as set by CREG for year ‘n’ is equal to the sum of the risk-free rate, i.e. the average profi t for the Belgian ten-year OLO for year ‘n-2’ and a premium for market risk for shares weighted using the applicable beta factor. The beta factor is currently calculated using the historic beta factor for Electrabel compared with the BEL 20 index over a seven-year period and relevered in accordance with Elia’s fi nancial structure.

CREG requires Elia’s solvency ratio (average capital and reserves/average total assets) to be as close to 33% as possible. This ratio (33%) is adjusted to Elia’s average regulated asset base (RAB) to calculate the reference for Elia’s capital and reserves.

Part BIf Elia’s actual capital and reserves are higher than the reference for capital and reserves, the surplus amount is balanced out with a reduced rate of return calculated using the following formula:[OLO(n-2) + 70 base points) * (1 - corporate tax rate)].

If Elia’s total capital and reserves are booked under capital and reserves, the rate for capital and reserves is equal to: the rate that should be applied to capital and reserves less a sum equal to a rate of [(OLO(n-2) + 70 base points) x (1 - corporate tax rate)] on the missing part.

Part CCREG also decided that the fair remuneration margin should be reduced by € 12.4 million (before taxes) each year between 2002 and 2011 due too quick depreciations in the years preceding regulation, which it considers to be excessive.

The amendments to the Electricity Act on 1 June 2005 and, recently, on 20 July 2006, confi rm the principle of a fair profi t margin based on a European benchmark. The Act stipulates that the rate of return must correspond to the return that investors can expect to achieve on competitive markets for long-term investments with similar risks, in line with the best practices on international fi nancial markets. The practicalities of the new system had not yet been published in the relevant royal decrees at the start of 2007.

7 The main non-tariff income derives from commission on sales by auction of capacity at the Dutch and the French border, the congestion and ETSO committees, the capitalisation of some staff costs and taking back part of the tariff surplus from the previous fi scal years and telecom services.

8 Costs in accordance with Belgian accounting regulations with full consolidation of Elia System Operator, Elia Asset and Bel Engineering and the absorption of Elia Re and Belpex using the equity methods.

9 D: (consolidated shareholders’ equity/ consolidated total equity & liabilities) in accordance with Belgian accounting regulations (Be GAAP).


Settlement mechanismEach year, Elia settles the discrepancy between actual results and the budget used as the basis for the approved tariffs for the year. The differences, whether positive or negative, are entered onto the balance sheet in a suspense account. At the end of the fi rst half following the fi nancial year concerned (NB: the settlement for 2005 was only received in November 2006) CREG decides on the amount and how that amount should used. This may result in a decrease or increase in future tariffs. Part of this discrepancy may be assigned by CREG to Elia as a bonus. If CREG assigns a malus, this is deducted from Elia’s net result. Three conditions must be fulfi lled for a bonus to be awarded:

1. the budgeted costs have been approved by CREG;2. the cost savings have been made;3. the savings are sustainable over the long term.

Elia’s net result therefore refl ects the fair profi t margin for shareholders adjusted to take account of a possible bonus or malus from the year before and reduced by the total of the costs not considered by CREG as necessary for carrying out the system operator’s tasks.

The settlement mechanism as it appears in the suspense account is not a defi nite fi gure since the CREG decision is not given until the following fi nancial year.


Reconciliation: Shareholders’ equity – net profi t: Be GAAP – IFRS

The Group’s net profi t under Be GAAP principles is € 68.2 million, changing to € 75.9 million under IFRS.

(in million €)31 December 2004 31 December 2005 31 December 2006

Shareholders’ equity Be GAAP 1,098.0 1,322.2 1,329.5

IFRS adjustments previous years

20,4 -36,5 -40,6

IFRS adjustments Reserves Retained earnings

Issued capital / Equity

Hedging reserves IAS

32/39

Retained earnings

Issued capital / Equity

Hedging reserves IAS

32/39

Retained earnings

Software 1.5 4.1 3.4

Bel Engineering goodwill 1.4 1.4 1.4

Formation expenses Belpex

Hardware 1.9 -0.3 -0.8

Valuation inventory 1.7 -1.1 -0.4

Employee offering: amounts receivables from personnel

-0.3 0.1

Long term debts -22.5 -18.7 -0.1 16.4 -0.1

Employee benefi ts 1.4 8.0 5.1

Provisions ligations 0.2 -0.2 0.1

Deferred taxes 6.0 6.4 -2.3 -5.6 -3.4

Provisions environment 2.3

Elia RE consolidation 2.5 2.6 1.3

Balance future tariffs -4.3 -3.0 2.0

Dividends -49.0

Capital increase: charges 0.2 -0.2

Capital grants -0.7

Contracts -1.0

-49.0 -7.9 -0.5 -12.3 8.7 10.8 7.7

-56.9 -4.1 18.5

Total shareholders’ equity IFRS 1,061.5 1,281.5 1,307.4

Profit

Profi t of the year Be GAAP 67.4 67.8 68.2

IFRS adjustments -7.9 8.7 7.7

Profi t of the year IFRS 59.5 76.5 75.9

The table below shows the deviations that emerge when applying IFRS to consolidated data compiled under Be GAAP.



Joint auditors’ report on the consolidated financial statements



Abbreviated financial statements Elia System Operator SAThe next pages include excerpts from Elia System Operator SA’s statutory fi nancial statements presented in accordance with Belgian accounting standards.

In accordance with the Belgian Company Code, the complete fi nancial statements, the directors’ report and the joint auditors’ report will be deposited at the National Bank of Belgium.

These documents are also available on the company’s website: www.elia.be and can be obtained on request from Elia System Operator SA, Boulevard de l’Empereur 20, 1000 Brussels, Belgium.

The joint auditors have issued an unqualifi ed opinion with explanatory paragraphs on the statutory fi nancial statements.

1. Balance sheet after appropriation (Be GAAP)

(in million €) 2006 2005

AssetsFixed assets 3,306.5 3,306.5

Financial fi xed assets 3,306.5 3,306.5

Affi liated companies 3,306.0 3,306.0

Participating interests 3,306.0 3,306.0

Other enterprises linked by participating interests 0.5 0.5

Participating interests 0.5 0.5

Current assets 464.0 420.1

Inventories and contracts in progress 0.6 0.2

Contracts in progress 0.6 0.2

Amounts receivable within one year 400.3 340.7

Trade debtors 94.1 82.4

Other amounts receivable 306.2 258.3

Investments 11.9 18.8

Other term deposits 11.9 18.8

Cash at bank and in hand 1.6 2.3

Deferred charges and accrued income 49.6 58.1

Total assets 3,770.5 3,726.6


(in million €) 2006 2005

Equity and liabilitiesCapital and reserves 1,246.1 1,247.4

Capital 1,196.7 1,196.7

Issued Capital 1,196.7 1,196.7

Share premium account 8.5 8.5

Consolidation reserves 17.6 14.6

Legal reserve 17.6 14.6

Accumulated profi t 23.3 27.6

Provisions, deferred taxes 3.9 3.7

Provisions for risks and charges 3.9 3.7

Other risks and charges 3.9 3.7

Liabilities 2,520.5 2,475.5

Amounts payable after one year 2,121.3 2,131.1

Financial debts 2,121.3 2,131.1

Unsubordinated debentures 997.8 997.6

Credit institutions 240.0 250.0

Other loans 883.5 883.5

Amounts payable within one year 158.4 117.5

Trade debts 88.6 49.9

Suppliers 88.6 49.9

Advances received on contracts in progress 1.2 0.3

Amounts payable regarding taxes, remuneration and social security costs 4.5 4.1

Taxes 0.3

Remuneration and social security 4.2 4.1

Other amounts payable 64.1 63.2

Accrued charges and deferred income 240.8 226.9

Total equity and liabilities 3,770.5 3,726.6


2. Income statement (Be GAAP)

(in million €) 2006 2005


Turnover 681.9 681.6

Increase (+), decrease (-) in inventories of fi nished goods, work and contracts in progress

0.4 0.2

Other operating income 2.3 4.5

Operating charges -513.1 -509.6

Services and other goods -488.1 -483.8

Remuneration, social security costs and pensions -24.8 -24.6

Provisions for liabilities and charges -0.2 -0.4

Other operating charges -0.8

OPERATING PROFIT 171.5 176.7

Financial income 19.5 15.9

Income from fi nancial fi xed assets 9.3 10.4

Income from current assets 10.2 5.4

Other fi nancial income 0.1

Financial charges -101.4 -95.6

Interests and other debt charges -101.1 -93.8

Other fi nancial charges -0.3 -1.8

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 89.6 97.0

Extraordinary income 2.3 3.6

Other extraordinary income 2.3 3.6

Extraordinary charges -4.9 -2.6

Other extraordinary charges -4.9 -2.6

PROFIT FOR THE FINANCIAL PERIOD BEFORE TAXATION 87.0 98.0

Income taxes -26.9 -30.3

Income taxes -27.0 -30.3

Adjustment of income taxes and write-back of provisions 0.1

PROFIT FOR THE FINANCIAL PERIOD 60.1 67.7

Profi le



Key fi gures




EBITDA (1) 292.5 295.9





Average RAB (2) 3,443.5 3,371.0



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CENTRALESCENTRALES

centrale nucléaire


centrale de pompage

kerncentrale

thermische centrale

waterkrachtcentrale

pompcentrale

POSTES STATIONS

existants

en projet

bestaande

in ontwerp

380 kV

220-150 kV

70 kV

380 kV

220-150 kV

70 kV

MERCATOR

MOLENBEEK

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centrale thermique



380 kV

220 kV

150 kV

70 kV

Uitbatingsspanning

380 kV

220 kV

150 kV

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Nombre de ternes

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Aantal draadstellen

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2 x 150 + 2 x 70(4 x 150)

2 x 150(2 x 380 + 2 x 150)

3 x 380(4 x 380)

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2 x 150(4 x 150)

1 x 150 + 1 x 70(2 x 150 + 1 x 70)

4 x 70

3 x 150

1 x 70(4 x 150)

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3 x 150(4 x 150)

3 x 150 + 1 x 70(4 x 150)

3 x 220

1 x 380 + 2 x 150(2 x 380 + 2 x 150)

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4




150 kV

70 kV

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150 kV

70 kV



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2

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1

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150 kV 150 kV



220 kV 220 kV




380 kV 380 kV


Blandain

Noordschote

Gavere

ST-Denijs - Boekel

Zottegem

Geraardsbergen

Deux-Acren

Ronse

Bekaert

Kortrijk- NMBS

K.Oost

Bas-Warneton

Bornem Willebroek

Tisselt

Rijkevorsel

Turnhout

Ravels

HerentalsOlen

Herenthout

Geel/Oevel

Nijlen

Lummen

Hechtel Gerdingen

St-Huibrechts-Lille

Maaseik

Opglabbeek

Bekaert

Maasmechelen

Bilzen

Paalsteenstr.

Hasselt

(NMBS)

Alken

Halen

Kersbeek

AarschotDorenberg

Kessel-lo



Duffel

Muizen

Langveld

Baasrode

Lokeren

Lanaken

Tongeren

BorgloonSt-Truiden

Landen

Jodoigne

Glatigny

Aische-en-Refail

Sauvenière

Court-St-Et.

Ottignies (SNCB)

Baulers

Ronquières

Enghien (SNCB)

Braine-le-C.

Soignies

Hoves

Meslin

Ath(SNCB)

Quevaucamps

Carrièredu Milieu

Tournai

Harchies

Lobbes

Clermont

Renlies

Beaumont

Solre St-Géry

Thy-le-Château


Fourmies

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Pondrôme

Monceau-en-Ardennes

Fays-les-Veneurs

Orgeo

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Neufchâteau

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Marbehan(SNCB)

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Belv. Arbed

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Bevercé

SpaTuron

Heid-de-Goreux

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Comblain

Bomal

Soy

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Statte(SNCB)

MiécretFlorée

Ciney

Sart-Bernard(SNCB)

Grands-Malades

Dorinne

Yvoir(SNCB)

Warnant

Namur

Marche-les-Dames

Waret

Gerpinnes

Hanzinelle

Leuze

Croix-Chabot

Ivoz

FoozMonsin

Pepinster

Battice

Gileppe

Stembert

Welkenraedt (SNCB)

Les Plenesses

Henri-Chapelle

Montzen(SNCB)

Saives


Famenne

CharneuxOn

Forrières(SNCB)

Dinant

Sommière

Hastière

Herfelingen

Appelterre


(NMBS)

Kalmthout

St-Niklaas

Hamme

Temse

Elouges Ciply


St-Servais

GemblouxLens

Hannut

Soiron

Dowchemical

Ceroux

Stephanshof

Wierde

Amylum

Buissonville

Vesdre

[Edingen (NMBS)]

[Renaix]

[Neerwaasten]

Bütgenbach

[Amblève]

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Piéton

l’Evêque

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MARQUAIN

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KOKSIJDE

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SLIJKENS

ZEEBRUGGE

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ZEDELGEM

AALTER

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LANGERBRUGGESADACEM

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SIDMAR

NIEUWEVAARTHAM

FLORA

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KENNEDYLAAN

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ST-BAAFS-VIJVE

WORTEGEM

RUIEN

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MOEN

PITTEM

TIELT

MUIZELAAR

BEVEREN

RUMBEKE

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DESSELGEM

HARELBEKE

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MOUSCRON

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MALLE

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(I.E.)

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GODSHEIDE

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WILSELE


GRIMBERGEN

RELEGEM

TERLINDEN

KOBBEGEM

SCHAARBEEK

MOLENBEEK


DHANISQ. DEMETS K.

ZUID/MIDI

IXELLESELSENEFOREST

VORST

LABORELEC


BUIZINGEN

EIZERINGEN

SIDAL

PUTTEMECHELEN

NMBS KRUISBAAN

HEIST/BERG

TIP

ZELE


HERDERENBRUSTEM

NMBS

TIENEN

CORBAIS

LE CHENOI

WATERLOO

BRAINE-L’ALLEUD

BAISY-THY

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NIVELLES

CLABECQ

OISQUERCQ

SNCB

LIGNETHIEULAIN

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THUILLIES

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LUMES

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SNCB

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LANDRES

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BERTRANGE

HEISDORF

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BAUDOUR

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HARMIGNIES

V/HAINELA CROYERE

BASCOUP

TRIVIERES

PERONNES

BINCHE

GOSSELIES

FLEURUS

AMERCŒUR

DAMPREMY

MONCEAU MONTIGNIES

AUVELAIS

FARCIENNES

JEMEPPE-SOLVAY

SNCB

GARNSTOCK

ZONHOVEN

ZAVENTEM


MONT ST.MARTIN

DAMPLEIN

HARENHEIDE

ESCH-SUR-ALZETTE

LA PRAYEFOUR

PETROL

WALGOED

NOORDERDOKKEN(NMBS)

[MOESKROEN]

[DOTTENIJS]

CHAMP-DE-COURRIERE

Hte SARTE

AWIRS

CLERMONT

LA TROQUE

SERAING ROMSEE

BRESSOUX

JUPILLE

BERNEAU

CBR

LE VAL

BELLAIRE

CHERATTE

MARCHIN

CHERTAL

BAYER

FINA

EKEREN7e HAVENDOK

MERKSEMSCHELDELAAN

KALLO

ZURENBORG

BURCHT

ZWIJNDRECHT

WOMMELGEM

OELEGEM

BEVEREN

MORTSEL

SCHELLE DORP

ST-PAUWELS

HEIMOLEN

LIER

OORDEREN

C. ZWIJNDRECHT

Kontich

WAARLOOS

DAMPLEIN

PETROL

WALGOED


BASF

SOLVAY

LILLO

BAYER

EKEREN7e HAVENDOK

MERKSEM

ZURENBORG

WOMMELGEM

OELEGEM

MORTSEL

T

HEIMOLEN

LIER

OORDEREN

Kontich

WAARLOOS

DAMPLEIN


SCHELLE


PETROCHIM

FELUY

BAUDOURAIR

LIQUIDE

TERTRE

QUAREGNON

GHLIN

OBOURG

HARMIGNIES

VILLE/HAINE

LA CROYERE

BASCOUP

TRIVIERES

PERONNES

BINCHE

GOSSELIES

FLEURUS

AMERCŒUR

DAMPREMY

MONCEAUMONTIGNIES

TERGNEE

AUVELAIS

FARCIENNES

JEMEPPE-SOLVAY

JEMAPPES

BOELLL

BOEL HFBOEL TCC

BOELFOUR

MALFALISE

CARALFOC

CS MARCINELLE


LA PRAYE

PONT-de-LOUP

BUISSERET

LA PRAYEFOUR

CHAMP-DE-COURRIERE

GOUY

COURCELLES ST-AMAND

TERGNEE

ZANDVLIET

DOEL

MERCATOR

LINT

RIMIERETIHANGE

GRAMME

LIXHE

AVELGEM

MASTAING

RODENHUIZE

ZOMERGEM

WARANDE

AVELIN

CHEVALET

VERBRANDE BRUG

EEKLO NOORD

IZEGEM

GEERTRUIDENBERG

KREEKRAKBORSSELE

BUGGENHOUT

MASSENHOVEN

DODEWAARD

EINDHOVEN

MAASBRACHT

OBERZIER

BRUEGEL

DROGENBOS

MEKINGEN

MEERHOUT

AVERNAS

CHIEVRES

REVIN

MAZURES

LONNY

VESLE

AUBANGE

MOULAINE

VIGY

BRUMECOO

RIMIERETIHANGE

GRAMMECOGNELEE

CHAMPION

LIXHE

ACHENE

ZANDVLIET

DOEL

MERCATOR

LINT

GOUY

COURCELLES ST-AMAND

TERGNEE

REPPEL

VAN EYCK


Profi le



Key fi gures




EBITDA (1) 292.5 295.9





Average RAB (2) 3,443.5 3,371.0



Alzette

Moselle

Our

Sûre

Vierre

Semois

Lesse

Ourthe

Sambre

Warche

Amblève

Gileppe

Vesdr

e

Meu

se

Maas

Demer

Grote Nete

Ourthe

Vesdre

Meuse

Dijle

Dyle

Rupel

Dender

Dendre

Schelde

Leie

Escaut

IJzer

Meu

se

Sambre

Eau

d’Heu

re

Echelle Schaal

0 10 20 30 km


stand op1-1-2007




CENTRALESCENTRALES

centrale nucléaire


centrale de pompage

kerncentrale

thermische centrale

waterkrachtcentrale

pompcentrale

POSTES STATIONS

existants

en projet

bestaande

in ontwerp

380 kV

220-150 kV

70 kV

380 kV

220-150 kV

70 kV

MERCATOR

MOLENBEEK

Herbaimont

centrale thermique



380 kV

220 kV

150 kV

70 kV

Uitbatingsspanning

380 kV

220 kV

150 kV

70 kV

Nombre de ternes

prévus installés

1 1

2 1

2 2

> 2


Aantal draadstellen

voorzien uitgerust


1 1

2 1

2 2

> 2








10

123456

789

1112

131415161718

2 x 150 + 1 x 70(3 x 150)

4 x 150

1 x 150 + 2 x 70(3 x 150)

1 x 150 + 3 x 70(4 x 150)

2 x 150 + 2 x 70(4 x 150)

2 x 150(2 x 380 + 2 x 150)

3 x 380(4 x 380)

3 x 70

2 x 150(4 x 150)

1 x 150 + 1 x 70(2 x 150 + 1 x 70)

4 x 70

3 x 150

1 x 70(4 x 150)

1 x 220 + 2 x 70

3 x 150(4 x 150)

3 x 150 + 1 x 70(4 x 150)

3 x 220

1 x 380 + 2 x 150(2 x 380 + 2 x 150)

150 + 70

70(150)

4




150 kV

70 kV

parallele kabels

150 kV

70 kV



PETROCHIM

FELUY

BAUDOURAIR

LIQUIDE

TERTRE

Elouges

QUAREGNON

GHLIN

OBOURG

HARMIGNIESCiply

VILLE/HAINE

GOUY

LA CROYERE

BASCOUP

TRIVIERES

PERONNES

BINCHE

COURCELLES

GOSSELIES

FLEURUS

AMERCŒUR

DAMPREMY

MONCEAUMONTIGNIES

ST-AMAND

TERGNEE

AUVELAIS

FARCIENNES

JEMEPPE-SOLVAY

Gembloux

JEMAPPES

Boussu

MonsBOEL

LL

BOEL HFBOEL TCC

BOELFOUR

(SNCB)

Fontaine

MALFALISE

CARALFOC

CS MARCINELLE

Marchienne


Charleroi

Gilly

LA PRAYE

PONT-de-LOUP

Fosses-la-Ville

Sombreffe

Marbais(SNCB)

Chassart

Heppigniessud

Liberchies

Jumet

BUISSERET

Seneffe

S ambre

(30)

380 + 150

70+30(150)

70(150)

70(150)

70(150)

150 + 70

70(150)15

0+

70 70(150)

70(150)

150

+70 150 + 70

150 +70150 + 7070(150)

70(150)

150+70

150 + 30

150 + 70

30(150)

70(1

50)

70(150)

150 + 70

70(150)

16

12

4

2

2LA PRAYE

FOUR

70(150)

CHAMP-DE-COURRIERE

AMERCŒUR

MPREMYY

UMON

NEN

F

CARALFOC

CS MARCINELLE

Marchienne


Charleroi

Gilly

LALAA PRAYP

Ju70(150)

0(150)

70(150)15

0+

70 70(150)4

2LA PRAYEAYEA E

FOURFOUFO

LA CROYERE

LLL

BOELB HFBOEL TCC

BOELLFOURFOUR

EGNON

u

Mons

)

70(150))

150+70

s

1: 500 000

Pâturages

Maisières

La Louvière

Piéton

l’Evêque

Keumiée

ZANDVLIET

DOEL

BAYER

FINA

EKEREN7e HAVENDOK

MERKSEMSCHELDELAAN

KALLO

ZURENBORG

BURCHT

ZWIJNDRECHT

WOMMELGEM

OELEGEM

BEVEREN

MORTSEL

SCHELLE DORP

ST-PAUWELS

St-Niklaas

HEIMOLEN

Temse

LIER

LINT

OORDEREN

C. ZWIJNDRECHT

OeverBelliardstr.



WilrijkMHO

Hoboken

Aartselaar Kontich

WAARLOOS

150+

70

150

+36

150+

36

9

7

2

2

2

3

380+

150

DAMPLEIN

2

2

PETROL

WALGOED

2


1: 500 000L

BASF

SOLVAY

LILLO

BAYER

EKEREN7e HAVENDOK

MERKSEM

ZURENBORG

WOMMELGEM

OELEGEM

MORTSEL

T

t

HEIMOLEN

LIER

LINT

OORDEREN

rBelliardstr.



WilrijkMHO

Hoboken

Aartselaar Kontich

WAARLOOS

150

+36

150+

36

9

7

2

2

2

3

380+

150

DAMPLEIN

2

2

2


MERCATOR

SCHELLE

RIMIERETIHANGE

GRAMME

Hte SARTE

Croix-Chabot

AWIRS

CLERMONT

Ivoz-Ramet

LA TROQUE

SERAING

Fooz

ROMSEE

BRESSOUX

JUPILLE

BERNEAU

LIXHE

Saives

Ampsin-Neuville

CBR

Visé(SNCB)

Voroux(SNCB)

Hollogne

Ans

Alleur

Glain

Vottem

FN Vottem

Montegnée

Tilleur

Ougrée Sclessin

Sart-Tilman

Angleur

Jemeppe

Profondval

FlémalleLE VAL

Grivegnée

Chenée

Magotteaux

BELLAIRE

Monsin

FNCHERATTE

Herstal

EheinHermalle

s/Huy

Abée-Scry

MARCHIN

Poulseur

Esneux

Rivage(SNCB)

Ourthe

Vesdre

Meu

se

150

+70

70(1

50)

70 (150)

70 (150)70(220)

220

+15

0

380

+15

0

8

17

14

16

16

164

3

13

Anthisnes

70 (150)

Ramet

1 : 500 000

150+70

Pouplin

Ivoz-Ramet

LA TROQUOQO EEE


BRESSOUX

JUPILLLE

gne

Ans

Alleur

GlaiGG n

ttem

Montegnéee

Tilleur


n

AngleurA

Jemepppppe

fondvalo


Grivegnéer

ChenéeC

tteaux

BEBB

Monsinn

FNCH

rstal

70(1

7

70 (150)0)0

70 (150)(

70(220)

0+

150

8

171

141

16

16

164

3

RaR

150+70

Pouplin

CHERTAL

70 kV 70 kV



2

2

2

3

2

2

2

2

2

2

2

2

2

2

2

2

2

2

1

3

2

2

3

2

2

2

2

2

150 kV 150 kV



220 kV 220 kV




380 kV 380 kV


Blandain

Noordschote

Gavere

ST-Denijs - Boekel

Zottegem

Geraardsbergen

Deux-Acren

Ronse

Bekaert

Kortrijk- NMBS

K.Oost

Bas-Warneton

Bornem Willebroek

Tisselt

Rijkevorsel

Turnhout

Ravels

HerentalsOlen

Herenthout

Geel/Oevel

Nijlen

Lummen

Hechtel Gerdingen

St-Huibrechts-Lille

Maaseik

Opglabbeek

Bekaert

Maasmechelen

Bilzen

Paalsteenstr.

Hasselt

(NMBS)

Alken

Halen

Kersbeek

AarschotDorenberg

Kessel-lo



Duffel

Muizen

Langveld

Baasrode

Lokeren

Lanaken

Tongeren

BorgloonSt-Truiden

Landen

Jodoigne

Glatigny

Aische-en-Refail

Sauvenière

Court-St-Et.

Ottignies (SNCB)

Baulers

Ronquières

Enghien (SNCB)

Braine-le-C.

Soignies

Hoves

Meslin

Ath(SNCB)

Quevaucamps

Carrièredu Milieu

Tournai

Harchies

Lobbes

Clermont

Renlies

Beaumont

Solre St-Géry

Thy-le-Château


Fourmies

Couvin

Romedenne

Pondrôme

Monceau-en-Ardennes

Fays-les-Veneurs

Orgeo

Hatrival

Recogne

Neufchâteau

Vierre

Longlier (SNCB)

Marbehan(SNCB)

Respelt


Arlon

Differd.Arbed

Belv. Arbed

Bure

Schif.

Herbaimont


Cierreux

Trois-Ponts

Bronrome

Bevercé

SpaTuron

Heid-de-Goreux

Amel

[Butgenbach]

Comblain

Bomal

Soy

Andenne

Statte(SNCB)

MiécretFlorée

Ciney

Sart-Bernard(SNCB)

Grands-Malades

Dorinne

Yvoir(SNCB)

Warnant

Namur

Marche-les-Dames

Waret

Gerpinnes

Hanzinelle

Leuze

Croix-Chabot

Ivoz

FoozMonsin

Pepinster

Battice

Gileppe

Stembert

Welkenraedt (SNCB)

Les Plenesses

Henri-Chapelle

Montzen(SNCB)

Saives


Famenne

CharneuxOn

Forrières(SNCB)

Dinant

Sommière

Hastière

Herfelingen

Appelterre


(NMBS)

Kalmthout

St-Niklaas

Hamme

Temse

Elouges Ciply


St-Servais

GemblouxLens

Hannut

Soiron

Dowchemical

Ceroux

Stephanshof

Wierde

Amylum

Buissonville

Vesdre

[Edingen (NMBS)]

[Renaix]

[Neerwaasten]

Bütgenbach

[Amblève]

Wanze

Croix-Chabot

Ivoz-Ramet

Fooz

Saives

Ampsin-Neuville

CBR

Visé(SNCB)

Voroux(SNCB)

Hollogne

Ans

Alleur

Glain

Vottem

FN Vottem

Montegnée

Tilleur

Ougrée Sclessin

Sart-Tilman

Angleur

Jemeppe

Profondval

Flémalle

Grivegnée

Chenée

Magotteaux

Monsin

FN

Herstal

EheinHermalle

s/Huy

Abée-ScryPoulseur

Esneux

Rivage(SNCB)

Anthisnes

Ramet

Pouplin

St-Niklaas

Temse

OeverBelliardstr.



WilrijkMHO

Hoboken

Aartselaar Kontich

t

rBelliardstr.



WilrijkMHO

Hoboken

Aartselaar Kontich

Elouges

Ciply

Gembloux

Boussu

Mons

(SNCB)

Fontaine

Marchienne

Charleroi

Gilly

Fosses-la-Ville

Sombreffe

Marbais(SNCB)

Chassart

Heppigniessud

Liberchies

Jumet

Seneffe

Pâturages

Maisières

La Louvière

Piéton

l’Evêque

Keumiée

MARQUAIN

MACHELEN

HOENDERVELD

WESPELAAR

KOKSIJDE

BEERST

STADEN

SLIJKENS

ZEEBRUGGE

BRUGGE

ZEDELGEM

AALTER

EEKLO

LANGERBRUGGESADACEM

RINGVAART

SIDMAR

NIEUWEVAARTHAM

FLORA

DRONGEN

KENNEDYLAAN

DEINZE

ST-BAAFS-VIJVE

WORTEGEM

RUIEN

OUDENAARDE

MOEN

PITTEM

TIELT

MUIZELAAR

BEVEREN

RUMBEKE

OOSTROZEBEKE

DESSELGEM

HARELBEKE

HEULE

ZWEVEGEMWEVELGEM

PEKKE

MOUSCRON

KUURNE

DOTTIGNIES

MENENWEST

IEPER

IEPER NOORD

WESTROZEBEKE

MALDEREN

LEEST

MALLE

BEERSE

POEDERLEE

HEZE

AMOCO

ESSOCHEM

HERCULES

TESSENDERLO

BERINGEN

MOL

BALEN

DIEST

VIEILLEMONTAGNE

LOMMELOVERPELT

HOUTHALEN

(I.E.)

MHO

EISDEN

KNP

ZUTENDAAL

STALEN

GENK-LANGERLO

GODSHEIDE

SIKELWIJGMAAL

WILSELE


GRIMBERGEN

RELEGEM

TERLINDEN

KOBBEGEM

SCHAARBEEK

MOLENBEEK


DHANISQ. DEMETS K.

ZUID/MIDI

IXELLESELSENEFOREST

VORST

LABORELEC


BUIZINGEN

EIZERINGEN

SIDAL

PUTTEMECHELEN

NMBS KRUISBAAN

HEIST/BERG

TIP

ZELE


HERDERENBRUSTEM

NMBS

TIENEN

CORBAIS

LE CHENOI

WATERLOO

BRAINE-L’ALLEUD

BAISY-THY

VIEUXGENAPPESNCB

NIVELLES

CLABECQ

OISQUERCQ

SNCB

LIGNETHIEULAIN

WATTINESGAURAINSNCB

ANTOING

THUILLIES

JAMIOLLE


CHOOZ

VIREUX

LUMES

HEINSCH

SNCB

LATOUR

ROUVROY

St-MARD

HERSERANGE

OXYLUX

LANDRES

BELVAL SCHIFFLANGE

BERTRANGE

HEISDORF

TRIERROOST

FLEBOUR


NIEDERSTEDEM

VILLEROUX

MONT-LEZ-HOUFFALIZE

Hte SARTE

SEILLES

SNCB

SNCB

AWIRS

CLERMONTLE VAL

LA TROQUE

SERAINGROMSEE

BRESSOUXJUPILLE

CHERTAL

BERNEAU

EUPEN

PT-RECHAIN

MARCOURT

NINOVE

MERCHTEMAALST NOORD

AALST

BASF

SOLVAYLILLO

BAYER

FINAKETENISSE

EKEREN

7e HAVENDOK

MERKSEMSCHELDE-

LAANKALLO

ZURENBORGBURCHT

ZWIJNDRECHT

WOMMELGEM

OELEGEMBEVEREN

MORTSEL

SCHELLE

-DORP

ST-PAUWELS

HEIMOLEN

St-JOB

LIER


PETROCHIM

FELUY

BAUDOUR

AIR LIQ.

TERTRE

QUAREGNON

GHLIN OBOURG

HARMIGNIES

V/HAINELA CROYERE

BASCOUP

TRIVIERES

PERONNES

BINCHE

GOSSELIES

FLEURUS

AMERCŒUR

DAMPREMY

MONCEAU MONTIGNIES

AUVELAIS

FARCIENNES

JEMEPPE-SOLVAY

SNCB

GARNSTOCK

ZONHOVEN

ZAVENTEM


MONT ST.MARTIN

DAMPLEIN

HARENHEIDE

ESCH-SUR-ALZETTE

LA PRAYEFOUR

PETROL

WALGOED

NOORDERDOKKEN(NMBS)

[MOESKROEN]

[DOTTENIJS]

CHAMP-DE-COURRIERE

Hte SARTE

AWIRS

CLERMONT

LA TROQUE

SERAING ROMSEE

BRESSOUX

JUPILLE

BERNEAU

CBR

LE VAL

BELLAIRE

CHERATTE

MARCHIN

CHERTAL

BAYER

FINA

EKEREN7e HAVENDOK

MERKSEMSCHELDELAAN

KALLO

ZURENBORG

BURCHT

ZWIJNDRECHT

WOMMELGEM

OELEGEM

BEVEREN

MORTSEL

SCHELLE DORP

ST-PAUWELS

HEIMOLEN

LIER

OORDEREN

C. ZWIJNDRECHT

Kontich

WAARLOOS

DAMPLEIN

PETROL

WALGOED


BASF

SOLVAY

LILLO

BAYER

EKEREN7e HAVENDOK

MERKSEM

ZURENBORG

WOMMELGEM

OELEGEM

MORTSEL

T

HEIMOLEN

LIER

OORDEREN

Kontich

WAARLOOS

DAMPLEIN


SCHELLE


PETROCHIM

FELUY

BAUDOURAIR

LIQUIDE

TERTRE

QUAREGNON

GHLIN

OBOURG

HARMIGNIES

VILLE/HAINE

LA CROYERE

BASCOUP

TRIVIERES

PERONNES

BINCHE

GOSSELIES

FLEURUS

AMERCŒUR

DAMPREMY

MONCEAUMONTIGNIES

TERGNEE

AUVELAIS

FARCIENNES

JEMEPPE-SOLVAY

JEMAPPES

BOELLL

BOEL HFBOEL TCC

BOELFOUR

MALFALISE

CARALFOC

CS MARCINELLE


LA PRAYE

PONT-de-LOUP

BUISSERET

LA PRAYEFOUR

CHAMP-DE-COURRIERE

GOUY

COURCELLES ST-AMAND

TERGNEE

ZANDVLIET

DOEL

MERCATOR

LINT

RIMIERETIHANGE

GRAMME

LIXHE

AVELGEM

MASTAING

RODENHUIZE

ZOMERGEM

WARANDE

AVELIN

CHEVALET

VERBRANDE BRUG

EEKLO NOORD

IZEGEM

GEERTRUIDENBERG

KREEKRAKBORSSELE

BUGGENHOUT

MASSENHOVEN

DODEWAARD

EINDHOVEN

MAASBRACHT

OBERZIER

BRUEGEL

DROGENBOS

MEKINGEN

MEERHOUT

AVERNAS

CHIEVRES

REVIN

MAZURES

LONNY

VESLE

AUBANGE

MOULAINE

VIGY

BRUMECOO

RIMIERETIHANGE

GRAMMECOGNELEE

CHAMPION

LIXHE

ACHENE

ZANDVLIET

DOEL

MERCATOR

LINT

GOUY

COURCELLES ST-AMAND

TERGNEE

REPPEL

VAN EYCK










April 2007

An

nu

al R

ep

ort

20

06



Annual Report 2006

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Annual Report 2006 - KU Leuven...THIEULAIN LIGNE WATTINES SNCB GAURAIN ANTOING THUILLIES JAMIOLLE...

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