Independent auditor’s report

This auditor’s report is an unofficial translation of the original auditor’s report accompanying the original annual report 2024, both stated in Dutch. In case of any conflict between this translation and the original auditor’s report, the latter will prevail. The original auditor’s report can be found on the website of Alliander N.V.

To: the general meeting and the supervisory board of Alliander N.V.

Report on the audit of the financial statements 2024

Our opinion

In our opinion financial statements of Alliander N.V. (‘the Company’) give a true and fair view of the financial position of the Company and the Group (the Company together with its subsidiaries) as at 31 December 2024 and of its result and cash flows for the year then ended in accordance with IFRS Accounting Standards as adopted by the European Union (‘EU’) and with Part 9 of Book 2 of the Dutch Civil Code.

What we have audited

We have audited the accompanying financial statements 2024 of Alliander N.V., Arnhem. The financial statements comprise the consolidated financial statements of the Group and the company financial statements.

The consolidated financial statements comprise:

the consolidated statement of financial position as at 31 December 2024;
the following statements for 2024: the consolidated income statement, the consolidated statement of comprehensive income, changes in equity and cash flows; and
the notes to the financial statements, including material accounting policy information and other explanatory information.

The company financial statements comprise:

the company balance sheet as at 31 December 2024;
the company profit and loss account for the year then ended; and
the notes, comprising a summary of the accounting policies applied and other explanatory information.

The financial reporting framework applied in the preparation of the financial statements is IFRS Accounting Standards as adopted by the EU and the relevant provisions of Part 9 of Book 2 of the Dutch Civil Code for the consolidated financial statements and Part 9 of Book 2 of the Dutch Civil Code for the company financial statements.

The basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. We have further described our responsibilities under those standards in the section ‘Our responsibilities for the audit of the financial statements’ of our report.

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

Independence

We are independent of Alliander N.V. in accordance with the European Union Regulation on specific requirements regarding statutory audit of public-interest entities, the ‘Wet toezicht accountantsorganisaties’ (Wta, Audit firms supervision act), the ‘Verordening inzake de onafhankelijkheid van accountants bij assuranceopdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).

Our audit approach

We designed our audit procedures with respect to the key audit matters, fraud and going concern, and the matters resulting from that, in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The information in support of our opinion, such as our findings and observations related to individual key audit matters, the audit approach fraud risk and the audit approach going concern was addressed in this context, and we do not provide separate opinions or conclusions on these matters.

Overview and context

Alliander N.V. heads a group of entities and is a grid company that manages and develops an energy network. The shares of Alliander N.V. are held by provinces and municipalities authorities. Within the group, Liander N.V. is the only subsidiary that is significant for the audit. Liander N.V. has the statutory responsibility to ensure the energy supply in its service area are reliable, affordable and accessible. In total, Liander N.V. has more than 3.3 million gas and electricity connections in the Netherlands. The other companies in the group all have their field of work in energy supply. The Group is comprised of several components and therefore we considered our group audit scope and approach as set out in the section ‘The scope of our group audit’.

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the management board made important judgements, for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. In these considerations, we paid attention to, amongst others, the assumptions underlying the physical and transition risk related to climate change.

In paragraph 35 of the financial statements, the Company describes the areas of judgement in applying accounting policies and the key sources of estimation uncertainty. Given the significant estimation uncertainty and the related higher inherent risks of the valuation of property, plant and equipment and the useful lives of these assets, we considered these matters as key audit matter as set out in the section ‘Key audit matters’ of this report.

Alliander N.V. assessed the possible effects of climate on its financial position. In paragraph [opnemen] of the management’s board report the entity has disclosed the risks due to climate change. We discussed Alliander N.V.’s assessment and governance thereof with the management board and evaluated the potential impact on the financial position including underlying assumptions and estimates, for instance for the valuation of the property, plant and equipment. The expected effects of climate change are not considered to impact the key audit matter.

We ensured that the audit team included the appropriate skills and competences which are needed for the audit of a grid company. We therefore included experts and specialists in the areas of amongst others IT, valuations and tax in our team, as well as forensic specialists.

The outline of our audit approach was as follows:

Materiality

Overall materiality: €97.000.000.

Audit scope

The audit focused primarily on the group entities Alliander N.V., Liander N.V., Qirion N.V. and Alliander Corporate Ventures B.V. These activities were performed by the audit team itself. Coverage of audit activities: 97% of consolidated revenue and 97% of consolidated total assets.

Key audit matters

Valuation property, plant and equipment and useful lives of these assets.

First-year audit consideration

After our appointment as the Company’s auditors, we developed and executed a comprehensive transition plan. As part of this transition plan, we carried out a process of understanding the strategy of the Group, its business, its internal control environment and IT systems. We examined where and how this affected the Company’s and the Group’s financial statements and internal control framework. Additionally, we read the prior year financial statements and we reviewed the predecessor auditor’s files and discussed and evaluated the outcome of the audit procedures included therein. We attended the audit committee meeting related to the 2023 audit. Based on these procedures, amongst others, we obtained sufficient and appropriate audit evidence regarding the opening balances. Furthermore, we prepared our risk assessment, our audit strategy and our audit plan for the year 2024, which we discussed with the management board and the audit committee.

Materiality

The scope of our audit was influenced by the application of materiality, which is further explained in the section ‘Our responsibilities for the audit of the financial statements’.

Based on our professional judgement we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and to evaluate the effect of identified misstatements, both individually and in aggregate, on the financial statements as a whole and on our opinion.

Overall group materiality	€97,000,000.
Basis for determining materiality	We used our professional judgement to determine overall materiality. As a basis for our judgement, we used 0.75% of total assets
Rationale for benchmark applied	We used total assets as the primary benchmark, a generally accepted auditing practice, based on our analysis of the common information needs of the users of the financial statements. On this basis, we believe that assets is the most relevant metric for the financial performance of the Company. The use of total assets as benchmark is common in the industry.
Component materiality	Based on our judgement, we allocate materiality to each component in our audit scope that is less than our overall group materiality. The range of materiality allocated across components was between €82.450.000 and €88.740.000.

We also take misstatements and/or possible misstatements into account that, in our judgement, are material for qualitative reasons.

We agreed with the supervisory board that we would report to them any misstatement identified during our audit above €1.000.000 for the income statement and €5.000.000 for the balance sheet as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

The scope of our group audit

Alliander N.V. is the parent company of a group of entities. The financial information of this group is included in the consolidated financial statements of Alliander N.V.

We determined the scope of our audit in such a way that we perform sufficient audit procedures to be able to express an opinion on the annual accounts as a whole. In doing so, we took into account, among other things, the management structure of the group, the nature of the activities of the group entities, the business processes and internal control measures and the industry in which the company operates. Based on this, we determined the nature and extent of the work at the level of the group entities that were necessary to be performed by the group team and by the auditors of the group entities.

The group audit focused primarily on the entities Alliander N.V., Liander N.V., Qirion N.V. and Alliander Corporate Ventures B.V.

Audits of the complete financial information were performed at Alliander N.V. and Liander N.V. because these group entities individually have a significant financial size. We audited specific annual accounts items for Qirion N.V. and Alliander Corporate Ventures B.V.

In total, in performing these procedures, we achieved the following coverage on the financial line items:

Revenue	97%
Total assets	97%

None of the remaining components represented more than 1% of total group revenue or total group assets. For those remaining components we performed, among other things, analytical procedures to corroborate our assessment that there were no significant risks of material misstatements within those components.

We have performed the audit procedures for all group components.

By performing the procedures outlined above at the components, combined with additional procedures exercised at group level, we have been able to obtain sufficient and appropriate audit evidence on the Group’s financial information, to provide a basis for our opinion on the financial statements.

Audit approach fraud risks

We identified and assessed the risks of material misstatements of the financial statements due to fraud. During our audit we obtained an understanding of Alliander N.V. and its environment and the components of the internal control system. This included the management board’s risk assessment process, the management board’s process for responding to the risks of fraud and monitoring the internal control system and how the supervisory board exercised oversight, as well as the outcomes

We evaluated the design and relevant aspects of the internal control system with respect to the risks of material misstatements due to fraud and in particular the fraud risk assessment, as well as the code of conduct and whistleblower procedures. We evaluated the design and the implementation and, where considered appropriate, tested the operating effectiveness of internal controls designed to mitigate fraud risks.

We asked members of the management board, management (including the internal audit department and legal affairs), and the audit committee and supervisory board whether they are aware of any actual or suspected fraud. This did not result in signals of actual or suspected fraud that may lead to a material misstatement

As part of our process of identifying fraud risks, we evaluated, in close co-operation with our forensic specialists, fraud risk factors with respect to financial reporting fraud, misappropriation of assets and bribery and corruption. We evaluated whether these factors indicate that a risk of material misstatement due to fraud is present.

We identified the following fraud risks and performed the following specific procedures:

Identified fraud risks

Management override of controls

Management is in a unique position to commit fraud because of its ability to manipulate accounting data and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively.

Our audit work and observations

We evaluated the design and implementation of internal control measures and tested the operating effectiveness of these measures in the processes for generating and processing journal entries, revenue recognition and estimates.

We have performed our audit mainly substantively.

Therefore, in all our audits we consider the risk of management override of internal controls. For Alliander N.V., this risk is influenced by:

journal entries and other adjustments made during the preparation of the financial statements;
estimates;
significant transactions outside the normal course of business.

We have performed data analysis on manual journal entries based on risk criteria and have performed specific audit procedures on them. These procedures include inspection of information from source documents.

We have also paid particular attention to consolidation and elimination entries, focusing primarily on testing entries that affect revenue and result in the financial year in question.

We have not identified any significant transactions outside the normal course of business.

In addition, we have performed specific audit procedures on important estimates made by management, including the valuation of property, plant and equipment. We refer to the key audit matter for this. We have paid particular attention to the inherent risk of possible bias by management in making estimates.

We have considered the results of other audit procedures and evaluated whether any deviations identified are indicative of fraud. If such an indication existed, we re-evaluated the fraud risk analysis and determined the impact on our planned audit procedures.

Our procedures did not lead to specific indications of fraud or suspicions of fraud with regard to management override of controls.

Risk of fraud in revenue recognition

Based on the assumption that there are risks of fraud in revenue recognition, we have evaluated which types of revenue transactions give rise to the assumed risk of fraud in revenue recognition.

We see this risk specifically for high-volume consumer revenue that is invoiced at incorrect rates.

We have evaluated the design and implementation of the internal control measures and tested the effective operation of these measures in the processes with regard to revenue recognition.

We have performed detailed work on the high-volume consumer revenue:

the accounted quantity of network connections and the meter readings connected with (external) source registration, such as CAR;
the invoiced rates connected with the method decisions and rate decisions established by the Netherlands Authority for Consumers and Markets ('ACM');
determined that the underlying connection, relevant to the rate, has been determined correctly.
checked the existence of receivables via subsequent receipt testing and existence verification.

Our work has not led to specific indications of fraud or suspicions of fraud with regard to management override of controls.

We incorporated an element of unpredictability in our audit. We reviewed lawyer’s letters and correspondence with regulators. During the audit, we remained alert to indications of fraud. Furthermore, we considered the outcome of our other audit procedures and evaluated whether any findings were indicative of fraud or non-compliance with laws and regulations.

Audit approach going concern

As disclosed in section ‘Accounting policies’ on page 242 of the financial statements the management board performed their assessment of the entity’s ability to continue as a going concern for at least 12 months from the date of preparation of the financial statements.

Our procedures to evaluate the management board’s going-concern assessment included, amongst others:

considering whether the management board’s going-concern assessment included all relevant information of which we were aware as a result of our audit:
- The liquidity and financing elements in the 'Alliander Business Plan 2025-2029' and the underlying developments and assumptions for both the short and long term; and
- Treasury reports 2024; and
- Most recent credit ratings from Moody's and S&P
Through and inquiring with the management board regarding the management board’s most important assumptions underlying its going-concern assessment.
evaluating the management board’s current budget including cash flows for at least 12 months from the date of preparation of the financial statements taken into account current developments in the industry such as investment agend, funding needs and all relevant information of which we were aware as a result of our audit;
analysing whether the current and the required financing has been secured to enable the continuation of the entirety of the entity’s operations, including compliance with relevant covenants;
performing inquiries of the management board as to its knowledge of going-concern risks beyond the period of the management board’s assessment.

Based on our procedures performed, we concluded that the management board’s use of the going-concern basis of accounting is appropriate, and based on the audit evidence obtained, that no material uncertainty exists related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements. We have communicated the key audit matter to the supervisory board. The key audit matter is not a comprehensive reflection of all matters identified by our audit and that we discussed. In this section, we described the key audit matter and included a summary of the audit procedures we performed on this matter.

Key audit matters

Valuation property, plant and equipment and useful lives of these assets

Refer to Note 3 Property, plant, equipment and right-of-use assets

The tangible fixed assets of approximately €10 billion mainly consist of regulated networks (approximately 81%). In addition, it consists of tangible fixed assets under construction (9%), other fixed assets (8%) and company buildings and land (approximately 2%). The valuation and determination of the useful life of the tangible fixed assets concerns a significant estimate in the annual accounts. Given the complexity of the estimate and the time spent on this estimate, we have identified this as a key point.

The management board carries out an annual analysis to determine whether there are indications that point to an exceptional impairment. If the management board concludes that there are indications, the management board is obliged to determine the realisable value and compare it with the book value and, if necessary, to account for an exceptional impairment in the tangible fixed assets.

In these analyses, the management board pays particular attention to the developments in the regulatory framework for the regulated networks, the risks from climate change, the energy transition and other market developments.

The management board also annually evaluates the useful life and (partly degressive) depreciation periods of the tangible fixed assets.

Based on the analysis, the management board has concluded that there are no indications of a permanent decrease in value and that the useful life of the tangible fixed assets is appropriate.

Our audit procedures and observations

In our audit, we focused on the analyses of Alliander N.V. to identify whether there are indicators that the book value of a property, plant and equipment exceeds the recoverable amount. We performed substantive audit procedures to verify the information used by management in the analyses to identify triggering events (indicators) for an impairment.

We discussed and tested the reasonableness of the estimates and assumptions of management and tested the analyses, among other things, for relevant developments in the regulations. We received sufficient and appropriate audit information to substantiate these assumptions and estimates.

We agree with the conclusions of the management board that there are no indicators for an impairment.

In addition, we checked the annual impairment calculation for the capitalised goodwill of Liander N.V., which shows that the book value of property, plant and equipment of Liander N.V. can be recovered. We used our valuation experts for this.

In 2019, the Climate Act was adopted and governments, companies and social organisations presented the Climate Agreement, which is part of the implementation of the law. The Climate Agreement states that the Netherlands wants to reduce the use of natural gas to zero by 2050. This is one of the frameworks against which we have tested the useful lives and (partly degressive) depreciation periods of the assets.

Based on internal analyses with regard to the useful lives of the property, plant and equipment, we consider the useful lives of the property, plant and equipment to be acceptable and have not found any material deviations with regard to the valuation of the property, plant and equipment.

Finally, we have assessed the acceptability of the valuation principles and the explanations and the uncertainties mentioned therein.

Report on the other information included in the annual report

The annual report contains other information. This includes all information in the annual report in addition to the financial statements and our auditor’s report thereon.

Based on the procedures performed as set out below, we conclude that the other information:

is consistent with the financial statements and does not contain material misstatements; and
contains all the information regarding the directors’ report and the other information that is required by Part 9 of Book 2 of the Dutch Civil Code.

We have read the other information. Based on our knowledge and the understanding obtained in our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.

By performing our procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of such procedures was substantially less than the scope of those procedures performed in our audit of the financial statements.

The management board is responsible for the preparation of the other information, including the directors’ report and the other information in accordance with Part 9 of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirements

Our appointment

We were appointed as auditors of Alliander N.V. on 1 December 2023 by the supervisory board. This followed the passing of a resolution by the shareholders at the annual general meeting held on 19 April 2023. This is our first year as auditor of the Company.

No prohibited non-audit services

To the best of our knowledge and belief, we have not provided prohibited non-audit services as referred to in article 5(1) of the European Regulation on specific requirements regarding statutory audit of public-interest entities.

Services rendered

The services, in addition to the audit, that we have provided to the Company or its controlled entities, for the period to which our statutory audit relates, are disclosed in note 25 Other operating expenses to the financial statements.

Responsibilities for the financial statements and the audit

Responsibilities of the management board and the supervisory board for the financial statements

The management board is responsible for:

the preparation and fair presentation of the financial statements in accordance with IFRS Accounting Standards as adopted by the EU and Part 9 of Book 2 of the Dutch Civil Code; and for
such internal control as the management board determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the management board is responsible for assessing the Company’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the management board should prepare the financial statements using the going-concern basis of accounting unless the management board either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so. The management board should disclose in the financial statements any event and circumstances that may cast significant doubt on the Company’s ability to continue as a going concern.

The supervisory board is responsible for overseeing the Company’s financial reporting process.

Our responsibilities for the audit of the financial statements

Our responsibility is to plan and perform an audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence to provide a basis for our opinion. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high but not absolute level of assurance, and is not a guarantee that an audit conducted in accordance with the Dutch Standards on Auditing will always detect a material misstatement when it exists.

Misstatements may arise due to fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

Materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.

A more detailed description of our responsibilities is set out in the appendix to our report.

Utrecht, 3 March 2025
PricewaterhouseCoopers Accountants N.V.

The original, prevailing Dutch auditor’s report has been signed by drs K. Hofstede RA

Appendix to our auditor’s report on the financial statements 2024 of Alliander N.V.

In addition to what is included in our auditor’s report, we have further set out in this appendix our responsibilities for the audit of the financial statements and explained what an audit involves.

The auditor’s responsibilities for the audit of the financial statements

We have exercised professional judgement and have maintained professional scepticism throughout the audit in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit consisted, among other things of the following:

Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the intentional override of internal control.
Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal
Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management board.
Concluding on the appropriateness of the management board’s use of the going-concern basis of accounting, and based on the audit evidence obtained, concluding whether a material uncertainty exists related to events and/or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report and are made in the context of our opinion on the financial statements as a whole. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluating the overall presentation, structure and content of the financial statements, including the disclosures, and evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We are responsible for planning and performing the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the financial statements. We are also responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with the supervisory board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. In this respect, we also issue an additional report to the audit committee in accordance with article 11 of the EU Regulation on specific requirements regarding statutory audit of public-interest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report.

We provide the supervisory board with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related actions taken to eliminate threats or safeguards applied.

From the matters communicated with the supervisory board, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.