- TOOUR SHAREHOLDERS • MANAGEMENT REPORT Sustainabillty Emplonts • CONSOUDATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION 109 Diversity is decisive We place great emphasis on a good mix of employees to ensure diversity of nationality, gender, educational back- ground and professional experience, as well as a wide- ranging age structure. We specifically support this through activities such as gender networks at our major Germany sites and various events and formats that bring together people, enrich discussions and help build bridges between different cultures and backgrounds. The Evonik WoMentoring initiative entered its second round in 2015. In addition, we again included binding diversity targets in the objectives agreed with our corporate executives. Our diversity strategy also forms the strategic basis for our resolutions on implementing the new legislation on gender quotas', for which the German government set a deadline of September 30, 2015. These resolutions confirm that we will step up the measures already defined and estab- lished as part of our diversity strategy to foster women in management positions. Employee survey—Online only for the first time In our first fully online employee survey run under the motto t in online" at the end of 2015, around 33,000 employees worldwide were asked for their input to actively shape the future of the Group. The survey included questions about the change process for the ongoing development of Evonik's organizational structure. As a new element, there were specific questions on occupational safety, which is a top priority for Evonik as a specialty chemicals company. The participation rate was an excellent 83.9 percent. In the follow-up process, the results of the survey will be translated into specific improvement measures in 2016. Work-life balance Healthy and motivated employees are vital for Evonik's success and an integral part of our corporate responsibility. Our well@work program covers all aspects that maintain and 1 See Declaration on corporate governance. 2 See section on Environment. safety and health. improve the employability and quality of life of our employ- ees. For example, in the area of health management seminars are organized throughout Germany to provide information on a healthy diet, handling stress and appropriate physical exer- cise. Evonik also offers employees a wide range of sports activities—from yoga to conventional gym classes.' Combining work and family life has also had very high priority for Evonik for years and is part of our overall well@work approach. In 2015 we embarked on a review of our performance in this area in order to uphold our validation by the Hertie Foundation as a family-friendly company. Core elements of our offering include support in child care and flexible worktime models. At the end of 2015 we also started to revise our regional and country-specific approach to work-life balance. Lead In the area of leadership, Evonik builds on a uniform and concrete Group-wide understanding of leadership, centered on a trustful relationship between employees and managers. To ensure that sincere and effective leadership is a distinctive quality at all Evonik sites, in 2015 we harmonized global training to prepare staff for leadership roles. The aim is to establish high-quality leadership aligned to our corporate culture as a hallmark of Evonik. Strong leaders are essential for value-oriented manage- ment of the company. In 2015 nearly 70 corporate talents therefore once again made a contribution to the housing construction project in Vietnam in collaboration with Habitat for Humanity. As well as direct experience of value-oriented action, they gained inspiration, which they conveyed back into our company. In addition, in 2015 two pilot groups embarked on a program that explores ethical conduct, personal values and their relationship to the working environment. Nearly 30 corporate talents took part in this program in 2015. EFTA00598742

110 ANNUAL REPORT 2015 EVONIK INDUSTRIES 5.2 Environment, safety and health Ambitious environmental targets Protecting our environment and the climate are major global challenges of our age, along with the efficient use of limited natural resources in the face of the growing world population and increasing affluence. Maintaining the natural basis for future generations is part of our corporate responsibility. Key areas of action in the ecological arena can be derived from efficiency requirements. For us, that principally means reducing energy consumption, minimizing emissions into the air and water, and efficient water management. We also develop products that contribute to forging a clear link between economic success and ecological progress. However, improving our ecological footprint and remaining internationally competitive are also dependent on public acceptance and political opportunity. These conditions are reflected in our strategic focus. We have set demanding environmental targets for the period 2013-2020 (reference base: 2012): • Reduce specific greenhouse gas emissions' by 12 percent • Reduce specific water intake' by 10 percent In sustainable waste management, we are continuing our efforts to make more efficient use of resources. In 2015, we made substantial progress in further reducing emissions at all stages in the value chain. A functioning environmental management system is the basis for this. Integrating it into our corporate processes is an ongoing task and an integral part of sustainability management at Evonik. At Evonik, accountability for plants, technical systems, products and processes is therefore assigned to the responsible mem- bers of staff, for example, through job descriptions and letters of delegation. Our binding Group-wide Environment, Safety and Health (ESH) strategy, including a set of rules that has been audited externally, forms the basis for our action. Audits are conducted to monitor implementation by the segments, regions and sites. Alongside many internal audits in operating units, in 2015 we conducted 17 corporate audits. More than 95 percent of our global production is at sites that have been validated as con- forming to ISO 14001, an internationally recognized environ- mental management standard. Safety as a management task We take our responsibility in the field of safety particularly seriously—during production and while shipping products to our customers. Our objective is to protect our employees and local residents, as well as the environment, against any potential negative impact of our activities. The Group-wide "Safety at Evonik" initiative introduced in 2014 has become firmly established as an ongoing process to develop our safety culture and a fundamental management approach to all aspects of occupational and traffic safety. Our guiding principles for safety and our safety culture provide a structure and guidance for our corporate targets and activities. Binding principles are applicable for all employees, from local personnel to our management, and provide clear and measurable guidance for their personal conduct and leadership. Reduction in accident frequency A special focus of our initiative is the safety of our employ- ees—both at work and on the way to and from work—and the safety of contractors working at our sites. In 2015, we registered a further improvement in the accident frequency indicator' for our continuing operations to 1.0, compared with 1.2 in the previous year. This indicator has now been stable for several years at our long-term strategic goal of around 1.0. The accident frequency rate was well below the target of a maximum of 1.3 defined for 2015. There were no fatal accidents at work involving our employees or contractors at our sites in 2015, nor were there any fatal traffic accidents involving employees on the way to and from work or on business trips. The accident frequency indicator for contractors (number of work-related accidents involving non-Evonik employees resulting in absence from work per 1 million working hours) dropped back to 2.9 (2014: 3.6). We attribute this positive result to the steps taken to improve our contractor manage- ment principles in 2014. The processes to improve the moni- toring and evaluation of contractors were implemented at all major German sites in 2015 and are now having an effect. A standard has also been drawn up for our international sites and will be implemented in 2016. Energy- and process-related emissions as defined by the Greenhouse Gas Protocol. 2 Excluding site-specific factors in the use of surface eater or groundwater. 1 Number of accidents involving Evonik employees and contractors employees under Evonik's direct supervision per 1 million working hours. EFTA00598743

- TOOUR SI4AREHOLDERS • MANAGEMENT REPORT SusterielsIllty Environment, safety and health • CONSOUDATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION 111 Accident frequency indicator Number of accidents per I m is,. oorking hours 2008 1.7 2009 1.2 2010 1,3 2011 1.3 2012 1.4 2013 0.9 2014 1.2 stt 1.0 00 0.5 Incident frequency did not meet our target Process safety at our plants is another focus of our initiative. The concepts to prevent fire and the release of hazardous substances are regularly analyzed in detail. The aim is timely identification of risks so we can develop appropriate measures that reliably prevent these risks. We monitor and evaluate plant safety using the incident frequency indicator', which covers incidents involving the release of substances, fire or explosion, even if there is little or no damage (process safety performance indicator defined by the European Chemical Industry Council, Cefic). This indicator deteriorated slightly to 55 points in 2015 (2014: 53), so we did not meet our target of maximum 48 points. The differ- Incident frequency indicator 1.0 1.5 2.0 ence was attributable to one segment and individual sites and measures have already been taken to counter the situation. Another common indicator of plant safety is also used in external comparisons. This is defined as the number of incidents per 1 million hours worked by all employees in the Group. Evonik's performance rated by this indicator was 1.3. To ensure that our safety concepts to prevent the release of substances, fire and explosion meet uniformly high safety standards throughout the world, they are developed with the involvement of selected and experienced safety experts, who are assigned to our Global Process Safety Competence Center (GPSC) and form the Global Safety Expert Network led by the GPSC. Number of incidents per 1 million hours worked, taking 2008 as the referent* base 2008 2009 2010 2011 2012 46 60 2013 2014 2015 0 20 40 so S3 SS 75 76 100 60 80 100 1 Number of incidents per 1 million hours worked in the production facilities operated by the segments, taking 2008 as the reference base (expressed in percentage points: 2008 = 100). EFTA00598744

112 ANNUAL REPORT 2015 EVONIK INDUSTRIES High standard of climate reporting established Potential to grow our business can be leveraged by systematic realignment of our portfolio of products and services, taking global megatrends into account. For Evonik, these include global climate change. We have a large number of innovative products that improve energy efficiency at subsequent stages in the value chain and therefore make an important contri- bution to reducing the use of resources and cutting emissions. Our lubricant and fuel additives are a good example. Hydraulic fluids containing our DYNAVISe additives can increase the productivity of excavators by up to 30 percent and at the same time cut fuel consumption by up to 30 percent. Companies that are interested can calculate the exact savings for them- selves using a special calculator on the DYNAVIS't website. Maximum comparability based on complete transparency is essential to make sustainable business activities measurable and traceable. The Carbon Disclosure Project is currently the world's largest and most important initiative by the financial sector on climate change, bringing together more than 800 institutional investors with combined assets under management of over USE95 trillion. This project examines all aspects of corporate policy and how it is put into practice in business. It covers both the com- pleteness of reporting and the quality of the information relating to actual climate performance. In 2015, Evonik was able to improve on its very good results for 2014 (91/6). With a ranking of 98/B, Evonik once again did significantly better than the average of 72/C for the participating MDAX companies. Lower CO, emissions' CO2 emissions declined slightly from 8.8 million metric tons in 2014 to 8.7 million metric tons in 2015 although output increased from 10.3 million metric tons to 10.4 million metric tons in this period. The decline in emissions was mainly due to implementation of specific measures to raise energy efficiency, an altered energy mix in Marl (Germany) as a result of lower availability of the coal-fired power plants due to maintenance shut-downs, and the divestment of the remaining carbon black activities in China. The 30 facilities operated by Evonik that fall within the scope of the European Union's Emissions Trading System (EU ETS) emitted 4.0 million metric tons of CO2 in 2015. The reduction of 0.2 million metric tons com- pared with 2014 was mainly due to temporary reductions in coal-based energy generation and lower utilization of the hydrogen plant in Marl. Environmental protection investment and operating costs We invested €43 million in 2015 to achieve a further improve- ment in environmental protection. This comprised capital expenditures for investment projects undertaken in 2015 such as the expansion of capacity for specialty silicas in Ako (Japan), a large number of individual investments in effective end-of-pipe technologies, and environmental protection measures integrated into plants and processes. The high prior-year figure of €107 million was dominated by the start-up of major strategic investment projects in the Asian region. These included, in particular, the new methionine complex in Singapore and the new production facilities for isophorone and isophorone diamine in Shanghai (China). Operating costs for environmental protection facilities rose considerably to €283 million in 2015 (2014: €259 million), principally due to the start-up of methionine production and the use of the environmental protection facilities at the site in Singapore. Health management and contingency planning go hand-in-hand To fulfill our responsibility to our employees, we have a wide range of measures to protect and maintain their health. These have a firm place in our Group-wide well@work program.' Evonik's workplace health protection and promotion mea- sures focus first and foremost on encouraging a healthy lifestyle with offerings in the areas of exercise, a healthy diet, work-life balance, and preventing infections and addiction. To supplement this, special annual campaigns are devoted to different aspects and the company offers voluntary pre- ventive measures. In 2015, for example, campaigns aimed at preventing colorectal cancer were run at many of our sites. Standardized processes based on hazard assessments are used for occupational health management. Potential dangers in the workplace are systematically identified and measures are developed to assure the health and safety of our em- ployees. Their effectiveness is monitored through medical check-ups. Medical contingency management at Evonik is based on a global policy that sets out the necessary emergency organi- zation and the equipment and personnel to be provided, taking the regional emergency response infrastructure into account. Exercises are conducted regularly to check the functioning of this system. 1 Direct CO2 emissions (Scope 1 emissions under the Greenhouse Gas Protocol) come from energy generation and production. Indirect CO2 emissions come from purchased energy (Scope 2 emissions). 2 See also the section on Employees. EFTA00598745

- TOOUR SHAREHOLDERS • MANAGEMENT REPORT Opportunity end risk report Oppoitunity and risk mmeigement • CONSOU DATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION TO 6. Events after the reporting date No reportable events have occurred since the reporting date. 7. Opportunity and risk report 7.1 Opportunity and risk management Risk strategy Evonik's Group-wide internal opportunity and risk manage- ment (referred to generically as risk management in this section) forms a central element in the management of the company. Our risk detection system meets the requirements for publicly listed companies. The aims are to identify oppor- tunities and risks as early as possible and to define measures to counter and minimize any risks and utilize opportunities. That includes risks which could jeopardize the future of the company. We only enter into entrepreneurial risks if we are convinced that in this way we can generate a sustained rise in the value of the company and, at the same time, permanently limit possible negative implications. Structure and organization of risk management At Group level risk management is assigned to the Chief Financial Officer and is organized on a decentralized basis in line with Evonik's organizational structure. The segments, corporate divisions and service units bear prime responsibility for risk management. That comprises early identification of risks, estimating their implications, introducing suitable preventive and control measures and the related internal communication. Risk coordinators in the orga- nizational units are responsible for agreeing on the relevant risk management activities. Risk management is therefore a key element in various management and decision-making processes (for example, controlling processes) at all levels in the Group. It includes strategic and operational planning, the preparation of investment decisions, projections, and timely and systematic reporting of risks. A central Corporate Risk Officer coordinates and oversees the processes and systems. He is the contact for all risk co- ordinators and is responsible for information, documentation and coordination at Group level. Further responsibilities include ongoing development of the methodology used by the risk management system. The Risk Committee is chaired by the Chief Financial Officer and composed of represen- tatives of the corporate divisions. It validates the Group-wide risk situation and verifies that it is adequately reflected in financial reporting. The Supervisory Board, especially the Audit Committee, oversees the risk management system. In 2015, the companies included in our risk management system were identical to those in the scope of consolidation for the financial statements. At companies where we do not exert a controlling influence, we implement our risk manage- ment requirements primarily through our presence in manage- ment and supervisory bodies. Corporate Audit monitors risk management in our organizational units to make sure they comply with statutory and internal requirements and to ensure continuous improvement of risk management. The system used to identify emerging risks is included in the annual audit in compliance with the requirements for listed companies. This audit showed that Evonik's risk detection system is suitable for timely identification of risks that could pose a threat to the company's survival. The risk management system is based on the internation- ally recognized COSO Enterprise Management standard. It is implemented through a binding Group-wide policy. Individual risks are systematically identified and managed with the aid of special risk management software. Their probability of occurrence and the possible damage (potential impact) are evaluated and documented, together with their expected value (product of probability of occurrence and potential impact). Analogously to current planning, the evalu- ation is based on a period of three years (mid-term planning). Opportunities and risks are defined as positive and negative deviations from the plan. p— E :4 V EFTA00598746

114 ANNUAL REPORT 2015 EVONIK INDUSTRIES Opportunity/risk matrix ea Ew >250 50.1-250 10.1-50 2.6-10 0-2.5 1-10% 11-25% 26-49% 50-75% 76-100% Probability of occurrence e. High opportunities/risks Moderate opportunities/risks Low opporturstesinsks The organizational units conduct an extensive annual risk inventory in connection with the mid-term planning process. They are required to provide details of the measures to be taken with regard to the risks identified, introduce them immediately, and track their timely implementation. Internal management (for example, reporting by the Risk Committee) takes a mid-term view. The opportunities and risks identified are classified as low, moderate or high (see opportunity and risk matrix). The evaluation is always based on a net view, in other words, taking into account risk limitation measures. The risk inventory is supplemented by quarterly reviews of all opportunities and risks relating to the present year to spot changes in the opportunities and risks that have already been identified and identify new risks and opportunities. The management of risks and opportunities is based on their potential impact and probability of occurrence. All high risks are classified as material individual risks, as are moderate risks with an expected value of over €10 million in the mid term. The expected value is used exclusively as a basis for prioritization and to focus reporting on key issues. 7.2 Overall assessment of opportunities and risks Given the measures planned and implemented, no risks have been identified that—either individually or in conjunction with other risks—could jeopardize the continued existence of Evonik as a whole, including Evonik Industries AG in its role as the holding company for the Group. For 2015 we expected slightly more risks than opportu- nities. However, some major opportunities were realized during the year, resulting in a substantial increase in earnings, especially in the Nutrition & Care and Resource Efficiency segments. By contrast, the development of the Performance Materials segment was characterized by considerably more risks than opportunities. Key factors relating to the risk categories were the macro-economic environment and the specific market and competitive situation, especially in the markets for amino acids and C, chemicals. From the present standpoint, the risks for 2016 outweigh the potential oppor- tunities, which are around the same level as last year. Sections 7.3 and 7.4 present the opportunities and risks in each category in descending order of significance for the Evonik Group. Except where otherwise indicated, they apply for all segments. 7.3 Planning/market risks and opportunities In accordance with our internal management, opportunities and risks in the planning/market category are allocated to risk quantification classes within sub-categories. The chart shows the highest class to which an individual risk or opportunity is allocated in each sub-category. Individual opportunities and risks may also be allocated to the lower risk classes. Where two sub-categories have the same profile in the chart, they are ranked first on the basis of opportunities, then listed in descending order, based on their expected impact. 1. Sales markets The macro-economic environment is particularly relevant for an assessment of opportunities and risks. This applies both to the development of the global economy and to economic trends in specific regions such as Europe, China and other growth markets. There are also risks associated with geo- political conflicts in some regions and countries. EFTA00598747

- TOOUR SHAREHOLDERS • MANAGEMENT REPORT Opportunity end risk capon Planneig/inarket risks and Opportunities • CONSOU DATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION 715 Opportunity and risk classes within the planning/market category Sub-category Sales markets Financial markets Raw material markets Research Es development Capital expenditures Production Other Energy markets Mergers Er acquisitions Human resources Opportunities - High opportunities/risks e. Moderate opportuniGes/risks Low opportunities/risks Alongside the general demand situation, intensive competition in the various market segments harbors both opportunities and risks. In particular, competitors in low-wage countries increase competitive pressure through new capacities and aggressive pricing policies that can impair our selling prices and volume trends. To counter this we are broadening our foreign production base and gaining access to new markets in high-growth regions such as Asia and South America. The operating units affected also use various methods of increas- ing customer loyalty to reduce these risks. These include, in particular, strategic research alliances with customers and extending the services offered along the value chain. We are constantly developing attractive and competitive new products and technologies to mitigate the risk that chemical products could be replaced by new, improved or less expensive materials or technologies. Opportunities arise for our busi- ness from unmet demand in individual markets, for example if our competitors are unable to bring planned new capacity into service on schedule. The specific market development for individual business activities is another focus in the assessment of opportunities and risks. This relates to both demand from specific markets and the competitive situation in various industries. Changes in demand can impact our business volume and sales. We address these risks proactively through permanent market monitoring, activities to retain customers and gain new accounts, and timely endeavors to develop innovative new applications and enter new markets. In principle, these opportunities and risks may affect all segments, but they are particularly relevant for the Nutrition & Care and Per- formance Materials segments. One potential risk factor for our amino acids business, for example in Asia, is the possible impact of substandard food quality and food safety, especially due to bird flu. We utilize opportunities for profitable future growth by gaining access to new markets as part of our strategic development. One attractive market for our portfolio of feed additives is aquaculture, for which we have developed innovative products. As a result of global population growth, rising affluence in emerging markets and overfishing of the world's oceans, the global aquaculture market is growing faster than other areas of livestock farming. Customer concentration is basically low in our chemicals segments. None of the end-markets that we supply accounts for more than 20 percent of sales. Nevertheless, some oper- ational units, especially in the Nutrition & Care and Resource Efficiency segments, and the Services segment have a certain dependence on key customers. In the operating business, this applies in particular to production facilities erected in the direct vicinity of major customers. The possible loss of a major customer could result in lower sales and in impairment losses on receivables and investments, as well as impacting our long-term raw material agreements or the financial structure of our affiliates. 2. Financial markets On the financial markets, the company is exposed to risks and opportunities associated with prices and to liquidity and default risks. Price-related opportunities and risks result from changes in exchange rates, interest rates and other prices. Liquidity risks relate to the ability of the company to meet its payment obligations, while default risks entail the risk of a loss if a debtor is fully or partially unable to meet its payment commitments. 2 5 E EFTA00598748

116 ANNUAL REPORT 201S EVONIK INDUSTRIES Minimizing these risks is an important objective of our cor- porate policy. Group-wide policies and principles specify that all material financial risk positions have to be identified and evaluated. The risks are limited through selective use of derivative and non-derivative financial instruments, taking the cost/benefit profile into account. This may include the use of options for hedging purposes. For financial risk management purposes, Evonik applies the principle of separation of front office, risk controlling and back office functions and takes as its guide the banking-specific "Minimum Requirements for Risk Management" (MaRisk) and the requirements of the German legislation on corporate control and transparency (KonTraG). Binding trading limits, responsibilities and controls are thus set in accordance with recognized best practices. This forms the basis for selective hedging to limit risks. The risks and opportunities associated with interest rates and exchange rates are managed centrally by the Finance Division of Evonik Industries AG, which also issues instructions on the management of liquidity and default risks. Financial derivatives' are used exclusively to reduce the risks resulting from operating and financing activities and there- fore always relate to corresponding underlying transactions. Use of financial instruments for speculation is not permitted. Forward exchange contracts, currency swaps and cross- currency interest rate swaps are used to manage currency risks. When setting interest terms, we pay attention to care- ful structuring of the fixed-to-floating interest ratio; interest rate swaps can be used to optimize the situation. Commodity swaps are used to hedge the risk of fluctuations in the price of coal, natural gas and petrochemical feedstocks. We also use forward contracts to secure the procurement of emissions allowances to meet statutory obligations. A considerable portion of the Evonik Group's financial assets and liabilities and its sales are in currencies other than the euro, which is the Group's reporting currency. The most important foreign currencies are the US dollar and the Chinese renminbi yuan. All cash flows that are planned, firmly agreed or recognized on the balance sheet as receivables and liabilities and are not denominated in the functional currency of the respective company are exposed to the opportunities and risks of changes in exchange rates. Risk positions resulting from trade accounts receivable and payable in foreign curren- cies are normally bundled and offset through intragroup hedging. The remaining net risk exposure is then fully hedged through currency derivatives. Cash pool positions and time deposits in foreign currencies are hedged analogously. Unlike these portfolio hedges, micro-hedges are concluded for non-current loans and for planned and firmly agreed foreign currency payments (for example, planned foreign currency sales, where the aim is to hedge 65 percent of the identified exchange rate risk, and exchange rate risks relating to planned investments). When hedging planned and firmly agreed risk positions with financial instruments, hedge accounting is used to synchronize the earnings effects of the recognized hedging instruments with those of the off- balance-sheet hedged items. Evonik manages the opportunities and risks resulting from changes in interest rates in financing and investment activities on a case-by-case basis. Through the use of fixed-interest loans and interest rate hedging instruments, 96 percent of all financial liabilities were classified as fixed-interest as of the reporting date and therefore had no material exposure to changes in interest rates. Changes in interest rates can have a significant influence on the present value of our pension obligations) and thus entail both risks and opportunities for the Group. We use scenario analyses ' to assess the possible impact of opportunities and risks relating to currencies and interest rates. In view of the rising importance of regions outside the euro zone, exchange rate risks and opportunities will increase in the long term. Other price risks relating to the financial markets come mainly from investments in companies that are listed on the stock exchange, which IAS 39 specifies have to be recognized on the balance sheet at their stock market value. Since Evonik does not generally undertake such investments with a view to short-term purchase or sale, the unrealized changes in market value are only recognized in the income statement if they represent a significant or long-term loss of value. Otherwise, they are recognized as changes in equity with no impact on profit or loss until such gains or losses are realized through sale of the investment. At the heart of Evonik's central liquidity risk management is a Group-wide cash pool. In addition, the Group's financial independence is secured through a broadly diversified financ- ing structure. Further details of the financial derivatives used and their recognition and valuation can be found in Note 10.2 to theconsolidated financial statements. 2 See Note 4 (e). 1 A detailed overview of liquidity risks and their management an be found in Note1O2 to the consolidated financial statements. Details of the financing of the Evonik Group and action to protect liquidity can be found in the section on financial condition. EFTA00598749

- TOOUR SHAREHOLDERS • MANAGEMENT REPORT Opportunity end tisk repon Plenrung/mteket Hsks and opp•nunilies • CONSOU DATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION 117 Overall, Evonik believes that adequate financing instruments are available to ensure sufficient liquidity at all times. Credit risks relating to financial contracts are system- atically examined when the contracts are concluded and monitored continuously afterwards. Limits are set for each counterparty on the basis of internal or rating-based credit- worthiness analyses. Market opportunities and risks, and liquidity and default risks relating to financial instruments also arise from the management of our pension plan assets. Here, we take an active approach to risk management, which is combined with detailed risk controlling. Strategic management of the portfolios takes place via regular active/passive studies. To minimize risk, we use a range of derivative hedging strategies where appropriate. The broad diversification of asset classes, portfolio sizes and asset managers avoids cluster risks. How- ever, unavoidable residual risks may remain in the individual investments. Goodwill from business combinations is allocated to the segments. An impairment test is conducted annually for these reporting segments. Impairment losses on these intangible assets can result from a change in reporting structure, the weighted average cost of capital and, above all, lower cash flow expectations. 3. Raw material markets For our business operations we require both high-volume commodities and smaller amounts of strategically relevant raw materials that have to meet highly demanding specifi- cations. Across the entire spectrum of raw materials, Evonik is confronted with opportunities and risks relating to the increasing volatility of the availability of raw materials and their prices. Another risk may arise from single-source situations, although the extent of such risks is limited. The operating business is dependent on the price of strategic raw materials, especially petrochemical feedstocks obtained directly or indirectly from crude oil. The price of crude oil therefore has a considerable influence on both the procurement prices of raw materials further down the value chain and energy costs. The price of renewable raw materials is also highly volatile and depends, among other things, on harvest conditions. Another factor influencing price risks is changes in exchange rates. Some procurement risks are hedged by optimizing global procurement activities, for example, by accessing new markets for raw materials and concluding market-oriented agreements. The overriding aim of the procurement strategy is to secure the availability of raw materials on the best possible terms. To further reduce the risks with regard to products that have intensive raw material requirements, our aim is to align the procurement and sales sides in order to pass fluctuations in raw material prices along to other stages in the value chain where necessary, for example through price escalation clauses. The sharp drop in the oil price in the past two years has made a significant contribution to reducing the cost of procuring raw materials. Short- and mid-term bottlenecks in the availability of precursors and intermediates are also potential risks. We alleviate these where necessary by substituting suppliers. We constantly observe the business performance of suppliers of selected key raw materials to anticipate bottlenecks and avoid risks. 2015 was characterized to an usual extent by outages in the supply chain resulting from force majeure. Such events can generally be overcome by taking suitable steps in cooper- ation with the suppliers affected and alternative suppliers. Rising volatility will require increased management of the various supply chain risks in the future. Aspects such as safety, health, environmental protection, corporate responsibility and quality have a firm place in our procurement strategy. These sustainability aspects are also supported by standardized global assessments through the Together for Sustainability (TfS) sector initiative, which was co-founded by Evonik. Evonik's principal suppliers and the majority of critical suppliers have already taken part in these assessments, which are evaluated by EcoVadis, an impartial sustainability rating company. The opportunities and risks arising from changes in the price of petrochemical feedstocks mainly affect the Perfor- mance Materials segment because of its high procurement volume. Risks relating to single sourcing and short-term restrictions on the availability of raw materials mainly affect the Nutrition & Care and Resource Efficiency segments. 4. Research & development Opportunities for Evonik also come from market-oriented research & development I ) , which we regard as an important driver of profitable growth. We have a well- stocked pipeline with a balanced mixture of short-, mid- and long-term projects. On the one hand, we constantly strive to improve our processes to strengthen our cost leadership, and on the other, our projects open the door to new markets and new fields of technology. Our project portfolio is consistently aligned to the strategy of the relevant business entities. EFTA00598750

118 ANNUAL REPORT 2015 EVONIK INDUSTRIES Further opportunities are being generated by the increasing involvement of external partners (open innovation). We co- operate with research institutes and universities to ensure rapid translation of the latest research findings into our company. We also work with start-ups and other industrial companies to facilitate solutions at all stages in the value chain that set us apart from our competitors. Through our venture capital program, we take stakes in companies whose know-how can support us in joint devel- opments. Opportunities and risks in relate to the viability of planned product and process developments and the timing of their implementation. We mainly see significant opportu- nities from the introduction of new products that go beyond our present planning in the Resource Efficiency segment. 5. Investments Generating organic growth through investment entails risks as regards the proposed scope and timing of projects. These risks are addressed through established, structured processes. For instance, we take an extremely disciplined approach to implementing our investment program. Both projects that have not yet started and those that are already underway are constantly reviewed for changes in the market situation and postponed if necessary. At the same time, we regard building new production facilities in regions with high growth momentum as an oppor- tunity to generate further profitable growth. For example, socio-economic megatrends are driving the development of our amino acids business. Following the successful start-up of a world-scale facility for DL-methionine in Singapore in fall 2014, we are planning to erect another plant at this com- plex by 2019. Global population growth means that demand for animal protein will continue to rise steadily in the future. This is being reinforced by a further trend: In the emerging markets eating habits in the growing middle class are shifting towards western patterns in the wake of rising prosperity and increasing urbanization. Consumption of meat is therefore increasing sharply in Asian cities, leading to more intensive livestock farming in this region. Moreover, environmentally compatible agricultural production that makes more efficient use of resources is becoming more important worldwide for ecological reasons. In addition, in emerging markets there is rising demand from the affluent middle class for personal care products and cosmetics. China and Brazil are important growth markets for personal care products because of their size and momentum. Evonik wants to participate in this growth through new local production capacities. The resource efficiency megatrend is the basis for a large number of energy-efficient and environment-friendly products from Evonik. One example is precipitated silica, where we are a market leader. Combining these silicas with silanes allows the manufacture of tires with considerably lower rolling resistance than conventional auto tires, resulting in fuel savings of up to 8 percent. Here, future growth will be supported, among other factors, by the introduction of tire labeling regulations in further countries, for example in Brazil in 2016. To utilize the resultant opportunities, we are increasing our capacity for silica. A new production facility is therefore currently under construction in Americana (Brazil). This will be the first local producer of highly dispersible silica (HD silica) specifically for the South American tire industry. In South America the market for tires with low rolling resis- tance, and thus for HD silica, is growing far faster than the market for normal auto tires. The investments described above are included in our mid-term planning. Delayed realization or abandonment of investment projects, for example because of the political situation in certain countries, would adversely affect planned growth and, in extreme situations, could result in impairment losses and the associated write-downs on facilities or plants under construction. By contrast, new projects could result in additional earnings in some areas. 6. Production As a specialty chemicals company, Evonik is exposed to the risk of business interruptions, quality problems and unex- pected technical difficulties. Our products involve complex production processes, some of them with interdependent production steps. Consequently, disruption and stoppages can adversely affect subsequent production steps and products. The outage of production facilities and interruptions in pro- duction workflows could have a significant negative influence on business and earnings performance, and could also harm people and the environment. Group-wide policies on project and quality management, highly qualified employees and regular maintenance of our plants effectively minimize these risks. Insofar as is economically viable, we take out insurance to cover damage to our plants and sites and production stoppages, so the financial consequences of potential pro- duction risks are largely insured. Nevertheless, there is a risk of unforeseeable individual incidents. EFTA00598751

- TOOUR SHAREHOLDERS • MANAGEMENT REPORT Opportunity end risk report Planning/moket inks and OPPoilumin • CONSOU DATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION 119 7. Other To increase scope for growth and innovations, we are working steadily to improve our cost position, especially through the On Track 2.0 and Administration Excellence pro- grams. Beside the potential to raise strategic flexibility and strengthen the operating units as a result of these programs and other restructuring projects, there are risks relating to their implementation. These include the risk of failing to meet the ambitious timelines, a loss of personnel with key expertise, failure to meet financial targets, and higher restructuring costs. Stringent project management, including involving relevant stakeholders, is used to counter these risks. 8. Energy markets Evonik requires considerable amounts of energy from a wide variety of sources for its chemical facilities and infrastructure. The main sources are natural gas, coal and electricity. Oil only plays a subordinate role in Evonik's energy mix. At several major sites, Evonik generates some of its electricity require- ments itself in resource-efficient co-generation plants. In 2015, we constantly monitored the trend on national and international energy markets, enabling us to respond cost- consciously. In countries where the sourcing of energy is not state-regulated, Evonik procures and trades in energy and— where necessary—emission allowances (CO2 allowances) within the framework of defined risk strategies. The aim is to balance the risks and opportunities of volatile energy markets. Depending on how the general conditions develop, our segments could be faced with additional costs. A further significant drop in the price of oil and coal in the second half of 2015 and high supply on the global gas markets have led to a drop in electricity and natural gas prices, which has also been felt in Germany and Central Europe. Never- theless, natural gas prices at Evonik's sites in Europe and Asia are still far higher than in the USA and Canada. Risks could also arise from the continued rise in the price of emission allowances. In 2015, there was a largely uninter- rupted upward trend in the price of allowances in European emissions trading, unlike the situation for primary and secon- dary energy sources. Looking at the regulatory environment, it remains to be seen which rulings will be applied in Ger- many after 2017 to allocate the cost of renewables among captive energy generators. Overall, we are exposed to fluctuations in the market price and cost of various energy sources as a result of the specific demand/supply situation and political events. These entail both opportunities and risks. 9. Mergers £7 acquisitions Active portfolio management has high priority for Evonik as part of our value-based management approach. We have set out clear procedures for preparing, analyzing and under- taking acquisitions and divestments. In particular, these include clear rules on accountability and approval processes. An intensive examination of potential acquisition targets (due diligence) is undertaken before they are acquired. This involves systematic identification of all major opportunities and risks and an appropriate valuation. Key aspects of this process are strategic focus, earnings power and development potential on the one hand, and any legal, financial and environmental risks on the other. New companies are rapidly integrated into the Group and thus into our risk management and controlling processes. Every transaction of this type entails a risk that integration of the business may not be successful or that integration costs may be unexpectedly high, thus jeopardizing realization of the planned quantitative and qualitative targets such as synergies. Where businesses no longer fit our strategy or meet our sustainable profitability requirements despite optimization, we also examine external options. If a planned divestment is not achieved successfully, this could generate risks that impact the Group's earnings position. 10. Human resources Qualified specialists and managers are the basis for the achievement of our strategic and operational targets and thus a key competitive factor. Both the loss of key personnel and difficulties in attracting and hiring skilled and talented staff could therefore constitute a risk in this context. To ensure that we can recruit and retain qualified staff to meet our future requirements, we offer attractive employ- ment opportunities worldwide, systematic personnel devel- opment, and competitive remuneration. In this way, we retain and foster high-performers and talented employees, and position Evonik as an attractive employer for prospective staff. We also maintain close links to universities and pro- fessional associations to help us recruit suitable youngsters. Both our employer branding and many internal activities are aligned to diversity. The aim is to make Evonik even more attractive to talented specialists and managers. Strategic human resources planning identifies requirements for a five- year period so timely steps can be taken to cover future personnel needs. We have thus largely limited potential human resources risks. o V EFTA00598752

120 ANNUAL REPORT 201S EVONIK INDUSTRIES Opportunities and risks for the development of personnel expenses could come, for example, from future collective agreements. 7.4 Legal/compliance risks and opportunities The opportunities and risks in this category are far more dif- ficult to quantify than planning/market risks, as they not only have financial implications but often also involve reputational risks for the company and/or criminal law consequences. Provisions are set up on our balance sheet to cover the finan- cial impact. These are reflected in our system as reducing risk. In view of this complexity, legal/compliance opportunities and risks are not normally assigned to the opportunity/risk matrix illustrated above, nor are they allocated to the risk quantification classes. Major opportunities and risks for the Group's earnings naturally arise from issues that result in the reversal of or an increase in provisions. 1. Law, regulatory framework and compliance Evonik is exposed to legal risks resulting, for example, from legal disputes such as claims for compensation, and from administrative proceedings and fines. In its operating busi- ness, the Evonik Group is exposed to liability risks, especially in connection with product liability, patent law, tax law, com- petition law, antitrust law and environmental law. Changes in public law could also give rise to legal risks or materially alter such risk positions. As a chemical company with its own power plants, risks of particular relevance here are a possible change in the charges levied under the German Alternative Energies Act (EEG) and amendments to the European emis- sions trading regulations. Further, Evonik may be liable for guarantee claims relating to divestments. Post-transaction management closely monitors any liability and guarantee risks resulting from divestments. We have developed a concept involving high quality and safety standards to ensure a controlled approach to such legal risks. Insurance cover has been purchased for the financial consequences of any damage that may nevertheless occur as a result of damage to property, product liability claims and other risks. Where necessary, Evonik sets up provisions for legal risks. At present, the issues outlined below represent the main legal risks. As a matter of principle, we refrain from evaluating the opportunities and risks of potential legal proceedings or proceedings that have commenced, in order not to influence our position. Evonik is currently involved in three ongoing appraisal proceedings in connection with the settlement paid to former shareholders. The background relates to the following corpo- rate restructuring measures: the domination and profit- and-loss agreement concluded with RUTGERS GmbH (for- merly RUTGERS AG) in 1999, the squeeze-out of non- controlling interests in RUTGERS AG (now RUTGERS GmbH) in 2003, and the squeeze-out of non-controlling interests in Degussa AG (now Evonik Degussa GmbH) in 2006. The appraisal proceedings comprise a court review of the appropriateness of cash settlements or compensation. In connection with the divestment of its former energy activities, Evonik gave the purchaser various indemnities with regard to the Walsum 10 coal-fired power plant that was under construction at the time. As a result of technical problems, the commissioning of this plant was delayed by nearly four years, so commercial operation only started on December 20, 2013. Evonik is of the opinion that the general contractor is responsible for reimbursement of the majority of additional costs and the damage caused by the delay. Arbi- tration proceedings are now pending between the project company and the general contractor. In connection with the divestment of the former carbon black activities, the purchaser has requested indemnification from environmental guarantees relating to alleged infringe- ment of the US Clean Air Act. Evonik is currently engaged in a dispute with the purchaser on this. Following a fine imposed by the EU Commission in 2002 on various methionine producers (including Evonik), the Brazilian antitrust authorities have filed proceedings against Evonik in connection with the delivery of methionine to Brazil. Evonik is of the opinion that a fine cannot be imposed due to the statute of limitations. Furthermore, following completion of administrative pro- ceedings outside Germany, it is not improbable that individual customers could file claims for compensation. With regard to employment law, there are risks relating, for example, to recalculation of pension commitments entered into by Evonik and its legal predecessors. EFTA00598753

- TOOUR SHAREHOLDERS • MANAGEMENT REPORT Opportunity end risk repon Piocessiorgenization fists • CONSOU DATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION 121 Tax risks relate to differences in the valuation of business processes, capital expenditures and restructuring by the financial authorities and potential retroactive payments in the wake of tax audits. Compliance means lawful and ethically correct business conduct. All employees are subject to the binding regulations on fair treatment of each other and of business partners set out in our Code of Conduct. Risks could therefore result from failure to comply with the corresponding regulations.' To minimize compliance risks, extensive training and sensiti- zation of employees is undertaken at face-to-face training sessions and/or through e-learning programs. 2. Risks relating to the protection of intellectual property and know-how Innovations play a significant part in Evonik's business success. Protecting know-how and intellectual property is therefore of central importance. With markets growing ever closer and the globalization of business, a competent approach to protecting our competitive edge is a key element in our investment activities. The company is also exposed to a risk that intellectual property cannot be adequately protected, even through patents, especially when building new produc- tion facilities in certain countries. Similarly, the transfer of know-how in joint ventures and other forms of cooperation also entails a risk of an outflow of expertise from Evonik. For example, in the event of the possible separation from a joint venture or other cooperation partner there is no guarantee that the business partner will not continue to use know-how transferred or disclose it to third parties, thereby damaging Evonik's competitive position. Measures to minimize and avoid such risks are coordi- nated by the Corporate Security Division and the Intellectual Property Management unit. The Corporate Security Division has Group-wide responsibility for protecting Evonik's employ- ees, facilities, shipments and know-how. That includes, for example, the threat of violence, political unrest, sabotage and industrial espionage. Intellectual Property Management pro- vides Group-wide support for the development, protection, strategic use and commercialization of intellectual property, for instance through patents and brands. The approximately 150 employees in this unit are assisted by a global network of correspondent lawyers. 3. Environmental risks (environment, safety, health, quality) Evonik is exposed to risks in the fields of plant safety, product safety, occupational safety and failure to comply with environ- mental regulations. Group-wide policies on the environment, health and safety, and worldwide initiatives taken by the Group and the segments to steadily improve safety in our production facilities effectively reduce these risks. In addition, risks that could arise as a result of the sourcing of raw mate- rials and technical services and their impact on our operating business are systematically identified and evaluated. More- over, audits are conducted at the request of the Executive Board to check the controlled handling of such risks. Further- more, the Group-wide environment and safety management system, which is validated as conforming to international standards, undergoes constant development and improvement. As a responsible chemical company, Evonik ensures that such processes are operated in accordance with the principles of the global Responsible Care initiative and the UN Global Compact. Adequate provisions have been established to secure or remediate contaminated sites where necessary. Alongside the need to adjust environmental provisions identified through structured internal processes, for example as a result of changes in the regulatory framework, further unplanned additions to such provisions may be necessary. 7.5 Process/organization risks 1. General This risk category covers the interface between risk manage- ment and the internal control system (ICS). In this category, risks generally result from specific process shortcomings. Alongside general weaknesses, these include, in particular, risks within the ICS and the accounting-related ICS. Classifi- cation is therefore based on the list of processes drawn up by Corporate Audit. Starting from key corporate processes, the existence of relevant control objectives and standard controls for the main risks identified is checked. In view of the types of risk in this category, a purely qualitative assess- ment is normally used. I 0 The Corporate Governance Repo; I is contained in this annual report on page 56. EFTA00598754

122 ANNUAL REPORT 201S EVONIK INDUSTRIES The evaluation of specific risks resulting from weaknesses in processes within the organizational units showed very little scope to optimize existing processes because of the efficacy of the current controls. Corresponding scope for improve- ment has been identified. There are therefore no signs of systematic errors in the Evonik Group's ICS. 2. Internal control system for financial accounting The main financial reporting risks are identified in the ICS through a quantitative and a qualitative analysis. Controls are defined for each risk area of the accounting process. Their efficacy is tested at regular intervals and improved where necessary. All elements of the control process are verified by Internal Audit on the basis of random samples. To ensure the quality of financial statements we have a Group-wide policy which defines uniform accounting and valuation principles for all German and foreign companies included in the consolidated financial statements. The major- ity of companies have delegated the preparation of their financial statements to Financial Services. Through systematic process orientation, standardization and the utilization of economies of scale, this leverages sustained cost benefits and also improves the quality of accounting. Financial Services has developed a standardized control matrix for the internal control system for financial accounting. This is already applied to all Group companies in Germany for which Financial Services is responsible. Following successful introduction of the control matrix at the major operating companies in China, Southeast Asia and, in the course of 2015, the USA and Belgium, it will be rolled out successively to further foreign companies. The aim is to ensure a uniform global standard for the internal control system for financial accounting. An external audit is conducted on the annual financial statements of more than 95 percent of companies. All data are consolidated by the Accounting Division using the SAP SEM-BCS system. Group companies submit their financial statements via a web-based interface. A range of technical validations are performed at this stage. Computer- ized and manual process controls and checking by a second person are the key oversight functions performed in the financial reporting process. The preparation of the monthly consolidated income statement and publication of three quarterly reports enables us to gain experience with new accounting issues and provide a sound basis for plausibili- zation of the year-end accounts. The Executive Board receives monthly reports and quarterly reports are submitted to the Audit Committee of the Supervisory Board. Aspects that may represent opportunities or risks for financial reporting in the future are identified and evaluated early through the risk management system. This allows close meshing of risk management with controlling and accounting processes. 8. Information pursuant to Section 289 Paragraph 4 and Section 315 Paragraph 4 of the German Com- mercial Code (HGB) and explanatory report by the Executive Board pursuant to Section 176 Paragraph 1 of the German Stock Corporation Act (AktG) Structure of issued capital The capital stock of Evonik Industries AG is €466,000,000 and is divided into 466,000,000 no-par registered shares. Each share entitles the holder to one vote. Under Section 5 Paragraph 2 of the Articles of Incorpo- ration, shareholders do not have any claim to the issue of certificates for their shares unless the issue of a certificate is required by the rules of a stock exchange on which the share has been admitted for trading. There are no different share classes, nor any shares with special rights. Restrictions on voting rights or the transfer of shares In connection with Evonik's employee share programs, there are restrictions on the ability of participating employees to dispose of their shares for a certain time period. In particular, they are required to hold their shares in each case until the end of the next-but-one calendar year after the year of allocation. The Executive Board is not aware of any other restrictions on voting rights or the transfer of shares. EFTA00598755

- TOOUR SHAREHOLDERS • MANAGEMENT REPORT CONSOU DATED FINANCIAL STATEMENTS Talceover.rdeveni information SUPPLEMENTARY INFORMATION 123 Direct and indirect shareholdings that exceed 10 percent of the voting rights Under the German Securities Trading Act (WpHG), every shareholder whose voting rights in the company reach, exceed or drop below a certain level, whether through the purchase or sale of shares or in any other way, must notify the company and the Federal Financial Supervisory Authority (BaFin). Under Section 21 Paragraph 1 of the German Secu- rities Trading Act, the relevant thresholds are 3, 5, 10, 15, 20, 25, 30, 50 and 75 percent of the voting rights. Changes in voting rights between these thresholds are not subject to notification under the German Securities Trading Act so the following data may differ from more recent overviews of the shareholder structure. In compliance with Section 160 Para- graph 1 No. 8 of the German Stock Corporation Act (AktG), the notes to the financial statements of Evonik Industries AG contain an overview of all voting rights notifications sub- mitted to the company. Under Section 289 Paragraph 4 No. 3 and Section 315 Paragraph 4 No. 3 of the German Commercial Code (HGB), all direct and indirect shareholdings exceeding 10 percent of the voting rights must be declared. As of December 31, 2015, the Executive Board had only received notification of one direct shareholding exceeding 10 percent of the voting rights: RAG-Stiftung holds 67.91 per- cent of the company's shares. The Executive Board is not aware of any further direct or indirect holdings in the company's capital stock that exceed 10 percent of the voting rights. Appointment and dismissal of Executive Board members, amendments to the Articles of Incorporation The appointment and dismissal of members of the Executive Board of Evonik Industries AG is governed by Section 84 of the German Stock Corporation Act (AktG) and Section 31 of the German Codetermination Act (MitbestG), in conjunction with Section 6 of the company's Articles of Incorporation. Section 6 of the Articles of Incorporation states that the Executive Board comprises at least two members. Further, the Supervisory Board is responsible for determining the number of members. Changes to the Articles of Incorporation are normally resolved by the Annual Shareholders Meeting. Section 20 Paragraph 2 of the Articles of Incorporation states that, unless mandatory provisions require otherwise, resolutions shall be adopted by a simple majority of the votes cast and—unless, besides a majority of the votes, a majority of the capital is required by law—by a simple majority of the capital stock represented. Under Section 11 Paragraph 7 of the Articles of Incorpo- ration, the Supervisory Board is authorized to resolve on amendments to the Articles of Incorporation, provided they are only editorial. A simple majority vote is sufficient. Authorization of the Executive Board, especially to issue and repurchase shares Pursuant to a resolution of the Shareholders Meeting of March 11, 2013, the Executive Board is authorized until March 10, 2018, subject to the approval of the Supervisory Board, to purchase up to 10 percent of the company's capital stock. Together with other shares in the company which the company has already acquired or still owns, or which are attributable to it pursuant to Sections 71d and 71e of the German Stock Corporation Act (AktG), the shares acquired under this authorization may not, at any time, exceed 10 per- cent of the capital stock. Shares in the company may not be purchased for trading purposes. Subject to the principle of equal treatment (Section 53a AktG), the purchase may take place via the stock exchange or via a public offer to all shareholders for the purchase or exchange of shares. In the latter case, notwithstanding the exclusion of tender rights permitted in specific circumstances, the principle of equal treatment (Section 53a AktG) must also be taken into account. The Annual Shareholders' Meeting on May 20, 2014 ad- opted an amendment to Section 4 Paragraph 6 of the Articles of Incorporation authorizing the Executive Board until May 1, 2019, subject to the approval of the Supervisory Board, to increase the company's capital stock by up to €116,500,000 (Authorized Capital 2014). This authorization may be exercised through one or more issuances. The new shares may be issued against cash and/or contri- butions in kind. The Executive Board is authorized, subject to the approval of the Supervisory Board, to exclude share- holders' statutory subscription rights when issuing new shares in the following cases: • capital increases against contributions in kind • if the capital increase is against cash and the proportionate share of the capital stock attributable to the new shares does not exceed 10 percent of the capital stock, and the issue price of the new shares is not significantly below the stock market price of shares already listed on the stock exchange • to exclude fractional amounts arising from the subscrip- tion ratio • insofar as is necessary to grant holders and/or creditors of warrants or conversion rights or obligors of warrant and/ or conversion obligations subscription rights to new shares to the extent that they would be entitled to them after exercise of their warrants and/or conversion rights or fulfillment of their warrant or conversion obligations • to grant shares to employees (employee stock), provided that the new shares for which subscription rights are excluded do not in aggregate account for a proportionate share of the capital stock in excess of 1 percent • for the execution of a scrip dividend. 5 E EFTA00598756

124 ANNUAL REPORT 2015 EVONIK INDUSTRIES The proportionate amount of the capital stock attributable to the shares for which subscription rights are excluded, together with the proportionate amount of the capital stock attributable to treasury stock or to conversion and/or war- rant rights or obligations arising from debt instruments, which are sold or issued after May 20, 2014 under exclusion of subscription rights, may not exceed 20 percent of the capital stock. If the sale or issue takes place in application— analogously or mutatis mutandis—of Section 186 Paragraph 3 Sentence 4 of the German Stock Corporation Act (AktG), this shall also be deemed to constitute exclusion of sub- scription rights. The Executive Board is authorized, subject to the approval of the Supervisory Board, to define further details of capital increases out of the Authorized Capital 2014. The authorized capital has not yet been utilized. In connection with the authorization of May 20, 2014 to issue convertible and/or warrant bonds with a nominal value of up to €1.25 billion up to May 1, 2019, the capital stock is conditionally increased by a further C37,280,000 (Conditional Capital 2014). The conditional capital increase will only be conducted insofar as holders or creditors of warrant or conversion rights or obligors of warrant or conversion obligations arising from warrant bonds and/or convertible bonds issued or guaranteed on the basis of the authorization resolved at the Annual Share- holders' Meeting of May 20, 2014, exercise their warrants or conversion rights or, insofar as they have an obligation to exercise the warrants or conversion obligations, meet the obligation to exercise the warrant or conversion obligations and other forms of settlement are not used. The new shares are entitled to a dividend from the start of the fiscal year in which they are issued. Significant agreements concluded by the company that are contingent upon a change of control resulting from a takeover bid Evonik Industries AG is a contracting party in the following agreements that are contingent upon a change of control resulting from a takeover bid: The company has agreed a €1.75 billion syndicated credit facility with its core banks, which had not been drawn as of December 31, 2015. In the event of a change of control resulting from a takeover bid, these banks could withdraw the credit facility. On the terms agreed, this applies if a new major shareholder (apart from RAG-Stiftung and its subsidiaries) acquires direct or indirect voting rights of more than 50 percent in Evonik Industries AG—including through a voting rights agreement with one or more other shareholders (pursuant to Section 30 Paragraph 2 of the German Securities Acquisition and Takeover Act (WpOG)). The company has a debt issuance program to place bonds with a total volume of up to €3 billion. By December 31, 2015 two bonds with a total nominal value of C1.25 billion had been issued under this program. The issue conditions contain a change-of-control clause. In the event of a change of control resulting from a takeover bid and a deterioration in the credit rating of Evonik Industries AG to non-investment grade within 90 days as a result of such change of control, the bondholders have the right to demand redemption of the bond at nominal value plus accrued interest. A change of control is deemed to have occurred if a person (apart from RAG-Stiftung or a (direct or indirect) subsidiary of RAG-Stiftung) or persons acting in a concerted manner directly or indirectly acquire(s) more than SO percent of the voting rights in Evonik Industries AG. Agreements on payment of compensation by the company to members of the Executive Board or other employees in the event of a change of control Change-of-control clauses are only agreed with members of the Executive Board in connection with long-term remuner- ation. A change of control is defined as cases when another company obtains control of Evonik Industries AG as defined in the German Securities Acquisition and Takeover Act (WpOG) or there is a material change in the company's shareholders as a result of a merger or comparable reorgani- zation or business combination. In such cases, the long-term remuneration due to the eligible employees is calculated immediately and paid into their salary account with their next regular salary payment. From the 2013 tranche, the payment is calculated pro rata based on the period between the grant date and the change of control and the four-year performance period. EFTA00598757

- TOOUR SHAREHOLDERS • MANAGEMENT REPORT Remuneration report Remuneration of the Execurive Bard • CONSOUDATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION 12S 9. Declaration on corporate governance The declaration on corporate governance in compliance with Section 289a of the German Commercial Code (HGB) has been made available to the public on the company's website at governance. 10. Remuneration report The remuneration report outlines the principles of the remu- neration system for the members of the Executive Board and the Supervisory Board, together with the structure and level of their individual remuneration. This report complies with the German Commercial Code (HGB), including the principles set out in German Accounting Standard No. 17 (DRS 17), the International Financial Reporting Standards (IFRS), and the requirements of the German Corporate Governance Code. 10.1 Remuneration of the Executive Board Changes on the Executive Board The appointment of Mr. Patrik Wohlhauser ended on June 30, 2015 with his resignation from the Executive Board. At its meeting on June 25, 2015, the Supervisory Board appointed Dr. Ralph Sven Kaufmann to the Executive Board as Chief Operating Officer for three years from July 1, 2015. At its meeting on September 24, 2015, the Supervisory Board extended the appointment of Mr. Thomas Wessel as Chief Human Resources Officer for a further five years until August 31, 2021. Principles and objectives The remuneration system for the Executive Board is designed to ensure that members receive adequate remuneration for their tasks and responsibilities, and to take direct account of the performance of each member of the Executive Board and Further, extensive information on corporate governance is contained in the Corporate Governance Report in this annual report. of the company. The structure of the remuneration system for the members of the Executive Board of Evonik Industries AG is geared to sustained value creation and performance- oriented management of the company. It comprises a fixed monthly base salary, which takes account of the tasks and services performed by the respective member, and a variable short-term component comprising an annual bonus which is dependent on the attainment of annual performance targets. This is supplemented by a long-term component linked directly to the increase in the value of the company as an incentive for sustained commitment to the company, and the customary fringe benefits. The remuneration is reviewed regularly by the Super- visory Board, where appropriate on the basis of remuneration reports from independent consultants. These reviews exam- ine the structure and level of remuneration of the Executive Board, particularly in comparison with the external market, and also in relation to remuneration elsewhere in the company. If this reveals a need to adjust the remuneration system, or the level or structure of remuneration, the Executive Committee of the Supervisory Board submits a corresponding proposal to the full Supervisory Board for a decision. The last external review of the remuneration system for appropriateness was in September 2015. Following this review, it was decided that from January 1, 2016 the fixed annual base salary should be increased by €150 thousand for the Chairman of the Executive Board and by €100 thousand for all other Executive Board members. EFTA00598758

126 ANNUAL REPORT 2015 EVONIK INDUSTRIES The chart shows the breakdown of the main remuneration components in 2015, i.e. excluding benefits in kind, other fringe benefits and company pension plans. Structure of remuneration of members of the Executive Board a Lontierm remuneration (agreed target amounts) approx. 37% Axed annual base salary approx. 30% Annual bonus (assuming 100% target attainment) agoprox.33% ' Excluding fringe benefits and retirement pensions. Performance-unrelated components Fixed annual base salary The fixed annual base salary is a cash payment for the fiscal year. It takes account of the scope of responsibility of each Executive Board member and is paid out in twelve equal installments. Benefits in kind and other fringe benefits As benefits in kind and other fringe benefits, members of the Executive Board receive, in particular, a company car with a driver, the installation of telecommunications equipment, and an entitlement to an annual medical check-up. Executive Board members may receive a rent subsidy if performance of their duties requires them to rent a second apartment. Benefits in kind are presented in this remuneration report at the values defined in the tax regulations. Further, members of the Executive Board may receive additional remuneration for offices at Group companies that they hold in the interests of Evonik. Apart from fees for the attendance of meetings, insofar as such fees are paid to Executive Board members, such payments are deducted from their annual bonus or paid over to the company. In this remu- neration report, remuneration for offices held in the interests of the company is included in other fringe benefits. Performance-related components Short-term variable remuneration The performance-related annual bonus is dependent on the attainment of business targets measured by performance indicators (bonus factor) and the attainment of individual objectives (performance factor). The bonus factor and performance factor are multiplied. The level of the bonus factor depends on the achievement of the agreed business targets, and may be between 0 and 200 percent. ROCE, adjusted net income and adjusted EBITDA are defined as business targets. The ROCE target is measured against the mid-term cost of capital, the net income target is derived from a comparison with the prior year, and the EBITDA target is derived from corporate planning. The company's accident performance in the financial year (number and severity of accidents compared with the previous year) also has an influence. The performance factor rewards the attainment of the personal objectives and can vary between 80 percent and 120 percent. The reference indicators are aligned individually to the performance objectives for each member of the Executive Board and normally have a multi-year context within the target-setting framework. If the personal and business targets are achieved in full, the contractually agreed bonus is paid. If the company's income falls short of the planned level, the bonus factor may—in the extreme case—be zero, regardless of personal attainment. In other words, it is conceivable that a bonus might not be paid for a specific year. The bonus is capped at 200 percent of the target bonus. The business and personal targets set for Executive Board members for the bonus and performance factors are agreed in writing at the start of each fiscal year between the Super- visory Board and each member of the Executive Board and the level of attainment is determined by the Supervisory Board after the end of the year. Long-term variable remuneration (LTI) The members of the Executive Board receive long-term variable remuneration in the form of Long-Term Incentive (LTI) Plans. Following Evonik's stock exchange listing, the structure of the LTI Plans was redefined as from the 2013 tranche. The general reference base for long-term remuner- ation is a sustained rise in the value of the company. EFTA00598759

- TOOUR SHAREHOLDERS • MANAGEMENT REPORT RenwnetretIon report Remuneration of the Exeturive Some • CONSOUDATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION 127 LT! trenches 2070 through 2012 The [ranches 2010 through 2012 reward achieving or ex- ceeding the operating earnings targets set in the mid-term planning and their impact on the value of the company. Each tranche runs for five years from January 1 of the grant year. Entitlements are based on individually agreed target amounts provided that earnings targets are met. LTI payments are calculated in the year following the end of the perfor- mance period, when the necessary indicators are available. Payments are capped at three times the target amount, and can be zero if the defined lower threshold is not reached. To determine the value of the company as a basis for ascertaining target attainment, the share price at the end of the performance period is used. For this purpose, the average price of shares in Evonik in the three months prior to the end of the performance period is calculated. In addition, divi- dends paid and any capital increases or decreases during the performance period are taken into account. The cumulative discrepancy between planned and actual target attainment in the performance period and the dividends paid in the last year of the performance period are taken into account in the calculation. If there is no share price, the value of equity is determined on the basis of the last share transaction in the last twelve months of the performance period. If there was no share transaction in the last twelve months, a fictitious equity value is used. This is derived by applying a fixed EBITDA multiple to the company's business performance in the last full fiscal year. Given the structure of the LTI Plans 2010 through 2012, they did not meet the definition of share-based payment pur- suant to DRS 17.9 until Evonik Industries AG was listed on the stock exchange. Consequently, they were not classified as share-based payments. In each case, payment was contingent on attainment of the defined performance target and on the condition that the amount available for distribution was not zero. Accordingly, these tranches were only deemed to have been granted in the year in which the respective performance period ended. Granting of payments was further conditional on the fact that the stock exchange listing had not taken place. This final condition was met in 2013, resulting in the reclassification of this remuneration component as a share- based payment. In accordance with DRS 17, the LTI tranches 2010 through 2012 are therefore regarded as granted as of this date and treated as share-based payments. The fair value of each tranche as of the date of the legally binding commitment was calculated. LT! trenches 2073 and subsequent years In view of the stock exchange listing of Evonik Industries AG, the Supervisory Board redesigned the LTI Plan for the period from 2013 so it differs from the tranches 2010 through 2012. Performance is now measured by the absolute performance of Evonik's share price and its performance relative to the MSCI World Chemicals Indexsm. Based on the contractually agreed target amount, which is defined in euros, a number of virtual shares is calculated using the share price at the start of the performance period. This is based on the price in the last 60 trading days before the start of the performance period. The performance period starts on January 1 of the grant year and runs for four years. Since there was no share price at the start of the performance period, as an exception, the virtual shares for the 2013 tranche were calculated from the share price in the first 60 trading days following admission to the stock exchange (April 25, 2013). At the end of the performance period, the starting price of Evonik shares is viewed against the average share price at the end of the performance period, including any dividends per share actually paid in this period. This is compared with the performance of the benchmark index (total shareholder return). The relative performance may be between 70 and 130 percentage points. If the relative performance is below 70 percentage points, the relative performance factor is deemed to be zero. If the relative performance is above 130 percentage points, the relative performance factor is set at 130. The payment is calculated by multiplying the relative performance by the number of virtual shares allocated and the average price of Evonik shares at the end of the performance period. Eligible participants are informed of the outcome after the end of the performance period. They can then opt to accept the payment calculated or to extend the performance period on a one-off basis for a further year. In this case, a renewed calculation is performed at the end of the extended per- formance period. Partial exercise at the end of the original performance period is not permitted. The upper limit for these payments is set at 300 percent of the individual target amount. EFTA00598760

123 ANNUAL REPORT 2015 EVONIK INDUSTRIES The fair values of the LTI tranches 2010 through 2015 as of the date of the legally binding commitment are shown in the next table: LTI tranehes Dr. Klaus Engel Dr. Ralph Sven Kaufmann Christian Kullmann Thomas Wessel Patrik Wohlhauser Ute Wolf Total 2010' 2011' 2012' 2013' 2014'. 20156 In €'000 In €000 in 0000 No. of No. of virtual virtual shares in €000 shares In C000 479 495 43,133 96 297 25,880 216 297 25,880 478 791 1,089 6,470 101,363 1,028 45,208 - 13,562 617 27,125 617 27,125 154 27,125 2,416 140,145 307 614 614 614 3,172 I No. of virtual shares 47,510 14,253 28,506 28,506 28,506 28,506 175,787 in €'000 1,482 447 893 893 893 893 5,507 • No detads are give, of other share-based payments because a speak number of shares or share options was not owed, not can the trenches be converted into a number of virtual shares. b The date of the legally binding commitment corresponds to the grant date. The total expense for all LTI tranches in 2015 was €4,753 thousand. The breakdown of the expense was as follows: €1,204 thousand for Dr. Engel, €102 thousand for Dr. Kaufmann, €329 thousand for Mr. Kullmann, €752 thou- sand for Mr. Wessel, €1,837 thousand for Mr. Wohlhauser, and €529 thousand for Ms. Wolf. Company pension plan The company pension arrangements for Dr. Klaus Engel comprise a percentage of his fixed annual base salary, which is dependent on length of service with the company and is capped at 60 percent. This pension commitment provides for a lifelong retirement pension and surviving dependents' benefits. A defined-contribution system is applicable for Christian Kullmann, Thomas Wessel, Patrik Wohlhauser and Ute Wolf. This is a capital-based system funded by provisions. The company credits a fixed annual amount to their pension account. This comprises 15 percent of their target remuner- ation, i.e. base salary and target bonus (variable short-term remuneration assuming 100 percent target attainment). The guaranteed annual return is 5 percent. The pension benefit comprises the amount that has accrued on the account, i.e. contributions credited to the account plus interest. In the event of death or disability, the amount that would be available on the account on the member's 55th birthday, including projected contributions and interest, is calculated. Payment normally comprises a lifelong pension. Alternatively, Executive Board members may opt for disbursement of part of the capital (maximum 50 percent) in six to ten install- ments. Pension entitlements accrued prior to appointment to the Executive Board are either integrated into the system as an initial contribution or continue to be managed separately. If a member's contract as a member of the Executive Board ends before benefits are payable, no further contributions are credited to the account. However, it continues to earn interest at the common market interest rate based on the average return earned by major German life insurers (at least 2.25 percent M.) until benefits are claimed. Currently, no pension arrangements have been agreed for Dr. Ralph Sven Kaufmann. Members of the Executive Board are entitled to pension benefits after they leave the company if they leave on or after reaching the age of 60 or 62 (depending on their individual pension arrangements) or if they leave as a result of permanent incapacity to work. In addition, Dr. Engel can claim pension benefits from the date of premature termi- nation or non-extension of his contract on the Executive Board, providing he does not give due cause for such termi- nation. Mr. Kullmann, Mr. Wessel and Mr. Wohlhauser have similar claims based on pension entitlements accrued prior to their appointment to the Executive Board. In 2015, the service cost for members of the Executive Board totaled €875 thousand (2014: €2,977 thousand) based on the German Commercial Code (HGB) and €2,261 thou- sand (2014: €1,526 thousand) based on IFRS. EFTA00598761

- TOOUR SHAREHOLDERS a MANAGEMENT REPORT Remuneration report Remuneration of the Executive Board • CONSOUDATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION 129 Service cost and p value of pension obligations German Commercial Code (HGB) Settlement amount of pension obligations as of Dec. 31 IFRS Service cost Present value of the defined benefit obligation as of Dec. 31 Service cost in C000 2015 2014 2015 2014 2015 2014 2015 2014 Dr. Klaus Engel 114 2,215 14,102 12,148 712 488 16,945 17,162 Dr. Ralph Sven Kaufmann (from July 1, 2015) Christian Kullmann (from July 1, 2014) 217 121 2,787 2,068 414 160 3,732 3,523 2 a Thomas Wessel 236 251 3,027 2,332 384 280 3,810 3,563 2 Patrik Wohlhauser (until June 30, 2015) 73 254 - 2,917 402 322 - 4,539 Lite Wolf 235 136 998 600 349 276 1,312 986 Total 875 2,977 20,914 20,065 2,261 1,526 25,799 29,773 The difference in service cost for pension commitments is attributable to differences in the valuation methods used to calculate the settlement amount in accordance with the German Commercial Code and the present value of pension obligations calculated in accordance with IFRS. The present value of pension obligations for members of the Executive Board was €20,914 thousand (2014: €20,065 thousand) based on the German Commercial Code (HGB) and €25,799 thousand (2014: €29,773 thousand) based on IFRS. Provisions for pension obligations to former members of the Executive Board and their surviving dependents as of the reporting date were €38,704 thousand (2014: €28,801 thou- sand) based on the German Commercial Code (HGB) and €50,951 thousand (2014: €43,816 thousand) based on IFRS. Rules on termination of service on the Executive Board Cap on termination benefits in the event of premature termination of term of office In conformance with the German Corporate Governance Code, the employment contracts with all members of the Executive Board provide for a cap on termination benefits. Termination benefits If a member's term of office is prematurely terminated, payments may not exceed two years' remuneration, including variable remuneration components. In no case is remuneration payable for periods beyond the remaining term of contract. The contracts specify that no termination benefits are payable if an Executive Board member's contract is terminated for reasons for which he or she is responsible. The cap on termination benefits is based on total remuneration including fringe benefits in the previous fiscal year and, where appro- priate, the anticipated total remuneration for the current fiscal year. The termination benefit paid to Patrik Wohlhauser does not exceed the cap. In addition, from April 1, 2016 Mr. Wohlhauser will receive contractual transition payments totaling €1,795 thou- sand (past service cost) until he reaches the age of 60. These will be offset against any other earnings he receives in the future. Post-contractual non-compete agreements Post-contractual non-compete agreements have not been concluded with members of the Executive Board. in C000 Fixed remuneration Benefits in kind Annual bonus Pension contributions Long-term remuneration Total Patrik Wohthauser 450 11 878 141 9004 2,380° • The termination benefit takes account of the LTI 'ranches 2011 and 2012 and—on a pro rata basis-2016. The LT !ranches 2013 through 2015 will be upheld. b At Mr. Wohlhauser 's request, E97S thousand of this amount has been allocated for future pensgin benefits ('deferred compensation•). EFTA00598762

130 ANNUAL REPORT 2015 EVONIK INDUSTRIES Change-of-control clause Change-of-control clauses are only agreed with members of the Executive Board in connection with long-term remuneration. A change of control is defined as cases when another company obtains control of Evonik Industries AG as defined in the German Securities Acquisition and Takeover Act (WpOG) or there is a material change in the company's shareholders as a result of a merger or comparable reorgani- zation or business combination. In such cases, the long-term remuneration due to the eligible Executive Board members is calculated immediately and paid into their salary account. From the 2013 tranche, the payment is calculated pro rata Remuneration of the Executive Board based on the period between the grant date and the change of control and the four-year performance period. Remuneration of the Executive Board in fiscal 2015 The total remuneration paid to the members of the Executive Board for their work in 2015, including remuneration for the performance of other offices, was €15,608 thousand (2014: €10,677 thousand). In 2015 provisions for bonus payments of €332 thousand for 2014 were reversed. Based on the principles outlined, the breakdown of remu- neration for each Executive Board member in 2015 was as follows: Performance-unrelated remuneration Performance-related remuneration Total .emu motion in accords e with DRS 17 Fixed remuneration Benefits in kind and other fringe benefits Annual bonus LTI' in €000 2015 2019 2015 2019 2015 2014 2015 2014 2015 2014 Dr. Klaus Engel 1,100 1,100 22 49 1,959 1,419 1,488 1,023 4,569 3,591 Dr. Ralph Sven Kaufmann° 300 28 585 447 1,360 Christian Kullmann` 600 300 SS 27 1,139 358 893 307 2,687 992 Thomas Wessel' 600 600 77 91 1,045 700 893 614 2,615 2,005 Rata Wohlhausere 300 600 17 34 522 869 893 614 1,732 2,117 Ute Wolf 600 600 45 89 1,107 669 893 614 2,645 1,972 Total 3,500 3,200 244 290 6,357 4,015 5,507 3,172 15,608 10,677 • Fair value as of the legally binding commitment or grant date. b 2015, pro rata from Oily 1, 2015. • 2014; pro rata from Oily 1,2014. d Correction to the remuneration report 2014: remuneration of E33 thousand received for other offices bin not stated in the remuneration report for 2014. • 2015; pro rata up to June 30,2015. In 2015, no member of the Executive Board received benefits or corresponding promises from third parties in connection with his or her service on the Executive Board. Further, as of December 31, 2015 there were no loans or advances to members of the Executive Board. Finally, third-party financial loss insurance cover is pro- vided for each member of the Executive Board to cover their statutory liability arising from their work on the Executive Board. In the event of a claim, this provides for a deductible of 10 percent of the damage, up to one-and-a-half times the individual member's fixed annual remuneration. Remuneration report in accordance with the German Corporate Governance Code The German Corporate Governance Code recommends that listed companies should also disclose the remuneration of the Executive Board on the basis of a defined table showing the granting and allocation of benefits. EFTA00598763

TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS - SUPPLEMENTARY INFORMATION 131 Remuneration report Remuneration of the Executive Bard Benefits granted In 4000 Fixed compensation 1,100 Fringe benefits 49 Total 1,149 One-year variable compensation 1,150 Multi-year variable compensation 1,023 1712014 through 2017 1,023 EH 2015 through 2018 - Total 3,322 Service cost 488 Total compensation 3,810 Dr. Klaus Engel Dr. Ralph Sven Kaufmann Chief Executive Officer 2019 2015 2015 (min) 2015 (max) 1,100 1,100 1.100 22 22 22 1,122 1,122 1,122 1,150 2,300 1,488 Chief Operating Officer (from July 1, 2015) 2014 2015 2015 (min) 2015(max) 300 300 300 28 28 28 328 328 328 325 650 3,750 447 1,125 1,488 3,760 1,122 712 712 4,472 1,834 3,750 447 1,125 7,172 1,100 328 2,103 712 7,884 1,100 328 2,103 In C000 Fixed compensation Fringe benefits Total One-year variable compensation Multi-year variable compensation LT! 2014 through 2077 1112015 through 2078 Total Service cost Total compensation Christian Kullmann Thomas Wessel Chief Strategic Officer (from July 1, 2014) Chief Human Resources Officer 2014 2015 2015 (min) 2015(max) 2014' 2015 2015 (min) 2015(max) 300 600 600 600 600 600 600 600 27 55 55 55 91 77 77 77 327 653 655 655 691 677 677 677 325 307 307 959 160 1,119 650 1,300 650 650 893 i — 2,250 — — — 893 - 2,250 2,198 655 4,205 414 414 414 2,612 1,069 1 4,619 614 893 614 1,955 280 2,235 893 2,220 384 2,604 i 677 384 1,061 1,300 2,250 2,250 4,227 384 4,611 merle° Rata Wohllsauser Ute Wolf Chief Operating Officer (until June 30, 2015) Chief Financial Officer 2014 2015 2015 (min) 2015(max) 2014 2015 2015 (min) 2015(max) Fixed compensation 600 300 300 300 600 600 600 600 45 645 1,300 Fringe benefits 34 17 17 17 89 45 45 Total 634 317 317 317 689 645 645 One-year variable compensation 650 325 - 650 650 650 - Multi-year variable compensation 614 893 - 2,250 614 893 - 2,250 1112014 through 2017 614 - - - 614 - - - 1712015 through 2018 - 893 - 2,250 - 893 - 2,250 Total 1,898 1,335 317 3,217 1,933 2,188 645 4,193 Service cost 322 402 402 402 276 349 349 349 Total compensation 2,220 1,937 719 3,619 2,229 2,337 994 4,54E Correction lathe remuneration report 2014: remuneration01433 thousand received by Mr. Wessel for other offices but not stated in the remuneration repot for 2014. I S 0 1/4, EFTA00598764

132 ANNUAL REPORT 2015 EVONIK INDUSTRIES Allocation Dr. Ralph Sven Dr. Klaus Engel Kaufmann Christian Kullmann Thomas Wend Patrik Wehlhauser Ute Wolf Chief Executive Chief Operating Chief Strategic Chief Human Chief Operating Chief Financial Officer Officer Officer Resources Officer Officer Officer (from July 1, 2015) (from July 1, 2019) (until June 30. 2015) in 0000 2014 2015 2014 2015 Fixed compensation Fringe benefits Total One-year variable compensation.'" Multi-year variable compensation L77 2009 through 2073 L77 2010 through 2074 1.100 1,100 1,128 2070 - 420 Total 3,112 Service cost 488 Total compensation 3,600 3,612 712 4,324 2019 2015 2014 600 91 913 653 - 160 913 813 1,170 632 2015 2014 2015 600 600 300 77 34 17 677 634 317 1,825 419 -2 ,239 1,323 280 1,603 1,286 322 1,608 902 402 1,304 1,785 384 2,169 652 585 2014 2015 606 1,170 -1 ,295 1,815 276 349 1,571 2,164 • to some casts, fees for other offices held. which are contained i fringe benefits, ere offset against one•yett variable comae., d?, :in, 2014:0r. Engel €26 thousand, Wessel € 53 thousand (including correction of €33 thousand), Wolff thousand; 2015! Wessel €30 thousand. The co•tecr m, nude for Mr. Wessel for 2014 is also offset against his one.year. verisble compensation in 2015. b The one-year veriable compensation for 2014 corresponds to the actual payments made in 2015 for 2014 (a correction has been mode for any discrepancies between the actual payments in 2015 end the estimate made for 2015 in the 2014 remuneration report). • The one-year variable compensation for 2015 has not yet been finalized; estimate based on assumptions made for previsions. Former Executive Board members, including members who left the Executive Board in 2015 Total remuneration of former members of the Executive Board and their surviving dependents was €2,729 thousand in 2015 (2014: €1,374 thousand). 10.2 Remuneration of the Supervisory Board The remuneration of the Supervisory Board is governed by Section 15 of the Articles of Incorporation of Evonik Industries AG. The remuneration system takes account of the responsi- bilities and scope of activities of the members of the Super- visory Board. In addition to reimbursement of their expenses and value-added tax payable on their remuneration and expenses, the members of the Supervisory Board receive a fixed annual payment. Their remuneration does not include a variable component. Different levels of fixed annual remuneration are paid to the Chairman (€200 thousand), Deputy Chairman (€130 thousand) and other members of the Supervisory Board (€90 thousand). Additional remuneration of €45 thousand is paid for chairing the Executive Committee and the Audit Committee, while the deputy chairpersons receive €30 thousand each and other members €30 thousand each. The chairperson of the Finance and Investment Committee receives additional remuneration of €35 thousand, the deputy chairperson €27.5 thousand, and the other members €27.5 thousand each. The addi- tional remuneration for the Nomination Committee and the Mediation Committee is €30 thousand for the chairperson, €15 thousand for the deputy chairperson and €15 thousand each for the other members. Members of the Mediation Committee are only entitled to the additional remuneration if the committee meets during the year. Further, members of the Supervisory Board receive a fee of €1 thousand for each meeting of the Supervisory Board and its committees that they attend. If several meetings are held on the same day, this fee is only paid once. Members who only serve on the Supervisory Board for part of a fiscal year receive remuneration on a pro rata basis. This also applies for increases in the remuneration for the Chairman and Deputy Chairman of the Supervisory Board and any increased remuneration paid for membership of or chairing a committee. EFTA00598765

TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Remuneration report Renunciation of the Supervisory Board - SUPPLEMENTARY INFORMATION ttl Remuneration of the Supervisory Board Fixed 'enunciation Remuneration for membership Ma committee Attendance fees Total In C000 2015 2014 2015 2014 2015 2014 2015 2014 GOnter Adam (until December 10, 2015) 58 58 10 10 158 158 Martin Albers (from October 1, 2015) 23 2 26 Prof. Barbara Albert (from July 1, 2014) 45 95 47 Dr. peter Bettermann (until June 30, 2014) 45 - I 48 Karin Erhard 90 30 20 129 117 Carmen Fuchs (from December 10, 2015) 8 Stephan Gemkow 90 28 9 127 126 Ralf Giesen (until April 30, 2014) 30 19 53 Prof. Barbara Grunewald 90 90 30 30 9 9 129 129 Ralf Hermann 90 90 58 58 10 9 158 157 Prof. Wolfgang A. Herrmann 90 90 5 95 95 Dieter Kleren 90 90 95 95 Steven Koltes 90 90 45 45 8 S 143 140 Frank Ldllgen (from May 1, 2014) 90 60 28 18 8 7 126 85 Dr. Siegfried Luther 90 90 45 45 10 10 145 145 Dr. Werner Muller 200 200 103 103 16 13 319 316 Jurgen ituitng (until September 30, 2015)• 68 110 30 11 98 151 Norbert Pohlmann 90 90 8 6 S 104 95 Dr. Wilfried Roben 90 90 30 30 9 10 129 130 Michael ftUdiger 90 90 35 35 9 9 134 134 Ulrich Terbrack 90 90 95 95 Dr. Volker Tout: 90 90 45 45 8 6 143 141 Michael Vasslliadis 130 130 58 58 12 10 200 198 Dr. Christian Wlldmoser 90 90 58 58 14 13 162 161 Total 1,959 1,970 684 680 175 166 2,818 2,816 Mr. Mang was also a member of the Supervisory Boa d of (von& Services GmbH until J ly 31,2014. The remuneration and attendance fees paid to the Super- visory Board in 2014 and 2015 is presented on a cost basis. For members who joined or left the Supervisory Board during 2014 and 2015, the amounts are calculated on a pro rata basis. As of December 31,2015 there were no loans or advances to members of the Supervisory Board. In 2015, the members of the Supervisory Board did not receive any remuneration for services provided personally, especially consulting and referral services. Finally, third-party financial loss insurance cover is provided for each member of the Supervisory Board to cover their statutory liability arising from their work on the Supervisory Board. In the event of a claim, this provides for a deductible of 10 percent of the damage, up to one-and-a-half times the individual member's fixed annual remuneration. I a EFTA00598766

134 ANNUAL REPORT 2015 EVONIK INDUSTRIES 11. Report on expected developments • Slightly weaker global economic development • Slightly lower sales and adjusted EBITDA of between €2.0 billion and C2.2 billion expected • ROCE expected to be well above the cost of capital again 11.1 Economic background Weaker global economic growth momentum anticipated for 2016 We anticipate that global economic conditions will once again be characterized by differing regional growth trends in 2016. The continued economic upturn in the industrialized economies will probably be held back by slower growth in the emerging markets. Overall, we expect a slight reduction in global momentum in 2016, with the growth rate dropping to 2.5 percent, compared with 2.6 percent in 2015. We assume that in 2016 the industrialized economies will continue to benefit from an expansionary monetary policy and that the oil price will boost consumer spending. In view of this, we expect the fragile upturn in Europe to continue, although momentum will be lower than in 2015. We anticipate that the German economy will grow by 1.8 percent in 2016, with consumer spending remaining the main growth driver. By contrast, we expect little impetus to come from capital expenditures and foreign trade. GDP forecast for 2016 In % Global GOP 2.5 23 Germany 1.8 1.7 Other European Countries North America 13 1.6 .2 2 2.3 Central and South America Asia-Frack Middle Eat. Afek4 Ad 4A 1.424 -1.0 0 1.0 2.0 3.0 4.0 5.0 We still see the USA as the keystone of global economic growth, but we expect the growth rate to drop to 2.2 percent in 2016. Domestic consumer spending will probably make the biggest contribution here, while capital spending and foreign trade are likely to be lower than in 2015. The present challenges in the emerging markets will presumably continue in 2016 and could even be exacerbated by the Fed's monetary policy. If the Fed raises interest rates as planned in 2016, this could accelerate the outflow of capital from emerging markets and increase the cost of financing their high levels of debt. Overall, we expect economic growth in the emerging markets to be around the 2015 level, but the downside risks remain high. We assume that growth will slow further in China. Given the Chinese government's willingness to take action to sup- port the economy, we expect gross domestic product to rise by 6.5 percent in 2016. However, the projection for the global economy is still marked by considerable uncertainty. Apart from geopolitical conflicts, action by central banks could cause the global eco- nomic development to differ from our expectations. 2016 — 2015 (projected) EFTA00598767

TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOU DATED FINANCIAL STATEMENTS Report on expected deve4opmems Eronoemc background - SUPPLEMENTARY INFORMATION 13S Forecast for Evonik's end-customer industries 2016' in % Industry overall 2.2 2.3 Consumer end personal care products Food end enigma reed Automotive end mechanical engineering Construction Elastics and rubber. Pharmaceuticals Decide.' end electronics Metal and oil products Paints and coatings° Paper end printing Agdcukure 0 1.0 10 3.0 4.0 a. 2016 a. 2015 (projected) ' Rounded *mounts. where not directly assigned to other end.cvstorner industries. Along with global economic momentum, trends in our end- customer industries influence the development of Evonik's market environment. While the general industrial trend was weak in 2015 with low growth in output, and only a few industries registering moderate growth, looking ahead to 2016 we only anticipate slight additional impetus in view of the fragile macro-economic environment. Cyclical end- customer industries such as the construction, automotive, mechanical engineering, and electrical and electronics sectors will probably report slower growth. There could be some isolated positive impetus on a regional basis, especially in Europe, which is Evonik's most important market. In other key end-customer industries such as pharmaceuticals, food and animal feed, and the consumer goods and personal care sectors, we assume that the pace of growth will continue. The development of our end-customer industries is likely to have a varied impact on industrial value chains and our business. We anticipate that global inflation will remain at the present low level as a result of slower growth and price pressure from commodities. Moreover, significant deflationary trends could emerge in some areas. We expect that the weaker cyclical momentum and cur- rent increase in supply will continue to have an impact on the raw material markets. Evonik's specific raw materials will be slightly more expensive compared with the end of 2015/early 2016, but overall we expect our internal raw material cost index to remain below the average for 2015. This scenario is based on the assumption that the average oil price will be slightly lower in 2016 than in 2015. Risks here still include geopolitical conflicts, which could adversely affect supply. I j EFTA00598768

136 ANNUAL REPORT 201S EVONIK INDUSTRIES 11.2 Outlook Basis for our forecast: • Global growth of 2.5 percent • Euro/US dollar exchange rate around the same level as 2015 (approx. US51.10) • Internal raw material cost index lower than in prior year Sales and earnings The anticipated weak global growth momentum outlined in the section headed "Economic background" will also affect the development of our business in 2016. Following a very successful year in 2015, we expect to report slightly lower sales in 2016 (2015: €13.5 billion). Thanks to our strong market positions, balanced portfolio and concentration on high-growth businesses, we assume continued high demand for our products and appreciable volume growth despite the difficult macro-economic condi- tions. The new production capacities taken into service in recent years and further intensification of sales activities should also contribute to this. We expect selling prices to develop solidly across most of our product portfolio. How- ever, lower selling prices are anticipated for some businesses in the Nutrition & Care and Performance Materials segments, leading to the forecast slight reduction in overall sales. Nevertheless, we are confident that our business will continue to develop successfully in 2016 and expect to report adjusted EBITDA of between €2.0 billion and €2.2 billion (2015:€2.47 billion). For the majority of businesses in the Nutrition & Care segment we are expecting a stable or slightly positive busi- ness trend compared with the previous year. We assume that the price of essential amino acids for animal nutrition will normalize from the very high prior-year level. Moreover, the baby care business will be affected by persistently high competitive pressure. We expect that the Resource Efficiency segment will continue the previous year's successful business development despite weaker global growth. In the Performance Materials segment, the year-on-year decline in the oil price, in particular, will result in a further reduction in selling prices, putting downward pressure on this segment's operating performance. The continued systematic implementation of our On Track 2.0 and Administration Excellence efficiency enhance- ment programs will also contribute to earnings in 2016. The earnings impact of lower raw material prices on individual businesses will vary, but should largely balance out across the portfolio as a whole. The return on capital employed (ROCE) should again be above the cost of capital in 2016, although it will be slightly lower than in 2015 (16.6 percent) due to the overall reduction in earnings. Financing and investments We anticipate that capital expenditures will be around the 2015 level (€0.9 billion) and thus slightly higher than depreciation and amortization. The free cash flow should therefore be clearly positive again, but will fall short of the high level reported for 2015 (€1.1 billion) owing to the weaker operating earnings trend. Occupational and plant safety We assume that the accident frequency' indicator will be stable in 2016 (2015: 1.0) and expect it to be below the upper limit of 1.3 defined for 2015. Our long-term goal is still a sustained value of less than 1.0. We are retaining our target of a maximum of 48 for the plant safety indicator incident frequency' in 2016 and expect it to be between 48 and 53, a slight improvement compared with 2015 (55). This report contains forward-looking statements based on the present expectations, assumptions and forecasts made by the Executive Board and the information available to it. These forward-looking statements do not constitute a guarantee of future developments and earnings expectations. Future performance and developments depend on a wide variety of factors which contain a number of risks and unforeseeable factors and are based on assumptions that may prove incorrect. Number of accidents involving Evonik employees and contractors employees under Evonik's direct supervision per 1 million working hours. 2 Number of incidents per 1 million hours worked in the production facilities operated by the segments, taking 2008 as the reference base (expressed in percentage points: 2008= 100). EFTA00598769

- TOOUR SHAREHOLDERS MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION 137 Cornett,' CONSOLIDATED FINANCIAL STATEMENTS 2 Income statement 138 1 Statement of comprehensive income 139 Balance sheet 140 Statement of changes in equity 142 Cash flow statement 143 Notes to the consolidated financial statements of the Evonik Group 144 1. Segment report 144 2. General information 146 3. Basis of preparation of the financial statements 146 4. Discussion of assumptions and estimation uncertainties 158 5. Changes in the Group 160 6. Notes to the income statement 169 7. Notes to the balance sheet 173 8. Notes to the cash flow statement 188 9. Notes on the segment report 189 10. Other disclosures 192 11. Disclosures in compliance with German legislation 208 EFTA00598770

1.18 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Income statement Income statement for the Evonik Group Nate 2015 2014 Sales 6.1 13,507 12,917 Cost of sales 6.2 —9,096 —9,308 Gross profit on sales 4,411 3,609 Selling expenses 6.2 —1,447 —1,289 Research and development expenses 6.2 -434 -413 General administrative expenses 6.2 -693 -601 Other operating income 6.3 445 250 Other operating expenses 6.4 -603 -493 Result from investments recognized at equity 6.5 -15 14 Income before flnandal result and Income taxes, continuing operations 1,664 1,077 Interest income 46 71 Interest expense -245 -289 Other financial income/expense -24 -17 Finandal result 6.6 -223 -233 Income before Income taxes, continuing operations 1,441 342 Income taxes 6.7 -422 -252 Income after taxes, continuing operations 1,019 590 Income after taxes, discontinued operations 5.3 -17 -9 Income after taxes 1,002 331 thereof attributable to Non-controlling interests 11 13 Shareholders of Evonik Industries AG (net Income) 991 568 Earnings per share In ((bask and diluted) 6.8 •2.13 •1.22 Prior-year figures restated. EFTA00598771

70004 SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 119 Income statement Steternent of foroprohonfive Income Statement of comprehensive income Statement of comprehensive income for the Evonik Group Jr.0 mi ,r, 2015 2014 Income after taxes 1,002 581 Comprehensive income that will be reclassified subsequently to profit or loss 2.7 185 Gains/losses on available-for-sate securities 21 -11 Gains/losses on hedging instruments 32 -142 Currency translation adjustment 245 295 Attributable to the equity method (after income taxes) 6 - Deferred taxes -17 43 Comprehensive income that will not be reclassified subsequently to profit or loss 253 -601 Remeasurement of the net defined benefit liability for defined benefit pension plans 361 -844 Attributable to the equity method (after income taxes) -4 -7 Deferred taxes -104 250 Other comprehenshro income after taxes 540 -416 Total comprehensive income 1,542 165 thereof attributable to Non-controlling interests 12 19 Shareholders of Evonik Industries AG 1,530 146 Total comprehensive income attributable to shareholders of Evonik Industries AG 1,530 146 thereof attributable to continuing operations 1,547 156 discontinued operations -17 -10 8 gi LI EFTA00598772

140 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Balance sheet Balance sheet for the Evonik Group InE Sloan Nate Doc. 31, 2015 Dee. 31, 2014 Intangible assets 7.1 3,168 3,100 Property, plant and equipment 72 5,808 5,515 Investments recognized at equity 73 53 357 Financial assets 7A 116 83 Deferred taxes 7.12 1,110 1,127 Current Income tax assets 7.12 11 11 Other receivables 7.6 54 58 Non-current assets 10,320 10,251 Inventories 73 1,763 1,778 Current income tax assets 7.12 111 211 Trade accounts receivable 7.6 1,813 1,720 Other receivables 7A 265 303 Financial assets 7A 365 449 Cash and cash equivalents 8.3 2,368 921 6,685 5,382 Assets held for sale 5.3 — 52 Current assets 6,685 5,434 Total assets 17,005 15,685 Prbr•yeer figures resoled. EFTA00598773

TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 141 Balance Sheen in E million Note Dec. 31, 2015 Dec. 31, 2014 Issued capital 466 466 Capital reserve 1,166 1,165 Accumulated Income 5,821 5,040 Accumulated other comprehensive Income 40 —244 Equity attributable to shareholders of Evonik Industries AG 7,493 6,427 Equity atuibutable to non-controlling Interests 83 95 Equity 7.7 7,576 6,522 Provisions for pensions and other post-employment benefits 7.8 3,349 3,953 .2 Other provisions 7.9 854 903 5 Deferred taxes 7.12 479 449 gi Other Income tax liabilities 7.12 150 199 Financial liabilities 7.10 1,415 666 Other payables 7.11 106 71 Non-current liabilities 6,353 6,241 S Other provisions 957 7.9 1.177 0 Other Income tax liabilities 7.12 209 105 Financial liabilities 7.10 291 469 a - Trade accounts payable 7.11 1.090 1,126 Other payables 7.11 309 247 3.076 2,904 Liabilities associated with assets held for sale 5.3 18 Current liabilities 3.076 2,922 Total equity and liabilities 17,005 15,685 Polor•year liguies resisted. EFTA00598774

142 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Statement of changes in equity Statement of changes in equity for the Evonik Group Note 7.7 Accumulated Attributable to Attributable other corn- shareholders to non- Capital Accumulated Treasury prehensive of Evonik controlling Total In Emilhon Issued capital reserve income shares income Industries AG interests 44oity As of January 1, 2014 466 1,165 5,547 — —420 6,758 78 6,836 Capital Increases/decreases — — — — — — — — Dividend distribution — — —466 — — —466 -5 —471 Purdiase of treasury shares — — — —13 — —13 — —13 Share-based payment — 3 — — — 3 — 3 Sale of treasury shares — —3 — 13 — 10 — 10 Income after taxes — — 568 — — 568 13 581 Other comprehensive income after taxes - - -601 - 179 -422 6 -416 Total comprehensive Income - - -33 - 179 146 19 165 Other changes - - -8 - -3 -11 3 -a As of December 31, 2014 466 1,165 5,040 - -244 6,427 95 6,522 Capital Increases/decreases - - - - - - 3 3 -477 -14 3 12 1,002 Dividend distribution - - -466 - - -466 -11 Purdiase of treasury shares - - - -14 - -14 Share-based payment - 3 - - - 3 12 991 539 1,530 1 - 7,493 - ; Sale of treasury shares - -2 - 14 - Income after taxes - - 991 - - 11 Other comprehensive income after taxes - - 253 - 286 1 540 1,542 -15 7,576 Total comprehensive Income - - 1,244 - 286 12 -16 - 83 Other changes - - 3 - -2 As of December 31, 2015 466 1,166 5,821 - 40 EFTA00598775

TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 143 Statement of ch•nges in equity Cob flow swernent Cash flow statement Cash flow statement for the Evonik Group roe million Note 2015 2014 Income before financial result and income taxes, continuing operations 1,664 1,077 Depreciation, amortization, impairment losses/reversal of impairment losses on non-current assets 764 656 Result from investments recognized at equity 15 -14 Gains/tosses on the disposal of non-current assets -144 -4 Change in inventories 52 -90 Change in trade accounts receivable -44 -29 Change in trade accounts payable and current advance payments received from customers -18 28 Change in provisions for pensions and other post-employment benefits —162 —165 Change in other provisions 111 —43 Change in miscellaneous assets/liabilities 92 —70 Cash outflows for interest —67 —114 Cash inflows from interest 22 13 Cash inflows from dividends 19 20 Cash Inflows/outflows for income taxes —336 —230 Cosh flow from operating activities, continuing operations 1,966 1,035 Cash flow from operating activities, discontinued operations 3 31 Cash flow from operating activities 8.1 1,971 1,066 Cash outflows for investments In intangible assets, property, plant and equipment -916 -1,095 Cash outflows for investments In shareholdings -70 -114 Cash Inflows from divestments of intangible assets, property, plant and equipment 13 17 Cash Inflows/outflows from divestment of shareholdings 421 578 Cash Inflows/outflows relating to securities, deposits and loans 111 248 Transfers to the pension trust fund (CTA) -219 -209 Cash flow from investing activities, continuing operations -660 -575 Cash flow from investing activities, discontinued operations - -1 Cosh flow from investing acthAties 8.2 —660 —576 Cash inflows/outflows relating to capital contributions 3 — Cash outflows for dividends to shareholders of Evonik Industries AG —466 —466 Cash outflows for dividends to non-controlling Interests —11 —5 Cash outflows for the purchase of treasury shares —14 —13 Cash Inflows from the sale of treasury shares 15 13 Cash Inflows from the addition of financial liabilities 844 207 Cash outflows for repayment of financial liabilities —238 —891 Cash flow from financing activities, continuing operations 133 -1,155 Cash flow from financing activities, discontinued operations - - Cash flow from financing activities 133 -1,155 Change In cosh and cash equivalents 1,444 -665 Cash and cash equivalents as of January 1 921 1,572 Change in cash and cash equivalents 1,444 -665 Changes In exchange rates and other changes In cash and cash equivalents 3 14 Cash and cash equivalents as on the balance sheet as of December 31 8.3 i 2,368 921 Mos-year figures resisted. LI a EFTA00598776

144 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Notes to the consolidated financial statements of the Evonik Group 1. Segment report Segment report by operating segments Note 9.1 InE million Nutrition Er Care Resource Efficiency Performance Materials 2015 2014 2015 2014 2015 2014 External sales 4,924 4,075 4,279 4,040 3,435 3,827 Internal sales 34 27 53 84 133 156 Total sales 4,958 4,102 4,332 4.124 3,568 3,983 Result from investments recognized at equity —25 —4 1 1 -1 Adjusted EBITDA 1,435 847 896 836 309 325 Adjusted EBITDA margin m % 29.1 20.8 20.9 20.7 9.0 8.5 Adjusted EBIT 1,214 685 675 642 174 204 Capital employed (annual average 2,923 2,527 2,726 2,474 1,467 1,397 ROLE in% 41.5 27.1 24.8 25.9 11.9 14.6 Depreciation and amortization' —212 —157 -222 -194 -132 -109 Capital expenditures' 250 458 241 273 183 218 Financial Investments S 2 54 42 22 No. of employees as of December 31 7,165 6,943 8,662 7,835 4,380 4,353 Prior-year figures restated. • For intangible assets. property, plant and equipment. For the segmentation of impairment losses and reversals of impairment losses, see Notes 6.3 and 6.4. Segment report by regions Note 9.2 Germany Other European countries North Amerio InEmillran 2015 2014 2015 2014 2015 2014 External sates 2,436 2,814 4,148 4,235 2,647 2,310 Goodwill as of December 31' 1,542 1,542 546 544 370 330 Other intangible assets, property plant and equipment as of December 31' 2,832 2,777 555 534 1,052 863 Capital expenditures 427 419 88 133 208 141 No. of employees as of December 31 21,514 21,435 2,681 2,741 3,801 3,709 Prior•yeer figures restated. • Non•current assets according to IFRS 833 b. EFTA00598777

TOOLIR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 145 Notes Segment report Total Group Services Other operations Corporate, consolidation (continuing operations) 2015 2014 2015 2014 2015 2014 2015 2014 828 906 51 104 -10 -35 13,507 12,917 1,886 1,865 87 71 -2,194 -2,203 - - 2,715 2,771 138 175 -2,204 -2,238 13,507 12,917 9 7 1 23 - -13 -15 14 163 151 -81 -54 -257 -223 2,465 1,882 19.7 16.7 - - - - 18.2 14.6 53 49 -96 -68 -268 -256 1,752 1,256 565 507 11 801 2,838 2,348 10,530 10,054 9.4 9.7 - - - - 16.6 12.5 -107 -101 -15 -14 -12 -31 -700 -606 177 153 24 20 2 1 877 1,123 6 6 2 64 1 - 90 114 12,668 13,173 391 775 310 162 33,576 33,241 Central and South America 2015 954 32 Asia-Pacific Middle East, Africa 178 668 2014 777 29 172 611 2015 2014 2015 1,587 1,564 8 10 6,212 250 323 1 1 Total Group (continuing operations) 2014 12,917 2,695 5,920 161 125 33,576 33,241 E .2S gE r a EFTA00598778

146 FINANCIAL REPORT 2015 EVONIK INDUSTRIES 2. General information Evonik Industries AG is an international specialty chemicals company headquartered in Germany. Its registered office is at Rellinghauser Strafte 1-11, 45128 Essen (Germany), and the company is registered in the Commercial Register at Essen District Court under HR8 No.19474. The present consolidated financial statements of Evonik Industries AG and its subsidiaries (referred to jointly as Evonik or the Group) were prepared by the Executive Board of Evonik Industries AG at its meeting on February 19, 2016, discussed at the meeting of the Audit Committee on Feb- ruary 26, 2016, and presented to the Supervisory Board for approval at its meeting on March 2, 2016. The consolidated financial statements are published in the German Federal Gazette (Bundesanzeiger). 3. Basis of preparation of the financial statements 3.1 Compliance with IFRS As permitted by Section 315 a Paragraph 1 of the German Commercial Code (HGB), the present consolidated financial statements have been prepared on the basis of the Inter- national Financial Reporting Standards (IFRS) and comply with these standards. The IFRS comprise the standards (IFRS, IAS) issued by the International Accounting Standards Board (IASB), London (UK) and the interpretations (IFRIC, SIC) of the IFRS Interpretations Committee (IFRS IC), as adopted by the European Union. 3.2 Presentation of the financial statements The consolidated financial statements cover the period from January 1 to December 31, 2015 and are presented in euros. All amounts are stated in millions of euros million) except where otherwise indicated. In some cases, rounding may mean that the figures in this report do not add up exactly to the totals stated, and percentages do not correlate exactly to the figures presented. The recognition and valuation principles and items presented in the consolidated financial statements are in principle consistent from one period to the next. Deviations from this principle are outlined in Note 3.3 where they relate to changes to accounting standards, and in Note 3.4 or the relevant Notes where they relate to other changes. To enhance the clarity of presentation, some items are combined in the income statement, statement of comprehensive income, balance sheet and statement of changes in equity and explained in the Notes. The income statement has been prepared using the cost- of-sales method. Expenses are divided by function. The statement of comprehensive income is a reconcilia- tion from income after taxes as shown in the income state- ment to the Group's total comprehensive income, taking into account other comprehensive income. On the balance sheet, assets and liabilities are classified by maturity. They are classified as current if they are due or expected to be realized within twelve months from the reporting date. The statement of changes in equity shows changes in the issued capital, reserves attributable to shareholders of Evonik Industries AG and changes in non-controlling interests in the reporting period. Transactions with shareholders in their capacity as owners are also shown separately here. The cash flow statement provides information on the Group's cash flows. The cash flow from operating activities is calculated using the indirect method, where income before financial result and income taxes from continuing operations is adjusted for the effects of non-cash income and expenses and items that are allocated to investing or financing activities. Certain other changes in amounts shown on the balance sheet are added to the result. The Notes contain basic information on the financial statements, supplementary information on the above compo- nents of the financial statements and further information such as the segment report. 3.3 New accounting standards Accounting standards to be applied for the first time A number of revised and newly issued standards and inter- pretations had to be applied for the first time in fiscal 2015. However, they did not have a material impact on the consoli- dated financial statements. Accounting standards that are not yet mandatory The IASB has issued further accounting standards which did not become mandatory in fiscal 2015 or have not yet been officially adopted by the European Union. The accounting standards that could be of relevance for the consolidated financial statements are outlined below. They will probably be applied for the first time from the date on which they come into force. EFTA00598779

- TOOUR SHAREHOLDERS MANAGEMENT REPORT • CONSOUDATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION 147 Notes Basis 01 ptepatation oI the linandal statements Accounting standards that are not yet mandatory Standard a: Issued by the IASB b: Effective date as per IASB c: Effective date as per EU d: Publication in the Official Journal of the EU Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations IFRS 15 Revenue from Contracts with Customers IFRS 9 Financial Instruments Subject of standard—Expected impact on the consolidated financial statements a: May 6, 2014 The amendments clarify recognition of acquisitions of interests in a joint operation where the b: Jan. 1, 2016 joint operation constitutes a business. They stipulate that the principles of accounting for business c: Jan. 1, 2016 combinations (IFRS 3) also apply for the acquisition of interests in Joint operations of this type. d: Nov. 25, 2015 This amendment is not currently relevant for the consolidated financial statements. a: May 28, 2014/ Sep. 11, 2015 b: Jan. 1, 2018 c: open d: open a: July 24, 2014 b: Jan. 1, 2018 c: open d: open Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture a: Sep. 11, 2014/ Dec. 17, 2015 b: open c: open d: open IFRS 15 contains extensive new rules for the recognition of revenues arising from contracts with customers for all sectors. A five-step model outlines in detail aspects such as identifying distinct performance obligations, the level of the expected consideration, taking into account variable price components, and the distribution of the expected consideration among the Identified performance obligations. There are now uniform criteria to determine whether a performance obligation is to be satisfied at a point in time or over time. In addition, IFRS 15 will result in a considerable increase in disclosures in the notes to the consolidated financial statements. This new standard will replace the following current standards and interpretations: IAS 11, IAS 18, IFRIC 13, IFRIC 15, IFRIC 18 and SIC-31. An analysis of contracts has identified a possible need for change. A change in the timing of revenue recognition may result from identification of an additional performance obligation, a change in the assessment of whether revenue is realized at a point in time or over time, or of the timing of the transfer of control. The following could be identified as separate performance obligations: • Dosing systems, which were previously transferred as an additional benefit in connection with the sale of a product • Freight and transportation services provided after transfer of control • Extended warranties that go well beyond the statutory requirements and contain a service • component • Exclusive sales rights. An altered assessment of whether the performance obligation Is satisfied at a point in time or over time is possible in the following cases: • License agreements • Development contracts. An altered assessment of the time of the transfer of control is possible for agreements on consignment warehouses. Further, under IFRS 15 the level of revenues recognized over the total period may differ from previous practice. This is possible in the follovnng cases: • Prepayments by customers, where it may be necessary to recognize a financing component that would increase sales • Agreements on the unconditional repurchase of products • Exchange-type transactions between competitors. Finally, the cost of services that are incurred after inception of the contract and can be clearly assigned to the contract must be capitalized and depreciated over the period of time in which the associated goods were transferred to the customer or the services were provided. This may affect application technology services. In the next step, the quantitative impact on the consolidated financial statements will be analyzed in more detail. IFRS 9 is the replacement for IAS 39 Financial Instruments: Recognition and Measurement. The main changes in IFRS 9 compared with the old standard IAS 39 comprise the introduction of completely new classification and measurement rules for financial assets, the introduction of a new impairment model which should result in more timely recognition of losses, extension of the permitted hedged items, a modified assessment of the effectiveness of hedge accounting relationships, and extended information in the notes. The impact on the consolidated financial statements is currently being examined. The purpose of this amendment is to eliminate an inconsistency between IFRS 10 and IAS 28 in the event of the sale or contribution of assets to an associate or joint venture. The amendment provides that in the future the full gain or loss resulting from such transactions should only be recognized if the assets sold or contributed constitute a business as defined in IFRS 3. Otherwise, only partial gain or loss recognition will be permitted. The legal form of the assets sold or contributed is not relevant. In 2015, the IASB postponed the date of first-time application indefinitely. This amendment is not currently relevant for the consolidated financial statements. E S 0 EFTA00598780

148 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Accounting standards that are not yet mandatory Standard a: Issued by the IASB b: Effective date as per IASB c: Effective date as per EU d: Publication in the Official Journal of the EU Annual Improvement Process (IFRSs 2012-2014 Cycle) Amendments to IAS 1 Disclosure Initiative IFRS 16 Leases a: Sep. 25, 2014 b: Jan. 1, 2016 c Jan. 1, 2016 d: Dec. 16, 2015 Subject of standard—Expected impact on the consolidated financial statements Annual Improvements to IFRSs 2012-2014 Cycle contains amendments to IFRS 5, IFRS 7, IAS 19 and IAS 34. They comprise improvements and clarification of existing standards. The amendments are not currently relevant for the consolidated financial statements. a: Dec. 18, 2014 Through these amendments the IASB eliminates uncertainty relating to the application of the b: Jan. 1, 2016 materiality principle outlined in IAS 1, and the subdivision of items in the balance sheet and statement c: Jan. 1, 2016 of comprehensive income. Further clarifications and improvements relate to the presentation of d: Dec. 19, 2015 sub-totals, the structure of disclosures in the notes to the financial statements, and information on significant accounting policies. These amendments only affect the disclosures in the notes to the consolidated financial statements. a: Jan. 13, 2016 b: Jan. 1, 2019 c: open d: open Amendments to IAS 12 a: Jan. 19, 2016 Recognition of b: Jan. 1, 2017 Deferred Tax Assets c: open for Unrealised Losses d: open Amendments to IAS 7 a: Jan. 29, 2016 Statements b: Jan. 1, 2017 of Cash Flows c: open d: open The new standard has far-reaching implications for the recognition of leases by the lessee. Under IAS 17, the transfer of substantially all opportunities and risks of the leased asset was decisive for recognition of a lease by the lessee. In future, the lessee will generally recognize each lease on the balance sheet in the form of a right-of-use for the leased asset and a corresponding liability. For lessors, by contrast, the accounting principles are essentially unchanged, especially as regards the continued requirements for the classification of leases. IFRS 16 supersedes IAS 17 and the associated interpretations IFRIC 4, SIC-15 and SIC-27. The impact on the consolidated financial statements will be examined at a later date. The amendments clarify the recognition of deferred tax assets for unrealized losses on debt instruments recognized at fair value. The impact on the consolidated financial statements is currently being examined. The changes relate to additional disclosure requirements for notes to financial statements to enable users to evaluate changes in liabilities from a company's financing activities. These amendments affect the disclosures in the notes to the consolidated financial statements. 3.4 Changes in presentation, structure and accounting principles Effective January 1, 2015, the Executive Board of Evonik Industries AG altered the management and portfolio struc- ture to further improve the opportunities for profitable growth. This has greatly increased the entrepreneurial independence of the three chemical segments. In line with this, changes have been made to the presentation of the income statement to ensure clear separation of operational and financing-related income and expenses and to better reflect the reorganized responsibilities. Further, this improves comparability with competitors. The following changes have been made to the presentation: the result from investments recognized at equity is now allocated to income before financial result and income taxes from continuing operations • greater differentiation in the allocation of income and expenses from currency translation and currency hedging; these are recognized in income before financial result and income taxes from continuing operations where they relate to the operating business, and in the financial result where they relate to financing • more transparent presentation of the economic signifi- cance of the results of currency translation and currency hedging by switching from a gross to a net view.' Cf. the explanations on currency management and the associated results in Note 10.2. EFTA00598781

- TOOUR SHAREHOLDERS - MANAGEMENT REPORT 4 CONSOLIDATED FINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 149 Notes Basis of preparation of the rinandal statements The following prior-period items have been restated: Impact of changes in the presentation of the consolidated income statement of the Evonik Group (excerpt) in € million Other operating income Other operating expenses Result from investments recognized at equity Income before financial result and Income texas, continuing operations 2014 Input of change -450 467 14 31 Result from investments recognized at equity -14 Other financial Income Financial result Income before income taxes, continuing operations -17 -31 There was no impact on net income or on basic or diluted earnings per share. For reasons of materiality, investment property, which was previously shown as a separate line item on the balance sheet, is now included in property, plant and equipment. As of December 31, 2015, investment property amounting to €10 million (2014: €10 million) was included in this item. With effect from January 1, 2015, the determination of the discount rate used to value newly acquired pension entitle- ments (service cost) in the euro zone was adjusted. While the discount rate for service cost was previously derived from total cash flows relating to pension entitlements (present employees, vested rights of former employees, retirees), it is now based on cash flows relating to present employees, since only they acquire new entitlements. Before this change, the discount rate as of January 1, 2015 would have been 2.50 percent. The new discount rate for newly acquired entitlements is 2.75 percent. The service cost was therefore €15 million lower as of December 31, 2015. As a change in estimation, this adjustment is entirely prospective. 3.5 Consolidation methods and scope of consolidation Scope of consolidation Alongside Evonik Industries AG, all material German and for- eign subsidiaries directly or indirectly controlled by Evonik Industries AG are fully consolidated in the consolidated finan- cial statements of Evonik Industries AG. Evonik Industries AG controls a company if it is exposed to, or has rights to, vari- able returns from its involvement with the company and has the ability to affect those returns through its power over the company. Joint operations are included in the consolidated financial statements on a pro rata basis. A joint operation is an arrangement where the parties that have joint control have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint ventures and associates are generally recognized at equity. A joint venture is a joint arrangement where the Group has joint control, together with other parties, and has rights to the net assets of the arrangement. Associates are companies where the Evonik Group has a significant influence but does not have control or joint control of financial and operating policies. Companies whose influence on the assets, financial position and earnings of the Group, both individually and in aggregate, is negligible are carried at amortized cost. Changes in the scope of consolidation are outlined in Note 5.1. Consolidation methods The financial statements of the consolidated German and foreign subsidiaries are prepared using uniform accounting and valuation principles. Capital is consolidated at the time of acquisition by offset- ting the carrying amount of the business acquired against the pro rata revalued equity of the subsidiary. Ancillary acquisi- tion costs are not included in the carrying amount of the subsidiary. Instead they are recognized as expense in the income statement. The assets and liabilities (net assets) of the subsidiary are included at their fair values. If shares in the subsidiary are held before acquiring control, they must be revalued and any resultant change in value must be recog- nized in the income statement in other operating income or other operating expenses. Gains or losses recognized in other comprehensive income must be derecognized in the same way as if the acquirer had divested the shares previously held. Any remaining excess of the acquisition cost over the fair value of the net assets is recognized as goodwill. Negative differences are included in income following a renewed examination of the fair value of the net assets. 0 EFTA00598782

150 FINANCIAL REPORT 2O1S EVONIK INDUSTRIES Changes in shareholdings in a previously consolidated sub- sidiary that do not result in a loss of control are recognized directly in equity as a transaction between owners. In this case, the shares attributable to the owners of the parent company and to the other shareholders are adjusted to reflect the changes in their respective stakes in the subsidiary. Any difference between this adjustment and the fair value of the consideration paid or received is recognized directly in equity and allocated to the shares attributable to the owners of the parent company. Directly related transaction costs are also recognized as a transaction between owners that has no impact on income, with the exception of costs for the issu- ance of debt or equity instruments, which are still measured in accordance with the criteria for recognizing financial instruments. Cash inflows and outflows relating to these transactions are presented in the cash flow from financing activities. A subsidiary must be deconsolidated as of the date on which control is lost. The net assets of the subsidiary and the non-controlling interests (in other words, the parent company's share in the net assets of the subsidiary) are derecognized. The gain or loss on the divestments must be calculated from the Group viewpoint. It is derived from the difference between the proceeds of the divestment (selling price less costs to sell) and the parent company's share in the divested net assets of the subsidiary (including the remaining hidden reserves and liabilities, and any goodwill shown on the balance sheet). The shares in the former subsidiary still held by Evonik are revalued at fair value as of the date on which control is lost. All resulting gains and losses are recog- nized in the income statement as other operating income or other operating expenses. In addition, amounts shown in equity under accumulated other comprehensive income are also reclassified to the income statement, except where another accounting standard requires direct transfer to reve- nue reserves. Intragroup income and expenses, profits, losses, receivables and liabilities between consolidated subsidiaries are fully eliminated. In the case of joint operations, elimination is pro rata. Write-downs on shares in such companies recognized in the separate financial statements are reversed. Joint operations are recognized in the consolidated financial statements at the proportionate amount of their assets and liabilities, revenues and expenses in accordance with Evonik's rights and obligations. The same consolidation principles apply for companies accounted for using the equity method. In this case, any good- will is recognized in the carrying amount of the investment. The financial statements of the companies recognized at equity are prepared using uniform accounting and valuation principles, see Note 3.7 Investments recognized at equity". 3.6 Currency translation The financial statements of Evonik Industries AG and its sub- sidiaries are generally prepared in their functional currency. The functional currency is the currency used in the primary economic area in which the respective company operates. In the separate financial statements prepared by these companies, business transactions in foreign currencies are translated at the exchange rate on the date of initial recogni- tion. Any gains or losses resulting from the valuation of mon- etary assets and liabilities in foreign currencies are recognized in other operating income, other operating expenses, or other financial result at the closing rate on the reporting date. In the consolidated financial statements, the assets and liabilities of all foreign subsidiaries are translated from their functional currency into euros at closing rates on the report- ing date. Goodwill and hidden assets and liabilities from the acquisition of a foreign subsidiary are translated at the closing rate as assets and liabilities of the foreign subsidiary. Income and expense items are translated at average exchange rates for the year. The average annual exchange rates comprise the mean of the exchange rates at month-end over the past 13 months. Translation differences compared to the prior year and translation differences between the income statement and balance sheet are recognized in other comprehensive income. They are only reclassified to the income statement when the foreign subsidiary is divested. The equity of foreign companies recognized using the equity method is translated in the same way. EFTA00598783

- TOOUR SHAREHOLDERS MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notes Basis ol preparation ol the financial statement, • SUPPLEMENTARY INFORMATION 151 Exchange Average annual rates Closing rates Dec. 31, Dec. 31, Cl corresponds to 2015 2014 2015 2019 Brazilian real (BRL) 3.70 3.12 4.31 3.22 British pound (GBP) 0.73 0.81 0.73 0.78 Chinese renrninbi yuan (CNY) 6.99 8.17 7.06 7.54 Japanese yen OPY) 134.52 140.83 131.07 145.23 Singapore dollar (SGD) 1.53 1.62 1.54 1.61 US dollar (USD) 1.11 1.33 1.09 1.21 3.7 Accounting policies Revenue recognition (a) Sales Sales revenues arise from normal business activity. The Nutrition & Care, Resource Efficiency and Perfor- mance Materials segments mainly generate sales by selling specialty chemicals to industrial customers for further pro- cessing. The Services segment principally provides services for the chemicals businesses, the management holding com- pany, and external customers at Evonik's sites; for further details see Note 9.1. Prices are contractually agreed between the parties to a transaction. Sales revenues are measured as the fair value of the consideration received or to be received less value-added tax and any discounts or bulk rebates granted. The general principle for revenue recognition is that both the revenues and the related costs can be measured reliably. It must also be sufficiently probable that the economic benefit will flow to the company. Revenues from the sale of products are recognized, assuming that the general principles for revenue recognition are met, when the main opportunities and risks associated with title to the products pass to the customer. This is gener- ally determined by the international terms for commercial transactions (Incoterms9. Provisions are established for general risks arising from such sales on the basis of previous experience. Revenues from services are recognized, assuming that the general principles for revenue recognition in the period are met, when the percentage of completion can be reliably measured. Where the provision of services extends over more than one reporting period, revenues are recognized proportionately to the total service to be provided. (b) Other revenues Other revenues are only recognized if they can be determined reliably and it is sufficiently probable that the economic benefit will flow to the company. Interest income is recognized on a pro rata temporis basis using the effective interest method. Income from royalties is accrued on the basis of the commercial terms of the under- lying contract and recognized on a pro rata basis. Dividend income is recognized as of the date of the right to receipt of the payment. Intangible assets Intangible assets are capitalized at acquisition or production cost. Intangible assets with a finite useful life are amortized and an impairment test is conducted if there are indications of a possible impairment, see Note 3.7 Impairment test". Depending on the type of intangible asset, amortization is recognized in the cost of sales, selling expenses, research and development expenses or general administrative expenses. Intangible assets with an indefinite useful life are not amortized; instead they are tested for impairment at least once a year. Goodwill has an indefinite useful life and is tested for impairment at least once a year. E 0 EFTA00598784

132 FINANCIAL REPORT 201S EVONIK INDUSTRIES Franchises, trademarks and licenses are amortized over their estimated useful life of between 5 and 25 years using the straight-line method. Some rights have an indefinite useful life. These are trademarks with no restrictions on their use. They are tested annually for impairment and to check that their useful life is still indefinite. If the assessment of the useful life of such trademarks has altered and is reclassified as finite, their carrying amounts are amortized over their estimated remaining useful life using the straight-line method. Development costs are capitalized if they can be clearly assigned to a newly developed product or process that is technically feasible and is designated for captive use or commercialization. Capitalized development costs mainly relate to the development of new products and are amortized using the straight-line method over their estimated useful life of between 3 and 15 years. The majority of other intangible assets are acquired cus- tomer relationships. These are amortized over their expected useful life. Their useful life is estimated on the basis of contractual data and experience and is generally between 2 and 11 years. Amortization takes account of both useful life and probability of continuance of the customer relationship in the form of a churn rate. Property, plant and equipment Property, plant and equipment are carried at acquisition or production cost and depreciated over their useful life. If there are indications of a possible impairment, an impairment test is conducted as outlined in Note 3.7 "Impairment test". The cost of acquisition includes expenses directly attributable to the acquisition. The cost of production of self-manufactured assets comprises all direct costs, plus the systematically allocable fixed and variable material costs and manufacturing overheads. Costs relating to obligations to dismantle or remove non-current assets at the end of their useful life are capitalized as acquisition or production costs at the time of acquisition or production. Acquisition and production costs may also include transfers from gains and losses on cash flow hedges entered into to hedge foreign currency exposures in connection with the purchase of plants, which were recognized in the statement of comprehensive income until they were reclassified to property, plant and equipment. Borrowing costs that can be allocated directly to the acquisi- tion, construction or production of a qualifying asset are included in the cost of acquisition or production. A qualifying asset is an asset for which more than a year is required to get it ready for its intended use. Government grants for the purchase or construction of property, plant and equipment reduce the cost of acquisition or production of such assets. They are reflected in the income statement over the useful life of the assets through lower depreciation. Property, plant and equipment are depreciated using the straight-line method over the expected useful life of the assets. Useful life of property, plant and equipment in years Buildings Plant and machinery Other plant, office furniture and equipment 5-50 2-25 3-25 If major components of an asset have different useful lives, they are recognized and depreciated separately. Spare parts and servicing equipment that meet the require- ments for recognition as property, plant and equipment are recognized as such, rather than as inventories. Minor repairs and other maintenance work are expensed in the period in which they are incurred. If there is a high probability that the project will be real- ized, costs incurred for planning and pre-engineering work for capital expenditure projects are capitalized. Depreciation is recognized in line with the useful life of the project. Gains and losses from the disposal of property, plant and equipment are calculated as the difference between the net proceeds of sale and the carrying amount and recognized in other operating income or other operating expenses. Impairment test If there are indications of possible impairment, an impairment test is conducted on intangible assets, property plant and equipment in accordance with IAS 36 Impairment of Assets. Goodwill and other intangible assets with an indefinite useful life are tested for impairment at least once a year. The impairment test on such assets is generally conducted for a cash-generating unit (CGU), which is the smallest identifi- able group of assets that generates independent cash flows, or for a group of CGUs. EFTA00598785

- TO OUR SHAREHOLDERS - MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Note, Basis ol preparation ol the financial statements • SUPPLEMENTARY INFORMATION 153 The impairment test comprises comparing the recoverable amount of the CGU/group of CGUs with its carrying amount. The recoverable amount is determined as the higher of the fair value less costs of disposal and the value in use of the CGU/group of CGUs. An impairment loss is recognized if the recoverable amount of a CGU/group of CGUs is below its carrying amount. The impairment loss is reversed—except in the case of goodwill—if the reason for the original impair- ment charge no longer applies. When testing goodwill for impairment, the recoverable value of goodwill is determined from the fair value less costs of disposal of the relevant segment. The fair value less costs of disposal is determined as the present value of future cash flows using a valuation model and on the basis of non- observable inputs (Level 3 of the fair value hierarchy). Future cash flows are derived from the current three-year mid-term plan. The mid-term planning is based on a mixture of expe- rience and expectations of future market trends. The main economic data, such as growth in gross domestic product, the development of exchange rates, raw material and energy prices and the increase in wages and salaries used in the mid- term planning are derived from internal and external market expectations and are set centrally by Evonik. The specific growth rates for individual segments are derived from expe- rience and future expectations; a terminal growth rate is also assumed. The expected future cash flows are discounted using the weighted average cost of capital (WACC) after taxes. WACC is determined for each segment on the basis of a capital asset pricing model and is the weighted average cost of debt and equity. The cost of equity is determined from the risk-free interest rate and a risk premium. An identical thirty-year risk- free interest rate is used for all segments. The risk premium is derived by multiplying the beta factor by the market risk premium. The cost of debt comprises a risk-free interest rate plus a premium for the credit risk, taking into account the average tax rate. The beta factor, the credit risk premium and the capital structure are obtained from the capital market by comparison with the values for the peer group for the segment. Parameters used in impairment testing and allocation of goodwill by segment WACC after taxes(in%) 2015 2014 Nutrition & Care 7.19 7.01 Resource Efficiency 8.38 9.28 Performance Materials 8.83 8.58 Services 8.16 8.31 Corporate, other operations 7.75 8.06 The carrying amounts of goodwill are allocated among the segments for the purpose of impairment testing. The good- will allocated to the three chemical segments principally relates to earlier acquisitions of shares in Evonik Degussa GmbH (Evonik Degussa), Essen (Germany). In the segment reporting, it is assigned to 'Corporate, consolidation'. Changes in the allocation of this goodwill compared with the previous Terminal growth rate (N%) Goodwill (Int militia) 1 2015 2014 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 Dec. 31, 2015 1,023 1,186 492 63 Oec. 31, 2014 1,021 892 717 51 14 year resulted from the reorganization of various activities, see Note 9.1. All other goodwill is recognized immediately in the segments. For impairment testing of other intangible assets, and property, plant and equipment, the recoverable amount is normally determined by calculating the value in use of the CGU/group of CGUs. E 0 io EFTA00598786

154 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Investments recognized at equity Associates and joint ventures are generally recognized using the equity method if Evonik is able to exert a significant influence or exercises joint control. Initially they are measured at cost of acquisition. The cost of acquisition also contains all ancillary acquisition costs directly attributable to the investment. For initial measurement, the difference between the cost of acquisition and the investor's share in the investee's equity must be determined. This is then analyzed to see whether it contains hidden reserves or hidden liabilities. Any positive difference remaining after allocation of hidden reserves or liabilities is treated as goodwill and recognized in the carrying amount of the investment. Negative differences are included in income by increasing the carrying amount of the investment. Starting from the cost of acquisition of the investment, in subsequent periods its carrying amount is increased or reduced by the investor's share in the investee's net income. Further adjustments to the carrying amount of the invest- ment are necessary if the equity of the investment alters as a result of items contained in other comprehensive income. Subsequent measurement must take into account deprecia- tion of the hidden reserves identified at the time of initial recognition, which must be deducted from the investor's share in the investee's net income. To avoid dual recognition, any dividends received must be deducted from the carrying amount. If there are indications of a possible impairment, the investment must be tested for impairment, see Note 3.7 "Impairment test". There is no separate impairment test for the goodwill. Rather, the impairment test is performed for the entire carrying amount of the investment. Accordingly, impairment losses are not allocated to the goodwill included in the carrying amount of the investment and can thus be reversed in full in subsequent periods. Inventories Inventories are measured at the lower of cost and net realiz- able value. The historical cost of acquisition or production is the upper limit. The net realizable value corresponds to the selling price in the ordinary course of business less the production and selling expenses incurred prior to sale. The cost of inventories of similar structure or for similar applications is determined uniformly as an average or using the first-in first-out method. The cost of production of finished goods and work in progress comprises the cost of raw materials and supplies, directly attributable personnel expenses, other direct costs and fixed and variable overheads that can be systematically assigned to production (based on normal oper- ating capacity). The cost of inventories may also contain gains and losses from cash flow hedges entered into to hedge the exchange rates or price of goods in connection with the procurement of raw materials and which were included in other comprehensive income in the statement of comprehen- sive income until they were reclassified to the inventories acquired. Cash and cash equivalents This item contains checks, cash and cash equivalents and balances held at banks. It also contains highly liquid financial instruments with a maturity, calculated as of the date of purchase, of no more than three months, provided that they can be converted into cash and cash equivalents at any time and are only subject to negligible fluctuations in value. They are measured at fair value. Provisions for pensions and other post-employment benefits Provisions for pensions and other post-employment benefits are measured using the projected unit credit method for de- fined benefit obligations in accordance with IAS 19 Employee Benefits. This method takes account of future salary and pension increases as well as pension obligations and accrued entitlements as of the reporting date. In Germany, valuation is based on the biometric data in the 2005 G mortality tables published by Klaus Heubeck. For the companies in the UK, the S1PXA tables are used, and for the USA PPA mortality tables are used. Pension obligations in the remainder of the Group are determined using country-specific parameters and measurement principles. Actuarial gains and losses relating to pension obligations and income from plan assets (apart from interest income) are derived from the difference between the expected pension obligations and the actual obligation calculated at year end, and from deviations between the expected and actual fair value of plan assets calculated at year end. EFTA00598787

- TOOUR SHAREHOLDERS - MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Not•a Sinn of piepaiatioo of the financial statement, • SUPPLEMENTARY INFORMATION 1SS Changes that arise during a year as a result of actuarial gains/ losses relating to pension obligations, income from plan assets (excluding interest income), changes in the asset ceiling (excluding interest cost) and income from claims to refunds (excluding interest income) are offset directly in other com- prehensive income. The benefit obligations at year end are compared with the fair value of the plan assets (funded status). Pension provisions are derived from this, taking the asset ceiling into account. Defined contribution plans result in an expense in the period in which the contribution is made. Defined contribu- tion plans exist for both company pension plans and state pension plans (statutory pension insurance). Other provisions Other provisions are liabilities of uncertain timing or amount. They are established to cover a present legal or constructive obligation to third parties based on past events that will prob- ably lead to a cash outflow. If there are several obligations of the same type, the probability of a cash outflow is calculated for these obligations as an aggregate. It must also be possible to reliably estimate the level of the obligation. Provisions are based on the probable settlement obliga- tions and take account of future cost increases. Non-current provisions are discounted. Current provisions and the current portion of non-current provisions are not discounted. Provi- sions are adjusted over time to take account of new findings. Reversals of provisions are recognized as income in the functional areas to which the original expense for the provi- sion was charged. Long-Term Incentive Plans are included in personnel- related provisions. These are performance-related remuner- ation plans for Evonik's executives and members of the Exec- utive Board. The resulting obligations are determined as a cash compensation payment and expensed in accordance with IFRS 2 Share-based Payment. Restructuring provisions are only established if construc- tive obligations exist on the basis of a formal, detailed plan and those affected have been given justifiable expectations that the restructuring will be carried out. Provisions relating to legal risks are allocated to the various categories of provisions on the basis of their type. They contain appropriate expenses for, e.g. court and lawyers' fees, payments to plaintiffs and any payments for settlement or indemnity. The level of such provisions is based, among other factors, on the type of dispute or claim, status of the legal proceedings, the opinion of lawyers, experience of comparable cases and probability assumptions. Deferred taxes, other income taxes In compliance with IAS 12 Income Taxes, deferred tax assets and liabilities are established for temporary valuation and recognition differences between the assets and liabilities recognized in the balance sheets prepared for tax purposes and those prepared in accordance with IFRS. Tax-deductible loss carryfowards that will probably be utilized in the future are capitalized at the amount of the deferred tax asset, taking into account whether they can be carried forward for a limited or unlimited period. The recognition of deferred tax assets at companies with tax-deductible loss carryforwards is based, on the one hand, on current planning calculations, which are normally for a five-year period, and on the other hand, the availability of sufficient temporary tax differences. Deferred tax assets are recognized where it is probable that future taxable income will be generated, which can cover these temporary differences. Where the realization of deferred tax assets is unlikely, they are written down. Deferred tax assets and liabilities are netted if the com- pany is permitted to net other income tax assets and liabilities and if the deferred tax assets and liabilities relate to income taxes in the same tax jurisdiction. The tax rates used to calculate deferred taxes are those valid under current legislation or that have been announced as being applicable as of the date when the temporary differences will probably be settled. The overall tax rate used to calculate deferred taxes for companies in Germany is 30 percent. In addition to 15 percent German corporation tax, the tax rate includes a solidarity surcharge of 5.5 percent of the German corporation tax and average trade tax of around 14 percent. The tax rates used for foreign companies are their national tax rates. These vary between 10 percent (Hungary) and 40 percent (USA). E a 0 EFTA00598788

156 FINANCIAL REPORT 201S EVONIK INDUSTRIES Other income taxes for the reporting period and previous periods are recognized on the basis of the expected payment or refund. They are calculated using the company-specific tax rates applicable on the reporting date. Uncertain tax assets and liabilities are recognized as soon as their probability of occurrence is more than 50 percent. Uncertain income tax positions are recognized on the basis of their most likely amount. Financial instruments Financial instruments comprise contractually agreed rights and obligations resulting in an inflow or outflow of financial assets or the issue of equity instruments. They are divided into derivative and non-derivative financial instruments and are recognized on the balance sheet as financial assets or financial liabilities or as trade accounts receivable or trade accounts payable. Financial instruments are initially measured at fair value plus any directly attributable transaction costs. Transaction costs for financial instruments held at fair value through profit or loss are included directly in the income statement. To measure non-current financial instruments that do not bear interest at market rates, the expected future cash flows are discounted to the date of acquisition using the effective interest rate (present value). The effective interest rate takes account of all directly attributable fees that are by nature interest. Subsequent measurement is based on the classifica- tion of the financial instruments. (a) Non-derivative financial instruments Evonik classifies non-derivative financial instruments as financial assets in the categories loans and receivables or available-for-sale. They are initially recognized at the settle- ment date. Financial assets are derecognized when the con- tractual rights to receive payments lapse or are transferred and Evonik has transferred substantially all opportunities and risks associated with ownership. There were no instances where the Group sold financial assets and the assets were still reported in the financial statements on the basis of continuing involvement. Non-derivative financial instruments that constitute finan- cial liabilities are recognized at amortized cost. Financial liabilities are derecognized when the obligation has been settled or canceled, or has expired. The categories used by the Group are outlined below: Loans and receivables principally comprise trade accounts receivable and loans. The assets assigned to this category are valued at amortized cost using the effective interest rate method. If there are objective indications based on historical empirical values that it will not be possible to collect the full amounts due under the customary conditions, an impair- ment loss is recognized. This is measured as the difference between the carrying amount of the asset and the present value of the estimated future payments calculated using the original effective interest rate. Impairment losses are recog- nized in the income statement. If the original reason for the impairment loss no longer applies, it is reversed to income, but only up to the amortized cost. Available-for-sale assets comprise equity instruments that are not consolidated or recognized at equity, and other secu- rities. If no fair value is available for such assets or the fair value cannot be determined reliably, for example, in the case of equity instruments that are not listed on a stock exchange, the assets are recognized at amortized cost. Changes in the fair value are recognized in other comprehensive income, taking into account deferred taxes. Financial assets are exam- ined for objective indications of impairment on every report- ing date. A material or lasting reduction in the fair value to below the cost of acquisition is regarded as an indication of impairment. In the case of equities, a decline in the fair value of at least 20 percent compared with the cost of acquisition is regarded as material. In such cases, the corresponding losses are derecognized from other comprehensive income and recognized in the income statement. If the reason for the impairment loss no longer applies, the reversal is recognized in other comprehensive income. Only debt instruments that are allocated to this category are written back by up to the amount of the original impairment in the income statement. Impairment losses are not reversed if they apply to invest- ments and other financial assets whose fair value cannot be reliably determined. The category at amortized cost mainly refers to trade accounts payable and loans. The liabilities assigned to this category are valued at amortized cost using the effective interest rate method. EFTA00598789

- TO OUR SHAREHOLDERS - MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Note, Resit of ptepetetion of the tinencial sotemeno • SUPPLEMENTARY INFORMATION 1T/ b) Derivative financial instruments Derivative financial instruments are used to hedge the risk of changes in exchange rates, the price of commodities and interest rates. Hedging instruments are recognized on the balance sheet either on a stand-alone basis or as a valuation unit with the corresponding hedged items (hedge account- ing). Initial recognition is on the trading date. If no stock exchange or market price is available for the derivative from an active market, the fair value is determined using financial valuation methods. The market price of options is determined using established option pricing models. Commodity deriva- tives are valued with the aid of spot prices and forward rates while interest rate derivatives are valued by discounting future cash flows. Stand-alone financial derivatives are assigned to the category at fair value through profit or loss and classified as held for trading. Financial instruments assigned to this category are recognized at fair value on each reporting date. Any gain or loss resulting from a change in their fair value is recognized in the income statement. Both the hedging instrument and the hedged item have to meet specific criteria to qualify for hedge accounting. In par- ticular, hedge accounting requires extensive documentation of the hedging relationship, together with evidence that the expected and actual effectiveness of the hedge is between 80 and 125 percent. A derivative no longer qualifies for hedge accounting if these conditions are not fulfilled. In the case of cash flow hedges, hedge accounting must also be halted if the forecast transaction no longer appears probable. In such cases, the amount recognized in other comprehensive income is reclassified to the income statement. Depending on the type of hedge, hedging instruments and the associated hedged items for which hedge accounting is used, are valued as outlined below: The purpose of fair value hedges is to hedge the fair value of assets or liabilities reflected on the balance sheet. Changes in the fair value of the hedging instrument as well as changes in the fair value of the hedged item are recognized in the income statement. If off-balance-sheet firm commitments are hedged, changes in the fair value of the firm commitment resulting from changes in the hedged risk give rise to recog- nition of an asset or a liability which affects income. In view of this method, changes in the value of the hedged item and the hedge cancel each other out in the income statement. The purpose of cash flow hedges is to minimize the risk of volatility of future cash flows from a recognized asset or liability or a forecast transaction that is considered highly probable. The effective portion of changes in the fair value of a hedging instrument is recognized in other comprehensive income and the ineffective portion of the change in value is recognized in the income statement. Amounts recognized in other comprehensive income are reclassified to the income statement as soon as the hedged item has an impact on the income statement. In the case of interest rate hedges, such amounts are included in net interest income or expense, while in the case of sales hedges they are included in the corresponding sales revenues, and hedges on the procure- ment of goods are included directly in the cost of sales. If the hedged future transaction comprises a non-financial asset or a non-financial liability, the gain or loss previously recognized in other comprehensive income is included in the cost of acqui- sition of the asset or liability when it is initially recognized. The purpose of a hedge of a net investment is to reduce the foreign currency risk involved in an investment in a com- pany whose functional currency is not the euro. Such hedges are accounted for in the same way as cash flow hedges. Gains and losses recognized in other comprehensive income are reclassified to the income statement when the foreign sub- sidiary is divested or investment in it is reduced. Leasing A lease comprises an agreement that transfers the right to use an asset for a certain period in return for one or more payments. The Group is mainly party to operating leases as either lessor or lessee. The related income and expenses are recognized in the income statement in the period in which they are received or incurred. Assets held for sale and the associated liabilities Non-current assets are classified as held for sale if the corre- sponding carrying amount is to be realized principally through a sale transaction rather than through continued use. Such assets must be available for immediate sale in their present condition, on terms that are usual and customary for the sale of such assets, and sale must be highly probable. If the associated liabilities are to be sold with the asset as part of the transaction, these must also be presented separately. E t. 0 EFTA00598790

158 FINANCIAL REPORT 2015 EVONIK INDUSTRIES The assets and liabilities must be measured in accordance with the relevant accounting standards immediately before initial classification as held for sale. They are subsequently valued at the lower of the carrying amount and fair value less costs to sell. Where the assets and liabilities do not fall within the scope of the measurement criteria set out in IFRS 5 Non-current Assets Held for Sale and Discontinued Opera- tions, subsequent revaluation is performed in accordance with the relevant accounting standards. Unless they are classified as discontinued operations, the results of the valuation and the sale of the asset are still included in income from continuing operations. Discontinued operations A discontinued operation is either a major line of business or geographical area of the company that is to be sold or shut down on the basis of a single coordinated plan, either as a whole or in parts, or a subsidiary acquired with a view to resale. The income from the operating activities and the measure- ment and divestment of discontinued operations is reported separately from the continuing operations on the income statement. Similarly, the cash flow from the operating activi- ties of discontinued operations is reported separately from the continuing operations in the cash flow statement. Determination of fair value The fair value is the price that would be received for the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date. It is therefore an exit price based on a hypothetical transaction on the reporting date. If there are several markets for the asset or liability, the principal market or, as a secondary criterion, the most advantageous market to which the reporting entity has access is used. Transaction costs are not included in fair value. They are accounted for as prescribed by the applicable accounting standard. The fair value of non-financial assets is determined as the best use from a market perspective; this may differ from current use of the asset. In the measurement of financial assets and liabilities, the credit default risk is taken into account. Fair value measurement is based on a three-level hierarchy: Where available, the fair value is determined from the quoted prices for identical assets or liabilities in an active market without adjustment (Level 1). If such data are not available, measurement based on directly or indirectly observable inputs is used (Level 2). In all other cases, valuation methods that are not based on observable market data are used (Level 3). Where input factors from different levels are used, the level applicable for the lowest material input factor is determined and the overall fair value is assigned to this level. Contingent liabilities, contingent receivables and other financial commitments Contingent liabilities, except for those recognized in connec- tion with a business combination, are possible or present obligations arising from past events where an outflow of resources is not improbable but which are not recognized on the balance sheet. Contingent receivables are possible assets arising from past events, which cannot be recognized on the balance sheet, and whose existence will be confirmed by the occur- rence or non-occurrence of one or more uncertain future events that are not fully under the company's control. A con- tingent receivable is indicated where an inflow resulting from its economic benefits is probable. Other financial commitments result from non-onerous executory contracts, continuous obligations, statutory require- ments and other commercial obligations that are not already included in the liabilities shown on the balance sheet or in contingent liabilities and that are of significance for an assess- ment of the company's financial position. 4. Discussion of assumptions and estimation uncertainties The preparation of consolidated financial statements involves assumptions and estimates about the future. Evidently, the subsequent circumstances do not always match the estimates made. Adjustments to estimates are recognized in income as soon as better information is available. The estimates and assumptions that constitute a considerable risk that the carry- ing amounts of assets and liabilities may have to be adjusted within the next fiscal year are discussed below. EFTA00598791

- TOOUR SHAREHOLDERS MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS N•t,, Discussion of ossumocions end estaimion uncenointies SUPPLEMENTARY INFORMATION 159 (a) Impairment testing of goodwill Testing goodwill for impairment also involves assumptions and estimates regarding, for example, future cash flows, expected terminal growth rates and discount rates. The rele- vant assumptions may change, leading to impairment losses in future periods. In the impairment test on goodwill in the Performance Materials segment, the recoverable amount exceeded the carrying amount of the segment by €119 million. The reduc- tion in this amount compared with the previous year was mainly due to the new management and portfolio structure introduced on January 1, 2015. In this context, the segment was defined essentially as a product-oriented, energy and raw material intensive supplier that will in future concentrate on securing and extending its good market positions. This included reallocation of operations between the segments, see Note 9.1, which had a negative impact on the difference between the recoverable amount and carrying amount of the Performance Materials segment. The recoverable amount would correspond to the carrying amount of the segment if the weighted average cost of capital after taxes increased by 0.4 percentage points, or if there was a reduction of 5.0 per- cent in the net cash flow or of 0.5 percentage points in the terminal growth rate. In the Nutrition & Care, Resource Efficiency and Services segments, a relative increase in the weighted average cost of capital after taxes of 10 percent or a reduction of 10 percent in the net cash flow or terminal growth rate would not result in an impairment loss. (b) Impairment testing of deferred tax assets Deferred tax assets may only be recognized if it is probable that sufficient taxable income will be available in the future. Deferred taxes are calculated on the basis of the tax rates applicable on the date when temporary differences are likely to be reversed. If these expectations are not met, an impairment loss must be recognized in income for the deferred tax assets. (c) Uncertain income tax positions Group companies are liable to pay income tax in many coun- tries around the world. When evaluating global income tax assets and liabilities, there may be some uncertainty relating, in particular, to the interpretation of tax regulations. It cannot be ruled out that the fiscal authorities will take a different view on the correct interpretation of tax regulations. Changes in assumptions regarding the correct interpretation of tax regulations, for example, as a result of changes in legal deci- sions, are reflected in the recognition of uncertain income tax assets and liabilities for the corresponding fiscal year. (d) Impairment of other assets Estimates are made about the useful life, depreciation/amor- tization period and value of other intangible assets, property, plant and equipment, investments, and loans and receivables. These estimates are based on experience and planning data, which contain assumptions on business conditions, sector trends and the creditworthiness of customers. If there is a considerable change in such assumptions or circumstances, the estimates have to be reviewed. This may result in impairment of the related assets. (e) Valuation of provisions for pensions and other post-employment benefits The valuation of provisions for pensions and other post- employment benefits is subject, among other things, to assumptions about discount rates, expected future salary and pension increases, the cost trend for healthcare, and mortality tables. The actual data may differ from these assumptions as a result of changes in economic or market conditions. Sensitivity depends on the interest rate as of December 31 of the respective fiscal year, which is used as the discount rate, see Note 7.8. A reduction of 1 percentage point in the Group-wide discount rate, assuming other parameters remain unchanged, would increase the present value of the defined benefit obli- gation by €1,906 million (2014: €1,976 million). Conversely, increasing the discount rate by 1 percentage point, assuming other parameters do not change, would decrease the defined benefit obligation by €1,456 million (2014: €1,518 million). A reduction of 1 percentage point in the assumed Group- wide salary increases would reduce the defined benefit obligation by €162 million (2014: €185 million). Conversely, assuming other parameters remain unchanged, a rise of 1 per- centage point in the assumed Group-wide salary rises would increase the defined benefit obligation by €175 million (2014: €198 million). E 0 EFTA00598792

160 FINANCIAL REPORT 2015 EVONIK INDUSTRIES 1 A reduction of 1 percentage point in the assumed Group- wide pension increase, assuming other parameters remain unchanged, would reduce the defined benefit obligation by €841 million (2014: €857 million). Conversely, assuming other parameters remain unchanged, a rise of 1 percentage point in the assumed Group-wide pension rises would increase the defined benefit obligation by €999 million (2014: €1,025 million). Assuming all other parameters remain unchanged, a reduc- tion of 20 percent in mortality in the retirement phase would increase the defined benefit obligation by €762 million (2014: €768 million). If the trend in healthcare costs were to increase by 1 per- centage point, the accumulated healthcare benefit obligation would increase by €16 million (2014: €14 million). Con- versely, a reduction of 1 percentage point in the cost trend would reduce the accumulated healthcare obligation by €14 million (2014: €12 million). (f) Valuation of other provisions Other provisions, especially provisions for recultivation and environmental protection, in connection with legal risks and for restructuring are naturally exposed to significant fore- casting uncertainties regarding the level and timing of the obligation. The company has to make assumptions about the probability of occurrence of an obligation or future trends, such as value of the costs, on the basis of experience. Non-current provisions in particular are exposed to fore- casting uncertainties. In addition, the level of non-current provisions depends to a large extent on the selection and development of the market-oriented discount rate. The Group uses different interest rates for different currencies and terms to maturity. 5. Changes in the Group 5.1 Scope of consolidation and list of shareholdings Changes in the scope of consolidation Other No. of to-npnc. Germany countries Total Even& industries AG and consolidated subsidiaries As of December 31, 20'14 42 98 140 Acquisitions - 2 2 Other companies consolidated for the first time - 1 1 Divestments -1 -1 -2 Intraroup mergers -2 - -2 Other companies deconsolidated - -1 -1 As of December 31, 2015 39 99 138 joint operations As of December 31, 20'14 2 2 4 Other companies consolidated for the first time 1 - 1 As of December 31, 2015 3 2 5 Investments recognized at equity As of December 31, 20'14 S 9 14 Divestments -1 - -1 Other companies deconsolidated -1 -1 -2 As of December 31, 20'15 3 8 11 45 109 154 EFTA00598793

TO OUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notes Changes in the Group • SUPPLEMENTARY INFORMATION 161 Further information on acquisitions and divestments in 2015 can be found in Note 5.2. The following list shows Evonik's shareholdings in accor- dance with Section 313 Paragraph 2 of the German Commer- cial Code (HGB). The shareholdings have been calculated in accordance with Section 16 of the German Stock Corporation Act (AktG). Accordingly, the calculation includes shares held by the Consolidated subsidiaries Shareholding Name of company Registered office in% Consolidated subsidiaries Germany AQura GmbH Hanau • 100.00 BK-Wolfgang-Warme GmbH Hanau 100.00 CyPlus GmbH Hanau 100.00 DeAM Treasury 1 Spezlalfoads der Evonik Industries AG Essen b 0.00 Evonik Betelligungs-GmbH Frankfurt am Main • 100.00 Evonlk Catering Semites GmbH Marl • 100.00 Evonlk Creavls GmbH Essen • 100.00 Evonlk Dahlenbum GmbH Dahlenburg • 100.00 Evonik Degussa GmbH Essen 100.00 Evonik Goldschmidt Rewo GmbH Essen 100.00 Evonik Gorapur GmbH Wittenburg • 100.00 Evonik Gorapur Verwahungs-GmbH Wittenburg 100.00 Evonik Manse GmbH Geesthadit • 100.00 Evonik IP GmbH Eschbom • 100.00 Evonik Nuultion & Care GmbH Essen • 100.00 Evonik O0 Additives GmbH Essen 100.00 Evonik Performance Materials GmbH Essen • 100.00 Evonik Pwoxygens Holding GmbH Essen 100.00 Evonik Projekt-Betelligungs-GmbH & Co. KG Essen 99.00 Evonik Projekt-Betelligung Verwaltungs-GmbH Essen 100.00 Evonik Real Estate GmbH & Co. KG Marl • 100.00 Evonik Real Estate Verwaltungs•GmbH Marl 100.00 Evonik Resource Efficiency GmbH Essen • 100.00 Evonlk Risk and Insurance Services GmbH Essen • 100.00 Evonik Rohm GmbH Essen 100.00 Evonik Technochemie GmbH Essen • 100.00 Evonik Technology & Infrastructure GmbH Essen • 100.00 Evonik Venture Capital GmbH Hanau • 100.00 Gotdschmldt ETB GmbH Berlin • 100.00 HD Ceracat GmbH Frankfurt am Main 100.00 HAS integrierte Logistik &Service GmbH Marl • 100.00 KMV Vermogensverwaltungs-GmbH Marl 100.00 Mench-Kunststofftedinik GmbH Bad KtInig • 100.00 parent company, a subsidiary included in the consolidated financial statements or a person acting on behalf of these companies. German subsidiaries that make use of the provisions of Sections 264 Paragraph 3 and 264b of the German Commer- cial Code (HGB) on exemption from disclosure of annual financial statements and the preparation of notes to their financial statements and a management report are indicated. EFTA00598794

162 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Consolidated subsidiaries Shareholding Name of company Registered office in% RSV Vrwaltungs•GmbH Essen 100.00 RCIV Vermilgensverwaltungs-GmbH Essen 100.00 ROTGERS Dlenstlelstungs•GmbH Essen 100.00 ROTGERS GmbH Essen 100.00 Stockhausen UnterstOtzungseinriduung GmbH Krefeld 100.00 Westgas GmbH Marl 100.00 Other counalea Degussa International Inc Wilmington (Delaware, USA) 100.00 DSL. Japan Co., Ltd. Tokyo (Japan) 51.00 Egesil Kimya Sanayl ye Titres A.S. Istanbul (Turkey) 51.00 Evonik Acrylics Africa (Pty) Ltd. Johannesburg (South Africa) 51.00 Evonik Aerosil France S.A.R.L. Salalse•sur•Sanne (France) 100.00 Evonik Africa (Pty) Ltd. Midrand (South Africa) 100.00 Evonik Agroferm Th. Kaba (Hungary) 100.00 Evonik Amalgamation Ltd. Milton Keynes (UK) 100.00 Evonik Australia Ply Ltd. Mount Waverley (Australia) 100.00 Evonik Canada Inc. Calgary (Canada) 100.00 Evonik Catalysts India Pvt. Ltd. DomblvIl (India) 100.00 Evonik CB LLC Wilmington (Delaware, USA) 100.00 Evonik Colombia S.A.S. Medellin (Colombia) 100.00 Evonik Corporation Parsippany (New Jersey, USA) 100.00 Evonik Cyro Canada Inc. Etobicoke (Canada) 100.00 Evonik Cyro LLC Wilmington (Delaware, USA) 100.00 Evonik Degussa Africa (Pty) Ltd. Midrand (South Africa) 100.00 Evonik Degussa Antwerpen . Antwerp (Belgium) 100.00 Evonik Degussa Argentina S.A. Buenos Aires (Argentina) 100.00 Evonik Degussa Brasil Ltda. Sao Paulo (Brazil) 100.00 Evonik Degussa Carbons, Inc. Wilmington (Delaware, USA) 100.00 Evonik Degussa Chile S.A. Santiago (Chile) 99.99 Evonik Degussa (China) Co., Ltd. Beijing (China) 100.00 Evonik Degussa International AG Zurich (Switzerland) 100.00 Evonik Dutch Holding B.V. Amsterdam (Netherlands) 100.00 Evonik Espana y Portugal, SA.U. Granollers (Spain) 100.00 Evonik Fermas s.r.o. Slovenski Cupla (Slovakia) 100.00 Evonik Fibres GmbH Sd,drfling (Austria) 100.00 Evonik Finance B.V. Amsterdam (Netherlands) 100.00 Evonik Foams Inc. Wilmington (Delaware, USA) 100.00 Evonik Forhouse Optical Polymers Corporation Taichung (Taiwan) 51.00 Evonik France S.A.S. Ham (France) 100.00 Evonik Goldschmidt UK Ltd. Milton Keynes (UK) 100.00 Evonik Gulf FZE Dubai (United Arab Emirates) 100.00 EFTA00598795

TO OUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 163 Not., Changes in the Group Consolidated subsidiaries Shareholding Name of company Registered office in% Evonik Hong Kong Ltd. Hong Kong (Hong Kong) 100.00 Evonik India Pvt. Ltd. Mumbai (India) 100.00 Evonik Industries de Mexico, SA de C.V. Mexico City (Mexico) 100.00 Evonik International Holding B.V. Amsterdam (Netherlands) 100.00 Evonik Iran AG Teheran (Iran) 100.00 Evonik Italia Pandino (Italy) 100.00 Evonik Japan Co., Ltd. Tokyo (Japan) 100.00 Evonik Jayhawk Fine Chemicals Corporation Canon City (Nevada, USA) 100.00 Evonik Korea Ltd. Seoul (South Korea) 100.00 Evonik Limited Egypt Cairo (Egypt) 100.00 Evonik Malaysia Sdn. Bhd. Kuala Lumpur (Malaysia) 100.00 Evonik MedAvox M. (In liquidation) Milan (Italy) 100.00 Evonik Membrane Extraction Technology Limited Milton Keynes (UK) 100.00 Evonik Methionine SEA Pte. Ltd. Singapore (Singapore) 100.00 Evonik Metllatos S.A. Rosario (Argentina) 100.00 Evonik Mexico, S.A. de C.V. Mexico City (Mexico) 100.00 Evonik Oil Additives Asia Pacific Pte. Ltd. Singapore (Singapore) 100.00 Evonik Oil Additives Canada Inc. Morrisburg (Canada) 100.00 Evonik Oil Additives SAS. Lauterbourg (Rance) 100.00 Evonik Oil Additives USA, Inc. Horsham (Pennsylvania, USA) 100.00 Evonik Oxeno Antwerpen. Antwerp (Belgium) 100.00 Evonik Para-Chemie GmbH Gramatneusiedl (Austria) 99.00 Evonik Pension Scheme Trustee Limited Milton Keynes (UK) 100.00 Evonik Peroxid GmbH Weissenstein (Austria) 100.00 Evonik Peroxide Africa (Pty) Ltd. Umbogintwini (South Africa) 100.00 Evonik Peroxide Holding B.V. Amsterdam (Netherlands) 100.00 Evonik Peroxide Ltd. Morrinsvilk (New Zealand) 100.00 Evonik Peroxide Netherlands B.V. Amsterdam (Netherlands) 100.00 Evonik Re S.A. Luxembourg (Luxembourg) 100.00 Evonik Realm (Nanning) Pharmaceutical Co., Ltd. Nanning (China) 100.00 Evonik Rexim S.A.S. Ham (France) 100.00 Evonik (SEA) Pte. Ltd. Singapore (Singapore) 100.00 Evonik Servidos, S.A. de C.V. Mexico City (Mexico) 100.00 Evonik (Shanghai) Investment Management Co., Ltd. Shanghai (China) 100.00 Evonik Silquimica, S.A.U. Zubillaga-Lantaron (Spain) 100.00 Evonik Speciality Organics Ltd. Milton Keynes (UK) 100.00 Evonik Specialty Chemicals Olin) Co., Ltd. Jilin (China) 100.00 Evonik Specialty Chemicals (Shanghai) Co., Ltd. Shanghai (China) 100.00 Evonik Taiwan Ltd. Taipei (Taiwan) 100.00 Evonik Tasnee Marketing LLC Riyadh (Saudi Arabia) 75.00 Evonik Thal Aerosil Co., Ltd. Bangkok (Thailand) 100.00 Evonik (Thailand) Ltd. Bangkok (Thailand) 100.00 gR EFTA00598796

164 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Consolidated subsidiaries Shareholding Name of company Registered office in% Evonik Tianda (Llaoyang) Chemical Additive Co., Ltd. Liaoyang (China) 97.04 Evonik Ticaret Ltd. Sirked Tuzla/istanbul (Turkey) 100.00 Evonik Trustee Limited Milton Keynes (UK) 100.00 Evonik UK Holdings Ltd. Milton Keynes (UK) 100.00 Evonik United Silica Industrial Ltd. Taoyuan Hsien (Taiwan) 100.00 Evonik United Silica (Siam) Ltd. Rayong (Thailand) 70.00 Evonik Vietnam Limited Liability Company Ho-Chi-Minh City (Vietnam) 100.00 Evonik Wellink Silica (Napping) Co., Ltd. Nanping (China) 60.00 Insilco Ltd. GaJraula (India) 73.11 IIDA Evonik High Performance Polymers (Changchun) Co., Ltd. Changchun (China) 84.04 Laporte Industries Ltd. Milton Keynes (UK) 100.00 Laporte Nederland (Holding) B.V. Amsterdam (Netherlands) 100.00 Nilok Chemicals Inc. (in liquidation) Parsippany (New Jersey, USA) 100.00 Nippon Aerosil Co., Ltd. Tokyo (Japan) 80.00 OOO DESTEK Podolsk (Russian Federation) 62.25 OOO Evonik Chimia Moscow (Russian Federation) 100.00 PT. Evonik Indonesia Clkarang Bekasl (Indonesia) 100.00 PT. Evonik Sumi Asih Belcasi Timur (Indonesia) 75.00 Roha B.V. Tilburg (Netherlands) 100.00 RUTGERS Organics Corporation State College (Pennsylvania, USA) 100.00 SKC Evonik Peroxide Korea Co., Ltd. Ulsan (South Korea) 55.00 Sflbond Corporation Weston (Michigan, USA) 100.00 Stockhausen Nederland B.V. Amsterdam (Netherlands) 100.00 • Utilizes the exemptions permitted under Sections 264 Paragraph 3 and 264b of the German CommercialCode (HGB). b Fully consolidated 'vectored entity in accordance with IFRS 10.88 in conjunction with 819 04. DeAM-Fonds Treasury 1 is a special purpose segregated alternative investment fund (AIF) with fixed investment terms pursuant to Section 284 of the German Capital Investment Act (KAGB). It was established by Evonik at Deutsche Asset & Wealth Management Investment GmbH (DeAWM), Frank- furt am Main (Germany). Evonik does not hold any shares in this company but it is the sole investor and owns all the investment certificates. Evonik is therefore fully exposed to the opportunities and risks of this special purpose entity. Evonik plays a role in setting the investment strategy by defining the basic focus of the fund in the Investment Com- mittee and through general and special contractual terms. Contractually, Evonik is the principal and DeAWM is the agent. The fund therefore constitutes a structured entity, which has to be fully consolidated as Evonik exercises control. No financial or other assistance has been granted or pledged. EFTA00598797

TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Non Changes in the Group • SUPPLEMENTARY INFORMATION US Joint operations recognized on a pro rata basis Name of company Shareholding Registered office in% Point operations Germany Neolyse IbbenbOren GmbH ibbenberen 50.00 StoHaas Marl GmbH Marl 50.00 StoHaas Monomer GmbH & Co. KG Marl 50.00 Other countries ROH Delaware LLC Deer Park (Texas, USA) 50.00 ROH Delaware LP Deer Park (Texas, USA) 50.00 At the joint operations there is no difference between the shareholding and proportion of the voting rights. The purpose of Neolyse Ibbenburen GmbH is the joint production of potassium hydroxide solution and chlorine for use by Evonik and its partner Akzo Nobel Industrial Chemicals GmbH. The purpose of StoHaas Monomer GmbH & Co. KG and its wholly owned subsidiaries StoHaas Marl GmbH, ROH Delaware LLC and ROH Delaware LP is joint production of acrylic acid (CAA) for use by Evonik and its partner Dow Chemicals Inc. (formerly ROHM AND HAAS TEXAS, INC.). Companies recognized at equity Name of company joint ventures Other countries CyPlus Mesa, MI. de C.V. Daicel-Evonik Ltd. Evonik Headwaters LLD Evonik Lansing (Rlzhao) Chemical Industrial Co., Ltd. Evonik Trelbacher GmbH LiteCon GmbH Rusferm Limited Saudi Acrylic Polymers Company, Ltd. Associates Germany ARG mbH & Co. KG T0V NORD InfraChem GmbH & Co. KG T0V NORD InfraChem Verwaltungsgesellschaft mbH Registered office Shareholding in% Mexico City (Mexico) Tokyo (Japan) Milton Keynes (UK) Riahao (China) Trelbach/Althofen (Austria) Hanigtherg/MUrzzuschlag (Austria) Nicosia (Cyprus) Ju bail (Saudi Arabia) 50.00 50.00 Duisburg Marl Marl 50.00 50.00 50.00 49.00 49.00 25.00 19.93 49.00 49.00 feonik is able to exercise a materiel influence under contractual agreements. EFTA00598798

VA FINANCIAL REPORT 2015 EVONIK INDUSTRIES Companies recognized at amortized cost Shareholding Name of company Registered office in% Non-consolidated subsidiaries Germany PKU Pulverkautschuk Union GmbH (In liquidation) Marl 100.00 Studlengesellschaft Kohle mbH Mülheim 84.18 Other countries EGL Ltd. Milton Keynes (UK) 100.00 Evonik Guatemala, S.A. Guatemala City (Guatemala) 100.00 Evonik International Costa Rica, S.A. Santa Ma (Costa Rica) 100.00 Laporte Chemicals Ltd. Milton Keynes (UK) 100.00 LLC 'Evonik Ukraine lane ventures Kiev (Ukraine) 100.00 Germany 50.00 dev.log GmbH (in formation) Niederkassel Faserwerke Hüls Gesellschaft mit beschr6nkter Haftung Marl 50.00 StoHaas Management GmbH Marl 50.00 Other countries Idevo Servicios, SA. de C.V. Mexico City (Mexico) 50.00 RSC Evonik Sweeteners Co., Ltd. Bangkok (Thailand) 50.00 Associates Germany ARG Verwaltungs GmbH Duisburg 20.00 Industriepark Münchsmünster GmbH Er Co. KG Münchsmünster 30.00 Indusulepark Münchsmünster Verwaltungsgesellsdaft mit beschr6nkter Haftung Münchsmünster 38.00 Umschlag Terminal Marl GmbH & Co. KG Marl 50.00 Umschlag Terminal Marl Verwaltungs-GmbH Marl 50.00 Vivawest GmbH Essen a 25.00 Based on the nature of the plan meets, these shares were menaced In accordance with IAS 19. Evonik holds more than 5 percent of the voting rights in the following company, which is defined as a large stock corporation in accordance with Section 267 Paragraph 3 of the German Commercial Code (HGB) (disclosure pursuant to Section 313 Paragraph 2 No. 4 Sentence 2 German Commer- cial Code (HGB)): Borussia Dortmund GmbH & Co. KGaA, Dortmund (Ger- many) (shareholding: 14.78 percent; fiscal year 2014/2015: income after taxes: €2.4 million; equity: E324 million). 5.2 Acquisitions and divestments This section provides a more detailed overview of the prin- cipal changes in the scope of consolidation in the reporting period, divided into acquisitions and divestments. Acquisitions Evonik acquired all shares in Monarch Catalyst Pvt. Ltd. (Monarch), Dombivli (India) on June 5, 2015. Monarch's global activities in the field of oil and fat hydrogenation catalysts extend Evonik's portfolio of catalysts. In addition, this acquisition strengthens Evonik's market position in activated base and precious metal catalysts in India and on the Asian market. The company has been renamed Evonik Catalysts India Pvt. Ltd. On October 30, 2015, Evonik acquired all shares in PeroxyChem Netherlands B.V., Amsterdam (Netherlands) from PeroxyChem Cooperatief U.A., Amsterdam (Netherlands). The production facilities in Delfzijl (Netherlands) complement Evonik's European production network for hydrogen peroxide, comprising three European sites in Antwerp (Belgium), Rhein- felden (Germany) and Weissenstein (Austria). The company has been renamed Evonik Peroxide Netherlands B.V. EFTA00598799

- TOOUR SHAREHOLDERS MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION 167 Notes (barges rr, lie Group Both acquisitions have been integrated into the Resource Efficiency segment. Their aggregate impact on the balance sheet as of the date of first-time consolidation was as follows: Impact of the acquisitions on the balance sheet inEmmen Non-current assets Current assets thereof receivables thereof cash and cash equivalents Non-current liabilities Current liabilities Net assets Goodwill Cost of acquisition (purchase price) Fair value recognized 54 21 11 1 —14 —12 49 5 54 The purchase prices were settled out of cash and cash equivalents. Transaction costs of €1 million relating to these acquisitions are included in other operating expenses. The goodwill is not tax-deductible and mainly comprises the expected future benefits of assets that were not individually identifiable or for which recognition is not permitted, for example, anticipated synergies and the workforce. Both since the date of acquisition and on a pro forma basis since January 1, 2015, the aggregate sales generated by the acquisitions were less than €45 million and the aggregate earnings after taxes were under €5 million. Sales and earnings were not material relative to the Resource Efficiency segment as a whole. Divestments of subsidiaries Under an agreement dated April 29, 2015, Evonik sold its 100 percent stake in Evonik Litarion GmbH, Kamenz (Ger- many) to Electrovaya GmbH, Chisseldorf (Germany). It was agreed not to disclose the purchase price. This divestment was closed on the date on which the agreement was signed. Under an agreement dated September 30, 2015, Evonik sold its 52 percent stake in Qingdao Evonik Chemical Co., Ltd., Jiaozhou (China) to Orion Engineered Carbons International GmbH, Frankfurt (Germany). It was agreed not to disclose the purchase price. The stake was deconsolidated on October 27, 2015 and was classified as held for sale until that date. Until completion of these transactions, the shares were included in the segment report in other operations. The aggregate impact of the divestments on the balance sheet at the time of deconsolidation or divestment was as follows: Impact of divestments on the balance sheet in E million Non-current assets Current assets thereof cash and cash equivalents Non-current liabilities Current liabilities Carrying amounts divested 35 7 - 5 - 9 The deconsolidation of subsidiaries resulted in a loss of €4 million (2014: gain of C5 million), which is recognized in other operating expenses and in income after taxes, dis- continued operations. Divestment of investments recognized at equity Under an agreement dated June 23, 2015, Evonik sold 10.3 percent of the shares in Vivawest GmbH (Vivawest), Essen (Germany), to RAG Aktiengesellschaft, Herne (Ger- many), for a purchase price of €428 million. The transaction was closed on June 29, 2015. The proceeds from this trans- action amounted to €143 million. In the segment report, these shares were previously included in other operations. 5.3 Assets held for sale and discontinued operations Assets held for sale and the associated liabilities have to be stated separately from other assets and liabilities on the balance sheet. The amounts recognized for these assets and liabilities in the previous year do not have to be restated. Businesses whose assets and liabilities have been classified as held for sale may also meet the criteria for classification as discontinued operations, especially if a separate, significant business area is to be disposed of. The income and expenses of such discontinued operations have to be stated separately from those of continuing operations in the income statement. The cash flows also have to be stated separately. The prior- period figures have to be restated in the income statement and the cash flow statement. The 100 percent stake in Evonik Litarion GmbH, com- prising the remaining lithium-ion business, was classified as a discontinued operation until the divestment was completed on April 29, 2015. E 0 EFTA00598800

166 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Impact of the discontinued operations on the income statement Operating income after taxes in €million 2015 Divestment gains/losses Income after taxes, after taxes discontinued operations 2014 2015 2014 2015 2014 Lithium ion business —8 21 —7 -1 —15 20 Former Energy Business Area —30 —2 —2 —29 —9 —17 —9 No tax was incurred in connection with the divestment proceeds. Operating Income, discontinued operations In f nullKon 2015 2014 Lithium•ion business 10 90 Former Energy Business Area — 145 Income 10 233 Lithium•ion business —18 —62 Former Energy Business Area — —175 Expenses —18 —237 Lithium•ion business —8 28 Former Energy Business Area - -30 Operating Income before Income taxes, discontinued operations -8 -2 Lithium•ion business - -7 Former Energy Business Area - - Income taxes - -7 Lithium•ion business -8 21 Former Energy Business Area — —30 Operating Income after taxes, discontinued operations -8 -9 The operating income before income taxes from the lithium- ion business included impairment losses of €7 million in fiscal 2015. As of December 31, 2015, there were no assets or liabilities classified as held for sale on the balance sheet. Cash flow from discontinued operations In f Sloan 2015 2014 Lithium•lon business 3 7 Former Energy Business Area — 24 Cash flow from operating activities 3 31 Lithium•ion business — —1 Former Energy Business Area — — Cash flow from Investing activities — —1 Lithium•lon business 3 6 Former Energy Business Area — 24 Change in cash and cash equivalents, discontinued operations 3 30 On the cash flow statement, the cash flows from the ope- rating, investing and financing activities of the discontinued operations only comprise cash flows generated through transactions with third parties. The net cash flows reflect the change in cash and cash equivalents and intragroup cash pooling activities. EFTA00598801

- TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notts Notes. to the mcome statement • SUPPLEMENTARY INFORMATION 169 6. Notes to the income statement 6.1 Sales The sales of €13,507 million (2014: €12,917 million) principally comprise revenues from the sale of goods and services. 6.2 Function costs Function costs are derived from cost accounting data. IFRS accounting policies are the central recognition principles used at Evonik. Therefore, implicit costs may not be allocated to the functional areas. Function costs are determined after internal cross-charging to ensure that they take account of transactions between the functional areas. Evonik divides function costs into the cost of sales, selling expenses, research and development expenses and general administrative expenses. Operating expenses that cannot be allocated to the func- tional areas are recognized as other operating expenses. 6.3 Other operating income Other operating income inEmotion 2015 2014 Income from the disposal of assets 153 20 Income from non-core operations 55 SS Income from the reversal of provisions 44 30 Income from restructuring measures 43 11 thereof income from the disposal of assets 3 thereof income from the reversal of provisions thereof income from the reversal of impairment losses 37 6 5 Net income from currency translation of operating monetary assets and liabilities 35 39 Income from the reversal of impairment losses 12 6 Other income 103 89 445 250 thereof adjustments 216 30 The income from non-core operations contains income from occasional, unplanned business activities that are not intended to be permanent operations. The income from restructuring measures mainly comprises income in connection with the planned optimization of admin- istrative and service structures and workflows, and income relating to the exit from the photovoltaic business. This item also includes income that by nature would otherwise be allocated to other line items in other operating income. An explanation of the economic effect of the net income from currency translation of operating monetary assets and liabilities is provided in Note 10.2. Other income includes insurance refunds, research sub- sidies, commission income, income from the sale of scrap and income relating to other periods. Other operating income includes a total of €7 million (2014: €10 million) from the divestment of property, plant and equipment, and €146 million (2014: €13 million) from the sale of investments and business operations. In 2015 the income from the sale of investments mainly came from the sale of the 10.3 percent shareholding in Vivawest, see Note 5.2. Further, other operating income contains a total of €17 mil- lion (2014: €6 million) from the reversal of impairment losses. This comprises €10 million (2014: €4 million) in accordance with IAS 39 Financial Instruments: Recognition and Mea- surement relating to trade accounts receivable. The income from reversals of impairment losses in accor- dance with IAS 36 Impairment of Assets totaling €7 million (2014: €2 million) relates to the following segments: income from the reversal of impairment losses by segment in Erniition 2015 2014 Resource Efficiency 6 1 Performance Materials — 1 Other operations 7 2 E it EFTA00598802

170 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Evonik defines non-operating income and expenses that are by nature one-off or rare as adjustments. These adjustments are included in other operating income and expenses in the income statement. The adjustments recognized in other operating income relate to the following functional areas: Adjustments included in other operating income in E million 2015 2014 Production-related 11 1 Administration-related 35 Other 170 29 216 30 6.4 Other operating expenses Other operating expenses in E million 2015 2014 Expenses for restructuring measures 108 97 thereof Impairment losses 6 2 Net expenses for operational currency hedging 71 44 Impairment losses 69 64 Expenses for recultivation and environmental protection 10 6 Losses on the disposal of assets 9 19 Expenses relating to the REACH Regulation 8 6 Other expense 328 257 603 493 thereof adiustments 290 209 The expenses for restructuring measures mainly contain expenses for optimization of the product portfolio in the Performance Materials segment and in connection with the new Group structure. This item also includes expenses that by nature would otherwise be allocated to other line items in other operating expenses. An explanation of the economic effect of the net expenses for operational currency hedging is provided in Note 10.2. Losses from the disposal of assets comprise €9 million (2014: €16 million) from the divestment of property, plant and equipment and, in the prior year, losses of €3 million from the sale of investments and business operations. The increase in other expense is mainly due to provisions for risks arising from an agreement with a raw material supplier, and to expenses for the reorganization and simplifi- cation of corporate structures in Euro e. This item also includes expenses for outsourcing, projects, non-core operations, commission payments, other taxes, and legal and consultancy fees. Other operating expenses contains impairment losses totaling €75 million (2014: €66 million). The impairment losses on financial instruments, which are calculated in accor- dance with IAS 39 Financial Instruments: Recognition and Measurement, totaled €12 million (2014: €19 million) and relate to trade accounts receivable. Impairment losses on assets classified until now as held for sale recognized in accordance with IFRS 5 totaled €3 million (2014: €2 million). Impairment losses determined in accordance with IAS 36 Impairment of Assets in response to indications of a possible impairment were divided among the segments as shown in the table below: Impairment losses by segment in E million 2015 2014 Performance Materials 43 38 Resource Efficiency 11 3 Nutrition Er Care 5 2 Services 1 2 60 45 The impairment losses relate principally to capitalized costs for a project in the Resource Efficiency and Performance Materials segments that was terminated following a routine review of investment projects, and a production plant and intangible assets in the Performance Materials segment. EFTA00598803

- TOOUR SHAREHOLDERS MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notts Notes to the noose statement SUPPLEMENTARY INFORMATION 171 The determination of the value in use of the production plant in the Performance Materials segment did not generate a positive value; the discount rate used was the weighted cost of capital of the segment, see Note 3.7. The recoverable value of the other assets was not determined as the assets were not considered to have any further benefit. The adjustments recognized in other operating expenses relate to the following functional areas: Adjustments included In other operating expanses Jae million 2015 2014 Production-related 129 88 Sales-related 12 - 7 - -related Adminisuation-related 67 60 Other 75 61 290 209 6.5 Result from investments recognized at equity Result from investments recognized at equity in e million 2015 2014 Income from measurement at equity 11 18 Expenses for measurement at equity -26 -4 -15 14 The expenses for measurement at equity in 2015 include an impairment loss of €14 million on an equity investment in the Nutrition & Care segment, which is contained in adjustments. In the prior year, income from measurement at equity included income of €10 million in connection with the 10.3 percent shareholding in Vivawest, which was sold in the second quarter of 2015 and was previously recognized at equity, see Note 5.2. 6.6 Financial result Financial result in Clutha, 2015 2014 Income from securities and loans 4 S Interest and similar income from derivatives 8 6 Other interest-type income 34 60 Interest Income 46 71 Interest expense on financial liabilities —47 —50 Interest and similar expenses for derivatives —29 —19 Interest expense on accrued Interest on other provisions —23 —60 Net Interest expense for pensions —96 —120 Other interest-type expense —50 —40 Interest expense —245 —289 Result from currency translation of financing-related assets and liabilities —22 —39 Income from financing-related currency hedging 16 23 Miscellaneous financial Income and expenses —18 -1 Other financial Income -24 -17 -223 -235 Borrowing costs of €5 million (2014: €35 million) are capital- ized. The average underlying cost of financing was 3.1 percent (2014: 5.5 percent). An explanation of the economic effect of the result from currency translation of financing-related assets and liabilities is provided in Note 10.2. The miscellaneous financial expenses of €18 million mainly relate to impairment losses on an equity investment. I 3 EFTA00598804

172 FINANCIAL REPORT 2015 EVONIK INDUSTRIES 6.7 Income taxes Income taxes shown in the income statement InE million 2015 2014 Other Income texas 508 225 thereof relating to other periods 21 -18 Deferred taxes -se 27 thereof relating to other periods -24 12 thereof relating to temporary differences -85 1 422 252 The tax reconciliation shows the development of expected income taxes relative to the effective income taxes stated in the income statement. As in the previous year, the expected income taxes are based on an overall tax rate of 30 percent, comprising German corporation tax of 15 percent, a solidarity surcharge of 5.5 percent and an average trade tax rate of around 14 percent. The effective income taxes include other income taxes and deferred taxes. Tax recondllation in emillinn 2015 2014 Income before Income taxes, continuing operations 1,441 842 Expected income taxes 432 253 Variances due to differences in the assessment base for trade tax 5 2 Deviation from the expected tax rate 17 21 Changes in the valuation of deferred taxes —9 5 Losses not affecting deferred taxes and the use of loss carryforwards 24 —6 Changes In tax rates and tax legislation 1 — Non-deductible expenses 35 19 Interest ceiling — 1 Tax-free income —88 —28 Result from investments recognized at equity 4 —5 Other 1 —10 Effective income taxes (current Income taxes and deferred taxes) 422 252 Effective income tax rate in% 29.3 29.9 The impairment losses on deferred taxes previously recog- nized totals E3 million (including €2 million from loss carryfowards). This is countered by reversals of 415 million, mainly in connection with loss carryforwards. 'Other' con- tains other income taxes and deferred taxes relating to different periods. 6.8 Earnings per share Earnings per share as shown in the income statement are calculated by dividing net income by the weighted average number of shares issued, i.e. 466,000,000 shares. Net income comprises the total earnings for the year less non-controlling interests, including the earnings of discontinued operations. Earnings per share could be diluted by potential ordinary shares. Since there were no potential ordinary shares in either 2015 or 2014, diluted earnings per share are identical to basic earnings per share. Earnings per share In C million 2015 2014 Income after taxes, continuing operations 1,019 590 Income after taxes, discontinued operations —17 —9 Less Income after taxes attributable to non-controlling interests -11 -13 Income after taxes attributable to shareholders of Evonik Industries AG (net income) 991 568 Earnings per share in E (basic and diluted) from continuing operations 2.19 1.27 from discontinued operations -0.04 -0.02 less earnings per share attributable to non-controlling interests -0.02 -0.03 Earnings per share In t (basic and diluted) attributable to shareholders of Evonlk indusbles AG .2.13 .1.22 EFTA00598805

TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 173 Noun Notes to the balance 'heel 7. Notes to the balance sheet 7.1 Intangible assets Change in intangible assets Nandises, Capitalized Other modems, ks, development intangible Goodwill and licenses costs assets Total Cost of acquisition/production As of January 1, 2014 2,730 1,647 169 488 5,034 Currency translation 56 10 3 69 Additions from business combinations 12 13 14 39 Other additions 12 7 19 Disposal —9 —18 Reclassification 20 —2 —14 4 E As of December 31, 2014 2,792 165 497 5,147 1,693 Currency translation 64 7 2 73 Additions from business combinations 5 1 16 22 Other additions 10 15 25 Disposal —54 —54 Reclassification 9 —3 6 As of December 31, 2015 2,861 1,666 165 527 5,219 Amortization and impairment losses 0 As of January 1, 2014 102 1,311 148 435 1,996 Currency translation 7 1 8 Additions from business combinations Amortization 48 2 57 Impairment losses 2 Reversals of impairment losses Disposal —9 —16 Reclassification —11 1 10 As of December 31, 2014 1,348 149 453 2,047 Currency translation S 6 Additions from business combinations Amortization 33 1 39 Impairment losses 2 12 14 Reversals of Impairment losses —1 —1 Disposal —53 —54 Reclassification —4 4 As of December 31, 2015 97 1,330 162 462 2,051 Carrying amounts as of December 31, 2014 2,69S 345 16 44 3,100 Carrying amounts as of December 31, 2015 2,764 336 3 65 3,160 Franchises, trademarks and licenses include trademarks with As in the previous year, on the reporting date there were an indefinite useful life totaling E203 million (2014: no intangible assets to which title was restricted and no E202 million). commitments to purchase intangible assets. EFTA00598806

174 FINANCIAL REPORT 2015 EVONIK INDUSTRIES 7.2 Property, plant and equipment Change in property, plant and equipment in E million Advance Other plant, payments and Land, land rights Plant and office furniture construction and buildings machinery and equipment in progress Total Cost of acquisition/production As of January 1, 2014 2,765 10,753 979 1,140 15,637 Currency translation 85 335 12 31 463 Additions from business combinations 5 9 1 - 15 Other additions 131 334 41 598 1,104 Disposal -65 -330 -30 -35 -460 Reclassification 235 685 22 -936 6 As of December 31, 2014 3,156 11,786 1,025 798 16,765 Currency translation 69 265 7 -8 333 Additions from business combinations 22 13 - 1 36 Other additions 52 271 44 485 852 Disposal —26 —185 —44 —2 —257 Reclassification 101 546 15 —663 —1 As of December 31, 2015 3,374 12,696 1,047 611 17,728 Deprecation and Impairment losses As of January 1, 2014 1,525 8,486 778 16 10,805 Currency translation 31 212 8 — 251 Additions from business combinations 1 2 — — 3 Depredation 60 425 64 — 549 Impairment losses 2 8 — 36 46 Reversals of Impairment losses — —2 — — —2 Disposal —56 —292 —29 —25 —402 Reclassification — 1 —1 — — As of December 31, 2014 1,563 8,840 820 27 11,250 Currency translation 28 176 5 — 209 Additions from business combinations — — — — — Depreciation 77 516 68 — 661 Impairment losses 1 33 — 19 53 Reversals of impairment losses — —6 — — —6 Disposal —20 —187 —42 — —249 Reclassification —9 24 —10 —3 2 As of December 31, 2015 1,640 9,396 2,946 841 43 11,920 Carrying amounts as of December 31, 20'14 1,593 205 771 5,515 Carrying amounts as of December 31, 2015 1,734 3,300 206 568 5,808 Prio-year figures restated. The Group had commitments of E159 million (2014: E105 mil- lion) to purchase property, plant and equipment. As a lessor, Evonik mainly leases out land under operating leases. The nominal values of future minimum lease pay- ments for these assets over the non-cancelable term of the lease are due as follows: Maturity structure of future minimum lease payments (lessor; operating leases) In E million 2015 2014 Due within 1 year 9 9 Due in more than 1 and up to S yews 23 20 Due in more than 5 years 152 120 184 149 EFTA00598807

• TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATEDFINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 175 Noun Notts to the balance sheet 7.3 Investments recognized at equity This item comprises associates and joint ventures recognized using the equity method, see Note 5.1. Investments recognized at equity lite ninon Carrying amount of material associates Carrying amount of individually non-material associates Carrying amount of individually non-material Joint ventures Dee. 31, Dec. 31, 2015 2014 300 7 2 46 55 53 357 In the previous year, Vivawest was classified as material for the Evonik Group. The shares in Vivawest, which were recognized at equity, were divested in the second quarter of 2015, see Note 5.2. Income from investments recognized at equity of E1 million (2014: €10 million) is recognized in connection with Vivawest. 7.4 Financial assets Financial assets Ine melon Dec 31, 2015 Dec.31, 2014 thereof Total non-current thereof Total non-current Other Investments 74 74 64 64 Loans 29 24 12 a Securities and similar claims 265 3 392 5 Receivables from derivatives 84 11 35 3 Other finandal assets 29 4 29 3 481 116 532 83 The condensed financial data for the investments recognized at equity which are classified individually as non-material for Evonik, based on Evonik's interest, are as follows: Condensed financial data for individually non-material investments recognized at equity Associates Joint ventures In E million Carrying amount as of December 31 Income after taxes, continuing operations Total compre- hensive Income For information on contingent liabilities to associates and joint ventures see Note 10.3. (a) Other investments Other investments include shares in Borussia Dortmund GmbH & Co. KGaA, Dortmund (Germany) totaling €55 million (2014: €53 million), which are recognized at their stock market value as of the reporting date. This investment is therefore exposed to a market price risk and is allocated to the category available-for-sale. Further, other investments contains unlisted equity instruments that are recognized at the cost of acquisition since their fair value cannot be determined reliably. EFTA00598808

176 FINANCIAL REPORT 2015 EVONIK INDUSTRIES (b) Loans Loans are recognized at amortized cost. They are exposed to an interest rate risk, which can affect their fair value or future cash flows. Risk and maturity structure of loans Dec. 31, Dec. 31, InE million 2015 2014 Impaired loans 3 Nominal value 3 2 Impairment losses —2 Non-Impaired loans 26 12 Not yet due 26 12 Overdue 29 12 As in the previous year, Evonik did not renegotiate the terms and conditions of any non-current loans in 2015. (c) Securities and similar claims Securities and similar claims mainly comprise bonds and money market paper purchased to invest liquid funds. They are exposed to an interest rate risk, which can affect their fair value or future cash flows. All securities are classified as available-for-sale and are measured at market price. Securities listed on a stock exchange are exposed to a risk of changes in their market price. As in the previous year, this item contains various securities and similar claims totaling approximately E250 million which are bundled in a fully consolidated segregated investment fund, see Note 5.1. The units in an investment fund totaling E127 million included in the previous year were sold in 2015. (d) Receivables from derivatives Receivables from derivatives InEmillion Dec. 31, Dec. 31, 2015 2014 Receivables horn cross-currency Interest rate swaps 33 4 Receivables from forward exchange contracts and currency swaps 51 31 84 35 (e) Other financial assets Other financial assets comprise time deposits at banks, receivables from profit-and-loss transfer agreements with investments that are not fully consolidated, and claims relating to the termination of contracts. Risk and maturity structure of other financial assets Dec. 31, Dec. 31, in 2015 2014 Impaired other (Mandel assets 3 Nominal value 10 Impairment losses —7 Non-Impaired other flnandal assets 26 29 Not yet due 26 29 Overdue 29 29 (f) Security pledged Financial assets pledged as security for Group liabilities amounted to E1 million (2014: E2 million). They comprised current securities provided as security for commitments to employees under the partial retirement program in Germany. 7.5 Inventories Inventories Jae Shan Dec. 31, Dec. 31, 2015 2014 Raw materials and supplies 438 414 Work in progress 65 78 Finished goods and merdiandise 1,260 1,286 1,763 1,778 Impairment losses on raw materials, supplies and merchan- dise totaling E37 million were recognized in 2015 (2014: E47 million), while reversals of impairment losses amounted to E25 million (2014: E21 million). Reversals of impairment losses were mainly due to higher selling prices and improved market conditions. EFTA00598809

TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notes Noses to the balance she! • SUPPLEMENTARY INFORMATION 177 7.6 Trade accounts receivable, other receivables Trade accounts receivable, other receivables in E million Dec. 31, 2015 Dec. 31, 2014 thereof Teal 11041-CINfellt thereof Total non-current Trade accounts receivable 1,813 1,720 Advance payments made 26 1 37 2 Miscellaneous other receivables 241 47 281 48 Deferred expenses 52 6 43 8 2,132 54 2,081 SS Risk and maturity structure of trade accounts receivable Dec. 31, Dec. 31, in C nnP on 2015 2014 Impaired receivables 4 3 Nominal value 16 15 Impairment losses -12 -12 Non-Impaired receivables 1,809 1,717 Not yet due 1,540 1,479 Overdue 269 238 up to 3 months 235 212 more than 3 and up to 6 months 7 15 more than 6 and up to 9 months 13 1 more than 9 and up to 12 months 6 1 more than 1 year 8 9 1,813 1,720 At year end, trade accounts receivable totaling E497 million (2014: E498 million) were covered by credit insurance, and E10 million (2014: E3 million) were covered by other collateral. No terms were renegotiated for trade accounts receivable not yet due. In the prior year, the terms for receiv- ables with a carrying amount of E2 million were renegotiated and would otherwise have been impaired or overdue. 7.7 Equity (a) Issued capital As in the previous year, the company's fully paid-up capital was €466,000,000 on the reporting date. It is divided into 466,000,000 no-par registered shares. (b) Authorized capital Under a resolution adopted by the Annual Shareholders' Meeting on May 20, 2014 on authorized capital, the Executive Board is authorized until May 1, 2019, subject to the approval of the Supervisory Board, to increase the company's capital stock by up to €116,500,000 by issuing new registered shares with no par value (Authorized Capital 2014). This authorization may be exercised through one or more issuances. The new shares may be issued against cash and/or contribu- tions in kind. The Executive Board is authorized, subject to the approval of the Supervisory Board, to exclude shareholders' statutory subscription rights when issuing new shares in the following cases: • capital increases against contributions in kind • if the capital increase is against cash and the proportionate share of the capital stock attributable to the new shares does not exceed 10 percent of the capital stock, and the issue price of the new shares is not significantly below the stock market price of shares already listed on the stock exchange • to exclude fractional amounts arising from the subscrip- tion ratio • insofar as is necessary to grant holders and/or creditors of warrants or conversion rights or obligors of warrant and/ or conversion obligations subscription rights to new shares to the extent that they would be entitled to them after exercise of their warrants and/or conversion rights or fulfillment of their warrant or conversion obligations to grant shares to employees (employee stock), provided that the new shares for which subscription rights are excluded do not in aggregate account for a proportionate share of the capital stock in excess of 1 percent for the execution of a scrip dividend. y e 8 2 1• Oat a EFTA00598810

lit FINANCIAL REPORT 2015 EVONIK INDUSTRIES The proportionate amount of the capital stock attributable to the shares for which subscription rights are excluded, together with the proportionate amount of the capital stock attributable to treasury stock or to conversion and/or war- rant rights or obligations arising from debt instruments, which are sold or issued after May 20, 2014 under exclusion of subscription rights, may not exceed 20 percent of the capital stock. If the sale or issue takes place in application— analogously or mutatis mutandis—of Section 186 Paragraph 3 Sentence 4 of the German Stock Corporation Act (AktG), this shall also be deemed to constitute exclusion of subscrip- tion rights. The Executive Board is authorized, subject to the approval of the Supervisory Board, to define further details of capital increases out of the Authorized Capital 2014. The authorized capital has not yet been utilized. (c) Conditional capital Under a further resolution adopted by the Annual Share- holders' Meeting of May 20, 2014, the capital stock is con- ditionally increased by up to €37,280,000, divided into up to 37,280,000 registered shares with no par value (Conditional Capital 2014). This conditional capital increase relates to a resolution of the above Shareholder's Meeting granting authorization to issue convertible and/or warrant bonds. The conditional capital increase will only be conducted insofar as holders or creditors of warrant or conversion rights or obligors of warrant or conversion obligations arising from warrant bonds and/or convertible bonds issued or guaranteed on the basis of the authorization resolved at the Annual Shareholders' Meeting of May 20, 2014, exercise their warrants or conversion rights or, insofar as they have an obligation to exercise the warrants or conversion obligations, meet the obligation to exercise the warrant or conversion obligations and other forms of settlement are not used. In principle, the shareholders have a statutory right to sub- scription rights to the convertible and/or warrant bonds; the authorization sets out specific cases where the Executive Board may exclude subscription rights to convertible and/or warrant bonds, subject to the approval of the Supervisory Board. The new shares shall be issued at the warrant or conversion price set in accordance with the above provisions of the resolution. The new shares are entitled to a dividend from the start of the fiscal year in which they are issued. The Executive Board is authorized, subject to the approval of the Supervisory Board, to define further details of capital increases out of the conditional capital. The conditional capital has not yet been utilized. (d) Treasury shares On March 6, 2015, Evonik Industries AG announced that it would be utilizing the authorization granted by the Annual Shareholders' Meeting on March 11, 2013 to purchase shares in the company totaling up to €113.4 million by April 23, 2015 at the latest. The purpose of purchasing the shares was to grant shares to employees of Evonik Industries AG and certain subordinated companies in the Evonik Group as part of an employee share program. Through this share buyback program, by April 20, 2015 Evonik Industries AG purchased a total of 415,533 shares in the company (corresponding to 0.1 percent or €415,533 of the capital stock). A total of €13.9 million was spent on the shares, corresponding to an average price of €33.43 per share. The purchases were made from March 10, 2015 at an average daily volume of around 15,400 shares on each Xetra trading day through a bank acting on the instructions of Evonik Industries AG. The consideration for each share repurchased (excluding ancillary costs) could not exceed or fall short of the opening price as set in the opening auction for the trading day for shares in Evonik Industries AG in Xetra trading on the Frankfurt Stock Exchange by more than 5 per- cent. At the end of April, 374,627 ordinary shares (including 95,748 bonus shares) were transferred to participating employees on the basis of the share price and the exchange rate for the US dollar prevailing on April 23, 2015. The remaining 40,906 ordinary shares were sold to third parties by April 27, 2015. As of December 31, 2015, Evonik Industries AG therefore no longer held any treasury shares. (e) Capital reserve The capital reserve mainly contains other payments received from shareholders pursuant to Section 272 Paragraph 2 No. 4 of the German Commercial Code (HGB). (f) Accumulated income The accumulated income of €5,821 million (2014: €5,040 mil- lion) comprises both Group earnings from 2015 and previous years, and other comprehensive income from the remeasure- ment of the net benefit liability for defined benefit pension plans. Income after taxes corresponds to the net income attributable to shareholders of Evonik Industries AG, as stated in the income statement for fiscal 2015. However, under Ger- man stock corporation law, only revenue reserves from the separate financial statements drawn up by Evonik Industries AG which are not subject to any restrictions are available for dis- tribution. As of December 31, 2015, the profit reserves of Evonik Industries AG totaled €4,235 million (2014: €3,635 mil- lion). €47 million of this comprised the statutory reserve that is not available for distribution. EFTA00598811

- TOOUR SHAREHOLDERS MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notes Notes to the balance sheet SUPPLEMENTARY INFORMATION 179 A proposal will be submitted to the Annual Shareholders' Meeting that the net profit of Evonik Industries AG of €605,000,000.00 for 2015 should be used to pay a dividend of €535,900,000.00 and the remaining €69,100,000.00 should be allocated to revenue reserves. That corresponds to a dividend of €1.15 per no-par share. (g) Accumulated other comprehensive income Accumulated other comprehensive income contains gains and losses that are not included in the income statement. The reserve for gains and losses on available-for-sale securities contains remeasurement amounts resulting from changes in the value of financial instruments that are expected to be temporary and thus not charged to income. The reserve for gains and losses on hedging instruments comprises changes in the fair value of the effective portion of hedging instru- ments that are accounted for as cash flow hedges or net investment hedges. The reserve for revaluation surplus for acquisitions made in stages contains the change in the fair value of shares previously held in subsidiaries that were con- solidated for the first time on or before December 31, 2009. The reserve for currency translation adjustment comprises differences arising from the translation of foreign financial statements. Change in accumulated other comprehensive income attributable to shareholders of Evonik Industries AG Revaluation Gains/losses on Gains/losses surplus for Currency available-for-sale on hedging acquisitions translation E S in € million securities instruments in stages adjustment Total As of January 1, 2014 1 20 17 -458 -420 Other comprehensive income as in the statement of comprehensive Income -10 -103 292 179 Recognized gains and losses -11 -186 -197 Amounts reclassified to the income statement 45 45 Amounts reclassified to assets and liabilities -1 -1 Currency translation adjustment 289 289 0 Attributable to the equity method (after income taxes) -3 3 Deferred taxes 42 43 Other changes -3 -3 As of December 31, 2014 -33 14 -166 -244 Other comprehensive income as in the statement of comprehensive income 15 24 247 286 Recognized gains and losses 12 -171 -159 Amounts reclassified to the income statement 9 202 211 Amounts reclassified to assets and liabilities 1 1 Currency translation adjustment 244 244 Attributable to the equity method (after income taxes) 3 3 6 Deferred taxes -11 -17 Other changes -2 -2 As of December 31, 2015 -59 12 81 40 EFTA00598812

ISO FINANCIAL REPORT 2015 EVONIK INDUSTRIES In 2015, an overall hedging result of —E202 million (2014: —E45 million) was reclassified from the reserve for gains/ losses on hedging instruments to the income statement as follows: Reclassification of hedging results from accumulated other comprehensive income to the income statement in E million Sales 2015 2014 —182 17 Cost of safes —4 — Other operating income/expenses 1 —59 Net Interest expense —3 —3 Other financial income —14 - -202 —45 (h) Non-controlling interests Non-controlling interests amounting to E83 million (2014: E95 million) comprise shares in the issued capital and reserves of consolidated subsidiaries that are not attributable to the shareholders of Evonik Industries AG. There were no changes in subsidiaries without loss of control in 2015 or 2014. Change in accumulated other comprehensive income attributable to non-controlling interests Currency translation Ina/million adjustment Total As of January 1, 2014 -4 —4 Other comprehenshro Income as In the statement of comprehensive Income 6 6 Currency translation adjustment 6 6 As of December 31, 2014 2 2 Other comprehensive Income as In the statement of comprehensive Income 1 1 Currency translation adjustment 1 1 As of December 31, 2015 3 1 3 7.8 Provisions for pensions and other post-employment benefits Provisions for pensions are established to cover benefit plans for retirement, disability and surviving dependents' pensions. The benefit obligations vary depending on the legal, tax and economic circumstances in the various countries in which the companies operate. The level of the benefit obligations generally depends on length of service and remuneration. At the German companies, occupational pension plans are predominantly defined benefit plans. They are primarily funded by provisions, pension fund assets and a contractual trust arrangement (CTA). The pension plans at foreign companies may be either defined contribution or defined benefit plans. The present value of the defined benefit obligations and the fair value of the plan assets as of December 31, 2015 mainly relate to the following countries: Breakdown of the present value of the defined benefit obligation and the fair value of plan assets 2015 ME million Evonik total thereof Germany 2015 Defined benefit obligation Plan assets 10,542 7,302 9,099 6,066 thereof pension fund/reinsured support fund 3,933 3,102 thereof funded through CIA thereof USA 4,845 2,964 720 451 thereof UK 564 670 Breakdown of the present value of the defined benefit obligation and the fair value of plan assets 2014 Ine million 2014 Defined benefit obligation Plan assets Evonik total 10,630 6,811 thereof Germany 9,334 5,670 thereof pension fund/ reinsured support fund 3,892 3,025 thereof funded through CIA 5,092 2,645 thereof USA 675 433 thereof UK 551 662 EFTA00598813

- TOOUR SHAREHOLDERS MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notes Nimes to the balance sheet SUPPLEMENTARY INFORMATION 181 The main pension plans for employees in Germany are as follows: Pension fund (Pensionskasse): There are a number of closed pension plans. Income-related contributions are con- verted into defined benefits and invested with the company- owned Degussa Pension Fund. The structure of the tariffs, including investment of the assets, is subject to oversight by the supervisory authority for the insurance sector. The pension fund is a multi-employer fund. It is funded on a pro- jected benefit basis. The level of plan assets required to cover the projected benefits is derived from a technical business plan approved by the supervisory authority, and from statutory requirements. Funding must be sufficient at all times to cover benefits, which have to be upheld even if the employer's contributions are terminated. The company contribution to Tariff DuPK is calculated to ensure that, together with the employee contributions, funding of the resulting entitlements in line with the technical business plan is assured. The company contribution to the Marl and Troisdorf tariffs is proposed by the responsible actuary and is based on the funds required to cover the benefits. As the sponsoring company of this pension fund, Evonik Degussa GmbH has a contractual obligation to cover benefits under the Marl and Troisdorf tariffs if sufficient funding is not available. This obligation is not limited to the company where the insurees are employed. The obligation was assumed on the basis of a requirement stipulated by the supervisory authority when these tariffs were established. At that time, only company employees were insured in the plan. At present, it is not possible to estimate whether this obligation could be of relevance as a supplement to the tools set out in the pension fund regulation, such as increasing company contributions or cutting benefits in the event of a loss. Support fund (Unterstutzungskasse): This is the plan that is open to new employees. It also allows for deferred compensation arrangements. Income-related contributions are converted into defined benefits and invested with the company-owned Degussa Pension Fund. The structure of the tariffs, including investment of the assets, is subject to over- sight by the supervisory authorit for the insurance sector. Pension increases of 1 percent M. are a firm commitment. The support fund meets the criteria for classification as a multi-employer plan. It is funded through reinsurance with the Degussa Pension Fund, which maintains sufficient fund- ing for this in compliance with the German Insurance Super- vision Act and the ordinances issued by the supervisory authority. Funding must be sufficient at all times to cover benefits, which have to be upheld even if the employer's contributions are terminated. The level of benefits is based on the contributions paid into the fund. The support fund does not have any arrangements under which the Group is liable for the obligations of companies outside the Evonik Group in the event of inadequate funding. Direct pension commitments: These comprise various defined benefit plans where the pension benefit is generally directly or indirectly linked to the final salary. Most of these plans grant higher benefits for income components above the ceiling for contributions to the state pension insurance plan or are intended exclusively to cover such income components. All final salary plans are closed and in most cases they now only operate through the protection of the accrued benefits for insurees who are currently still working. Direct commitments of this type are now only used for senior executives and voluntary deferred compensation arrangements. In such cases, a defined benefit is calculated on the basis of an income-related contribution or an amount credited by the employee. Insurees can choose between various forms of payment, for example, as a lump sum, an annuity or installment payments. The benefits include a fixed pension increase of 1 percent a year. Plan assets for large Group companies, which account for the vast majority of obligations under direct commitments, are managed by Evonik Pensionstreuhand e.V. This fund is not subject to regulatory oversight or minimum funding requirements. It uses an asset-liability matching strategy, whereby changes in obligations are offset through changes in the plan assets. In this strategy, the interest rate and credit sensitivities of the liabilities are partially replicated in the plan assets. Description of the potential risks arising from pension plans: Most German pension plans grant lifelong pension bene- fits. A specific risk here is that rising life expectancy could increase the benefit obligation. In most cases, increases in the benefits paid by these funds are linked to the consumer price index. This entails an additional inflation risk. In the case of plans where employees can choose between a lump-sum payment or an annuity, there is a risk that the option could be selected on the basis of individual assessments of health and life expectancy. For final salary plans, the benefit risk relates to future salary trends for employees covered by collective agreements and exempt employees and, in some cases, changes in the ceiling for contributions to statutory pension insurance. Where assets are invested externally by the pension fund, support fund and Evonik Pensionstreuhand e.V., plans are exposed to a capital market risk. Depending on the com- position of the investment portfolio, this comprises a risk of changes in value and income risks which could mean that the assumed performance or return is not generated over the term of the investment. Under German legislation on occupa- tional pensions, the employer is liable to cover firm benefit commitments and guaranteed returns. V E 0 EFTA00598814

162 FINANCIAL REPORT 2015 EVONIK INDUSTRIES The main pension plans for employees in the USA: In the USA there are unfunded, fully funded and partially funded pension plans and post-employment benefits under healthcare plans. The majority of the obligations relate to funded plans. The defined benefit pension plans in the USA are not open to new employees. Benefits are based on a range of parameters such as final salary, average salary during career, individual pension accounts, and fixed benefits. Most plans include a lump-sum option with a corresponding risk to the company that this will be utilized. Minimum funding levels have to be observed. To avoid volatility this is supported by an asset-liability matching strategy. This is implemented primarily through US government bonds and corporate bonds denominated in US dollars. The assets are managed by a pension trust. The main pension plans for employees in the UK: In the UK, plans are organized through external trusts and the majority of the assets are invested in funds. The majority of the obligations relate to vested benefits for former employees and retirees. Only one plan is still open to new employees. Almost all plans are final salary plans. The plan assets are subject to the asset ceiling. They are required to meet minimum funding requirements that are agreed with the trustees. Similarly, surplus assets cannot be returned to the companies without the approval of the trustees. The invest- ment strategy for plan assets is an asset-liability matching strategy which is implemented principally through inflation- linked British government bonds and British corporate bonds. The table shows the weighted average assumptions used for the actuarial valuation of the obligations: Assumptions used in the actuarial valuation of pension obligations Discount rate as of December 31 Future salary increases Future pension increases Healthcare cost trend Group Germany 2015 2014 2015 2014 2.91 2.65 2.75 2.50 2.55 2.58 2.50 2.50 1.70 1.72 1.75 1.75 7.00 7.25 - I The discount rate for Germany and the euro-zone countries is extrapolated from a yield structure curve derived from AA-rated corporate bonds denominated in euros and, where there are no longer any market data, a yield curve for zero-coupon German government bonds, taking into account a risk premium for euro-denominated AA-rated corporate bonds. The data on AA-rated euro-denominated corporate bonds is based on bonds with an AA rating from at least one of the major rating agencies. The yield structure curve derived from AA-rated euro-denominated corporate bonds is used to determine the present value of the cash flows from company pension obligations. The discount rate comprises the rounded constant interest rate that results in the same present value when applied to the cash flow. Analogous methods are used in the UK and the USA. As of December 31, 2015, the rounded discount rate was 4.41 percent for the USA (2014: 4.06 percent) and 3.62 per- cent for the UK (2014: 3.50 percent). Change in the present value of the defined benefit obligation in E million 2015 2014 Present value of the defined benefit obligation as of January 1 10,650 9,042 Current service cost 191 172 Interest cost 281 341 Employee contributions 46 45 Actuarial gains (—) and losses (.) (remeasurement component) —371 1,332 of which based on financial assumptions —423 1,298 14 of which based on demographic assumptions 16 of which changes In the past fiscal year 36 20 Benefits paid —433 —404 Past service cost 1 1 Changes at the companies 70 9 Gain/loss from settlement -1 1 Payments for settlement of plans -3 -4 Currency translation 111 115 Present value of the defined benefit obligation as of December 31 10,542 10,650 The weighted term of the obligations is 16.1 years (2014: 16.5 years). EFTA00598815

TOODR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 133 Notes Notestothebalance thee! Breakdown of the present value of the defined benefit obligation lite million 2015 2014 Unfunded plans 357 385 Partially or fully funded plans 10,057 10,142 Healthcare benefit obligations 128 123 Present value of the defined benefit obligation es of December 31 10,542 10,650 Change in the fair value of plan assets In 2015, the employer contributions mainly comprised cash contributions of €200 million (2014: E200 million), and payments to Evonik Pensionstreuhand e.V. of E19 million (2014: E9 million) in settlement of tax payments from the previous year. in E million 2015 2014 Felt value of plan assets as of January 1 6,811 3,778 1P• gE Interest income from plan assets 189 224 Employer contributions 364 344 Employee contributions 11 12 Income from assets excluding interest Income from plan assets (remeasurement component) -26 526 Other administrative expense -5 -3 1 Benefits paid -185 -163 Payments for settlement of plans -3 -4 Changes at the companies Currency translation 55 4 93 4-a 91 V0 7,302 Fair value of plan assets as of December 31 6,811 Breakdown of the fair value of plan assets Der.. 31, 2015 Dec. 31, 2014 int million in % int million in % Cash/balances with banks 108 1.5 136 2.0 Shares—active market 705 9.7 490 7.2 Shares—no active market - - - - Government bonds—active market 1,128 15.5 1,662 24.4 Government bonds—no active market 58 0.8 61 0.9 Corporate bonds—active market Z187 29.9 1,696 24.9 Corporate bonds—no active market 36 0.5 34 0.5 Other bonds—active market 454 6.2 266 3.9 Other bonds—no active market 681 14 1,249 9.3 715 10.5 Real estate, direct and indirect investments—active market 0.2 14 0.2 Real estate, direct and indirect investments—no active market 17.0 1,090 16.0 Other investment funds—active market 1 - 450 6.6 Other Investment funds—no active market - 524 114 - - - Alternative investments (Infrastructure/hedge funds/commodities)—active market 7.2 116 1.7 Alternative investments (Infrastructure/hedge funds/commoditles)—no active market 1.6 54 0.8 Other—active market 38 0.5 27 0.4 Other—no active market 10 0.1 - - 7,302 100.0 6,811 100.0 EFTA00598816

164 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Company. Chang* in the asset ailing in Emilio:on 2015 2014 Asset ceiling as of January 1 114 67 Interest expense on the unrecognized portion of plan assets 4 3 Changes in asset ceiling, excluding interest expense (remeasurement component) —16 38 Changes at the companies — 6 Currency translation 7 — Asset ceiling as of December 31 109 114 Change in pension provisions InE Shen Dec. 31, Dec. 31, 2015 2014 Pension provisions recognized en the balance sheet as of January 1 3,953 3,331 Current service cost 191 172 Past service cost 1 1 Gain/loss from settlement —1 1 Net interest cost 96 120 Employee contributions 35 33 Other administrative expense 5 3 Changes recognized in 00 (remeasurement) —361 844 Benefits paid —248 —241 Employer contributions —364 —344 Changes at the companies 15 5 Currency translation 27 28 Pension provisions recognized on the balance sheet as of December 31 3,349 3,953 7.9 Other provisions Other provisions Dec. 31, 2015 Dec. 31, 2014 thereof thereof In C million Total non-Current Total non-current Personnel-related 900 358 808 336 ftecultivation and environmental protection 313 262 304 266 Restructuring 322 95 321 209 Sales and procurement 131 4 76 6 Other taxes and interest on taxes 63 35 59 20 Dismantling obligations 9 8 7 7 Other obligations 293 92 285 59 2,031 554 1,860 903 In 2015, as in 2014, none of the other assets were used by the The pension provisions recognized on the balance sheet included healthcare benefit entitlements, mainly of retirees of US subsidiaries. Expected change in benefit payments Int mill on 2015 2016 2017 2018 Reporting period Prior year 242 245 249 255 255 254 254 2019 258 258 2020 261 Employer contributions of €168 million are expected to be incurred for 2015 (2014: €155 million). The net interest expense is included in the financial result, see Note 6.6. The other amounts are allocated to the functional areas as personnel expense (personnel expenses). A breakdown of overall personnel expense is given in Note 11.2. Foreign subsidiaries paid a total of €18 million (2014: €18 million) into defined contribution plans, which are also included in personnel expense (pension expenses). Further, €138 million (2014: €126 million) were paid into defined-contribution state plans (statutory pension insurance) in Germany and abroad. This is also reported in personnel expense (expenses for social security contributions). EFTA00598817

- TOOUR SHAREHOLDERS MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notes Notes to the balance sheet • SUPPLEMENTARY INFORMATION 165 Overall, the other provisions were €171 million higher than in 2014, principally due to the change in personnel-related provisions and provisions for sales and procurement. It is expected that slightly more than half of total provisions will be utilized in 2016. Provisions relating to material legal risks amounted to €231 million (2014: €204 million) and are allocated to the various categories of provisions on the basis of their type. The principal legal risks for which provisions have been set up relate to three ongoing appraisal proceedings in connection Change in other provisions with the settlement paid to former shareholders, indemnities in respect of the Walsum 10 coal-fired power plant in con- nection with the divestment of the former Energy Business Area, and a claim from the purchaser of the former carbon black business for indemnification from environmental guar- antees. A provision has been recognized for the expected costs of a legal dispute involving proceedings to fine Evonik in connection with deliveries of methionine to Brazil. The background to these cases is outlined in detail in section 7.4 of the Management Report. Personnel- in E million reined As of January 1, 2015 Additions Utilization Reversal Addition of accrued interest/ interest rate adjustments Other As of December 31, 2015 Recultivation, Other taxes, environmental Sales, interest Dismantling Other protection Restructuring procurement on taxes obligations obligations Total 808 304 321 76 59 7 285 1,860 514 22 66 109 37 1 112 861 -433 -16 -22 -44 -3 - -SO -568 -12 -3 -46 -11 -30 - -45 -147 16 2 2 - - - 20 7 4 1 1 - 1 -9 5 900 i 313 322 131 63 9 293 2,031 Personnel-related provisions are established for many differ- ent reasons. They include provisions for bonuses and variable remuneration, statutory and other early retirement arrange- ments, lifetime working arrangements and anniversary bonuses. About one quarter of non-current personnel-related provisions will result in payments after the end of 2020. Provisions are established for recultivation and environ- mental protection on the basis of laws, contracts and regula- tory requirements. They cover soil reclamation obligations, water protection, the recultivation of landfills and site decontamination obligations. Slightly more than half of the non-current provisions will result in payments after the end of 2020. Provisions for restructuring are based on defined restruc- turing measures. Such measures comprise programs which are planned and controlled by the company and will materially alter one of the company's areas of business activity or the way in which a business activity is carried out. Restructuring provisions may only be established for costs that are directly attributable to the restructuring program. These include severance packages, redundancy and early retirement arrange- ments, expenses for the termination of contracts, dismantling and soil reclamation expenses, rents for unused facilities and all other shutdown and wind-up expenses. At year-end 2015 they included provisions for a program introduced to strengthen our competitive position and optimize the quality of administrative processes, and provisions relating to the divestment of the former Energy Business Area in 2011. Most of the non-current portion of all restructuring provi- sions will be utilized by the end of 2020. The provisions for sales and procurement relate principally to guarantee obligations, outstanding commission payments, price discounts and rebates, and impending losses. Almost all of these provisions will be utilized within one year. Provisions for other taxes and interest on taxes mainly comprise property tax, value-added tax and interest obligations relating to all types of taxes. The non-current portion will be utilized by the end of 2020. Provisions for dismantling obligations relate to dismantling that is not part of a restructuring program. Most of the non- current portion will be utilized after the end of 2020. E S 0 EFTA00598818

186 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Provisions for other obligations comprise provisions for a variety of obligations that cannot be allocated to the above categories. These include provisions for legal disputes, administrative proceedings or fines, liability risks and guaran- tee claims relating to divestments. This item also includes provisions for legal and consultancy expenses, audit fees, and 7.10 Financial liabilities Financial liabilities changes in public law regulations, for example, in connection with the levy on renewable energy sources and European emissions trading. The provisions for material legal risks included in this category amount to E115 million (2014: E87 million). The non-current portion of provisions for other obligations will mainly be utilized by year-end 2020. In F million Dec.31, 2013 Dec. 31, 2014 thereof TOW non-current thereof Teed non-current Bonds 1,241 1,241 496 496 Liabilities to banks 282 118 406 136 Loans from non-banks 14 7 Liabilities from derivatives 151 53 206 27 Other financial liabilities 18 3 20 7 1,706 1,415 1,135 666 (a) Bonds In 2015, Evonik Industries AG issued a bond with a nominal value of E750 million and an annual coupon of 1.000 percent which matures in January 2023. The issue price was 99.337 per- cent. Further, this item comprises a bond issued by Evonik Industries AG in 2013 with a nominal value of E500 million and an annual coupon of 1.875 percent which matures in April 2020. The issue price was 99.185 percent. The discount is credited over the maturity of each bond using the effective interest rate method. Fixed-interest bonds are exposed to a risk of price fluctu ations while variable-rate liabilities are exposed to a risk of changes in interest rates. These risks may affect their fair value or future cash flows. The bond issued by Evonik Industries AG in 2013 was quoted on the stock market at 104.940 percent on the reporting date (2014: 105.855 per- cent), giving a market value of E525 million (2014: E529 mil lion). The bond issued in January 2015 was quoted at 97.810 percent on the reporting date, giving a market value of E734 million. (b) Loans from non-banks The accrual of EN million (2014: E7 million) for payment of the coupon on the bonds is recognized in current loans from non-banks. (c) Liabilities from derivatives Liabilities from derivatives Ine million Dec. 31, Dec. 31, 2015 2014 Liabilities from cross-currency interest rate swaps 34 18 Liabilities from forward exchange contracts and currency swaps 96 184 Liabilities from commodity derivatives 21 4 151 206 EFTA00598819

TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 147 Notes Notes to the balance sheet 7.11 Trade accounts payable, other payables Trade accounts payable, other payables Jae million Trade accounts payable Advance payments received Miscellaneous other payables Deferred income Dec. 31, 2015 Dec. 31, 2014 thereof Total non-current thereof Total non-current 1,090 — 1,126 — 31 — 17 — 295 45 271 60 89 61 30 11 1,505 106 1,444 71 7.12 Deferred taxes, other income taxes Deferred taxes and other income taxes reported on the balance sheet int million Dee. 31, 2015 Dee. 31, 2014 thereof Total non-current thereof Total non-current Deferred tax assets 1,110 926 1,127 978 Current income tax assets 122 11 222 11 Deferred tax liabilities 479 425 449 401 Other income tax liabilides 359 150 304 199 In accordance with IAS 1 Presentation of Financial State- ments, the current elements of deferred taxes are reported on the balance sheet under non-current assets and liabilities. Deferred taxes by balance sheet item InE million Deferred tax risers Dec. 31, 2015 Deferred tax liabilities Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2014 Assets Intangible assets 3 3 125 127 Property, plant and equipment, Investment property 43 41 409 404 Financial assets 559 602 97 115 Inventories 72 42 — 1 Recehtables and other assets 301 152 18 18 Liabilities Provisions 1,086 1,104 856 692 Payables 76 93 30 31 Special tax allowance reserves (based on local law) — — 13 12 Loss carryforwards 40 39 — — Tax credits 1 1 - - Other 3 1 5 — Deferred taxes (gross) 2,184 2,078 1,553 1,400 Netting —1,074 —951 —1,074 —951 Deferred taxes (net) 1,110 1,127 479 449 . Prior year figures restated. EFTA00598820

10EI FINANCIAL REPORT 2015 EVONIK INDUSTRIES No deferred tax assets were recognized on temporary differ- ences of €273 million (2014: €229 million) because it is not probable that there will be sufficient future taxable income to enable them to be realized. The total taxable temporary differences relating to shares in subsidiaries, associates and joint ventures, for which no deferred taxes were recognized, were €514 million. €434 mil- lion of this amount is only subject to a tax rate of around 1.5 percent, based on Section 8b of the German Corporation Tax loss carryforwards by expiration date Tax Act (KStG). Evonik is in a position to manage the timing of the reversal of temporary differences. Deferred tax assets of €15 million (2014: €19 million) were recognized for companies that made a loss. Utilization will be ensured by suitable measures. In addition to tax loss carryforwards for which deferred taxes were recognized, there were tax loss carryforwards that were not utilizable and for which no deferred taxes were recognized. Corporation taxes Local taxes (German and foreign) (German and foreign) Tax credits (foregn) In C million 2015 2014 2015 2014 2015 2014 Up to 1 year 42 More than 1 and up to 5 years 168 123 More than 5 and up to 10 years 4 11_ Unlimited 270 265 158 126 6 29 484 389 158 126 6 29 8. Notes to the cash flow statement The cash flow statement shows the changes in cash and cash equivalents of the Group in the reporting period. The cash flows are classified by operating, investing and financing activities. The net cash flow from discontinued operations that is attributable to third parties is shown separately. The impact of changes in the scope of consolidation has been eliminated. Interest paid and interest and dividends received are included in operating activities, while dividends paid are assigned to financing activities. 8.1 Cash flow from operating activities The cash flow from operating activities is calculated using the indirect method. Income before the financial result and income taxes, continuing operations, is adjusted for the effects of non-cash income and expenses and items that are allocated to investing or financing activities. Certain other changes in amounts shown on the balance sheet are calculated and added to the result. 8.2 Cash flow from investing activities The cash inflows from divestments and outflows for invest- ments in shareholdings include the following: The gross purchase prices for the acquisition of shares in subsidiaries consolidated for the first time amounted to €54 million (2014: €38 million). As in the previous year, the entire purchase prices led to a cash outflow. In the course of these acquisitions, cash and cash equivalents of €1 million were acquired in each year. The selling prices for the divestment of business activities totaled €14 million (2014: €41 million). As in the previous year the full amount was settled in cash and cash equivalents. The divestments included outflows of cash and cash equiv- alents totaling C7 million (2014: €38 million). The purchase price of €428 million for the sale of the remaining 10.3 percent shareholding in Vivawest was settled in full. Further, cash outflows of €9 million (2014: €15 million) were recorded in connection with the divestment of former business areas. This amount was booked as an expense in previous years. EFTA00598821

- TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notes Noon on lie, ettort.e?0,1 SUPPLEMENTARY INFORMATION 189 8.3 Cash and cash equivalents The cash and cash equivalents of €2,368 million (2014: €921 million) comprise the cash and cash equivalents shown in the balance sheet. 9. Notes on the segment report 9.1 Reporting based on operating segments The Executive Board of Evonik Industries AG decides on the allocation of resources and evaluates the earnings power of the Group's operations on the basis of the following reporting segments, which reflect the core operating busi- ness (subsequently referred to as segments): • Nutrition & Care (2014: Consumer, Health & Nutrition) • Resource Efficiency • Performance Materials (2014: Specialty Materials) • Services. The reporting based on operating segments therefore reflects the internal reporting and management structure of the Evonik Group (management approach). The same accounting standards are applied as for external financial reporting, see Notes 3.4 to 3.7. In connection with the new management and portfolio structure, see Note 3.4, with effect from January 1, 2015 some segments were renamed, some activities were reallo- cated among the segments, and the definition of the main management parameter adjusted EBITDA was modified. To ensure that adjusted EBITDA better reflects respon- sibilities, income and expenses relating to financing and liquidity management have been transferred from adjusted EBITDA to the financial result. These mainly comprise the results from currency translation of loans and the related hedging. This change also affects adjusted EBIT. Further, the following activities have been reallocated among the segments: • The Active Oxygens and High Performance Polymers activities are now part of the Resource Efficiency segment (2014: part of the Specialty Materials segment) • CyPlus Technologies is now part of the Performance Materials segment (2014: part of the Consumer, Health & Nutrition segment) and • some service functions have been transferred from Corpo- rate to the Services segment. The prior-year figures have been restated where applicable. The remaining lithium-ion activities, which were divested in the second quarter of 2015 and were classified as discontinued operations until then, see Notes 5.2 and 5.3, are shown in the segment report in the column 'Other operations'. Since the column "Total Group" no longer contains any discontinued operations, an adjustment is made for these activities in the column 'Corporate, consolidation'. Evonik's segments are outlined below: (a) Nutrition & Care The Nutrition & Care segment produces specialty chemicals, principally for use in consumer goods for daily needs, and in animal nutrition and healthcare products. Ingredients, additives and system solutions for high- quality consumer goods and specific industrial applications are focal areas of this segment. It has outstanding knowledge of interfacial chemistry. Its products are based on an exten- sive range of oleochemical derivatives, organically modified silicones, and active ingredients produced by biotechnology. Key success factors are high innovative capability, integrated technology platforms and strategic partnerships with import- ant consumer goods manufacturers. The Nutrition & Care segment also produces and markets essential amino acids for animal nutrition. One factor in its success is years of experience of chemical synthesis and biotechnology, which Evonik regards as major growth drivers. Other significant competitive advantages for this segment are its global distri- bution network and extensive and differentiated service offering. The Nutrition & Care segment is also a strategic partner for the healthcare industry. (b) Resource Efficiency The Resource Efficiency segment supplies high-performance materials for environment-friendly and energy-efficient sys- tem solutions for the automotive, paints, coatings, adhesives and construction industries and many other sectors. A central feature of the segment is its integrated silicon technology platform. Key customers include the tire, elec- tronics, construction and fiber optics industries. This seg- ment's core competency is the production, design and struc- turing of the specific surface properties of inorganic particles. Its offering is complemented by fumed specialty oxides, chlorosilanes and organofunctional silanes. It also develops and manufactures a broad spectrum of catalysts in close collaboration with customers. It supplies high-quality additives to the paints, coatings, adhesives and sealants industry. Further, it produces high-performance oil additives and additives for hydraulic fluids. In addition, this segment manufactures materials based on polyetherether ketone E j 0 EFTA00598822

190 FINANCIAL REPORT 2015 EVONIK INDUSTRIES (PEEK) and polyimides to meet high-tech mechanical, thermal and chemical requirements. Thanks to its innovative capability, the Resource Efficiency segment has gained access to new growth markets for hydrogen peroxide. (c) Performance Materials The heart of the Performance Materials segment is the production of polymer materials and intermediates, mainly for the rubber, plastics and agricultural sectors. Success factors for this segment are advanced chemical processes, which Evonik has developed systematically over decades, including its integrated technology platforms for methylmethacrylate (MMA) and C4 chemistry. It also produces alcoholates, which are used as catalysts in the production of biodiesel. (d) Services The Services segment provides site management, utilities, and waste management, technical, process technology, engi- neering, and logistics services for the chemicals segments and external customers at Evonik's sites. This segment also supports the chemicals businesses and the management holding company by providing standardized Group-wide administrative and business-support services, for example, in the areas of IT, human resources, accounting and legal services. (e) Other operations, Corporate and consolidation Other operations contains the Group's business activities that are not assigned to any of the reporting segments. The column headed "Corporate, consolidation" includes the management holding company, strategic research, hidden reserves and liabilities and goodwill relating to former acquisitions of shares in Evonik Degussa and intersegment consolidation effects. 9.2 Reporting based on regions For this purpose, countries and country groups are aggregated into regions. Details of the reporting based on regions is out- lined in more detail in Note 9.3. 9.3 Notes to the segment data External sales reflect the segments' sales with parties outside the Group. Sales generated between the segments are internal sales and are cross-charged at market prices or using the cost-plus method. Reconciliation from the sales of all reporting segments to Group sales in E awn 2015 2014 Sales, reporting segments 15,573 14,980 Sales, other operations 138 175 Corporate, consolidation, less discontinued operations -2,204 -2.238 Sales, corporate, other operations, consolidation -2,066 -2,063 External sales of the Evonik Group 13,507 12,917 External sales by country (location of customer) Jae million 2015 2014 USA 2,458 2,128 Germany 2,436 2,814 China 1,087 882 Switzerland 750 816 Netherlands 499 SOS UK 453 463 France 400 396 Brazil 398 327 Japan 351 318 Italy 337 371 Other countries 4,338 3,897 External sales of the Evonik Group 13,507 12,917 The result from investments recognized at equity corresponds to the result for these investments as reported in the income statement; see Note 6.5. The Executive Board of Evonik Industries AG uses ad- justed EBITDA as the main parameter to measure operating performance. Adjusted EBITDA is the main earnings param- eter that can be influenced by the segment management. It comprises earnings before financial result, income taxes, depreciation, amortization and impairment losses/reversal of impairment losses; after adjustments. EFTA00598823

- TOOUR SHAREHOLDERS MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notea Notes on the segment report SUPPLEMENTARY INFORMATION 191 Recondliation from adjusted EBITDA of the reporting segments to income before income taxes, continuing operations In if million 2015 2014 Adjusted EBITDA, reporting segments 2,803 2,159 Adjusted EBITDA, other operations —81 —54 Adjusted EBITDA, Corporate —269 —202 Consolidation 4 —13 Less discontinued operations 8 —8 Adjusted EBITDA, Corporate, other operations, consolidation —338 —277 Adjusted EBITDA 2,465 1,882 Depreciation —700 —606 Impairment losses/reversals of impairment losses —80 -63 Depreciation, amortization, impairment losses/reversal of Impairment losses included in adjustments 67 43 Depredation and amortization -713 -626 Adjusted EMT 1,752 1,256 Adjustments' -88 —179 Financial result —223 —235 Income before Income taxes, continuing operations 1,441 842 See management report, setting, 2.4 Stamm performance. The adjusted EBITDA margin is the ratio of adjusted EBITDA to external sales. Adjusted EBIT comprises earnings before financial result and income taxes, after adjustments. It is used to calculate the internal management parameter return on capital employed (ROCE). Capital employed comprises the net assets required by the reporting segments for their operations. It is calculated by determining the total of intangible assets, property, plant and equipment, investments, inventories, trade accounts receivable, and other non-interest-bearing assets. The sum of interest-free provisions, trade accounts payable, and other interest-free liabilities is then deducted from this. ROCE is another major internal management parameter used by the Group. It is calculated from the ratio of adjusted EBIT to capital employed. To smooth the closing date effect, the calculation uses average capital employed in the reporting period. Depreciation and amortization relate to the depletion in the value of intangible assets, property, plant and equipment over their estimated useful life. Capital expenditures comprise additions to intangible assets (excluding goodwill from capital consolidation), prop- erty, plant and equipment. Additions resulting from changes in the scope of consolidation are not taken into account. Capital expenditures by region are based on the location of the subsidiaries. Additions to investments recognized at equity, other invest- ments, non-current loans and non-current securities and similar claims made in the reporting period are recognized as financial investments. The acquisition of subsidiaries is shown as an addition to financial investments in the year of acqui- sition (including goodwill from capital consolidation). The headcount is taken on the reporting date. It shows the number of employees. Part-time employees are included as absolute figures. The headcount by region is based on the location of the subsidiaries. Goodwill and other intangible assets, and property, plant and equipment are segmented by the location of the subsid- iaries. Together, these assets comprise the non-current assets in accordance with IF RS 8 Operating Segments (cf. IFRS 8.33 b). Breakdown of non-current assets by country IA E million Dee. 31, Dec. 31, 2015 2014 Germany 4,373 4,319 USA 1,321 1,065 China 871 878 Singapore 613 622 Belgium 546 535 Other countries 1,252 1,196 Non-current assets 8,976 8,615 E S 3 0 EFTA00598824

192 FINANCIAL REPORT 2015 EVONIK INDUSTRIES 10. Other disclosures 10.1 Performance-related remuneration Evonik's remuneration system comprises a basic salary, annual short-term incentive payments and, as a long-term compo- nent, the Long-Term Incentive (LTI) Plans for members of the Executive Board and other executives of the Evonik Group. Since Evonik did not have a quoted share price, for both members of the Executive Board and other executives the targets for the annual tranches of these LTI Plans issued up to and including 2012 were based on the development of uniformly defined business indicators. However, the target amounts and performance periods of the plans differed. Following the stock exchange listing, the performance of Evonik shares became the central element in the LTI Plan for the first time in 2013. The redesigned LTI Plan was introduced for both Executive Board members and other executives. Following the stock exchange listing of Evonik Industries AG, the performance of shares in the company also became rele- vant for the valuation of the pre-2013 LTI Plans. All LTI Plans are share-based payments with cash settle- ment. They are valued on the reporting date using a Monte Carlo simulation, which models exercise patterns. The LTI Plans result in personnel expense which is distributed over the term of each tranche. (a) Evonik LTI Plan for members of the Executive Board—Tranches 2010 through 2012 The reference base for this long-term remuneration compo- nent is a sustained rise in the value of the company. The plan rewards achieving or exceeding the operating earnings targets set in the mid-term planning and their impact on the value of the company. Each of these tranches runs for five years from January 1 of the year in which it was granted. Entitlements are based on individually agreed target amounts provided that earnings targets are met (lower threshold). LTI payments are calculated in the year following the end of the performance period, when the necessary indicators are avail- able. Payments are capped at three times the target amount, and can be zero if the defined lower threshold is not reached. To determine the value of the company as a basis for ascertaining target attainment, the share price at the end of the performance period is used. For this purpose, the average price of shares in Evonik in the three months prior to the end of the performance period is calculated. In addition, dividends paid and any capital increases or decreases during the performance period are taken into account. The cumula- tive discrepancy between planned and actual target attain- ment in the performance period and the dividends paid in the last year of the performance period are taken into account in the calculation. If there is no share price, the value of equity is determined on the basis of the last share transaction in the last twelve months of the performance period. If there was no share transaction in the last twelve months, a fictitious equity value is used. This is derived by applying a fixed EBITDA multiple to the company's business performance in the last full fiscal year. As of December 31, 2015, there was a provision of €0.1 million for the tranches for members of the Executive Board for the years 2011 and 2012 (2014: €0.6 million includ- ing the 2010 tranche). In keeping with the terms of the plan, regular exercise of the 2010 tranche took place in 2015 (€0.4 million). The 2011 tranche of the Evonik LTI Plan for Executive Board members was vested as of December 31, 2015 but had no intrinsic value as of this date. LTI Plan for Executive Board members—Tranches 2010 through 2012 Grant date Performance period Expense (*)/income (-) for the period Carrying amount of provision 2012 Uanche 2011 tranche 2010 lianche Date Dec. 18, 2012 Sep. 30, 2011 Aug. 31, 2010 from - to int '000 int '000 Jan. 1, 2012 - Dec. 31, 2016 Jan. 1, 2011 - Dec. 31, 2015 Jan. 1, 2010 - Dec. 31, 2014 20 -128 2 94 0 0 EFTA00598825

- TOOUR SHAREHOLDERS MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notes OI*4 cIHIflu es SUPPLEMENTARY INFORMATION 193 (b) Evonik LTI PLan for executives-2012 tranche The reference base for this long-term remuneration compo- nent is also a sustained rise in the value of the company. The plan rewards achieving or exceeding the operating earnings targets set in the mid-term planning (75 percent) and eco- nomic value added (EVA) (25 percent). Each tranche runs for three years from May 1 of the year in which it is granted. Entitlements are based on individually agreed target amounts provided that earnings targets are met (lower threshold). LTI payments are calculated in the year following the end of the performance period, when the necessary indicators are available. Payments are capped at double the target amount, and can be zero if the defined lower threshold is not reached. To determine the value of the company as a basis for ascertaining target attainment, the share price at the end of the performance period is used. For this purpose, the average price of shares in Evonik in the three months prior to the end of the performance period is calculated. In addition, dividends paid and any capital increases or decreases during the performance period are taken into account. The cumula- tive discrepancy between planned and actual target attainment in the performance period and the dividends paid in the last year of the performance period are taken into account in the calculation. If there is no share price, the value of equity is determined on the basis of the last share transaction in the last twelve months of the performance period. If there was no share transaction in the last twelve months, a fictitious equity value is used. This is derived by applying a fixed EBITDA multiple to the company's business performance in the last full fiscal year. The actual EVA values in the performance period are used to measure attainment of the EVA target. In keeping with the terms of the plan, regular exercise of the 2012 tranche took place in 2015 (€7.6 million). Conse- quently, no provision was necessary as of December 31, 2015 (2014: €1.1 million). LTI Plan for executives-2012 tranche 2012 tranche Grant date Date Dec. 19, 2012 Performance period Expense (.)/income (-) for the period Carrying amount of provision in € '000 0 from - to in € '000 May 1, 2012 - Apr. 30, 2015 6,508 (c) Evonik LTI Plan for Executive Board members and other executives—Tranches 2013 through 2015 In view of the stock exchange listing of Evonik Industries AG, the Supervisory Board redesigned the LTI Plan for the period from 2013 so it differs from the tranches 2010 through 2012. Performance is measured by the absolute performance of Evonik's share price and its performance relative to the MSCI World Chemicals Indexs^^. Based on the contractually agreed target amount, which is defined in euros, a number of virtual shares is calculated using the share price at the start of the performance period. This is based on the price in the last 60 trading days before the start of the performance period. The performance period starts on January 1 of the grant year and runs for four years. Since there was no share price at the start of the performance period, as an exception, the virtual shares for the 2013 tranche were calculated from the share price in the first 60 trading days following admission to the stock exchange (April 25, 2013). At the end of the performance period, the starting price of Evonik shares is viewed against the average share price at the end of the performance period. This is compared with the performance of the benchmark index (total shareholder return). If the relative performance is below 70 percentage points, the relative performance factor is deemed to be zero. If the relative performance is above 130 percentage points, the relative performance factor is set at 130. The payment is calculated by multiplying the relative performance by the number of virtual shares allocated and the average price of Evonik shares at the end of the perfor- mance period. At the end of the performance period, there is an option to extend it once for a further year. Partial exercise at the end of the original performance period is not permitted. The upper limit for these payments is set at 300 percent of the individual target amount. Since the previous performance periods for the LTI Plan for executives, including the 2012 tranche, were three years, the 2013 tranche for executives was set to allow the first half of the 2013 tranche to be exercised after three years and the second half after four years. As a further incentive for the transition, the payments for this tranche are multiplied by 1.2. As from 2014, a four-year performance period is applied for executives. As of December 31, 2015, there was a provision of €28.3 million (2014: €9.1 million) for the LTI Plans for 2013, 2014 and 2015. E j I EFTA00598826

194 FINANCIAL REPORT 2015 EVONIK INDUSTRIES LTI Plan for Executive Board members—Tranches 2013, 2014 and 2015 2015 eranehe 2014 treadle 2013 tranche Grant date Virtual shares granted Virtual shares forfeited Virtual shares as of December 31, 2015 Performance period Expense (r.)/income (-) for the period Carrying amount of provision LTI Plan for executives—Tranches 2013, 2014 and 2015 2015 vanche 2014 Randle 2013 tranche Grant date Date May 18, 2015 Apr. 11,2014 Aug. 27, 2013 Virtual shares granted No. 535,195 420,598 395,422 Virtual shares forfeited No. 8,137 10,870 Virtual shares as of December 31, 2015 No. 535,195 412,461 384,552 Performance period from - to Jan. 1, 2015 - Jan. 1, 2014 - Jan. 1, 2013 - Dec. 31, 2018 Dec. 31,2017 Dec. 31, 2016 Expense (a)/income (—) for the period In € '000 3,844 3,779 6,800 Carrying amount of provision In E '000 3,844 5,826 12,138 Date Apr. 29, 2015 No. 175,787 No. No. 175,787 from-to Jan. 1, 2015 - Dec. 31, 2018 In E '000 1,825 In E'000 1,825 Apr. 14, 2014 140,145 Jan. 1, 2014 — Jan. 1, 2013 — Dec 31, 2017 1,661 2,355 Aug. 14, 2013 153,123 51,760 Dec. 31, 2016 1,373 2,351 As of December 31, 2015, total provisions for share-based payment amounted to E28.4 million (2014: €10.8 million). In 2015, total expense including expense for share-based payment, including the 2012 tranche, was €25.7 million (2014: E2.1 million). 10.2 Additional information on financial instruments Rights of set-off for financial assets and financial liabilities To enhance the comparability of financial statements as regards the different netting rules for financial instruments under IFRS and US GAAP and inform users of the financial statements of the potential effect of netting arrangements on the company's financial position, IFRS 7 requires disclosure of the gross and net amounts of recognized financial instru- ments that are set off in the balance sheet. Amounts subject to a legally enforceable master netting arrangement or similar agreement but which are not set off in the balance sheet also have to be disclosed. These include financial instruments that do not fully meet the stringent netting requirements of IAS 32.42 and amounts relating to financial collateral. EFTA00598827

TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 195 Notes Other disclosures Offsetting rights for financial assets In€mlllon Netting of financial assets Affected by enforceable master netting arrangements or similar arrangements Gross amount of Amounts transactions Amounts recognized affected by set off in for the netting accordance relevant arrangements with IAS 32 transactions Receivables that do not fully Amounts meet the related to offsetting financial criteria collateral Net amount December 31, 2015 Receivables from derivatives Other financial assets Trade accounts receivable December 31, 2014 Receivables from derivatives Other financial assets Trade accounts receivable Offsetting rights for financial liabilities in E million Affected by enforceable master netting acrangements Netting of financial liabilities or similar arrangements Gross Liabilities amount of Amounts that do transactions Amounts recognized not fully Amounts affected by set off in for the meet the related to netting accordance relevant offsetting financial arrangements with IAS 32 transactions criteria collateral Net amount December 31, 2015 Liabilities from derivatives 144 — 144 53 — 91 Other financial liabilities 6 6 — — — — Trade accounts payable 386 85 301 — — 301 536 91 445 53 — 392 December 31,2014 Liabilities from derivatives 201 — 201 31 — 170 Other financial liabilities — — — — — — Trade accounts payable 222 91 131 — — 131 423 91 332 31 — 301 83 83 53 30 10 8 2 2 716 51 665 665 809 59 750 S3 697 34 34 31 3 311 30 281 31 281 345 30 315 204 EFTA00598828

196 FINANCIAL REPORT 2015 EVONIK INDUSTRIES The amounts disclosed for trade accounts receivable and pay- able result from credit notes granted and received that were set off against existing receivables or liabilities relating to the same counterparty. There are no master netting arrange- ments for trade accounts. The master agreements concluded by Evonik with counterparties for derivatives transactions provide for limited offsetting arrangements, especially if one of the contractual parties should become insolvent. Net result by valuation category 2015 A corresponding disclosure has become established as best practice since the relevant provisions of IFRS 7 came into effect. The prior-year figures are therefore restated accordingly. Results of financial instruments by valuation category The income and expenses, gains and losses from financial instruments reflected in the income statement are allocated to the following valuation categories: in f million Proceeds from disposals Income from derivatives Impairment losses/reversals of impairment losses Net interest expense Income from other investments Net result by valuation category 2015 Financial instruments Available-for- Loans and held for sale assets receivables trading Liabilities at amortized cost - 3 - - -3 - -55 - -55 -16 -2 - - -18 1 3 -22 -52 -70 1 - - 1 —17 1 —77 —52 —145 Net result by valuation category 2014 in C million Proceeds from disposals Income from derivatives Impairment losses/reversals of impairment losses Net interest expense Income from other investments Net result by valuation category 2014 Available-for- Loans and sale assets receivables —2 —14 1 4 Financial instruments held for trading liabilities at amortized cost — — — —21 — —21 — — —16 —13 —85 —93 —10 —34 —85 -130 Income from derivatives does not include income from derivative financial instruments for which hedge accounting is applied. As in 2014, net interest expense did not include any interest income on the impaired portion of financial assets or trade accounts receivable. EFTA00598829

TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 197 Notes Other disclosures Carrying amounts by valuation category and fair values of financial instruments Financial instruments that fall within the scope of IFRS 7 Financial Instruments: Disclosures are to be disclosed by classes that take into account the characteristics of the financial instruments. At Evonik, the classification is based on the presentation on the balance sheet. The following tables present the carrying amounts of each class broken down to the IAS 39 valuation categories. Assets and liabilities not allocated to any category are shown in a separate column. The total carrying amount per class or balance sheet item is then compared to the fair value. Carrying amounts and fair values of financial assets as of December 31, 2015 inEmotion Financial assets Other investments' Loans Securities and similar claims Receivables from derivatives Other financial assets Trade accounts receivable Cash and cash equivalents Carrying amount by valuation category Dee. 31, 2015 Available-for- Loans and sale assets receivables 339 58 74 265 339 29 29 Assets held for trading 24 24 Not allocated to any category 60 1,813 2,368 4,239 24 60 Carrying amount Fair value 481 462 74 55 29 29 265 265 84 84 29 29 1,813 1,813 2,368 2,368 4,662 I 4,643 • The difference between the carrying amount and fair value results from investments measured at cost of acquisition for which no fair value could bedeterrnmed reliably (419 Shen). Carrying amounts and fair values of financial assets as of December 11, 2014 Carrying amount by valuation category Not allocated to Dec. 31, 2014 Available-for- Loans and Assets held Carrying in( million sale assets receivables for trading any category amount Fair value Financial assets 456 41 19 16 532 521 Other investments' 64 64 53 Loans 12 12 12 Securities and similar claims 392 392 392 Receivables from derivatives 19 16 35 35 Other financial assets 29 29 29 Trade accounts receivable 1,720 1,720 1,720 Cash and cash equivalents 921 921 921 456 2,682 19 16 3,173 3,162 • The difference between the carrying amount end fair value results from investments measured at cost 04 acquisition for which no fair value<ould bedetertnined reliably (4811 milon). E 01 EFTA00598830

19$ FINANCIAL REPORT 2015 EVONIK INDUSTRIES Carrying amounts and fair values of financial liabilities as of December 31, 2015 in €maim Carrying amount by valuation category Dee. 31, 2015 Liabilities Liabilities at Not held fee amortized allocated to wading cost any category Carrying amount Fair value Financial liabilities 19 1,554 133 1,706 1,719 Bonds 1,241 1,241 1,258 Liabilities to banks 282 282 278 Loans from non banks 14 14 14 Liabilities from derivatives 19 132 151 151 Other financial liabilities 17 1 18 18 Trade accounts payable 1,090 1,090 1,090 19 2,644 133 2,796 2,809 Carrying amounts and fair values of finandal liabilities as of December 31, 2014 Carrying amount by valuation Liabilities Liabilities at held for amortized In g million trading cost category Not allocated to any category 171 Dec. 31, 2014 Carrying amount Fair value Financial liabilities 36 928 1,135 1,171 Bonds - 496 — 496 529 Liabilities to banks — 406 — 406 409 Loans from non banks — 7 — 7 7 Liabilities from derivatives 36 — 170 206 206 Other financial liabilities — 19 1 20 20 Trade accounts payable — 1,126 — 1,126 1,126 36 2,034 171 2,261 2,297 That part of derivative financial instruments for which hedge accounting is applied is not allocated to any of the valuation categories. EFTA00598831

TO OUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notes Other disclosures • SUPPLEMENTARY INFORMATION 199 Financial instruments recognized at fair value The fair value determination is based on the three-level hierarchy stipulated by IFRS 13 Fair Value Measurement, which is outlined in section 3.7. The following table shows the financial instruments that are measured at fair value on a recurring basis after initial recognition on the balance sheet: Financial instruments recognized at fair value as of December 31, 2015 in E million Other investments Securities and similar claims Receivables from derivatives Liabilities from derivatives Dec. 31, Fair value based on 2015 Publicly quoted market prices Directly observable market- related prices Individual valuation parameters (Level 1) (Level 2) (Level 3) 55 55 265 265 84 84 —151 —151 Financial instruments recognized at fair value as of December 31, 2014 in E minion Dec. 31, Fair value based on 2014 Directly Publicly observable Individual quoted market- valuation market prices related prices parameters (Level 1) (Level 2) (Level 3) Other investments 53 — — 53 Securities and similar claims 392 — — 392 Receivables from derivatives — 35 — 35 Liabilities from derivatives — —206 — —206 The financial instruments allocated to Level 1 are recognized at their present stock market price. They comprise all securi- ties and one equity investment. As of the present reporting date, all derivatives are allocated to Level 2. They comprise currency, interest rate and commodity derivatives whose fair value was determined with the aid of a discounted cash flow method on the basis of the exchange rates at the European Central Bank, observed interest rate structure curves, observed commodity prices, and observed credit default premiums. No derivatives were reclassified to other levels in the fair value hierarchy in fiscal 2015. t.a 0 EFTA00598832

200 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Fair value of financial instruments recognized at amortized cost The fair value of bonds is their directly observable stock market price on the reporting date. For loans, other financial assets, liabilities to banks, loans from non-banks, and other financial liabilities the fair value is determined as the present value of the expected future cash inflows or outflows and is therefore allocated to Level 2. Discounting is based on the interest rate for the respective maturity on the reporting date, taking the creditworthiness of the counterparties into account. Since the majority of other financial receivables and liabilities, and trade accounts receivable and payable are current, their fair values—like the fair value of cash and cash equivalents— correspond to their carrying amounts. Notional value of derivative financial instruments The other investments that are recognized on the balance sheet at amortized cost comprise investments in equity instruments for which there is no quoted price in an active market and whose fair values cannot be determined reliably in accordance with one of the three levels of the fair value hierarchy. There is no intention of selling these investments. Notional value of derivatives The notional value of interest rate swaps is the principal on which the swap agreement is based, while the notional value of the cross-currency interest rate swaps, forward exchange contracts and currency swaps is the hedged foreign exchange amount converted into euros. The notional value of the com- modity derivatives is the hedged procurement cost translated into euros. Dec. 31, 2015 thereof therecIl Dec. 31, 2014 thereof thereof in f million Total current non-current Total current non-current Cross-currency interest rate swaps 678 110 568 390 31 359 Forward exchange contracts and currency swaps 5,190 4,842 348 4,462 4,135 327 Commodity derivatives 111 15 96 26 15 11 5,979 4,967 1,012 4,878 4,181 697 Hedge accounting Hedge accounting was applied for the following major trans- actions in 2015: (a) Cash flow hedges As of the balance sheet date, forward exchange contracts and currency swaps were used to hedge forecast foreign currency sales amounting to around €1,950 million (2014: around €1,600 million) up to March 2017 against exchange rate movements. These hedging instruments had a nega- tive fair value of €56 million (2014: negative fair value of €96 million). At year-end 2015, losses of €56 million (2014: losses of 96 million) were recognized in the hedge reserve. Evonik hedges the currency risk arising from intragroup foreign currency loans against the functional currency of the relevant Group company through cross-currency interest rate swaps, forward exchange contracts and currency swaps. The notional value of these cash flow hedges on the reporting date was €1,413 million (2014: €1,065 million). The desig- nated hedges had a positive fair value of €17 million (2014: negative fair value of €52 million). The hedge reserve is €18 million (2014:€11 million). Between December 2011 and December 2012 Evonik successively purchased a total of ten forward starting payer swaps with a notional value of €50 million each to hedge the interest rate risk of a highly probable refinancing transaction totaling €500 million forecast for 2013. In this way, a 5-year swap rate of 1.6 percent was locked in for a period of five years starting from June 2013. The expected refinancing took place in spring 2013 through the issue of a new bond by Evonik Industries AG. The hedge was terminated when the financing terms were fixed. The realized hedging expense of €15 million will be released to net interest expense over the original hedged financing period using the effective interest method. At year-end 2015, a negative fair value of €8 million was recognized in the hedge reserve for this transaction (2014: negative fair value of €11 million). EFTA00598833

- TOOUR SHAREHOLDERS MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notes 011*, di, (Ic.,.wet • SUPPLEMENTARY INFORMATION 201 As of year-end 2015, commodity swaps with a negative fair value of €21 million (2014: negative fair value of €4 million) were used to hedge forecast purchases of raw materials against price fluctuations up to 2019. For these swaps, a nega- tive fair value of €20 million was recognized in the hedge reserve in 2015 (2014: negative fair value of €4 million). The effectiveness of the hedge relations was determined using the dollar offset method, critical term match, the hypo- thetical derivatives method, regression analysis and sensitivity analyses. When hedging the currency risk of highly probable forecast transactions, in general only the spot components of forward exchange contracts used to hedge currency risks are designated as hedges. In 2015, the valuation of cash flow hedges did not contain any ineffective portion (2014: income of €1 million). (b) Hedge of a net investment Since March 2010 the investment in UK subsidiaries has been hedged against foreign currency risks on a rolling basis. The hedging contracts normally have terms of a few months. As of December 31, 2015, the notional value of the hedges was £65 million, as in the previous year. At year-end 2015, the outstanding hedging contracts had a positive fair value of €2 million (2014: negative fair value of €1 million). Between the start of hedging in March 2010 and year-end 2015, total expenses of €19 million (2014: €12 million) were assigned to the hedge reserve. In July 2015, the investment in a subsidiary in Switzerland was hedged against foreign currency risks. The hedging contracts have a notional value of CHF 69 million and a term of nine months. The fair value of the outstanding hedging contracts was €2 million. Between the start of this hedging transaction and the reporting date, income of €2 million was allocated to the hedge reserve. Notes on financial risk management As an international company, Evonik is exposed to financial risks in the normal course of business. A major objective of corporate policy is to minimize the impact of market, liquidity and default risks on both the value of the company and profitability in order to check adverse fluctuations in cash flows and earnings without forgoing the opportunity to benefit from positive market trends. For this purpose a systematic financial and risk management system has been established. Interest rate and exchange rate risks are managed centrally by the Finance Division of Evonik Industries AG, while commodity risks are managed by the segments in accordance with established corporate policies. The financial derivatives contracts used by Evonik are entered into exclusively in connection with a corresponding under- lying transaction (hedged item) relating to normal operating business, which provides a risk profile directly opposite to that of the hedge. The instruments used are customary products found on the market. For the management of interest rates and exchange rates, they comprise currency swaps, forward exchange contracts, cross-currency interest rate swaps and interest rate swaps. Commodity swaps are used to hedge the risk of fluctuations in the price of coal, natural gas, electricity and petrochemical feedstocks. The procurement of emission allowances to meet obligations pursuant to Section 6 of the German Emissions Trading Act (TEHG) can be optimized through use of EUA-CER swaps and EUA or CER futures. (a) Market risk Market risk can basically be subdivided into exchange rate, interest rate and commodity risks. The management of these risks is explained below. Exchange rate risks relate to both the sourcing of raw materials and the sale of end-products in currencies other than the functional currency of the company concerned. One aim of currency risk management is to protect the company's operating business from fluctuations in earnings and cash flows resulting from changes in exchange rates. Any opposite effects arising from procurement and sales activities are taken into account. Another objective of currency management is to eliminate the currency risk relating to financing transactions that are not denominated in the functional currency of the respective Group companies. For currency hedging of risk positions on the balance sheet, Evonik uses a portfolio approach: the risk positions resulting from foreign currency receivables and liabilities are generally netted and bundled via intragroup hedging; the resulting net positions are then hedged via market deriva- tives. Currency management is carried out separately for operational risk positions (mainly trade accounts receivable and payable in foreign currencies) and risk positions arising from financing activities. Currency translation and hedging results are disclosed in the income statement in line with this distinction. The net presentation of the results reflects both their economic substance and the risk management undertaken by Evonik. EFTA00598834

202 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Net currency result in E Sloan 2015 2014 From operating currency exposure and assodated hedging instruments Gross income from currency translation 189 135 Gross expenses for currency translation -154 -96 Net result from currency translation of operating monetary assets and liabilities 35 39 Gross income from currency hedging 180 122 Gross expenses for currency hedging -251 -166 Net result from operational currency hedging -71 -44 From finandng-related currency exposure and associated hedging instruments Gross income from currency translation 266 113 Gross expenses for currency translation -288 -152 Net result from currency translation of finandng-related monetary assets and liabilities -22 -39 Gross income from currency hedging 192 118 Gross expenses for currency hedging -176 -95 Net result from financing-related currency hedging 16 23 Net currency result (operational and finandng-related) -42 -21 The net currency result is determined principally by the swap premiums at the start of hedging, and the time lag between the hedges and changes in the hedged foreign currency items recognized on the balance sheet during the hedging period. Since hedge accounting is applied for micro-hedging of foreign currency balance sheet exposure (for example, financing-related currency hedging of non-current loans through cross-currency interest rate swaps) and for hedging of planned or firmly agreed cash flows in foreign currencies (for example, hedging of planned sales revenues), their hedge results are only reflected in the net currency result with the corresponding ineffective portion or any forward components that are excluded from the hedge accounting relationship. By contrast, the effective results of these hedges are recognized in accumulated other comprehensive income until the hedged transaction is realized. Subsequently, they are recognized in sales if they were used as a sales hedge, inventories or the cost of sales if they were used to hedge cost risks relating to procurement, or in the first-time recog- nition of property, plant and equipment if the purpose was to hedge the foreign currency risk relating to the procurement of assets of this type. In the case of currency hedges for loans for which cash flow hedge accounting is applied, the effec- tive portion of the hedge is derecognized from accumulated other comprehensive income to offset the income or expenses from currency translation of monetary assets and liabilities triggered by the hedged item. See Note 7.7 (g). The aim of Interest rate management is to protect net income from the negative effects of fluctuations in market interest rates. Interest rate risk is managed by using derivative and non-derivative financial instruments. The aim is to achieve an appropriate ratio of fixed rates (with interest rates fixed for more than one year) and variable rates (terms of less than one year), taking costs and risks into account. At year-end 2015, 94 percent (2014: 85 percent) of non- derivative financial instruments were hedged by fixed- interest contracts. Several scenario analyses were carried out to measure exchange rate and interest rate risk as of December 31, 2015. The most important currencies for Evonik are the US dollar (USD) and the Chinese renminbi yuan (CNY/CNH). CNH is the technical market designation for renminbi that are tradable and deliverable outside the territory of China. A sensitivity analysis was performed for these currencies by modeling a change of 5 percent and 10 percent in the exchange rate relative to all other currencies to simulate the possible loss of value of derivative and non-derivative financial instruments in the event of the appreciation or depreciation of these currencies. The percentage standard deviations of changes in exchange rates versus the euro in 2015 was 0.7 percent for the USD (2014: 2.6 percent), and 0.7 percent for the CNY/CNH (2014: 2.7 percent). EFTA00598835

TOOLIR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notes Other disclosures • SUPPLEMENTARY INFORMATION 203 the results of these scenarios were as follows: USD sensitivity analysis Dec. 31, 2015 Dec. 31, 2019 Impact on Impact on I Impact on Impact on Jae million income equity income equity +5% -1 -64 3 -51 -5% 1 64 -3 51 +10% -1 -127 -103 -10% 1 127 -s 103 CNY/CNH sensitivity analysis Dee. 31. 2015 Dec. 31, 2019 Impact on in E million income Impact on equity Impact on Impact on income equity +5% -11 -1 -9 -5% 11 1 9 +10% -23 -1 -17 -10% 23 17 Several scenarios were also simulated for interest rates. These analyzed shifts of 50,100 and 150 basis points in the euro interest rate curve to simulate the possible loss of value of derivative and non-derivative financial instruments. The scenarios are summarized in the table: EUR Interest rate sensitivity analysis Jae million Dec.31, 2015 Dec. 31, 2014 Impact on Impact on income equity impact on impact on income equity +SO basis points 1 — 2 - -50 basis points —1 — —2 — +100 basis points 1 — 4 1 —100 basis points —1 — —4 —1 +150 basis points 2 — 6 1 —150 basis points —2 — —7 —1 Commodity risks result from changes in the market prices for the purchase and sale of raw materials. Raw materials were purchased principally to meet in-house demand. Other factors of importance for Evonik's risk position are the availability and price of raw materials, starting products and intermedi- ates. In particular, raw material prices of significance to the Evonik Group are dependent on exchange rates and the price of crude oil. Commodity management, which is the responsibility of the segments, involves identifying procure- ment risks and defining effective measures to minimize them. For example, price escalation clauses and swaps are used to reduce price volatility. Pricing and procurement risks are reduced through worldwide procurement and optimized processes to ensure immediate sourcing of additional raw material requirements. Further, use of alternative raw mate- rials is examined for various production processes and Evonik is working on the development of alternative production technologies. Financial derivatives were also used on a small scale to hedge procurement price risks. If the price of natural gas had been 10 percent higher or lower, the impact of the fluctuation in the value of the commodity derivatives on the hedge reserve would have been +E2 million or —E2 million at year-end 2015 (as in 2014). If the price of naphtha-based petrochemical feedstocks had been 10 percent higher or lower, the impact of the fluctuation in the value of the com- modity derivatives on the hedge reserve would have been +E7 million or —E7 million at year-end 2015. In both cases, the impact on income would have been negligible. Similarly, there was no impact on income in the previous year. (b) Liquidity risk Liquidity risk is managed through business planning to ensure that the funds required to finance the current operating business and current and future investments in all Group companies are available at the right time and in the right currency at optimum cost. Liquidity requirements for busi- ness operations, investments and other financial activities are derived from a financing status and liquidity planning, which form part of liquidity risk management. Liquidity is pooled in a central cash management pool where this makes economic sense and is legally permissible. Central liquidity risk management facilitates low-cost borrowing and advanta- geous offsetting of financial requirements. t.2 0 EFTA00598836

204 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Alongside cash and cash equivalents of E2,368 million and investments of E262 million in current securities, the Group's central source of liquidity is a E1.75 billion revolving credit facility from a syndicate of 27 national and international banks. This credit facility is divided into two tranches of E875 million each. The second and last option to extend their term by one year was exercised in 2015 and they now run until September 2018 and 2020 respectively. This credit facility does not contain any covenants requiring Evonik to meet specific financial ratios and was not drawn at any time in fiscal 2015. Further, as of December 31, 2015, various unused credit lines totaling E368 million were available to meet local requirements, especially in the Asia-Pacific region. The table shows the remaining maturity of the non-derivative financial instruments based on the agreed dates for interest and redemption payments. Remaining maturity of non-derivative financial instruments 2015 in Emillion Dec.31, Payments due in 2015 more than 1 more than 3 and up to and up to more than up to 1 year 3 years 5 years S years Rumba liabilities 211 89 381 796 1,677 Bonds 3 34 534 772 1,343 Liabilities to banks 179 52 47 24 302 Loans from non-banks 14 - - - 14 Other financial liabilities 15 3 — — 18 Trade accounts payable 1,086 4 — — 1,090 Remaining maturity of non-derivative financial instruments 2014 Payments due in more than 1 and up to Dec. 31. 2014 more than 3 and up to more than In E million up to 1 year 3 years S years 5 years Financial IlabIlltles 320 94 45 559 1,018 Bonds 9 19 19 509 556 Liabilities to banks 291 72 24 48 435 Loans from non-banks 7 7 Other financial liabilities 13 3 2 20 Trade accounts payable 1,126 1,126 The Group met all payment terms agreed for its financial liabilities. EFTA00598837

TOOUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS • SUPPLEMENTARY INFORMATION 205 Notes Other disclosures The breakdown of the sum of interest and redemption pay- ments by maturity in the following table relates to derivative financial instruments with positive and negative fair values. The table shows the net value of cash inflows and outflows. Since netting was not agreed for forward exchange contracts, currency swaps and cross-currency interest rate swaps, they are presented as gross amounts: Remaining maturity of derivative financial instruments 2015 Payments due Doc. 31, in 2015 more than 1 and up to more than in l million up to 1 year 3 years 3 years Receivables from derivatives 50 4 54 Cross-currency Interest rale swaps 13 4 17 Cash inflows 123 41 173 Cash outflows -110 -37 -156 .2 Forward exchange contracts and currency swaps 37 37 Cash Inflows 2,118 137 2,255 Cash outflows -2,081 -137 -2,218 I Commodity derivatives Liabilities from derivatives -122 -43 -57 -222 Cross-currency Interest rate swaps -12 -27 -53 -92 Cash inflows 23 57 314 394 a Cash outflows -35 -84 -367 -486 0 Forward exchange contracts and currency swaps -102 -7 -109 Cash Inflows 2690 202 2,893 Cash outflows -2,792 -209 -1 -3,002 Commodity derivatives -8 -9 -21 Remaining maturity of derivative financial instruments 2014 Dec. 31, Paymentsdue in 2014 more than 1 and up to more than In! million up tot year 3 years 3 years Receivables from derivatives 23 —4 19 Cross-currency Interest rate swaps —5 —5 —10 Cash Inflows 26 63 89 Cash outflows —31 —68 —99 Forward exchange contracts and currency swaps 28 1 29 Cash Inflows 1,141 28 1,169 Cash outflows —1,113 —27 —1,140 Commodity derivatives -267 liabilities from derivatives —198 —36 -33 Cross-currency Interest rate swaps —7 —24 -33 -64 Cash inflows 19 28 262 309 Cash outflows —26 —52 -295 -373 Forward exchange contracts and currency swaps —188 -11 -199 Cash inflows 2,832 286 1 3,119 Cash outflows -3,020 -297 -1 -3,318 Commodity derivatives -3 -1 -4 EFTA00598838

206 FINANCIAL REPORT 2015 EVONIK INDUSTRIES Receivables from cross-currency interest rate swaps comprise transactions with negative net cash flows resulting from positive inflows in euros and negative outflows in foreign currencies. In each maturity bracket, the foreign currency outflows translated into euros exceeded the actual euro inflows. To calculate the present value, the foreign currency side of these swaps is discounted using a yield curve for the foreign currency while the euro side is discounted using a euro yield curve. Since interest rates in the foreign currencies are higher, discounting results in a positive fair value and thus a positive overall carrying amount for the instruments despite the negative net cash flows. This phenomenon is encoun- tered in particular with the Chinese renminbi yuan (CNH) and the Brazilian real (BRL). (c) Risk of default Credit risk management divides default risks into three categories, which are analyzed separately on the basis of their specific features. The three categories are debtor and creditor risk, country risk, and the risk of default by financial counterparties. The debtor and creditor default risks are analyzed and monitored continuously with the aid of an internal limit system. Political risk (country risk) is also taken into account for export orders so that the overall risk assessment takes account of both political and economic risk factors. On the 10.3 Related parties In addition to the subsidiaries included in the consolidated financial statements, the Group maintains relationships with related parties, i.e. companies, the government and indi- viduals. As of December 31, 2015, related parties with which the Group maintains business relationships included RAG- Stiftung, Essen (Germany), due to its controlling interest, Business relations with related parties (companies) RAG-Stiftung Fellow subsidiaries Joint ventures Associates InEmiguon 2015 2014 2015 2014 2015 2014 2015 2014 Goods and servkes supplied - - 2 2 25 32 1 9 Goods and services received - - -57 -66 -1 - -2 -2 Other Income - - 143 - 4 - - 6 Receivables as of December 31 - - 1 - 7 3 - 1 Liabilities as of December 31 - - - - - - -1 - Contingent liabilities as of December 31 - - - - -44 -33 -1 -2 basis of this analysis, a maximum risk exposure limit is set for the contracting party. The credit standing of contracting parties is updated constantly via ratings or scoring processes. In addition, a specific limit is set for financial counter- parties for each type of risk (money market, capital market and derivatives). Maximum limits for each contracting party are set on the basis of the creditworthiness analyses. These are predominantly based on the ratings issued by international rating agencies and our own internal credit analysis. In addi- tion, the development of the price of credit default swaps and equity prices (where available) is analyzed. Country limits are set for the money and capital markets to ensure diversifi- cation of country risks. Credit management also covers derivative financial instru- ments, where the risk of default is equivalent to the positive fair value. This risk is minimized by setting high standards for the creditworthiness of counterparties. Only common instru- ments found on the market with sufficient liquidity are used. Consequently, no material risk of default is expected in this field. As for non-derivative financial instruments, there is also a default risk amounting to the positive fair value. This can be minimized by regular creditworthiness reviews. We do not anticipate any material risk of default here either. Owing to the diversity of business and the large number of customers, there were no significant cluster risks. and Gabriel Acquisitions GmbH (Gabriel Acquisitions), Gadebusch (Germany), as it can still exercise a significant influence through the appointment of representatives to the Supervisory Board of Evonik Industries AG. Further related parties comprise fellow subsidiaries of Evonik owned by RAG-Stiftung and associates and joint ventures of Evonik, which are recognized at equity. EFTA00598839

TO OUR SHAREHOLDERS • MANAGEMENT REPORT • CONSOLIDATED FINANCIAL STATEMENTS Notes Other disclosures • SUPPLEMENTARY INFORMATION 207 The dividend for fiscal 2014 was paid following the adoption of the resolution by the Annual Shareholders' Meeting on May 19, 2015. RAG-Stiftung, Essen (Germany) received E316 million, Gabriel Acquisitions GmbH, Gadebusch (Ger- many) received E24 million, and The Gabriel Finance Limited Partnership, St. Helier (jersey), received E20 million. In 2015, Evonik received dividends of E18 million (2014: E44 million), mainly from associates. The other income from fellow subsidiaries comprised the divestment of the 10.3 percent shareholding in Vivawest to RAG Aktiengesellschaft, see Note 5.2. The contingent liabilities recognized as of December 31, 2015 comprise E44 million relating to a joint venture and result mainly from a guarantee of E39 million granted to secure a loan for the joint venture Saudi Acrylic Polymers Company, Ltd., Jubail (Saudi Arabia). In addition, two guar- antees totaling E5 million were provided as collateral for a facility for hedging transactions at the joint venture CyPlus Idesa, de C.V., Mexico City (Mexico). Remuneration paid to related parties (Individual persons The Federal Republic of Germany and the federal states of North Rhine-Westphalia and the Saarland are also classified as related parties as they are able to exercise a significant influence on RAG-Stiftung through their membership of the Board of Trustees of RAG-Stiftung. Transactions effected between Evonik and these federal and state governments and their subsidiaries or joint ventures in the reporting period comprised generally available govern- ment grants and subsidies, and investments in their securities. Further, customary business relationships were maintained with the Deutsche Bahn Group, and the Duisport Group. Individuals defined as related parties also include mem- bers of the management who are directly or indirectly responsible for corporate planning, management and over- sight, and members of their families. At Evonik, these parties comprise the Executive Board and Supervisory Board of Evonik Industries AG, the Executive Board and Board of Trustees of RAG-Stiftung, and other management members who hold key positions in the Group. Executive Brad of Evonik Industries AG Int000 2015 2014 Short-term remuneration 10,101 7,472 Share-based payments 4,753 850 Current service cost for pension and other post-employment benefits 2,261 1,526 Termination benefits 2,380 8 1• t.2 Supervisory Board of Evonik Industries Other management AG members 2015 2014 2015 2014 Z818 2,816 12,982 I 4,317 2,322 121 4. 933 493 Short-term remuneration comprises both amounts not related to performance and short-term performance-related payments. As of December 31, 2015, there were provisions of €6,688 thousand (2014: €3,676 thousand) for short-term performance-related remuneration of members of the Exec- utive Board and E9,160 thousand (2014: €1,677 thousand) for other management members. At year-end 2015, provisions for share-based payment amounted to E6,624 thousand (2014: €2,291 thousand) for the Executive Board and E2,408 thousand (2014: E942 thou- sand) for other management members. Further, as of December 31, 2015 there were provisions for termination benefits for the Executive Board totaling E878 thousand. The information on share-based payment relates to ex- penses for fiscal 2015 for the LTI tranches 2010 through 2015 for the Executive Board and LTI tranches 2012 through 2015 for other management members. The present value of pension obligations (defined benefit obligations) was €25,799 thousand (2014: €29,773 thou- sand) for the Executive Board, and €17,631 thousand (2014: €10,672 thousand) for other members of the management. Further, the employee representatives elected to the Super- visory Board of Evonik Industries AG continued to receive the regular salary agreed in their employment contract. The level of their salary provided appropriate remuneration for the exercise of their functions and tasks in the company. In 2015, business relations with the Evonik Group amounting to E4 million (2014: E2 million) were maintained by one member of the Board of Trustees of RAG-Stiftung through companies attributable to this person. This amount principally comprised goods and services supplied. The liabil- ities were less than El million on the reporting date. Apart from the relationships stated above, Evonik did not have any other significant business relationships with related parties. EFTA00598840

208 FINANCIAL REPORT 201S EVONIK INDUSTRIES 10.4 Contingent liabilities, contingent receivables and other financial commitments Contingent liabilities mainly comprise guarantee and war- ranty obligations totaling €70 million (2014: €56 million). They include a guarantee of €44 million in favor of a joint venture, see Note 10.3, and indemnity obligations of €10 mil- lion in connection with divestments, which expire in the period up to December 31, 2017. Furthermore, following completion of administrative proceedings in foreign jurisdictions, it is not improbable that individual customers could file claims for compensation. Since the probability is considered low, Evonik is of the opinion that the risk is in the low double-digit-euro range. There were no contingent receivables as of Decem- ber 31, 2015. Other financial commitments are outlined below. As a lessee, Evonik is mainly party to operating leases for land and buildings, plant and machinery, and office furniture and equipment. The table shows the nominal value of obligations from future minimum lease payments for leased assets with the following payment terms: Maturity structure of future minimum lease payments (lessee; operating leases) inc mlllgn 2015 2014 • Due within 1 year 92 78 Due in more than 1 and up to 5 years 246 211 Due in more than 5 years 218 179 556 469 Total payments of €99 million (2014: €108 million) were recognized as expense for operating leases in the reporting period. As in the previous year, the entire amount related to minimum lease payments. No contingent rental payments were made. 10.5 Other agreements between managers and third parties In connection with the acquisition of 25.01 percent of the shares in Evonik Industries AG by Gabriel Acquisitions in 2008, selected managers at Evonik were granted a right to participate indirectly in Evonik's success. To this end, the managers purchased, at market price, limited partnership shares in the partnership Angel MEP GmbH & Co. KG, Frankfurt am Main (Germany), which held 4.24 percent of the shares in Evonik Industries AG at year-end 2015 (2014: 17.93 percent) jointly with Gabriel Holding through three intermediate companies (Gabriel Investments, Gabriel Acqui- sitions, and The Gabriel Finance Limited Partnership). The purpose of this program is to provide an incentive to managers to contribute to the future growth and sustained performance of the Group. On the reporting date, the managers participating in this program held an indirect stake of 0.06 percent (2014: 0.31 percent) in Evonik Industries AG. The cash contribution for this was equivalent to the market value of the partnership shares and was determined by a suitable enterprise valuation method. Since the managers paid the fair value of the shares when they acquired them, the fair value of the equity instruments allocated in return was zero. For this reason, no expense would have to be recognized at any time, either in the event of an exit or if a manager were to leave the company. Evonik will not at any time be required to make payments to the eligible managers under this program. 10.6 Events after the reporting date There were no material events after the reporting date. Disclosures in compliance with German legislation Information on shareholdings pursuant to Section 313 Paragraph 2 of the German Commercial Code (HGB) The Group's shareholdings are listed in Note 5.1. The list indicates which companies have made use of the provisions in Sections 264 Paragraph 3 and 264 b of the German Com- mercial Code (HGB) on exemption from disclosure of annual financial statements and the preparation of notes to their financial statements and a management report. 11.2 Personnel expense and number of employees pursuant to Section 314 Paragraph 1 No. 4 of the German Commercial Code (HGB) Personnel expense in C mill 2015 2014 Wages and salaries 2,520 2,200 Social security contributions 370 341 Pension expenses 209 192 Other personnel expense 22 16 3,121 2,749 Pilor•year figuresrennet EFTA00598841