Dear Shareholders. 2 Letter to the Shareholders

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Dear Shareholders

The value of the company’s investment portfolio in CHF terms during the first half of 2015 remained virtually un-changed (–0.2 %). This performance is significantly given the deep recessionary climate of the emerging market economies in Eastern Europe, combined with weak energy commodity prices, as well as, a further significant decrease of the Ukrainian Hryvna and the Russian Ruble vs. the reporting currency, CHF. Overall during the first half of 2015, EEII’s (the “Company”) net asset value (“NAV”) declined by 4 % from CHF 5.61 to CHF 5.39 per share. In absolute terms, the Company reports a net loss of CHF 0.3 million (H1 2014: net profit of CHF 2 million). The primary negative contributors to the NAV develop-ment during H1 2015 were the weakening currencies of Eastern Europe against the CHF. The Ukrainian Hryvna in particular lost more than 29 % of its value against the CHF during the reporting period. In addition, Kaz Minerals lost 25 % in share value due to weakening commodity prices, and the value of the Company’s Ukrainian electricity company shares also suffered from the weakening Hryvna and lost overall 4 % in local currency in the reporting period. The positive share price developments of EEII’s largest investments, Ukrnafta, and Gazprom virtually fully compensated for the negative developments. Overall Ukrnafta and Gazprom rose 1.2 % and 4.3 % in CHF terms respectively, during the reporting period.

The ongoing territorial conflict between Russia and Ukraine continued to massively affect the economies of the two countries where EEII’s main investments are located. Ukraine’s industrial output, with the background of a factual war situation in the Donbas region, decreased by almost 20 % in 2015, and does not show recovery signals yet. Based on Ukraine’s staff-level agreement with the IMF, the European Union recently disbursed a first tranche of EUR 600 mln, out of a total EUR 1,8 bln loan package to Ukraine. The loan aims to address Ukraine’s urgent financing needs and tries to stabilize its economy. In return, Ukrainian authorities have agreed to implement reforms in the areas of public finance management, governance, and the energy and financial sectors.

With respect to the Russian economy, based on preliminary estimates by the Ministry of Economy and Rosstat for 2015, Russia’s GDP declined by more than 2 % in comparison with the previous year. The primary causes of Russia’s macroeconomic instability in 2015 remain the high rate of inflation of almost 17 %, mainly caused by the weakening ruble and the ongoing trade restrictions imposed on Russia due to its involvement in the Ukraine conflict, as well as declining commodity prices which continue to form the most significant source of income of Russia’s economy. EEII therefore continues to face severe country risks within its core investment region. Many countries in Eastern Europe continue to experience heavy net capital outflow, and most international institutional investors remain con-cerned about the challenging investment environment in Eastern Europe, in particular in Russia and Ukraine where the unresolved border conflict in the Donbas region negatively impacts the outlook of both economies. We continue to observe these developments closely.

Although we are well aware that the company’s invest-ment portfolio can continue to develop in a volatile man-ner we are convinced that the current share price levels of EEII’s investments by far do not reflect their underlying fundamental values and the market growth potential of the companies. In addition, we are encouraged that in spite of deeply negative developments in the past, we succeeded to virtually hold the overall value of EEII’s investments constant during this period. We are keeping to our positions and our positive long term view of the energy and infrastructure markets in Eastern Europe, in particular with the implementation of structural reforms in the areas of the Ukrainian energy and financial sector. In the name of the entire Board of Directors, I thank you for your continued trust in the Company.

Yours sincerely,

Heinz-Dieter Waffel Chairman

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Determination of the Net Asset Value

Determination of

the Net Asset Value

as of June 30

in CHF 2015 2015 2014 2014 Following IFRS presentation Representing the shareholders’ economic interest Following IFRS presentation Representing the shareholders’ economic interest

Cash and other assets 382,505 382,505 2,216,119 2,216,119 Financial assets at fair value through profit or loss 7,983,402 7,983,402 12,502,429 12,502,429

Total assets 8,365,907 8,365,907 14,718,548 14,718,548

Total current liabilities 134,320 134,320 1,832,354 1,832,354

Share capital 10,845,321 10,845,321 10,845,321 10,845,321 (Accumulated deficit)/Accumulated profit (2,613,734) (2,613,734) 2,040,873 2,040,873

Total shareholders’ equity 8,231,587 8,231,587 12,886,194 12,886,194

Total liabilities and shareholders’ equity 8,365,907 8,365,907 14,718,548 14,718,548

Total shares outstanding 1,527,510 1,527,510

Number of treasury shares – –

Net Asset Value per share CHF 5.39 CHF 9.55

Net Asset Value per share ex* CHF 8.43

* Net Asset Value per share excluding the pending payment to the shareholders of CHF 1.12 according to the capital decrease as decided by the AGM April 3rd, 2014

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Interim IFRS Financial Statements

IFRS Statement of Financial Positions

as of June 30

in CHF (unaudited) Notes 30.06.2015 31.12.2014

Assets

Cash and cash equivalents 382,222 729,923

Other assets 283 6,426

Total current assets 382,505 736,349

Financial Assets at fair value through profit or loss 5,6,7 7,983,402 8,002,606

Total non current assets 7,983,402 8,002,606

Total assets 8,365,907 8,738,955

Liabilities and shareholders’ equity

Accounts payable 4,007 82,481

Accrued expenses and other liabilities 4 130,313 83,000

Total current liabilities 134,320 165,481

Share capital 10,845,321 10,845,321

(Accumulated deficit) (2,613,734) (2,271,847)

Shareholders’ equity 8,231,587 8,573,474

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Interim IFRS Statement

of Income

for the period from January 1st to June 30

in CHF (unaudited) 2015 2014

Operating income

Interest income 72 146

Unrealised (loss)/income on financial assets at fair value through profit or loss (19,203) 2,329,731

Income from sale of financial assets - 32,755

Foreign exchange (loss)/gain (34,407) 1,515

Net operating (loss)/profit (53,538) 2,364,147

Operating expenses

Management & Advisory fees 87,500 110,000

Administrative fees 26,778 26,779

Directors fees 71,134 71,134

Personnel cost 25,023 –

Professional fees 34,080 44,665

Other expenses 41,282 66,927

Bank charges and interest expenses 1,927 4,101

Capital tax expense 457 950

Total operating expenses 288,181 324,556

(Loss)/income before tax (341,719) 2,039,591

Income taxes 240 –

Net (loss)/income after tax/Total comprehensive (loss)/income (341,479) 2,039,591 Net earnings per share

Net (loss)/profit (341,479) 2,039,591

Weighted Average Number of shares (basic and diluted) 1,527,510 1,527,510 Net (loss)/income per share – (basic and diluted) (0.22) 1.34

Interim IFRS Statement of Comprehensive Income

in CHF (unaudited) 2015 2014

Net (loss)/profit for the year (341,479) 2,039,591

Other comprehensive income:

Items that will not be reclassified to profit or loss

Remeasurements of post employment benefit obligations (444) – Income taxes on remeasurement of post employment benefit obligations 36 –

Total other comprehensive income (408)

Total comprehensive (loss)/income for the year (341,887) 2,039,591

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Interim IFRS Cash Flow

Statement

for the period from January 1st to June 30

in CHF (unaudited) 2015 2014

Operating activities

(Loss)/income before tax (341,719) 2,039,591

Adjustments to reconcile (loss)/profit before tax to net cash flows

Non-Cash:

Defined benefit cost recognised in profit or loss 3,007 –

Interest income (72) (146)

Foreign exchange (gain) on cash and cash equivalents (34,407) (1,515) Unrealized losses/(gains) on financial assets at fair value through profit or loss 19,203 (2,329,731) Realized (gain) on financial assets at fair value through profit or loss – (32,755)

Working capital adjustments

Decrease in other assets 6,419 7,089

Decrease in accounts payable (78,474) (79,813)

Increase in accrued expenses and other liabilities 43,863 51,300

Net cash flows used in operating activities (382,180) (345,980)

Investing activities

Disposal of equity instruments – 149,325

Interest received 72 146

Net cash flows from investing activities 72 149,471

Financing activities

Increase in financial receivables from shareholder – (1,457,463)

Net cash flows used in financing activities (1,457,463)

(Decrease) in cash and cash equivalents (382,108) (1,653,972)

Cash and cash equivalents at the beginning of the year 729,923 2,411,109 Foreign exchange gain on cash and cash equivalents 34,407 1,515

Cash and cash equivalents at the end of the period 382,222 758,652

Cash and cash equivalents consist of:

Cash at banks 382,222 758,652

Short-term deposits – –

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IFRS Cash Flow Statement // IFRS Statement of Changes in Equity

Interim IFRS Statement of

Changes in Equity

in CHF (unaudited) Share

capital premiumShare Treasurystock deficit)/retained (Accumulated earnings

Total equity

Balance as of January 1st, 2013 15,275,100 3,774,508 (3,113) (4,127,705) 14,918,790 Net loss for the year/

Total comprehensive loss – – – (2,362,905) (2,362,905)

Transactions with owner in their capacity as owners

Dividend – – – – –

Sale of treasury shares – – 3,113 (1,584) 1,529

Balance as of December 31st, 2013 15,275,100 3,774,508 (6,492,194) 12,557,414 Net loss for the year/

Total comprehensive loss – – – (2,273,128) (2,273,128) Share capital/share premium set off

against accumulated deficit (2,718,968) (3,774,508) – 6,493,476 –

Transactions with owner in their capacity as owners

Nominal value reduction (1,710,811) – – – (1,710,811)

Balance as of December 31st, 2014 10,845,321 (2,271,847) 8,573,474

Net loss for the period – – – (341,479) (341,479)

Transactions with owner in their capacity as owners

Nominal value reduction – – – – –

Other comprehensive loss for the year – – – (408) (408)

Total comprehensive loss for the year (341,887) (341,887)

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// Note 1 – Changes in accounting

principles

In accordance with International Financial Reporting Standards, the interim financial statements have been prepared using the same accounting policies and methods of computation and valuation as used in the 2014 financial statements and are in compliance with IAS 34 interim financial reporting.

// Note 2 – Fair value of the

invest-ment portfolio

Fair value is determined on the basis of bid prices for actively traded investments and on the basis of fair value models for illiquid investments.

// Note 3 – Exchange Rate

The Company holds assets denominated in currencies other than Swiss Francs, the functional currency. It is therefore exposed to currency risk, as the value of the securities denominated in other currencies will fluctuate due to changes in exchange rates.

The exchange rates used against the CHF were:

2015 2014

USD 0.93400 0.98938

UAH 0.04354 0.06147

GBP 1.46807 1.53675

// Note 4 – Retirement benefit plan

In accordance with IAS 19, an actuarial calculation has been prepared for the Company’s retirement benefit plan as at June 30, 2015. According to the actuarial calculation, the pension plan shows a shortfall of CHF 3,451 as at June 30, 2015. The resulting adjustments are recognized in the statement of income (CHF 3,007) and in the statement of comprehensive income (CHF 444).

Notes to the

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Notes to the IFRS Financial Statements

// Note 5 – Investments

as of June 30, 2015

Financial assets at fair value through profit or loss

Balance as of

January 1st, 2015 Balance as of June 30, 2015

Quantity CHF Quantity CHF

Ukranian Energos/Power Generation Companies

Centrenergo 141,000 64,900 141,000 48,493

Dniproenergo 1,380 56,097 1,380 25,752

Donbasenergo 11,400 22,742 11,400 11,180

Kievenergo 13,400 9,637 13,400 9,217

Zakhidenergo 9,800 83,352 9,800 72,628

Ukrainian Oil & Gas Companies

Ukrnafta 302,701 3,848,573 302,701 3,895,571

Ukrainian Oblenergos/Power Distribution Companies

Cherkasyoblenergo 1,139,044 53,306 1,139,044 31,940

Dniprooblenergo 1,250 4,769 1,250 4,438

Krimenergo 155,000 19,096 155,000 4,470

Volynobelenergo 2,085,000 30,035 2,085,000 25,329 Zhytomyroblenergo 552,204 68,723 552,204 49,010

Total Ukrainian Investments 4,261,230 4,178,028

Other Investments

Gazprom ADR 742,800 3,417,407 742,800 3,562,996

KAZ Minerals 81,517 323,969 81,517 242,378

Total Other Investments 3,741,376 3,805,374

Total financial assets at fair value through profit or loss 8,002,606 7,983,402

// Note 6 – Financial Assets at fair value through profit or loss

in CHF 30.06.2015 31.12.2014

Financial Assets at fair value through profit or loss brought forward 8,002,606 10,289,268

Purchase – –

Sale – (408,418)

Unrealised loss on financial assets at fair value (19,204) (2,018,841) Realised gain on financial assets at fair value – 140,597

Financial Assets at fair value through profit or loss 7,983,402 8,002,606

Listed shares CHF % CHF %

Liquid shares (Level 1 in fair value hierarchy IFRS 13) 7,926,133 99 7,919,265 99 Shares with limited liquidity (Level 3 in fair value hierarchy IFRS 13) 57,269 1 83,341 1

Total 7,983,402 100 8,002,606 100

Ukraine 4,178,028 52 4,261,230 53

Russia 3,562,996 45 3,417,407 43

Kazakhstan 242,378 3 323,969 4

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in CHF 30.06.2015 31.12.2014 Financial Assets at fair value through profit or loss

At fair value

as of January 1st 83,341 127,036

(Loss) in profit or loss (26,072) (43,695)

as of June 30 57,269 83,341

// Management fee

Until December 31st, 2014 the Company, pursuant to an

Investment Management Agreement, conferred invest-ment manageinvest-ment activities on AIL Structured Finance Ltd, Zürich. An annual flat fee of CHF 220,000 was applicable. In early 2015, the Investment Management Agreement was amended and a new CEO was elected by EEII. The Investment Management Agreement has been amended as of the beginning of the year 2015. Since then AIL serves as an advisor to EEII on the basis of a new mandate agreement and the annual fee has been reduced to CHF 175,000.

// Shares

Listed on Swiss Exchange (SWX) on January 21st, 1999

(Valor 716 295). Nominal value: CHF 7.10 (CHF 10.00 until June 20, 2014). In total, 1,527,510 shares have been issued (see capital structure).

// Weekly NAV information

Bloomberg: EEII SW www.eeii.ch

// Capital structure

As of June 30, 2015 the Company’s share capital consisted of 1,527,510 ordinary bearer shares with a nominal value of CHF 7.10 (CHF 10.00 until June 20, 2014) per share (Security No. 716 295/ISIN Code CH007162958). Each share represents one voting right. As per June 30, 2015 Gehold SA, Geneva owned 92.41 % of the outstanding shares of the Company.

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Organization, Related Parties,

Manager and Address

Registered office EEII AG

Alpenstrasse 15 P.O. Box 4853 6304 Zug Switzerland

Manager of the Company

Andres Heusser, CEO

Advisor

AIL Structured Finance Ltd Schaffhauserstrasse 418 8050 Zurich

Switzerland

Team of the Advisor

› Beat Imwinkelried, AIL Structured Finance Ltd › Urs Gerspacher, AIL Structured Finance Ltd

Custodians UBS AG Baarerstrasse 14a 6300 Zug Switzerland PJSC PrivatBank Ukraine Naberezhnaya Peremogy 50 49094 Dnipropetrovs’k Ukraine Administrator

Moore Stephens Zug AG Alpenstrasse 15 P.O. Box 4853 6304 Zug Switzerland Auditor BDO Ltd Fabrikstrasse 50 8031 Zurich Switzerland

For general inquiries

AIL Structured Finance Ltd Schaffhauserstrasse 418 8050 Zurich Switzerland Phone +41 43 299 62 00 Fax +41 43 299 62 12 www.ailsf.ch info@ailsf.ch EEII AG Alpenstrasse 15 P.O. Box 4853 6304 Zug Switzerland Phone +41 41 729 42 80 Fax +41 41 729 42 29 www.eeii.ch

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