1. Ackermans & van Haarenconsiders the family values ofthe founding families to beof paramount importance. Elements such ascontinuity, ethical entrepreneurship, long-term thinking, working with partners andmutual respect have consequently driventhe groups policies for many decades andhave created value through growth.May 15, 2013 Interim statement Q1 2013May 27, 2013 Ordinary general meetingAugust 28, 2013 Half-year results 2013November 15, 2013 Interim statement Q3 2013February 28, 2014 Annual results 2013May 26, 2014 Ordinary general meetingAnnualreport2012Financial calendarAckermans & van Haaren NVBegijnenvest 1132000 Antwerp - BelgiumTel. +32 3 231 87 70info@avh.bewww.avh.beAnnualreport2012

2. Ackermans & van Haarenconsiders the family values ofthe founding families to beof paramount importance. Elements such ascontinuity, ethical entrepreneurship, long-term thinking, working with partners andmutual respect have consequently driventhe groups policies for many decades andhave created value through growth.May 15, 2013 Interim statement Q1 2013May 27, 2013 Ordinary general meetingAugust 28, 2013 Half-year results 2013November 15, 2013 Interim statement Q3 2013February 28, 2014 Annual results 2013May 26, 2014 Ordinary general meetingAnnualreport2012Financial calendarAckermans & van Haaren NVBegijnenvest 1132000 Antwerp - BelgiumTel. +32 3 231 87 70info@avh.bewww.avh.beAnnualreport2012 3. Annual report2012 4. 4Pursuant to the Royal Decree of 14 November 2007 on theobligations of issuers of financial instruments admitted totrading on a Belgian regulated market, Ackermans & vanHaaren is required to publish its annual financial report.This report contains the combined statutory and consolidat-edannualreportoftheboardofdirectorspreparedinaccord-ance with article 119, last paragraph of the Company Code.The report further contains a condensed version of thestatutory annual accounts prepared in accordance witharticle 105 of the Company Code, and the full version ofthe consolidated annual accounts. The full version of thestatutory annual accounts has been deposited with the Na-tional Bank of Belgium, pursuant to articles 98 and 100 ofthe Company Code, together with the annual report of theboard of directors and the audit report.The auditor has approved the statutory and consolidatedannual accounts without qualification. In accordance witharticle 12, 2, 3 of the Royal Decree of 14 November 2007,the members of the executive committee (i.e. Luc Bertrand,Tom Bamelis, Piet Bevernage, Piet Dejonghe, Koen Janssenand Jan Suykens) declare that, to their knowledge:a)the annual accounts contained in this report, whichhave been prepared in accordance with the applicablestandards for annual accounts, give a true view of theassets, financial situation and the results of Ackermans& van Haaren and the companies included in the con-solidation;b) the annual accounts give a true overview of the devel-opment and the results of the company and of the po-sition of Ackermans & van Haaren and the companiesincluded in the consolidation, as well as a descriptionof the main risks and uncertainties with which they areconfronted.The annual report, the full versions of the statutory andconsolidated annual accounts, as well as the audit re-ports regarding said annual accounts are available onthe website (www.avh.be) and may be obtained uponsimple request, without charge, at the following address:Begijnenvest 1132000 Antwerp, BelgiumTel. +32 3 231 87 70Fax +32 3 225 25 33E-mailinfo@avh.be 5. 5ContentsAnnual report 2012Mission statement 72012 at a glance 8Key events 2012 1012 Annual report Message of the chairmen 15Annual report on the statutory annual accounts 18Annual report on the consolidated annual accounts 22Corporate governance statement 30Remuneration report 38Corporate social responsibility 4246 Activity report Group structure 4748 MarineEngineering &InfrastructureDEME 52Algemene Aannemingen Van Laere 56Rent-A-Port 58NMP 5960 Private Banking Delen Investments 64Bank J.Van Breda & C 68ASCO-BDM 7172 Real Estate,Leisure &Senior CareExtensa 76Leasinvest Real Estate 79Financire Duval 82Anima Care 8486 Energy& ResourcesSipef 90Sagar Cements 92Oriental Quarries & Mines 93Max Green 94Telemond Group 9596 Development Capital114 Financial statementsGeneral information regarding the company and the capital 174Annual information 176Appendix Key figures 2012 6. 6 7. 7Positioning ofAckermans & van Haaren an independent and diversified group led by an experienced, multidisciplinarymanagement team based upon a healthy financial structureto support the growth ambitions of theparticipationsMission statementAnnual report 2012Our mission is to create shareholder valuethrough long-term investments in a limited numberof strategic participations with growth potentialon an international level.Long term perspective clear objectives agreed upon with the par-ticipations responsibility of the participations fortheir own financial position strive for annual growth in the profits ofeach participation and in the group as awhole focus on growth sectors in an interna-tional contextProactive shareholder involvement in selecting senior manage-ment and defining long-term strategy permanent dialogue with management monitoring and control of strategic fo-cus, operational and financial discipline active support to management for spe-cific operational and strategic projects 8. 8 The consolidated net result (group share) of Ackermans & van Haaren NV amounts to 167.5 million eurosfor the year 2012. Delen Investments recorded an out-standing result, stimulated by assets un-der management that grew to a recordlevel of 25.9 billion euros at the endof 2012. Bank J.Van Breda & C alsoshowed a strong performance with a 7%growth in volume of client assets. Since itsresult was positively influenced on a one-off basis by negative goodwill in 2011,the net profit contribution is less than inthat year. At the end of 2012, ABK madeuse of the possibility offered by the newlegislation to exit from the Beroepskredietstatute, with only a limited impact on itsequity position. DEME ended the transitional year 2012with a net profit of 89.4 million euros.The results of the second half of the yearshowed a firm recovery. By winning somemajor new contracts in Australia, Africa,the Middle East and in offshore wind,DEMEs order book closed at 3,317 millioneuros. Within the Marine Engineering &Infrastructure segment, Rent-A-Port con-tributed positively thanks to the strongperformance of its Vietnamese opera-tions. The active management of LeasinvestReal Estate allowed its real estate port-folio to grow to 618 million euros at theend of 2012. Increased rental income andthe absence of negative value adjust-ments on the portfolio are reflected in a63% increase in net profit to 20.5 mil-lion euros. The development activities ofExtensa and Groupe Financire Duvalwere adversely affected by difficult mar-ket conditions, leading to a diminishedcontribution to the group result. After the record year 2011 with very highmarket prices, Sipef stands firm thanks tothe increase of the production volumes ofpalm oil and rubber. The contribution from the DevelopmentCapital segment was encumbered in2012 by the non-recurring results of Her-tel. The sale in the second half of 2012 ofthe participation in AR Metallizing con-tributed to the 22.7 million euros capitalgains that were realized in this segment.Breakdown of the consolidated net result(part of the group) - IFRS( mio) 2012 2011 2010Marine Engineering & Infrastructure 51.7 54.6 58.7Private Banking 71.5 88.1 63.6Real Estate, Leisure & Senior Care 3.6 4.5 8.6Energy & Resources 16.4 19.0 16.5Development Capital 6.1 8.6 13.3Result of the participations 149.3 174.8 160.7Capital gains Development Capital 22.7 -0.9 -0.3Result of the participations (incl. capital gains) 172.0 173.9 160.4AvH & subholdings -3.9 -0.9 -0.1Other non-recurrent results -0.6 4.5 0.5Consolidated net result 167.5 177.5 160.82012at a glanceAnnual report 2012The board of directors of Ackermans & vanHaaren proposes to the general meeting ofshareholders of 27 May to increase the divi-dend to 1.67 euros per share. 9. 9Key figures - consolidated balance sheet( mio) 2012 2011 2010Net equity(part of the group - before allocation of profit)2.007,2 1.882,6 1.711,4Net cash position of AvH & subholdings 87,9 73,0 77,7 Marine Engineering & Infrastructure Private Banking Real Estate, Leisure & Senior Care Energy & Resources Development CapitalConsolidated result of the participations(before capital gains of Development Capital)Pro forma turnoverThe pro forma turnover comprises the turnover of all participations held by the AvHgroup, and therefore deviates from the turnover as reported in the legal IFRS consoli-dation. In this pro forma presentation, all (exclusive) control interests are incorporatedin full and the other interests proportionally.Pro forma personnelThe AvH group represented in 2012,through its share in its participations, a turnover of3.3 billion euros and employed approximately18,750 people.Information by segment 3,308 mio 18,7521,1503982881581,3142,5188101,4225,7348,268 10. 10January Anima Care acquires the residential carecentre Rsidence Parc des Princes inAuderghem.February DEME secures a contract for the Wheat-stone project in Australia, worth 916million euros.March MEDCO (DEME 44%) wins a contract forthe New Port Project in Qatar, worth 941million euros. Sofinim sells its 60% stake in AluralBelgium.May DEME launches the self-propelled rockcutter dredger Ambiorix.Financire Duval (Residalya) - Le Clos Saint-Vincent DEME - AmbiorixKey events 2012Annual report 2012June GeoSea (DEME) is awarded a contractfor the Northwind offshore wind turbineproject off the Belgian coast, worth morethan 230 million euros. Anima Care acquires Azur Soins etSant in Braine-LAlleud. AvH increases its stake in Groupe Finan-cire Duval to 41.14%.July Extensa secures planning permission forthe building for the Brussels Departmentof Environment on the Tour & Taxis sitein Brussels. 11. 11September DEME launches the powerful high-techjack-up vessel Innovation. Sofinim sells its 63% (fully diluted) inter-est in AR Metallizing. Leasinvest Real Estate subscribes the realestate certificate for the Knauf shoppingcentre in Luxembourg.November DEME launches the first maintenancevessels of OWA and the cutter dredgerAmazone. NMC acquires the operations in the areaof EPS subfloor foils and thin wall insula-tion of Isomo.January DEME issues a retail bond, which isclosed early. Sofinim announces the sale of itsparticipation in Spano Invest. Sofinim and NPM Capital contributeto a substantial refinancing of Hertelby way of a cash injection.Sipef - Oil palm nursery (North Sumatra)Leasinvest Real Estate - Knauf shopping centre DEME - InnovationDecember Leasinvest Real Estate acquires a primelocation in the centre of Luxembourg City. Anima Care acquires Rsidence Kinkem-pois in Angleur. After obtaining two licences for a potentialexpansion of 19,500 hectares in SouthSumatra, Sipef has already compensatedmore than 2,000 hectares and planted anextra 1,790 hectares in 2012. ABK (Bank J.Van Breda & Co) exists theBeroepskrediet statute.Key events2013 12. 1212Annual report 2012Message of the chairmenAnnual report of the board of directorsCorporate social responsibility 13. Ackermans & van Haaren considers thefamily values of the founding families tobe of paramount importance. Elementssuch as continuity, ethical entrepreneur-ship, long-term thinking, working withpartners and mutual respect haveconsequently driven the groups policiesfor many decades and have created valuethrough growth. 14. 14From left to right: Luc Bertrand, Jacques Delen 15. 15Ladies and gentlemen,Although the actual situation today in Western Europe, the United States and Japan suggests otherwise, the world economy is probablydeveloping faster during this decade than in the previous three decades. A 4.1% growth (Goldman Sachs) is projected for the period from2011 to 2020. In the previous three decades, this growth figure never exceeded 3.5%.What is clearly different is where this growth originates. The share of the BRIC countries in the world economy is expanding. In 2012, thecompanies of our group derived roughly 1/3 of their turnover (3.3 billion euros in total) outside Western Europe. The international activitiesof Ackermans & van Haaren allow our companies to participate in the expansion of international trade outside the traditional industrializedcountries. The success of this strategy should sustain the long-term growth of our group.In the fifth year of the financial crisis, AvH stood its ground very well with a stable result for our participations of 172 million euros in 2012compared to 173.9 million euros in 2011. Although this result was influenced by a number of positive and negative one-off elements, itprovides a solid basis for the anticipated growth during the current financial year. This result also led to an increase in the groups equity tomore than two billion euros, which is an all-time high. The goal of a strong equity without any debt should bolster the groups credibilityin todays difficult economic environment.In the Marine Engineering & Infrastructure segment, the turnover and EBITDA of DEME increased by 8.5% and 17% to 1,915 million euros(1,766 million euros in 2011) and 351 million euros (300 million euros in 2011) respectively. On the other hand, the net profit decreasedto 89.4 million euros (104.1 million euros in 2011), due partially to increased depreciation and financial charges. The record order book ofDEME (3,317 million euros at year-end 2012 compared to 2,404 million euros in 2011) constitutes a solid basis for the current year. Theshift of activities to Australia and the Middle East continues. The Western European operations remain stable. Following the expansion ofthe fleet with 7 vessels in 2012, DEME now has the necessary state-of-the-art and appropriate capacity to execute its order book in themost productive way. The diversification into wind farms, offshore and jack-up vessels, oil and gas, environment, services and concessionsunderscores the companys potential for continuing future growth.Despite the turbulent financial markets, the Private Banking segment of the group experienced a vigorous growth in 2012. JM Finn & Coincluded, the assets under management of Delen Investments grew by 14.6% to 25,855 million euros (22,570 million euros in 2011).The cost-income ratio is highly competitive at 55.2% (38.8% for Delen Private Bank), but increased as expected in relation to the previ-ous year (44.2%) as a result of the consolidation of JM Finn & Co for a full financial year. The group is more than adequately capitalizedand amply satisfies the Basel II and Basel III requirements with respect to equity, with a Core Tier1 capital ratio of 23.1%. The net result ofDelen Investments grew by 9.5% to 62.6 million euros (57.2 million euros in 2011). The financial return for the clients was supported bythe banks prudent management in a more favourable environment. The steady improvement of the results of JM Finn & Co bodes well forthis investment in a new market.Bank J.Van Breda & Coagain showed a strong financial performance in 2012. As a result of the constant inflow of new funds, the client assetsgrew by 7% to 8.0 billion euros (7.5 billion euros in 2011). With the banks targeted policy of focusing on a known clientele of liberal professionalsand entrepreneurs, provisions for loan losses were kept very low (0.08%). The consolidated profit amounted to 27.7 million euros (26.4 millioneuros normalized in 2011). The growth in equity to 427 million euros (395 million euros in 2011) allows the bank to continue its expansion. Witha Core Tier1 capital ratio of 14.2%, Bank J.Van Breda & Coalready satisfies the solvency criteria of Basel III. At year-end 2012, ABK decided to exitfrom Beroepskrediet, which allows it to organize its partnership with Bank J.Van Breda & Coas efficiently as possible.Messageof the chairmenAnnual report 2012 16. 16The Real Estate, Leisure & Senior Care segment again made a diminished contribution of 3.6 million euros to the groups profit, comparedto 4.5 million euros in 2011. This is due to limited project results and delays in land development projects at Extensa. We firmly believethat this is a cyclical rather than structural phenomenon. Leasinvest Real Estate continues to develop its operations on a profitable foot-ing. The management was able to boost the net profit by 63% to 20.5 million euros through a higher rental income and the absence ofnegative value adjustments on the portfolio. Financire Duval and Anima Care are currently bearing the cost of their future growth inthe sector of retirement homes and holiday residences. The groups real estate strategy is focused on realizing a sustainable profit on realestate related service activities of a recurrent nature.The Energy & Resources segment contributed 16.4 million euros to the group result in 2012 (compared to 19 million euros in 2011). Theturnover of Sipef stood at USD 333 million (USD 368 million in 2011), while the net result decreased by 28% to USD 68.4 million com-pared to the record year 2011 (USD 95.1 million). The shrinking demand from China had an adverse impact on the average price of palmoil and rubber (USD 999 and USD 3,377 compared to USD 1,125 and USD 4,823 in 2011). Along with increased production costs, this hascontributed to a decrease in profit in 2012. With an EBITDA of USD 103 million (USD 130 million in 2011), Sipef has the necessary meansto further expand its plantations. The total planted acreage is approximately 65,000 hectares, of which more than 20% has not yet reachedthe production stage. The skills of a highly professional management to develop new plantations at a cost of less than the current marketprice confirm our belief in the continued growth of the added value of this company for our group.Sagar Cements and Oriental Quarries & Mines suffered from the difficult economic situation in India, but the big infrastructurebudgets of the Indian government should shore up our operations in the future. Today, their contribution to the group is not yet mean-ingful. Changes in the Flemish regulations in the area of renewable energy have a substantial impact on the results of Max Green andmarkedly increase the risks in new projects. At Telemond Group, which specializes in welded steel structures in Poland, the turnover andEBITDA increased further to 74.3 million euros (64.4 million euros in 2011) and 7.4 million euros (3.4 million euros in 2011) respectively.Further growth is expected for 2013.As far as Development Capital is concerned, a result including capital gains of 28.8 million euros was recorded. The recurring result(AvH share) of the portfolio companies amounted to 6.1 million euros, including a negative contribution of 11 million euros at Hertel.Hertels result was once again affected by certain heavy loss-making activities in Kazakhstan, France and Australia. The accompanyingrestructuring operations and impairments led to a highly negative result of 33 million euros at Hertel (-21.8 million euros in 2011). A newmanagement team has taken over and the balance sheet was recapitalized at the beginning of 2013 with 75 million euros (37.5 million eu-ros Sofinim). We are confident that this has helped to restore the balance sheet ratios and that it will also lead to a recovery in profitability.The importance of a professional management team was highlighted once more by the turnaround at AR Metallizing, which enabledthe sale in 2012 with a capital gain of 20.6 million euros. In line with the strategy of this segment in terms of focus on bigger portfoliocompanies, the interest in Alural Belgium was also sold at a slight profit. An earn-out was realized on the sale of Engelhardt Druck. Theagreement for the sale of Spanogroup was recently (March 2013) confirmed and, if approved by the competition authorities, is expectedto yield a substantial capital gain in 2013.The strategy of the group in the direction of a further growth of the larger companies in the Development Capital segment continues. In2012, the adjusted net asset value of this segment increased further to 481 million euros (452 million euros at year-end 2011).Annual report 2012 17. 17In the course of 2012, the net cash position of the group increased slightly from 73.0 million euros to 87.9 million euros. The growth of thegroups equity from 1.883 million euros to 2.007 million euros and the favourable outlook for the current financial year of Ackermans &van Haaren inspired the board of directors to propose an increase in the gross dividend from 1.64 euros per share to 1.67 euros per share.We would like to thank all the staff members of the group for their efforts and resilience in a difficult economic environment.27 March 2013Luc BertrandPresident of the executive committeeJacques DelenPresident of the board of directors 18. 18IStatutory annualaccounts1. Share capital andshareholding structureNo changes were made to the companysshare capital during the last financial year.The share capital amounts to 2,295,278euros and is represented by 33,496,904no-nominal-value shares. All shares havebeen paid up in full.In 2012, 47,000 new options were grantedunder the stock option plan. As at 31 De-cember 2012, the options granted and notyet exercised entitled their holders to acquirean aggregate of 353,000 Ackermans & vanHaaren shares (1.05%).The company received a transparency no-tice on 31 October 2008 under the tran-sitional regulations of the Act of 2 May2007, whereby Scaldis Invest NV - togetherwith Stichting Administratiekantoor HetTorentje - communicated its holding per-centage. The relevant details of this trans-parency notice can be found on the websiteof the company (www.avh.be).2. ActivitiesFor an overview of the groups main activi-ties during the 2012 financial year, pleaserefer to the Message of the chairmen (p. 15).3. Comments on the statutoryannual accounts3.1 Financial situation asat 31 December 2012The statutory annual accounts have beenprepared in accordance with Belgian ac-counting principles.The balance sheet total at year-end 2012amounted to 2,424 million euros, which isvirtually the same as the previous year (2011:2,426 million euros). Besides the 12 millioneuros in tangible fixed assets on the balancesheet (primarily the office building locatedon Begijnenvest and Schermersstraat in Ant-werp), the assets consist of 50 million eurosin investments and 2,348 million euros infinancial fixed assets.Unlike in 2011, which was characterizedby a substantial portfolio growth followingthe liquidation of the subsidiary NationaleInvesteringsmaatschappij, the portfolio un-derwent only minor changes in 2012. Thelargest investments in 2012 were the ad-ditional investments by Ackermans & vanHaaren in Anima Care and Holding GroupeDuval. Since Ackermans & van Haaren soldno participations to speak of in 2012, virtu-ally no capital gains were realized. The verysubstantial capital gain that was reported in2011 originated from the liquidation of theNationale Investeringsmaatschappij and wasnot in the least recurrent.On the liabilities side of the balance sheet,the dividend payment of 56 million eurosAnnual reportof the board of directorsAnnual report 2012Dear shareholder,It is our privilege to report to you on the activities of our company during the past financial year and to sub-mit to you for approval both the statutory and consolidated annual accounts closed on 31 December 2012.In accordance with Article 119 of the Companies Code, the annual reports on the statutory and consoli-dated annual accounts have been combined. 19. 19and the profit for the financial year of 40million euros caused the shareholders equi-ty to decrease to 1,639 million euros (2011:1,655 million euros). In 2012, too, the short-term financial debts consisted for the mostpart of financial liabilities incurred by AvHCoordination Center, a company that is anintegral part of the group and which fulfilsthe role of internal bank for the group. Theother liabilities already include the profitdistribution for the 2012 financial year thatis being proposed to the ordinary generalmeeting. As a result of the dividends re-ceived, the financial year closed with a profitamounting to 40 million euros.Including the profit distribution proposalsubmitted to the annual general meetingon 27 May 2013, the statutory sharehold-ers equity of Ackermans & van Haaren atthe end of 2012 stood at 1,639 million eurosas compared to 1,655 million euros at theend of 2011. This amount does not includeunrealised capital gains present in the port-folio of Ackermans & van Haaren and groupcompanies.In the course of 2012, Ackermans & vanHaaren did not purchase own shares andsold 13,500. These transactions are purelyrelated to the implementation of the stockoption plan.3.2 Appropriation of the resultsThe board of directors proposes to appropri-ate the result (in euros) as follows:Profit fromthe previous financial yearcarried forward1,480,698,020Profit of the financial year 40,121,506Total for appropriation 1,520,819,526Allocation to the legalreserve0Allocation to thenon-distributable reserves0Allocation to thedistributable reserves0Dividends 55,939,830Directors fees 277,500Profit to be carriedforward1,464,602,196The board of directors proposes to distrib-ute a gross dividend of 1.67 euros per share.After deduction of withholding tax, the netdividend will amount to 1.2525 euros pershare.If the annual general meeting approves thisproposal, the dividend will be payable from3 June 2013. From that day onwards, hold-ers of bearer shares can present themselvesto Bank Delen, Bank J.Van Breda & C, BankDegroof, BNP Paribas Fortis, KBC Bank, INGBelgium, Belfius Bank and Petercam and willreceive the dividend against presentation ofcoupon no. 14.Following this distribution, shareholders eq-uity will stand at 1,638,622,063 euros andwill be composed as follows:Capital- Subscribed capital 2,295,278- Issue premium 111,612,041Reserves- Legal reserve 248,081- Non-distributable reserves 16,259,805- Tax-exempt reserves 0- Distributable reserves 43,604,663Profit carried forward 1,464,602,196Total 1,638,622,0633.3 OutlookAs in previous years, the results for the cur-rent financial year will to a large extent de-pend on the dividends paid by the compa-nies within the group and on the realizationof any capital gains or losses.4. Major events afterthe closing of the financial yearSince the closing of the 2012 financial year,there have been no major events whichcould have a significant impact on the de-velopment of the company, except thosereferred to under II.3 below.5. Research and developmentThe company did not undertake any activi-ties in the area of research and development. 20. 206. Financial instrumentsCompanies within the group may use fi-nancial instruments for risk managementpurposes. Specifically, these are instrumentsprincipally intended to manage the risksassociated with fluctuating interest and ex-change rates. The counterparties in the re-lated transactions are exclusively first-rankedbanks. As at the end of 2012, neither Acker-mans & van Haaren nor any other fully con-solidated group company within the AvH &sub-holdings segment had any such instru-ments outstanding.7. Notices7.1 Application of Article 523 ofthe Companies CodeExtract from the minutes of the meeting ofthe board of directors of Ackermans & vanHaaren held on 13 November 2012:Mandate for granting stock optionsBefore the board of directors starts delibera-tions on the granting of stock options, LucBertrand declares that he, as a beneficiary ofthe stock option plan, has a direct interest ofa proprietary nature which conflicts with theproposed resolution within the meaning ofArticle 523 of the Companies Code.Pursuant to Article 523 of the CompaniesCode, Luc Bertrand states that he will informthe company auditor of the conflict of inter-est after this meeting. Luc Bertrand leavesthe meeting and does not take part in thedeliberations or decision-making concerningthis item.Based on the recommendations of the re-muneration committee, the board of di-rectors decides to grant, under the currentstock option plan, Jacques Delen and LucBertrand, each acting separately, special au-thorization to offer a maximum of 50,000options on Ackermans & van Haaren sharesto the members of the executive committeeand certain members of staff and independ-ent service providers of Ackermans & vanHaaren and Sofinim.The offering of the options is to take placeon 2 January 2013 and, as in previous years,the exercise price will be determined basedon the average price of the share during the30 days preceding the offer.As it is the policy of the company to hedgethe stock options through the purchase ofown shares, the proprietary consequencesfor the company are in principle limited to (i)the interest borne or lost during the periodrunning from the purchase of the shares totheir resale to the option holders, (ii) any dif-ference between the purchase price of ownshares and the exercise price of the optionsgranted, and (iii) the accounting cost whichin pursuance of IFRS 2 must be shown in theincome statement and which has an impacton the result per share.Luc Bertrand rejoins the meeting.7.2 Additional remunerationfor the auditorPursuant to Article 134, 2 and 4 of theCompanies Code, we inform you that an ad-ditional fee of 17,980 euros (excluding VAT)was paid to Ernst & Young Tax Consultantsfor tax advice and 5,750 euros (excludingVAT) to Ernst & Young Bedrijfsrevisoren fordiverse activities.7.3 Acquisition and transfer ofown sharesOn 25 November 2011, the extraordinarygeneral meeting authorized the board ofdirectors of Ackermans & van Haaren to ac-quire own shares within a well-defined pricerange during a period of 5 years.In the course of the 2012 financial year,Ackermans & van Haaren did not acquire ad-ditional own shares to cover its obligationsunder the stock option plan.Annual report 2012 21. 21Taking into account the sale of 13,500shares pursuant to the exercising of options,the situation as at 31 December 2012 wasas follows:Number oftreasury shares304,200 (0.91%)Par value per share 0.07 eurosAverage price pershare53.34 eurosTotal investmentvalue16,225,052 eurosIn addition, Brinvest, a direct subsidiary ofAckermans & van Haaren, holds another51,300 shares of Ackermans & van Haaren.7.4 Notice pursuant to the lawon takeover bidsIn a letter dated 18 February 2008, ScaldisInvest sent a notice to the company in ac-cordance with Article 74, 7 of the Act of1 April 2007 on takeover bids. From thisnotice, it appeared that Scaldis Invest ownsover 30% of the securities with voting rightsin Ackermans & van Haaren and that Sticht-ing Administratiekantoor Het Torentje ex-ercises ultimate control over Scaldis Invest.7.5 Protection schemes(i) Powers of the management bodyOn 25 November 2011, the extraordinarygeneral meeting renewed the authorizationof the board of directors to proceed, in caseof a takeover bid for the securities of Acker-mans & van Haaren, to a capital increase inaccordance with the provisions and withinthe limits of Article 607 of the CompaniesCode.The board of directors is allowed to usethese powers if the notice of a takeover bidis given by the Financial Services and Mar-kets Authority (FSMA) to the companynot later than three years after the date ofthe abovementioned extraordinary generalmeeting. The board of directors is also au-thorised for a period of three years expiringon 14 December 2014 to acquire or transfershares of the company in the event that suchaction is required in order to safeguard thecompany from serious and imminent harm.(ii) Important agreementsThe shareholders agreement with respectto DEME NV which the company conclud-ed on 22 March 2007 with Aannemings-maatschappij CFE NV (CFE) grants specificrights to the latter in the case of a change oracquisition of direct control over Ackermans& van Haaren. These rights essentially meanthat in such case CFE has the option of ter-minating the shareholders agreement. 22. 22II Consolidated annualaccounts1. Risks and uncertaintiesThis section describes, in general terms, therisks facing Ackermans & van Haaren NV(AvH) as an international investment com-pany, and the operational and financial risksassociated with the different segments inwhich it is active (either directly or indirectlythrough its subsidiaries).The executive committee of AvH is respon-sible for the preparation of a framework forinternal control and risk management whichis submitted for approval to the board of di-rectors. The board of directors is responsiblefor the evaluation of the implementationof this framework, taking into account theevaluation carried out by the audit commit-tee. At least once a year the audit committeeevaluates the internal control systems whichthe executive committee has set up in orderto ascertain that the main risks have beenproperly identified, reported and managed.The subsidiaries of AvH are responsible forthe management of their own operationaland financial risks. Those risks, which varyaccording to the sector, are not centrallymanaged by AvH. The management teamsof the subsidiaries in question report to theirboard of directors or audit committee ontheir risk management.Risks at the level of Ackermans& van HaarenStrategic riskThe objective of AvH is to create shareholdervalue by long-term investment in a limitednumber of strategic participations. The avail-ability of opportunities for investment anddivestment, however, is subject to macro-economic, political, social and market condi-tions. The achievement of the objective canbe adversely affected by difficulties encoun-tered in identifying or financing transactionsor in the acquisition, integration or sale ofparticipations.The definition and implementation of thestrategy of the group companies is also de-pendent on this macroeconomic, political,social and market context. By focusing asa proactive shareholder on long-term valuecreation and on the maintenance of opera-tional and financial discipline, AvH endeav-ours to limit those risks as much as possible.In several group companies, AvH workstogether with partners. In certain groupcompanies, AvH has a minority stake. Thediminished control which may result fromthat situation could lead to relatively greaterrisks; however, this is counterbalanced by aclose cooperation and by an active represen-tation on the board of directors of the com-panies concerned.Risk related to the stockmarket listingAs a result of its listing on NYSE EuronextBrussels, AvH is subject to a whole series ofregulations regarding information require-ments, transparency reporting, takeoverbids, corporate governance and insidertrading. AvH pays the necessary attentionto keeping up and complying with the con-stantly changing laws and regulations in thisarea.The volatility of the financial markets has animpact on the value of the share of AvH (andof some of its listed group companies). Aswas mentioned earlier, AvH seeks to system-atically create longterm shareholder value.Short-term share price fluctuations and thespeculation associated with this can producea momentarily different risk profile.Annual report 2012 23. 23Liquidity riskAvH has sufficient resources at its disposalto implement its strategy and has no netfinancial debts. The subsidiaries are respon-sible for their own debt financing, it beingunderstood that, in principle, AvH does notextend credit lines or securities to or for thebenefit of its participations.The external financial debts of AvH & sub-holdings virtually correspond to the treas-ury bonds issued by AvH (commercial paperprogramme). AvH has confirmed credit linesfrom different banks with which it has along-term relationship, such credit lines am-ply exceeding the outstanding commercialpaper obligations.The board of directors believes that the li-quidity risk is fairly limited.Risks at group company levelMarine Engineering &InfrastructureThe operational risks of this segment areessentially associated with the executionof often complex projects and are, amongother things, related to the technical designof the projects and the integration of newtechnologies; the setting of prices for ten-ders and, in case of deviation, the possibil-ity or impossibility of hedging against extracosts and price increases; performance obli-gations (in terms of cost, conformity, quality,turnaround time) with the direct and indirectconsequences associated therewith, and thetime frame between quotation and actualexecution. In order to cope with those risks,the different group companies work withqualified and experienced staff. In principle,AvH is only involved in strategic decisionsat the level of the board of directors and inthe selection of the top management of theDEME group rather than in the managementof the operational risks mentioned above.The construction and dredging sector is typi-cally subject to economic fluctuations. Themarket of large traditional infrastructuraldredging works is subject to strong cyclicalfluctuations on both the domestic and inter-national markets. This has an impact on theinvestment policy of private sector custom-ers (e.g. oil companies or mining groups)and of local and national authorities. DEMEis to a significant degree active outside theeuro zone. Consequently, it runs not only acurrency exchange risk, but in some casesalso a political risk. DEME hedges againstexchange rate fluctuations or sells foreigncurrency futures. Certain commodities orraw materials, such as fuel, are hedged aswell.Given the size of the contracts in thissegment, the credit risk is closely moni-tored too. For the purposes of large foreigncontracts, for instance, DEME regularly usesthe services of the Office national du du-croire/Nationale Delcrederedienst (ONDD- Belgiums national delcredere office) in-sofar as the country concerned qualifiesfor this service and the risk can be cov-ered by credit insurance. For largescaleinfrastructural dredging contracts, DEMEis dependent on the ability of custom-ers to obtain financing and can, if neces-sary, organize its own project financing.Van Laere bills and is paid as the works pro-gress. As far as NMP is concerned, the riskof discontinuity of income is estimated to befairly limited, since it has long-term transportcontracts with large national and interna-tional petrochemical firms.The liquidity risk is limited by spreadingthe financing over several banks and byconsolidating this financing to a significantextent over the long term. DEME continu-ously monitors its balance sheet structureand pursues a balance between a consoli-dated shareholders equity position and con-solidated net debts. DEME has major creditand guarantee commitments with a wholestring of international banks. In a number ofcases, certain ratios (covenants) were agreedin the loan agreements with the relevantbanks which DEME must observe. In addi-tion, it has a commercial paper programmeto cover short-term financial needs. DEMEpredominantly invests in equipment witha long life which is written off over severalyears. For that reason, DEME seeks to sched-ule a substantial part of its debts over a longterm. Om bovendien In order to diversify thefunding over several sources, DEME issueda retail bond of 200 million euros in Janu-ary 2013. This was placed with a diversifiedDEME 24. 24group of (mainly private) investors. Accor-ding to the terms of issue, DEME will notmake any interim redemptions of the princi-pal, but will instead repay everything on thematurity date in 2019.Private BankingThe credit risk and risk profile of the invest-ment portfolio have for many years nowbeen deliberately kept very low by DelenPrivate Bank and Bank J.Van Breda & C.The banks invest in a conservative manner.In the case of Delen Private Bank, lendingto customers is limited and is guaranteed bypledges on securities. The credit portfolio ofBank J.Van Breda & C is very widely spreadamong a client base of local entrepreneursand professionals, and credit is granted tothis target group of clients. The bank appliesconcentration limits per sector and maxi-mum credit amounts per client.Bank J.Van Breda & C adopts a cautiouspolicy with regard to interest rate risk,well within the standards set by the NBB.Where the terms of assets and liabilities donot match sufficiently, the bank deployshedging instruments (a combination of in-terest rate swaps and options) to correctthe balance. The interest rate risk at DelenPrivate Bank is limited, due to the fact thatit primarily focuses on asset management,with very limited lending and without takingpositions.The exchange rate risk at Delen Invest-ments is limited to the holdings in foreigncurrency (Delen Suisse & JM Finn & Co). Atpresent, the net exposure in pound sterlingis limited since the impact of exchange ratefluctuations on the equity of JM Finn & Co isneutralized by an opposite impact on the li-quidity obligation on the remaining 26.51%in JM Finn & Co.The liquidity and solvency risk of thebanks is continuously monitored by a proac-tive risk management. Furthermore, the twogroups have more than sufficient liquid as-sets to meet their commitments, as well assound Core Tier1 equity ratios.Both banks are adequately protected againstbusiness risk or income volatility risk. Theoperating charges of Delen Private Bank areamply covered by the regular income, whilein the case of Bank J.Van Breda & C theincome from relationship banking is highlydiversified in terms of clients as well as ofproducts.Since Delen Investments does not manage ashare portfolio of its own, the direct marketrisk is limited to open overnight positionsfor securities purchased or sold for clientsand not yet settled. The (indirect) risk that aprolonged stock market decline impairs thebanks assets under management is counter-balanced by a solid cost/income ratio for De-len Investments, so that the group continuesto be profitable even in the event of a sharpstock market decline.Real Estate, Leisure &Senior CareThe operational risks in the real estatesector can be classified according to thedifferent stages in the process. A first cru-cial element is the quality of the offering ofthe right buildings and services. In addition,long-term lease contracts with solvent ten-ants are expected to guarantee the highestpossible occupancy rate of both buildingsand services and a recurrent flow of income,and should limit the risk of non-payment. Fi-nally, the renovation and maintenance risk isalso continuously monitored.The real estate development activity is sub-ject to strong cyclical fluctuations (cyclicalrisk). Development activities for office build-ings tend to follow the conventional eco-nomic cycle, whereas residential activitiesrespond more directly to the economic situa-tion, consumer confidence and interest ratelevels. Extensa Group is active in Belgiumand Luxembourg (where the main focus ofits activity lies) as well as in Turkey, Romaniaand Slovakia, and is therefore subject to thelocal market situation. However, the spreadof its real estate operations over differentsegments (e.g. residential, logistics, offices,retail) limits this risk.The exchange risk is very limited becausemost operations are situated in Belgium andLuxembourg, with the exception of Extensasoperations in Turkey (risk linked to the USDand the Turkish lira) and in Romania (risklinked to the RON). Leasinvest Real EstateAnnual report 2012Bank J.Van Breda & C - Sint Niklaas Delen Private Bank 25. 25and Extensa Group possess the necessarylong-term credit facilities and backup linesfor their commercial paper programme tocover present and future investment needs.Those credit facilities and backup lines serveto hedge the financing risk. The liquidityrisk is limited by having the financing spreadover several banks and by diversifying theexpiration dates of the credit facilities overthe long term.The hedging policy for the real estate opera-tions is aimed at confining the interest raterisk as much as possible. To this end, variousfinancial instruments such as spot & forwardinterest rate collars, interest rate swaps andCAPs are employed.Energy & ResourcesThe focus of this segment is on businessesin growth markets, such as India, Indonesiaand Poland. Since the companies concernedare to a great extent active outside the eurozone (Sagar Cements and Oriental Quar-ries & Mines in India, Sipef in Indonesia andPapua New Guinea among others), the cur-rency exchange rate risk (on the balancesheet and in the income statement) is morerelevant here than in the other segments.The risk of fluctuations in the local economicand political situation must be taken intoaccount as well.The output volumes and therefore theturnover and margins realized by Sipef are tosome extent influenced by climatic conditi-ons such as rainfall, sunshine, temperatureand humidity.Finally, the group is in this segment also ex-posed to fluctuations in raw material prices(e.g. Sipef: palm oil, rubber and tea; SagarCements: coal).Development CapitalAvH makes venture capital available to a lim-ited number of companies with internationalgrowth potential. The investment horizon ison average longer than that of the tradition-al players on the development capital mar-ket. The investments are usually made withconservative debt ratios, with in principle noadvances or securities being granted to orfor the benefit of the group companies con-cerned. In addition, the diversified nature ofthese investments contributes to a balancedspread of the economic and financial risks.As a rule, AvH will finance those investmentswith shareholders equity.The economic situation has a direct impacton the results of the groups companies, par-ticularly in the case of the more cyclical orconsumer-driven companies. The fact thatthe activities of the group companies arespread over different segments affords apartial protection against the risk.Each group company is subject to specificoperational risks such as price fluctuationsof services and raw materials, the ability toadjust sales prices, competitive risks, etc. Thecompanies monitor those risks themselvesand can try to limit them by operational andfinancial discipline and by strategic focus.Monitoring and control by AvH as a proac-tive shareholder also play an important partin that respect.Several of the groups companies (e.g.Hertel, Manuchar) are to a significant extentactive outside the euro zone. The exchangerate risk in each of these cases is monitoredand controlled by the group company itself.Extensa - Tour & Taxis Sipef 26. 262. Comments on theconsolidated annual accountsThe consolidated annual accounts wereprepared in accordance with InternationalFinancial Reporting Standards (IFRS).The groups consolidated balance sheet totalas at 31 December 2012 amounted to 6,759million euros, which is an increase of 4%compared to the figure for the end of 2011(6,517 million euros). This balance sheet to-tal is obviously impacted by the manner inwhich certain group companies are includedin the consolidation.The accounting principles used remained un-changed from those applied to the accountsfor 2011. Shareholders equity (group share)at the end of 2012 was 2,007 million euros,which represents an increase of 125 millioneuros compared to the figure for the end of2011. In June 2012, AvH paid out a grossdividend of 1.64 euros per share, resultingin a decrease in equity by 54.3 million euros.In the course of 2012, investments amount-ed to 51 million euros, while divestmentsreached 65 million euros. Apart from somesmaller investments, an additional 26.1 mil-lion euros was invested in Hertel; the capi-tal of Anima Care was further paid up, inan amount of 8.4 million euros, in orderto finance the expansion of the retirementhome portfolio, and AvH increased its stakein Groupe Financire Duval by 1.96% to41.14%. AvH further streamlined its portfo-lio with the sale of its interests in Alural Bel-gium (60% through Sofinim), AR Metallizing(63% through Sofinim), Gulf Lime (35%),and the sale of 2% of its interest in Koffie F.Rombouts (remaining interest 12%).The net cash position of Ackermans & vanHaaren stood at 87.9 million euros at theend of 2012, compared with 73.0 millioneuros at the end of 2011.An (economic) breakdown of the results forthe groups various activity segments is setout in the Key Figures appendix to the an-nual report.Marine Engineering & Infrastructure.DEMEs profit contribution decreased in2012 despite an increase in turnover and avery solid order book. Rent-A-Port contrib-uted positively thanks to the strong perfor-mance of its Vietnamese operations.Despite the persistent economic slowdownin large parts of the world, DEME (AvH50%) managed to increase its turnover in2012 to 1,915 million euros (compared to1,766 million euros in 2011) thanks to awell-filled order book (3,317 million euroscompared to 2,404 million euros at the endof 2011) and a strategy that is resolutely fo-cused on a balanced spread of its activities,coupled with a multidisciplinary approach tomarkets and customers.The traditional dredging activities in 2012represented 65% of DEMEs turnover. Theancillary activities, such as environmentalworks, services to the oil, gas and miningindustry, extraction of construction aggre-gates at sea, and the construction of off-shore wind farms, together accounted forthe remaining 35% of turnover. GeoSea andTideway in particular, which specialize inmaritime and offshore construction works,witnessed a spectacular growth as a resultof the rapidly growing renewable energymarket and developments in the oil and gasindustry.The EBITDA increased from 300 million eu-ros in 2011 to 351 million euros, whereasthe net result decreased to 89.4 millioneuros due to higher depreciation expensesresulting from the expansion of the fleet, aswell as increased financial costs.The order book contains a fair number ofnew orders from across all continents. Theseinclude some strategic contracts which thegroup won for the construction of port andoil & gas infrastructures in Australia and thePersian Gulf. MEDCO (DEME 44%) signedthe New Port Project in Qatar (total value941 million euros), and the Wheatstone LNGproject of Chevron in Australia (total value916 million euros) was approved. In addi-tion, GeoSea was awarded a contract for theconstruction and installation of the founda-tions for the Northwind offshore wind tur-bine project off the Belgian coast (turnoverin excess of 230 million euros).In 2012, DEME concluded its ambitious in-vestment programme for the period 2008-Annual report 2012DEME - Thornton Bank 27. 272012, and seven new vessels were launchedand put into service: the backhoe dredgerPeter the Great, the DP2 jack-up vesselNeptune, the rock cutter dredger Am-biorix (28,000 kW), the state-of-the arthigh-tech jack-up vessel Innovation, twomaintenance vessels Arista and Aquata,and finally the seagoing cutter dredgerAmazone (12,860 kW). With these vessels,the group has one of the most advanced, ef-ficient and versatile fleets in the world.Targeted commercial efforts enabledAlgemene Aannemingen Van Laere(AvH 100%) to realize in 2012 anothersignificant increase in turnover (161 millioneuros, +17% compared to 2011). Severalprojects were successfully implemented,such as the State Archives in Bruges, theJetair-Tui hangar at Brussels Airport, andthe Genzyme project in Geel. The net re-sult, however, decreased (1.2 million euroscompared to 1.7 million euros in 2011)due to the extremely competitive market,some difficult sites and the start-up costsof the parking company Alfa Park. The or-der book amounted to 131 million eurosat the end of the year, which bodes wellfor 2013.Bank (17,884 million euros) and JM Finn(7,971 million euros) contributed to thisgrowth of 14.6% compared to the end of2011 (22,570 million euros). The group pri-marily benefited from a major organic netgrowth, with an inflow of new assets fromboth existing and new private clients, as wellas from the impact of recovering financialmarkets on its client portfolio. The grossoperating income of Delen Investments in-creased to 214.8 million euros (2011: 162.5million euros), primarily thanks to the higherlevel of assets under management andthe recognition of JM Finn & Co for a fullyear (2011: three months). The cost - in-come ratio remained highly competitive at55.2% (38.8% for Delen Private Bank), butincreased substantially as expected in com-parison to the previous year (44.2%), as aresult of the consolidation of JM Finn for afull financial year. The net profit amountedto 62.6 million euros (57.2 million euros in2011). The consolidated equity of Delen In-vestments (group share) at the end of 2012stood at 414.5 million euros (364.3 millioneuros at the end of 2011). The group ismore than adequately capitalized and am-ply satisfies the Basel II and Basel III criteriawith respect to equity. The Core Tier I capi-2012 was a breakthrough year for Rent-A-Port (AvH 45%) in several respects,particularly in Vietnam, Oman and Qatar.The project in the industrial zone of DinhVu (Vietnam) is a success and will probablybe extended to 1,500 ha of industrial land.Negotiations for this project are expectedto be completed in the course of 2013. InDecember, a key contract was signed inOman between the Omani governmentand Consortium Antwerp Port for theconcession of the port and industrial es-tates of Duqm for a 30-year period. Rent-A-Port realized a net profit in 2012 of 12.3million euros.Private Banking. The solid performanceof Delen Investments and Bank J.Van Breda& C has raised the volume of assets undermanagement to a record level. The profitcontribution of this segment is less than in2011 due to a one-off negative goodwillwhich at the time was recognized in the re-sults.The assets under management of theDelen Investments (AvH 78.75%) groupattained a record high of 25,855 million eu-ros at the end of 2012. Both Delen PrivateDEME - Aquata Van Laere - Leopold III tunnel (Brussels) 28. 28tal ratio stood at 23.1% and remained wellabove the industry average, taking into ac-count the acquisition of the stake in JM Finnand the long-term commitment to buy outminority shareholders in JM Finn.Bank J.Van Breda & C (AvH 78.75%)again showed a strong financial performancein 2012. As a result of a constant inflowof funds, the total client assets (incl. ABK)grew by 7% to 8.0 billion euros (2011: 7.5billion euros, 7 months ABK), of which 3.4billion euros client deposits and 4.6 billioneuros entrusted funds. After a 20% volumegrowth in 2011, client deposits stagnated in2012. The 14% increase in entrusted fundsis due to the inflow of additional funds andthe excellent financial performance of theassets under management. Of these, 2.5 bil-lion euros is managed by Delen Private Bank.Aslo the loan volume from the banking coreclients increased further to 2.9 billion euros,while provisions for loan losses remainedvery low (0.08%).The consolidated net profit for 2012amounted to 27.7 million euros, comparedto the normalized net result of 26.4 millioneuros in 2011. The cost - income ratio stoodat 58% (61% in 2011). The consolidatedequity (group share) increased from 395.0million euros to 427.3 million euros. Thisequity solidifies the banks position to sus-tain its steady growth on a sound financialfooting. Furthermore, the bank already sat-isfies the solvency criteria which the Basel IIIagreement will implement, with a financialleverage (assets-to-equity ratio) of 9 and aCore Tier 1 capital ratio of 14.2%.At the end of 2012, ABK took the opportu-nity to exit from the Beroepskrediet statute,subject to payment of an extraordinary con-tribution of 60.1 million euros, with only alimited impact on its equity position. This en-ables it to roll out the strategy of asset man-ager in a more flexible way and to organ-ize the partnership between ABK and BankJ.Van Breda & C as efficiently as possible.Real Estate, Leisure & Senior Care. Theactive management of Leasinvest Real Estateled to a growth of its real estate portfolioand net profit. The development activities ofExtensa and Groupe Financire Duval, how-ever, had a negative impact on the contribu-tion to the group results.Due to the delay of various permits and thepoor economic climate in Romania, Extensa(AvH 100%) made a loss in 2012 of 5.3 mil-lion euros, of which 3.2 million euros in im-pairments and exchange losses.The group sold some land at a profit andsuccessfully continued the sale of its prop-erty developments in Roeselare, Hasselt andIstanbul. In Wallonia, Extensa is actively in-volved in three real estate promotion pro-jects, which will contribute to the resultswithin a few years.The permit for the construction of a pas-sive office building on the Tour & Taxis site(Extensa 50%) in Brussels was obtained inJuly 2012, and construction works have be-gun. The building will be completed in 2014along with a new public car park. Construc-tion works on the Grossfeld site in Luxem-bourg (Extensa 50%) couldnt start yet,which meant that the projected results couldnot be realized in 2012.Strategically, 2012 was a crucial year forLeasinvest Real Estate (LRE, AvH 30.01%).Firstly, significant investments made theGrand Duchy of Luxembourg the main in-vestment market for LRE (53% of the realestate portfolio, compared to 47% in Bel-gium); secondly, the share of retail increasedsubstantially in the split of the portfolio bytype of building (offices 47%, retail 29%,and logistics 24%).The fair value of this real estate portfolio, in-cluding project developments, stood at 618million euros at the end of the year (com-pared to 504 million euros at 31/12/2011).This 22.5% increase is primarily the resultof the investments in the Knauf shoppingcentre, the Rix Hotel (both in Luxembourg),and the State Archives in Bruges. As a resultof these major investments, rental income in2012 increased to 38 million euros (36.6 mil-lion euros at the end of 2011).As a result of the new (re)lettings and thefully let investments, the average duration ofthe portfolio increased to 4.9 years and theoccupancy rate rose from 92.57% (2011) tonearly 95%. In June, 100% of the logisticalpremises of Canal Logistics (Brussels) wereoccupied as a result of new lettings; in De-cember, a major lease and services agree-ment was concluded for 2,300 m in thebuilding The Crescent (Anderlecht), raisingits occupancy rate to 62.5%.The rental yield, calculated on the fair value,was 7.30% at 31/12/2012 (2011: 7.23%),and the debt ratio increased to 56.19%(47.29% at 31/12/2011). Leasinvest RealEstate ended 2012 with a higher net resultof 20.5 million euros (2011: 12.6 million eu-ros), thanks to increased rental income andthe absence of negative value adjustmentson the portfolio.Groupe Financire Duval (AvH 41.14%)realized a lower net result in 2012 (3.9 mil-lion euros compared to 6.6 million euros in2011), despite a substantial increase (+19%)in turnover to 514 million euros. The pro-motion activities witnessed a delay in thepermitting procedure for certain projects, aswell as exceptional losses in project manage-ment. The exploitation activities (Odalys holi-day parks, Rsidalya retirement homes, andNGF golf) continue to make the biggest andfairly constant contribution to the operatingresults of the Duval group.Energy & Resources. After the record year2011 with very high market prices, Sipefstands firm thanks to the increase of theproduction volumes of palm oil and rubber.Plantation group Sipef (AvH 26.69%) real-ized rising production volumes in 2012 forthe four basic products palm oil, rubber, teaand bananas. This growth is attributable tofavourable weather conditions, greater ma-Annual report 2012 29. 29turity of the plantations, and newly devel-oped acreage.A lower demand for palm oil from Chinaand the biofuel industry, combined withhigher production volumes in the main pro-ducing countries, resulted in higher stocks inthe second half of the year and had an im-pact on palm oil pricing. Coupled with risingcosts as a result of local inflation and higherlabour costs, this had a negative impact onoperating results.The turnover stood at 333 million USD (368million USD in 2011), while the net resultdecreased by 28% to 68.4 million USD com-pared to the record year 2011 (95.1 millionUSD).Despite a delay in the implementation ofthe expansion plans in Papua New Guineaand Indonesia as a result of sustainabilityprocedures and technical limitations, 1,790hectares were added to the planted acreageof the group. This acreage has now topped65,000 hectares, of which more than 20%has not yet reached the production stage.Development Capital. The contributionfrom the Development Capital segment wasencumbered by the non-recurring results ofHertel. Thanks to the capital gains from thesales of AR Metallizing and Alural Belgium,this segment had a larger contribution tothe group result. The results of the differentparticipations in this segment are describedfrom page 98 onwards.3. Key events after the closingof the financial yearOn 16 January 2013, Sofinim and NPM Capi-tal contributed to a substantial refinancing ofHertel by way of a cash injection of 75 mil-lion euros (Sofinim 37.5 million euros). Thishas laid the foundations for an upturn in theresults, and at the same time served to dras-tically reduce Hertels net financial debt to27.6 million euros.On 25 January 2013, AvH announced thatSofinim has agreed to sell its 72.92% stakein Spano Invest to the Unilin group. Thetransaction, which is subject to the approvalof the competition authorities and to othercustomary conditions precedent, is expected(depending on the timing of the closing) toresult in a capital gain of more than 30 mil-lion euros.On 25 January 2013, DEME successfully is-sued a retail bond of 200 million euros. Thesedebentures yield a gross interest of 4.145%and are quoted on Alternext Brussels.4. Research and developmentThe fully-consolidated group companies ofAckermans & van Haaren did not engage inany significant research and developmentactivities in 2012.5. Financial instrumentsWithin the group (a.o. Bank J.Van Breda &C, Leasinvest Real Estate, DEME, Extensa),an effort is being made to pursue a cautiouspolicy in terms of interest rate risk by usinginterest swaps and options. A large numberof the groups companies operate outsidethe euro zone (for example DEME, DelenInvestments, Sipef, Hertel, Manuchar, Tele-mond Group). Hedging activities for ex-change rate risk are always carried out andmanaged at the level of the individual com-pany.6. OutlookNotwithstanding a limited view of how theeconomy will evolve in 2013, the board ofdirectors expects an improvement in the netresult.Leasinvest - Canal Logistics (Neder-over-Heembeek) Sipef - Fresh palm fruit bunches entering the oil mill 30. 30III Corporategovernance statement1. GeneralAckermans & van Haaren has adopted theBelgian Corporate Governance Code (theCode), as published on 12 March 2009, asits reference code. The Code can be consult-ed on the website of the Corporate Govern-ance Committee (http://www.corporategov-ernancecommittee.be).On 14 April 2005, the board of directors ofAckermans & van Haaren adopted the firstCorporate Governance Charter (Charter).The board of directors has subsequently up-dated this Charter several times: On 18 April 2006, the Charter was alignedto various Royal Decrees adopted pursuantto European regulations on market abuse; On 15 January 2008, the board of directorsamended article 3.2.2. (b) of the Charterin order to clarify the procedure regardinginvestigations into irregularities; On 12 January 2010, the Charter wasmodified to reflect the new Code and thenew independence criteria set forth in Arti-cle 526ter of the Companies Code; On 4 October 2011, the board of direc-tors deliberated on the adaptation of theCharter to the Act of 6 April 2010 on thereinforcement of corporate governance inlisted companies and the Act of 20 Decem-ber 2010 on the exercise of certain share-holders rights in listed companies. On thisoccasion, the board of directors also tight-ened its policy on the prevention of marketabuse (Section 5 of the Charter) with theintroduction of a prohibition on short sell-ing and speculative share trading.The Charter is available in three languages(Dutch, French and English) on the companyswebsite (www.avh.be).This chapter (Corporate Governance State-ment) contains the information as referredto in Articles 96, 2 and 119, second para-graph, 7 of the Companies Code. In accord-ance with the Code, this chapter specificallyfocuses on factual information involving cor-porate governance matters and explains anyderogations from certain provisions of theCode during the past financial year in accord-ance with the principle of comply or explain. 31. 31Board of directors - from left to right: Pierre Macharis, Pierre Willaert, Teun Jurgens, Julien Pestiaux,Jacques Delen, Luc Bertrand, Frederic van Haaren, Thierry van BarenJacques Delen (born 1949, Belgian) com-pleted his studies as a stockbroker in 1976.He is chairman of the executive committeeof Bank Delen and a director with the listedagro-industrial group Sipef and with BankJ.Van Breda & C. Jacques Delen was ap-pointed director at Ackermans & van Haarenin 1992 and has been chairman of the boardof directors since 2011.Luc Bertrand (born 1951, Belgian) is chair-man of the executive committee of Acker-mans & van Haaren. He graduated in 1974as a commercial engineer (KU Leuven) andbegan his career at Bankers Trust, wherehe held the position of Vice-President andRegional Sales Manager, Northern Europe.He has been with Ackermans & van Haarensince 1986. He holds various mandates asdirector within and outside the Ackermans& van Haaren group. His mandates includebeing chairman of the board of directorsof DEME, Dredging International, Finaxis,Sofinim and Leasinvest Real Estate and heis a director at Sipef, Atenor Group andGroupe Flo. Outside the group, Luc Bertrandholds mandates as director at Schroedersand ING Belgium. Luc Bertrand is also ac-tive at the social level and is, among otherthings, chairman of Guberna (the BelgianGovernance Institute) and Middelheim Pro-motors, and sits on the boards of severalother non-profit organizations and publicinstitutions such as KU Leuven, de DuveInstitute, Institute of Tropical Medicine andMuseum Mayer van den Bergh. Luc Bertrandwas appointed director at Ackermans & vanHaaren in 1985.Teun Jurgens (born 1948, Dutch) gradu-ated as an agricultural engineer at the RijksHogere Landbouwschool in Groningen (TheNetherlands). He was a member of the man-agement team of Banque Paribas Nederlandand founder of Delta Mergers & Acquisi-tions. Teun Jurgens was appointed directorat Ackermans & van Haaren in 1996.Pierre Macharis (born 1962, Belgian) com-pleted a masters degree in commercial andfinancial sciences (1986) and also earneda degree in industrial engineering with aspecialization in automation (1983). He iscurrently CEO and chairman of the execu-tive committee of VPK Packaging Group, avertically integrated packaging group head-quartered in Belgium. Pierre Macharis is alsochairman of Cobelpa, the Association ofBelgian Pulp, Paper and Boards Industries,and is a director at AXA Belgium and CEPI,the Confederation of European Paper Indus-tries. Pierre Macharis was appointed directorat Ackermans & van Haaren in 2004 and ischairman of the remuneration committee.Julien Pestiaux (born 1979, Belgian) gradu-ated in 2003 as electromechanical civil engi-neer (specialization energy) at the UniversitCatholique de Louvain and also obtained amasters degree in engineering managementat Cornell University (USA). Julien Pestiauxspecializes in energy and climate themes andis partner at Climact, a company that adviceson these topics. He is currently working forthe federal government, a.o. on a strategicplan for sustainable energy in Belgium, incooperation with the Department for Energyand Climate Change in the UK. Before that,he worked for five years as a consultant andproject leader at McKinsey & C. Julien Pes-tiaux was appointed director at AckermansName Born Type of mandate Mandate endJacques Delen 1949 Chairman, non-executive 2016Luc Bertrand 1951 Executive 2013Teun Jurgens 1948 Non-executive 2014Pierre Macharis 1962 Independent, non-executive 2016Julien Pestiaux 1979 Independent, non-executive 2015Thierry van Baren 1967 Independent, non-executive 2014Frederic van Haaren 1960 Non-executive 2013Pierre Willaert 1959 Non-executive 20162. Board of directors2.1 Composition 32. 32& van Haaren in 2011 and is a member ofthe audit committee.Thierry van Baren (born 1967, French/Dutch) holds a masters degree and teach-ing qualification in philosophy as well as anMBA from Solvay Business School. He is cur-rently an independent consultant. Thierryvan Baren was appointed director at Acker-mans & van Haaren in 2006. He is a memberof the audit committee and of the remuner-ation committee.Frederic van Haaren (born 1960, Belgian)is an independent entrepreneur and memberof the council of the municipality of Kapel-len. He is also active as a director for variouscompanies and associations. He is, amongother things, a director at water-link, chair-man of the non-profit organization Consul-tatiebureau voor het Jonge Kind in Kapellen,of Zonnekind primary school in Kalmthoutand of Bosgroepen Antwerpen Noord aswell as member of the police council ofthe police zone North. Frederic van Haarenwas appointed director at Ackermans & vanHaaren in 1993 and is a member of the re-muneration committee.Pierre Willaert (born 1959, Belgian) holdsa masters degree in commercial and finan-cial sciences and obtained the degree ofthe Belgian Association of Financial Analists(ABAF-BVFA), of which he is still a member.He worked for many years as a financial ana-lyst at Bank Puilaetco. Later he became re-sponsible for the institutional managementdepartment. Pierre Willaert was a managingpartner and member of the audit commit-tee at Bank Puilaetco until 2004 and is a di-rector at Tein Technology, a Brussels-basedICT company specializing in, among otherthings, video surveillance. Pierre Willaertwas appointed director at Ackermans & vanHaaren in 1998 and has been chairman ofthe audit committee since 2004.The mandates of Luc Bertrand and Fredericvan Haaren will end at the annual generalmeeting of 27 May 2013. The board of direc-tors will propose to the annual general meet-ing to renew their mandates for a term of fouryears.2.2 Independent directors Pierre Macharis Julien Pestiaux Thierry van BarenPierre Macharis, Julien Pestiaux and Thierryvan Baren meet the independence criteriaset out in Article 526c of the CompaniesCode.2.3 Other directors Luc Bertrand Jacques Delen Teun Jurgens Frederic van Haaren Pierre WillaertLuc Bertrand and Jacques Delen are direc-tors of Scaldis Invest which is, with a stakeof 33%, the principal shareholder of Acker-mans & van Haaren. Luc Bertrand is also a di-rector of Belfimas, which holds a controllinginterest of 91.35% in Scaldis Invest. ScaldisInvest and Belfimas are holding companieswhich exclusively invest (directly and indi-rectly) in Ackermans & van Haaren shares.2.4 Activity reportThe board of directors convened nine timesin 2012. The average attendance rate was98.6%. Frederic van Haaren could not at-tend the additional meeting of the board ofdirectors of 11 December 2012.In 2012, the board of directors: discussed and regularly updated thebudget for the current financial year; monitored the groups results and the de-velopment of the activities of the variousgroup companies on the basis of reportsprepared by the executive committee, discussed the off-balance-sheet commit-ments, and changed the composition of the executivecommittee.In 2012, the board of directors invited themanagement teams of Anima Care, HertelHolding, DEME, Algemene AannemingenVan Laere, Extensa Group and LeasinvestReal Estate to give a presentation on thegeneral state of affairs of their respectivecompanies or a particular investment. Theboard of directors also took important deci-sions on investments (capital increase HertelHolding, capital increase Anima Care) anddivestments (Alural Belgium, AR Metallizingand Spano Invest) in the past financial year.At its meeting of 11 December 2012, theboard of directors, together with the execu-tive committee, deliberated on the strategyof the group.In accordance with Article 2.7 of the Char-ter, assessment procedures are carriedout periodically within the board of direc-tors. These assessments take place on theinitiative and under the supervision of thechairman. The annual assessment by theindependent directors of the relationshipbetween the board of directors and the ex-ecutive committee took place on 28 March2012. This assessment procedure was car-ried out in the absence of the executive di-rector. On this occasion, the non-executivedirectors expressed their general satisfactionwith the good quality of the collaborationbetween the two bodies and made a num-ber of suggestions to the executive directorin this respect.2.5 Code of conduct regardingconflicts of interestThe board of directors published in theCharter (Articles 2.9 and 4.7) its policy re-garding transactions between Ackermans &van Haaren or a company affiliated to it onthe one hand, and members of the boardof directors or executive committee (or theirclose relatives) on the other, which maygive rise to a conflict of interest (within themeaning of the Companies Code or other-wise). In 2012, no decisions were made towhich this policy applied.Annual report 2012 33. 332.6 Code of conduct regardingfinancial transactionsThe board of directors published its policy onthe prevention of market abuse in the Char-ter (Section 5).3. Audit committee3.1 CompositionChairman Pierre WillaertNon-executive directorJulien PestiauxIndependent,non-executive directorThierry van BarenIndependent,non-executive directorAll members of the audit committee havethe necessary accounting and audit exper-tise: Pierre Willaert (born 1959) holds a mas-ters degree in commercial and financialsciences and obtained the degree of theBelgian Association of Financial Analists(ABAF-BVFA), of which he is still a mem-ber. He worked for many years as a finan-cial analyst at Bank Puilaetco. Later hebecame responsible for the institutionalmanagement department. Pierre Willaertwas managing partner and member ofthe audit committee of Bank Puilaetcountil 2004. Pierre Willaert was appointeddirector at Ackermans & van Haaren in1998 and has been chairman of the auditcommittee since 2004. Julien Pestiaux (born 1979) graduated in2003 as electromechanical civil engineer(specialization energy) at the UniversitCatholique de Louvain and also obtaineda masters degree in engineering man-agement at Cornell University (USA).The focus of the master in engineeringmanagement was on financial and eco-nomic analyses. An important part of thecourse was given at the Johnson Gradu-ate School of Management of Cornell.Julien Pestiaux is partner at Climact, acompany that advices on energy andclimate themes with numerous businesscustomers. Before that, he worked for fiveyears as a consultant and project leader atMcKinsey & C, where he got acquaintedwith different accounting aspects. JulienPestiaux was appointed director at Acker-mans & van Haaren in 2011. Thierry van Baren (born 1967) holds amasters degree and teaching qualifica-tion in philosophy and obtained an MBAfrom Solvay Business School. As part ofthis degree course, he specialized in,among other things, Finance, FinancialAccounting and Managerial Account-ing. Thierry van Baren is now an inde-pendent consultant and in this capacityfamiliar with different accounting aspects.Thierry van Baren became a board mem-ber at Ackermans & van Haaren in 2006.3.2 Activity reportThe audit committee convened four times in2012 and was every time complete.On 27 February and 20 August 2012, in thepresence of the financial management andthe auditor, the audit committee focusedmainly on the reporting process and on theanalysis of the annual and half-yearly finan-cial statements respectively. The membersof the audit committee received upfront theavailable reports of the audit committees ofthe operational subsidiaries of Ackermans &van Haaren.The audit committee meeting of 21 March2012 focused primarily on the financial re-porting as published in the annual report of2010 and the review of the one-on-onerule related to the non-audit services pro-vided by Ernst & Young.At the audit committee meeting of 11 De-cember 2012, the reporting on the internalaudit was discussed. The audit committeealso discussed an update of the internalcontrol and risk management system, theICT infrastructure and the current optionplans and off-balance-sheet commitmentswithin the group. Finally, the internal auditplanning for the 2013 financial year was ap-proved.The audit committee reported systematicallyand extensively to the board of directors onthe performance of its duties. 34. 344. Remuneration committee4.1 CompositionChairman Pierre MacharisIndependent,non-executive directorThierry van BarenIndependent,non-executive directorFrederic van HaarenNon-executive director4.2 Activity reportThe remuneration committee convenedtwice in 2012, on 28 March 2012 and on13 November 2012, and was every timecomplete.At its meeting of 28 March 2012, the re-muneration committee discussed the draftremuneration report, which in accordancewith Article 96(3) of the Companies Codeconstitutes a specific part of the CorporateGovernance Statement, and verified thatit contained all the information requiredby law. The committee also reviewed thepayment of the variable remuneration tothe members of the executive committeeagainst the recommendations it had madeon this subject at its meeting of 15 Novem-ber 2011.At the meeting of 13 November 2012, thecommittee discussed the fixed and variableremuneration of the members of the execu-tive committee for 2013, the remunerationof the directors, and the number of stockoptions to be granted to the members ofthe executive committee, and made recom-mendations in this respect to the board ofdirectors.5. Nomination committeeOn 29 February 2012, the board of direc-tors deliberated as nomination committeeand, in accordance with the procedure setforth in Article 2.2.2 of the Charter, decidedto propose the renewal of the mandatesof Jacques Delen, Pierre Macharis (as inde-pendent director) and Pierre Willaert to theannual general meeting of 29 May 2012.6. Executive committee6.1 CompositionChairman Luc BertrandTom BamelisPiet BevernagePiet DejongheKoen Janssen(since 1 April 2012)Jan SuykensJacques Delen, chairman of the board of di-rectors, attends the meetings of the executivecommittee as an observer.Jan Suykens (born 1960, Belgian) is amember of the executive committee atAckermans & van Haaren. He holds a mas-ters degree in applied economic sciences(UFSIA, 1982) and earned an MBA fromColumbia University (1984). Jan Suykensworked for a number of years at GeneraleBank in corporate and investment bankingbefore joining Ackermans & van Haaren in1990.Piet Bevernage (born 1968, Belgian) is sec-retary general and a member of the execu-tive committee at Ackermans & van Haaren.He earned a masters degree in law (KU Leu-ven, 1991) and an LLM from the Universityof Chicago Law School (1992). Piet Bever-nage initially worked as a lawyer in the Cor-porate and M&A Department at Loeff ClaeysVerbeke before moving to Ackermans & vanHaaren in 1995.Piet Dejonghe (born 1966, Belgian) is amember of the executive committee atAckermans & van Haaren. After earning amasters degree in law (KU Leuven, 1989),he completed a postgraduate in manage-ment at KU Leuven (1990) and an MBA atInsead (1993). Before joining Ackermans &van Haaren in 1995 he worked as a lawyerfor Loeff Claeys Verbeke and as a consultantfor Boston Consulting Group.Tom Bamelis (born 1966, Belgian) is CFOand a member of the executive committee atAckermans & van Haaren. After completinghis masters degree in commercial engineer-ing (KU Leuven, 1988), he went on to earna Masters degree in Financial Management(1991). Tom Bamelis then worked for ToucheRoss and Groupe Bruxelles Lambert beforejoining Ackermans & van Haaren in 1999.Koen Janssen (born 1970, Belgian) is amember of the executive committee atAckermans & van Haaren since 1 April 2012.He holds a degree in electromechanical civilengineering (KU Leuven, 1993) and com-pleted an MBA at IEFSI (France, 1994). KoenJanssen worked at Recticel, ING InvestmentBanking and ING Private Equity before join-ing Ackermans & van Haaren in 2001.6.2 Activity reportThe executive committee convened 20 timesin 2012. The average attendance rate was95.83%. The executive committee is respon-sible for, among other things, the day-to-daymanagement of Ackermans & van Haarenand prepares the decisions to be taken bythe board of directors.During the previous financial year, the execu-tive committee prepared and followed upthe participation in the boards of directors ofthe subsidiaries, examined new investmentproposals (both in the current group compa-nies and external), approved certain divest-ments, prepared the quarterly, half-yearlyand annual financial reports and investigatedthe implications of changes in the law rel-evant for the company.Annual report 2012 35. 357. Internal and external audit7.1 External auditThe companys statutory auditor is Ernst &Young Bedrijfsrevisoren BCVBA, representedby Marnix Van Dooren and Christel Wey-meersch. The statutory auditor conductsthe external audit (of both consolidatedand statutory figures) of Ackermans & vanHaaren, and reports to the board of direc-tors twice a year. The statutory auditor wasappointed at the ordinary general meetingof 25 May 2010 for a three-year term, whichexpires at the ordinary general meeting of27 May 2013. At its meeting of 26 February2013, the board of directors, on the recom-mendation of the audit committee, decidedto propose to the ordinary general meetingto reappoint Ernst & Young, represented byMarnix Van Dooren, for another three-yearterm.In 2012, a statutory annual fee for auditingthe statutory and consolidated Ackermans &van Haaren annual accounts of 43,260 euros(excluding VAT) was paid to the auditor. In ad-dition, a fee of 17,980 euros (excluding VAT)was paid to Ernst & Young Tax Consultants fortax advice and 5,750 euros (excluding VAT) toErnst & Young Bedrijfsrevisoren for various ac-tivities.The total fees for audit activities paid in2012 by Ackermans & van Haaren and itsconsolidated subsidiaries to Ernst & Youngamounted to 734,756 euros (including theabovementioned 43,260 euros).7.2 Internal auditThe internal audit is conducted by thegroup controllers, Hilde Delabie and Ben DeVoecht, who report to the executive commit-tee. At least once a year, the group control-lers report directly to the audit committee.7.3 Principal features ofthe internal control and riskmanagement systems withregard to the process offinancial reporting andpreparation of the consolidatedannual accountsThe board of directors of Ackermans & vanHaaren is responsible for assessing the ef-fectiveness of the internal control and riskmanagement systems.By the present system, the board of direc-tors aims, at group level, to ensure that thegroups objectives are attained and, at sub-sidiary level, to monitor the implementationof appropriate systems that take into ac-count the nature of each company (size, typeof activities, etc) and its relationship withAckermans & van Haaren (controlling inter-est, shareholders agreement, etc).Given the diversified portfolio and the smallnumber of staff working at the holding com-pany, the group opted for a customized in-ternal control model that nevertheless has allthe essential features of a conventional sys-tem. The internal control and risk manage-ment system is characterized by a transparentand collegiate structure. The executive com-mittee deliberates and decides by consensus.Risks are identified on an ongoing basis andproperly analyzed. Appropriate measures areproposed to accept, limit, transfer or avoidthe identified risks. These assessments anddecisions are clearly minuted and document-ed to allow a strict follow-up.The board of directors also regards thetimely provision of complete, reliable andrelevant financial information in accordancewith IFRS and with the other Belgian report-ing requirements to all internal and externalstakeholders as an essential element of itscorporate governance policy. The internalcontrol and management systems for finan-cial reporting endeavour to satisfy those re-quirements as fully as possible.7.3.1 Control environmentThe control environment is the frameworkwithin which internal control and risk man-agement systems are set up. It comprises thefollowing elements:a. Integrity and ethicsThe family values that underlie the groupssuccess are today reflected in a relationshipbetween the different stakeholders thatis based on respect: the shareholders, themanagement, the board of directors and thestaff, but also the business partners. Thosevalues are put into practice by the manage-ment on a daily basis, and are explicitly en-shrined in the Internal Company Guidelinesto ensure that they are clear to everyone.b. SkillsAnother cornerstone of Ackermans & vanHaarens management policy is the fact ofworking together as a professional team.Special attention is paid to a balanced andqualitative content for every position withinthe organization. Additionally, the necessarytraining is provided to ensure that knowl-edge is constantly honed and fine-tuned.Highly skilled people with the right experi-ence and attitude in the right job form thebasis of the groups internal control and riskmanagement system. This equally applies tothe board of directors and the audit com-mittee, who strive for complementary back-grounds and experience of the members.c. Board of directors/audit committeeThe duties and responsibilities of the boardof directors and, by extension, its advisorycommittees, such as the audit committee,are clearly set out in the Charter. The auditcommittee oversees the financial reportingof the group, the internal control and riskmanagement system, and the internal andexternal audit procedures.d. Organizational structure,responsibilities and powersAs was already pointed out, Ackermans &van Haaren has a highly transparent organi-zational structure at group level, where deci-sions are taken collectively by the executivecommittee. The organizational structure and 36. 36powers are clearly set out in the InternalCompany Guidelines.7.3.2 Risk management processThe risks with regard to financial reportinghave been identified and can be divided intoa number of categories.Risks at subsidiary level: These are typicallyhighly diverse and are addressed by the at-tendance by the investment managers ofAckermans & van Haaren at the meetings ofthe boards of directors and advisory commit-tees of the subsidiaries, clear reporting in-structions to the subsidiaries with deadlinesand standardized reporting formats and ac-counting principles, and an external audit ofthe half-yearly and annual figures that alsotakes into account internal control and riskmanagement features at the level of eachindividual company.Risks in terms of provision of information:These are addressed by a periodical IT audit,a proactive approach involving the imple-mentation of updates, backup facilities andregular testing of the IT infrastructure. Busi-ness continuity and disaster recovery planshave also been put in place.Risks in terms of changing regulations: Theseare addressed by close monitoring of thelegislative framework on financial reportingand by a proactive dialogue with the auditor.Finally, there is the integrity risk, which isaddressed by maximum integration of ac-counting and reporting software, extensiveinternal reporting.7.3.3 Control activitiesAs was already pointed out above in the de-scription of the risks, various controls are builtinto the financial reporting process in order tomeet the objectives with regard to this report-ing as fully as possible.First, a number of basic controls such as segre-gation of duties and delegation of powers arebuilt into the administrative cycles at grouplevel: purchasing, payroll and (dis)investments.This ensures that only permissible transactionsare processed. The integration of accountingand reporting software at group level servesto cover a number of integrity risks. Addition-ally, a stable IT infrastructure with the neces-sary backup systems guarantees an adequatecommunication of information.Clear reporting instructions with timely com-munication of deadlines, standardized report-ing formats and uniform accounting princi-ples are meant to address certain quality risksin the reporting by the subsidiaries.There is also a cycle of external audit of boththe consolidated group reporting and the re-porting by the subsidiaries. One of the pur-poses of this external audit is to assess theeffectiveness of the internal control and riskmanagement systems implemented by thesubsidiaries and to report on this to the statu-tory auditor of Ackermans & van Haaren.Finally, there is a system of inter