Brederode 1999 GB - KU Leuven · Henri Poincar é — p 2 — II. KEY ... resolved to purchase, from Monceau-Zolder s.a., its subsidiaries Brederode Insurance s.a. and Geyser s.a

Annual report

Siège social : Drève Richelle 161 / Bte 1 - 1410 Waterloo

Tél. (02) 352.00.90 - Fax. (02) 352.00.99

e-mail : [email protected]

Web site : http://www.brederode.be

Registre de Commerce de Nivelles : 79465

T.V.A. n° 405.963.509 (franchise)

CONTENTS

I. Mission statement ............................................................................................................................ 1

II. Key figures ........................................................................................................................................ 2

III. Management report......................................................................................................................... 3

IV. Consolidated accounts .................................................................................................................... 9

Balance sheet...................................................................................................................................... 9

Profit and loss account ...................................................................................................................... 11

Notes to the accounts ....................................................................................................................... 13

Annex ............................................................................................................................................... 14

Accounting policies ........................................................................................................................... 16

Cash flow statement ......................................................................................................................... 23

V. Joint statutory auditor’s report ..................................................................................................... 25

VI. Company’s accounts ....................................................................................................................... 27

Balance sheet.................................................................................................................................... 27

Profit and loss acount........................................................................................................................ 29

Annex ............................................................................................................................................... 31

VII. Corporate governance ................................................................................................................... 33

VIII. Main shareholdings of the Brederode Group .............................................................................. 35

IX. Financial calendar........................................................................................................................... 39

BOARD OF DIRECTORS

Pierre van der MERSCH, Chairman and Chief Executive Officer

Gérard COTTON, Managing Director

Johanne IWEINS d’EECKHOUTTE, Managing Director

Bernard DE CORTE, Non-executive Director Comte Philippe GREINDL, Non-executive Director Baron Jean PETERBROECK, Non-executive Director

AUDITORS

S.C. KLYNVELD, PEAT,MARWICK, GOERDELER & CO,

Company auditorsrepresented by Mr Pierre BERGER

Mr Paul COMHAIRE,Company auditor

Brederode

Afrifina+ Artilat (93.9%)

Brederode UK

Brederode C.I.T.

GeyserMonceau-

Zolder+ Greenhill (100%)

Brederode Insurance

+ Athanor (100%)

71.5% 62.6%55.9% 99.4% 100.0% 50.0%

16.7% 32.1% 5.0%

I. MISSION STATEMENT

BREDERODE is an investment company listed on the Brussels Stock Exchange which actively manages adiversified portfolio of listed and unlisted securities through several direct and indirect subsidiaries.

BREDERODE’s main aim is to achieve for its shareholders maximum long-term GROWTH in the total returnon their investment.

The success of this policy is clearly demonstrated by regular increases in the dividends distributed, whilstcapital gains are fully devoted to financing the development of the group.

In order to achieve these objectives BREDERODE maintains a long-standing tradition of INDEPENDENCEwith regard to decision making, FLEXIBILITY of its management teams inspired by a spirit of partnership,and QUALITY of both the particular assets in which the group invests and the financial structures of each ofits component parts.

— p 1 —” C h a n c e i s o n l y t h e m e a s u r e o f o u r i g n o r a n c e . “ Henri Poincaré

” C h a n c e i s o n l y t h e m e a s u r e o f o u r i g n o r a n c e . “ Henri Poincaré

II. KEY FIGURES

CONSOLIDATED FIGURES

*Includes securities stated in the consolidated balance sheet under the headings ‘Financial investments’ and ‘Treasury investments".**folowing the consolidation of the industrial companies of the group (associated companies) with the equity method.

* based on the number of shares in issue and the start of their entitlement to receive dividends, namely : 3.781.991 (of which 1.084.600 VVPR shares) from 1st January 1995 3.782.247 (of which 1.505.077 VVPR shares) from 1st January 1996 3.795.094 (of which 1.517.924 VVPR shares) from 1st January 1997 4.619.998 (of which 2.342.828 with VVPR strips) from 1st January 1998

FINANCIAL RATIOS

STOCK EXCHANGE FIGURES (ORDINARY SHARES)

(EUR million) 1999**

1998pro-forma**

1997 1996 1995

Total assets 867 738 548 456 371

Capital and reserves 581 523 348 205 172

Securities portfolio (*) 799 710 504 378 328

Dividends received 32 28 24 18 15

Net realised capital gains 91 192 60 27 13

Profit after tax(group share) 57 117 54 23 19

(EUR) 1999 1998 1997 1996 1995

Profit after tax (group share)* 12.34 25.39 14.25 6.00 4.93

Net dividend 2.31 2.10 1.91 1.74 1.56

- with coupon “ strip ” 2.62 2.38 2.16 1.96 1.78

% 1999 1998(pro-forma)

1997 1996 1995

Financial independenceCapital and reserves/ Total assets

67.0 70.9 63.6 44.9 46.5

Return on equityProfit after tax / Capital and reserves

13.3 44.0 23.3 16.5 16.5

Pay-out ratioGross dividend/ Profit after tax (group share)

24.9 11.0 17.7 38.4 42.1

EUR 1999 1998 1997 1996 1995

Highest price 218.00 215.67 129.90 88.00 49.70

Lowest price 160.00 111.55 84.04 45.86 36.89

Price on December 31 184.70 198.31 116.51 83.54 49.70

— p 2 —

III. MANAGEMENT REPORTPRESENTED BY THE BOARD OF DIRECTORS TO THE SHAREHOLDERS’ ANNUAL GENERAL MEETING OF 30 MAY 2000

Ladies and gentlemen,

We have the honour to present you with the management report on the activities of the company and ofthe group formed by BREDERODE S.A. itself and its subsidiaries.

Significant changes were made to the composition of the consolidation area of the group during the finan-cial period. Further to a resolution passed at the extraordinary general meeting of shareholders held on 4December 1999, Brederode acquired from Monceau-Zolder its 99.4 % holding in Brederode Insurance s.a.and its 53 % holding in Geyser s.a. Further information is provided in the appendices to the consolidatedaccounts with the view of making the comparison between these successive accounts meaningful.

1999 CONSOLIDATED RESULTS

In the past year, the Brederode group has generated consolidated results (group share) of EUR 57 million,or EUR 12,34 on a per share basis.

The Brederode group has sold securities for a total of EUR 337 million, realising EUR 91.1 of net capitalgains, and bought securities for EUR 413.8 million.

The dividend income generated by the consolidated securities portfolio totalled EUR 28 million. The divi-dends received by Brederode s.a. largely cover the dividend proposed to its sharehollders

ISSUE OF MANDATORILY CONVERTIBLE BONDS

In February 1999, Brederode made a public subscription offer of 341.367 bonds mandatorily convertibleinto new Brederode shares with VVPR strips. The bonds have a duration of five years and carry a 4% cou-pon. The transaction was very well received by the market and the issue, including the green shoe option,was fully subscribed. Brederode’s permanent funds increased by EUR 73 million as a result.

36

710

910

428

1013

1315

2718

6024

24828

9132

Developments in net capital gains (EUR mio)

Developments in dividends received (EUR mio)

1999199819971996199519941993199219911990

— p 3 —

M

ANAGEMENT

REPORT

Quasi-treasury (0.8%)

Others (20.0%)

Media-telecom (4.0%)

Chemicals (11.0%)

Energy (18.9%)

Banking (11.5%)

Insurance (13.8%)

Bankinsurance (19.9%) EUR (55.6%)

USD (24.2%)

GBP (20.2%)

FURTHER STEP IN THE SIMPLIFICATION OF THE GROUP STRUCTURE

At an Extraordinary General Meeting held in December 1999, Brederode’s shareholders have unanimouslyresolved to purchase, from Monceau-Zolder s.a., its subsidiaries Brederode Insurance s.a. and Geyser s.a.Subsequently, Brederode has made an offer to the minority shareholders of those companies to purchasetheir shares at the same price paid to Monceau-Zolder.MZ Investments Ltd has been put into solvent liquidation while its subsidiary MZ Securities Ltd has beensold by Monceau-Zolder to Brederode s.a. and renamed Brederode (UK) Ltd.As a result Monceau-Zolder, Afrifina, Brederode Insurance, Geyser, Brederode CIT and Brederode UK are alldirect subsidiaries of Brederode.

DISTRIBUTION BY AFRIFINA OF AN EXTRAORDINARY DIVIDEND IN THE FORM OF MONCEAU-ZOLDER SHARES

In December 1999, Brederode’s subsidiary Afrifina distribued an extraordinary dividend in the form of Mon-ceau-Zolder shares. As a result, Brederode recorded an additional holding of 6.8 % in Monceau-Zolder’scapital.

SECURITIES PORTFOLIO SELECTION AND OPTION STARTEGY

The Brederode group’s investment objective is to purchase securities considered by the management to beundervalued and to obtain a risk adjusted return on its investments superior to that of the market overtime. The group’s investment policy continues to follow a pattern of careful diversification, both at industrylevel and between the three main currencies (Euro, US Dollar and Sterling).

Breakdown by currency of assets at book value (private equity not included)

Breakdown by sector of assets at book value (private equity not included)

— p 4 —

M

ANAGEMENT

REPORT

Total commitments (EUR million)

Net drawndowns (EUR million)

19991998199719961995199419931992

7 922 24 23

3827

4132

49 57

139

81

168154

331

The Brederode’s group main shareholdings are stated in the consolidated balance sheet under the headings‘Financial Investments’ and ‘Treasury investments’ and are listed in more detail at the end of the annualreport.

These securities are acquired or disposed of either directly or, if appropriate, by writing put and call optionsif that market is sufficiently broad and liquid. The group’s option strategy consists of writing over the counter call options on shares in the securitiesportfolio (covered calls) which no longer present any strategic interest and writing puts on coveted shares.The strike price for calls is higher and for puts is lower than the stock market price (out of the money) pre-vailing at the time the option is written. The aim is to obtain an additional return on shares, with broad stock market capitalization, held in thesecurities portfolio. In 1999, the total amount of premium received was EUR 9.3 million.

DEVELOPMENTS IN “ PRIVATE EQUITY ”The heading ‘Private equity’ relates essentially to the group’s investments in unlisted securities.

For almost ten years now, the group’s subsidiaries Monceau-Zolder, Geyser and, more recently, BrederodeCIT, have focused their involvement in ‘private equity’ towards investments in the capital of unlisted com-panies, in association, for a pre-set period of time, with other international investors. The aim is to achievea level of profitability on these investments which is substantially higher than that normally achievable onthe markets for listed stocks.

The combination of the sums already invested and the commitments not yet drawn down represents themaximum level of committment for the group in this area of investment.In 1999, the Brederode group again increased its total commitments to ‘private equity’ by EUR 163.2 mil-lion, bringing them to EUR 331.3 million in total, of which EUR 154.6 million was actually invested by theend fo the financial period.

— p 5 —

M

ANAGEMENT

REPORT

Others (27%)

Environment (1%)

Technology (2%)

Food (3%)

Petroleum, gas (2%)

Aircraft anddefense (3%)

Manufacturingindustries (5%)

Leisure (5%)

Health (5%)

Insurance (5%)

Services (9%)

New economy (33%)

Others(17%)

Western Europe(30%)

North America(53%)

These investments, denominated in USD, EUR and GBP, are spread across a very large number of compa-nies, operating mainly in North America and Western Europe, in a wide range of sectors.

The group's investment policy in Private Equity had until last year been limited to ‘buy-out’, ‘capital devel-opment’ and ‘buy and build’ transactions. Hower, in order to take advantage of the opportunities arisingfrom the new economy, Brederode has expanded its investment policy to include ‘venture capital’ transac-tions intended to finance younger companies in a phase of strong growth, particularly in the Communica-tion and Information Technology sector.

Brederode and Qualis, a young French industrial group, have decided to share their experience and rela-tions to invest in European companies operating in the telecommunications and information technologiessector, including the Internet.As a result, in December 1999, a new company was incorporated under Belgian law, called BrederodeCommunication Information Technology s.a., Brederode CIT in short.

One third of the private equity investments of the group’s subsidiaries Monceau-Zolder s.a., Geyser s.a. andBrederode CIT are devoted to new economy companies in the United States and Europe.

Each ‘private equity’ investment is approved only after a thorough ‘due diligence’ process intended to con-firm the integrity and quality of the partners and managers. The latter are necessarily known personally tothe Brederode executives.

The accounts of the entities with which we are associated in this transactions are always audited by inter-national firms of auditors and management reports are prepared at least once a quarter.

Since the beginning of our involvement in private equity in 1992 and up to the end of 1999, 56 invest-ments acquired for a total amount of USD million 11.8 have been realised for USD million 34.6. The aver-age exit multiple was 2.9 with an average holding period of 26 months.These first results are largely superior to our own initial expectations and augure well. However such per-formance cannot be extrapolated neither to the existing nor to the future investments.

Geographical breakdown of total private equity commitments

Breakdown by sector of total private equity commitments

— p 6 —

M

ANAGEMENT

REPORT

MANAGEMENT OF FOREIGN EXCHANGE RISK

As the Brederode group has substantial exposure to the USD and GBP due to the securities portfolio itholds in those currencies, it aims at optimising the cover of its foreign exchange risk through forwardexchange transactions and currency swaps.

At the end of 1999, these forward transactions gave rise to the booking of a net foreign exchange loss ofEUR 43.6 million. At the same time, the securities portfolio denominated in those currencies containedexchange gains, the amount of which was higher than the booked loss, which are not expressed in theaccounts.

CONSOLIDATION WITH THE EQUITY METHOD OF THE GROUP’S INDUSTRIAL HOLDINGS (ASSOCIATED COMPANIES)Artilat n.v., Vyrolat s.r.o., Arthemaura n.v. and Dumo n.v. are included in Brederode’s 1999 consolidatedaccounts using the equity method. The 1998 consolidated accounts are presented as previously publishedand pro forma in order to facilitate the comparison between the consolidated accounts of the past twofinancial periods.

In 1999, Artilat distributed two extraordinary dividends, one of which was a dividend in the form of Mon-ceau-Zolder s.a. shares, resulting in the elimination of this holding from Artilat’s portfolio.Artilat and its subsidiares continue to be involved in the production and marketing of polyurethane andlatex foam articles in Belgium and the Czech Republic.

RECENT DEVELOPMENTS AND PROSPECTS FOR THE CURRENT YEAR

Since the beginning of the current year the financial markets have experienced quite a turbulent periodcharacterised by a decoupling, possibly exaggerated, of the new and old economy.

Brederode continues to hold and actively manage a portfolio of listed securities in old economy sectorssuch as banking, insurance, financial services and utilities. Despite their overall diminution in value since theend of last year, the listed companies in which Brederode invests have major plus points, including positivecash flow, well-established and growing profitability, dividend growth. Some of these companies have alarge market capitalization and lend themselves well to the use of options as previously described whileothers have the potential for consolidation, thus possibly generating added value.Of course, none of these companies fails to integrate the new information and telecommunication technol-ogies in their operational management.

On the other hand, for several years now, Brederode has invested in the capital of many unlisted compa-nies, that can be characterised as players in the new economy, supporting them until they are floated onthe stock market or sold to a strategic buyer. At the moment, Brederode is therefore still associated withthe selling parties, rather than those who focus on the speculative bubbles on the stock market. Thesecompanies are often not yet profitable and, due their acute need of capital, do not usually pay a dividend.However, their growth prospects are often stupendous and the anticipated valuations tend to be extremelyattractive.

— p 7 —

M

ANAGEMENT

REPORT

APPROPRIATIONS AND ALLOCATIONThe profit for the year attributable to shareholders (non consolidated accounts) amounts to EUR52,173,348.19 compared with EUR 76,503,827.08 in 1998.

Including the profit carried forward from the previous year of EUR 98,649,558,28, the total profit availableto shareholders amounts to EUR 150,822,906 which we propose to allocate as follows:

PROPOSED DIVIDEND INCREASED BY 10 %

The board of directors will propose to the annual general meeting to be held on May 30, 2000 to pay agross dividend per share of EUR 3,08, EUR 2,31 on a net basis. The proposed net dividend on the shareswith attached the "vvpr strip" will be EUR 2,63.

The dividend will be payable upon presentation of coupon n° 44, starting from June 14, 2000 at thecounters of Fortis Bank and KBC Bank.

THE BOARD OF DIRECTORS

EUR 1999 1998 Variation (%)

To other reserves 317,411 4,325 s.s.

To be carried forward 136,275,901 98,649,558 + 38 %

To dividends 14,229,594 12,935,994 + 10 %

Total 150,822,906 111,589,877 + 35 %

19991998199719961995199419931992199119901989198819871986198519841983

0.170.27

0.35 0.370.45

0.62

0.770.89

1.021.14

1.26

1.41

1.56

1.74

1.91

2.1

2.31

Net dividend per ordinary share (in EUR)

— p 8 —

IV. CONSOLIDATED ACCOUNTS

CONSOLIDATED BALANCE SHEET (AFTER PROFIT APPROPRIATION)

ASSETS

EUR 000 31 December 1999 31 December 1998Pro-forma

31 December 1998

Fixed assets 701,692 611,196 567,608

Issue costs 35 0 0

Tangible fixed assets (1) 8,659 9,220 18,016

• Land and buildings 5,145 5,425 10,372

• Plant, machinery and equipment 0 0 3,185

• Fixture, fittings and motor vehicles 121 135 735

• Other tangible fixed assets 3,393 3,660 3,724

Financial investments (2) 692,998 601,976 549,592

• Associated companies

Shareholdings 6,135 52,384 0

• Other investments

Shareholdings 680,617 549,150 519,150

Debtors 6,246 442 442

Current assets 165,025 127,116 234,766

Debtors due after more than one year 71 74 74

Stocks and work in progress 0 0 3,591

Debtors due within one year (3) 15,269 13,264 18,990

• Trade debtors 0 1,123 5,425

• Other debtors 15,269 12,141 13,565

Treasury investments (4) 146,369 107,906 202,820

• Other short-term investments 146,369 107,906 202,820

Cash at bank and in hand 2,602 5,206 8,325

Other prepayments and accrued income 714 666 966

TOTAL ASSETS 866,717 738,312 802,374

— p 9 —

C

ONSOLIDATED

ACCOUNTS

LIABILITIES AND CAPITAL

EUR 000 31 December 1999 31 December 1998RETRAITE

31 December 1998

Capital and reserves 581,387 523,425 528,174

• Shareholders equity 365,822 335,766 335,766

Called up share capital 25,610 25,610 25,610

Share premium account 51,724 51,724 51,724

Revaluation surpluses 643 1,332 1,332

Reserves 280,170 237,398 237,398

Consolidation differences 3,291 23,587 23,587

Currency translation differences (5) 4,384 -3,885 -3,885

Minority interests 215,565 187,659 192,408

Provisions and deffered taxes 5,746 2,814 3,936

Provisions for liabilities and charges (others)

5,240 2,273 3,096

Deferred taxation 506 541 840

Liabilities 277,371 212,073 270,264

Amounts falling due after more than 1 year (6)

73,143 46 38,689

• Borrowings

Non subornoted bonds 73,053 5 5

Banks 49 38,643

Other borrowings 41 41 41

Amounts falling due within one year 204,228 210,390 227,157

• Current portion of long term debt 5 0 1,413

• Borrowings 183,129 176,163 187,407

Banks 82,345 106,279 136,365

Other borrowings (7) 100,784 69,884 51,042

• Trade creditors 16 1,744 1,515

• Deferred income 25 20 20

• Taxation,salaries and social security costs

1,315 1,045 5,382

Taxation 1,301 966 3,489

Salaries and social security costs 14 80 1,893

• Other creditors (8) 19,738 31,418 31,420

Other accruals and deferred income 2,213 1,637 4,418

TOTAL LIABILITIES AND CAPITAL 866,717 738,312 802,374

— p 10 —

C

ONSOLIDATED

ACCOUNTS

CONSOLIDATED PROFIT AND LOSS ACCOUNT (AFTER PROFIT APPROPRIATION)

CHARGES

EUR 000 31 December 1999 31 December 1998Pro-forma

31 December 1998

Interest charges 10,453 8,349 11,689

Other financial charges (9) 54,587 11,129 11,435

Amortisation of consolidation differences (10) 4,351 2,410 2,410

Services and miscellaneous goods 2,484 3,576 8,655

Salaries, social security costs and pensions 244 379 10,620

Other current charges 172 11,988 12,454

Amortisation and write down of tangible and intangible fixed assets

333 674 2,298

Write down: (11) 21,810 25,383 36,918

• On Investments 16,314 19,867 19,857

• On current assets 5,496 5,526 17,061

Provisions for liabilities and charges 303 0 -76

Losses on disposal: 24,919 10,184 10,184

• Of investments (12) 24,919 10,184 10,184

Tax on profit 135 1,193 1,623

Share in result of associated companies 364 0 0

Profit after tax 76,541 230,694 237,058

• Group’s share 57,002 117,348 117,348

• Minority interests 19,539 113,345 119,710

TOTAL CHARGES 196,332 305,959 345,268

— p 11 —

C

ONSOLIDATED

ACCOUNTS

INCOME

EUR 000 31 December 1999 31 December 1999pro-forma

31 December l998

Income from financial investments (13) 23,243 25,759 26,155

• Dividends 22,385 24,561 24,957

• Interest 858 1,198 1,198

Income from current assets (14) 7,644 5,948 9,425

Other financial income (15) 13,932 17,990 18,438

Other current income (16) 1,710 17,075 38,662

Write back of amounts previously written down:

241 195 347

• Investments 241 195 195

• Current assets 0 0 152

Gains on disposal of: (17) 115,988 201,696 252,115

• Fixed tangible assets 343 130 130

• Financial Investments 106,053 162,844 171,529

• Current assets 9,592 38,721 80,456

Extraordinary income 215 1 1

Tax adjustments 36 91 125

• Deffered taxes 36 38 38

• Others 0 53 87

Share in the result of associated companies (18) 33,323 37,204 0

TOTAL INCOME 196,332 305,959 345,268

— p 12 —

C

ONSOLIDATED

ACCOUNTS

NOTES TO THE CONSOLIDATED ACCOUNTS (EUR MILLION)

1. TANGIBLE FIXED ASSETS (8,659 VS 9,220)These are buildings, in particular the registeredoffice (4,491) and the reminder of the land informer coal-mining regions (4,168).

2. FINANCIAL INVESTMENTS (692,998 VS 601,796)Represent the majority of the shareholdingsdetailed at the end of the annual report.

3. DEBTORS DUE WITHIN ONE YEAR (15,269 VS 13,264)

These are amounts receivable as a result of thesale of securities (3,850), tax credits (3,135) andvarious amounts receivable linked to the group’sactivity (7,710).

4. TREASURY INVESTMENTS (146,369 VS 107,906)Includes non strategic shareholdings (111,196),Geyser’s bond portfolio (7,390) and short-termliquidity placements (27,783)

5. CURRENCY TRANSLATION DIFFERENCES (4,384 VS –3,885)

Relates to the accounts of foreign subsidiaries and isaffected by the fluctuation of the exchange rate of theUS dollar and the pound sterling.

6. AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR (73,143 VS 46)

This is the principal amount of the bonds manda-torily convertible into Brederode shares offered forpublic subscription in February 1999. These bondshave a duration of five years and bear interest at4% per annum.

7. AMOUNTS FALLING DUE WITHIN ONE YEAR - OTHER BORROWINGS (100,784 VS 69,884)

Outstanding commercial paper issued by thegroup.

8. AMOUNTS FALLING DUE WITHIN ONE YEAR – OTHER CREDITORS (19,738 VS 31,418)

Dividend for the financial year (14,230) andminority interests in the dividend of the subsidiar-ies (5,508).

9. OTHER FINANCIAL CHARGES (54,587 VS 11,129)

Includes exchange losses (48,344) partly offset byexchange profits (4,646) included under the head-ing “ other financial income ”, costs of purchas-ing and selling securities (3,227) as well as theStock Exchange listing charges and the Bankingand Finance Commission charges(3,016),

10. AMORTISATION OF CONSOLIDATION DIFFERENCES (4,351 VS 2,410)

Recorded at the time of transactions affectingshares in group companies.

11. WRITE DOWN (21,810 VS 25,383)Recorded on investments in listed securitieswhich, although profitable, have suffered from asharp fall in their stock market price. The amountswritten down on current assets (5,496) relate totreasury investments.

12. LOSSES ON DISPOSAL OF INVESTMENTS (24,919 VS 10,184)

Losses recorded on the sale of securities by GeyserS.A. It also includes the third-party share in Mon-ceau-Zolder loss on the disposal of BrederodeInsurance.

13. INCOME FROM FINANCIAL INVESTMENTS (23,243 VS 25,759)

It represents dividends received by the group(22,385), excluding those received on its treasuryinvestments, and interest income (859) receivedby Geyser and Greenhill on their bond portfolios.Dividends received on treasury investments, areshown under “income from current assets” andamount to 5,211.

14. INCOME FROM CURRENT ASSETS (7,644 VS 5,948)

It represents dividends received on treasury invest-ments (5,211) and interest income from fundsdeposited with third parties (2,433).

15. OTHER FINANCIAL INCOME (13,932 VS 17,990)

It represents exchange profits (4,646) and put andcall options premium received (9,286).

16. OTHER CURRENT INCOME (1,710 VS 17,075)It includes the technical result of Athanor (508)and rental income received by Monceau-Zolder(460).

17. GAINS ON DISPOSAL (115,988 VS 201,696)These are the capital gains recorded on disposal oflisted and unlisted securities shown under ‘treasuryinvestments’ and ‘investments’.

18. SHARE IN THE RESULT OF ASSOCIATED COMPANIES (33,323 VS 37,204)

Group share in the result of Artilat and its indus-trial subsidiaries.

— p 13 —

CONSOLIDATED ACCOUNTS

ANNEX

FULLY CONSOLIDATED SUBSIDIARIES

NAME AND REGISTERED OFFICE

N. OF SHARESOWNED BY THE

GROUP

DIRECT ANDINDIRECT PERCENT-

AGE OF OWNERSHIP

DIRECT PERCENTAGEOF OWNERSHIP

YEAR END

AFRIFINA S.A. 1,678,774 71.5 71.5 31.12

KoningsboanB 2560 NIJLENN.N. 404.282.934

ATHANOR LTD 5,500,000 100.0 99.4 31.12

24 Bevis MarksGB LONDON EC3A 7NL

BREDERODE INSURANCE S.A.

1,192,047 99.4 99.4 31.12

Dreve Richelle 161 B1B 1410 WATERLOON.N. 402.816.848

GEYSER S.A. 840,410 99.6 87.9 31.12

Boulevard Joseph II, 28L 1840 Luxembourg

GREENHILL S.A. 10,000 100.0 67.8 31.12

Rue de Namur, 138B 6041 GOSSELIEST.V.A. 435.367.870

MONCEAU-ZOLDER S.A.

2,992,777 72.5 67.8 31.12

Drève Richelle 161 B1B1410 WaterlooN.N. 401.726.092

BREDERODE UK 100,000 100.0 100.0 31.12

Rutland HouseRutland GardensGB LONDON SW7 1 BX

BREDERODE CIT 3,001 50.0 50.0 31.12

Drève Richelle 161 B1N.N.468.166.243

— p 14 —


ASSOCIATED COMPANIES

NON-CONSOLIDATED SUBSIDIARIES

OTHER SIGNIFICANT NON-CONSOLIDATED HOLDINGS


N. OF SHARESOWNED

BY THE GROUP

DIRECT AND INDI-RECT PERCENTAGE

OF OWNERSHIP


YEAR END

ARTILAT S.A. 141,705 93.9 67.2 31.12

KoningsbaanB 2560 NIJLENN.N.404.291.743

ARTHEMAURA N.V 5,000 50.0 33.6 31.12

Wijnendalestraat 171 B 8800 ROESELAREN.N. 417.651.415

DUMO N.V 30,265 50.0 33.6 31.12

Wijnendalestraat 171B 8800 ROESELAREN.N. 417.651.415

VYROLAT S.R.O 1,000 100.0 67.2 31.12

Prazska 2220 28802 NYMBURK (Tchèquie)


N. OF SHARESOWNED

BY THE GROUP

DIRECT AND INDI-RECT PERCENTAGE

OF OWNERSHIP


REASONFOR EXCLUSION

ELUBANGUI S.A.Zaïre

5,100 51.0 51.0 Lack of effective control

YAZOO VALLEY Inc 40,000 100.0 67.8 Immaterial size

1013 Jackson Avenue Oxford (Mississippi) –USA

Name and registered office

Shareholding % Year end Currency Capital andreserves (000)

Net profit(000)

Rutland Trust PlcRutland House, Rutland GardensLondon SW7 1BX

11.5% 31 Dec 99 GBP 138,887 7,645

— p 15 —


ACCOUNTING POLICIES

TANGIBLE FIXED ASSETSTangible fixed assets are stated in the balance sheet at cost or their contribution value. Revaluation is per-mitted when the realisation value is greater than the residual book value. Depreciation is linear and calcu-lated using rates approved by the tax authorities.

FINANCIAL ASSETS

SHAREHOLDINGSStated in the balance sheet at cost or contribution value, taking into account any amounts still to be paidup and reductions in value prior to 1976. Eachpurchase is accounted for separately. At the end of eachfinancial year, an individual valuation of each holding is made in order to reflect as accurately as possiblethe situation, profitability and prospects of the company in question. The valuation method is chosenaccording to objective criteria and is based on one of the traditionally accepted valuation methods for suchassessments or on the average of several of them, weighted or otherwise. Traditional financial criteria areused to determine the value of any holding requiring a more in depth assessment.The valuation method selected for a security is used from one year to the next, unless a change in circum-stances makes this impossible. In such cases, provided that the change has significant consequences, a spe-cial note is attached as an annex.When this valuation exercise reveals a permanent diminution in value compared with the book value of thesecurity, its value is reduced in line with the permanent element of the loss in value recorded. A write-backis made when a previously recorded write-down is partially or entirely recovered.

DEBTORSDebtors are stated in the accounts at their nominal value or their acquisition value. A reduction in value isbooked when the realisation value on the date the accounts are closed is lower than the book value.

TREASURY INVESTMENTS AND CASH IN BANK AND AT HANDInvestments are stated in the balance sheet at cost. At the end of the financial year a reduction in value isbooked if the “market” value is lower than the book value. Each purchase is accounted for separately.

Other short-term investments and cash in bank and at hand are calculated in the same way as debtors duewithin one year.

PROVISIONS FOR RISKS AND CHARGESAt the end of each financial year the board of directors, acting with prudence, sincerity and in good faith,examines the provisions to be set aside to cover all of the foreseen risks or losses that may have arisen dur-ing the course of the year or previous years.

The provisions relating to previous years are regularly reviewed and transferred to the profit and lossaccount when they no longer serve any purpose.

CREDITORSAmounts payable are posted on the liabilities side of the balance sheet at their nominal value.

RECEIVABLES RESULTING FROM THE NATIONALISATION OF OUR FORMER HOLDINGS IN CONGOOur efforts to obtain compensation for our former subsidiaries in Congo have not yet come to fruition.Their book value has been written off.

FOREIGN ACCOUNTS AND CURRENCIESAssets and liabilities in foreign currencies are translated at the buying rate for the currency in question onthe last business day of the year. Differences are transferred to the profit and loss account as charges orincome (as appropriate), accordingto the rules of the Accounting Standards Commission.

— p 16 —


OPTIONS AND DERIVATIVESThe group regularly employs various derivatives instruments such as put and call options on securities, for-ward currency contracts, F.R.A., I.R.S., etc. Its policy is to use such instruments strictly to control and mini-mise risks or to improve the yield of the securities’ portfolio and never as speculative instruments.

The premiums collected from put and call options issued are immediately recorded under “other financialincome”. The risk assumed is subject to a provision charged against the financial income on closure of thefinancial year or at any interim closure.

Forward currency contracts are recorded as contingent liabilities and reviewed at the end of the financialyear.Commitments resulting from I.R.S. contracts are compensated.

*

The valuation rules used for each company have been applied either because they are uniform, or becausethey are specific to each of the companies included in the consolidation.

Tax charges in the consolidated accounts correspond to the total tax burden on the companies included inthe consolidation.

Acquisition premiums, which represent the positive difference between the acquisition price and the groupshare of the equity capital of consolidated companies, is amortised,where appropriate, over a maximumperiod of five years and charged to the profit and loss account.

In compliance with article 57 sub-paragraph 2 of the Royal Decree of 6 March 1990, intra-group capitalgains are eliminated in proportion to the interests of the parent company in the subsidiaries in question.

AREA OF CONSOLIDATION AND METHOD USEDAll of the companies in which BREDERODE has a direct or indirect holding of more than 50% of the votingrights or a controlling interest are consolidated using the global integration method. The consolidation areahas changed from the previous accounting period as a result of:

• the sale by Monceau-Zolder to Brederode of its holding in Brederode Insurance and Geyser.• the sale by Monceau-Zolder of its holding in La Lieve.• the consolidation of Artilat and its subsidiaries using the equity method.• the subscription by Brederode of 50.01% of the capital of Brederode CIT

However, the Congolese company ELUBANGI is not included in the consolidation area despite the fact thatBrederode holds 51%, since the group has been prevented from exercising any influence for several yearsnow. In any case, this shareholding has been written off entirely.

Companies in which the percentage shareholding or voting rights held are between 20% and 50%, and/orover whose management BREDERODE is able to exercise significant control, are in principle consolidated bythe equity method.

CONSOLIDATION DIFFERENCESThis is the difference between the acquisition price of a consolidated subsidiary and the group’s share in theequity capital of the subsidiary itself. In principle, this consolidation difference is determined on the acquisi-tion date of the subsidiary and remains fixed until the rate of participation stays unchanged, except in thecase of acquisition premiums subjected to depreciation.

For group’s companies that were subsidaries before january 1st. 1999, however, the consolidation differ-ences are calculated on the closing date of the financial year that precedes the first consolidation, i.e. 31December 1988.

— p 17 —


EXCHANGE DIFFERENCESThe conversion into euro of the accounts of the consolidated foreign subsidiaries is carried out on the basisof the exchange rate as at 31 December for the balance sheet, and at the average rate over the year for theprofit and loss account.

The rates used are as follows:

These differences are included in the balance sheet under the heading ‘EXCHANGE DIFFERENCES’, which islisted under “Capital and reserves”.

The following figures are in EUR 000

STATEMENT OF ISSUE COSTS

1999 1998

EUR EUR

USD on 31 December 1.0031 1.1664

USD average rate 1.0662 1.1116

GBP on 31 December 0.6204 0.7053

GBP average rate 0.6589 0.6708

Net Book value at the end of the previous year

0

Changes during the year

New expenses incurred 35

Depreciation 0

Net book value at year end 35

— p 18 —


STATEMENT OF TANGIBLE FIXED ASSETS

Land andbuildings

Plant,machinery

and equipment

Furnitureand vehicles

Other tangiblefixed assets

Cost

• At end of previous year 13,908 9,086 1,913 444

• Changes during the year

Acquisitions 40 42

Sales and disposals 2 41

Removed from full consolidation 7,477 9,086 1,530 64

• At year end 6,431 0 421 381

Capital gains

• At end of previous year 3,298


Cancelled 268

• At year end 3,030

Depreciation and amounts written down

• At end of previous year 3,536 5,901 1,178 18


Recorded 280 53

Cancelled 1

Removed from full consolidation 2,530 5,901 930

• At year end 1,286 0 300 18

Net book value at year end 5,145 0 121 3,393

— p 19 —


STATEMENT OF FINANCIAL ASSETS

Participations

Debtors

Associated companies Other investments

Cost 573,165

• At end of previous year


First time consolidation under the equity method

52,384

Acquisitions 1,165 312,961

Sales and disposals -182,758

Exchange differences 10,918

• At year end 53,549 714,286

Amounts written down


• Changes during the year:

Recorded 16,314

Written back -241

Cancelled -8,935

Exchange differences 3,588


Uncalled commitments


• Changes during the year:

Called -1,071


Change in Capital and Reserves of associated companies

• Share in the results of associated companies

33,323

• Elimination of dividends paid by associated companies

(80,737)

Net book value at year end 6,135 680,617

Net book value at end of previous year 442

Changes during the year

• additions 5,807

• disposals -3

Net book value at year end 6,246

Cumulative amounts written off on receivables at year end

0

— p 20 —


STATEMENT OF RESERVES

POSITIVE CONSOLIDATION DIFFERENCES

NEGATIVE CONSOLIDATION DIFFERENCES

STATEMENT OF LIABILITIES

At end of previous year 237,398

Changes during the year :

• Group’s share in the result 57,002

• Dividends for the year -14,230

At year end 280,170

Net book value at end of previous year 0


• Changes due to a percentage increase in the shareholding

4,351

• Amortisation -4,351

At year end 0

Net book value at end of previous year 23,587


• Changes due to a percentage decrease in the shareholding

-20,296

At year end 3,291

Breakdown of amounts originally payable after more than a year, according to their remaining period

Due within the year Due after more than one yearbut less than 5

Financial obligations

• Unsubordinated bond 73,053

• Credit institutions 5 49

• Other 41

TOTAL 5 73,143

— p 21 —


OPERATING RESULTS

TAXES

CONTINGENT LIABILITIES

1999 1998

Personnel costs

Fully-consolidated companies

Average N° of employees 5 302

• Labour 0 247

• Staff 5 52

• Management 0 3

Personnel costs 244 10,305

Extraordinary results

Breakdown of other extraordinary income

• Reduction of municipal and provincial taxes

102 0

• Liquidation of Yazoo Valley 113 0

Effect of extraordinary results on income taxes for the year

1999 1998

Non taxable capital gains on disposal of assets

82,371 408,653

1999 1998

Real guarantees given or irrevocably promised by consolidated companies as collateral for their debts of commitments

34,085 34,085

Major commitments for the sale of tangible assets

247 199

Rights and commitments arising from exchange rate operations (forward selling of USD and GBP)

133,151 239,935

Amount reserved for the repair of former mines damages

1,151 1,170

Uncalled commitments in " Limited Partnerships "

176,198 86,837

Guarantees given on behalf on third parties

887 887

Financial obligations resultingfrom put options

48,746 29,665

Commitments for sale of shares arising from call options

67,217 19,404

— p 22 —


RELATIONSHIPS WITH ASSOCIATED COMPANIES AND OTHER RELATED COMPANIES NOT INCLUDED IN THE CONSOLIDATION

FINANCIAL RELATIONS WITH DIRECTORS AND MANAGERS INCLUDED IN THE PROFIT AND LOSS ACCOUNT

CASH FLOW STATEMENT

The objective of the cash flow statement is to show the cash movements, generated by the activities of theconsolidated companies, during the year under review.

This statement, based on the consolidated accounts, highlights the cash flows movements by providing thevarious cash inflows and outflows, during the financial year, related to the operating, investment andfinancing activities.

OPERATIONS

The operating cash flow changes as a result of the change in the net profit for the year and as a result ofthe consolidation with the equity method of the industrial companies of the group.

INVESTMENT OPERATIONS

The group continue to pursue its expansion policy. The group net investment totaled EUR million 78 duringthe year under review.

FINANCING OPERATIONS

Group indebtedness increased during the year in order to finance new investments carried out by thegroup.

Affiliated companies

Current year Previous year

Financial investments

• Creditors due within one year 1,573 24

• Debtors due within one year 1,483 904

Financial income

• Income from current assets 902 249

• Interest charges 191 0

Disposal of fixed assets

• Capital gains realised 0 709

1999 1998

Direct and indirect emoluments

• of directors and managers 586 791

— p 23 —


EUR 000 31 December 1999 31 December 1998

OPERATING ACTIVITIES

Profit after tax (group share) 57,002 117,348

Minority Interests 19,539 119,710

Amortisation of consolidation differences

4,351

Depreciation of tangible and intangible fixed assets

333 2,298

Net change in provisions 2,932 1,846

Net change in write-downs 21,569 36,571

Net capital gains on disposals of assets (91,069) (252,115)

Share in the results of associated companies

(33,323)

Gross Cash flow (18,666) 38,253

Changes in working capital (15,901) (15,511)

Impact of currency fluctuations and changes in consolidation area on working capital

939 2,211

Dividends received from associated companies

(80,737)

Operating Cash Flow 47,109 24,953

INVESTING ACTIVITIES

Issue costs 35

Acquisitions of tangible and intangible fixed assets

82 (2,797)

Acquisitions of financial assets 320,875 (409,161)

New loans granted 5,807 0

Total investments 326,799 (411,957)

Sale of tangible and intangible fixed assets

385 969

Sale of financial assets 254,957 335,870

Repayments of borrowings 3 5,978

Total of divestments 255,345 342,817

Net change of treasury investments in securities

(6,584) (3,543)

Impact of consolidation area (421)

Investments Cash Flow (78,459) (72,683)

FINANCING ACTIVITIES

Net change in financial obligations 80,068 65,154

Dividends paid to shareholders (12,936) (9,659)

Dividends paid by subsidiaries to minorities

(10,603) (6,123)

Financing Cash Flow 56,529 49,372

Net change in cash and cash equivalents 25,179 1,643

— p 24 —

V. JOINT STATUTORY AUDITOR’S REPORTON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1999 TO THE SHAREHOLDERS' MEETING OF BREDERODE S.A.

To the Shareholders,

In accordance with the legal and regulatory requirements, we are reporting to you on the performance ofthe mandate which you have entrusted to us.

We have audited the consolidated financial statements for the year ended December 31, 1999, with a bal-ance sheet total of (000) EUR 866,717 and a consolidated profit for the year of (000) EUR 57,002. Theseconsolidated financial statements have been prepared under the responsibility of the Board of Directors ofthe Company. In addition, we have reviewed the management report on the consolidated accounts.

UNQUALIFIED AUDIT OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS

Our audit was performed in accordance with the standards of the "Institut des Reviseurs d'Entreprises/Insti-tut der Bedrijfsrevisoren". Those standards require that we plan and perform the audit to obtain reasona-ble assurance about as to whether the consolidated financial statements are free of material misstatement,taking into account the Belgian legal and regulatory requirements relating to the consolidated financialstatements.

In accordance with these standards, we have considered the administrative and accounting organisation ofthe Group as well as the system of internal control. The group's management has provided us with allexplanations and information which we required for our audit. We have examined on a test basis, the evi-dence supporting the amounts included in the consolidated financial statements. We have assessed theaccounting policies used, the significant accounting estimates made by the Company and the overall pres-entation of the consolidated financial statements. We believe that our audit provides a reasonable basis forour opinion.

In our opinion, the consolidated financial statements of Brederode S.A. for the year ended December 31,1999 present fairly the financial positition of the Group and the results of its operations, in conformity withthe prevailing legal and regulatory requirements, and the disclosures made in the notes to the consolidatedaccounts are adequate.

ADDITIONAL ASSERTION

We supplement our report with the following statement which does not impact on our audit opinion onthe consolidated financial statements :

-The consolidated directors' report contains the information required by law and is in accordance with theconsolidated financial statements.

Liège, April 21, 2000

Klynveld Peat Marwick Goerdeler S.C.C.Reviseurs d'Entreprises

Statutory Auditorrepresented by

P. COMHAIRE P.P. BERGERStatutory Auditor Reviseur d'Entreprises

— p 25 —

JOINT STATUTORY AUDITOR’S REPORT

— p 26 —

VI. COMPANY’S ACCOUNTS

Pursuant to article 80 bis of the law on Commercial companies, the statutory accounts hereafter are an abridged version in which the legally requiredannex and the auditor’s report are missing. These accounts have been certified without qualifications. The full version will be deposited with the BanqueNationale de Belgique and is also available at the company’s registered office.

BALANCE SHEET

ASSETS

31 december 1999 31 december 1998

FIXED ASSETS 433,788 242,570

Tangible fixed assets 157 172

• Land and buildings 58 65

• Furniture and vehicles 99 107

Financial investments 433,631 242,398

• Affiliated companies

Shareholdings 426,966 242,398

Other financial investments

• Shareholdings 6,665 0

CURRENT ASSETS 15,823 71,963

Debtors due within one year 8,252 3,597

• Other debtors 8,252 3,597

Treasury investments 6,987 68,217

• Other short-term investments 6,987 68,217

Cash at bank and in hand 509 49

Deferred charges and accrued income 75 100

TOTAL ASSETS 449,611 314,533

— p 27 —

COMPANY’S ACCOUNTS

LIABILITIES AND CAPITAL

EUR 000 31 december 1999 31 december 1998

CAPITAL AND RESERVES 282,759 245,008

Capital 25,610 25,610

• Called up share capital 25,610 25,610

Share premium account 51,724 51,724

Revalution surpluses 2;385 2,386

Reserves 66,765 66,638

• Legal reserve 2,561 2,561

• Untaxed reserves 8,004 8,195

• Available reserves 56,200 55,882

Profit carried forward 136,276 98,650

PROVISIONS AND DEFERRED TAXES 3 3

Deferred taxes 3 3

CREDITORS 166,849 69,522

Creditors due after more than one year

• Borrowings

Non subordonated bonds 73,053

Creditors due within one year

• Borrowings

Credit institutions 5,969 10,536

Other borrowings 23,000 10,982

Suppliers 8 5

• Taxes, salaries, and social security costs

Taxation 364 9

Salaries and social security costs 12 17

• Other creditors 64,361 47,955

Other accruals and deffered income 82 18

TOTAL LIABILITIES AND CAPITAL 449,611 314,533

— p 28 —


PROFIT AND LOSS ACOUNT

CHARGES


Interest charges 3,185 2,054

Other financial charges 1,761 522

Services and other goods 687 526

Salaries, social security costsand pensions

144 122

Other current charges 4 5

Depreciation and write downs of issue costs, intangible andtangible fixed assets

54 50

Write down on financial assets 48 30

Taxes 8 241

Profit after tax 51,983 76,500

TOTAL CHARGES 57,874 80,050

PROFIT FOR THE YEAR AVAILABLE

FOR APPROPRIATION

52,173 76,504

— p 29 —


INCOME

APPROPRIATIONS AND ALLOCATIONS


Income from financial investments 54,098 12,593

• Dividends 54,098 12,593

Income from current assets 2,675 3,396

Other financial income 2 375

Other current income 539 459

Capital gains on disposals 560 63,224

• of tangible and intangible fixed assets 0 4

• of financial investments 560 41,099

• of current assets 0 22,121

Transfers from deferred taxes 0 3

TOTAL INCOME 57,874 80,050

Transfers from untaxed reserves 190 4


PROFIT TO BE ALLOCATED 150,823 111,590

• Profit for the year available for appropriation

52,173 76,504

• Profit carried forward from previous year

98,650 35,086

TRANSFER FROM CAPITALAND RESERVES

2

• From the other reserves 2

TRANSFER TO CAPITAL AND RESERVES -317 -6

• To other reserves 317 6

RESULT TO BE CARRIED FORWARD -136,276 -98,650

• Profit to be carried forward 136,276 98,650

PROFIT AVAILABLE FOR APPROPRIATION -14,230 -12,936

• Dividends 14,230 12,936

— p 30 —


ANNEX (EUR 000)

STATEMENT OF CAPITAL

SHAREHOLDERS (DISCLOSURE LAW OF 2 MARCH 1989)

Amounts N° of shares

CAPITAL

Called up share capital

• At end of previous year 25,610 xxxxxxxxx

• At year end 25,610 xxxxxxxxx

Composition of capital

• Share categories

ordinary shares (of which 2,342,828 with VVPR-strip)

25,610 4,619,998

• Registered or bearer shares

Registered 2,973,813

Bearer 1,646,185

COMMITMENTS TO ISSUE SHARES

Further to the exercising of conversion rights

• amount of current convertible loans 73,053

• amount of capital to be to be issued 1,892

• corresponding maximum number of share to be issued

341,367

AUTHORISED SHARE CAPITAL NOT YET CALLED UP (E.G.M.-4 June 1997)

20,997

Voting rights attachedto issued shares

Rights relatingto bond conversion

Total

Declara-tion date

N° ofshares

% N° ofshares

% N° ofshares

%

AUXIMINES S.A.Drève Richelle 161 / 251410 Waterloo

29 June 99 447,140 9.7 0 0 447,140 9.0

BELGO-KATANGA S.A.Drève Richelle 161 / 25 1410 Waterloo

29 June 99 2,370,869 51.3 0 0 2,370,869 47.8

Total group Auximines 29 June 99 2,818,009 61.0 0 0 2,818,009 56.8

— p 31 —


STATEMENT OF LIABILITIES

RELATIONS WITH AFFILIATED COMPANIES AND OTHER RELATED COMPANIES

ACCOUNTING POLICIESThe valuation rules used to prepare the annual accounts of Brederode S.A. are the rules of the group asdescribed in the annex to the consolidated accounts with the exception of provisions that apply exclusivelyto the consolidated accounts..

TAXES, SALARIES AND SOCIAL SECURITY COSTS

Year Previous year

Taxes

• Tax charges non yet due 364 9

Salaries and social security

• Other Salaries and social security costs 12 17

AFFILIATED COMPANIES

1999 1998

FINANCIAL ASSETS

Shareholdings 426,966 242,398

DEBTORS

Due within one year 8,124 3,424

TREASURY INVESTMENTS

Amounts receivable / Deposits 0 61,230

CREDITORS

Due within one year 46,980 33,142

REAL AND PERSONAL GUARANTEES

Given 898 898

FINANCIAL INCOME

Income from financial assets 53,889 12,592

Income from current assets 2,227 2,246

Interest charges 269 1,753

DISPOSAL OF FIXED ASSETS

Capital gains on disposal 17 34,770

— p 32 —

VII. CORPORATE GOVERNANCE

1. MEMBERS OF THE BOARD OF DIRECTORS

Pierre van der Mersch Chairman and Chief Executive OfficerGérard Cotton Managing DirectorJohanne Iweins d’Eeckhoutte Managing DirectorBernard De Corte Non executive DirectorComte Philippe Greindl Non executive DirectorBaron Jean Peterbroeck Non executive Director

Pierre van der Mersch, Gérard Cotton and Johanne Iweins, executive directors, are responsible for the day-to-day management.

Bernard De Corte is the Chairman of Afrifina, a subsidiary of Brederode.Philippe Greindl has had a long career as the financial director of several industrial and financial companiesincluding Brederode. Jean Peterbroeck is Chairman of the investment banking firm PETERCAM and Vice-Chairman of BXS (TheBrussels Exchange).

Since Brederode is 50% controlled by Auximines and Belgo-Katanga, it should be noted that Pierre van derMersch is also a director of Auximines and chairman of Belgo-Katanga, Gérard Cotton, is an executivedirector of Auximines and Belgo-Katanga, and Johanne Iweins is also a director of these two companies,whilst Philippe Greindl is chairman of Auximines and a director of Belgo-Katanga.

Pierre van der Mersch’s term of office expires in 2002, whilst that of Bernard De Corte, Philippe Greindl andJean Peterbroeck expire in 2003, and that of Gérard Cotton in 2004.

2. FUNCTIONS OF THE BOARD OF DIRECTORS

The board of directors meets whenever the interests of the company requires. During 1999 the Board ofDirectors met formally on five occasions.

At formal meetings the board examines in particular the semi-annual statement and the annual companyand consolidated accounts, as well as changes, compared with the previous accounting period, in theequity, net profits and securities’ portfolios of Brederode, its subsidiaries and sub-subsidiaries. It discussesmarket operations and global risks. It reviews press releases. The board deliberates on any subject con-cerning the company’s affairs, holding, if necessary, telephone conferences with the non-executive direc-tors. The decisions of the board are tecnically taken by a majority of votes, but in practice decisions are alwaysunanimous.

The directors are remunerated by fixed emoluments which together with benefits in kind represented lessthan 0.5% of the net profits of the company for the 1999 financial year. For many years they haverenounced to their statutory directors’ share of the profits for the benefit of shareholders. They do notbenefit from share options or loans or advances from the company.

3. COMMITTEES CREATED BY THE BOARD OF DIRECTORS

At the beginning of 1999, the board of directors decided to set up a an audit committee and a remunera-tions committee.

The Audit Committee will henceforth review the financial statements of the company on 30 June and 31December in connection with the autitors and the general risks run by the company. It is composed of thenon-executive directors and is chaired by Jean Peterbroeck.

— p 33 —

CORPORATE GOVERNANCE

The audit committee met prior to the meetings of the Board of Directors convened to discuss the accountsas at 30 June and 31 December 1999.

The Remunerations Committee is consulted on the subject of the remuneration of executive directors. It iscomposed of the non-executive directors and Pierre van der Mersch, Executive Chairman of Brederode, andis chaired by Philippe Greindl. Johanne Iweins will take minutes of the committee meetings.

The remuneration committee met once in 1999.

4. DAILY MANAGEMENT

The board provides collegial management of the company in a spirit of partnership.

The executive directors are responsible for the company’s daily management.

5. DIVIDEND POLICY

The policy aims at enabling a regular growth of dividends paid to shareholders based on the flow ofincome received by the company. Capital gains on disposals, in principle, are systematically reinvestedtherefore reinforcing Brederode’s own growth capabilities.

6. RELATIONSHIPS WITH MAJOR SHAREHOLDERS

Brederode is controlled by Belgo-Katanga which, in turn, is controlled by Auximines. However, Brederode isnot aware of joint control agreements between these shareholders, nor of shareholders’ or directors’ com-mittees which may have been formed through the application or otherwise of these agreements.

— p 34 —

VIII. MAIN SHAREHOLDINGS OF THE BREDERODE GROUP AS AT 31 DECEMBER 1999

INSURANCE

BANKINSURANCE

ACE Limited 538,562 shares

Aetna Inc. 61,477 shares

AIG Inc 231,996 shares

Allied Zurich Plc 320,035 shares

American General Inc 36,500 Pfd. Cv. shares

Amlin Plc 3,621,139 shares

Atrium Capital Ltd 500,000 shares

Atrium Underwriting Plc 758,500 shares

BRIT Insurance Holding Plc 2,031,245 shares

Conseco Inc 251,800 shares

57,500 Pfd. Cv. shares. serie B

Goshawk Insurance Holding Plc 2,276,025 shares

Hardy Underwriting Group Plc 1,429,000 shares

IPC Holdings Limited 134,500 shares

Partner Re Holdings Ltd 140,000 shares

Renaissance Re Holdings Limited 107,100 shares

Risk Capital Holdings Limited 153,100 shares

Royal & Sun Alliance Plc 702,361 shares

Scor 100,000 shares

SVB Holdings Plc 16,353,559 shares

Torchmark Inc 50,000 shares

Unum Provident Inc 40,000 shares

Wellington Underwriting Plc 5,587,500 shares

XL Capital Ltd 133,057 shares

Almanij 80,000 shares

Espirito Santo Financial Holding 346,392 shares

Fortis (B) 4,446,972 shares

I.N.G. 255,975 shares

KBC 577,618 shares

Lloyd's Bank TSB 455,000 shares

— p 35 —

MAIN SHAREHOLDINGS OF THE BREDERODE GROUP

BANKING

UTILITIES

Banco Portuguese de Investimentos 1,630,890 shares

Banco Pinto & Sotto Mayor 332,128 shares

BNP-Paribas 116,000 shares

First Union Corp 95,000 shares

H.S.B.C. Plc 2,772,117 shares

J.P.Morgan & Co 124,800 shares

National Australia Bank 150,000 Pfd. Cv. shares

National City Corp 320,000 shares

Republic New –York Corporation 62,068 shares

Royal Bank of Scotland Plc 309,907 shares

Société Générale S.A. 30,000 shares

Standard Chartered Plc 550,000 shares

Washington Mutual Inc 202,500 shares

WestPac Banking Corporation 75,000 Pfd. Cv. shares

Electrabel 329,267 shares

Electricidade de Portugal 310,000 shares

Hyder Plc 418,013 shares

Kelda Plc 829,544 shares

National Power Plc 2,162,117 shares

Repsol 376,848 shares

Royal Dutch 125,000 shares

Scottish Power Plc 1,312,000 shares

Severn Trent Plc 1,053,631 shares

Texas Utilities 230,000 shares

Thames Water Plc 406,157 shares

TotalFina 43,833 shares

United Utilities Plc 961,576 shares

Unocal Corp 200,000 Pfd. Cv. shares

— p 36 —


DIVERSIFIED INDUSTRIES

TELECOMMUNICATION

Akzo-Nobel 171,084 shares

Aquafin N.V. 12,000 shares

AIMCO 200,000 shares

Archstone Communities 334,400 shares

Beckman Coulter 30,000 shares

Blue Circle Plc 1,162,115 shares

Booker Plc 225,507 shares

Britax International Plc 1,200,000 shares

Chelsea Gca Realty Inc 207,800 shares

Daimler Chrysler 25,000 shares

D.S.M. 176,750 shares

Elementis Plc 871,487 shares

Franchise Financial Corp of America 300,000 shares

Gallaher Group Plc 700,000 shares

Indymac 360,388 shares

J.P. Realty Inc 300,000 shares

Meditrust Corp 234,272 shares

Pro Logis Inc 270,000 shares

100,000 Pfd. Cv. shares

Psinet 40,000 Pfd. Cv. shares

Rank Group Plc 919,736 shares

Rutland Plc 32,400,000 shares

Shurguard Storage Corp 200,000 shares

Sovran Self Storage Inc 160,000 shares

Unilever N.V. 180,000 shares

180,000 Pfd. shares

Unilever Plc 500,000 shares

United Biscuits Plc 933,333 shares

Verio Inc 40,000 shares

Cable & Wireless Plc 80,000 shares

K.P.N. 423,467 shares

Portugal Telecom 218,739 shares

Tele Denmark 30,000 shares

Telesp Participacoes 80,000 shares

TNT Post Group 654,053 shares

— p 37 —


PRIVATE EQUITY

EUR Equivalent (million)

Called amounts USD million 113.2 112.9

GBP million 14.2 22.7

EUR million 19.0 19.0

subtotal 154.6

Uncalled amounts USD million 144.9 144.4



subtotal 177.2

Total commitments USD million 258.1 257.3



Total 331.8

— p 38 —

IX. FINANCIAL CALENDAR

Le rapport annuel français constitue le texte original.Il existe une traduction néerlandaise du présent rapport.

En cas de divergence d'interprétation entre les différentes versions, letexte français fera foi.

*

De originele tekst van het jaarverslag werd in de Franse taal opgesteld.Het jaarverslag opgesteld in het Nederlands is een vertaling

van deze originele tekst.Bij eventuele interpretatieverschillen, mag enkel de Franstalige versie als

referentie dienen.

*

This annual report is available in English, French and Dutch.In case of diffrerences of interpretation the French version will prevail.

*

This annual report is also available on the internet at www.brederode.be

2000 Annual General Meeting 30 May 2000 at 10.00am

Detachment and payment of coupon n° 44 14 June 2000

Unaudited interim statement for half year to 30th June 2000

first two weeks of September 2000

Publication of 2000 results first two weeks of April 2001

2001 Annual General Meeting 29 May 2001 at 10.00 a.m.

— p 39 —

Documents

Brederode 1999 GB - KU Leuven · Henri Poincar é — p 2 — II. KEY ... resolved to purchase, from Monceau-Zolder s.a., its subsidiaries Brederode Insurance s.a. and Geyser s.a