Annual Report Revenue Net result attributable to Year-end order book (in € million) shareholders (in € million) (in € million)

10,000 300 14,000

12,000 8,000 200 13,100 8,835

10,000 8.646 8,324 12,100 7.770 11,100 7,697 7,611 11,000

6,000 7,404 100 161.9

8,000 10,400 126.0 31.3 15.3 6,000 4,000 0

4,000 -187.4 2,000 -100 2,000

0 -200 0 08 09 10 11 12 08 09 10 11 12 08 09 10 11 12

Equity/capital base Net result per share Dividend per ordinary share (in € million) (fully diluted) (in €) (in €)

1,400 1.80 0.60

1,200

1,362 0.50

1,302 1.20

1,000 0.50 1,162 1.20 0.40 1,098 1,100 1,077 800 0.60 1,045.4 875 921.9 847

0.18 0.30 0.54 600 0.08 0.00 0.20 400 -0.79 -0.60 0.10 200 0.16 0.03 0.10 0.10 0 -1.20 0.00 08 09 10 11 12 08 09 10 11 12 08 09 10 11 12*

Equity Capital base *proposal

Revenue by sector year-end 2012 Order book by sector year-end 2012 Result before taxes as percentage of revenues by sector

2012 2011 6% 7% 7% 9% Construction and M&E services 1.4% 2.2%

Civil engineering 1.5% 2.4% 41% 37% Property neg. neg.

Public Private Partnerships 2.9% 2.1% 46% 47%

Revenue by region year-end 2012

5% 3% 9% United Kingdom

12% 43% Germany Ireland

Worldwide 28% 2012 – 3

Contents

4 Foreword Key figures (in € million, unless otherwise mentioned)

2012 2011 6 Royal BAM Group nv shares Revenue from continuing operations 7,404 7,697 Operating result from continuing operations (293.2) 135.4 10 Report by the Executive Board Result before tax from continuing operations (291.0) 143.5 11 Financial results Net result attributable to shareholders (187.4) 126.0 16 Outlook 18 Strategic agenda 2013-2015 Earnings per share (x €1.–) 20 $POTUSVDUJPOBOENFDIBOJDBMBOEFMFDUSJDBMTFSWJDFT t $POUJOVJOHPQFSBUJPOT (1.06) 0.49 34 $JWJMFOHJOFFSJOH t %JTDPOUJOVFEPQFSBUJPOT 0.27 0.05 50 Property 58 Public-Private Partnerships Dividend per ordinary share (in €1.–) 1 0.10 0.16 62 Acquisitions and disposals Payout (as percentage) - 30 62 $PSQPSBUFHPWFSOBODF Number of issued ordinary shares as at year-end 73 Declaration in accordance with the Dutch Financial (x 1,000) 241,525 232,938 Supervision Act Total number of issued shares as at year-end 73 Decision on Article 10 of the Takeover Directive (x 1,000) 241,525 232,938 76 Risk and risk management $MPTJOHQSJDFPSEJOBSZTIBSFTPO%FDFNCFS 85 $PSQPSBUFTPDJBMSFTQPOTJCJMJUZ (in €1.–) 3.23 3.26 87 Human resources management 90 Worker participation Equity attributable to shareholders 921.9 1,162.4 90 $POTUSVDUJPOJOEVTUSZCBSPNFUFS $BQJUBMCBTF 1,045.4 1,362.4 92 Particulars of the Executive Board members

Orderbook 2 11,000 10,400 94 Report by the Supervisory Board to the shareholders Net addition to tangible fixed assets 86.9 57.2 107 Remuneration report Depreciation/amortisation/impairments: 116 Particulars of the Supervisory Board members t 5BOHJCMFBTTFUT 80.8 94.9 t *OUBOHJCMFBTTFUT 158.6 11.1 119 Financial statements 2012 t 0UIFSJNQBJSNFOUT 247.7 - 119 $POUFOUTPGUIFGJOBODJBMTUBUFNFOUT $BTIGMPXCFGPSFEJWJEFOE 299.7 232.0 120 $POTPMJEBUFECBMBODFTIFFUBTBU%FDFNCFS 121 $POTPMJEBUFEJODPNFTUBUFNFOU Average number of employees (fte) 23,188 23,702 122 $POTPMJEBUFETUBUFNFOUPGDPNQSFIFOTJWFJODPNF Number of employees at year-end (fte) 23,734 23,830 123 $POTPMJEBUFETUBUFNFOUPGFRVJUZ 124 $POTPMJEBUFEDBTIGMPXTUBUFNFOU Ratios: 125 Notes to the consolidated financial statements t 3FTVMUGSPNDPOUJOVJOHPQFSBUJPOTCFGPSFUBY 198 $PNQBOZCBMBODFTIFFUBTBU%FDFNCFS as % of revenue 3 1.4 1.9 198 $PNQBOZJODPNFTUBUFNFOU t /FUSFTVMUGPSUIFZFBSBTPGSFWFOVF (2.5) 1.6 199 Notes to the company financial statements t /FUSFTVMUGPSUIFZFBSBTPGBWFSBHFFRVJUZ (18.0) 11.1 208 Other information Capital ratios: 208 Proposed appropriation of profit for 2012 t &RVJUZBUUSJCVUBCMFUPTIBSFIPMEFST 208 Provisions of the Articles of Association concerning as % of total assets 13.8 16.1 profit appropriation t $BQJUBMCBTFBTPGUPUBMBTTFUT 15.7 18.9 209 Anti-takeover measures 211 *OEFQFOEFOUBVEJUPSTSFQPSU 212 Overview of principal subsidiaries and associates 1 Dividend proposal 2012. 213 Organisational structure 2 The order book comprises both signed contracts, as well as verbally agreed upon orders. 214 Offices 3 Before impairments. 215 Executive officers 216 Ten years of key data 218 Key financial dates 4 – 2012 Foreword

Royal BAM Group presents its annual report for 2012.

*OMJOFXJUIUIFGPSFDBTUNBEFBUUIFUJNFPGUIF 

half-year report, BAM ended this year with a result from

continued activities before tax and impairments of

€107.1 million from an operating income of €7.4 billion.

‘BAM is working to position itself as a best-in-class construction company, well placed to take advantage of renewed growth in the European markets.’ 2012 – 5

Last year did not see the economic recovery that is sorely OFFEFECZUIFDPOTUSVDUJPOTFDUPSBOEPUIFSBSFBTPGJOEVTUSZ*O the Netherlands, BAM is an important player on the residential DPOTUSVDUJPONBSLFU*OESBXJOHVQPVSIBMGZFBSSFQPSU XF came to the conclusion that our future property development projects in the Netherlands will be later (in time), fewer (in numbers) and lower (in terms of average sales price) than had previously been expected. At that time, this conclusion required BAM to take impairments totalling €398 million, including a EPXOHSBEJOHPGUIFWBMVFPGUIF(SPVQTMBOEIPMEJOHTCZB FNQMPZFFTXIPBSFMPTJOHUIFJSKPCT PSGPSUIFJSGBNJMJFT*O quarter. order to turn the tide and achieve sustainable growth, we continue to focus on cost awareness, risk management and 5IFTFEPXOXBSEWBMVFBEKVTUNFOUTDBTUBTIBEPXPWFS#".T excellent project implementation. OPUVOGBWPVSBCMFPQFSBUJOHQFSGPSNBODFT*OHFOFSBM PVS operating companies posted results that were in themselves *OUFSNTPGTVTUBJOBCJMJUZ XFIBWFBHBJOCFFOBCMFUPNBLF satisfactory, taking into account the market downturn in the progress. Our ambitions and results are presented briefly in this Netherlands and the difficult conditions in the other European report from page 85 on. More details can be found in our home markets. TFQBSBUFTVTUBJOBCJMJUZSFQPSU XIJDI*XBSNMZSFDPNNFOE BAM is committed to corporate social responsibility across the

Our earlier strategic choice to focus on public-private FOUJSF(SPVQ XJUIBQBSUJDVMBSGPDVTPOTBGFUZ $02 reduction QBSUOFSTIJQTQSPWFEUPCFUIFSJHIUPOF#".T111BDUJWJUJFTBSF and waste processing. on the right track, with a good supply of new projects. Our multidisciplinary, life-cycle-costs-oriented and integrated BAM started the financial year 2013 with an order book worth approach successfully sets us apart from the competition. Our €11.0 billion, which represents an increase of €0.6 billion PPP projects are further detailed on page 58, and the compared to year-end 2011. contribution of the various PPP transactions in the year under SFWJFXJTEFUBJMFEJOUIFEJSFDUPSTWBMVBUJPO0OFTVDITVDDFTT This healthy order book is a testament to the trust that customers was the award, in collaboration with our partners, of the N33 QMBDFJOUIF(SPVQ*UQSPWJEFTTPMJEGPVOEBUJPOTPOXIJDIUP highway construction project (the first Dutch infrastructure achieve the strategic priorities set during the year under review for project for which long-term financing is provided by a pension UIFQFSJPE5IFNBJOBTQFDUTPG#".TTUSBUFHZBSF fund). presented in more detail starting on page 18 of this Annual Report. The Group foresees various market developments, but in *O UIF(SPVQPODFBHBJOEFMJWFSFEPVUTUBOEJOHUFDIOJDBM general expects to see only limited improvement in conditions in performances. This report includes photos of many projects of JUT&VSPQFBOIPNFNBSLFUT#".TGPDVTXJMMCFPOPQFSBUJPOBM which BAM is proud and to which BAM employees contributed improvements and targeted growth initiatives in services, their skills and enthusiasm. Fierce competition is forcing the multidisciplinary projects and international niche markets, Group to accept low margins, while customers are increasingly combined with a solid and conservative financial strategy. BAM is demanding that construction companies pre-finance projects. working to position itself as a best-in-class construction company, BAM management maintains that the cash outflow this entails is well placed to take advantage of renewed growth in the European VOBDDFQUBCMF5IF(SPVQTDBTIQPTJUJPOJTUIFSFGPSFBOBSFBPG markets. particular focus Group-wide. Bunnik, the Netherlands, 6 March 2013 During the last year, various divisions and regions were forced to further adjust their workforce levels to reflect contracting N.J. de Vries, markets. The fact that this process is necessary and is being $IBJSNBO&YFDVUJWF#PBSE conducted with all due care makes it no less painful for the BAM Royal BAM Group nv 6 – 2012

Royal BAM Group nv shares

Stock exchange listing > Graph 2 shows the development of the average number of ordinary shares traded in 2012 on NYSE Euronext Amsterdam. The shares of Royal BAM Group nv have been listed on the NYSE > Graph 3 (page 8) shows the development of the average price Euronext Amsterdam stock exchange since 1959. BAM is listed on on NYSE Euronext Amsterdam in 2012. UIF".9JOEFY .JELBQ BTXFMMUIF&VSPOFYU/&95*OEFY Royal BAM Group ordinary share options have been traded by *GOFDFTTBSZ */(BOE3BCPCBOLBDUBTMJRVJEJUZQSPWJEFSTGPSUIF NYSE Liffe, the NYSE Euronext derivatives exchange, since 2006. trade in ordinary shares.

The total stock exchange value (market capitalisation) of the Movements in the number of outstanding shares Group stood at approximately €0.8 billion at year-end 2012 (year-end 2011: approximately €0.8 billion). *O UIFOVNCFSPGPVUTUBOEJOHPSEJOBSZTIBSFTJODSFBTFECZ 8,587,345 to 241,524,914, attributable to the payment of stock Share price dividend.

The 2012 closing price for the ordinary share was €3.23, which was The movements in the number of outstanding shares in 2012 is approximately 1 per cent lower than the closing price for 2011 shown in > table 1. The average number of ordinary shares in 2012 (€3.26), meaning the share price lagged behind the AMX index was 238,193,212 (2011: 232,377,783). BQFSDFOUJODSFBTF #".TTIBSFQSJDFIBTGBMMFOCZBMNPTU 75 per cent over the last five years. By way of comparison, the AEX According to the AFM register of substantial shareholdings, five and the AMX index fell by 34 per cent and 19 per cent in the same institutional investors have real interests of 5 per cent or more. period. $IBOHFTNBZIBWFPDDVSSFE IPXFWFS XJUIJOUIFEJTDMPTVSF thresholds. > Graph 1 shows the history of the BAM ordinary share price over the past five years. > Table 2 shows the interests of 5 per cent or more according to the AFM register of substantial shareholdings. Volume of trade on NYSE Euronext Amsterdam

The cash value of the Royal BAM Group ordinary share decreased in the financial year by almost 11 per cent to a total of 306.9 million shares (2011: 344.0 million). The average daily trade was 1,198,900 ordinary shares (2011: 1,338,500). The value of ordinary shares traded in 2012 fell by approximately 40 per cent to €859 million (2011: €1,434 million). The average daily trade in BAM shares in 2012 was €3.4 million (2011: €5.6 million).

Graph 1 Ordinary share price movement Graph 2 Number of traded ordinary shares in 2012

(in €) (average per day - NYSE Euronext 2012)

24 2,000,000 22 20 18 1,500,000 16 14 12 1,000,000 10 8 6 500,000 4 2 0 0 2008 2009 2010 2011 2012 j f m a m j j a s o n d

BAM sector NL sector Eur AEX AMX ordinary trade moving average large blocks 2012 – 7

Dividend policy Investor relations

Dividend policy and proposed dividend for 2012 Royal BAM Group attaches great importance to the provision of Royal BAM Group strives to distribute between 30 per cent and USBOTQBSFOUBOEJEFOUJDBMJOGPSNBUJPOUPBMMJOWFTUPST#".T 50 per cent of the net profit as dividend on the ordinary shares. investor relations policy is geared to informing investors about the The General Meeting of 24 April 2013 will be invited to declare a (SPVQTTUSBUFHZ PCKFDUJWFT QFSGPSNBODFBOEQSPTQFDUTJOHPPE dividend for 2012, at the discretion of the individual shareholder, time, fully and in clear and unambiguous terms. Business results of either €0.10 in cash (2011: €0.16) or in shares. will not be adequately reflected in the value of the shares unless there is high-quality communication with investors. The dividend return on the ordinary shares is 3.1 per cent based on the proposed dividend and the 2012 closing price (2011: 4.9 per All press and analysts meetings organised in connection with the DFOU *OGPSNBUJPOPOUIFQSPQPTFEEJWJEFOEGPSDBOCFGPVOE publication of the annual, half-yearly and quarterly figures are JOUIF&YFDVUJWF#PBSETSFQPSUPOQBHFUPP BDDFTTJCMFUPFWFSZPOFWJBUIF*OUFSOFU XFCDBTU 

The press meetings for the annual and half-yearly figures are held in Dutch. The analysts meetings will be held in English. More JOGPSNBUJPOPOUIJTTVCKFDUDBOCFGPVOEPOUIFDPNQBOZT website.

Table 1 Number of outstanding shares in 2012

Ordinary Total Shares in issue as at 1 January 2012 232,937,569 232,937,569 100.0% 100.0%

Stock dividend shares issued 8,587,345 8,587,345

Shares in issue as at 31 December 2012 241,524,914 241,524,914 100.0% 100.0%

Table 2 *OUFSFTUTPGQFSDFOUPSNPSFBDDPSEJOHUPUIFSFHJTUFSPGTVCTUBOUJBMTIBSFIPMEJOHT kept by the Netherlands Authority for the Financial Markets (AFM)

(as a percentage) Interest above Date of last Total 5 per cent since notification A. van Herk 10.0 October 2005 18 June 2012 */((SPFQ/7 9.8 February 1992 20 April 2012 Delta Lloyd N.V. 5.6 December 2002 6 May 2011 Delta Lloyd Deelnemingen Fonds N.V. 5.2 April 2012 17 April 2012 Governance for Owners LLP 5.0 November 2010 16 November 2010 8 – 2012

Graph 3 Value of traded ordinary shares in 2012 The significant interest from investors is also expressed in the numbers of contacts in the form of road shows, participation in (average per day - NYSE Euronext 2012) seminars and presentations for investment clubs, amongst others. 6,000,000 For questions or more information concerning Royal BAM Group, 5,000,000 QMFBTFWJTJUUIFDPNQBOZTXFCTJUFBUXXXCBNFV4IBSFIPMEFST

4,000,000 (or potential shareholders) and financial analysts can address any RVFTUJPOTUPUIF*OWFTUPS3FMBUJPOT.BOBHFSPG3PZBM#".(SPVQ  3,000,000 Mr P.R.E. Snippe, e-mail [email protected], telephone +31 (0)30 659 87 07. 2,000,000

1,000,000

0 j f m a m j j a s o n d

Table 3 Numbers of ordinary shares (in €, unless otherwise indicated)

2012 2011 2010 2009 4 2008 Number of ordinary shares ranking for dividend as at year-end 241,524,914 232,937,569 231,765,736 135,196,679 135,192,833 Average number of ordinary shares 238,193,212 232,377,783 204,183,583 172,193,087 133,833,884

Net result (0.79) 0.54 0.08 0.18 1.21 Net result from continued operations (1.06) 0.49 0.08 0.18 1.21

Average number of ordinary shares ranking for dividend (fully diluted) 238,193,212 232,665,153 204,624,298 172,635,525 135,542,904

Net result (fully diluted) (0.79) 0.54 0.08 0.18 1.20 Net result from continued operations (fully diluted) (1.06) 0.49 0.08 0.18 1.20

$BTInPX 1.26 1.00 1.23 1.55 2.67 Equity attributable to shareholders 3.82 4.99 4.75 6.47 6.27 Dividend 2 0.10 0.16 0.03 0.10 0.50 Payout (as a percentage) - 30 45 43 42 Dividend yield (as a percentage) 2 3.1 4.9 0.7 1.4 7.8

Highest closing price 3.97 5.76 6.19 7.37 16.60 Lowest closing price 1.94 2.17 3.62 3.87 4.67 Price on 31 December 3.23 3.26 4.60 5.69 6.41 Average daily turnover (in number of shares) 1,198,900 1,338,500 2,010,000 1,152,000 1,126,000 Market capitalisation at year-end (x €1,000) 3 779,401 759,376 1,070,302 984,452 870,585

1 Dividend proposal 2012. 2 Based on share price at year-end. 3 Based on total number of outstanding ordinary shares and financing preference shares. 4 2009 adjusted for rights issue. 2012 – 9

BAM Utiliteitsbouw. De Yp, new-build complex for Haaglanden police force, The Hague. Architect: Van Mourik, The Hague. 10 – 2012 Report by the Executive Board

‘Across the board, the Group companies – given the market conditions – recorded pleasing performances in 2012.’ 2012 – 11

Financial results The decrease in the Property sector largely concerned the Dutch market and was due especially to the bad circumstances on the t 3FTVMUCFGPSFUBYBOEJNQBJSNFOUTGSPNDPOUJOVJOHPQFSBUJPOT housing market. Operating revenue also went up in the United in 2012: €107.1 million (2011: €143.5 million). ,JOHEPNBOE#FMHJVNCZUIFTBMFPGDPNNFSDJBMSFBMFTUBUF*O t 3FWFOVFGSPNDPOUJOVJOHPQFSBUJPOTEPXOCZQFSDFOUUP *SFMBOE PQFSBUJOHSFWFOVFXBT[FSP MJLFJO €7.4 billion (2011: €7.7 billion). t .BSHJOCFGPSFUBYBOEJNQBJSNFOUTGSPNDPOUJOVJOHPQFSBUJPOT The decrease in operating revenue in the PPP sector was related to 1.4 per cent (2011: 1.9 per cent). the decreased number of projects in the construction phase. t /FUSFTVMUïNJMMJPOMPTT ïNJMMJPOQSPGJU  t 1SPQPTFEEJWJdend of €0.10 per ordinary share with stock Result alternative (2011: €0.16 or stock alternative). 5IF(SPVQTOFUSFTVMUGPSUIFUXPZFBSTCSFBLTEPXOBTGPMMPXT t 0SEFSCPPLïCJMMJPO ZFBSFOEïCJMMJPO  (x €1 million) 2012 2011 Course of business Across the board, the Group companies – given the market Operating result before depreciation/ conditions – recorded satisfactory performances in 2012. The amortisation and impairments course of business in the various sectors is explained elsewhere in from continuing operations 193.8 238.7 this Annual Report. Depreciation/amortisation of tangible and intangible assets (88.9) (103.3) Operating revenue *NQBJSNFOUT (398.1) - Royal BAM Group posted operating revenue of €7,404 million in Operating result from continuing 2012, which is a decrease of €293 million (minus 4 per cent) operations (293.2) 135.4 compared with 2011 (€7,697 million). Operating revenue decreased Finance income 87.1 72.7 in all sectors. The decrease was predominantly a consequence of a Finance expense (83.6) (99.0) selective tendering policy and several major ongoing PPP and Result from associates (1.3) 34.4 infrastructure projects coming to an end. The effects of exchange Result before tax from continuing rate differences had an absorbing effect on the decrease in operations (291.0) 143.5 operating income. Taxes 39.1 (28.0) Net result from continuing (x €1 million) 2012 2011 operations (251.9) 115.5 Net result from discontinued $POTUSVDUJPOBOENFDIBOJDBMBOE operations 65.0 12.2 electrical services 3,336 3,389 Non-controlling interest (0.5) (1.7) $JWJMFOHJOFFSJOH 3,760 3,834 Net result (187.4) 126.0 Property 548 674 Public-Private Partnerships 476 508 Less: intercompany sales (716) (708) The result before tax from continuing operations in 2012 was a 7,404 7,697 loss of €291.0 million and was therefore considerably lower than in 2011 (€143.5 million positive). The deterioration occurred especially in the property sector, in which an impairment of Operating revenue in Construction and mechanical and electrical property assets and related goodwill totaling €398 million was services fell, in particular at the Dutch and German non-residential SFDPHOJ[FEJO5IFSFTVMUJOUIF/FUIFSMBOETXBTOFHBUJWFMZ DPOTUSVDUJPODPNQBOJFT*O#FMHJVNBOEUPBMFTTFSFYUFOUJOUIF impacted by reorganisation costs of €35 million. Result before tax United Kingdom there was an increase in operating revenue. and impairments from continuing operations is €107.1 million ïNJMMJPO "MTPJOUIFTFDUPST$POTUSVDUJPOBOE The Civil engineering sector recorded strong decrease in NFDIBOJDBMBOEFMFDUSJDBMTFSWJDFTBOE$JWJMFOHJOFFSJOH UIFSFTVMU operating revenue compared with 2011, owing to the completion CFGPSFUBYEFDSFBTFE QBSUJDVMBSMZJOUIF/FUIFSMBOET*O1VCMJD of a number of large projects in 2012. Earnings went also down in private partnership, the net result increased as a consequence of Belgium and the United Kingdom. Operating revenue increased in disposals of projects to the joint venture with PGGM. (FSNBOZBOE*SFMBOE The profit margin based on the aforementioned result is 1.4 per cent of turnover (2011: 1.9 per cent). 12 – 2012

At a loss of €187.4 million, the net result for 2012 was considerably 24 April 2013 in Amsterdam is to declare a cash dividend for 2012 worse than in 2011 (€126 million profit), especially by the of €0.10 per ordinary share with stock alternative (2011: €0.16 in recognition of impairments in the property sector. The sale of cash or stock dividend). The dividend return on ordinary shares is Tebodin contributed €65 million to the result. therefore 3.1 per cent, based on the closing price for 2012 (2011: 4.9 per cent). Results by sector The distribution of the result before tax over the various sectors is Financial position shown in > table 4 below. The percentages reflect the result in (in € million) 2012 2011 relation to revenue. Net cash position 619 1,008 Order book *OUFSFTUCFBSJOHEFCUT 1,758 2,191 During the year the order book increased by €0.6 billion (6 per Net debt position 1,138 1,178 cent) to €11.0 billion by year-end 2012 (2011: €10.4 billion). Despite Recourse net debt position (154) (56) a selective contracting policy the level of new order acquisitions of Non-current assets 2,334 2,229 €8 billion was considerably higher than in 2011, when, after Net operating capital (excluding deduction of cancellations of several large projects in the United cash and cash equivalents and ,JOHEPNBOE*SFMBOE BOPWFSBMMBNPVOUPGïCJMMJPOXBTBEEFE current interest-bearing debts) 283 621 to the order book. The order book increased in 2012, particularly 4IBSFIPMEFSTFRVJUZ 922 1,162 JOUIF$JWJMFOHJOFFSJOHTFDUPS QSFEPNJOBOUMZBTBDPOTFRVFODFPG $BQJUBMCBTF 1,045 1,362 acquiring several large projects in Germany, Australia, the Balance sheet total 6,664 7,218 /FUIFSMBOETBOE*SFMBOE Solvency 15.7% 18.9% Of the total order book, it is expected that €5.9 billion worth of Solvency excluding PPP 18.6% 21.9% work will be carried out in 2013 and €5.1 billion in subsequent years. Accordingly, nearly 80 per cent of the expected operating revenue for 2013 is already in the order book. This is the same The net cash position, i.e. the balance of cash and cash equivalents situation as at year-end 2011 in relative terms, but is a clear minus current bank loans, was €619 million as at 31 December 2012 improvement when expressed in absolute figures. ZFBSFOEï NJMMJPO *O UIJTCBMBODFXBTBGGFDUFE The aforementioned order book comprises the orders for the next negatively by €435 million following refinancing in January 2012 GJWFZFBST*OBEEJUJPO UIF(SPVQTPSEFSCPPLJODMVEFTPWFSï and it was impacted positively by €145 million following the billion in contracts for the period post-2017. This work primarily disposal of Tebodin in April 2012. Part of the cash balance as at consists of maintenance contracts for PPP projects and concession %FDFNCFSSFQSFTFOUTUIF(SPVQTTIBSFJOUIFïNJMMJPO income. in cash and cash equivalents held by joint ventures and other forms of partnership (year-end 2011: €205 million). Result per ordinary share The number of ordinary shares ranking for dividend increased in The interest-bearing debts amounted to €1.758 million as at 2012 by stock dividend and amounts to approximately 241.5 million 31 December 2012 (year-end 2011: €2,191 million) and the net shares. At present, no convertible preference shares remain debt position was €1,138 million (year-end 2011: €1,178 million). outstanding. The majority of the debt consists of non-recourse PPP loans and non-recourse project funding (€1,287 million), recourse PPP loans The average number of outstanding ordinary shares in 2012 and recourse project funding (€299 million) and a subordinated increased in relation to the previous year to 238.2 million shares. loan (€123.5 million). The reduction in the debts was due to a The net result per ordinary share for 2012 amounts to €0.79 reduction in recourse project funding as a result of the repayment negative (2011: €0.54 positive). Now that the convertible of the senior loan (€360 million), partial repayment of the preference shares have been converted in full, there is no subordinated loan (€75 million) and a reduction in recourse difference any more between the net result per ordinary share project funding as a result of the scaling down of property and the fully diluted net result per ordinary share. positions. On the other hand, the debts increased because of the growth in PPP loans on current projects. Dividend policy and proposed dividend for 2012 Royal BAM Group endeavours to achieve a dividend distribution on The recourse net debt position (excluding non-recourse debts), ordinary shares of between 30 per cent and 50 per cent of the net which is part of the leverage ratio in the bank covenants at Group profit. Despite the fact that a net profit was not realised in 2012, level, stood at €154 million positive as at 31 December 2012, the proposal to the General Meeting of Shareholders to be held on having fallen compared to year-end 2011 (€56 million positive). 2012 – 13

As at year-end 2012, the Group had two credit facilities at its Development of (other) balance sheet positions disposal: the subordinated loan (€125 million), with a period to The book value of property, plant and equipment grew slightly to maturity until July 2017 and the senior facility (€500 million) with ïNJMMJPO ïNJMMJPO *O OFUJOWFTUNFOU a period to maturity until January 2016. The latter facility was amounted to €87 million (2011: €57 million) and depreciation/ VOVTFEBUZFBSFOE ZFBSFOEJEFN *O+BOVBSZ  amortisation amounted to €81 million (2011: €95 million). The the option to extend by an additional year was exercised for the increase in net investments related predominantly to equipment bank facility. As a consequence, the facility was extended in the JOUIF$JWJMFOHJOFFSJOHTFDUPS amount of €442.5 million for the period of January 2016 until January 2017. The book value of the intangible assets was €586 million at year-end 2012 (year-end 2011: €734 million). The decrease was The non-current assets increased in 2012 and amounted to €2,334 almost entirely due to the abovementioned impairment of million as at 31 December 2012 (2011: €2,229 million). The goodwill AM of €150 million. The values of the remaining reduction reflects mainly PPP claims following an increase in the cash-flow generating units are of such a nature that they give no PPP order book and deferred tax assets following losses in the reason for impairment. The remaining goodwill amounts to €396 1SPQFSUZTFDUPSJOUIF/FUIFSMBOET*OBEEJUJPO HPPEXJMM".XBT million. impaired by €150 million, as a consequence of which intangible assets decreased. The total PPP receivables increased in 2012 to €969 million (year-end 2011: €879 million). The increase primarily reflects the Operating capital (excluding cash and cash equivalents and current progress of current PPP activities (new loans granted minus liabilities) stood at €283 million as at 31 December 2012 (year-end repayments), involving a net amount of €332 million (2011: €403 2011: €621 million). The decrease in operating capital in 2012 was million). On the other hand, there are decreases resulting from mainy due to one-off factors, including impairment of land and recording as assets held for sale claims with regard to three property positions and the disposal of Tebodin, whose operational projects, which are expected to be transferred to the discontinued operations at year-end 2011 were fully included in joint venture with PGGM in 2013 (€246 million). working capital, as assets held for sale. The total effect of these one-off factors on the increase in operating capital amounted to The total intangible and financial PPP assets (including the current approximately €310 million. part) amounted to €1,150 million as at year-end 2012 (2011: €1,063 million). The related (non-)recourse PPP loans increased by a 5IF(SPVQTTIBSFIPMEFSTFRVJUZTUPPEBUïNJMMJPOBTBU smaller amount and stood at €1,049 million as at 31 December 31 December 2012, having decreased compared to the position 2012 (year-end 2011: €991 million). Therefore the net position as at year-end 2011 (€1,162 million). The principal changes in at 31 December 2012 was €102 million (year-end 2011: €72 TIBSFIPMEFSTFRVJUZBSFUIFOFUSFTVMUGPS BMPTTPGï NJMMJPO *OBEEJUJPO BOFUJOWFTUNFOUPGïNJMMJPOXBTNBEF million) and the negative effect of hedge accounting (a loss of with regard to other assets and liabilities in these SPVs and €47 million). The dividend distribution for 2011 and exchange rate non-consolidated associates (year-end 2011: €16 million). The increases had a limited effect. (SPVQTUPUBMOFUJOWFTUNFOUJOQVCMJDQSJWBUFQBSUOFSTIJQTXBT therefore €115 million (year-end 2011: €88 million). The net "QBSUGSPNUIFBGPSFNFOUJPOFETIBSFIPMEFSTFRVJUZ UIFDBQJUBM investment increased as a consequence of progress of ongoing base only comprises the subordinated loan, which decreased by projects and acquisition of new projects; it decreased as a €76.5 million in 2012. consequence of recording three operational projects as assets held for sale. Solvency based on the capital base stood at 15.7 per cent as at 31 December 2012, which is lower than the position at year-end Additionally, the Group had net investment commitments as at 2012 (18.9 per cent). Solvency excluding public-private 31 December 2012 in the amount of €118 million (2011: partnerships decreased as well, standing at 18.6 per cent as at ïNJMMJPO "UQSFTFOUUIF(SPVQTPSEFSCPPLDPOUBJOT111 31 December 2012 (year-end 2011: 21.9 per cent). contracts (2011: 36), excluding two preferred bidder contracts of Recourse solvency, the ratio in accordance with the bank which 27 (2011: 22) contracts are operational. covenants, decreased to reach 23.5 per cent as at 31 December 2012 (year-end 2011: 25.4 per cent), which is well above the lower The book value of the participating interests remained the same limit of 15 per cent. with €19 million at year-end 2012 (year-end 2011: €19 million).

"TSFHBSETQSPKFDUTGPSUIJSEQBSUJFT UIF(SPVQTCBMBODFTIFFUBT at 31 December 2012 includes projects in progress with a total 14 – 2012

balance of €417 million (year-end 2011: €437 million). The balance OFUBNPVOUSFMBUFEUPJTEVFUPUIFGBDUUIBUUIFFNQMPZFST consists of €859 million (year-end 2011: €936 million) owed to contributions to the pension funds are higher than the pension clients and €442 million (year-end 2011: €499 million) receivable costs calculated on an actuarial basis. from clients. The total balance sheet position for provisions (longterm and As at 31 December 2012, gross investments in property short-term) increased to €150 million (2011: €137 million). The development amounted to €1,244 million (year-end 2011: €1,492 increase is related to the dividend reorganisation provisions made million). The reduction is primarily related to the impairment of JOUIF/FUIFSMBOET*OBEEJUJPO FYQFOEJUVSFPGQSPWJTJPOT land and property holdings of €242 million, many of which in the decreased. Netherlands. The reduction also related to several commercial property transactions. On the other hand, there was an increase as The balance of the deferred tax positions on the balance sheet is a consequence of still recording re-assessed contracts with regard a deferred tax asset of €181 million (year-end 2011: €73 million). to repurchase liabilities in the Netherlands. The reduction in The increase is almost entirely due to deferred tax assets following holdings was largely compensated for by the progress of projects losses in the Property sector in the Netherlands and recording a under construction. Project financing of property development proportion of the current tax asset as a deferred tax asset. decreased to a lesser extent in 2012 and stood at €538 million as at 31 December 2012 (year-end 2011: €595 million). From this Assets held for sale at 31 December 2012 amounted to €357 amount, a total of €340 million relates to non-recourse loans million (year-end 2011: €303 million). The assets increased, on the (year-end 2011: €372 million) and €198 million to recourse loans one hand, as a consequence of recording PPP projects which are (year-end 2011: €223 million). The net position (gross investment expected to be transferred to the joint venture with PGGM in 2013, minus funding) at year-end 2012 was €706 million (year-end 2011: and decreased, on the other, as a consequence of disposals of two €897 million). PPP projects to the joint venture with PGGM and of Tebodin in 2012. The assets for pension rights, minus provisions for employee The balance of assets and liabilities held for sale amounted to benefits, amounted to €64 million at year-end 2012. At year-end €3 million at year-end 2012 (year-end 2011: €70 million). The 2011, there was still a liability of €37 million. The increase in the decrease was a consequence of the disposal of Tebodin.

Table 4 Results by sectors

(in € million) 2012 2011

Result Revenue % Result Revenue % $POTUSVDUJPOBOENFDIBOJDBMBOEFMFDUSJDBMTFSWJDFT 47.8 3,336 76.2 3,389 $JWJMFOHJOFFSJOH 57.8 3,760 91.9 3,834 Property (1.4) 548 (23.4) 674 Public-Private Partnership 13.6 476 10.5 508 Eliminations and other 0.3 (716) - (708) Total for continuing operations 118.1 7,404 155.2 7,697 Group overhead (3.5) (10.9) Group interest charge (7.5) (31.5) Result before tax and impairments from continuing operations 107.1 1.4% 112.8 1.5% Dredging - 30.7 Result before tax and impairments from continuing operations 107.1 143.5 *NQBJSNFOU1SPQFSUZ (247.7) - *NQBJSNFOU(PPEXJMM (150.4) - Taxes 39.1 (28.0) Net result from continuing operations (251.9) 115.5 Net result from discontinued operations 65.0 12.2 Net result for the period (186.9) 127.7 Non-controlling interest (0.5) (1.7) Net result attributable to shareholders (187.4) 126.0 2012 – 15

Wayss & Freytag Ingenieurbau. Wastewater tunnel, 47 kilometres long, next to the Emscher Canal to the west of Dortmund. Eight tunnel boring machines needed more than one hundred starting and receiving shafts to build the tunnel.

Changes 2013 As a result of the amended reporting standards regarding QFOTJPOT *"4 BOEUIFBQQMJDBUJPOPG*'34 KPJOU arrangements) as of 1 January 2013, the balance sheet of the (SPVQXJMMDIBOHFJO5IFBQQMJDBUJPOPG*"4NFBOTUIF unrealised actuarial gains and losses will be transferred to the share capital, resulting in a drop in the share capital. The BQQMJDBUJPOPG*'34 XIJDINFBOTUIBUKPJOUWFOUVSFTDBOOP longer be consolidated, but instead must be recognised in the accounts as an associate, will cause balance-sheet contraction. The combination of the lower share capital and a reduced balance sheet, will cause no appreciable difference in the solvency of the Group. 16 – 2012

Outlook Short-term prospects for the residential construction segment Royal BAM Group started 2013 with an order book of contracts o#".TQSJNBSZBSFBPGBDUJWJUZJOUIF/FUIFSMBOEToBSFTPNCSF worth a total €11.0 billion (year-end 2011: €10.4 billion). The According to Euroconstruct (December 2012) the residential increase primarily involves the civil engineering activities in sector forecasts a recovery after 2013. BAM expects the housing (FSNBOZ *SFMBOEBOEUIF/FUIFSMBOET0GUIFUPUBMPSEFSCPPL JU market to worsen in 2014 too, and only to stabilise at the end of is expected that €5.9 billion will be completed in 2013 and €5.1 that year. billion in the years afterwards. This means that for 2013, almost 80 per cent of the expected turnover is already in the order book. The Euroconstruct forecasts (December 2012) present a mixed This percentage is almost the same as at year-end 2011. Taking picture for the civil engineering sector. For 2013, the markets JOUPBDDPVOUNBSLFUDPOEJUJPOTBOEFYQFDUBUJPOT UIFTJ[FBOE TIPXBEPXOUVSOJOUIF/FUIFSMBOET #FMHJVNBOE*SFMBOEBOE quality of the order book offer a solid basis for 2013. improvements in the United Kingdom and Germany. The civil engineering market in the Netherlands will begin to recover in Royal BAM Group has confidence in the future, based on the 2014. However, the government cutbacks announced recently strategic priorities that have been set out for further internal OPXHJWFSFBTPOUPEPVCUUIJTGPSFDBTU#FMHJVNBOE*SFMBOEXJMM JNQSPWFNFOUTUPCFDPNFUIFACFTUJODMBTTJOUIFBDUJWJUJFTBOE first see recovery in this market segment in 2015. service provision of the BAM companies. This will contribute to NBJOUBJOJOHBOEJNQSPWJOHUIF(SPVQTQPTJUJPOJOUIFNBSLFUJO The Group is currently involved in many tenders for PPP contracts UIFGBDFPGJODSFBTJOHMZGJFSDFDPNQFUJUJPO*UBMTPQSPWJEFTUIF in the home markets. The number of new projects being tendered necessary basis for the planned growth initiatives in under this contract type remains large given the current economic multidisciplinary projects, services and international niche DMJNBUF*OMJOFXJUIUIFTUSBUFHJDQMBO UIF(SPVQFYQFDUTUPCF markets. Although it is too early to give an outlook for the full able to make further investments in PPP contracts. BAM also year, at this stage BAM has no reason to expect that performance expects to transfer a number of PPP contracts to the BAM in 2013 will be significantly different from the operational PPP-PGGM joint venture again in 2013. performance for 2012. Outside the home markets, BAM has established offices in The Euroconstruct forecasts (December 2012) for construction 4XJU[FSMBOEBOE-VYFNCPVSHBOEIBTGVSUIFSTUSFOHUIFOFEUIF output in 2013 show falling output in the construction and NBSLFUQPTJUJPOTPG#".*OUFSOBUJPOBMJOHSPXUINBSLFUTPVUTJEF mechanical and electrical services sector, especially in the &VSPQF "VTUSBMJB *OEPOFTJB "GSJDBBOEUIF.JEEMF&BTU #". Netherlands and the United Kingdom. After 2013, output is expects that it will continue to grow in these markets in the expected to recover. coming years.

BAM Contractors. Business park (with offices for Dell/Quest) and City Gate Park shops, Cork, Ireland. 2012 – 17 ‘Royal BAM Group has confidence in the future, based on the strategic priorities that have been set out for further internal improvements to become the ‘best in class’ in the activities and service provision of the BAM companies.' 18 – 2012

Strategic agenda 2013-2015 Market developments

Every three years, the BAM Executive Board sets out a strategic #".THSPXUITUSBUFHZJTCBTFEPOUIFFYQFDUBUJPOUIBUUIF(SPVQ BHFOEBUIFQSJPSJUJFTGPSBDIJFWJOH#".TMPOHUFSNHPBMPGCFJOH will be able to benefit from three global market developments in one of the leading sustainable construction companies in Europe. the long term (macro trends): The strategic agenda contains, among other things, an *ODSFBTJOHVSCBOJTBUJPOBOEEFNBOEGPSTVTUBJOBCMFTPMVUJPOT FYBNJOBUJPOPG#".TQFSGPSNBODFBOEDPNQFUJUJWFQPTJUJPOBT are leading to more complex construction assignments. well as its strategic objectives, initiatives and financial projections 2. Limited financial resources and cost optimisation are leading relevant to market developments.The most important goals in the DMJFOUTBOEVTFSTUPBGPDVTPOAMJGFDZDMFDPTUJOHBOEUIFSFGPSF 2013-2015 strategic agenda build on sustainable performance by to an increasing demand for service provision throughout the better mobilising the potential talent and synergies across Royal CVJMEJOHQSPDFTTDIBJO UIFXIPMFAMJGFDZDMFPGBCVJMEJOH #".(SPVQJOPSEFSUPFOIBODFUIF(SPVQTDPNQFUJUJWFQPTJUJPO project), from initiative and financing to management and and create value for customers and all other stakeholders. maintenance. 3. The world over, developing economies demand infrastructure BAM has an enterprising culture. This means that the operating projects, which are often complex in nature. Successful access companies bear an important level of responsibility in to these markets can be gained by contributing knowledge and implementing the strategy. They incorporate the Group strategy experience. in their operational plans. This process is supported centrally in Growth in the short term is only possible, first and foremost, by order that the potential of the Group is fully realised. The maintaining the leading position that BAM occupies in its current Executive Board closely monitors the progress of this process. home markets and sectors by executing projects in an exemplary NBOOFS ACFTUJODMBTT 5IFIVHFQSFTTVSFPGDPNQFUJUJPOSFRVJSFT continuous operational improvements. Mission, vision, and values

#Z #".XJMMCFBA CVTJOFTT BDPNQBOZXIJDIBDIJFWFT Four strategic objectives NPSFUIBOQFSDFOU3FUVSOPO$BQJUBM&NQMPZFE 30$& UIBU PQFSBUFTJOUIF&VSPQFBODPOTUSVDUJPOTFDUPST5PQBOEXJUIB By 2020, BAM is aiming to be recognised and identified as one of turnover of more than €10 billion. UIFMFBEJOHTVTUBJOBCMFDPOTUSVDUJPODPNQBOJFTJO&VSPQF*OPSEFS to realise this mission, the Group has formulated four objectives Mission: ‘What drives our company?’ for the 2013-2015 strategic period. 5IFA TUBUVTDPSSFTQPOETUPUIF#".NJTTJPOUPADSFBUFWBMVF for customers, shareholders, employees, and building partners by 1. ‘Best in class’ construction projects bringing together people, knowledge, and resources at every BAM projects are exemplary projects - technologically, stage of the construction process in order to produce a sustainable organisationally, and in terms of their results. BAM is CVJMUFOWJSPONFOU continuously improving its operational performance, a process made possible by tighter controls, better risk management, Vision: ‘Where do we want to be in 2020?’ JNQMFNFOUJOHMFBO #*. TVTUBJOBCJMJUZBOETBGFUZJOJUJBUJWFT  5IJTA TUBUVTBMTPGPSNTUIFGVMGJMMNFOUPGUIF#".WJTJPOUP and by continuing the national and Group-wide purchasing occupy a position as ‘one of the leading construction companies in programmes. The Group will also improve its financial results by Europe, with healthy profits and a strong balance sheet, that is further reducing its real estate portfolio and by optimising its active in the whole building process chain in the European home working capital. NBSLFUTBOEPVUTJEF&VSPQFJOTFMFDUFEHSPXUINBSLFUT 2. Leadership in complex multidisciplinary projects Values: ‘What are our starting points and principles?’ BAM supports the success of its group companies through t8FBSFSFMJBCMFBOEQSPGFTTJPOBM better internal co-operation and by co-ordinating operating t8FNBLFPQUJNVNVTFPGPVSUBMFOUTBOEBSFUFBNQMBZFST processes. This stimulates multidisciplinary projects. BAM fills in t8FBSFQSPBDUJWF JOOPWBUJWF DMJFOUGPDVTTFEBOE UIFAXIJUFTQBDFTPOJUTBDUJWJUZNBUSJYJOJUTIPNFNBSLFUTJO entrepreneurial. order to be able to offer multidisciplinary services everywhere. t8FPQFSBUFTBGFMZ TVTUBJOBCMZBOESFTQPOTJCMZ #".XJMMFYUFOEJUTBDUJWJUJFTGSPN(FSNBOZJOUP4XJU[FSMBOE  and from Belgium into Luxembourg. 2012 – 19

3. Expanding activities in the ‘built asset’ process chain In summary BAM will set up and develop business units, or ‘asset NBOBHFNFOUTFSWJDFVOJUT XIJDIXJMMCFFRVJQQFEUPSVOBOE By 2020, BAM strives to have a wide portfolio of activities to offer maintain projects. Led by specialised management teams, they in its home markets in the construction (non-residential and will gradually grow, firstly as part of PPP projects, and also residential) and mechanical and electrical services, civil UISPVHIMPDBMBDRVJTJUJPOTBOEMPDBMFYQBOTJPO*OBEEJUJPO #". engineering, public-private partnership and property sectors, as will introduce energy and water-efficient concepts to be used in XFMMBTTFSWJDFTJOUIFGJFMEPGBTTFUNBOBHFNFOU5IJTJT#".T non-residential and residential building projects, as well as in response to the increasing demand for multidisciplinary work civil and technical engineering projects. EVSJOHUIFXIPMFAMJGFDZDMFPGCVJMEJOHQSPKFDUT#".XJMMBMTP occupy niche positions in selected emerging markets. 4. Occupying niche positions in selected growth markets 5IF(SPVQXJMMTUSFOHUIFOUIFDVSSFOU#".*OUFSOBUJPOBM organisation, improve processes and systems, and invest in strategic equipment. BAM will focus on four growth areas in which BAM occupies a good starting point: the Middle East, Australia, Asia Pacific and Africa. Finally, BAM will continue to seek more intensive relationships with global customers in the oil and gas, mining, and industrial sectors.

BAM Utiliteitsbouw, BAM Techniek, BAM Civiel, BAM Wegen. De Nieuwe Kolk cultural centre, Assen. Architect: De Zwarte Hond. 20 – 2012 $POTUSVDUJPO and mechanical and electrical services

Royal BAM Group is active in the construction and mechanical and

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construction works in all the home markets, BAM operating

companies also carry out residential construction contracts (mainly in

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carries out non-residential construction projects in the Middle East and

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Key figures for the Construction and mechanical and electrical services sector (x € million) 2012 2011 Revenue 3,336 3,389 Profit (loss) before tax 47.8 76.2 Margin before tax 1.4% 2.2% Order book (year-end) 4,423 4,456 2012 – 21

BAM Utiliteitsbouw, BAM Techniek, Interflow. Laboratory for Infectious Diseases, Groningen. Architect: De Zwarte Hond.

"U$POTUSVDUJPOBOENFDIBOJDBMBOE 1.4 per cent (2011: 2.2 per cent), reflecting electrical services, revenue was down by ongoing pressure on margins and higher €53 million (negative 2 per cent) to €3,336 reorganisation costs, particularly in the million. Most of this fall was in the fourth quarter. The closing order book of Netherlands and Germany, offset by higher €4,423 million was 1 per cent lower than non-residential revenue in Belgium. year end 2011; the order books for Revenues in the United Kingdom were in Germany and Belgium grew but new line with 2011. The sector pre-tax result fell orders for residential construction in the to €47.8 million, equivalent to a margin of Netherlands fell significantly. 22 – 2012

BAM Utiliteitsbouw (in joint venture), BAM Techniek. Fries Museum, Leeuwarden. BAM Utiliteitsbouw. Architect: Bierman Henket / Bonnema. Van Wijhe Verf office building, Zwolle. Architect: BDG. BAM Utiliteitsbouw, BAM Techniek, Interflow. Isala Klinieken hospital, Zwolle. Architect: Alberts & Van Huut, a/d Amstel. 2012 – 23

> BAM Utiliteitsbouw Projects completed in 2012 include the > BAM Woningbouw new development of the De Yp training and Core activities education centre for the Haaglanden police Core activities development, construction and precinct; the redevelopment and extension development, construction and maintenance of buildings PGUIF%F.POBSDI*PGGJDFCVJMEJOHJO5IF maintenance of housing Headquarters Hague; the new development of the De Headquarters Bunnik, the Netherlands Nieuwe Kolk cultural centre in Assen; Bunnik, the Netherlands Offices QSPKFDU/JFVX;BBJMBOE XIJDIJODMVEFTUIF Offices 14 throughout the Netherlands Fries Museum in Leeuwarden (joint venture 9 throughout the Netherlands Projects project), the conversion of the Projects approximately 100 projects under Rembrandtpark Building into Hotel Ramada approximately 40 projects under EFWFMPQNFOU JODMVEJOH&SBTNVT.$  "QPMMP"NTUFSEBN$FOUSF BOEUIF%F development, including 100hoog in 3PUUFSEBN*TBMB$MJOJDT ;XPMMFUIF Vredenburg residential complex in Utrecht. ; Roeterseiland university centre of the Two months ahead of schedule, the De Ooievaar apartments and care University of Amsterdam; Public ministries of Security and Justice and of the facilities, Rotterdam; student Transport Terminal, Arnhem; Groninger *OUFSJPSBOE,JOHEPN3FMBUJPOTJO5IF accommodation, Delft and Eindhoven; Forum, Groningen Hague were also delivered (as part of a passive apartments and passive houses Concepts joint venture project). (Passivhaus), Eindhoven 7JUBBM;PSH7BTU 0GGJDF6Q Concepts Number of employees Restoration experts Schakel & Schrale W&R, W&R Renovation, Smart approximately 1,550 completed stage 3 of the Blaauwlakenblok $PMMFDUJPO "DUJWF)PVTF 1BTTJWF)PVTFT project in Amsterdam, and in Number of employees BAM Utiliteitsbouw aims to become they began restoring and converting Het approximately 1,450 involved at the earliest possible stage of Hof into an interactive historical museum. the process to ensure that clients can get BAM Woningbouw, market leader in the maximum benefit from its expertise and BAM Utiliteitsbouw was also involved in Netherlands, operates out of nine sites FYQFSJFODF*OPSEFSUPCFDMPTFUPJUT two large-scale healthcare-related projects: offering regional expertise. clients, BAM Utiliteitsbouw operates from &SBTNVT.$5SBODIFJO3PUUFSEBN JO ten regional offices and maintains a joint venture) and the new development of The W&R housebuilding concept, which national business unit for major projects. *TBMB$MJOJDTJO;XPMMF XIJDISFQMBDFE has proved its success, enables BAM 4PQIJB[JFLFOIVJTIPTQJUBMBOEUIF%F Woningbouw to construct comfortable #".TPXODPOTVMUBODZBOEFOHJOFFSJOH 8FF[FOMBOEFOIPTQJUBM homes in conjunction with a select group firm, BAM Advies & Engineering, employs of established partners, based on chain around 100 people and provides key Other projects under development include integration, strict sustainability support through structural, construction the large-scale renovation and upgrade of performance indicators and lean and project management expertise. the Roeterseiland university centre for the construction, and to do so at University of Amsterdam; Public Transport affordable, fixed prices. A total of 16,000 The product concepts developed by BAM Terminal stage 2 in Arnhem (in joint W&R homes were built in the Netherlands Utiliteitsbouw are in line with the WFOUVSF .BSJÑOEBBM$FOUSFPG&YDFMMFODF over the past two decades, and BAM DPNQBOZTPCKFDUJWFPGBDIJFWJOHGPSXBSE the new head office of electricity Woningbouw has extended this concept and backward integration during the transmission system operator TenneT in GPSVTFJOSFOPWBUJPOQSPKFDUT*O83 DPOTUSVDUJPOQSPDFTT7JUBBM;PSH7BTU GPS Arnhem (in joint venture) and the new Renovation, the operating company example, deploys innovative real estate development of two faculties for Eindhoven converts old homes into energy-efficient, solutions to respond to changes in the 6OJWFSTJUZPG5FDIOPMPHZ*O6USFDIU B comfortable homes that meet all current healthcare sector and the different laboratory, office and underground car standards in just seven days, with minimal demands as regards accommodation. park for Danone and a new head office for disruption to residents. One of W&R OfficeUp is a property development $BQHFNJOJBSFDVSSFOUMZVOEFS 3FOPWBUJPOTDPNQFUJUJWFTUSFOHUITJT company that focuses on converting old development. BAM Utiliteitsbouw is also good communication with residents. office buildings for other designated uses, responsible for the reconstruction and functions and users. renovation of Brummen town hall. During the year under review, BAM Woningbouw and AM further developed 83JOUPBOFXQSPEVDU 4NBSU$PMMFDUJPO 24 – 2012

This product is aimed at living and interiors Bouwbedrijf Pennings, a construction > Heilijgers BOEJTFOUJSFMZBEBQUFEUPDPOTVNFST company reporting to BAM Woningbouw, OFFET5IF4NBSU$PMMFDUJPOIPVTJOHTUPDL has long been established in Rosmalen in Core activities is based on extensive consumer research the province of Brabant, but operates property development, construction, into the most popular lifestyles and throughout the Netherlands across the management and maintenance architectural styles (e.g. 1930s, Old Dutch, entire construction chain (i.e. plan Vestigingsplaats and modern/contemporary). Each Smart development, residential and non- Amersfoort, the Netherlands home also incorporates the combined residential construction and maintenance). Projects expertise and experience of AM, BAM As part of its transparent approach, it approximately 20 projects under Woningbouw and their various partners, takes on many duties, allowing its clients development, mainly in the centre of which have brought together their highest- to focus on their core activities. The the Netherlands quality materials, equipment, technologies company, which employs 120 people, is Number of employees and processes. As a result, the Smart also committed to building strong, close approximately 110 $PMMFDUJPOQSPWJEFTGSFFEPNPGDIPJDF B relationships with its clients. quick turnaround for project completion, )FJMJKHFSTDPNQFUJUJWFBTTFUTJODMVEFJUT and excellent value for money. The first The maintenance department of integrated approach and proactive 4NBSU$PMMFDUJPOQSPKFDU -BBOUKFWBO Bouwbedrijf Pennings renovated a total of response to social trends and Salland in The Hague, went on sale at the 1,200 homes in 2012, and both the developments. The company focuses on end of 2012. EFQBSUNFOUTUFDIOJDBMFYQFSUJTFBOEUIF demand-driven development, innovative clear communications with residents construction and maintenance solutions, *O;PFUFSNFFS #".8POJOHCPVX resulted in successful renovations. The tools for sustainable housing, life-cycle constructed the first forty starter refurbishment and new development of DPTUJOHBOEDPTUMFBEFSTIJQ*O JU apartments based on W&R, while in furniture store Meubelplein Ekkersrijt is received the Keurmerk Klantgericht Nieuwegein it completed 138 apartments currently being completed in Son en Bouwen quality mark for customer- (part of The Edge apartment complex). On Breugel (comprising a total area of 45,000 oriented construction for the seventh time behalf of investor MN, W&R Renovation m²); Bouwbedrijf Pennings was responsible in a row. completed a comprehensive renovation for development and construction. project in 2012, including the full The properties completed by Heijligers communication and participation project During the year under review, the during the year under review include in Oegstgeest, Maarssen and other company also completed 12 homes in IPNFTJOUIF7PHFMXJKLEJTUSJDUPG;FJTU locations. W&R-Renovatie also renovated Woudrichem, 27 apartments in Vught, (stage 1); the third residential tower of the 116 homes in Leiden on behalf of housing 64 apartments in Breda, and 10 healthcare Kerkelanden project in Hilversum; corporation De Sleutels, based on chain GBDJMJUJFTGPSUIF$FMMPGPVOEBUJPOJO 19 apartments (De Terp) in Amersfoort; DPMMBCPSBUJPO*O%FMGUBOE&JOEIPWFO JU )BBSFO*UBMTPDPOUJOVFEDPOTUSVDUJPO 47 apartments, shops and an underground completed the construction of large-scale work on 60 healthcare units, including car park (project Gelria) in Ede; the student accommodation (comprising 295 facility areas and a commercial plinth in re-purposing of Thermion De Waalsprong units and 227 units, respectively). The Gennep, 37 apartments in Arnhem and in Lent/Nijmegen, and the renovation of Ooievaar tower block in Rotterdam, also 117 homes in Utrecht. These new 1-megawatt solar panels in Amersfoort. completed in 2012, comprised c93 developments will be continued into 2013. apartments and a variety of amenities and The properties under development facilities, including healthcare facilities. comprise a skyway between the Kerkelanden healthcare facilities in *O.POUGPPSUSFOPWBUJPOJTVOEFSXBZPG Hilversum; the extension of the industrial ten homes based on the Active House space of Transportonderneming Huigen in QSJODJQMF5IFQSPKFDUTVOJRVFEFTJHO Bunschoten; the extension of the Harlekijn ensures a good balance between efficient day care centre in Utrecht; the renovation energy consumption, indoor climate and PGUIF$#(PGGJDFJO6USFDIUMBSHFTDBMF environment, with the living comfort and maintenance and re-let repairs at the De health of the residents being the central Brink housing complex in Baarn, and the focus. The third stage of the highly SFTUPSBUJPOPGUIF3FGPSNFE$IVSDIJO sustainable Passive Houses is currently Goudriaan, the restoration of Villa underway in the De Kroeven district of Jongerius in Utrecht; the restoration of the Roosendaal. 2012 – 25

BAM Woningbouw. Major maintenance (‘W&R’ renovation) of 116 homes (1918-1935), Leiden. BAM Woningbouw. In cooperation with the customer De Sleutels based on chain integration. 40 ‘W&R’ starter’s apartments, Oosterheem, Zoetermeer.

Heilijgers. Refurbishment Villa Jongerius, Utrecht.

Heilijgers. Boogie Woogie (57 apartments and 23 ground-level homes), Amersfoort. 26 – 2012

BAM Materieel. Transport of BAM tunnel formwork. The folding side CEI-De Meyer. walls limit the available storage and transport volume. New build project and the renovation of the Kazerne Dossin - Memorial Museum and Documentation Centre on the Interbuild. Holocaust and Human Rights, Mechelen. Port management offices for the municipal Port of Antwerp Architect: AWG. (artist’s impression). Architect: Zaha Hadid. 2012 – 27

panopticon in Breda; 37 apartments at One of the most noteworthy projects was Liege, the company – in association with "NB[FJO"NFSTGPPSU TUBHF UIF the installation of a tower crane on top of its sister company Galère – has begun refurbishment of the Voestalpine the 103-metre-tall North Brabant construction on Tour Paradis. This project Polynorm business school in Bunschoten; provincial government building in Den comprises the construction of a 110-metre- major maintenance on Latherusbuurt Bosch for the renovation of the outer walls high, 26-floor office tower featuring a stage 3 in Amsterdam; renovation and to be performed by BAM Utiliteitsbouw 3-level basement. The property is directly re-purposing of a school building into and BAM Betontechnieken. adjacent to the Liege-Guillemins high- commercial premises on Kraijenhoffstraat speed train station, which was also in Amsterdam; 73 houses, apartments, and developed by Galère. BDBSQBSL QSPKFDUU)PG JO;FJTU > Interbuild 66 apartments and 1,800 m2 of social 1SPQFSUJFTDPNQMFUFECZ*OUFSCVJMEJO space (Paranadreef project) in Utrecht and Core activities include the Gallifort and Silsburg senior routine maintenance on 33 homes in the non-residential and residential building apartments in Antwerp; the renovation of *OEJTDIF#VVSUEJTUSJDUPG;FJTU in and Flanders the outer walls of housing and health Located in centre De Mick, and the renovation of an Wilrijk, Belgium office building for Vivium, by the name of > BAM Materieel Projects Desguinlei. The construction of a total of approximately 20 projects under 52 senior apartments was completed in Core activities development, including Résidence the resort town of Wenduine. Properties supply and consultancy relating to plant Palace (principal seat of the European completed in Ghent include the new and equipment to all BAM construction $PVODJM BOE/"50)FBERVBSUFST CPUI development of laboratories and offices projects in the Netherlands located in Brussels; Havenhuis, Antwerp for Vlaamse Milieumaatschappij LAK VMM, Located in Number of employees and in Brussels the new development of Lelystad, the Netherlands more than 260 the Hooikaai apartments and the Projects Genèvestraat apartment complex $BNQVT)PPHWMJFU 67"SFD 074""- *OUFSCVJMEEFWFMPQTOPOSFTJEFOUJBM (stage 2). T)FSUPHFOCPTDIQSPWJODJBM construction projects for clients in the government building private and public sectors. As a /FXQSPKFDUTBDRVJSFECZ*OUFSCVJME Number of employees construction partner, the company is include the extension and fitting-out of a approximately 230 primarily engaged in the new development Brussels-based office building for the and renovation of offices, schools and German state of Hesse (Montindu); the 4JODF #".TFYUFOTJWFFRVJQNFOU public buildings in Brussels and Flanders, new development of the Genèvestraat fleet and wide range of services have been as well as having won several major apartment complex (stage 3); the new managed, organised and supplied from contracts in the residential and healthcare development of shopping centres, offices Lelystad. The equipment business has sectors in 2012. and apartments at Wolvengracht- begun standardising its range of products Prinsenstraat; the new development of a and services in order to provide even At any given time, the company manages school and boarding school (Kasterlinden, better services to its sister companies. an average of twenty construction for children with hearing or sight projects, many of which have a high problems, language or speech problems, BAM Materieel has supplied products and QSPGJMF*O#SVTTFMT *OUFSCVJMEJTDVSSFOUMZ and autism spectrum disorders); and the services for several large-scale projects: it constructing the new NATO Headquarters new development of a retirement home manufactured 7,000 m2 of form-work for (in collaboration with sister companies) and serviced apartments (Excelsior). UIF$BNQVT)PPHWMJFUQSPKFDU BTXFMMBT and the principal seat of the European providing highly complex support for the $PVODJM 3ÏTJEFODF1BMBDF*O"OUXFSQ JUT UVA-rec project. Additionally, the company projects include Artesis Hogeschool > Galère and > CEI-De Meyer created two pedestrian bridges (including university of applied sciences and the an over-voltage of 16 metres each) from Havenhuis, the new principal seat of the (BMÒSFBOE$&*%F.FZFSBMTPPQFSBUFJO scaffolding materials produced for the Municipal Port Authority, designed by the Walloon and Flemish construction and OV Saal project (a railway extension ;BIB)BEJE*O(IFOU *OUFSCVJMEJT property sectors, respectively, and their CFUXFFOUIF"NTUFSEBN;VJE85$BOE constructing the new Flemish activities are detailed in the section Duivendrecht train stations). "ENJOJTUSBUJWF$FOUSF 7"$ BTXFMMBTUIF A$JWJM&OHJOFFSJOHPOQBHFTBOE UIF#FWFSFOQSJTPOJOOFBSCZ8BBTMBOE*O 28 – 2012

> BAM Construct UK longstanding collaboration with the > BAM Properties developer Argent LLP. Core activities The activities of the subsidiary BAM construction, property development, Some important new client relationships Properties which engages in high value, design, engineering services and facility XFSFJOJUJBUFEJO#".$POTUSVDUJPO sustainable commercial and retail property management was awarded the contract to build a development are described in the section Headquarters substantial new training academy for on the property sector on page 56. Hemel Hempstead, United Kingdom .BODIFTUFS$JUZ'PPUCBMM$MVCBOEXPOJUT Regional offices first project with Rolls Royce, for whom it #".$POTUSVDU6,CFMJFWFTUIBUJOOPWBUJPO 14 offices throughout England, Scotland will build a state-of-the-art blade casting and sustainability are key differentiators in and Wales facility. A number of high-profile projects UIFDVSSFOUNBSLFU#".$POTUSVDU6,IBT Projects were delivered successfully, including the a leading position on the application of approximately 100 projects under Laboratory of Molecular Sciences in #VJMEJOH*OGPSNBUJPO.PEFMMJOH #*. BOE development,including the Manchester $BNCSJEHFBOEBOFXDPSQPSBUF its design, construction and facilities $JUZ'$USBJOJOHDPNQMFYPGGJDFBOE headquarters in Manchester for The management divisions are working shops at 110 Queen Street, Glasgow; $PPQFSBUJWF(SPVQ"QBSUJDVMBSIJHIMJHIU UPHFUIFSUPCVJMEUIFDBQBDJUZUISPVHI#*. Aston Student Village, Birmingham; of the year was the completion of to deliver a whole lifecycle approach for )VEEFSTGJFME4QPSUT$FOUSF3PMMT3PZDF $IPCIBN"DBEFNZJO&BTU-POEPO XIJDI clients. Alongside this, the company is casting facility, Rotherham formed part of the Athletes Village for the developing expertise in sustainable design Number of employees Olympic Games of 2012, with BAM FM and construction techniques and is approximately 2,400 providing some of the maintenance achieving its principal performance targets services for the duration of the Games. on reducing carbon emissions, waste and The company continued to perform energy consumption. steadily in 2012 despite the prevailing flat *O UIFDPNQBOZEFDJEFEUPFYQBOE DPOEJUJPOTJOUIF#SJUJTIFDPOPNZ*U the capacity of its facilities management continues to develop its capacity to deliver arm and, since the year end, completed > BAM Contractors complex projects for clients who wish to the acquisition of a facilities management procure a high value-added service rather firm which will enable BAM Facilities The projects carried out by BAM than the lowest tender price. Managagement to offer a wider range of $POUSBDUPSToXIJDIPQFSBUFTJOUIF*SJTI maintenance and energy management and property sector through subsidiaries *O JUTQSJODJQBMTVCTJEJBSZ#". services in-house and to extend its BAM Building and BAM Property – are $POTUSVDUJPOXPOQSPKFDUT&EVDBUJPO customer base. described in more detail in the section on remained a dominant sector and the the civil engineering sector on page 47. company won projects to build 13 academy schools as well as university buildings, higher education colleges and QSJNBSZTDIPPMT*UJTBNFNCFSPGUIF GSBNFXPSLGPSUIF(PWFSONFOUT1SJPSJUZ Schools Building Programme which will let £1.75 billion work over the next five years.

The company developed its relationship with a number of key clients, for example, winning a contract to build office and training facilities at York Triangle in its fourth project for Network Rail, and a project for the developers Derwent to refurbish and rebuild a major office block JOUIFDFOUSFPG-POEPO*UBMTPTFDVSFE further projects in the continuing QSPHSBNNFPGSFHFOFSBUJPOPG,JOHT$SPTT in London, in the latest phase of its 2012 – 29

BAM Construction. Retail Floor One, a 220 metre long span providing retail, restaurant and café space in Waterloo Station, London, was completed in time for people going to the Olympic Games. BAM Construction, BAM Design. Strood Academy (one of the three universities of applied sciences being built by BAM for Medway) was awarded the 2012 Medway Culture and Design Award. 30 – 2012

BAM Construct UK. Headquarters of The Co-operative Group, Manchester. 2012 – 31

> BAM Deutschland BAM Deutschland will maintain the > BAM Techniek complex for a period of 25 years once it Core activities becomes operational. Core activities residential and non-residential development, design, construction, construction (in Germany and *OBOFZFDBUDIJOHMPDBUJPOPOUIF3JWFS management and operation of technical 4XJU[FSMBOE BSFOBTBOETUBEJVNT  4QSFF GBDJOHUIF$IBODFMMFSZBOECFIJOE systems facility management and asset #FSMJOT$FOUSBM4UBUJPO #".%FVUTDIMBOE Headquarters management is making rapid progress with the PPP Bunnik, the Netherlands Headquarters project for the Ministry of Education and Offices Stuttgart, Germany Research. A key focus in the design and 13 sites, throughout the Netherlands Offices construction of the project is Projects Berlin, Dresden, Dusseldorf, Stuttgart, sustainability, in accordance with the approximately 1,900 projects under Frankfurt am Main, Munich .JOJTUSZTEVUJFT'PSFYBNQMF UIFPVUFS EFWFMPQNFOU JODMVEJOH&SBTNVT.$  Projects wall contains photovoltaic elements, and 3PUUFSEBN*TBMB$MJOJDT ;XPMMF%BOPOF 25 projects under development, BAM Deutschland is building the largest 3FTFBSDI$FOUFS 6USFDIU7PQBL including the Potsdam parliamentary fuel cell in Europe, which can cover 50 per Terminal Amsterdam Westpoor building; the Ministry of Education and cent of the energy needs. Number of employees Research in Berlin; hospitals in Ulm, Bad approximately 1,500 Homburg and Usingen; and the Another project completed in 2012 is the penitentiary in Bremervörde #SFNFSWÚSEFQFOJUFOUJBSZ*OUIJT/PSUI BAM Techniek is a multidisciplinary Number of employees German town, BAM Deutschland installation company operating approximately 750 constructed a prison with a capacity for throughout the Netherlands, serving 300 inmates, including sporting facilities clients across the country from its 14 sites As a total service provider for non- and work facilities. As part of this PPP and providing high-quality, across-the- residential construction, BAM Deutschland project, BAM will be responsible for a board services. develops offices, hospitals, educational period of 25 years for maintenance, CVJMEJOHT QSJTPOT IPUFMTBOE*5DFOUSFT technical support and facility services *OUIFIFBMUIDBSFTFDUPS #".5FDIOJFL throughout Germany, focusing mainly on (including medical services), as well as for constructed the Radiotherapy Building at turnkey projects and public-private FNQMPZNFOUGPSUIFJONBUFT$PNQMFUFE Westfriesgasthuis in Hoorn this year, and, QBSUOFSTIJQ 111 QSPKFDUT*OBEEJUJPO UIF in late 2012, the project has been awarded in collaboration with BAM Utiliteitsbouw, it DPNQBOZTQPSUGPMJPBMTPJODMVEFTB for its innovative prison facilities in a PPP built a new wing featuring radio bunkers number of large housing complexes and structure. GPS766OJWFSTJUZ.FEJDBM$FOUSFJO concrete structures. The experience and Amsterdam. The division also added a High expertise of the BAM Sports subsidiary in $BSF$FOUSF JODMVEJOHPQFSBUJOHBOE multi-functional arenas, stadiums and recovery rooms, an intensive care entertainment venues have made it a department and an emergency sought-after partner both in Germany and EFQBSUNFOUUP6USFDIUT%JBLPOFTTFOIVJT JOUFSOBUJPOBMMZ#".*NNPCJMJFO hospital. Dienstleistungen is responsible for the facility management in its own PPP For the construction of the new Fries projects, as well as handling asset Museum in Leeuwarden, BAM Techniek management for external clients. adapted the air-conditioning systems, substantially reduced operating expenses One of the most high-profile projects in and environmental impact. Also in the portfolio is the Brandenburg Leeuwarden, BAM Techniek installed QBSMJBNFOUBSZCVJMEJOH*ODPOKVODUJPO sustainable systems in the new building of with BAM PPP, BAM Deutschland is DPMMFDUJPOBHFODZ$FOUSBBM+VTUJUJFFM developing this new regional government *ODBTTPCVSFBV5IF.BSJUJNF"DBEFNZJO building in Potsdam. The modern office is %FMG[JKMJTUIFGJSTUCVJMEJOHDPNQMFUFECZ concealed behind the reconstructed #".5FDIOJFLUPCFGVMMZEFTJHOFEJO#*. historical façades of the city castle that Revit 3D, in accordance with BREEAM once occupied these grounds. standards. 32 – 2012

On the campus of Dutch insurance *O #".5FDIOJFL'JSF1SPUFDUJPO company Achmea in Apeldoorn, BAM was developed a key innovation: the home responsible for developing the final design sprinkler system. Other projects under and specifications and for implementing development include foam fire the mechanical systems, including a extinguishing systems in tunnels, including central, sustainable energy supply with hot the Liefkenshoekspoortunnel in Belgium. and cold storage. The project comprised seven new buildings and an upgrade of the #".TVCTJEJBSZ*OUFSGMPXXBTSFTQPOTJCMF existing office building. for the new construction of the pharmaceutical labs and the GMP 6USFDIU6OJWFSTJUZTUIF%SJGU UIF preparation rooms at Brocacef landmark educational building and library ;JFLFOIVJTGBSNBDJFJO7FOSBZ5IF was fully renovated in partnership with company built clean-rooms both at the BAM Utiliteitsbouw. The company also /FUIFSMBOET*OTUJUVUFGPS.BSJUJNF realised another library, De Boekenberg Research on the island of Texel and at A#PPL.PVOUBJO JO4QJKLFOJTTF BOECVJMU Lasertec in Barendrecht. WBSJPVTEBUBDFOUSFT JODMVEJOH5%$(JO Delft. BAM Techniek is a member of the Energy 4FSWJDF$PNQBOZ &4$P /FUXPSL"TQBSU Several contracts for technical of this network, owners/occupiers of a management were signed by BAM building outsource the energy supply and Techniek in 2012, notably a multi-year management of the building to a third contract for the maintenance of systems in party with the objective to substantially UIFCVJMEJOHTPG4DIJQIPM3FBM&TUBUF*O reduce energy costs, deliver better quality addition, BAM Techniek took on the and save capital tied up in systems, and maintenance of the systems in the office SFMJFWFJUTPXOPSHBOJTBUJPO&4$PTUIF building The Base at Schiphol, which is company entered into in 2012 include currently being redeveloped. "SU$PVSUJO)PPGEEPSQBOE#MBVXF;PPN in Hardinxveld-Giessendam. BAM Techniek has a new organisational structure (based on a business unit structure) consisting of Energy Systems, *OUFHSBUFE8PSLTBOE'JSF1SPUFDUJPO *O partnership with BAM Woningbouw, BAM Techniek-Energy Systems is installing solar roofs and solar boilers as part of a large-scale renovation in a residential neighbourhood in Kerkrade in the province of Limburg.

#".5FDIOJFL*OUFHSBUFE8PSLTQSPWJEFT added value in the form of a bridge CFUXFFO*$5 TFDVSJUZBOENFBTVSJOHBOE control technologies with regular installation technology. The projects implemented in 2012 include optimisation of the Wi-Fi connection at the British School in (The Hague) and installing and integrating a surveillance camera system BU)PSJ[PO$PMMFHF XIJDIIBTDBNQVTFTJO and Hoorn. 2012 – 33

BAM Deutschland. Steigenberger BBI Airport Hotel, Berlin. BAM Utiliteitsbouw (in joint venture), BAM Techniek. Erasmus MC, Rotterdam. BAM Techniek. Installations for the Boekenberg Library, Spijkenisse. 34 – 2012 $JWJMFOHJOFFSJOH

Royal BAM Group PQFSBUFTJOUIF%VUDI #FMHJBO #SJUJTI *SJTIBOE

(FSNBODJWJMFOHJOFFSJOHNBSLFUT#".*OUFSOBUJPOBMVOEFSUBLFT

specialist construction and civil engineering projects worldwide.

5IF(SPVQTFUVQ#".*OGSB1SPKFDUNBOBHFNFOUBOE#".*OGSB

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fully integrated coordination of large-scale

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Key figures for the Civil engineering sector (x € million) 2012 2011 Revenue 3,760 3,834 Profit (loss) before tax 57.8 91.9 Margin before tax 1.5% 2.4% Order book (year-end) 5,622 5,087 2012 – 35

BAM PPP, CEI-De Meyer, Wayss & Freytag Ingenieurbau. Diabolo railway tunnel between Zaventem/Brussels Airport and Brussels.

3FWFOVFBU$JWJMFOHJOFFSJOHGPSXBT sector pre-tax result fell to €57.8 million €74 million lower (negative 2 per cent) at from €91.9 million last year. The increase in €3,760 million. Revenues were down in the the closing order book to €5,622 million Netherlands, the United Kingdom and (positive 11 per cent) came from Germany, Belgium, higher in Germany and stable in *SFMBOE UIF/FUIFSMBOETBOE#". *SFMBOE#".*OUFSOBUJPOBMHSFXTUSPOHMZ *OUFSOBUJPOBM#".IBTGPSNFE#".*OGSB Due to higher than anticipated 1SPKFDUNBOBHFNFOUBOE#".*OGSB"TTFU reorganisation costs as well as more Management to enhance the collaboration projects with margins that reflect the between its six Dutch infrastructure tough competitive environment, the companies on complex multidisciplinary projects. 36 – 2012

> BAM Civiel Other projects under development include *O #".$JWJFMFBSOFEWFSTJPOPG

OV SAAL (an extension of the railway the $02 awareness certificate at level 5, as Core activities tracks at Schiphol Airport, Amsterdam, XFMMBTSFDFJWJOHUIF*40 *40 design and construction of Almere and Lelystad), the Groningen BOE7$"1FUSPDIFNJDBMDFSUJGJDBUFT infrastructure Europapark train station and the Western Headquarters and Eastern Passages of Amsterdam #".$JWJFMMBVODIFEUIFA1BSUOFSJO4BGFUZ Gouda, the Netherlands $FOUSBM4UBUJPO 801"$ 5IFESJMMJOH campaign to coincide with the Worldwide Offices machine for Sluiskil Tunnel under the BAM Safety Day, which is devoted to Amsterdam, Breda, Elsloo, Ravenstein, (IFOU5FSOFV[FODIBOOFMJTOPX promoting personal responsibility and ;VJECSPFL operational. New contracts the company co-operation in the interest of safety. Projects won in 2012 include the double extension approximately 140 projects under of the N33 motorway between Assen and development, including Nijmegen city ;VJECSPFLBOEUIF0QTUFMUFSSFJOFO > BAM Infratechniek bridge and the Sluiskil Tunnel in Metrovoertuigen Amsterdam (OMA) 5FSOFV[FO project. Core activities Concepts cable and piping systems, BAM Energie and BAM GO-Park Through the BAM GO-Park concept, BAM telecommunications and data Number of employees $JWJFMPGGFSTBOJOUFHSBUFEBQQSPBDIGPSUIF infrastructures, traffic systems and approximately 670 development, design and construction of tunnel technology, industrial piping and DBSQBSLT5IF,FJ[FS,BSFMDBSQBSLJO storage systems, and heat and cold #".$JWJFMJNQMFNFOUFENFBTVSFTJO Nijmegen was completed in 2012 and the storage systems to increase added value for its clients and construction of the Brink car park in Headquarters reduce costs, and its business Apeldoorn is making good progress. Bunnik, the Netherlands management system has been adapted A newly acquired contract is the car park at Offices BOEDFSUJGJFEBDDPSEJOHMZ*OBEEJUJPO UIF Noordwal-Veenkade in The Hague. BAM 19 offices across the Netherlands organisation is also using methods such as $JWJFMJTBMTPQMBZJOHBLFZSPMFJOUIF Projects MFBODPOTUSVDUJPOBOE#*.&NQMPZFFT large-scale developments for the Nieuw several thousand each year, including attend simulation training in collaboration. )PPH$BUIBSJKOFTIPQQJOHDFOUSFJO Vopak Terminal Amsterdam Westpoort; This development process will remain in Utrecht and in Kudelstaart, in Heemstede the 380kV connection for TenneT in QMBDFJO#".$JWJFMIBTCFHVO and at the Groninger Forum, which South Holland; the widening of the working more closely with other BAM includes the construction of fully Utrecht Lunetten to Veenendaal stretch companies. automated underground car parks. of the A12 motorway ; and the SFOPWBUJPOPGUIF*+5VOOFM "NTUFSEBN $JWJMFOHJOFFSJOHQSPKFDUTDPNQMFUFE *OUFSNTPGNBSJUJNFXPSLT UIFRVBZXBMMT Number of employees during the year under review include the and infrastructure for Maasvlakte 2 are approximately 1,900 stadium development project Sporen in nearly completed. The De Oversteek city Armhem and the replacement of the bridge Nijmegen is currently under #".*OGSBUFDIOJFLPQFSBUFTJOGPVSLFZ Vollenhovenbrug bridge between development. markets: the distribution of gas, Overijssel and Flevoland. Thanks to an electricity, water, waste-water and heat, in integrated approach, the capacity BAM Energy combines knowledge of and which the regional companies Midden- enhancement and reconstruction of the expertise in mono-disciplinary and 8FTU /PPSEPPTUBOE;VJEPQFSBUF#". A12 motorway between Lunetten and NVMUJEJTDJQMJOBSZFOFSHZQSPKFDUT$VSSFOU *OGSBUFDIOJFL5FMFDPNGPDVTFTPOUIF Veenendaal could be completed two years projects include concepts for offshore market for telecommunications and data ahead of schedule. The widening of the wind park foundations (Gravity Base JOGSBTUSVDUVSFT XIJMF#".*OGSBUFDIOJFL A4 motorway between Burgerveen and Foundations) and tidal energy. Mobiliteit operates in markets for traffic Leiden is also proceeding well. The systems and tunnel systems. BAM southern section became operational in *OUIFJOEVTUSJBMBSFB UIF7PQBL5FSNJOBM -FJEJOHFO*OEVTUSJFTFSWFTUIFNBSLFU 2012, two-and-a-half years ahead of Amsterdam Westpoort was completed, for industrial piping and storage systems. schedule. For the second consecutive and the company was awarded a contract #".*OGSBUFDIOJFLTNBJOOJDIFNBSLFUT TVNNFS UIF"NTUFSEBN*+UVOOFMXBT for the new development of an ammonium are its specialisations in hot and cold renovated, this time for the second stage. sulphate plant for DSM. storage systems and piping renovation technologies. The activities are integrated 2012 – 37

BAM Speciale Technieken (BAM Civiel). Foundation work for the De Monarch II office building, The Hague.

BAM Betontechnieken, BAM Wegen, BAM Civiel, BAM Wegen, Mostert De Winter. BAM Infratechniek Mobiliteit and BAM Civiel. The two-storey Keizer Karel car park in Renovation of the IJ tunnel, Amsterdam. Nijmegen offers capacity for 680 cars. 38 – 2012

BAM Leidingen & Industrie, BAM Civiel. Mostert De Winter. Adaptation of the pipe work and wet well for the ‘Growth Project’, Green school playground on a rooftop car park for Deltion College, Zwolle. BP terminal, Amsterdam.

BAM Civiel, BAM Infratechniek, BAM Rail, BAM Wegen, BAM Infraconsult (in joint venture). Construction of the quays, railway and roads, as well as the container terminal, Maasvlakte 2 harbour and industrial area, Rotterdam.

BAM Wegen. Ridderstraat street reconstruction, Oosterhout. 2012 – 39

in BAM Nelis De Ruiter. Electronic piping maintenance of charging facilities for Rail: competition in the railway market registration, fibre-optic measuring sensors electric cars. remains fierce, while the number of and services in connection with the contracts was limited. Due to this and

*OGPSNBUJPO&YDIBOHF 6OEFSHSPVOE #".*OGSBUFDIOJFLIBTFBSOFEUIF$02 other factors, the company failed to /FUXPSLT "DU A8FU*OGPSNBUJF certificate level 5 in accordance with the achieve the targeted revenue and profit in VJUXJTTFMJOH0OEFSHSPOETF/FUUFO  ProRail performance ladder. 2012. Several larger and smaller projects 8*0/ BOEFMFDUSJDUSBOTQPSUBSFUIF were completed during the year, including DPNQBOZTPUIFSLFZTQFDJBMJTBUJPOT Mega 1, a project that involved large-scale > BAM Rail railway maintenance in the provinces #".*OGSBUFDIOJFLQSPWJEFTB ;FFMBOEBOE-JNCVSHBOEJOQBSUPG comprehensive range of services, ranging Core activities #SBCBOU*O5IF)BHVF UIFDPNQBOZ from design to performance-based design, construction and maintenance renovated the Binckhorst rail yard, and NBJOUFOBODF*OBEEJUJPOUPJOOPWBUJPO  of rail connections successfully completed the ‘Sporen in national coverage and expertise, a large Headquarters "SOIFNQSPKFDU EFNPOTUSBUJOHUIBU in-house implementing organisation is Breda, the Netherlands partnerships between the various BAM POFPGUIFDPNQBOZTNBJOTVDDFTT Offices operating companies in integrated, GBDUPST#".*OGSBUFDIOJFL XIJDIXJMMCF Dordrecht, Eindhoven and Rotterdam, multidisciplinary projects pay off. relocating its head office to Bunnik the Netherlands mid-2013, caters to nearly all network Projects *OFBSMZ #".3BJMBOE#". managers operating in over 140 each year, including PGO *OGSBUFDIOJFLXFSFDPOUSBDUFECZ1SP3BJM telecommunications, gas, electric power, Betuwe; BAVO Spoor joint venture; to construct the Utrecht Vaartsche water and heat. Edinburgh Tram Network; Utrecht Rijn-Houten superstructure (second Vaartsche Rijn-Houten superstructure tranche), which involved improving the Many thousands of smaller and larger (second tranche); Groningen new-build capacity, reliability and accessibility of the contracts are performed for these station tracks around the Utrecht, Lunetten and customers every year. Other clients Number of employees Houten line sections. Even while include Gasunie, ProRail, the Directorate- approximately 750 undertaking this project, the company General for Public Works and Water worked hard on the calculation for the Management (Rijkswaterstaat), Shell, #".3BJM UIF3PZBM#".(SPVQTSBJM DSSU project (renovation of Utrecht Tata Steel, BP, TenneT, Vopak and Schiphol specialist, is available 24 hours a day for $FOUSBM4UBUJPO 5IJTQSPKFDUIBTCFFO Airport. failure recovery. As part of this continuous awarded on a provisional basis to a process, reliability, customer focus, building consortium of which BAM Rail #".*OGSBUFDIOJFLDPNQMFUFETFWFSBM co-operation and continuity for the future GPSNTQBSU5IF$JUZPG"NTUFSEBN high-profile projects during the year under are the key values that create employee BTTJHOFE$PNCJOBUJF#".0." review, including - in conjunction with loyalty. DPNQSJTJOH#".3BJMBOE#".$JWJFM UP sister companies - the widening of the develop the Opstelterreinen A12 PPP project between Utrecht Lunetten 5IFDPNQBOZTNBJODMJFOUJT1SP3BJM UIF Metrovoertuigen Amsterdam rail-yard and Veenendaal; the construction of the company managing the Dutch main QSPKFDUJODPMMBCPSBUJPOXJUI"3$"%*4BOE 380kV connection for TenneT in South railway network. BAM Rail also works for #".*OGSBUFDIOJFL Holland; the Vopak Terminal Amsterdam regional and local public transport Westpoort, and the renovation of the companies and national and local network *ONBJOUFOBODFXPSL #".3BJMCFHBOB *+5VOOFMJO"NTUFSEBN NBOBHFSTJOUIF6OJUFE,JOHEPN *SFMBOE 5-year railway maintenance project in the and Belgium. The company is Betuwe region in June 2012, which The key newly won contracts include the headquartered in Breda and also operates comprises the railway tracks in the Greater N33 PPP project, the construction and sites in Dordrecht (equipment company), Den Bosch Area in the province North operation of Het Groene Net in Limburg, Eindhoven and Rotterdam. The Belgian Brabant and Geldermalsen in the province and a number of large fibre-optic projects NBSLFUJTTFSWFECZ$BSNBOT4QPPSXFSLFO Gelderland. This Performance-Oriented GPSDMJFOUT3FHHFGJCFSBOE3"#0$*' near Hasselt in Flanders, while BAM Rail Ltd .BJOUFOBODF$POUSBDU 1(0DPOUSBDU  PQFSBUFTOFBS%VCMJO JO*SFMBOE provides BAM Rail with the option to *OFMFDUSJDUSBOTQPSU UIFDPNQBOZDSFBUFE organise the maintenance in a flexible and a help desk for Leaseplan and other The year under review was another innovative way, thereby improving companies in 2012 for the installation and economically challenging year for BAM performance, including by further 40 – 2012

reducing the number of incidents. JOTUBMMBUJPOTBOEZFBSNBJOUFOBODF*O > BAM Infraconsult addition, large amounts of low-energy *O4DPUMBOE #".3BJM #"./VUUBMMBOE asphalt concrete were added to the A12 Core activities

#".$POUSBDUPST BTQBSUPGUIF#PSEFST NPUPSXBZ SFTVMUJOHJOFOFSHZBOE$02 infrastructure consultancy and design Railway project, began the construction of savings of around 25 per cent. Headquarters a 50-kilometre track from the capital of Gouda, the Netherlands &EJOCVSHIGVSUIFSJOMBOE*O#FMHJVN  At Fort Vechten in Bunnik, BAM Wegen and Offices #".3BJMJOWFTUFFDPNQBOZ$BSNBOT several chain partners used sustainable 7 offices in the Netherlands, and offices Spoorwerken is carrying out several concrete, known as ViaVerde, for the a car in Jakarta and Singapore projects, including the renovation of park. The use of ViaVerde has reduced Projects

Netebruggen in Duffel and the railway $02 emisions by roughly 75 per cent. BAM more than 500 projects per year, bridge over the Albertkanaal channel near 8FHFO #".$JWJFMBOEUIF#FMHJBOCBTFE including Maasvlakte 2, Rotterdam; Antwerp. 7JDUPS#VZDL4UFFM$POTUSVDUJPOTCVJMUB Nijmegen city bridge; Sluiskil Tunnel, round bicycle bridge on Heerbaan in 5FSOFV[FO)BSUFMGJFUTCSVH 4QJKLFOJTTF BAM Rail continues to invest in the Eindhoven across a recessed intersection, OV SAAL railway extension project, company and its employees, in accordance which allows motor traffic to drive at a "NTUFSEBN;VJE with the lean/Six Sigma philosophy, in different level from cyclists. Number of employees order to promote safety, change the approximately 270 culture, and increase commitment. *O/JKNFHFO #".$JWJFMBOE#".8FHFO CVJMUUIFVOEFSHSPVOE,FJ[FS,BSFMDBS #".*OGSBDPOTVMUJTUIFDPOTVMUBODZBOE park, for which Mostert De Winter FOHJOFFSJOHGJSNGPSUIF$JWJMFOHJOFFSJOH > BAM Wegen provided the rooftop plants. BAM PPP and section of the Royal BAM Group. The its joint venture partner PGGM were company manages the design relating to Core activities awarded the contract for the double urban infrastructure, large-scale line design, construction, management and extension of the N33 motorway between infrastructure, ports, and coastal maintenance of transport infrastructure "TTFOBOE;VJECSPFL7BSJPVT#". FOHJOFFSJOH*UJTJOWPMWFEJOUIFUFOEFS  Headquarters companies, including BAM Wegen, are design, construction and management Utrecht, the Netherlands involved in this project. stages of projects, incorporating both Offices design and other services, including risk 13 across the Netherlands *O"MCSBOETXBBSE #".8FHFOMBJEUIF management, systems engineering, Projects groundwork for the construction of the environmental management and licence approximately 2,500 projects per year %PNFTUJD$MJNBUF#VGGFS XIJDIGPSNTQBSU management. Number of employees PGUIF*+TTFMNPOEFDMJNBUFCVGGFS5IJT approximately 1,500 represents an area of 1,000 hectares )FBERVBSUFSFEJO(PVEB #".*OGSBDPOTVMU featuring a 10-kilometre-long water also has sites in Apeldoorn, Breda, The *OBEEJUJPOUPTJYSFHJPOBMPGGJDFT #". DPOOFDUJPOCFUXFFO;VJEFSQBSLBOE Hague, Utrecht, Jakarta and Singapore, Wegen maintains ten specialised ;VJEQPMEFS AEF#MBVXF7FSCJOEJOH 5IJT along with support offices in Amsterdam, subsidiaries, which operate in areas such as climate buffer is a sustainable, climate- 3BWFOTUFJOBOE;VJECSPFL noise barriers, asphalt production and proof solution for water management in processing, environmental and cement this area. The main projects in which BAM technologies, green areas, sports fields, *OGSBDPOTVMUXBTJOWPMWFEJOJODMVEF mechanical paving, traffic measures Near Venlo in Limburg, BAM Wegen has Maasvlakte 2, Nijmegen city bridge, the (temporary or otherwise) and traffic constructed the Greenportlane (N295), Sluiskil drilling tunnel, Hartelfietsbrug near barriers. which facilitates the connection with the Spijkenisse, and the railway extension A67 and A73 motorways, as well as the project OV SAAL. The company was also *OUIFZFBSVOEFSSFWJFX #".8FHFOBOE further development of the Klavertje 4 involved in the widening of the A12 several of its sister companies completed work landscape. The Greenportlane, an motorway between Utrecht Lunetten and the DBFM project Poort van Bunnik. This arterial road, will boost economic activity Veenendaal and of the A4 motorway project comprises the widening of the A12 in the region and served as the main access between Burgerveen and Leiden. Other motorway between the Utrecht-Lunetten road to the 2012 exhibition. road construction projects include the N33 junction and Veenendaal, the construction Poort van Noord, Hondsrugwegtunnel and adjustment of bridges, traffic Emmen and the conversion of the N261 2012 – 41

BAM Wegen, BAM Betontechnieken, BAM Infraconsult. Construction of a car park with ViaVerde, green, innovative and sustainable concrete, Fort Vechten, Bunnik.

BAM Indonesia, BAM Infraconsult. Xblocs for coastal protection for Gorgon LNG, Barrow Island, Australia. 42 – 2012

Betonac, Galère. Galère, Betonac. Car park near railway station for Expansion of lightrail network for Gewestelijk Gewestelijk ExpresNet (Brussels Regional ExpresNet (GEN) (Brussels Regional Express Express Network), Genval. Network), Charleroi. Betonac (in joint venture). Redesign of the E313/E314 Lummen motorway junction. 2012 – 43

NPUPSXBZ#".*OGSBDPOTVMUBOE#". > BAM Technics > Betonac *OUFSOBUJPOBMIBWFCFFOXPSLJOHUPHFUIFS POWBSJPVTKFUUZQSPKFDUT JODMVEJOH*DIUIZT Core activities Core activities Jetty Australia, Vale Jetty Malaysia, water treatment and mechanical and construction and maintenance of Wheatstone Jetty Australia and Brunei LNG electrical services infrastructure Jetty. Other projects involve foundations Located in Located in for offshore wind parks in the North Sea, Louveigné, Belgium Sint-Truiden, Belgium and a quay wall in Liverpool. Projects Projects approximately 300: 100 (Balteau) and approximately 30 projects under 200 (Balteau ie), including Lanaye sluice; development, including Genval rail > Galère */(.BSOJY #SVTTFMTESJOLJOHXBUFS project; noise barriers on A12 motorway, QSPKFDUT$BNFSPPO$MJOJDT-F7BMEPS  Meise; bridge renovation, Kraainem Core activities Liège Number of employees construction of infrastructure and Number of employees approximately 1,200 buildings approximately 300 Located in During the year under review, Betonac $IBVEGPOUBJOF #FMHJVN With a staff of more than 100 people, managed a large number of projects Projects Balteau holds a leading position in the relating to the redesign of the layout of approximately 150, including Tour treatment of drinking and waste water city, town and village centres, including Paradis, Liege; Brussels; NATO market in . The company is the upgrade of several key roads in the )FBERVBSUFST &WFSF*WP[3BNFUTMVJDF diversifying its turnover in industry and in centres of Lanaken, Leuven and Deurne, as Number of employees the field of hydraulics for waterways well as in Sterrebeek, where these approximately 1,000 (electromechanical equipment linked to activities started at the end of 2012. locks and dams). Balteau is carrying on Besides these major roadworks, Betonac Galère constructs both buildings and successful work in the drinking water field completed its largest project ever in the infrastructure and is involved in many JO$BNFSPPOJUJTFYQFDUJOHBTJHOJGJDBOU railway infrastructure in Genval. The major Walloon construction projects. order for a waste water treatment plant in completion of the parking facility marks an Vietnam in 2013. The co-operation with end to the projects for the ‘Gewestelijk Galère was involved in a range of projects #".*OUFSOBUJPOBMXJMMCFJOUFOTJGJFE &YQSFT/FUSFHJPOBMFYQSFTTOFUXPSLJOUIF in the year under review, such as the abroad, where financing is a key success Greater Brussels Area. As part of this building of a new navigation lock on the factor. Good co-operation with Galère QSPKFDU UIFOFXUSBNMJOFJOUIF$IBSMFSPJ 3JWFS.FVTFJO*WP[3BNFU UIFDPNNVUFS remains an important element of the DJUZDFOUSFXBTPGGJDJBMMZPQFOFEJO*O rail service in Genval and and the #BMUFBVTDPOUJOVPVTHSPXUI Watermaal-Bosvoorde, BAM Wallonia is Schuman-Josaphat tunnel project in making rapid progress with the Brussels. The Buildings division handled Balteau ie specialises in heating and construction of a kilometre-long railway the restoration of the Opera in Liège, the electrical engineering. The company has tunnel, and in the Province of East Flanders construction of a prison in Beveren and a worked on numerous projects with Galère, it completed the renovation of 22 train SFTFBSDIDFOUSFGPS"($(MBTT&VSPQFJO #BMUFBV $&*%F.FZFSBOE*OUFSCVJME5IF platforms. (PTTFMJFT*O JOQBSUOFSTIJQXJUI largest projects in the year under review BAM Alliance, Galère was involved in the included renovation works on hospitals: #"."TQIBMU #FUPOBDTBTQIBMUGBDJMJUZJO building of the new NATO headquarters in UIF$MJOJDT-F7BMEPSJO-JÒHF 4BJOUF"OOF Vinalmont, was involved in the restoration Evere near Brussels and the Stafelter Saint-Remi in Anderlecht, André Renard in of large motorway sections on the E19, Tunnel and the Pulvermühle Railway Herstal and the university clinic in & &BOE3NPUPSXBZT#FUPOBDT Viaduct in Luxembourg. Mont-Godinne, and the renovation of flexibility enabled these projects to be PGGJDFTGPS*/(JO#SVTTFMTBOE$FOUSF&UPJMF constructed within a short space of time, in Luxembourg. Balteau ie was also at night and during weekends and be responsible for the heating system and completed successfully. electrical engineering projects carried out JOWBSJPVTSFTUIPNFT 1VCMJD$FOUSFTGPS *OTQSJOH UIFOFX&& Social Welfare in Pepinster and Wavre, interchanger was officially opened in home in Waterloo) and residential Lummen, thereby eliminating one of the complexes (Logis Andennais, Logement most dangerous traffic junctions in .FVTF$POESP[BOEJO"OHMFVS BTXFMMBT Belgium. for the new NATO headquarters and the hotel Pulman in Brussels. 44 – 2012

Betonac, the Belgian market leader in the project – the railway tunnel connection (comprising 63 apartments); the installation of noise barriers, added CFUXFFO;BWFOUFN"JSQPSUBOE#SVTTFMT refurbishment of a tower block in Evere; cement noise barriers for a 5-kilometre- city centre – was completed during the new office buildings on behalf of Floreal long trajectory near Meise (north of year under review and officially opened by BOE"$-7#JO#SVTTFMT QSPKFDUTGPSUIF Brussels) on the A12 motorway. ,JOH"MCFSU**PG#FMHJVNJO+VOF$&*%F University of Ghent and VUB in Brussels, Meyer also completed several smaller civil and the Groeninge hospital in Kortrijk. The company also overhauled the bridges engineering projects for its client: the two $&*%F.FZFSJTBMTPJOWPMWFEJOUIF of Kraainem and Lavoir in 2012. The full CSJEHFTGPSA5IF-PPQOFBS'MBOEFST&YQP construction of the new NATO renovation of the superstructure extended in Ghent; sections of the infrastructure Headquarters in Evere, for which it is the lifespan of these artworks by at least works for Gewestelijk ExpresNet (the working closely with several sister 30 years. provincial express network, primarily in companies. Limal-Limelette), and renovation works on #FUPOBDTNPCJMFDFNFOUGBDJMJUZIBTCFFO the platforms in the stations and stops set up on the construction site of building along the railway tracks from > BAM Nuttall consortium BAM Alliance in Evere, Geraardsbergen to Aalst, Denderleeuw and Brussels, for the second consecutive year, Edingen. Core activities as part of the construction of the new design and construction of NATO Headquarters. *O UIFDPNQBOZNBEFTUFBEZ infrastructure progress in several projects carried out on Headquarters Betonac operates its own extensive behalf of the Belgian national railway $BNCFSMFZ 6OJUFE,JOHEPN laboratory, where it performs quality company, including the bridges across the Offices control for cement and asphalt mixtures, Nete River in Duffel; the GEN in Rixensart, approximately 15, throughout England, along with its own design company. Ottignies and Watermaal-Bosvoorde; Scotland and Wales along the Ghent-Ostend railway track near Projects the Drongen train station; at the English approximately 100 projects under > CEI-De Meyer CSBODIGPSNBUJPOA#MBVXF5PSFOJO#SVHFT development, including legacy work at inside the Jette railway station near 2VFFO&MJ[BCFUI0MZNQJD1BSL -POEPO Core activities Brussels, on Krijgslaan in Ghent, and on the 5PUUFOIBN$PVSU3PBE5VCFTUBUJPO  $POTUSVDUJPOPGJOGSBTUSVDUVSF IPVTJOH railway bridges over the Albertkanaal London; Borders Railway, Scotland and other buildings channel in Antwerp. There has been a Number of employees Headquarters slight reduction in the number of contracts approximately 3,000 Brussels, Belgium JOUIFJOEVTUSJBMTFDUPS*O $&*%F Office Meyer completed projects in the Port of BAM Nuttall is one of the largest civil &LF /B[BSFUI Antwerp and for ArcelorMittal in the Port engineering contractors in the UK. The Projects of Ghent. company employs over 3,000 people approximately 40 projects under MPDBUFEBUJUTIFBEPGGJDFBU$BNCFSMFZ  development, including NATO The Buildings section completed the regional offices and depots provide Headquarters, Evere; Liefkenshoek GPMMPXJOHQSPKFDUT%PTTJOLB[FSOFJO customers with both a national and railway tunnel connection, Antwerp; Mechelen; the administrative centre in regional civil engineering service. Schuman-Josaphat railway tunnel, 8JMMFCSPFL0PTUDBNQVT<&BTU$BNQVT>JO #SVTTFMT[JFLFOIVJT(SPFOJOHF ,PSUSJKL 0PTULBNQUIF3FNZ**PGGJDFDPNQMFYJO Significant projects currently being SFTJEFOUJBMDPNQMFYDBSFDFOUSF.JMJU[B  Leuven; the residential care centre in undertaken include the upgrade of Bruges Sint-Niklaas, and the Ernotte, Bervoets and 5PUUFOIBN$PVSU3PBEBOE7JDUPSJB Number of employees Bruyn-West housing projects. Other underground stations in central London, approximately 450 QSPKFDUTJODMVEFEUIF.JMJU[BSFTJEFOUJBM tunnelling and station construction care centre in Bruges, a service centre in QSPKFDUTBTQBSUPGUIF$SPTTSBJMTDIFNF  5IFNPTUTVCTUBOUJBMQSPKFDUTPG$&*%F Boom, Van der Elst in Leuven, and Bara in MFHBDZXPSLPOUIF2VFFO&MJ[BCFUI .FZFSJOUIF$JWJMFOHJOFFSJOHTFDUPS Anderlecht. Olympic Park, utilisation of the hard involve the construction of the shoulder during peak traffic flows on the Liefkenshoek railway tunnel connection $&*%F.FZFSXPOTFWFSBMOFXDPOUSBDUTJO M62 motorway as part of the Managed near Antwerp and the Schuman-Josaphat the year under review, including the Motorways Framework and the Luton to railway tunnel in Brussels. The Diabolo Dijledal residential project in Leuven Dunstable Guided Busway. 2012 – 45

BAM Nuttall (in joint venture). Construction of tidal landscape near Wallasea Island (east coast of England) using soil removed to make way for the Crossrail Project. Galère. New-build Pulvermühle railway viaduct, BAM Nuttall. Luxemburg City. Civil engineering work (ground work, soil decontamination, paving, landscaping, construction of fountain), King’s Cross, London. 46 – 2012

BAM International (in joint venture). Construction of Tanzam Highway, Tanzania. Wayss & Freytag Ingenieurbau. Wupper Bridge, Leverkusen-Opladen.

BAM International, BAM Infraconsult. Six hundred metre long quay wall for the Monrovia container terminal, Liberia. 2012 – 47

During 2012 BAM Nuttall completed > BAM Contractors $PSSJC(BTLJMPNFUSFUVOOFMVOEFS numerous contracts on the Olympic Park. Sruwaddacon Bay in north Mayo for Shell These included hard and soft landscaping, Core activities &1*SFMBOEXJUITJTUFSDPNQBOZ8BZTT bridge construction and earthworks. The DJWJMFOHJOFFSJOH #".$JWJM OPO Freytag. company spent over five years on the residential building (BAM Building) and Olympic Park, having been the first property development (BAM Property) #".DPOUJOVFTUPCFBDUJWFJOUIF*SJTI111 contractor on-site carrying out demolition Headquarters market and has already successfully and remediation work. The reopening of ,JMM $PVOUZ,JMEBSF *SFMBOE delivered three projects to date: the M1 the hydro-electric power scheme at Offices Dundalk Western Bypass PPP Motorway; Glendoe in the Highlands of Scotland was $PSL (BMXBZ 8BUFSGPSE %VCMJOBOE the M7/M8 Portlaoise Motorway PPP also completed. This involved the Belfast Scheme; and the M25 Waterford Bypass construction of a new water-supply tunnel Projects PPP Motorway, which includes the JOQBSUOFSTIJQXJUI(SPVQ$PNQBOZ8BZTT approximately 60 projects under 465-metre wide, 5-span, cable-stayed and Freytag. Another project successfully EFWFMPQNFOU JODMVEJOHUIF$PSSJC bridge, with its distinctive 112m-high delivered was the upgrade of the mainline Tunnel; Ballymore waste-water pylon. railway between London Marylebone and processing system; Sutherland School BAM has been awarded preferred bidder Birmingham. This involved extensive track of Law, Dublin status for the implementation of the and signaling work. Finally a new Number of employees /FXMBOET$SPTT/1114DIFNF maintenance depot was delivered to approximately 600 $POTUSVDUJPOIBTDPNNFODFEPOUIF London Underground at Neasden designed Schools Bundle 3 PPP project: the design, to cope with the new generation of trains #".$POUSBDUPSTJTPOFPG*SFMBOETMBSHFTU build, finance and 25-year maintenance of on the network. QVCMJDXPSLTDPOTUSVDUJPODPNQBOJFT*UT eight schools located across the island of principal activities are building and civil *SFMBOE BAM Nuttall continues its long association engineering in the public, private and PPP with the Olympic Park with the award of sectors, where activities include rail Significant international works, in two legacy contracts which will involve infrastructure, facility management and partnership with BAM sister companies, demolishing temporary structures on the property development. The service include: the New Port of Aqaba in Jordan; site and preparing it for permanent provided comprises Design/Build/Finance/ a new stadium and hotel development at development in the future. A recent Maintain (or combinations thereof) and "M"JO 6"& UIF$PMFSBJOFUP%FSSZ5SBDL contract award is the construction of the traditional contracting. 3FOFXBMJO/PSUIFSO*SFMBOEUIF.8 Borders Railway in Scotland. This 30-mile $BMMJBDIBSXJOEGBSN UIF,JMEFSNPSJF section of railway from Tweedbank to Major projects completed in 2012 include Hydroelectric Scheme; and the Borders &EJOCVSHIJTDVSSFOUMZEJTVTFE*UXJMMCF UIF%FMM)FBERVBSUFST $JUZHBUF$PSL  Rail projects in Scotland. reopened with new stations, new track and which features a range of energy-efficient signals with all structures upgraded. measures to make it more eco-friendly and BAM Nuttall implement the project in joint FOFSHZFGGJDJFOUBOEXBTUIFGJSTU*SJTI venture with two Group companies building to be granted the Gold LEED #".$POUSBDUPSTBOE#".3BJM BDDSFEJUBUJPOUIFA1SPKFDU&EHF%BUB $FOUSF %VCMJO GPSBOJOUFSOBUJPOBM TFBSDIFOHJOFDPNQBOZ$PNNVOJDBUJPOT 8PSLFST6OJPO)2 %VCMJOBOE$JMM3POBJO Harbour Development on the Atlantic DPBTUPGUIF"SBO*TMBOET$JMM3POBJOXBT voted Engineering project of the Year at UIF&OHJOFFST*SFMBOE&YDFMMFODF Awards.

Major projects under construction include: Schools Bundle 3 PPP; Sutherland School of -BX 6OJWFSTJUZ$PMMFHF%VCMJO5SBMFF Bypass, Kerry; Ballymore Water Treatment 1MBOUGPS%VCMJO$JUZ$PVODJMBOEUIF 48 – 2012

> Wayss & Freytag Ingenieurbau QBSUPGUIFOFX&SGVSU-FJQ[JH)BMMFSBJMXBZ tunnel will have a length of 4,900 line, was completed by Wayss & Freytag kilometres and bored with a Hydroshield- Core activities *OHFOJFVSCBVBTUFDIOJDBMMFBEFSJOBKPJOU 5#.5IFDPOUSBDUPSJT4IFMM&1*SFMBOE construction of infrastructure and WFOUVSF,BU[FOCFSHUVOOFM BTJOHMFUSBDL power-generation systems, specialising railway tunnel as part of the new/upgraded The first section of the 6.1 kilometre in bored and dug tunnels Karlsruhe-Basel railway line, has also been 9%SJWF $ IBTCFFODPNQMFUFE Headquarters completed. between Royal Oak Portal and Paddington Frankfurt am Main, Germany 4UBUJPOJO-POEPO*UJTQBSUPGUIFDPOUSBDU Offices 5IFDPOTUSVDUJPOPG4MVJTLJM$BOBM$SPTTJOH GPS$SPTTSBJM8FTUFSO5VOOFMT"TQBSUOFS Berlin, Düsseldorf, Hamburg, Kansdorf, has started in the Netherlands. Wayss & of joint venture BFK (BAM/Ferrovial/Kier), Munich, Stuttgart 'SFZUBH*OHFOJFVSCBVJTCVJMEJOHB 8BZTT'SFZUBH*OHFOJFVSCBVJTCVJMEJOH Projects twin-bore road tunnel under the Ghent- two parallel, single-railway tunnels of $VSSFOUMZQSPKFDUTVOEFS 5FSOFV[FO$BOBMJOKPJOUWFOUVSFXJUI#". 5.9 kilometre each as well as two stations. construction, including Abwasserkanal 5#*GPSUIFDMJFOU;FFMBOEQSPWJODJBM $SPTTSBJM-JNJUFE -POEPO BXBSEFEUIF Emscher, Germany; Sluiskiltunnel, the authority. The project will be terminated in contract. The project is planned for /FUIFSMBOET$PSSJC0OTIPSF1JQFMJOF 8BZTT'SFZUBH*OHFOJFVSCBVBOE completion in 2015. 5VOOFM *SFMBOE$SPTTSBJM-POEPO 6OJUFE BAM Utiliteitsbouw Amsterdam have Kingdom; Liefkenshoek railway tunnel, executed a revitalisation of the US Belgium $POTVMBUFJO"NTUFSEBNJO XJUIIJHI Number of employees standards of physical security being approximately 900 implemented.

8BZTT'SFZUBH*OHFOJFVSCBVJTBDUJWFJO *O#FMHJVN %JBCPMP5VOOFMBU#SVTTFMT Germany and Europe. The company Airport, the first PPP project in Belgium, (including subsidiaries) currently has more has been completed. The railway tunnel is than 80 projects in progress worldwide in part of the connection to the new the civil engineering, infrastructure, high-speed railway line from Brussels to industrial and non-residential sectors. The Antwerp. Two tubes in a TBM drive with a company is one of the major European length of 1,070 metres each have been tunnel contractors and has been heavily constructed by Wayss & Freytag involved in the development of *OHFOJFVSCBV $&*%F.FZFSBOEPUIFS mechanised tunnelling techniques. QBSUOFSTPGA5)7%JBMJOL5IFDMJFOUJT A/PSUIFSO%JBCPMPOWBOE7*";BWFOUFN *O(FSNBOZ 8BZTT'SFZUBH*OHFOJFVSCBV Liefkenshoek Rail Link, a double-track has been awarded a contract for the railway tunnel has reached the final stages &NTDIFS$BOBMQSPKFDUUPFYUFOEUIF with the breakthrough of two TBM existing overground sewage channel in tunnels. The PPP project was executed by underground tunnels with a total length of the consortium THV LocoBouw consisting 35 kilometres. The project will be PG8BZTT'SFZUBH*OHFOJFVSCBV $&*%F completed in 2017. Wayss & Freytag Meyer and others. *OHFOJFVSCBVIBTBMTPXPOBKPJOUWFOUVSF contract for the construction of a railway *O-VYFNCPVSH 4UBGFMUFS5VOOFMIBTCFFO tunnel of approximately 3.8 kilometres in completed in a joint-venture contract MFOHUIJO#BE$BOOTUBUU5IFUVOOFMJTQBSU CFUXFFO8BZTT'SFZUBH*OHFOJFVSCBV of the rail project Stuttgart 21 for and Galère. The twin-tube motorway Deutsche Bahn AG and will be completed tunnel is part of the Route du Nord. in 2018. Deutsche Bahn AG has assigned 8BZTT'SFZUBH*OHFOJFVSCBVJOKPJOU *O*SFMBOE 8BZTT'SFZUBH*OHFOJFVSCBV venture to build Tunnel Widderstall with a "(BOEKPJOUWFOUVSFQBSUOFS#".$JWJM length of 962 m, which is part of the new *SFMBOE-UEIBWFCFFOBXBSEFEUIF railway line Wendlingen-Ulm. Finnetunnel, DPOUSBDUGPSUIFDPOTUSVDUJPOPG$PSSJC a single-track railway tunnel, which forms Pipeline Tunnel in Sruwaddacon Bay. The 2012 – 49

> BAM International stages of the 2.4-kilometre LNG jetty with DMJFOUTMPBEJOHGBDJMJUZGPSJSPOPSF#". the installation of the topsides. completed another part of that Core activities rehabilitation in 2011. civil engineering and non-residential *O*OEPOFTJB#".TUBSUFEUIFGBCSJDBUJPOPG construction precast concrete elements that will be The contract for the design and Headquarters supplied to a third contractor for the construction of a 600-metre quay wall for Gouda, the Netherlands (PSHPO-/(QSPKFDUBU#BSSPX*TMBOE  a container terminal in Monrovia, Liberia, Offices "VTUSBMJB*OUIFPQFSBUJOHDPNQBOZ is moving forward according to schedule Dubai, Dar es Salaam, Accra, Jakarta, was also awarded the contract to build the and is planned to be ready in 2013. Perth .BSHP$JUZ)PUFMJO%FQPL TPVUIPG Projects +BLBSUB"MTPJO*OEPOFTJB#".TUBSUFEUIF There is optimism about resuming the $VSSFOUMZQSPKFDUTVOEFS upgrade of a live petrochemical jetty in PQFSBUJPOTPG#".*OUFSOBUJPOBMJO-JCZB EFWFMPQNFOU BTFMFDUJPO*SPOPSFKFUUZ $JMFHPOGPS$IBOESB"TSJ *OEPOFTJBT A small team is back in the country to start for Vale in Lumut, Perak, Malaysia; Al Ain leading supplier of petrochemical activities again on a small scale. Stadium in Abu Dhabi, New port project production. The ninety reinforced concrete in Aqaba; LNG jetty in Papua New structures that BAM is currently building Guinea and three new LNG contracts in GPSUIF)PMDJN$FNFOU'BDUPSZJO5VCBO "VTUSBMJB*DIUIZTKFUUZBOE*DIUIZT will be completed in 2013. module offloading platform in Darwin, *O.BMBZTJBUIFDPOTUSVDUJPOPGUIFKFUUZGPS Northern Australia as well as 7BMF UIFXPSMETMBSHFTUJSPOPSFFYQPSUFS  Wheatstone jetty near Onslow, Western is moving forward in partnership with the Australia; Quay walls for APMT Terminals Australian construction company in Monrovia, Liberia and Aqaba, Jordan .D$POOFMM%PXFMMBOEUIF.BMBZTJBO Number of employees contractor See Yong & Son. approximately 3,000 *O#".XBTBXBSEFEUXPGBTUUSBDL #".*OUFSOBUJPOBMPQFSBUFTJOUIF contracts in the Arab Emirate of Abu following geographic areas: Australia, Asia, Dhabi: one to build a mixed-use stadium in Africa and Middle East & Gulf States. Al Ain, another for the construction of a $VSSFOUMZUIFDPNQBOZIBTTPNFUXFOUZ TUBSIPUFMBU"CV%IBCJ*OUFSOBUJPOBM projects in progress worldwide in the civil Airport. Phase 4 of the Oman Botanic engineering, infrastructure, industrial and Garden was suspended by the client to non-residential sectors. The operating SFDPOTJEFSUIFEFTJHOPGUIFQSPKFDU*O company has embarked on an ambitious Aqaba, Jordan, BAM is currently extending HSPXUITUSBUFHZ*OTUFQXJUIUIJTHSPXUI  a wharf for a container terminal, and has the organisation has been strengthened, started the construction of a new port in both technically and commercially. the same city.

*O"VTUSBMJB#".BOEKPJOUWFOUVSFQBSUOFS #PUIQIBTFPG5BO[BN)JHIXBZ B $MPVHITUBSUFEUIFEFTJHOBOE LJMPNFUSFTUSFUDICFUXFFO*SJOHBBOE construction of an LNG project module Mafenga, and the 95-kilometre road offloading facility near Darwin, Northern improvement scheme for the Laela- Territory, Australia, as well as a product- Sumbawanga road section in south-west MPBEJOHKFUUZ CPUIGPSUIF*DIUIZT-/( 5BO[BOJB XJMMCFDPNQMFUFEEVSJOH Project. These projects will be completed #".*OUFSOBUJPOBMJTFYFDVUJOHUIFTFSPBE JO*OUIF#".$MPVHI+PJOU construction projects in a joint venture. Venture was also awarded the contract to design and construct the Wheatstone LNG *O/PWFNCFS#".*OUFSOBUJPOBMXBT product loading facility and tug berths awarded the contract for the design and near Onslow in Western Australia, which is construction of a fuel unloading and QMBOOFEGPSDPNQMFUJPOJO*O1BQVB layover facility in Pepel, Sierra Leone, as /FX(VJOFB#".$MPVHISFBDIFEUIFGJOBM part of the ongoing rehabilitation of the 50 – 2012 Property

*O1SPQFSUZ, total revenue fell by 19 per cent to €548 million.

$POEJUJPOTJOUIF%VUDISFTJEFOUJBMIPVTJOHBOEDPNNFSDJBM

property markets continued to worsen during the year,

JOMJOFXJUI#".TBEKVTUFEBTTVNQUJPOTBOOPVODFE

at the half year results.

Key figures for the Property sector (x € million) 2012 2011 Revenue 548 674 Profit (loss) before tax and impairments (1.4) (23.4) Margin before tax - - Order book (year-end) 1,080 1,103 2012 – 51

In the year under review, BAM Properties sold the Chiswick Green office building (7,500 m2), West London. Built by BAM Construction.

*OUIF/FUIFSMBOET  IPNFTXFSFTPME Kingdom. Total investment in the stock of 40,400m2 of finished but unlet commercial (2011: 2,230). The result before tax and property at end-December 2012 was property (2011: approximately 43,200m2) impairments of negative €1.4 million €1,244 million (31 December 2011: €1,492 and approximately 44,100m2 of finished (2011: negative €23.4 million) included million), a decrease of €248 million. This and let commercial property (2011: the operational impact of adjusted decrease includes €64 million net approximately 41,300m2), in total assumptions announced at the half year operational reduction of the portfolio. representing €172 million of investments. results offset by good performance in The investments included stock of 157 There were 374 unsold homes still under Belgium and a book profit on a commercial completed but unsold homes (2011: 205), construction (2011: 354). property transaction in the United of which 54 are rented out, approximately 52 – 2012

> AM Although output in the housing market was > AM Real Estate Development low across the board, AM achieved sales Core activities successes in a variety of locations. AM and Core activities development of housing, including Stadgenoot are transforming the former development of commercial real estate residential areas Joint Administration Office (GAK) office in Headquarters Headquarters "NTUFSEBNT#PTFO-PNNFSEJTUSJDUPOUIF Utrecht, the Netherlands Nieuwegein, the Netherlands western ring road into a complex featuring Projects Offices 320 student and starter homes plus approximately 5 projects under "NTUFSEBN 3PUUFSEBN 5FSOFV[FOBOE GBDJMJUJFT*OUIF%F4UVEJPQSPKFDUJO development per year, including, in ;XPMMF UIF/FUIFSMBOET Amsterdam, all 170 apartments were sold  IFBEPGGJDFPG$BQHFNJOJ Projects during the first stage. The Villa Mokum /FEFSMBOE 6USFDIU/JFVX;BBJMBOE  more than 100 projects under QSPKFDUJOUIFDBQJUBMT"NTUFMLXBSUJFS -FFVXBSEFO$FOUSVNQMBO development, including De Studio, district managed by AM meets the demand Brouwerspoort, Veenendaal; De Amsterdam; 100hoog, Rotterdam; for high-quality, affordable accommodation Voorwaarts, Apeldoorn Fourty5High, Amersfoort; for students and first-time renters/buyers. Number of employees ,SBBOCPMXFSL ;XPMMF$BSPMVT  approximately 55 Den Bosch *O)FFNTUFEF DPOTUSVDUJPOCFHBOPOUIF Number of employees Nieuw Overbos housing and healthcare AM Real Estate Development focuses on the approximately 160 complex, initiated by AM and its partners, development of commercial real estate, as Stichting Sint Jacob and Syntrus Achmea well as being engaged in developing and *O ".PQFSBUFEJOBNBSLFUUIBU Real Estate & Finance. The project redeveloping offices, shopping centres and continued to contract. The Dutch property comprises roughly 120 homes and 200 NJYFEVTFQSPKFDUT*OPSEFSUPJOUFHSBUF market remained affected by the weak parking spaces in an upgraded rural setting. UIFBDUJWJUJFTJOUIJTNBSLFU *1..$ economy, falling house prices, monetary Other projects where new phases of Vastgoed and AM Real Estate Development uncertainty, shrinking consumer construction could begin following merged in 2011 and currently operate confidence, and reduced consumer credit in TVDDFTTGVMTBMFTJODMVEFE01;6*%JO under the name AM Real Estate the mortgage market. Amsterdam; DEO NEO and De Entree in Development. The office, located in Haarlem; Schelphoek in Alkmaar; Louis Utrecht, was awarded the Betonprijs *OSFTQPOTFUPUIFTFDIBOHJOHNBSLFU %BWJETDBSSÏJO;BOEWPPSU7JMMBQBSL $PODSFUF"XBSE JO conditions, AM implemented a new focus Eikelenburgh in Rijswijk; Wilgenwende in strategy in early 2012, as part of which the %PSESFDIU$BSPMVTJO%FO#PTDI *OFBSMZ ".3FBM&TUBUF%FWFMPQNFOU  company has shifted its focus more to the Thorbeckepark in Utrecht; Fourty5High in BAM Utiliteitsbouw and BAM Techniek core economic areas of the Netherlands. Amersfoort, and Enka and Kernhem in Ede. officially began the construction of the The focus strategy also involves a further The five Entrada residential towers were %VUDIIFBEPGGJDFPG$BQHFNJOJJO6USFDIU reduction in the capital invested in projects DPNQMFUFEJO)JMWFSTVNTDJUZDFOUSF.BOZ The implementation of the ‘New Way of BOEMBOEIPMEJOHT*OEFWFMPQJOHUIF". PGUIFTFQSPKFDUTXFSFDPNQMFUFECZ".T 8PSLJOHBOETVTUBJOBCJMJUZXFSFLFZ New Business Model, the company has also sister companies. principles in developing the building. The increased its customer focus. AM involves office, which covers approximately both investors and private individuals in the 21,000m2, earned the prestigious development process more closely and at BREEAM-NL design certificate of ‘Very an earlier stage, so as to be able to offer (PPE5IFOFX3BCPCBOLPGGJDFXBT potentially successful projects with shorter DPNQMFUFEPO;VJEFSWBM &OTDIFEF5IF preparation time and at a lower cost. As building comprises approximately 6,000 m² part of this process, AM is using new of office space and offers a high level of marketing and e-business methods, sustainability. including crowd sourcing. These tools have already proved their worth in projects such The start of a number of developments was BT,SBBOCPMXFSLJO;XPMMF )BBS[JDIUJO celebrated during the year, including the Utrecht and Merici in Bergen. There is a first stage of the De Voorwaarts shopping stronger emphasis on advice to, and centre in Apeldoorn. The first sub-project, supervision of, private residential which will be built directly adjacent to the consumers through personal sales support. Omnisportcentrum, mainly consists of 2012 – 53

AM Real Estate Development, AM, BAM Woningbouw. BAM Utiliteitsbouw (in joint venture). Het Bordes, 39 apartments, 2 penthouses, Nieuw Zaailand, Leeuwarden. 6 quayside apartments, and a half-sunken car park, Ridderkerk.

AM Real Estate Development, AM, BAM Utiliteitsbouw, BAM Woningbouw. Bernard van Kreelpoort as part of the Brouwerspoort centre plan, Veenendaal. 54 – 2012

AM, BAM Woningbouw. 55 homes, Hoogh Waalre project. Architects: LSWA, F. Woudstra, Van Woerkom De Brouwer.

AM, BAM Woningbouw. Blokhoeve The Edge, Nieuwegein. Architect: Groosman Partners. 2012 – 55

large-scale shops, food establishments, > Kaïros mid-2012, is a prestigious project IPUFMTBOEMFJTVSFGBDJMJUJFT#BOOF$FOUSVN  comprising 45 loft apartments located in the multi-functional complex in North Core activities the residential neighbourhood Woluwe Amsterdam (Amsterdam-Noord) featuring property development Saint-Pierre, Brussels. homes, shops, a community theatre, a Headquarters library, an activity centre, after-school care Wilrijk, Belgium Mid-2012 also saw the launch of the facilities and a car park, reached its peak Projects project on Wolvengracht in Brussels. this year. approximately 12 projects under Located near the Théâtre Royal de la development, including Flemish Monnaie, this project is a mixed AM Real Estate Development also "ENJOJTUSBUJWF$FOUSF (IFOU&NCBTTZ development project including celebrated the opening of city centre Building for the German State of Hessen; apartments, offices and commercial space. projects Brouwerspoort in Veenendaal and Hooikaai/Werfkaai, apartments, /JFVX;BBJMBOE MPDBUFEJODFOUSBM Brussels; serviced apartments and *OUIFIFBMUIDBSFTFDUPS BUPUBMPG Leeuwarden. Both projects are examples of service centres, Antwerp; Wolvengracht, serviced apartments for the elderly was developments where a combination of Brussels; National Archives, Ghent and completed in Deurne (near Antwerp), the expertise, close cooperation and trust with Namur remaining 200 units are planned for partners has resulted in successes. Number of employees completion in 2013 and 2014. approximately 10 *ONJE ,BÕSPTXBTTFMFDUFE BTQBSUPG *O ".3FBM&TUBUF%FWFMPQNFOUNBEF BDPOTPSUJVN UPEFWFMPQUIFOFX;/" significant progress in developing and Kaïros has for some time been one of the hospital in Antwerp, which has an area of redeveloping shopping centres in the largest and most successful players in the 65,000 m² including facilities. Netherlands, including the Muntplein Belgian property market. The company has shopping centre in Nieuwegein, Lange been able to increase its share and Special development projects involve the 8FNFOJO)FOHFMP %F$JUBEFMJO/JKNFHFO  profitability in this market, including development of the Government Archives Noorderarcade in Alkmaar, and Nieuwe through diversification across the various in Namur and Ghent. Kaïros was awarded )BBHTF1BTTBHFJO5IF)BHVF*OBEEJUJPO  market segments. Outside the office the DBFM contract for a school project approval was granted for the development market, Kaïros also operates in the (Kasterlinden) in Berchem-Sainte-Agathe, PGUIF$MJODLIPFGGTIPQQJOHDFOUSFJO residential market and the healthcare the government will lease the property *+TTFMTUFJO sector, as well as participating in specific from Kaïros for a period of 27 years. projects (including schools and archives). *1..$$POTVMU BEJWJTJPOPG".3FBM&TUBUF Development, is an integrated service The company maintains a strong presence provider specialising in consultancy, project in the office market, with projects management, housing advice and concepts. including the development of the Flemish *1..$$POTVMUJTJOWPMWFEJOWBSJPVT "ENJOJTUSBUJWF$FOUSFJO(IFOU5IJT housing projects, including the full contemporary architecture project has a rebranding of the interiors of more than floor area of 37,000 m² for Flemish */(CBOLJOHDFOUSFTBDSPTTUIF HPWFSONFOUTFSWJDFT*O#SVTTFMT UIF /FUIFSMBOET*1..$$POTVMUBMTPQSPWFEJUT German State of Hesse is witnessing the success in taking on the project rapid progress of its new office complex, a management for the construction of the complex comprising 5,750 m² situated in offices of law firm De Brauw Blackstone the European District. Westbroek and the renovations of the Amsterdam offices of Allen & Overy, *OUIFSFTJEFOUJBMNBSLFU UIFGJSTUUXP another law firm, as well as the Friesland stages of the Genève park project in Evere $BNQJOBCVJMEJOHJO"NFSTGPPSU (comprising a total of 356 apartments) were completed, with a large number of units sold. The 65 apartments on Hooikaai in Brussels were completed, while construction began on the project in Gerlache (consisting of 56 apartments). The Orée Gardens project, launched in 56 – 2012

> BAM Properties by the Scottish Government and European Regional Development Fund. Queen Street Core activities is regarded as a development that will property development attract inward investment to Glasgow and Headquarters it has generated much favourable publicity Glasgow, Scotland for BAM in Scotland. At year-end, Offices negotiations were at the final stage on a Bristol, London pre-letting of one floor of the development Projects to a leading Scottish professional services approximately 10 projects under firm. development, including office in $IJTXJDL(SFFO 8FTU-POEPOPGGJDF *O4FQUFNCFSUIFDPNQBOZTFDVSFEB 110 Queen Street, Glasgow; office of letting of 827m2 of its FORE office Fore, Solihull; student accommodation, development in the West Midlands to the Durham steel and mining company ArcelorMittal. Number of employees Negotiations are underway on a 2,787m2 approximately 10 MFUUJOHBUJUTEFWFMPQNFOUJO"[UFD8FTU  Bristol. #".1SPQFSUJFTTQFDVMBUJWFDPNNFSDJBM EFWFMPQNFOUJO$IJTXJDL(SFFO 8FTU *O #".1SPQFSUJFTXJMMDPODFOUSBUF London, completed in the spring of 2012, on achieving lettings and sales at full value immediately attracted a high degree of JOPSEFSUPDPOUSJCVUFUPUIF(SPVQT interest from occupiers owing to its objective of easing pressure on working MPDBUJPOBOEJUTTVTUBJOBCMFGFBUVSFT*O capital. To this end, the company is early autumn, five floors of the six-storey seeking alternative uses and planning building were let to the international consents for some parts of its portfolio satellite company Viasat on a fifteen year where it considers doing so will help to MFBTF*O%FDFNCFS #".1SPQFSUJFTTPME DSFBUFWBMVF*UXJMMDPOUJOVFUPUBLFB UIFEFWFMPQNFOUUP1361*. UIFSFBM selective approach to new development by estate fund management arm of M&G seeking high-value opportunities for *OWFTUNFOUT*O#".1SPQFSUJFTXBT sustainable developments in prime the first developer to resume activity in locations. West London following the economic downturn because it assessed that there was an underlying level of demand. The SFTVMUTBDIJFWFEPOUIF$IJTXJDL(SFFO development project proved that this assessment was correct.

(MBTHPX$JUZ$PVODJMHSBOUFEQMBOOJOH consent for the proposed development of a seven-storey 13,656m2 office building with ground-floor retail space in Queen Street in the heart of the principal business and retail district of Glasgow. BAM Properties announced in December that the project would commence in January 2013. The company secured £9.6m in funding through the Scottish Partnership GPS3FHFOFSBUJPOJO6SCBO$FOUSFT 4136$& 'VOE XIJDIJTPQFSBUFEKPJOUMZ 2012 – 57

Kaïros, Interbuild, BAM Woningbouw. 193 service apartments, Gallifort, Deurne, for Zorgbedrijf Antwerpen care services. AM Real Estate Development, BAM Utiliteitsbouw, BAM Techniek. Rabobank Enschede-Haaksbergen, BAM Properties, BAM Construction. Zuiderval, Enschede. FORE office building, Solihull. 58 – 2012 Public-Private Partnerships

BAM PPPJTSFTQPOTJCMFGPS3PZBM#".(SPVQTQSFTFODF

in the European Public-Private Partnerships (PPP) market;

its results reflect the returns from investment activities only.

Operating from offices in Bunnik, Birmingham, Brussels, Dublin,

Frankfurt am Main and Glasgow, BAM PPP operates in the roads, rail,

education, health care, judicial and general accommodation sectors

and employs around 100 staff.

Key figures for the PPP sector (x € million) 2012 2011 Revenue 476 508 Result before tax 13.6 10.5 Margin before tax 2.9% 2.1% Order book (year-end) 865 908 2012 – 59

BAM PPP, CEI-De Meyer, Wayss & Freytag Ingenieurbau, BAM Techniek (in joint venture). Liefkenshoek rail tunnel link, Antwerp.

At the end of 2012 the number of PPP #".111TQSPKFDUTBSFTQSFBEBDSPTT projects in the portfolio was 36 of which #".T&VSPQFBONBSLFUTXJUISFWFOVF 29 are managed by BAM PPP; the based mainly on the availability criterion. remaining seven contracts involve a very The ratio of accommodation to civil MJNJUFEBNPVOUPGTIBSFIPMEFSTFRVJUZ engineering projects is also balanced, and are managed by sister companies that although civil engineering projects are are also responsible for the construction PGUFOHSFBUFSJOTJ[F5IFKPJOUWFOUVSFXJUI and maintenance work under the contract. PGGM made good progress during 2012, Additions to the PPP portfolio in 2012 with two existing projects being were: transferred to the partnership and three tEPVCMJOHUIFTJ[FPGUIF/NPUPSXBZ  new projects acquired by it. The joint Netherlands; venture provides BAM PPP with the twin t4VQSFNF$PVSUOFXEFWFMPQNFOU 5IF benefits of a strong position from which to Hague, Netherlands; pursue further projects and a stable t4DIPPMT#VOEMFJO*SFMBOE DPOTJTUJOHPG platform within which equity can be made eight new schools on seven sites. available for new investments. 60 – 2012

Strategy does not invest in projects until their investments, in addition, as at year-end BAM PPP harnesses the strengths, structural completion, with the 2012, to an order book of construction experience and expertise within Royal BAM TIBSFIPMEFSTFRVJUZQBSUCFJOHGJOBODFE turnover of €565 million and Facility Group, coordinating the provision of with a bridging loan. Management and lifecycle turnover for lifecycle solutions for the benefit of BAM sister companies of €2.4 billion. public-sector clients. The company is $PNNJUUFEFRVJUZJTïNJMMJPO  BAM PPP has in the pipeline 20 active bids, GPDVTTJOHPO#".T&VSPQFBOIPNF including an amount of €15 million providing potential equity investments of markets where the Group has proven committed by PGGM, which will be €373 million, potential construction construction and maintenance skills and transferred to PGGM when BAM PPP is turnover of €3.1 billion and potential FYQFSUJTF*UTTUSBUFHZBJNTUPHSPXUIF making the equity investment for the Facility Management turnover (excluding portfolio to provide short-term project. The net committed equity of BAM lifecycle) of €3.7 billion. construction turnover, long-term Facility 111 XJUIPVU1((.TDPNNJUNFOU  Management and lifecycle turnover, equity amounts to €115 million. Directors’ valuation investment returns and asset management 5IF%JSFDUPSTWBMVBUJPOJTJOUFOEFEUP income. The invested and committed equity illustrate movements in the value of the UPUBMMFEïNJMMJPO*UJTFYQFDUFEUIBU PPP portfolio during the year taking Market over the next few years a considerable account of the impact of intervening Notwithstanding continuing economic share of the invested and committed transactions, through the application of a uncertainty, the PPP market remained equity will be transferred to PGGM in consistent methodology. The valuation is robust during 2012 and is expected to accordance with the joint venture based on the forecast returns of the offer an attractive level of bidding agreement. projects, based on current projections and opportunities in 2013. The Netherlands may differ significantly from the book and Belgium are expected to be the most The future asset flow is based on the value of the investments shown in the active markets. The United Kingdom expected inflow of cash from the BDDPVOUT$BTIGMPXTBDDSVJOHGSPN appears likely to offer improved deal flow DPODFTTJPOTQPSUGPMJPGPSUIFTIBSFIPMEFST projects are calculated on the basis of following the recent announcement of equity (dividend and repayment). The financial models, based on contractual PF2, and continuing deal flow in Scotland. discounted value of this future cash inflow terms with clients and have been approved The first projects to be commenced since JTUIF%JSFDUPSTWBMVBUJPOBOEUPUBMTï by external lenders. The valuation is the financial crisis of 2010 are expected in million. calculated using the widely acknowledged *SFMBOE5IF(FSNBOBOE4XJTTNBSLFUT "DPNQBSJTPOPGUIF%JSFDUPSTWBMVBUJPO discounted cash flow basis, discounting all should continue to offer further and the discounted value of the invested future cash flows to BAM PPP at an opportunities for steady growth. and committed equity results in an appropriate discount rate. All future cash unrealised value of the portfolio of €96 flows are converted into Euros. All projects BAM PPP Portfolio financial performance million. that have reached financial close are taken "UZFBSFOE TIBSFIPMEFSTFRVJUZ into account; projects for which BAM PPP invested by BAM PPP totalled €115 million, Business development is the preferred bidder have been of which BAM PPP invested €38 million The current portfolio currently provides excluded. during the past financial year. BAM PPP BAM PPP with returns on equity

BAM PPP Portfolio financial performance 2012 (in € million)

Nominal Discounted

*OWFTUFEFRVJUZ 115 $PNNJUUFEFRVJUZ 130 5PUBMJOWFTUFEBOE$PNNJUUFEFRVJUZ B 245 234 Future equity cash flows (b) 1.130 330 *NQMJFEGPSFDBTUVOSFBMJTFEWBMVFJOUIF portfolio (b) – (a) 96 2012 – 61

Directors’ valuation 2012 (in € million)

Valuation as at December 2011 304 Dividends and distributions received since December 2011 (10) Divestments since December 2012 (14) Exchange rate movements 2 Rebased December 2011 valuation 281

Valuation at December 2012 330 *ODSFBTF EFDSFBTF JO1PSUGPMJPWBMVBUJPO 49

New projects added 28 Revaluation 2012 1 21 *ODSFBTF EFDSFBTF JOQPSUGPMJPWBMVBUJPO 49

1 The revaluation 2012 consists of a combination of factors including: - The discount unwind (over time, the discounted value increases given that the future BAM PPP, Wayss & Freytag Ingenieurbau value is a year closer); (in joint venture). - The impact of changes in discount rates applied as projects move into operations; Dittersdorf exit roads and access ramps on the - Operational performance gains as a result of factors such as the impact of macro-economic A9 motorway. Triptis-Schleiz road widening. changes, higher inflation, better performance, successful asset management, changes in demand and revisions to costs.

Discount rates Construction revenue secured BAM PPP applies discount rates based on through PPP projects (€ million) UIFDPNQBOZTLOPXMFEHFPGUIFNBSLFU  450 the agreed transfer mechanism with PGGM, through the joint venture, and the 375 410

use of a simple project phase analysis. 8.646 300 A higher discount rate is applied from 7.770 300 financial close through to construction 225 completion before stepping it down once 215 into operations. BAM PPP believes this 150 approach is preferable to using an adjusted 75 market risk free rate approach as we have the benefit of up-to-date market 0 50 12 13 14 15 information based on our discussions and agreement with PGGM.

Discount rate adjustment Portfolio valuation Difference in valuation (€ million) (€ million) -1% 364 34 -2% 399 69 +1% 310 (20) +2% 289 (41) BAM PPP, BAM Deutschland (in joint venture). Brandenburg parliament building, Potsdam. 62 – 2012

Acquisitions and disposals Corporate governance

Acquisitions The Supervisory Board and the Executive Board are responsible for #".*NNPCJMJFO%JFOTUMFJTUVOHFO(NC)oUIF#".%FVUTDIMBOE UIFDPNQBOZTDPSQPSBUFHPWFSOBODFTUSVDUVSFBOEGPSDPNQMJBODF subsidiary which specialises in facility management – acquired with that structure. The main aspects of this corporate governance 75 per cent of the share capital in MR Facility Services GmbH of structure are set out in the Annual Report every year and are Hallbergmoos, near Munich, on 16 February 2012. MR Facility QVCMJTIFEPOUIFDPNQBOZTXFCTJUF5IF4VQFSWJTPSZ#PBSEBOE Services has an annual turnover of approximately €4 million and the Executive Board subscribe to the principles and best practice employs approximately forty people. The company provides provisions of the Dutch corporate governance code (hereafter: technical equipment services, domestic services and property AUIF$PEF 5IFZIBWFBRVBMJGZJOHDPNNFOUJOSFTQFDUPGTPNFPG management for retail and office as well as residential buildings. UIFQSPWJTJPOTPGUIF$PEF BOECFTUQSBDUJDFQSPWJTJPOT** BAM Deutschland is strengthening its facility management QFSGPSNBODFDSJUFSJB WBSJBCMFSFNVOFSBUJPO BOE** NBYJNVN capacity so that it can continue responding to the increased severance payment) are not applied in full. See also the demand for these services, including in relation to its own growing explanation given below of how the company complies with the portfolio of PPP projects. %VUDIDPSQPSBUFHPWFSOBODFDPEF5IFGVMMUFYUPGUIF$PEFDBOCF found at www.commissiecorporategovernance.nl. "GUFSUIFCBMBODFTIFFUEBUF #".$POTUSVDU6,-UEIBTBDRVJSFE facilities management services provider Sutton Group Ltd and its Executive Board subsidiary Sutton Maintenance Ltd. The Supervisory Board and the Executive Board share the premise The acquisition of Sutton Group is expected to contribute PGUIF$PEFUIBUUIF&YFDVUJWF#PBSE BQBSUGSPNMPPLJOHBGUFSUIF BQQSPYJNBUFMZïNJMMJPOUP#".TUVSOPWFSGSPNJUTGBDJMJUJFT day-to-day management of the company, is also responsible for management activities and will increase the number of employees formulating and achieving corporate objectives, for corporate by more than one hundred. The company was established in 1978 strategy with its associated risk profile and for corporate social and operates from four locations: London, Luton, Manchester and responsibility. The Executive Board accounts for its activities to the Glasgow. Sutton provides hard and soft maintenance facilities and 4VQFSWJTPSZ#PBSEBOEUPUIF(FOFSBM.FFUJOH*OQFSGPSNJOHJUT its portfolio includes retail, office and residential properties. duties, the Executive Board is guided by the interests of the The acquisition of Sutton Group and Sutton Maintenance will company and the related enterprise, weighing the justifiable FOBCMF#".'. BTVCTJEJBSZPG#".$POTUSVDU6, UPPGGFSBXJEFS interests of the various stakeholders against each other. The SBOHFPG'.TFSWJDFT*UJTJOMJOFXJUI#".TTUSBUFHZGPSHSPXUICZ $PEFTCFTUQSBDUJDFQSPWJTJPOTFWPMWJOHGSPNUIJTQSFNJTFBSF broadening the range and depth of services the Group can offer to supported. its customers. The members of the Executive Board jointly manage the company Disposals and are jointly and severally liable for that management. Subject Royal BAM Group reached agreement to sell consultancy and to the approval of the Supervisory Board, the members of the engineering firm Tebodin to Bilfinger on 29 February 2012. The &YFDVUJWF#PBSETIBSFPVUUIFJSBDUJWJUJFT5IF$IBJSNBONBOBHFT transaction has a total cash consideration of €145 million. BAM UIF&YFDVUJWF#PBSE5IF$IJFG'JOBODJBM0GGJDFS $'0 JTTQFDJGJDBMMZ and Bilfinger closed the transaction on 24 April 2012. DIBSHFEXJUIGJOBODJBMUBTLT5IF$IBJSNBOBOEPUIFSNFNCFSTPG the Executive Board manage the companies that are entrusted to their supervision. Most of the key managerial positions fall under UIFSFTQPOTJCJMJUZPGUIF$IBJSNBOPGUIF&YFDVUJWF#PBSE5IF $IJFG'JOBODJBM0GGJDFSJTSFTQPOTJCMFGPSUIFLFZNBOBHFSJBM QPTJUJPOTJO'JOBODF 3JTL.BOBHFNFOU *OTVSBODF *$5BOEo UPHFUIFSXJUIUIF$IBJSNBOoGPS*OWFTUPS3FMBUJPOT

The Executive Board ensures proper provision of information to UIF4VQFSWJTPSZ#PBSE*OUIF"OOVBM3FQPSU UIF&YFDVUJWF#PBSE EFTDSJCFTUIFQSJODJQBMSJTLTSFMBUFEUPUIFDPNQBOZTTUSBUFHZ UIF organisation and operation of internal risk management and control systems in relation to the principle risks during the financial year and any significant shortcomings in the internal risk management and control systems that were identified during the financial year, any significant changes that were made and any significant improvements that are planned. 2012 – 63

The Group has implemented general risk management measures 5IFDPNQBOZT&YFDVUJWF#PBSEDBODPOTJTUPGGPVSPSGJWF in the form of standards and values that have been made explicit, members, which is a number that the Supervisory Board considers internal procedures and instructions and a system of budgeting, BQQSPQSJBUFJOUPEBZTDJSDVNTUBODFT FTQFDJBMMZHJWFOUIFTJ[FBOE reporting and internal (and external) control. Besides general international nature of the Group. risk-management measures, the Group has also implemented A mitigated two-tier regime applies to the company. Members of specific measures focused primarily on risks relating to market, the Executive Board are appointed by the General Meeting. The reputation, safety, projects, currency, credit, debtors, interest and Supervisory Board has the right to make a (binding) proposal as liquidity positions. These risks are discussed in greater detail on regards nominees for appointment. However, the General Meeting page 76 and page 140 of the Annual Report, along with the risk can render a proposal non-binding, in line with best practice management measures that the Group has taken. The risk section QSPWJTJPO*7PGUIF$PEF JOXIJDIDBTFUIF(FOFSBM.FFUJOHJT in the Annual Report contains a statement by the Executive Board then free to fill the vacant seat on the Executive Board as it deems POUIFSJTLTPGGJOBODJBMSFQPSUJOH BTSFGFSSFEUPJOQSPWJTJPO** GJU JOBDDPSEBODFXJUIUIFGPSNBMJUJFTTUBUFEJOUIFDPNQBOZT PGUIF$PEF Articles of Association. Decisions by the General Meeting regarding candidates proposed by the Supervisory Board for The Executive Board is subject to a set of rules approved by the membership of the Executive Board require a simple majority of Supervisory Board, laying down the details of how the Executive the votes cast. Decisions by the General Meeting about candidates Board operates and its relationship with the Supervisory Board, for membership of the Executive Board who are not proposed by UIFTIBSFIPMEFSTBOEUIF$FOUSBM8PSLT$PVODJM5IF&YFDVUJWF the Supervisory Board require an absolute majority of the votes #PBSESVMFTIBWFCFFOQVCMJTIFEPOUIFDPNQBOZTXFCTJUF5IF cast, but that majority must represent at least one third of the DPNQBOZBMTPPQFSBUFTBDPEFPGDPOEVDUBOEBXIJTUMFCMPXFST issued capital. The General Meeting can suspend or dismiss TDIFNF CPUIPGXIJDIBSFQVCMJTIFEPOUIFDPNQBOZTXFCTJUF members of the Executive Board. The Supervisory Board has the

Schakel & Schrale. Museum aan het Vrijthof, Maastricht. Architect: SATIJNplus. 64 – 2012

BAM Infratechniek. Cone penetration work for the construction of a dedicated bus lane, Santpoort-Noord. 2012 – 65

power to suspend members of the Executive Board. Decisions to results of the variable remuneration components and the suspend or dismiss a member of the Executive Board can only be DPOTFRVFODFTGPSUIFEJSFDUPSTSFNVOFSBUJPO5IF4VQFSWJTPSZ taken by an absolute majority of the votes, providing that majority Board determines the level and structure of this remuneration on represents at least one third of the issued capital, unless the the basis of scenario analyses, taking into account remuneration proposal to suspend or dismiss is put forward by the Supervisory ratios within the Group, and in doing so considers financial and Board, in which case the decision can be taken by an absolute OPOGJOBODJBMJOEJDBUPSTXIJDIBSFSFMFWBOUUPUIF(SPVQT majority of the votes without the requirement for a quorum. The objectives. Apart from an annual variable component, the Supervisory Board appoints one of the members of the Executive remuneration package of members of the Executive Board also #PBSEBT$IBJSNBOBOEDBOBQQPJOUPOFPGUIFNFNCFSTPGUIF includes a remuneration plan that rewards long-term &YFDVUJWF#PBSEBT7JDF$IBJSNBO improvements.

1VSTVBOUUPUIF$PEF NFNCFSTPGUIF&YFDVUJWF#PBSEBSF *OUIFJOGPSNBUJPOPOWBSJBCMFSFNVOFSBUJPOUPCFTUBUFEJOUIF appointed for a period of no more than four years. They retire remuneration report, the company strives to achieve a proper after the conclusion of the first Annual General Meeting, to be balance between transparency on the one hand and not revealing held in the fourth year after the year in which they were JOGPSNBUJPOUIBUNBZIFMQDPNQFUJUPSTPOUIFPUIFSIBOE*ODBTFT appointed. Members of the Executive Board can be re- appointed where the variable remuneration is awarded on the basis of for a further period of four years. The contractual agreements with inaccurate (financial) data, the Supervisory Board can adjust the members of the Executive Board who were appointed before the variable remuneration accordingly and the company is entitled to $PEFDBNFJOUPFGGFDUXJMMCFIPOPVSFEUIFJSBQQPJOUNFOUJTGPS reclaim (any part of) the variable remuneration paid to a director an indefinite period. on the basis of incorrect (financial) information. The Supervisory Board also has the power to amend the existing conditional The main elements of the employment contracts with members of awards of the variable remuneration by quantified performance UIF&YFDVUJWF#PBSEBSFQVCMJTIFEPOUIFDPNQBOZTXFCTJUF JO criteria if, in its opinion, applying the award without amendment BDDPSEBODFXJUIUIF$PEF5IF$PEFTQSPWJTJPOTSFMBUJOHUPUIF would have an unreasonable or unintended outcome. The amount of the remuneration payable to members of the Executive Supervisory Board would only use these powers as a last resort. Board and the composition of the remuneration package as well as These matters have all been incorporated into the employment the disclosure of these details are supported. The Supervisory agreements with members of the Executive Board since the Board draws up a proposal – prepared by the Remuneration JOUSPEVDUJPOPGUIF$PEF $PNNJUUFFoSFHBSEJOHUIFDPNQBOZTSFNVOFSBUJPOQPMJDZ5IJT remuneration policy is put forward for approval at the General The payment for members of the Executive Board if they are Meeting of Shareholders. The Supervisory Board also compiles an dismissed during or after the expiry of the first term of annual remuneration report, once again prepared by the BQQPJOUNFOUJTBNBYJNVNPGPOFZFBSTTBMBSZPS JGUIJTJTDMFBSMZ 3FNVOFSBUJPO$PNNJUUFF5IFSFNVOFSBUJPOSFQPSUDPOGJSNTUIF VOSFBTPOBCMF BNBYJNVNPGUXJDFUIFBOOVBMTBMBSZ*GUIFOFX manner in which the remuneration policy has been followed in member of the Executive Board comes from within the company, QSBDUJDFEVSJOHUIFGJOBODJBMZFBS*UBMTPDPOUBJOTEFUBJMTPGUIF the company reserves the right to take rights accumulated within total remuneration of the members of the Executive Board, the Group into account when determining the level of severance subdivided into the various elements, and a summary of the pay. This provision was made because of the fact that long periods remuneration policy adopted by the shareholders for the coming of employment at the same company are not unusual in the financial year and the subsequent financial years. construction industry. Reducing rights accrued in that way may be considered undesirable or unreasonable in certain circumstances. As part of the report by the Supervisory Board, the remuneration report is included in the Annual Report and it is also published on The employment contracts of members of the Executive Board UIFDPNQBOZTXFCTJUF5IF4VQFSWJTPSZ#PBSEEFUFSNJOFTUIF appointed before 1 January 2004 do not include a provision remuneration of the members of the Executive Board, within the SFHBSEJOHTFWFSBODFQBZ*OTVDIBOFWFOU UIF4VQFSWJTPSZ#PBSE framework of the remuneration policy, based on a will assess the amount of the severance pay, taking into account SFDPNNFOEBUJPOCZUIF3FNVOFSBUJPO$PNNJUUFF the circumstances of the case, current practice, prevailing legislation and the requirements of good corporate governance. The premise when determining the variable portion of the remuneration for members of the Executive Board is that it should The company has a long-term benefit plan for members of the be linked to predefined objectives that are assessable and that can Executive Board in the form of a benefit component consisting of be influenced, with a responsible balance between short-term and AQIBOUPNTIBSFT5IFDPNQBOZEPFTOPUIBWFBOZTIBSFPS long-term focus. The Supervisory Board analyses the possible options plans, and there is no serious intention to introduce such 66 – 2012

QMBOT*GUIFDPNQBOZFWFSEFDJEFTUPJOUSPEVDFUIFN UIF$PEFT to that management letter, setting the operational plan with the recommendations will be followed. operational and financial goals for the following financial year (set once a year) and approval of the strategic plan and the related The company does not provide any personal loans or guarantees parameter conditions (every third year). to members of the Executive Board, managers or any other employees. The Group has the usual indemnity and insurance At least once a year, the Supervisory Board discusses the strategy arrangements in relation to normal company business, and these and the principal risks connected to the business, the Executive arrangements cover members of the Executive Board, managers #PBSETBTTFTTNFOUPGUIFPSHBOJTBUJPOBOEPQFSBUJPOPGUIF and other employees. internal risk management and control systems, as well as any significant changes to those systems. A statement that these Principles and best practice provisions relating to conflicts of discussions took place is included in the report by the Supervisory interest are supported. Any form or appearance of conflicting Board. interests between the company and members of the Executive The Supervisory Board is subject to a set of rules laying down the Board must be avoided. Decisions to enter into transactions that details of how it operates and its relationship with the Executive involve conflicts of interest on the part of members of the #PBSE UIFTIBSFIPMEFSTBOEUIF$FOUSBM8PSLT$PVODJM5IF Executive Board and that are of material importance to the 4VQFSWJTPSZ#PBSETSVMFTDBOCFGPVOEPOUIFDPNQBOZTXFCTJUF company and/or the Executive Board member in question must be BQQSPWFECZUIF4VQFSWJTPSZ#PBSE5IF&YFDVUJWF#PBSETSVMFT The Supervisory Board can consist of five to seven members, which set out in detail what action should be taken in the event of is a number that the Supervisory Board considers appropriate in possible conflicts of interest. These rules govern such matters as UPEBZTDJSDVNTUBODFT FTQFDJBMMZHJWFOUIFTJ[FBOEJOUFSOBUJPOBM what situations might constitute conflicts of interest, the manner nature of the Group. The members of the Supervisory Board are in which members of the Executive Board are to report conflicts of appointed by the General Meeting on the recommendation of the interest, the impartiality of the Executive Board member Supervisory Board, that recommendation being made on the basis concerned during participation in discussions and in relevant of the profile. The Board discusses the profile with the General EFDJTJPOTBOEUIF4VQFSWJTPSZ#PBSETBQQSPWBMQSPDFEVSF .FFUJOHBOEXJUIUIF8PSLT$PVODJMXIFOUIFQSPGJMFJTGJSTUESBXO up (and in the event of any changes). The General Meeting and the Supervisory Board 8PSLT$PVODJMBSFFOUJUMFEUPSFDPNNFOEDBOEJEBUFTGPSJODMVTJPO The duty of the Supervisory Board is to exercise supervision of the in the proposal made by the Supervisory Board. &YFDVUJWF#PBSETQPMJDJFTBOEUIFHFOFSBMBGGBJSTPGUIFDPNQBOZ and the related enterprise. The role of the Supervisory Board is The General Meeting can reject the candidates put forward by the also to advise the Executive Board. The Supervisory Board, too, is Supervisory Board, in which case the Supervisory Board must draw guided by the interests of the company and the related enterprise, VQBOFXQSPQPTBM5IF8PSLT$PVODJMIBTBOFYUFOEFESJHIUPG weighing the justifiable interests of the various stakeholders recommendation in respect of one third of the membership of the against each other. The Supervisory Board also considers 4VQFSWJTPSZ#PBSE*GUIF4VQFSWJTPSZ#PBSESFKFDUTUIF corporate social responsibility in its assessments. recommended candidate or candidates, the Board and the Works The principles and best practice provisions relating to the $PVODJMDPOTVMUXJUIFBDIPUIFSBOEUIF8PSLT$PVODJMNBLFTB Supervisory Board are supported. OFXSFDPNNFOEBUJPO*GUIF4VQFSWJTPSZ#PBSEBOEUIF8PSLT $PVODJMGBJMUPSFBDIBHSFFNFOU UIFOUIFNBUUFSJTTVCNJUUFEUP At its periodic meetings with the Executive Board, the Supervisory UIF&OUFSQSJTF$IBNCFSPGUIF"NTUFSEBN$PVSUPG"QQFBMGPSB Board discusses a number of subjects, including the general state SVMJOH*GUIF4VQFSWJTPSZ#PBSEBEPQUTUIF8PSLT$PVODJMT of affairs (e.g. order book, major tenders, special projects, recommendation, the General Meeting may still reject it. The problem areas, major claims and legal proceedings) and financial General Meeting may dismiss the entire Supervisory Board once reporting based on the operational plan for the year in question UIF8PSLT$PVODJMIBTIBEUIFPQQPSUVOJUZUPHJWFJUTPQJOJPO5IF (quarterly reports, balance sheet and income statement, cash and (FOFSBM.FFUJOHEFUFSNJOFTUIF4VQFSWJTPSZ#PBSENFNCFST cash equivalents, capital investment and warranties). SFNVOFSBUJPO*OSFMBUJPOUPUIFJOEFQFOEFODFPG4VQFSWJTPSZ %JSFDUPST BTEFUBJMFEJOCFTUQSBDUJDFQSPWJTJPO*** JUTIPVMECF The agenda for Supervisory Board meetings also includes subjects pointed out that all of the current members of the Supervisory such as major investments (both as regards acquisitions and #PBSERVBMJGZBTCFJOHJOEFQFOEFOUXJUIJOUIFNFBOJOHPGUIF$PEF disposals and as regards fixed assets), human resources, corporate social responsibility, the relationship with shareholders, the The Supervisory Board has created a profile, which was discussed EJWJEFOEQSPQPTBM RVBSUFSMZBOEIBMGZFBSMZSFQPSUT UIFBVEJUPST with the shareholders at the Annual General Meeting on 21 April SFQPSU UIFFYUFSOBMBVEJUPSTNBOBHFNFOUMFUUFSBOEGPMMPXVQT 2009. This profile is available for shareholders to examine at the 2012 – 67

BAM Civiel, BAM Rail, BAM Advies & Engineering, BAM Infraconsult, BAM Infratechniek, BAM Milieu, BAM Materieel. Construction of shopping arcades below a railway line as a publicly accessible link (no public transport chip card required) between the IJ side and the city centre side of Amsterdam Central Station.

DPNQBOZTPGGJDFBOEJUJTBMTPQVCMJTIFEPOUIFDPNQBOZT financial and accounting disciplines at a large legal entity. website. The composition of the Supervisory Board must be The company will be responsible for an induction programme for balanced and in line with this profile. directors appointed to the Supervisory Board for the first time as SFGFSSFEUPJOQSPWJTJPO***5IJTQSPWJTJPOJTBMTPGVMGJMMFECZ The members of the Supervisory Board must have the experience BSSBOHJOHXPSLJOHWJTJUTUPUIF(SPVQTPQFSBUJOHDPNQBOJFTBOE needed to perform well in a large multinational construction through presentations by operating company managers for the company. Each member must be capable of assessing the main Supervisory Board. aspects of the overall policy and of behaving in a critical and independent manner with regard to the other members of the Principles and best practice provisions relating to conflicts of Supervisory Board and the members of the Executive Board. The interest are supported. The matters set out above in connection members of the Supervisory Board must carry out the tasks of the with the Executive Board apply equally to the members of the 4VQFSWJTPSZ#PBSEBTTQFDJGJFECZMBXBOECZUIFDPNQBOZT Supervisory Board. The Supervisory Board rules set out in detail Articles of Association and they must be able to give the Executive what action should be taken in the event of possible conflicts of Board solicited and unsolicited advice. interest.

Other, specific criteria applied by the Board to its composition are The company has prepared rules as regards ownership of and a general, broad-based understanding of business, knowledge of transactions in shares by members of the Supervisory Board and the construction industry, experience in the management of large, members of the Executive Board, if those shares are issued by preferably international companies and expertise relating to issues other companies. These rules are included in the BAM rules on with a social dimension and concerning society at large. ownership of and transactions in shares.

The Supervisory Board appoints one of its members to be *GUIFUSBOTBDUJPOTBSFOPUVOEFSUBLFOCZBOJOEFQFOEFOUUIJSE chairman, and another to be vice-chairman to act in the party, members of the Supervisory Board and of the Executive DIBJSNBOTQMBDFBTUIFPDDBTJPOEFNBOET5IF#PBSEIBTBNPOH Board report their ownership of and transactions in shares issued its members a financial expert with experience in both the by listed companies established in the Netherlands which operate 68 – 2012

Galère (in joint venture). Restoration of the Opéra Royal de Wallonie, Liège. 2012 – 69

in sectors where the Group operates or in associated sectors. 5IF3FNVOFSBUJPO$PNNJUUFFBMTPQSPQPTFTBSFNVOFSBUJPO This includes companies operating as subcontractors, advisers report on the way in which remuneration policy has been or suppliers in the construction industry in the broad sense. implemented in practice.

The company does not issue any personal loans or guarantees to 0OFPGUIFUBTLTPGUIF4FMFDUJPOBOE"QQPJOUNFOUT$PNNJUUFFJT members of the Supervisory Board. to make proposals to the Supervisory Board with regard to: The Group has taken out the usual professional indemnity t 4FMFDUJPODSJUFSJBBOEBQQPJOUNFOUQSPDFEVSFTXJUISFHBSEUP insurance to cover members of the Supervisory Board. members of the Supervisory Board and members of the Executive Board; Supervisory Board Committees t 5IFTJ[FBOEDPNQPTJUJPOPGUIF4VQFSWJTPSZ#PBSEBOEUIF The Supervisory Board has three permanent committees, namely Executive Board and a profile of the Supervisory Board; BO"VEJU$PNNJUUFF B3FNVOFSBUJPO$PNNJUUFFBOEB4FMFDUJPO t "TTFTTNFOUPGUIFQFSGPSNBODFPGJOEJWJEVBMNFNCFSTPGUIF BOE"QQPJOUNFOUT$PNNJUUFF5IFSVMFTBOEUIFDPNQPTJUJPOPG Supervisory Board and members of the Executive Board; UIFTFDPNNJUUFFTDBOCFGPVOEPOUIFDPNQBOZTXFCTJUF5IF t 3F BQQPJOUNFOUPGNFNCFSTPGUIF4VQFSWJTPSZ#PBSEBOE composition and role of these committees are in line with the members of the Executive Board; SFMFWBOUQSPWJTJPOTPGUIF$PEF*UJTUIFUBTLPGUIFDPNNJUUFFTUP t "O&YFDVUJWF#PBSENFNCFSTBDDFQUBODFPGNFNCFSTIJQPGUIF support and advise the Supervisory Board concerning the Supervisory Board of another listed company; BDUJWJUJFTUIBUBSFUIFDPNNJUUFFTSFTQPOTJCJMJUZBOEUPQSFQBSF t 1PTTJCMFDPOGMJDUTPGJOUFSFTUBSJTJOHJODPOOFDUJPOXJUIUIF UIF4VQFSWJTPSZ#PBSETEFDJTJPOTSFHBSEJOHUIPTFBDUJWJUJFT5IF acceptance of other positions by members of the Supervisory Supervisory Board as a whole remains responsible for the way in Board. which it performs its tasks and for the preparatory work carried 5IF$PNNJUUFFBMTPNPOJUPSTUIF&YFDVUJWF#PBSETQPMJDZPO out by the committees. The committees submit reports on all selection criteria and appointment procedures for senior their meetings to the Supervisory Board. management.

5IF"VEJU$PNNJUUFFTBTTFTTNFOUTJODMVEF Shareholders t 5IFPQFSBUJPOPGUIFJOUFSOBMSJTLNBOBHFNFOUBOEDPOUSPM The company supports the principles and best practice provisions systems; JO$IBQUFS*7PGUIF$PEFXJUISFHBSEUPUIFTIBSFIPMEFSTBOEUIF t 5IFQSPWJTJPOPGGJOBODJBMJOGPSNBUJPOCZUIFDPNQBOZ JODMVEJOH (FOFSBM.FFUJOHPG4IBSFIPMEFST1SJODJQMF*7BOEUIFFOTVJOH the financial statements, the quarterly figures and the process best-practice provisions concern the issue of depositary receipts through which this information is generated; for shares. No depositary receipts for shares in the company have t $PNQMJBODFXJUISFDPNNFOEBUJPOTBOEUIFGPMMPXVQUP CFFOJTTVFEXJUIUIFDPNQBOZTDPPQFSBUJPO3PZBM#".(SPVQ comments by the external auditor; does not have any provisions limiting voting rights. One vote may t 5IFBVEJUQSPDFTTBOEUIFBVEJUQMBO CFDBTUGPSFWFSZTIBSFIFME5IFDPNQBOZTDBQJUBMDPOTJTUTPG t 5IFSFMBUJPOTIJQXJUIUIFFYUFSOBMBVEJUPS PSEJOBSZTIBSFTBOE$MBTT#BOE'QSFGFSFODFTIBSFT OPUJTTVFEBU t 5IFQSPDFTTUISPVHIXIJDIUIFDPNQBOZNPOJUPSTDPNQMJBODF present). The ordinary shares are listed on NYSE Euronext in with laws and regulations and with its own code of conduct; Amsterdam. Ordinary share options are also traded on the t 1PMJDZJOSFTQFDUPGUBYQMBOOJOH Amsterdam option exchange of NYSE Liffe. t 5IFBQQMJDBUJPOPG*$5 t (SPVQGJOBODJOH The Supervisory Board and the Executive Board believe it to be t 5IFGJOBODJBMBOEBENJOJTUSBUJWFPSHBOJTBUJPO very important that as many shareholders as possible take part in UIFEFDJTJPONBLJOHQSPDFTTJOTIBSFIPMEFSTNFFUJOHT/PUJDFT 5IF"VEJU$PNNJUUFFBMTPBTTFTTFTXIFUIFSUIF(SPVQOFFETBO DPOWFOJOHTIBSFIPMEFSTNFFUJOHT BHFOEBTBOEEPDVNFOUBUJPO internal auditor and makes a recommendation accordingly to the to be discussed are published no later than forty-two days prior to Supervisory Board. One of the tasks of the Remuneration UIFNFFUJOHBOEQMBDFEPOUIFDPNQBOZTXFCTJUF5IFXFCTJUF $PNNJUUFFJTUPNBLFQSPQPTBMTUPUIF4VQFSWJTPSZ#PBSEXJUI also includes an anonymous list, broken down by agenda item, of regard to company remuneration policy, as well as the the votes cast by proxy received by the company prior to the remuneration structure, the level of remuneration and the terms meeting. Remote voting and voting by proxy also play a role in and conditions of employment of members of the Executive Board increasing shareholder participation. The Act of Parliament to and the remuneration of the members of the Supervisory Board. promote the use of electronic communication media enables 5IF$PNNJUUFFBMTPDPOTVMUTUIF$IBJSNBOPGUIF&YFDVUJWF#PBSE shareholders to participate in meetings of shareholders and to about the policy on terms and conditions of employment for cast their votes at such meetings without being physically present. operating company managers and executives of equivalent rank. The company has incorporated the facilities offered by law for 70 – 2012

using electronic communication media into the Articles of worth €50 million, can place items on the agenda of the General Association. The company considers that the manner in which Meeting if the company receives a written request to that effect shareholders take part in their meetings and cast votes at such AXSJUUFODBONFBOBOFMFDUSPOJDNFTTBHF JODMVEJOHSFBTPOTUP meetings requires a meticulous procedure. The use of electronic substantiate the request, not later than sixty days before the day means of communication therefore depends greatly on the degree PGUIFNFFUJOH*OBEEJUJPO TIBSFIPMEFSTXIPSFQSFTFOUBUMFBTU of certainty that these means of communication will work QFSDFOUPGUIFDPNQBOZTJTTVFEDBQJUBMBSFFOUJUMFEUPDBMMB properly. TIBSFIPMEFSTNFFUJOH

*OBEEJUJPO WPUJOHCZQSPYZDPOUJOVFTUPQSPWJEFTIBSFIPMEFST The General Meeting is asked each year to authorise the Executive with a good mechanism for allowing their voice to be heard in Board – subject to the approval of the Supervisory Board – to issue meetings that they are unable to attend, so that the company can shares or share options. This authorisation is limited in time to a OPUFUIFJSWJFXT8IFOTIBSFIPMEFSTNFFUJOHTBSFDPOWFOFE UIF QFSJPEPGFJHIUFFONPOUIT*UJTBMTPMJNJUFEJOTDPQFJOSFTQFDUPG company invites shareholders to use their option to vote by proxy, PSEJOBSZTIBSFTBOE$MBTT'QSFGFSFODFTIBSFTUPQFSDFOUPGUIF and ensures that voting instruction forms can be obtained and issued capital, plus an additional 10 per cent, which additional that these forms are also available electronically. 10 per cent may be used exclusively for mergers and acquisitions by the company or by operating companies. The General Meeting Shareholders are also advised of their option to give a proxy of Shareholders is also asked – subject to the approval of the electronically. The company offers its shareholders the Supervisory Board – to exclude or limit pre-emptive rights to opportunity to give a proxy, with voting instructions, to an issued shares and to exclude or limit the issuing of ordinary share independent third party before the meeting takes place. The options. company also offers shareholders the possibility of voting in 5IF4IBSFIPMEFST.FFUJOHJTBTLFEFBDIZFBSUPBVUIPSJTFUIF advance of the meeting. As a rule, voting takes place electronically Executive Board for a period of eighteen months to repurchase at the meeting itself. shares in the company, within the limitations imposed by the law and the Articles of Association. Every request for the granting of The company invites shareholders to submit any questions to the such an authorisation is put separately to the shareholders. The company prior to the meeting, which will then be answered by the DPNQBOZTQPMJDZPOSFTFSWFTBOEEJWJEFOETBOEBQSPQPTBMUPQBZ company at the meeting. a dividend are discussed as separate agenda items at the General Meeting. Prior approval from the General Meeting is required for decisions concerning any important changes in the identity or nature of the A proposal for approval or authorisation by the General Meeting company or the business, including the entire or near-entire will be accompanied by a written explanation including all relevant transfer of ownership of the business, entry into long-term JOGPSNBUJPO5IFBHFOEBGPSTIBSFIPMEFSTNFFUJOHTXJMMTUBUF partnerships that have a significant effect on the company and which of the agenda items are for discussion and which items will acquiring or disposing of a participating interest worth at least a be put to a vote. third of the amount of the assets recognised on the consolidated CBMBODFTIFFU*OUIFFWFOUUIBUBTFSJPVTQSJWBUFCJEIBTCFFO 3FQPSUTPOTIBSFIPMEFSTNFFUJOHTBSFQSPWJEFEUPTIBSFIPMEFST  announced for part of the business or a participating interest, and BTTUJQVMBUFEJOUIF$PEF8JUIJOGJGUFFODBMFOEBSEBZTBGUFSFBDI that bid is worth at least a third of the amount of the assets TIBSFIPMEFSTNFFUJOH UIFSFTVMUTPGUIFWPUFT CSPLFOEPXOCZ recognised on the consolidated balance sheet, the Executive Board BHFOEBJUFN BSFQVCMJTIFEPOUIFDPNQBOZTXFCTJUF"TSFHBSET will publicly announce its standpoint in respect of the bid, UIFQSPWJTJPOPGJOGPSNBUJPOBTTUBUFEJO1SJODJQMF*7PGUIF$PEF  together with its reasons, as soon as possible. the Supervisory Board and the Executive Board endorse the importance of providing transparent and equal information. The 3FTPMVUJPOTUPBNFOEUIFDPNQBOZT"SUJDMFTPG"TTPDJBUJPONBZ company endeavours to do so, subject to exceptions under the be adopted by the General Meeting by a simple majority of the law. votes cast in response to a proposal by the Executive Board with the approval of the Supervisory Board. Material amendments to Press and analysts the Articles of Association will each be submitted separately to the "MMQSFTTBOEBOBMZTUTNFFUJOHTBOEDPOGFSFODFDBMMTJODPOOFDUJPO General Meeting. with the publication of the annual and half-year results and JOUFSJNTTUBUFNFOUTBSFPQFOUPFWFSZPOFWJBUIF*OUFSOFUPSCZ Shareholders are entitled to put items on the agenda of UFMFQIPOF4IBSFIPMEFSTNFFUJOHTBSFPQFOUPUIFQSFTTBOEBSF TIBSFIPMEFSTNFFUJOHT4IBSFIPMEFSTXIPPOUIFJSPXOPSKPJOUMZ webcast. All dates and locations of roadshows, seminars and the represent at least (i) 1.0 per cent of the issued capital, or (ii) shares MJLFBSFQVCMJTIFEPOUIFDPNQBOZTXFCTJUF'JOBODJBM 2012 – 71

BAM International. Construction of the Aqaba port area, Jordan.

presentations given to third parties are published on the known on the market – and they ensure that the information is DPNQBOZTXFCTJUFXIFSFUIFSFJTBNBUFSJBMEJGGFSFODFCFUXFFO provided in a clear and unambiguous manner. Should any these and previously published presentations. For six weeks prior price-sensitive information be provided by mistake during any to the publication of each annual report and three weeks prior to contact with shareholders, investors, analysts or the press, a press the publication of each quarterly and half-yearly report the release will be issued immediately. company will be extremely reticent about conducting any conversations with investors, analysts or members of the press The company has a general policy on bilateral contacts with about the overall course of business at the company. The company shareholders, investors, analysts and the press. This policy has EPFTOPUSFWJFXBOBMZTUTSFQPSUTPSWBMVBUJPOTCZBOBMZTUTJO CFFOQVCMJTIFEPOUIFDPNQBOZTXFCTJUF advance, nor add comments or correct them, except for matters of fact. Anti-takeover measures The Executive Board can invoke a response period as specified in The company does not pay any fees to parties for carrying out QSPWJTJPO**PGUIF$PEF5IF4VQFSWJTPSZ#PBSEXJMMCFJOWPMWFE JOWFTUJHBUJPOTGPSBOBMZTUTSFQPSUT OPSGPSXSJUJOHPSQVCMJTIJOH closely and in good time in the process concerning any offer for such reports, with the exception of credit rating firms. As a rule, shares in the company, and the Executive Board and the UIF$IBJSNBOPGUIF&YFDVUJWF#PBSEBOEPSUIF$IJFG'JOBODJBM Supervisory Board will immediately discuss any request from a 0GGJDFS XJUIUIFBTTJTUBODFPGUIF*OWFTUPS3FMBUJPOT.BOBHFSPS competing third-party bidder to examine company information. the Public Relations Director, will speak to investors, analysts or the press. These directors and officers are fully up to date As regards the protective provisions against undesirable regarding all relevant information – whether or not it is already developments that might affect the independence, continuity 72 – 2012

and/or identity of the Group, the company has the facility for 21 April 2009. The company will always submit any substantial JTTVJOH$MBTT#QSFGFSFODFTIBSFT changes in the main features of the corporate governance structure to the General Meeting for discussion purposes. A call option was issued to Stichting Aandelenbeheer BAM Groep #".(SPVQ4UPDL.BOBHFNFOU'PVOEBUJPO JOGPS$MBTT# preference shares. The company gave this foundation the right of JOWFTUJHBUJPOJO*OGPSNBUJPOSFMBUJOHUPQSPUFDUJWFNFBTVSFT is provided on page 209 of the Annual Report.

Financial reporting and the role of the auditor The principles and best practice provisions relating to financial reporting are supported. The Executive Board is responsible for the quality and completeness of the financial reports that are published. The Supervisory Board ensures that the Executive Board carries out this responsibility.

The principles and best practice provisions regarding the role, appointment, remuneration and assessment of the performance PGUIFFYUFSOBMBVEJUPSBSFBMTPTVQQPSUFE*UTIPVMECF emphasised that the external auditor will be present at the Annual General Meeting to answer questions from shareholders about his report regarding the truth and fairness of the financial statements.

The company does not have an internal auditor. The Audit $PNNJUUFFBTTFTTFTBOZQPTTJCMFOFFEGPSBOJOUFSOBMBVEJUPSFBDI year. Based on this assessment and on a proposal by the Audit $PNNJUUFF UIF4VQFSWJTPSZ#PBSENBLFTBSFDPNNFOEBUJPOUP the Executive Board and includes this recommendation in the report by the Supervisory Board.

The external auditor attends the meetings of the Supervisory Board at which the financial statements and the half-yearly figures are discussed. The external auditor reports the same information from his findings in respect of the financial statements to both the Executive Board and the Supervisory Board. The external auditor is BMTPQSFTFOUXIFOUIF"VEJU$PNNJUUFFEJTDVTTFTUIFGJOBODJBM statements, the half-yearly figures and the quarterly figures. The external auditor may also attend other meetings of the Audit $PNNJUUFF TVCKFDUUPBTLJOHUIF$IBJSNBOPGUIF"VEJU $PNNJUUFFGPSQFSNJTTJPOUPBUUFOEJOBEWBODF5IFFYUFSOBM auditor receives the financial information on which the quarterly and half-yearly figures are based and is given the opportunity to react to that information. The partner in the external audit company who performs the required audits is allowed to audit the (SPVQTGJOBODJBMTUBUFNFOUTGPSBNBYJNVNPGTFWFODPOTFDVUJWF years.

The Supervisory Board and the Executive Board are convinced that 3PZBM#".(SPVQTDPSQPSBUFHPWFSOBODFJTXFMMPSHBOJTFE

The corporate governance structure described above was discussed with the shareholders during the General Meeting on 2012 – 73

BAM Woningbouw. 227 student residential units, Cederlaan, Eindhoven.

Declaration in accordance with the Dutch Financial Decision on Article 10 of the Takeover Directive Supervision Act The following information and explanations relate to the provisions *OBDDPSEBODFXJUIUIFJSTUBUVUPSZPCMJHBUJPOTVOEFS"SUJDMF of the Decree of 5 April 2006 implementing Article 10 of Directive   PGUIF/FUIFSMBOET$JWJM$PEFBOE"SUJDMFD  D PGUIF OVNCFS&$PGUIF&VSPQFBO1BSMJBNFOUBOEUIF$PVODJMPG Dutch Financial Supervision Act, the members of the Executive the European Union dated 21 April 2004. Board declare that, in so far as they are aware: t UIFGJOBODJBMTUBUFNFOUTQSPWJEFBUSVFBOEGBJSQJDUVSFPGUIF Capital structure assets, liabilities, financial position and the result of both the > 5BCMFPOQBHFNBZCFVTFEBTBSFGFSFODFGPSUIFDPNQBOZT parent company and the consolidated companies; and capital structure. No rights apart from those arising under statute t UIFBOOVBMSFQPSUQSPWJEFTBUSVFBOEGBJSQJDUVSFPGUIF BSFBUUBDIFEUPUIFTIBSFTJOUPXIJDIUIFDPNQBOZTDBQJUBMJT situation on 31 December 2012 and the course of business divided, apart from the scheme specified in Article 32 of the during the 2012 financial year at the parent company and at the Articles of Association concerning the application of the profit in companies associated with the parent company, for which the SFMBUJPOUP$MBTT#BOE$MBTT'QSFGFSFODFTIBSFT EBUBIBWFCFFOJODMVEFEJOUIFQBSFOUDPNQBOZTGJOBODJBM statements, and the annual report describes the main risks A brief summary of Article 32 of the Articles of Association is facing the parent company. provided below. From the profit realised in any financial year, an BNPVOUXJMMGJSTUCFEJTUSJCVUFE XIFSFQPTTJCMF POUIF$MBTT# cumulative preference shares, calculated by applying the percentage stated below to the amount that must be paid up on those shares as at the start of the financial year for which the distribution is made. The percentage referred to above will be equal 74 – 2012

UPUIFBWFSBHFPGUIF&63*#03SBUFTGPSNPOFZNBSLFUMPBOTXJUIB The above percentages apply for the following periods: series FP1 maturity of twelve months – weighted according to the number of and FP5: five years; series FP2 and FP6: six years; series FP3 and FP7: days for which these rates prevailed – during the financial year for seven years and series FP4 and FP8: eight years. After a period which the distribution is made, plus one percentage point. expires, the percentage will be modified in accordance with the &63*#03SFGFSTUPUIF&VSP*OUFSCBOL0GGFSFE3BUFBTEFUFSNJOFE rules laid down in Article 32 paragraph 6(c) of the Articles of BOEQVCMJTIFECZUIF&VSPQFBO$FOUSBM#BOL Association.

Subsequently, if possible, a dividend will be distributed on each The Supervisory Board shall determine, on the basis of a proposal financing preference share of a certain series and sub-series, with by the Executive Board, what part of the profit remaining after due consideration of the provisions of Article 32(6) of the Articles application of the above provisions will be added to the reserves. of Association, equal to an amount calculated by applying a The part of the profit that remains thereafter is at the disposal of percentage to the nominal amount of the financing preference the General Meeting, subject to the provision that no further share concerned at the start of that financial year, plus the amount dividends will be distributed on the preference shares and with due of share premium paid in on the financing preference share issued consideration of the other provisions of Article 32 of the Articles of in the series and sub-series concerned at the time of initial issue of Association. the financing preference shares of that series and sub-series, less the amount paid out on each financing preference share concerned Please note that, as at the balance sheet date, neither preference and charged to the share premium reserve formed at the time of shares B nor preference shares F had been issued. issue of the financing preference shares of that series and TVCTFSJFTQSJPSUPUIBUGJOBODJBMZFBS*GBOEUPUIFFYUFOUUIBUB Limits on the transfer of shares distribution has been made on the financing preference shares The company has no limitation, under the Articles of Association or concerned in the course of the year and charged to the share by contract, on the transfer of shares or depositary receipts issued premium reserve formed at the time of issue of the financing XJUIUIFDPNQBOZTDPPQFSBUJPO BQBSUGSPNUIFSFTUSJDUJPOPOUIF preference shares of the series and sub-series concerned, or partial transfer of preference shares contained in the Articles of repayment has been made on such shares, the amount of the "TTPDJBUJPO"SUJDMFPGUIFDPNQBOZT"SUJDMFTPG"TTPDJBUJPO distribution will be reduced pro rata over the period concerned TUJQVMBUFTUIBUBQQSPWBMJTSFRVJSFEGSPNUIFDPNQBOZT&YFDVUJWF according to the amount of the distribution charged to the share #PBSEGPSUIFUSBOTGFSPG$MBTT#BOE$MBTT'QSFGFSFODFTIBSFT5IF premium reserve and/or the repayment with respect to the scheme is included in order to offer the company the facility – amount referred to in the preceding sentence. because of the specific purpose of issuing these shares, namely the acquisition of finance or achieving protection – of offering the The calculation of the dividend percentage for the financing holders of these shares an alternative in the event that they wish to preference shares of a certain series will be made for each of the dispose of their shares. series of financing preference shares referred to below, in the manner set forth for the series concerned. "TSFHBSETUIF$MBTT#QSFGFSFODFTIBSFT UIFDPNQBOZBOE Stichting Aandelenbeheer BAM Groep (BAM Group Stock Series FP1 to FP4 Management Foundation) have agreed that the company will not The dividend percentage will be calculated by taking the arithmetic proceed to issue these shares or to grant any rights to purchase mean of the yield to maturity on euro government loans issued by them to anyone other than the said foundation without the the Kingdom of the Netherlands with a remaining term matching GPVOEBUJPOTQFSNJTTJPO5IFGPVOEBUJPOXJMMOPUEJTQPTFPGPS as closely as possible the term of the series concerned, as published FODVNCFSBOZ$MBTT#QSFGFSFODFTIBSFT OPSSFOPVODFUIFWPUJOH in the Euronext Prices Lists, plus two percentage points. rights relating to them, without permission from the company. Please refer to pages 209 et seq. of the Annual Report with regard Series FP5 to FP8 to the reasons behind protecting the company and the manner in The dividend percentage will be equal to the average of the which this is done. &63*#03SBUFTGPSNPOFZNBSLFUMPBOTXJUIBNBUVSJUZPG months – weighted according to the number of days for which Substantial interests these rates prevailed – during the financial year for which the The company is aware of the following interests in its equity, which distribution is made, plus two percentage points. are now reported under the provisions concerning the reporting of controlling interests under the Disclosure of the Financial The above percentages may be increased or reduced by an amount Supervision Act. See > table 2 on page 7. of no more than three hundred basis points. 2012 – 75

Special control rights Supervisory Board. This authorisation is limited in duration to 5IFTIBSFTJOUPXIJDIUIFDPNQBOZTFRVJUZJTEJWJEFEBSFOPU FJHIUFFONPOUIT*UJTBMTPMJNJUFEJOTDPQFUPQFSDFOUPGUIF subject to any special control rights. issued capital, plus an additional 10 per cent, which additional 10 per cent may be used exclusively for mergers and acquisitions by Employee share plan or employee option plan the company or by operating companies. The General Meeting held The company does not have any employee share or employee on 25 April 2012 granted authority to the Executive Board for a option plans. period of eighteen months to repurchase shares in the company, within the limitations imposed by the law and the Articles of Voting rights Association and subject to the approval of the Supervisory Board. Each share in the company provides entitlement to the casting of POFWPUFBUTIBSFIPMEFSTNFFUJOHT5IFSFBSFOPSFTUSJDUJPOTPO *OQSJODJQMF UIF(FOFSBM.FFUJOHJTBTLFEUPHSBOUUIFTF UIFFYFSDJTJOHPGWPUJOHSJHIUT5IFDPNQBOZT"SUJDMFTPG authorisations every year. Resolutions to amend the Articles of Association contain the usual provisions in relation to intimation Association, or to dissolve the company may only be passed by the GPSUIFQVSQPTFPGCFJOHBDLOPXMFEHFEBTBQSPYZBUTIBSFIPMEFST General Meeting on the basis of a proposal put forward by the NFFUJOHT8IFSFUIFDPNQBOZT"SUJDMFTPG"TTPDJBUJPONFOUJPO Executive Board and approved by the Supervisory Board. holders of depositary receipts or depositary receipt holders, whether named or bearer, this is understood to mean holders of Change of control provisions in important agreements EFQPTJUBSZSFDFJQUTJTTVFEXJUIUIFDPNQBOZTDPPQFSBUJPOBOE 5IF(SPVQTNPTUJNQPSUBOUGJOBODJBMSVMFTTUBUFUIBUJOUIFFWFOU also individuals who, under the terms of Articles 88 or 89, Book 2 of a change of control (including in the event that more than 50 per PGUIF%VUDI$JWJM$PEF IBWFUIFSJHIUTBDDPSEFEUPIPMEFSTPG cent of the shares in Royal BAM Group are deemed to be held by EFQPTJUBSZSFDFJQUTGPSTIBSFTJTTVFEXJUIUIFDPNQBOZT one party), the banks may terminate further financing and the co-operation. Group can be obliged to repay outstanding loans under these arrangements and to extend the capital base provided for Shareholders’ agreements outstanding bank guarantees. The company is not aware of any agreements involving one of the DPNQBOZTTIBSFIPMEFSTBOEXIJDINJHIUQSPWJEFSFBTPOTGPS J  A change of control clause is not unusual in important collaboration restricting the transfer of shares or of depositary receipts issued agreements over a longer period, where the parties include parts XJUIUIFDPNQBOZTDPPQFSBUJPO PS JJ SFTUSJDUJOHUIFWPUJOH PGUIF(SPVQ1BSUMZCFDBVTFPGUIFUPUBMTJ[FPGUIF(SPVQ UIFTF rights. clauses are not considered significant within the meaning of the Decree on Article 10 of the Takeover Directive. Appointment and dismissal of members of the Supervisory Board and members of the Executive Board Change of control clauses in contracts of employment The company is obliged by law to operate a mitigated two-tier No agreement has been concluded with directors or employees of structure. The General Meeting appoints the members of the the company providing for a severance payment on termination of Supervisory Board, based on a recommendation from the employment resulting from a public bid for the company. Supervisory Board. The General Meeting also appoints the members of the Executive Board, with the Supervisory Board having the right of recommendation. The section headed A$PSQPSBUFHPWFSOBODFPOQBHFFUTFRPGUIFSFQPSUCZUIF Executive Board provides a more detailed explanation of the appointment and dismissal of members of the Supervisory Board and members of the Executive Board.

Powers of the Executive Board The company is managed by an Executive Board. The Executive #PBSETQPXFSTBSFUIPTFBSJTJOHGSPNMFHJTMBUJPOBOESFHVMBUJPOT "NPSFEFUBJMFEEFTDSJQUJPOPGUIF&YFDVUJWF#PBSETEVUJFTDBOCF GPVOEPOQBHFFUTFRPGUIF&YFDVUJWF#PBSETSFQPSU JOUIF TFDUJPOIFBEFEA$PSQPSBUFHPWFSOBODF5IF&YFDVUJWF#PBSEXBT authorised by the General Meeting held on 25 April 2012 to issue PSEJOBSZTIBSFTBOE$MBTT'QSFGFSFODFTIBSFTBOEPSUPHSBOU options to purchase these shares, subject to approval from the 76 – 2012

BAM Woningbouw. Conversion of De Fabriek van Delfshaven into a multi-tenant business building, Rotterdam.

Risk and risk management

Risk is inherent to any business venture, and the risk to which Royal BAM Group is exposed is not unusual or different from what is DPOTJEFSFEBDDFQUBCMFJOUIFJOEVTUSZ5IF(SPVQTSJTLNBOBHFNFOU system is designed to identify and manage threats and opportunities. Effective risk management enables BAM to capitalise in on opportunities in a carefully controlled environment.

*OUFOTJGZJOHSJTLNBOBHFNFOUJTPOFPGUIFNBJOJUFNTPOUIF strategic agenda for 2013-2015, as detailed on page 18. The agenda focuses both on process improvement and on fostering the appropriate risk attitude and awareness at the operating companies. The risk management system provides a platform for sharing knowledge and expertise among the operating companies in a structured manner, making risk management a key factor in achieving the strategic objectives.

The risk management system and its implementation are further explained below.

Risk management framework The Executive Board is responsible for risk management at the company and has created and implemented the Risk Management Framework, supported by the Risk Management department. This GSBNFXPSL XIJDIJTCBTFEPO$040 $PNNJUUFFPG4QPOTPSJOH 0SHBOJ[BUJPOTPGUIF5SFBEXBZ$PNNJTTJPO JTJOUFHSBUFEJOUPUIF regular planning and control cycle, and involves achieving the strategic objectives, the effectiveness and efficiency of business processes, the reliability of information provision (including financial information) and compliance with the relevant laws and regulations.

The first step in the risk management process is defining and planning the Group strategy. This process is conducted every three years in conjunction with all the operating companies and results in strategic objectives and implementation plans. The strategic PCKFDUJWFTBSFBTTFTTFECZUIF&YFDVUJWF#PBSEBOEUIF(SPVQTTUBGG directors based on the BAM Risk Register, which contains 28 predefined risk areas, relevant to the environment in which BAM operates, and to the risk appetite specified. The purpose of this assessment is to prioritise risk factors and the corresponding implementation and improvement goals.

The Group strategy and risk management framework are handed over to the operating companies, which operate in the specific industries and geographic areas shown in the activity matrix. They adapt the Group strategy to their own specific activities and environment and subsequently assess their (derived) strategy based on the BAM Risk Register. This process helps to identify all relevant risks in the 28 risk areas and results in the prioritisation of risk areas and the corresponding implementation and improvement plans for each operating company. 2012 – 77

The strategic plans and risk assessment for each operating inform the operating companies of their claims history in order to company are disseminated across the entire Group, resulting in a be able to continue improving. Royal BAM Group regularly consults platform where best practices are shared and implementation and professional insurance brokers on its insurance cover. improvement plans are executed collectively by the operating companies where possible. Staff positions and networks of subject Risk appetite matter experts accelerate this process of acquiring and sharing A3JTLBQQFUJUFJTEFGJOFEBTUIFMFWFMJOXIJDI#".JTXJMMJOHUP knowledge and expertise through a consistent approach to risk accept risk in the ordinary course of business in order to achieve its management. objectives. Based on its knowledge and experience, BAM is willing to invest in The Executive Board receives progress updates on the taking on complex multidisciplinary projects, which involves the implementation of the strategic goals and the related DPOUSPMMFEUSBOTGFSPGSJTLCFUXFFOUIFDMJFOUBOE#".*OPSEFSUP implementation and improvement plans through the quarterly spread risks, in principle BAM responds to calls for tenders for reports and management meetings. projects exceeding €500 million in conjunction with solid and solvent partners. General management measures *OFOUFSJOHJOUP1VCMJD1SJWBUF1BSUOFSTIJQ 111 JOWFTUNFOUT #". The Group uses a variety of general management measures as part aims to generate construction output for the operating companies. of its risk management and monitoring systems. The first of these 5IFDPNQBOZTJOUFOUJPOJTUPTFMMUIFTFQSPKFDUTUPJOWFTUPSTBGUFS BSFUIF#VTJOFTT1SJODJQMFT XIJDISFQSFTFOUUIF(SPVQTTCFMJFGT  the construction phase, as was achieved in the BAM PPP-PGGM WBMVFTBOEQSPDFEVSFT"MPOHXJUIUIF&UIJDBM$PEFPG$POEVDU  joint venture. Since the risk profile is substantial based on volume these principles form a key part of the internal environment in (i.e. variable compensation), BAM generally invests only in projects which risk management is conducted. based on contractual availability (i.e. fixed compensation). Property development is inextricably linked to the construction A second general management tool is the guidelines and industry, and BAM continues to invest in property development instructions the Group provides to the management of the projects provided they are profitable and a plausible and profitable operating companies, as well as the feedback. This measure defines exit strategy has been defined in advance. the powers of the operating companies and sets requirements for the quality of vital management measures. These guidelines Outside its home markets, BAM intends to invest worldwide in a include, among other things, limits for entering into risks and number of niche areas, provided they are in line with our own commitments related to investments and taking on projects. The Business Principles. guidelines are assessed - and amended if necessary - based on changes in the risk appetite for achieving the objectives, the risk The Group does not tender at a loss in almost all cases. QSPGJMF PSDIBOHFTJOUIFJOUFSOBMPSHBOJTBUJPO*OBEEJUJPOUPUIF Based on this risk appetite, BAM expects to be able to achieve the &YFDVUJWF#PBSETHVJEFMJOFT UIFSFBSFNPSFEFUBJMFEJOTUSVDUJPOT objectives defined in the strategic agenda for 2013-2015. for establishing the management environment, the financial and sustainability reports, security policy, tax policy and treasury- General risks and management measures for projects, property and related matters. public-private partnerships. The majority of construction work is performed on a project basis, 5IF(SPVQTUIJSEHFOFSBMNBOBHFNFOUUPPMJTBTZTUFNGPS XJUIQSPKFDUTWBSZJOHJOUIFJSOBUVSF TJ[F TDPQF DPNQMFYJUZBOE budgeting, reporting and (internal) controls. The entire Group uses duration. The industry as a whole shows a certain imbalance (i.e. uniform guidelines and accounting policies, which serve as the asymmetric) between risks and results, meaning the upward basis for all financial and management reporting. As part of the potential of projects tends to be more limited than the downward detailed quarterly reports, the operating companies report on potential. As a result, the Group must have a strong project changes in (projected) company revenues, financial results, liquid organisation in place, operating close to the projects and within assets, orderbook and sustainability. the markets.

Finally, the Group manages several insurance policies relating to Before taking on any new project, the operating companies assess liability, design liability (i.e. professional indemnity), construction the qualitative and quantitative risk factors. Uncertainties may BMMSJTLT $"3 BOEFRVJQNFOU JODMVEJOHGMPBUJOHTUSVDUVSFT BOE relate to financial and contractual aspects, safety, construction fire. A specialised department ensures that all relevant risks are materials, plant and equipment, location (including site conditions included in the insurance agreements during construction (which and permits), the construction period and the work schedule as are entered into at the head office) and that the liability insurance well as to clients, subcontractors and construction partners. A QPMJDJFTQVSDIBTFEQSPWJEFTVGGJDJFOUDPWFS*OBEEJUJPO UIFZBMTP quantitative analysis is performed on the risk factors, based on 78 – 2012

empirical data. This analysis is used to make adjustments to the invoicing, risks and bonus discounts). Project-specific orders can project schedule or construction methods in order to reduce then be placed under the framework contracts. project risk. The analysis may also result in adjustments to the risk premium in the contract price. Bids for major projects or projects The comprehensive knowledge and extensive experience of its involving exceptional risk are submitted to the Executive Board for operating companies enable Royal BAM Group to complete major prior approval. During the implementation phase, the project team projects successfully on its own. Nonetheless, it can be periodically and systematically assesses the opportunities and risks advantageous – including from the point of view of spreading the BUUBDIFEUPUIFQSPKFDU*GOFDFTTBSZ UIFQSPKFDUUFBNJNQMFNFOUT risks – to work in a joint venture when dealing with larger projects. measures to reduce newly identified risks, focusing mainly on the *OUIF/FUIFSMBOETUIJTVTVBMMZJOWPMWFTFTUBCMJTIJOHBHFOFSBM quality of the construction work to be completed, avoidance of partnership (a legal form in which all parties are jointly and severally construction faults and meeting the handover date. Project liable for mutual commitments connected with the performance of managers submit reports on progress, the main opportunities and the project). Royal BAM Group mitigates the risk arising from these downside risks associated with the project, the quality and the activities to its construction partners by entering into joint ventures financial aspects of the project to their regional office manager, POMZXJUITPMJEBOETPMWFOUQBSUOFST*GUIFSJTLUPXIJDIUIFQBSUOFS who, in turn, reports at least on a monthly basis to the operating is exposed is nevertheless assessed to be too high, the Royal BAM company managers. They, in turn, report to the Executive Board, Group operating company concerned demands other securities through the information systems described above each quarter. which can take the form of a bank guarantee or of the partner leaving sufficient cash invested in the joint venture. Whether the projects BAM takes on are successfully completed depends largely on the quality of the employees and management. Operating companies limit payment risk as much as possible during *OPSEFSUPBUUSBDU DIBMMFOHFBOEEFWFMPQUBMFOUFEFNQMPZFFTJOB projects by agreeing on contractual payment schedules. This structured and effective manner, Royal BAM Group has made FOTVSFTUIBUUIFDMJFOUTQBZNFOUTBSFBUMFBTUJOCBMBODF JGQPTTJCMF  human resources policies a key priority, as discussed on page 87 of with the cost of the portion of the work performed. For projects this annual report. completed in emerging markets and developing countries, adequate security is agreed or export credit insurance is purchased prior to *OPSEFSUPMJNJUMFHBMSJTL UIFMFHBMEPDVNFOUTSFRVJSFEGPS the start of the project in order to hedge political risk and payment projects are standard documents wherever possible. Where a risk. When entering into financing arrangements, BAM performs a non-standard contract is used, Royal BAM Group lawyers will assess credit check on clients. The Group also focuses in particular on the the contract beforehand. Standard contracts include clauses that security provided by banks and the payment systems used by provide that price increases in units of wages and materials may be government bodies. DIBSHFEPOUPUIFDMJFOUEVSJOHUIFDPOTUSVDUJPOQFSJPE$MJFOUT also have the option to buy off these risks. *GUIF(SPVQJOUFOETUPBTTVNFQSPQFSUZEFWFMPQNFOUSJTL UIJT requires the prior consent of the Executive Board. The latter takes a *OUIFDPOTUSVDUJPOJOEVTUSZ DMJFOUTSPVUJOFMZEFNBOEHVBSBOUFFT decision regarding these risks, based on project proposals from the by way of security that the project will be completed successfully. PQFSBUJOHDPNQBOZDPODFSOFEBOEBOBOBMZTJTCZUIF(SPVQT This guarantee may be provided by the parent company or, 1SPQFSUZ*OWFTUNFOU%JSFDUPS'PSQSPKFDUTJOUIF/FUIFSMBOET UIF alternatively, by external parties such as banks and surety general rule is that construction does not start on residential or institutions. Royal BAM Group has strict procedures in place that other projects until a substantial number of units have been sold or guarantee that the contractual terms of the guarantees provided a large part of the project has been let or sold. The Dutch property DPNQMZXJUIUIFDPNQBOZTTQFDJGJDHVJEFMJOFT portfolio, however, still includes a number of residential construction projects from the past where there is an unconditional On an annual basis, Royal BAM Group procures more than 75 per obligation to build. The general rules before starting construction cent of its revenue from suppliers and subcontractors. These XPSLJOUIF/FUIFSMBOETBMTPBQQMZJO#FMHJVNBOE*SFMBOE*OUIF companies have a major impact on the projects, both in financial United Kingdom – where BAM only operates in the commercial and in technical terms. The Group aims to build strong partnerships QSPQFSUZTFDUPSoQSFMFUUJOHJTOPUDPNNPOQSBDUJDF*OTUFBE UIF with its suppliers and subcontractors in order to ensure that the inventory risk is minimised by implementing a system of phased construction process runs as smoothly as possible and to achieve project execution. Depending on the date when work will begin on the optimum lowest possible costs and high quality of products. the project, the book value of purchased land reflects the historical For co-operation and management of price risks to work well, purchase value or lower market value growth. suppliers need to be involved in the project at an early stage. This Entering into PPP and concession contracts always requires the prior cooperation is set out in framework contracts, which contain DPOTFOUPGUIF&YFDVUJWF#PBSE*OJUTBTTFTTNFOUPGUIFSJTLT agreements about fees and conditions (such as delivery times, attached to PPP and concession contracts, the Executive Board is 2012 – 79

assisted by the management of BAM PPP. This operating company was incorporated in 2004 to optimise the utilisation of the know-how and experience available within the Group, both for acquiring new projects and for properly assessing the specific risks connected with concessions.

CEI-De Meyer. De Spoele residential care centre (128 residents), Sint-Niklaas. Architect: LLOX. 80 – 2012

Specific risks related to the strategy and the corresponding management measures Besides the general risks outlined above, several specific risks and measures have been identified in relation to the objectives of the updated strategy, which are detailed below.

Market factors

Risks Management measures

The current market has been heavily affected by the economic crisis in *OPSEFSUPEFBMXJUIUIFTFNBSLFUDPOEJUJPOT BTXFMMBTUPTFJ[FUIF Europe, resulting in intense competition for the shrinking number of opportunities they create, the company has launched or enhanced a QSPKFDUTBWBJMBCMFJOUIF(SPVQTIPNFNBSLFUT variety of initiatives based on the activity matrix and the best-in-class 5IJTIBTDSFBUFEBCVZFSTNBSLFU XIFSFNBSHJOTBSFEPXOBOEEFTJHO programme. The main initiatives are increasing our market share in and contract risks are shifted increasingly to construction companies. niche markets and other geographic areas; forward integration and a With many property development projects being cancelled or deferred, client-oriented approach; switching to complex/multidisciplinary UIFWBMVFPGPVSQSPQFSUZQPSUGPMJPIBTCFFOVOEFSQSFTTVSF*O  projects; and providing alternative property development and this resulted in an impairment of €248 million. financing methods. The limited availability of capital constitutes a substantial risk across We also assess and redefine predictive risk indicators (i.e. leading the entire value chain. As a result of tighter guidelines for banks under indicators) so as to be able to effectively compete in the rapidly #BTFM*** CBOLTBSFMFTTXJMMJOHUPQSPWJEFGJOBODFGPSQSPQFSUZ changing environment. EFWFMPQNFOU DPOTUSVDUJPOBOE111QSPKFDUT*OBEEJUJPO UIF *OFBSMZ UIF&YFDVUJWF#PBSETVDDFTTGVMMZDPNQMFUFEUIF pre-financing of projects by customers has also been compromised refinancing of the credit facilities for a 5-year period, until 2017. (i.e. working capital).

Specific market risks (e.g. financial risks), including interest rate risk, price risk, credit risk and liquidity risk are stated in section 4 (Financial risk management) of the financial statements in conjunction with the management measures implemented by the Group.

Corporate Social Responsibility (CSR)

Risks Management measures

The Group has a growing need for raw materials, water and energy, and The products are also becoming more sustainable, since BAM is the effects of climate change have had a substantial impact on the built increasingly opting to work on energy-efficient buildings and structures environment and infrastructure. Besides that, the built environment using recycled materials. One of the main resources in this process is also contributes significantly to greenhouse gas emissions. UIFVTFPG#*.JOEFUFSNJOJOHUIFQFSGPSNBODFPGPVSQSPEVDUT*O For Royal BAM Group, this means primary processes are affected by doing so, the Group remains in line with local laws and regulations by increasing volatility in raw materials and energy prices. The products actively participating in industry initiatives with industry leaders. produced by the Group must also meet current and future demands, Through stakeholder dialogue, BAM adapts the policies relating to its where the impact of changing laws and regulations, in particular, has TVTUBJOBCJMJUZPCKFDUJWFT*OUIJTEJBMPHVF TUBLFIPMEFSTIBWFUIF proved to be very significant. PQQPSUVOJUZUPTQFBLPVUPOUIFDPNQBOZTJNBHFBOEUIFSPMFJOUIF BAM has identified opportunities for innovation based on changing chain. client requests, particularly in relation to a growing need for energy- The Group manages its licence to operate through active environmental efficient buildings and a greater focus on recycling of materials and the management and community engagement programmes. BAM is also use of sustainable materials, including timber sourced from sustainable working with industry organisations to develop standards and forests. benchmarks in order to safeguard these types of initiatives. #".TSFQVUBUJPOJOUIJTBSFBJTJNQPSUBOUXIFOJUDPNFTUPTFDVSJOH 'PSBMMBTQFDUTPGUIF$43QPMJDZBOEUIFCVTJOFTTPQFSBUJPOT UIF future contracts, and it also determines how we are assessed by our actions are set out in the Business Principles, which link the strategic DMJFOUT#".TBOOVBMTUBLFIPMEFSEJBMPHVFIBTSFWFBMFEUIBU BHFOEBXJUIUIFQPMJDZ JODMVEJOHUIF$PEFPG$POEVDU stakeholders expect to assume responsibility in projects for the DPNQBOZTFOUJSFQSPEVDUJPODIBJO*OVOEFSUBLJOHPVSQSPKFDUT UIF licence to operate constitutes an operational risk. The processes may be delayed if financial support for the projects diminishes for whatever reason. 2012 – 81

Primary process

Risks Management measures

The primary process constitutes the core of construction activities, Based on the best-in-class programme, a variety of initiatives are being which include offers, procurement, contract management, property launched or further enhanced in order to address these risks and to take management, and the corresponding value chain. The results of advantage of the opportunities created as a result. projects are determined mainly during the tender stage. During this These initiatives include promoting research networks that actively stage, the changing contract types and conditions (contract exchange knowledge and expertise; further applying lean construction management) constitute a risk, as well as an opportunity in terms of BOE#*.UPJOUFHSBUFEQSPKFDUTNPSFTUSJOHFOUQSPKFDUNPOJUPSJOHBOE UIFQPUFOUJBMGPSEJGGFSFOUJBUJPO$POUSBDUNBOBHFNFOUJTWJUBM CPUI performance management; and concept and process innovation related during the tender stage as well as during implementation. to sustainability and lean construction. Another construction risk that manifests itself during implementation The company also increases contract knowledge and risk awareness of are changes in the final project result – known as the ‘asymmetrical risk operational employees through education and training. Reviews of the QSPGJMFoJOXIJDITFWFSBMTUSPOHQSPKFDUTBSFSFRVJSFEJOPSEFSUP property development documentation by BAM legal experts (some compensate for one unsuccessful project (project management). employed by BAM Group) also contribute to awareness and continuous improvement.

Employees, organisation and culture

Risks Management measures

&NQMPZFFTBSFUIFDPNQBOZTNPTUWJUBMBTTFU BOECZVTJOHUIFJS First of all, BAM will continue to invest in further developing employees potential the Group can respond more effectively to changes in the so they can contribute to achieving the strategic goal; prepare a market. sufficient number of candidates for key positions, and improve Specific issues in this process include, first of all, the change in (inclusive) leadership. leadership and the competencies required. Secondly, the company aims to foster an open culture of learning and Secondly, new types of contracts make it necessary to further train sharing knowledge in the form of training and education, drawing on employees in contract and risk management. the knowledge and expertise available. Thirdly, competencies such as sustainability, putting the end user first, Thirdly, BAM aims to increase the versatility of BAM employees in core integrated partnerships, knowledge management, risk management, businesses. A recruitment site has been launched, publishing all and diversity have become increasingly important in achieving our vacancies and career opportunities within the Group. strategic objectives. Finally, BAM operates in the labour market by working with recruitment Finally, it is essential that the company remains a preferred employer, in agencies, through advertising, and by collaborating with various order to be able to continue attracting talent. training institutes. BAM is also successfully involved in the Female Empowerment Programme, designed to promote women to more senior positions.

Safety and health

Risks Management measures

Royal BAM Group is committed to ensuring safe and healthy working Health and safety risks are managed as effectively as possible by conditions for its employees. The Group is aware that there is a risk of designing consciously, preparing projects systematically, and injury on construction sites in particular and therefore has a policy adequately instructing employees on safe operating procedures. aimed at implementing the measures required to prevent accidents, A Group-wide guideline for safety management provides operating occupational illnesses and financial loss. companies with a framework with which the safety management system must comply. Safety Awareness Audits monitor to what extent the safety management systems of operating companies comply with the guideline set by the Executive Board and to what extent employees are aware of the safety risks inherent in their projects. The audits also highlight areas where the safety management system could be JNQSPWFE*OBEEJUJPO #".BOEJUTDIBJOQBSUOFSTBSFUBLJOHUIF initiative to consolidate the culture of safety across the entire value chain. 82 – 2012

Integrity The trust placed by clients, shareholders, lenders, construction partners and employees in Royal BAM Group is vital in order to be BCMFUPFOTVSFUIFDPNQBOZTDPOUJOVJUZ5IF(SPVQBDDPSEJOHMZ adheres to generally accepted standards and values and complies with local statutory and other rules and regulations, particularly with respect to the acquisition and performance of contracts. This QSJODJQMFJTTFUPVUJOUIF(SPVQT#VTJOFTT1SJODJQMFTBOE$PEFPG $POEVDU"MMFNQMPZFFTBSFSFRVJSFEUPBDUGBJSMZ UPIPOPVS agreements and to act with care towards clients and business partners, including suppliers and subcontractors. This is kept under constant review in order to make integrity a fundamental part of day-today activities. 5IF&YFDVUJWF#PBSEIBTBQQPJOUFEB$FOUSBM$PNQMJBODF0GGJDFS  XIPQSPNPUFTDPNQMJBODFXJUIUIF$PEFPG$POEVDU BOEQSPWJEFT advice on issues involving integrity. The operating companies, too, IBWFUIFJSPXODPNQMJBODFPGGJDFST UPXIPNCSFBDIFTPGUIF$PEF PG$POEVDUDBOBOENVTUCFSFQPSUFE*OBEEJUJPOUPUIF$PEFPG $POEVDU UIF(SPVQBMTPIBTBXIJTUMFCMPXFSQPMJDZJOQMBDF

The Group believes it is important that employees can report any suspicions of wrongdoings within the Group and that they are able to report such matters without fear of reprisals. #PUIUIF$PEFPG$POEVDUBOEUIFXIJTUMFCMPXFSQPMJDZBSFFBTJMZ accessible to employees. For example, they can be found on the (SPVQTJOUSBOFUTJUFBOEPOJUTXFCTJUF *O UIF$PEFPG$POEVDUXJMMCFBEBQUFEUPUIFOFX0&$% Guideline 2013 and the UK Bribery Act, and a new training tool will be developed designed to remind employees of the BAM values and standards on a regular basis.

Reputation risk #".TSFQVUBUJPONBZCFEBNBHFEJGPOFPSNPSFPGUIFSJTLT its employees. Some examples of major legal proceedings described above occur. This means that reputation risk is not a involving Royal BAM Group are given briefly below. separate, defined risk area, but rather the result of specific risks occurring. *O EVSJOHUIFDPOTUSVDUJPOPGBESJMMFEUVOOFMGPSUIF4."35 Noordtunnel project in Kuala Lumpur, engineering firm Wayss & Outstanding claims and procedures 'SFZUBH*OHFOJFVSCBVXBTGBDFEXJUIHSPVOEDPOEJUJPOTUIBU $PNQBOJFTPQFSBUJOHJOUIFDPOTUSVDUJPOJOEVTUSZBSFJOWPMWFEJO varied from the information provided by the client. Wayss & discussions on the financial settlement of construction projects, Freytag terminated the contract in early 2006 as a result of the including contract variations, the time of completion and the DMJFOUTGBJMVSFUPGVMGJMJUTQBZNFOUPCMJHBUJPOTBOESFGVTBMUPEFBM quality level of the work. Most of these discussions are concluded XJUI8BZTT'SFZUBHTDMBJNTGPSBOFYUFOTJPOPGUIFDPOTUSVDUJPO to the satisfaction of all concerned. However, in some cases it is period and reimbursement of costs. The client, in turn, also impossible to avoid a discussion ending in legal proceedings. Royal terminated the contract in January 2006. Wayss & Freytag lodged BAM Group, too, is involved in a number of lawsuits. A settlement a claim against the client for more than €20 million as is usually agreed in the case of legal proceedings where a financial compensation for costs incurred. The client lodged provisional claim is made against the Group, unless the claim in question is counterclaims amounting to €5 million. The independent dispute completely lacking in substance. Financial claims that the Group adjudicator, in the contractually prescribed procedure, has now has pending against third parties are generally not capitalised held that Wayss & Freytag was entitled to terminate the contract. unless it is reasonably certain that the amount in question will be The proceedings are ongoing. Based on the present state of paid. The Group takes great care to prevent such legal proceedings knowledge, the Group considers that the provision that has been by implementing quality programmes and providing training for made is adequate. 2012 – 83

BAM Techniek. HPS-related mechanical engineering works in the Imec cleanroom (nanoelectronics and nanotechnology research), Leuven.

On 3 March 2009, during the construction of a section of the *O$BNCSJEHFJOUIF6OJUFE,JOHEPN #"./VUUBMMEFTJHOFEBOE $PMPHOFNFUSPTZTUFN TFWFSBMBEKBDFOUCVJMEJOHT JODMVEJOHUIF installed a guided busway. A dispute arose with the client CVJMEJOHPGUIF$JUZ"SDIJWFTPGUIF$JUZPG$PMPHOF DPMMBQTFE5XP regarding delays that occurred in the project and in relation to residents were killed as a result of this accident. Wayss & Freytag additional work performed. The client believes BAM Nuttall is *OHFOJFVSCBVJTBPOFUIJSEQBSUOFSJOUIFDPOTPSUJVNDBSSZJOHPVU liable for the loss resulting from these delays, and is claiming back this project but was not directly involved in the work performed at the amount it believes was paid in excess. Furthermore, it has the site of the accident. The customer has instituted a judicial docked amounts from the invoices sent by BAM Nuttall for work inquiry (known as a Beweisverfahren) before the district court (the DPNQMFUFE#"./VUUBMMIBTDIBMMFOHFEUIFDMJFOUTQPTJUJPOBOE -BOEHFSJDIUJO$PMPHOF "TQBSUPGUIFTFQSPDFFEJOHT BOVNCFS has demanded payment of the amounts withheld. The client of specialists are investigating the cause of the accident. Their brought the dispute before the court in mid-2011. The amount of investigation is expected to take some time. Only once their the claim the two parties have brought against each other runs investigation is complete will it be possible to determine whether into tens of millions of Euros. Based on the present state of the consortium is in any way responsible for the accident. The knowledge, the Group does not expect it will incur any substantial German Public Prosecution Service is also carrying out its own financial losses as a result of these legal proceedings. investigation to determine whether any criminal offences may have been committed. The damage to property is considerable and the parties involved have claimed under several different insurance policies. The Group is assuming, as matters currently stand, that no substantial adverse financial consequences for the Group will result from this event. 84 – 2012

BAM Utiliteitsbouw. Conversion of a former office building into the Ramada Apollo Amsterdam Centre hotel (23,500 m²), Amsterdam.

Intensifying risk management 'VSUIFS*OUFOTJGZJOH#".TSJTLNBOBHFNFOUJTPOFPGUIFNBJO JUFNTPOUIFTUSBUFHJDBHFOEB#".TJOUFOETUPBDIJFWF the following objectives: t "DDVSBUFMZBOEGVMMZJEFOUJGZJOHLFZPQQPSUVOJUJFTBOEUISFBUTBU the strategic, tactical and operational levels; t 4USFOHUIFOJOHUIFMJOLPGUIFTUSBUFHJDPCKFDUJWFTCFUXFFOUIF Group and its operating companies; t "WPJEJOHTVSQSJTFT t $SFBUJOHBTIBSFESJTLNBOBHFNFOUMBOHVBHF t 4VQQPSUJOHBOFOWJSPONFOUXJUIJOBEFDFOUSBMJTFEPSHBOJTBUJPO model, in which employees actively learn and share.

*OPSEFSUPGBDJMJUBUFFOIBODFNFOU #".DSFBUFEBSJTL management function at the Group level in mid-2011, DPNQMFNFOUBSZUPUIFPQFSBUJOHDPNQBOJFTDVSSFOUBDUJWJUJFT A standardised evaluation method to identify and prioritise risks and potential for improvement was implemented at operating companies and regions in 2012. There is a Group-wide focus on risk management in the primary process, prompted by increasing Management letter from external auditor from 2012 complexity and growing competition. The potential for 5IFFYUFSOBMBVEJUPSJOWFTUJHBUFE#".TJOUFSOBMDPOUSPM improvement is aimed at developing and sharing best practices environment as a routine part of its audit. This investigation related to project selection, new business development, focused mainly on the data-processing and reporting systems implementation and management. To support the primary underlying the information contained in these financial QSPDFTT UIFSFJTBGPDVTPOEFWFMPQJOHFNQMPZFFTSFMFWBOU statements. competencies and skills in this changing environment. Due to the difference in activities and the decentralised One goal for 2013 is to further integrate risk management into the management model, there are differences in some areas in the regular planning and control cycle, with a focus on both process structure and quality of the internal control environment at the and mindset. This process will include the following activities (this individual operating companies. The external auditor therefore list is not exhaustive): provides a separate opinion for each operating company. t "TTFTTNFOUPGUIFJOUFSOBMHPWFSOBODFGSBNFXPSLBTTFTTNFOU and possible refinement of the business principles and the As in the previous year, the external auditor has concluded that Executive Board guidelines as a basis for the internal governance the quality of the internal control environment at the operating framework. A key part of this is improving the project selection DPNQBOJFTJTHFOFSBMMZTPMJE*UTIPVMECFOPUFE IPXFWFS UIBU and tender process for large and high-risk projects which there are major differences between the business units and require the prior consent of the Executive Board; regions at two operating companies in the Netherlands. The t .PCJMJTJOHQPUFOUJBMBOECFTUJODMBTTGVSUIFSDPOTPMJEBUJOHUIF operating companies still considered to be in need of risk management network and facilitating the process of improvement in 2011 underwent some positive changes in 2012. learning and sharing best practices; t %FWFMPQJOHSJTLBXBSFOFTTBOESJTLNBOBHFNFOUUPPMT The investigation focuses on the management environment of intensification and integration at operating companies and property management activities. Approximately 400 project files networks of experts, including the platforms for human were assessed across BAM as part of the investigation. As in 2011, SFTPVSDFT $PSQPSBUF4PDJBM3FTQPOTJCJMJUZBOETVQQMZDIBJO the external auditor concluded that the management environment management; of the property management activities at all operating companies t5SBJOJOHFEVDBUJPOLOPXMFEHFGVSUIFSEFWFMPQNFOUBOE was of a high quality, where it should be noted that several of integration of risk management in the current curriculum of the these companies are in the process of standardising processes and BAM Business School; procedures across regions and business units. t 4USBUFHJDQMBOOJOHBOEQFSGPSNBODFNFBTVSFNFOUFWBMVBUJPO PGUIFLFZSJTLJOEJDBUPST ,3*T JOBEEJUJPOUPFYJTUJOH QFSGPSNBODFJOEJDBUPST ,1*T BTQBSUPGUIFJOUFHSBUFE reporting initiative. 2012 – 85

The auditor has also ruled that it can securely rely on the other Corporate Social Responsibility internal control and management measures relating to the (SPVQXJEF*5FOWJSPONFOU QSPDVSFNFOUBOEUIFQBZNFOU Royal BAM Group plays a central role in society and wishes to make environment, and other support processes. The application a contribution to making society more sustainable. The Group is management of a software package commonly used throughout aware that construction activities can affect the environment and the Group, which has been outsourced, still requires some the community in various ways, and that this can elicit both attention. positive and negative responses. The projects carried out by BAM for its customers in markets such as housing, schools, health care With regard to the improvements of risk management and transport are fundamentally important for the quality of the implemented, the auditor has concluded that the enhanced living environment and therefore have an effect on the natural framework is gaining momentum. However, there is still a clear environment and on society as a whole. This also means that future difference between operating companies in relation to the level of HFOFSBUJPOTXJMMCFBGGFDUFECZUIF(SPVQTBDUJWJUJFToCPUICZUIF risk awareness and the integration of the framework into the projects BAM undertakes and in terms of the resources and raw regular planning and control cycle. materials required for these projects.

Assessment of risk management and monitoring systems *OUFSNTPGDPSQPSBUFTPDJBMSFTQPOTJCJMJUZ #".BJNTUPDPOUJOVF The risk management and monitoring systems worked adequately playing a pioneering role in the construction and property sector. during the year under review, and no defects have been identified 5IF(SPVQTBNCJUJPOJTUPQSPWJEFDVTUPNFSTXJUITVTUBJOBCMF in relation to these systems and their operation that could have returns by offering socially responsible, sustainable solutions at all potential material implications in the 2012 financial year and the stages of the construction process. current financial year. We can therefore reasonably state that there are no indications that the risk management and monitoring *OPSEFSUPCFDFSUBJOUIBUQSPKFDUTXJMMIBWFBTMJUUMFJNQBDUBT systems will not function adequately during the 2013 financial possible on the natural environment and a maximum level of year. No other significant changes are planned for these systems, quality for the occupants, BAM is developing concepts based on except the further enhancement of risk management, as detailed the vision that it is possible to achieve a positive carbon footprint. above. The Group cannot guarantee that no risks will occur, and it For example, BAM is active in integrated area development in the does not mean that the risk management and monitoring systems knowledge that multiple functions combined within one area can require no further improvement. have a neutral or even a positive effect on the local environment.

The optimisation of internal risk management and monitoring BAM is increasingly using a virtual method in the form of Building systems remains a key focus for the Executive Board, and it may *OGPSNBUJPO.PEFMMJOH #*. UPQSFQBSFUIFDPOTUSVDUJPOQSPDFTT result in the systems being improved or expanded. The This simulation package improves construction efficiency and aforementioned tightening up of risk management is one BMMPXTNPSFBDDVSBUFFTUJNBUFTPGUIFNBUFSJBMTOFFEFE*O example. addition, it provides opportunities for improved co-operation with subcontractors and suppliers by optimising lead times in the Based on the above, the Executive Board certifies, with regard to construction stage and verifying project objectives in the model. the financial reporting risks, that the internal risk management The models are also suited for further use during the management and monitoring systems provide a reasonable degree of security stage of the project. that the financial report is free of material misstatement. The Executive Board further states that this section on the subject of BAM is also taking measures to improve its primary processes, SJTLXBTEJTDVTTFEXJUIUIF"VEJU$PNNJUUFFBOEUIF4VQFSWJTPSZ including by using lean planning and lean construction methods. Board. 5IFVTFPG#*.BOEMFBODPOTUSVDUJPONFUIPETIFMQTUPSFEVDFUIF

consumption of raw materials and the level of $02 emissions, not only in the production phase, but throughout the entire process chain. More efficient energy management in the built environment lowers operating costs in the occupancy phase and generates future value for the owner. These efforts are increasingly rewarded with BREEAM and LEED certificates, providing international SFDPHOJUJPOGPS#".TTVTUBJOBCMFTUSVDUVSFT 86 – 2012

Our operating companies and employees implement the principles $MJFOUT8FEPPVSVUNPTUUPFYDFFEDMJFOUTFYQFDUBUJPOT of corporate social responsibility in a variety of areas on a daily 2. The community: We promote good contacts with the local CBTJT BOEJODPSQPSBUFUIF(SPVQTFYQFSUJTFJOTVTUBJOBCJMJUZJOUP community. specific projects. An increased focus on sustainability requires an 3. Employees: We believe in our employees. integrated approach, taking into account long term life-cycle 4. Supply chain partners: We procure responsibly. costing (integrality). Against this background, BAM is working with 5. Energy: We strive to reduce our impact on climate change. numerous partners in the construction process on new and 6. Raw materials: We are becoming more efficient in the use of sustainable forms of co-operation. materials. We also encourage our chain partners to create innovative 7. Environment: We will limit our environmental impact. solutions in order to create added value for our clients and end *OOPWBUJPO8FJOOPWBUFUPJEFOUJGZCBMBODFETVTUBJOBCMF users. solutions. 9. Prosperity: We believe that sustainability results in economic $PODFQUTEFWFMPQFECZ#". TVDIBT-PX&OFSHZ"TQIBMU$PODSFUF value. (Laag Energie Asfalt Beton, LEAB) provide clients with the opportunity to incorporate sustainable products. The company has The objectives were drawn up based on dialogue with also invested substantially in research projects relating to Smart stakeholders, including an annual ‘multi-stakeholder dialogue (SJET UISPVHIUIF4NBSU&OFSHZ$PMMFDUJWF BOESFMBUJOHUP TFTTJPO*GUIFTFJTTVFTBSFUPCFUBDLMFEFGGFDUJWFMZ JUJTFTTFOUJBMUP energy-neutral areas, through Gebieden Energie Neutraal, GEN maintain focus. The Group therefore prioritises the achievement of (Energy-Neutral Areas). These projects are in line with the QSPHSFTTPOTBGFUZ SFEVDJOHUIF(SPVQTDBSCPOGPPUQSJOUBOE objectives of governments, including the Dutch government, to waste management. There is also an extra focus on diversity, as make new developments energy-neutral in the long term. Efforts part of the efforts to achieve a workforce that better reflects into determining the use of natural resources, in collaboration with society at large. the University of Twente, and participation in the Green Deal Beton agreement have revealed opportunities for more efficient recycling #".IBTGPSNVMBUFELFZQFSGPSNBODFJOEJDBUPST ,1* BOE of natural resources and for a circular economy (the economic ambitious objectives for these focal points in its sustainability system, intended to maximise the reusability of products and raw policy. Details can be found in the Sustainability Report. BAM made NBUFSJBMT 5IJTJTJOMJOFXJUIUIF%VUDIHPWFSONFOUTUBSHFUUP progress in all of these areas during the year under review. recycle 70 per cent of all raw materials by 2020. Sustainability Report The Group offers customers sustainable alternatives in the form of BAM has been publishing a Sustainability Report since 2007, concepts developed by BAM. allowing the Group to report as transparently as possible about Royal BAM Group again ranked ninth this year in the Transparency sustainability issues and corporate social responsibility. The Benchmark (Transparantiebenchmark) of the Netherlands Ministry Sustainability Report is compiled in accordance with the guidelines PG&DPOPNJD"GGBJSTBOEUIJSEJOUIF#FOFMVYPGUIF$BSCPO PGUIF(MPCBM3FQPSUJOH*OJUJBUJWF (3* 3PZBM#".(SPVQCFMJFWFT Disclosure project. BAM is the only Dutch construction company to UIFSFQPSUDPNQMJFTXJUIMFWFM" PGUIF(3*HVJEFMJOF  CFMJTUFEJOUIF$BSCPO%JTDMPTVSF-FBEFSTIJQ*OEFY5IF JODMVEJOHUIF$POTUSVDUJPOBOE3FBM&TUBUF4FDUPS4VQQMFNFOU "TTPDJBUJPOPG*OWFTUPSTGPS4VTUBJOBCMF%FWFMPQNFOU 7FSFOJHJOH $3&44  WBO#FMFHHFSTJO%VVS[BNF0OEFSOFNJOHFO 7#%0 BHBJOEFDMBSFE BAM the industry winner in its survey of responsible chain *OUFSFTUFEQBSUJFTDBOEPXOMPBEUIFTVTUBJOBCJMJUZSFQPSU management, with a score significantly higher than last year. from the BAM website or ask the company to send them a hard Nevertheless, BAM believes that further development of its copy. Please refer to this sustainability report for a more thorough sustainability policy is still needed. explanation of the various focal points identified by BAM in relation to corporate social responsibility. The Group has drawn up the BAM Business Principles based on its strategic agenda in order to embed an awareness of sustainability issues in the organisation. These principles were agreed with SFQSFTFOUBUJWFTPGUIF(SPVQTNBJOTUBLFIPMEFST

Business principles BAM has divided its business principles into twelve sustainability themes. The BAM Business Principles are the basis for developing and implementing policy and procedures. The principles relate to: 2012 – 87

Human resources management trainee programme where they have the opportunity to familiarise themselves with various operating companies. BAM organised a $POTUSVDUJPOJTBMMBCPVUCVJMEJOHPOQFPQMF5IFRVBMJUJFTPGPVS training course and a project visit for the committee members of FNQMPZFFTEFDJEFUIFRVBMJUZPGUIF(SPVQTQSPKFDUTBOEUIFSFCZ student organisations sponsored by BAM. A number of promising BMTPPVSNBSLFUQPTJUJPOBOESFUVSOT3PZBM#".(SPVQTIVNBO business professionals were once again selected as trainees and resources policy focuses on retaining and further developing the inducted into the programme in 2012. AIVNBODBQJUBMVOEFSUIFNPUUPA#".#VJMEJOHPO1FPQMF An international recruitment website was also launched in 2012, 5IFDPSOFSTUPOFTPGUIF(SPVQTIVNBOSFTPVSDFTNBOBHFNFOU featuring vacancies at all of the operating companies. are: t 3FUBJOJOHHPPEFNQMPZFFTCZPGGFSJOHHPPEXPSLJOHDPOEJUJPOT  Performance and talent management in which the human dimension and professional processes are Employee involvement at Royal BAM Group is enhanced by crucial performance management, in which the consequences of t "OBUUSBDUJWFBOEDPNQFUJUJWFFNQMPZNFOUDPOEJUJPOTQBDLBHF  formulated commercial goals are translated in terms of individual in accordance with market developments; positions. Performance management also includes career tA4UFFSJOHQFSGPSNBODFCZNFBOTPGDMFBSBHSFFNFOUTBCPVU development paths for more successful job performance. A third results-related targets and commercial goals as well as about mainstay of performance management is assisting employees to the development of personal qualities such as expertise, achieve their career aims. The further development of essential experience and personal competences; professional qualities and competences plays an important part in t "QSPBDUJWFBQQSPBDIUPUIFMBCPVSNBSLFUUPCSJOH3PZBM#". this respect. Group to the attention of talented people in a wide range of fields; An updated version of the performance management book t 5SBJOJOHQSPHSBNNFTGPSFNQMPZFFTBUBMMMFWFMT GPDVTTJOHJO A#VJMEJOH0O1FPQMF A#PVXFO"BO.FOTFO XBTQVCMJTIFEJOMBUF particular on themes such as expertise and entrepreneurship; 2012 to provide a boost to performance management at BAM. The t "DPODSFUFDBSFFSEFWFMPQNFOUBOENBOBHFNFOUEFWFMPQNFOU XFCTJUFA.Z#".$BSFFSXBTBMTPMBVODIFEUPHVJEFFNQMPZFFTJO policy with scope for job rotation, the development of personal their BAM careers, and careers advisers were made available to qualities and the timely discovery of talents. HJWFFNQMPZFFTBEWJDFPOUIFJSDBSFFSBU#".*ODMPTFDPPQFSBUJPO with the HR departments of the operating companies and BAM BAM HR Services #VTJOFTT4DIPPM UIFADBSFFSOBWJHBUPSBOEUIFAQSPGFTTJPOTDBO HR Services provides personnel, payroll and salary and pension were deployed across the Group in the Netherlands to provide administration services to the Dutch operating companies. 2012 careers advice. saw the further implementation of the new personnel administration system Me Online. Employees and managers use During the year under review, BAM Business School put into effect this system to process their own digital applications and to update UIFDPNQBOZTTUSBUFHZPOTBGFUZ5IJTSFTVMUFEJOUIFEFWFMPQNFOU information. This has significantly improved efficiency and cut PGUIF4BGFUZ.BTUFS$MBTTXIJDIJTJOUFOEFEUPJNQSPWFBXBSFOFTT DPTUT*O UIFMBTUPQFSBUJOHDPNQBOJFTXJMMCFDPOOFDUFEUP of safety by encouraging employees to reflect on their own Me Online and the system will be enhanced by the addition of new conscious and unconscious safety behaviour. The ability of features. managers to influence safe behaviour in the organisation and in the XPSLJOHFOWJSPONFOUXBTBMTPBEESFTTFE*O NPSFUIBO Communication with the labour market employees took part in this master class. This included members of *OTQJUFPGMFTTGBWPVSBCMFDJSDVNTUBODFTDPOUJOVJOHPOUIFMBCPVS management, works managers, heads of production and project market, Royal BAM Group once again focused systematically on directors, as well as a specially selected group of project managers communication with the labour market in 2012, including by and project leaders. making regular visits to educational establishments, taking part in business fairs, giving guest lectures and organising company *O #".#VTJOFTT4DIPPMEFWFMPQFEUIFQSPGFTTJPOBM excursions, so that BAM can recruit the best students. EFWFMPQNFOUUSBJOJOHQSPHSBNNFGPS#".T)3TUBGG GPDVTJOHPO the sharing of best practices – including with colleagues from other *O/PWFNCFS BTVDDFTTGVM#".*O)PVTF%BZXBTPSHBOJTFE BAM companies – and on the need for continuous in-service for the fourth time for approximately 250 selected students from training. This programme was a response to the rapid DPVSTFTUIBUBSFSFMFWBOUUP#".TBDUJWJUJFT&WFSZZFBS BOVNCFS developments in the world of HR and also focused on various key of young business graduates from academic courses take part in a points of BAM strategy and the need for training and refresher TUSJDUTFMFDUJPOQSPDFEVSFUPHBJOFOUSZUP3PZBM#".(SPVQT courses at all levels of knowledge. A particularly important factor 88 – 2012

was the specific focus on BAM as the programme was specially Diversity: women in the Group designed for BAM and as far as possible features teachers from Specifically for female employees in job grade 10 and above with within the company. the potential to grow into more senior positions, the Group has the BAM Female Empowerment Programme. The participants are 5IF#*.EFWFMPQNFOUQSPHSBNNFTHPUPGGUIFHSPVOEJOUIFGPSN selected by the chairmen of the operating company management PGUIF#*.$IBMMFOHF/FX&4'HSBOUTXFSFBMTPTFDVSFEBOEUIBU UFBNT*O GPVSUFFOXPNFOGSPNWBSJPVT#".DPNQBOJFT enabled the BAM Business School to create its own classrooms, completed this programme, which was being held for the second which will result in considerable annual savings. BAM Academy now time. The final session in April 2012 involved a discussion between enables all operating companies to work with a standardised participants and members of management from participating BAM training, planning and registration system. companies on issues relating to diversity.

Employee satisfaction surveys The company applies an active policy aimed at recruiting women There was a follow-up on the employee satisfaction surveys in 2012 GPSBDBSFFSBUUIF(SPVQ*OJUJBUJWFTJOUIJTSFHBSEIBWFJODMVEFEUIF when various operating companies conducted a survey among following: their employees to ask how they feel about their responsibilities t 4VQQPSUJOH'FNBMF$BQJUBM#". '$#". XIJDIJTUIF(SPVQT and development opportunities, how involved they are in XPNFOTOFUXPSL5IF&YFDVUJWF#PBSEIPMETSFHVMBS corporate objectives and the extent to which they are inspired to consultations with the network to identify possible obstacles for achieve these objectives. women in their career development at BAM and to discuss ways The medium-term intention is for all operating companies in the of removing these obstacles. Netherlands to conduct a similar survey once every two to three t 0O+VMZ '$#".BOEUIFDPNQBOZTJHOFEBEPDVNFOU years to improve the working atmosphere and ensure that FOUJUMFEA$PNNJUNFOUQMBOGPSUBDLMJOHEJWFSTJUZ everyone learns from each other. t "TQBSUPGUIFQSPKFDUSVOCZ3BECPVE6OJWFSTJUZ/JKNFHFOUP QSPNPUFFGGFDUJWFDPPQFSBUJPOCFUXFFOQSPGFTTJPOBMXPNFOT Terms of employment networks and their organisations, a workshop was held on As a result of the merging of several companies, many terms of Thursday 21 June 2012, in which various regional and other employment and personnel regulations were harmonised with directors from the Dutch operating companies took part. effect from 1 January 2005. At that time, certain matters were not t 0O+VMZ '$#".PSHBOJTFEUIFA4FUUJOHUIFDPVSTF included. UPHFUIFSDPOGFSFODF *O 3PZBM#".(SPVQ UIF%VUDIPQFSBUJOHDPNQBOJFTBOEUIF t 0O%FDFNCFS UIF'$#".5SPQIZXBTBXBSEFE $FOUSBM8PSLT$PVODJMXPSLFEUPHFUIFSPOUIFGVSUIFS *OBEEJUJPO SFDSVJUNFOUBOETFMFDUJPOQPMJDZGPDVTFEJOQBSUJDVMBS harmonisation of personnel regulations. These regulations include on the intake of new female graduates on the labour market. the calculation of the holiday allowance and payments marking km service anniversaries. Various regulations on allowances (for Unfortunately, women are heavily underrepresented in technical example, allowances for relocation costs, expenses and study education in the Netherlands. At an early age, it is socially accepted costs) were also examined. These new efforts to harmonise that girls have less aptitude for the sciences. This reduces the regulations will result in a uniform package of terms and conditions numbers of women entering the areas of the labour market of employment and help to promote employee mobility within the targeted by the Group. Unless there is a sufficient supply of women (SPVQ*OBEEJUJPO UIF%VUDIPQFSBUJOHDPNQBOJFTJOUFOEUP on the labour market, the level of female recruitment will remain present themselves increasingly on the job market as a single out of balance in relative terms and this will continue to have an employer. Finally, the harmonisation of personnel regulations will JNQBDUPOUIFFWFOEFWFMPQNFOUPGXPNFOTQBSUJDJQBUJPOBUUIF simplify administrative processes. Agreement has now been senior and very highest levels of management in the Group. reached on the new regulations, which will take effect on 1 January 2013. Worker participation 2012 saw a change in the BAM pension scheme. The new surplus scheme accounts for a later retirement date and a lower defined European Works Council contribution. The new scheme will be administered by bpfBOUW. 5IFBOOVBMNFFUJOHPGUIF&VSPQFBO8PSLT$PVODJM &8$ XBTIFME The old pension contract has been converted to non-participating JO#VOOJL UIF/FUIFSMBOET JONJE*UFNTPOUIFBHFOEB paid-up status, which will lead to changes in the indexation system JODMVEFEUIFOFX&VSPQFBO8PSLT$PVODJM%JSFDUJWF XIJDI and the supplement protocol. QSPWJEFTBSFGFSFODFGPSUIFBHSFFNFOUCFUXFFOUIF&8$BOEUIF company representative, and the election of the Dutch European 8PSLT$PVODJMEFMFHBUJPO5IFNFNCFSTPGUIFNFFUJOHBMTP visited the A12 PPP project. 2012 – 89

Schakel & Schrale. Restoration of the St Bavo Cathedral basilica (National Monument; second largest church in the Netherlands), Haarlem. 90 – 2012

5IF&YFDVUJWF$PNNJUUFFPGUIF&8$DPNQSJTFT&%FEEFO 1FFUFO $+3PGGFM )4OFFQ )7BONVMLFO 4FDSFUBSZ .T& $IBJSNBO UIF/FUIFSMBOET &#PSSF[FF 7JDF$IBJSNBO #FMHJVN  #PVU)JFTFMBBSJTUIFPGGJDJBMTFDSFUBSZUPUIF$03 BOE.T",SÊNFS 7JDF$IBJSNBO (FSNBOZ .T&#PVU)JFTFMBBS JTUIFPGGJDJBMTFDSFUBSZUPUIF&8$ Construction industry barometer Central Works Council *OUIF/FUIFSMBOET UIF$FOUSBM8PSLT$PVODJM $03 BHSFFE GPS 5IFDPOTUSVDUJPOJOEVTUSZCBSPNFUFSJTCBTFEPO&VSPDPOTUSVDUT the year under review, to an amendment of the BAM pension $PVOUSZ3FQPSUBTQVCMJTIFEJO%FDFNCFS(JWFOUPEBZT scheme and to the termination of the administration agreement SBQJEMZDIBOHJOHNBSLFUT GPSFDBTUTGSPNUIBU$PVOUSZ3FQPSUNBZ for the Nationale-Nederlanden surplus scheme, along with the have been adjusted in the meantime. pension scheme, alignment of employee benefits and a guideline GPSUBLJOHIPMJEBZEBZTBOETDIFEVMFEEBZTPGG5IF$03QSPDFTTFE According to Euroconstruct, the year under review saw growth in applications for consent regarding an amendment of to the UIFHSPTTEPNFTUJDQSPEVDUJOUIF(SPVQTGJWFIPNFNBSLFUT UIF remuneration policy, pension administration in 2013 and an /FUIFSMBOET #FMHJVN 6OJUFE,JOHEPN *SFMBOEBOE(FSNBOZ  BNFOENFOUUPUIFUFMFQIPOFTDIFNF*O UIF$03QSPWJEFE with significant differences between the various countries, ranging positive advice on the sale of Tebodin and the appointment of from contraction in the Netherlands ( 0.5 per cent) to growth in .T5.FOTTFOBTBNFNCFSPGUIF&YFDVUJWF#PBSE*OBEEJUJPO UIF Germany (0.8 per cent). At 0.1 per cent, average growth was agreement on foreign acquisitions was renewed for another two substantially lower than the forecast made in the previous Annual years, expiring on 31 August 2014. Report (1.3 per cent), while the range in 2012 was also larger than expected. *OPSEFSUPJODSFBTFUIFVOJPOTJOWPMWFNFOUJOXPSLFSQBSUJDJQBUJPO BUUIF(SPVQDPNQBOJFT UIF$03BHSFFEXJUIUIFVOJPOTJOFBSMZ "OBWFSBHFHSPXUIJTGPSFDBTUGPSUIF(SPVQTGJWFIPNFNBSLFUTJO UIBUUIFZXPVMEBUUFOE$03NFFUJOHTBUMFBTUPODFBZFBS 2013. The 2013 forecast is based on an average growth of 1.0 per 5IF&YFDVUJWF$PNNJUUFFPGUIF$03XJMMBMTPNFFUXJUIUIFVOJPOT cent, with figures across the different countries ranging from twice a year to discuss current issues. QFSDFOU #FMHJVN UPQFSDFOU *SFMBOE *ODSFBTJOHBWFSBHF growth is assumed for subsequent years; 2014: 1.8 per cent, 2015; "OFXEFQBSUNFOU #".*OGSB1SPKFDUNBOBHFNFOU XBT 2.0 per cent. established within the Group in order to manage complex NVMUJEJTDJQMJOBSZQSPKFDUT5IF$03NFUXJUIXPSLFSQBSUJDJQBUJPO The Netherlands bodies of the six operating companies joined in this business unit The Dutch construction industry experienced a rough year in 2012 to discuss the best way to organise the representative committee due to low volumes. Data provided by Euroconstruct (December GPSUIFFNQMPZFFTPG#".*OGSB1SPKFDUNBOBHFNFOU 2012) shows that building capacity fell by 6.9 per cent The Dutch economy contracted by 0.5 per cent in 2012. The contraction in the *OBQQPJOUJOHBOFXNFNCFSPGUIF4VQFSWJTPSZ#PBSEUPTVDDFFE construction industry occurred in all sectors. Notably, new .S+"%FLLFS UIF$03FYFSDJTFEJUTFOIBODFESJHIUPG construction fell by 9 to 10 per cent, while renovation declined by SFDPNNFOEBUJPO5IF$03SFDPNNFOEFE)-+/PZUPUIF more than 4 per cent. Supervisory Board for nomination as a member, and he was subsequently appointed to this position at the AGM on 25 April Euroconstruct (December 2012) reports that new housing 2012. construction fell by 10 per cent in 2012, (versus a drop of 6 per cent JO *UBOUJDJQBUFTBGVSUIFSEFDMJOFJO GPMMPXFECZ 5IF$03IFMEJUTBOOVBMJOGPSNBMNFFUJOHXJUIUIF4VQFSWJTPSZ modest growth from 2014 onwards. This means production will #PBSEBOEUIF&YFDVUJWF#PBSE5IF$PVODJMIBEQSFQBSFEBOVNCFS remain significantly below pre-crisis levels in the coming years. of statements regarding issues such as the economic crisis, BAM as a solid employer, and less secure employment contracts. This According to Euroconstruct data, new construction in the resulted in an honest and constructive debate. non-residential market fell by 10.3 per cent during the year under review, mainly due to a further decline in the office market and the 4JYOFXNFNCFSTKPJOFEUIF$03EVSJOHUIFZFBSVOEFSSFWJFX industrial sector. Nearly all sub-markets are expected to grow in "UZFBSFOE UIF$03DPOTJTUFEPGUIFGPMMPXJOHHFOUMFNFO the coming years, with the notable exception of the office market, )#$."OTFNT )#FDLFST 15+WBOEFO#SPFL 7JDF$IBJSNBO  which will contract by nearly 50 per cent over the next few years. &%FEEFO $IBJSNBO )+WBOEFS%POL +%JKLTUSB +-.WBO Gent, K.G. Geyteman, W.J. Heemskerk, A. van Heteren, A. Jansen, Production volume in the Dutch infrastructure market fell by M.F. Misset, J.P. Molenaar, F. Oudendorp, G.J. Pappot, W.G.H. approximately 7.4 per cent in 2012; this decline occurred in all 2012 – 91

sub-markets of this sector. For 2013, Euroconstruct also anticipates $POTUSVDUJPOJOUIF*SJTIOPOSFTJEFOUJBMNBSLFUIBTGBMMFOCZQFS a further contraction in all sub-markets, followed by slight growth cent in recent years, and for 2012 Euroconstruct anticipates a in 2014 and beyond. decrease of nearly 9 per cent One positive change in 2012 was that private-sector growth drove growth in the office market, although Belgium XJMMTFFBDPOUSBDUJPO#FZPOEUIJTQFSJPE UIF*SJTIOPO Euroconstruct reports that in 2012 Belgian construction output residential sector is expected to see growth again. remained virtually unchanged from the previous year, due mainly to the fall in output in the Belgian residential market. A similar 5IF*SJTIJOGSBTUSVDUVSFNBSLFUGFMMCZNPSFUIBOQFSDFOUJO construction output is expected for 2013, after which production 2012, with output in this market expected to decrease further in will pick up again in 2014 and 2015. 2013 and 2014. Output in 2014 will be slightly less than half that for 2008. The Belgian non-residential market grew by 2.4 per cent in 2012, driven primarily by growth in the health care and commercial Germany property sectors. However, growth is set to slow down in 2013 and According to Euroconstruct, German construction output fell 2014, mainly due to the declining office market. slightly during the year under review, by 0.2 per cent The medium- term outlook for the German construction industry is relatively $POTUSVDUJPOPVUQVUJOUIF#FMHJBOJOGSBTUSVDUVSFNBSLFUJODSFBTFE positive, and Euroconstruct anticipates growth over the next few by more than 7 per cent, fuelled mainly by higher spending in road years. construction. The outlook for 2013 is significantly less positive, with Euroconstruct expecting a decrease of around 3 per cent this The German non-residential market contracted by nearly 3 per cent year and no growth anticipated until 2015. in 2012. While new construction continued to grow, the renovation market, in particular, showed a decline. Government spending on United Kingdom education and health care in particular fell sharply. Although the British construction output fell by 6.6 per cent during the year renovation market is expected to recover in the next few years, the under review; the decline occurred in all sub-markets of the British outlook for new construction is less positive. industry. Output is expected to further decrease in 2013. The German infrastructure market fell by more than 5 per cent in According to Euroconstruct, construction output in the British 2012. All sub-sectors of the industry were affected, and road non-residential market fell by 6.6 per cent during the financial year; construction in particular. The infrastructure market - including this was caused mainly by lower output in the health care, road construction - is expected to recover in 2013, followed by education and commercial property sectors. The British modest growth in the following years. HPWFSONFOUTTQFOEJOHDVUTXJMMBMTPJNQBDUUIFIFBMUIDBSFBOE education sectors for the next few years. As a result of this and Outside its home markets, BAM has established permanent other factors, Euroconstruct expects British non-residential CSBODIFTJO4XJU[FSMBOEBOE-VYFNCPVSH BTXFMMBTDPOTPMJEBUJOH construction to fall by 7.6 per cent in 2013 and by 3.2 per cent in UIFNBSLFUQPTJUJPOTPG#".*OUFSOBUJPOBMJOHSPXUINBSLFUT 2014. However, signs of a private-sector recovery are evident in the PVUTJEF&VSPQF "VTUSBMJB *OEPOFTJB "GSJDBBOEUIF.JEEMF&BTU  UK, resulting in anticipated growth in the office market. BAM is expected to grow further in these markets in the coming years. Euroconstruct reports that output in the British infrastructure market fell by nearly 10 per cent during the year under review, Bunnik, the Netherlands, 6 March 2013 while nearly all sub-sectors also showed a sharp decline. The sole exception was railway construction, where output increased by 8 Executive Board: per cent The outlook for the various sub-markets for the next few N.J. de Vries years is similar: continued strong growth in railway construction T. Menssen versus a further decline in all other sub-markets. M.J. Rogers J. Ruis Ireland R.P. van Wingerden &VSPDPOTUSVDUEBUBTIPXTUIBUDPOTUSVDUJPOPVUQVUJO*SFMBOE decreased by 15 per cent during the financial year; a further decline is anticipated for 2013 (over 5 per cent). This represents a decrease of more than two-thirds from pre-crisis output. Output is expected to grow again in 2014 and 2015. 92 – 2012

Particulars of the Executive Board

From the left: N.J. de Vries, T. Menssen, M.J. Rogers and R.P. van Wingerden.

N.J. de Vries (1951), Chairman and regional director in 1995. He was promoted to the main board Mr De Vries completed an architecture foundation course in 1971. PG#".$POTUSVDU6,JOBOECFDBNFNBOBHJOHEJSFDUPSJO He went on to earn a degree in civil engineering from Delft *OIFCFDBNF$&0PG#"./VUUBMM-UE.S3PHFST 6OJWFSTJUZPG5FDIOPMPHZJO*O.S%F7SJFTKPJOFE#". became a member of the Executive Board of Royal BAM Group in as a planning engineer after which he held positions as project 2009. He is a British national. Other offices: NFNCFSPGUIF$#* NBOBHFS XPSLTNBOBHFSBOECSBODIEJSFDUPS*OIFXBT $POTUSVDUJPO$PVODJMNFNCFSPGUIF4PVUI&BTU3FHJPOBM$PVODJM appointed deputy director and in 1990 director of BAM Utiliteitsbouw, which was followed in 1995 by his appointment as J. Ruis (1950) sector director of civil engineering for Royal BAM Group. Mr De Mr Ruis joined BAM in 1971 and has held a number of different Vries has been a member of the Executive Board of Royal BAM GJOBODJBMQPTJUJPOT.S3VJTIBTCFFOPO3PZBM#".(SPVQT (SPVQTJODF)FXBTBQQPJOUFEBT$IBJSNBOPGUIF&YFDVUJWF &YFDVUJWF#PBSETJODF $IJFG'JOBODJBM0GGJDFS )FJTB Board in October 2010. He is a Dutch national. Dutch national. On 1 January 2013, Ms Menssen took over the Other offices: member of the Board of Vereniging van Nederlandse QPTJUJPOPG$'0GSPN.S3VJT.S3VJTXJMMTUFQEPXOGSPNUIF aannemers met belangen in het buitenland (NABU); member of Executive Board at the end of the General Meeting to be held on UIF#PBSEPG%JSFDUPSTPGUIF*OUFSOBUJPOBM$IBNCFSPG$PNNFSDF 24 April 2013. Nederland; member of the Board of Directors of Nederlands- Duitse Handelskamer; member of the Board of Directors of R.P. van Wingerden (1961) Stichting Raad van Arbitrage voor de Bouw. Mr Van Wingerden graduated as a civil engineer from Delft University of Technology in 1988. He joined the Group as a project T. Menssen (1967) surveyor in 1988 and subsequently worked in a variety of (project) Mrs Menssen graduated from the Technical University of management roles for operating companies in the Netherlands Eindhoven in 1990 with a degree in mechanical engineering. and elsewhere. He completed his MBA at Twente School of 4IFUIFOSFDFJWFEBNBTUFSTEFHSFFJO#VTJOFTT"ENJOJTUSBUJPO Management in 1994. He was appointed Director of HBG Bouw en GSPNUIF5FDIOJDBM6OJWFSTJUZPG5XFOUF*O.ST.FOTTFO Vastgoed in 2000, became Director at BAM Utiliteitsbouw in 2002, joined Unilever, she held various management positions until BOEXBTBQQPJOUFE$IBJSNBOPGUIF#PBSEPG#".8POJOHCPVXJO *O.ST.FOTTFOXBTBQQPJOUFENFNCFSPGUIF 2005. Mr Van Wingerden has been a member of the Executive management board of Havenbedrijf Rotterdam (Rotterdam Port Board of Royal BAM Group since 2008. He is a Dutch national. "VUIPSJUZ GJSTUBT$'0BOEGSPNBT$004IFJTB%VUDI Other offices: member of the Board of Governors of the Dutch OBUJPOBMBOEEPFTOPUIPMEBOZTIBSFTJOUIFDPNQBOZTDBQJUBM $POTUSVDUJPOBOE*OGSBTUSVDUVSF'FEFSBUJPO #PVXFOE/FEFSMBOE  Other offices: member of the Supervisory Board of PostNL; member member of the independent construction industry platform of the Supervisory Board of Vitens; member of the Supervisory Vernieuwing Bouw; chairman of the Supervisory Board of EN Board of the Rotterdam Maritime Museum; member of the (Gebieden Energieneutraal); member of the Supervisory Board of Supervisory Board of the Rotterdam Philharmonic Orchestra. Royal Saan; member of the Board of Nationaal Renovatie Platform.

M.J. Rogers (1955) Retirement schedule for the Executive Board Mr Rogers gained a Higher National Diploma in Building Studies at UIF)FSUGPSETIJSF$PMMFHFPG#VJMEJOH)FJTB'FMMPXPGUIF Year of Year of Period of $IBSUFSFE*OTUJUVUFPG#VJMEJOH '$*0# BOEB'FMMPXPGUIF As of January 2013 appointment re-appointment appointment 1 *OTUJUVUJPOPG$JWJM&OHJOFFST '*$& .S3PHFSTTQFOUUIFFBSMZQBSU PGIJTDBSFFSXJUINFEJVNTJ[FEDPOTUSVDUJPOBOEDJWJMFOHJOFFSJOH N.J. de Vries 1998 unlimited companies in the United Kingdom before joining BAM in 1979. T. Menssen 2012 four years .S3PHFSTJOJUJBMQPTJUJPOXBTQMBOOJOHFOHJOFFSXPSLJOHPO M.J. Rogers 2009 four years major pharmaceutical and industrial projects, prior to moving into J. Ruis 2004 2012 one year project management in 1981. He was appointed as a construction R.P. van Wingerden 2008 2012 four years director in 1989 before becoming an associate director in 1992 1 New members of the Executive Board have been appointed (re-appointed where applicable) for a maximum four-year period since 2004. 2012 – 93

BAM Techniek and BAM Utiliteitsbouw. Engineering and building datacenter for the Datacenter Group, Delft.

94 – 2012 Report by the Supervisory Board to the shareholders

‘Interesting opportunities can always be found, even during times of economic crisis. Given the Strategic Agenda 2013-2015, the Supervisory Board is convinced that the Group is capable of capitalising on these opportunities.’ 2012 – 95

Please find below our report for the financial year 2012. The past agenda is addressed in more detail elsewhere in this Annual year was again characterised by economic conditions that Report, namely on page 18. The key aspects of the Strategic DPOUJOVFEUPCFFYUSFNFMZEJGGJDVMU*OGBDU UIFFDPOPNJDDSJTJTIBT Agenda are achieving operational improvements and launching worsened, and the Supervisory Board and the Executive Board targeted growth initiatives in services, multidisciplinary projects held regular joint meetings to discuss the impact of the crisis on and international niche markets; all these measures have the aim the Group and how to respond. The focus was again on the state PGQPTJUJPOJOH#".BTBACFTUJODMBTTDPOTUSVDUJPODPNQBOZ of the property and residential property markets, especially in the The Supervisory Board has approved the Strategic Agenda and Netherlands, which were again the subject of analysis, including of believes that it represents a realistic strategy that sets out the future prospects for these markets. well-chosen priorities. Given the economic situation, the financial Since conditions in these markets continue to be difficult, the UBSHFUTBSFBNCJUJPVT*OGBDU UIFTUSBUFHZJTBMTPHFBSFEUPXBSET Executive Board, supported in this by the Supervisory Board, has ensuring that the Group is well-placed to take advantage once the decided to take a realistic and firm approach. The above state of current economic crisis is over. The Supervisory Board has affairs has led to a considerable downward adjustment in the value provided the Executive Board with its comments on this strategy, of property positions (especially in the Netherlands) and in the including the comment that the action items needed to realise the UPUBMGJHVSFGPS".THPPEXJMM BTBOFUSFTVMUPGXIJDIBMPTTGPS plan should be clearly defined, that the key indicators should be 2012 of €187.4 million has been posted. identified, and that the progress made and final results achieved The Supervisory Board deeply regrets the need for these should be defined in quantifiable terms, which would mean that downward adjustments. the plan could be monitored and adjusted where necessary.

The crisis is affecting more than just the property market and the The Supervisory Board has also approved the 2013 Operational Dutch residential construction market. Other markets in which the 1MBO XIJDITFUTPVUUIF(SPVQTGJOBODJBMUBSHFUT UIFTUSBUFHZ Group is active, such as non-residential construction and civil aimed at achieving these targets and the parameters used for this engineering markets, have been suffering under the prevailing strategy. At the request of the Supervisory Board, the Executive economic conditions too. Board gave more details about the sensitivity of the Operational Declining turnover figures have led to reorganisations and Plan. EPXOTJ[JOHT5IJTJTBWFSZQBJOGVMEFWFMPQNFOU FTQFDJBMMZGPS those employees who have lost their jobs as a result. Impairment of property Unfortunately, given the need to ensure continuity, the measures 5IF/FUIFSMBOETFDPOPNJDGPSFDBTUDPOUJOVFEUPEFDMJOFEVSJOH taken are unavoidable. the course of the financial year as the economic crisis deteriorated. Growth forecasts were adjusted due to additional government Accordingly, over the past year it has been the economic crisis - spending cuts, with the political developments in the Netherlands and the best way for the Group to cope with it - that has during the financial year creating additional uncertainty about the demanded the most attention from the Supervisory Board and the future direction the policy would take, especially in respect of the Executive Board. There has also been much exchanging of views housing market. about the Strategic Agenda 2013-2015 drawn up by the Executive As a result, the Executive Board considers it necessary to adjust Board. the assumptions made regarding future developments. This in turn has led to an impairment of €248 million and a downwards *O UIF&YFDVUJWF#PBSETQSJNBSZGPDVTXJMMCFPOTUFFSJOH BEKVTUNFOUPGUIFUPUBMGJHVSFGPS".THPPEXJMMBNPVOUJOHUP the Group through the economic crisis in the best way possible. €150 million. There will also be a major focus on the implementation of the new #PUIUIF4VQFSWJTPSZ#PBSEBOEUIF"VEJU$PNNJUUFFIBWF Strategic Agenda and on showing the results of this work. discussed these matters in detail. The members of the Supervisory Board have been informed in detail about the assumptions on The above topics and other work performed by the Supervisory which the analyses are based and have come to the conclusion Board are addressed in more detail below in this report. that these extensive write-offs were unavoidable. Given the robust approach taken and the reorganisations carried out at AM, the Supervisory Board is confident that in the coming financial years The Supervisory Board’s activities the Group should be able to succeed despite the current malaise in UIFQSPQFSUZNBSLFUT*ODPNJOHUPUIJTDPODMVTJPO UIF Strategy and operational plan 4VQFSWJTPSZ#PBSEIBTOPUFEUIF&YFDVUJWF#PBSETDPOWJDUJPOUIBU *O4FQUFNCFS BNFFUJOHCFUXFFOUIF4VQFSWJTPSZ#PBSEBOE the Dutch housing market will offer interesting opportunities the Executive Board was solely dedicated to discussing the again over time. Strategic Agenda 2013-2015 drawn up by the Executive Board. This 96 – 2012

BAM Infratechniek Mobiliteit. Sustainable black-ice alarm system, driven by solar panels, Huizen.

Financial The Executive Board has also discussed with the Supervisory Board During the financial year, the Supervisory Board and the Executive UIFFYUFOUPGUIF(SPVQTQFOTJPODPNNJUNFOUT UIFFGGFDUPOUIF #PBSESFHVMBSMZEJTDVTTFEUIF(SPVQTGJOBODJBMQPTJUJPOBOEUIF balance sheet of the new methodology (introduced at the start of way in which the Group should be financed. The Supervisory Board the 2013 financial year) used to account for changes in the net also exchanged views on several occasions with the Executive QFOTJPODPNNJUNFOUTBOEUIFJNQMFNFOUBUJPOPG*'34 BTB Board regarding the operating capital, the liquidity level, the result of which joint ventures can no longer be consolidated terms and conditions of the current financing covenants, the proportionately. (SPVQTTPMWFODZMFWFMBOEUIF(SPVQTGJOBODJOHSFRVJSFNFOUGPS the longer term. Risk profile "TVTVBM UIF4VQFSWJTPSZ#PBSETRVBSUFSMZNFFUJOHTJODMVEFEB At the start of the financial year, the Supervisory Board approved discussion on the course of business and prospects for both the the Group refinancing, which has a five-year term. This refinancing Group as a whole and for the respective sectors and individual is geared to both the current and expected financing needs and operating companies, on the basis of written reports and provides the Group with a solid foundation for the achievement of accompanying presentations. These discussions covered the main its strategic objectives. The Supervisory Board is pleased to note risks involved in the business, the internal management and that the Group remains well within the financing covenants DPOUSPMTZTUFNTBOEUIFSFTVMUTGSPNUIF&YFDVUJWF#PBSET agreed. assessment of these systems. The implications of the matters addressed in these contexts at the meetings of the Supervisory The stress scenarios drawn up by the Executive Board have been Board are discussed elsewhere in the Annual Report, including on VTFEBTJOQVUGPSBEJTDVTTJPOPGUIF(SPVQTCBMBODFTIFFUQPTJUJPO page 76 et seq. and the options for improving cash flow and operating capital. The main point arising from the scenarios is that the property portfolio The Board has satisfied itself that the Group has internal risk TIPVMECFEPXOTJ[FEJOPSEFSUPJNQSPWFUIFCBMBODFTIFFUSBUJPT management and internal control systems, financial reporting The Supervisory Board has regularly discussed the available manuals and procedures for drawing up such reports, as well as an EPXOTJ[JOHPQUJPOTXJUIUIF&YFDVUJWF#PBSE established monitoring and reporting system. 2012 – 97

*OUIJTDPOUFYU UIF4VQFSWJTPSZ#PBSEIBTFTUBCMJTIFEUIBUUIF JNQSPWFUPUIFOFYUMFWFMPGTBGFUZ5IF(SPVQTTVTUBJOBCMF Executive Board is continuing to monitor the operational activities business practices are looked at in more detail from page 85 PGUIF(SPVQTEJWJTJPOTKVTUBTDMPTFMZBTCFGPSF*UJTDPOTJEFSFEUP onwards of this Annual Report. be of great importance in this regard that each quarter the Executive Board extensively discusses the figures for each Group Other activities DPNQBOZXJUIUIBUDPNQBOZTNBOBHFNFOUUFBNTPUIBUUIFXBZ &BDIPGUIF4VQFSWJTPSZ#PBSETNFFUJOHTGFBUVSFEBSFQPSUPOXIBU in which the figures should be interpreted is understood, as are IBECFFOEJTDVTTFEJONFFUJOHTPGUIF#PBSETDPNNJUUFFT*O the challenges that the individual Group companies are facing. addition, the Executive Board reported in each case on the state of affairs, the financial situation and market developments for the The Supervisory Board has taken note of the annual assessment by operating companies and the risks they face, each report being UIF"VEJU$PNNJUUFFUIBUUIF(SPVQMBDLTBOJOIPVTFBVEJUPS*O based on the operational plan for the relevant financial year. Matters this context, the Executive Board has pointed out that a uniform also discussed included the Annual Report and financial statements method of evaluating risk has been introduced throughout the for 2011, the quarterly statements for 2012, the reserve and Group, this with the support of the central risk manager appointed dividend policy and the dividend proposal for 2011, corporate at Group level, which method has been embedded in the existing HPWFSOBODF UIFWBSJPVTFGGFDUTPG*'34 *OUFSOBUJPOBM'JOBODJBM managerial measures implemented by the Group companies. 3FQPSUJOH4UBOEBSET POUIF(SPVQTGJOBODJBMSFQPSUT UIF(SPVQT *ODPSQPSBUJOHUIFBCPWFJOUPUIFFYJTUJOHSFQPSUJOHTZTUFN existing anti-takeover measures, management development and the implements in practice the efforts to further intensify the quality of management, and the most important claims and legal management and control of operational risk. proceedings involving parts of the Group. The basic principle for the audit process is that this is performed by an external accountancy firm that is assisted by the executive During the financial year, the Supervisory Board again arranged to officers of the Group and by the Group systems deployed. This is a be regularly updated by both the Executive Board and the external logical approach to take, given such factors as the project-based auditor on the general course of business at the operating OBUVSFPGBDPOTUSVDUJPOHSPVQTBDUJWJUJFTBOEUIFMBSHFOVNCFSPG companies. These updates also focussed on the developments in projects being carried out by parts of the Group active at home UIF(SPVQTNBSLFUT5IF4VQFSWJTPSZ#PBSEBMTPSFDFJWFESFHVMBS and abroad. Also during 2012, the collaboration - stipulated in reports on the state of affairs regarding certain major projects that clearly-defined arrangements - between the external accountancy parts of the Group were involved in, and was also informed about firm and the BAM employees involved in this work proceeded DFSUBJOQSPQPTFECJETNBEFCZ#".*OUFSOBUJPOBMJOSFTQFDUPG satisfactorily. large-scale projects. The above led the Supervisory Board to recommend to the Executive Board that the current approach used to carry out the %VSJOHUIFBOOVBMWJTJUUPBOVNCFSPGUIF(SPVQTPQFSBUJOH audit process should be continued, and that the latter should companies over several days in September 2012, the Supervisory continue to closely monitor the way in which the new position of Board and the Executive Board exchanged views with the central risk manager is taking shape. management teams of the German operating companies. The directors gave a brief presentation on their companies, their Corporate social responsibility markets and the challenges they currently face. The Supervisory The Supervisory Board discussed the importance of corporate Board believes that the German operating companies are well TPDJBMSFTQPOTJCJMJUZ $43 GPSUIF(SPVQXJUIUIF&YFDVUJWF#PBSE positioned to take advantage of the very competitive German BOEBHSFFTXJUIUIFMJTUPG$43GBDUPSTJEFOUJGJFECZUIF&YFDVUJWF markets. Board as being most relevant for BAM. The Supervisory Board was pleased to note that the Group is very active in corporate social The Supervisory Board held talks on various occasions with the responsibility and is a pioneer in this field in the construction Executive Board about the proposed sale of Tebodin. The sector. The Board noted again the importance of getting the other 4VQFSWJTPSZ#PBSETIBSFTUIF&YFDVUJWF#PBSETHSFBUQMFBTVSFUIBU partners in the construction chain involved in this development UIJTUSBOTBDUJPOXBTDPNQMFUFECFDBVTFJUJTJOMJOFXJUIUIF(SPVQT too. efforts to increase the focus on core business and will strengthen *OUIFQBTUZFBS UIF(SPVQTFGGPSUTJOUIFGJFMEPGDPSQPSBUFTPDJBM the financial position. responsibility again included a regular focus on the progress being made by the Group in safety matters and on the proposed steps This year, delegations from the Supervisory Board, consisting of for achieving further improvements in this field. Evidently, it is different members on each occasion, again took part in two difficult to carry on achieving improvements in the way we have in DPOTVMUBUJPONFFUJOHTXJUIUIF$FOUSBM8PSLT$PVODJM5IFVTVBM past years. Accordingly, the Supervisory Board and the Executive informal annual meeting of the Supervisory Board and the Executive Board both see it as an important challenge for the Group to #PBSEXJUIUIF$FOUSBM8PSLT$PVODJMXBTIFMEJO.BZ 98 – 2012

Performances remuneration package for the members of the Executive Board for The performances of the Supervisory Board and its individual a remuneration component that rewards long-term improvement. members are assessed periodically using a written questionnaire A long-term benefit plan has been chosen that rewards the sent to survey the members of the Supervisory Boards, Executive Board members for positive development of the BAM TVQQMFNFOUFECZEJTDVTTJPOTCFUXFFOUIF$IBJSNBOBOEFBDI share price compared to alternative investments by shareholders Board member. This assessment was carried out for the past in comparable enterprises. This long-term benefit plan was financial year too. The assessment took place somewhat later this approved by the General Meeting on 20 April 2011 and is explained year (namely in early 2013) so as to take maximum advantage of in more detail on page 109 of the Annual Report. the insights provided by the new Board member appointed in 2012. The results of this assessment were first discussed by the Meetings Supervisory Board without the Executive Board being present and *OUIFZFBSVOEFSSFWJFX UIF4VQFSWJTPSZ#PBSENFUPOTFWFO XFSFUIFOTIBSFEXJUIUIF$IBJSNBOPGUIF&YFDVUJWF#PBSE occasions in the presence of the Executive Board. Six of these The most important observations made by the members of the NFFUJOHTXFSFPSEJOBSZNFFUJOHT*OBEEJUJPO UIF4VQFSWJTPSZ Supervisory Board are as follows: The members of the Supervisory Board arranged one meeting to discuss the 2013-2015 Strategic Board are pleased with the performance of the Supervisory Board Agenda with the Executive Board. Almost all of these meetings BOEUIBUPGUIFJOEJWJEVBMNFNCFSTPGUIF#PBSE*UJTGFMUUIBU were attended by the complete Supervisory Board and the further optimisation can be achieved by focussing on a more complete Executive Board. The Supervisory Board also met on four effective allocation of time between the financial reporting on the occasions without the Executive Board being present. The new one hand and other important issues on the other. Furthermore, member of the Supervisory Board who joined during the financial the members of the Supervisory Boards feel that it is important year completed the usual induction programme, during which that further structure be given to the introduction of new new members become acquainted with a number of key officers members of the Supervisory Board, the lifelong learning of XJUIJOUIF(SPVQBOEXJUILFZQBSUTPGUIF(SPVQ*OBEEJUJPO UIF members of the Supervisory Board about developments relating discussion about the 2013-2015 strategy presented a good to the construction sector and the Group, and to the Supervisory opportunity for the new member to become familiar with the #PBSETGPDVTPOUIFNBOBHFNFOUEFWFMPQNFOUQSPDFTT BOEUIBU Group. UIF#PBSETNPOJUPSJOHPGUIF(SPVQDPNQBOZTUPQMFWFM management be intensified. The meetings held without the Executive Board being present were devoted to such matters as internal deliberations about The assessment of the performance of the Executive Board and of decisions that the company had to take in this financial year and its individual members has been made based on interviews with the performance of the Executive Board and of the individual each member of the Executive Board that were carried out by the members of that Board. There were also discussions about the 3FNVOFSBUJPO$PNNJUUFF5IFSFTVMUTXFSFEJTDVTTFECZUIF 4VQFSWJTPSZ#PBSETPXOQFSGPSNBODF CPUIBTBXIPMFBOEPGUIF Supervisory Board without the Executive Board being present. JOEJWJEVBMNFNCFST BOEUIBUPGUIF#PBSETJOEJWJEVBM The Supervisory Board acknowledges that in 2012 the Executive committees. Matters discussed here included the composition of Board again had to perform in difficult economic conditions. Given and profile of the Supervisory Board, the decision-making process, these circumstances, the Executive Board saw itself forced to take the quality of the supervisory process and of the supervision itself, a number of decisions with far-reaching implications. However the relationship with the Executive Board and the composition of painful these decisions may be for the employees concerned, they and assessment of the Executive Board (both as a whole and of the are unavoidable with regard to ensuring the continuity of the individual members) and the remuneration paid to the members business. The Supervisory Board believes that in the past year the of the Executive Board, including the determination of the variable Executive Board acted properly and - given the current component thereof. conditions – performed well.

Remuneration The Supervisory Board has compiled the remuneration report QSFQBSFECZUIF3FNVOFSBUJPO$PNNJUUFF5IFSFNVOFSBUJPO report is included on page 107 of the Annual Report as part of the Report by the Supervisory Board. There are no plans to modify the remuneration policy, which will therefore continue unchanged in 2013. The Supervisory Board believes that the remuneration QBDLBHFJTXFMMCBMBODFE*OBEEJUJPOUPUIFGJYFESFNVOFSBUJPO and annual variable benefit component, there is room in the 2012 – 99

Wayss & Freytag Ingenieurbau, BAM Utiliteitsbouw. Renovation of the Consulate of the United States of America, Amsterdam. 100 – 2012

Heilijgers. Renovation of solar panels of 500 rental and owner-occupied homes, Nieuwland, Amersfoort.

*OUIFQBTUGJOBODJBMZFBS UIF$PNNJUUFFNFUTJYUJNFT GPVSPG which meetings were ordinary meetings. The external auditor was QSFTFOUGPSBUMFBTUQBSUPGBMMGPVSPGUIFTFNFFUJOHT*OBO BEEJUJPOBMNFFUJOH UIF"VEJU$PNNJUUFFEJTDVTTFEUIF developments on the property markets with the Executive Board, as well as the positions held therein by the BAM companies. Furthermore, in a further meeting the external auditor brought UIF"VEJU$PNNJUUFFVQUPEBUFPOSFMFWBOUEFWFMPQNFOUTJOUIF field of accountancy. 5IF$IBJSNBOBOEUIF$IJFG'JOBODJBM0GGJDFSPGUIF&YFDVUJWF #PBSEBMTPBUUFOEFEBMMUIF"VEJU$PNNJUUFFTNFFUJOHT

5IFQSJODJQBMUPQJDTBEESFTTFEBUUIFTF"VEJU$PNNJUUFFNFFUJOHT were the financial reporting of the 2011 annual figures, the 2012 quarterly and half-yearly figures, the impairments of property and the downward adjustment of the AM goodwill item, the 2011 The Supervisory Board’s committees management letter and the 2012 interim management letter, the GPMMPXVQUPUIFFYUFSOBMBVEJUPSTSFDPNNFOEBUJPOT UIFSJTLT The Supervisory Board has a set of rules governing the and risk management and control systems, including those composition, duties and procedures of the Board and its dealings concerning project development, the dividend policy and the XJUIUIF&YFDVUJWF#PBSE UIF(FOFSBM.FFUJOHBOEUIF$FOUSBM (SPVQTUBYQMBOOJOH5IFGPMMPXJOHUPQJDTXFSFBMTPBEESFTTFE 8PSLT$PVODJM5IFSVMFTPGUIF4VQFSWJTPSZ#PBSEBOEUIPTFPGUIF the activities and fee of and the relationship with the external Supervisory Board committees mentioned below, as well as the auditor; the audit plan for 2012; the 2013 operational plan; the DPNQPTJUJPOPGUIFDPNNJUUFFT DBOCFGPVOEPOUIFDPNQBOZT (SPVQTGVOEJOHBOETPMWFODZUIFSBUJPTJOUIFGVOEJOH website. agreements; banking relationships; the movement of the operating capital and liquidity level; the losses within the Group The Supervisory Board has three permanent committees, namely that can be offset against tax; the development and control of the BO"VEJU$PNNJUUFF B3FNVOFSBUJPO$PNNJUUFFBOEB4FMFDUJPO costs of the central executive departments; the financial and BOE"QQPJOUNFOUT$PNNJUUFF*UJTUIFUBTLPGUIFTFDPNNJUUFFT BENJOJTUSBUJWFPSHBOJTBUJPOBOETPNFFGGFDUTPG*'34POGJOBODJBM to support and advise the Supervisory Board concerning the SFQPSUJOH5IF"VEJU$PNNJUUFFBMTPIFMEEJTDVTTJPOTXJUIUIF BDUJWJUJFTUIBUBSFUIFDPNNJUUFFTSFTQPOTJCJMJUZBOEUPQSFQBSF Executive Board on several occasions about the refinancing of the UIF4VQFSWJTPSZ#PBSETEFDJTJPOTSFHBSEJOHUIPTFBDUJWJUJFT5IF Group. Supervisory Board as a whole remains responsible for the way in which it performs its tasks and for the preparatory work carried 5IF"VEJU$PNNJUUFFFYDIBOHFEWJFXTXJUIUIF&YFDVUJWF#PBSE out by the committees. about the package of insurance policies taken out by the Group, including in respect of a presentation on the subject. As a result, The committees submitted reports on all their meetings to the UIF"VEJU$PNNJUUFFIBTDPODMVEFEUIBUUIF(SPVQIBT Supervisory Board. satisfactory cover for the risks prevalent in its industry.

The Audit Committee *OUIFGJOBODJBMZFBS QBSUJDVMBSBUUFOUJPOXBTBHBJOQBJEUP *OUIFGJOBODJBMZFBSVOUJMUIFFOEPGUIF(FOFSBM.FFUJOHIFMEPO the consequences of the economic crisis for the Group, which "QSJM UIF"VEJU$PNNJUUFFXBTDPNQPTFEPG.FTTST included discussions with the Executive Board about opportunities Dekker, Scheffers and Wester, with Mr Dekker being the chairman. to reduce the amount of capital invested in property development Subsequently it was composed of Messrs Noy, Scheffers and projects. Wester, with Mr Scheffers being the chairman. 5IF"VEJU$PNNJUUFFNFUXJUIUIFFYUFSOBMBVEJUPSPOPOF 5IFDPNQPTJUJPOPGUIF"VEJU$PNNJUUFFJTJOMJOFXJUIUIF occasion without the Executive Board being present and reported provisions of the Dutch corporate governance code. The Audit to the Supervisory Board on the relationship with the external $PNNJUUFFTVQQPSUTUIF4VQFSWJTPSZ#PBSEJOUIFQFSGPSNBODFPG BVEJUPS5IF"VEJU$PNNJUUFFCFMJFWFTUIBUUIFSFMBUJPOTIJQXJUI its tasks, especially as regards financial and accounting matters, UIFFYUFSOBMBVEJUPSJTTPVOE5IF"VEJU$PNNJUUFFBMTPTQPLFUP and it drafts proposed decisions of the Supervisory Board in the Executive Board about the advantages and disadvantages of respect of matters covered by its remit. IBWJOHBOJOUFSOBMBVEJUEFQBSUNFOU5IF"VEJU$PNNJUUFF 2012 – 101

proposed to the Supervisory Board that it should not recommend The Selection and Appointments Committee an internal audit department to the Executive Board at this time During the financial year, the Selection and Appointments for the reasons given earlier in this report. This recommendation $PNNJUUFFXBTDPNQPTFEPG.FTTST&MWFSEJOHBOE4DIFGGFST XJUI also bore in mind that the Group is further intensifying its risk Mr Elverding being the chairman. One of the tasks of the Selection management activities. BOE"QQPJOUNFOUT$PNNJUUFFJTUPNBLFQSPQPTBMTUPUIF Supervisory Board regarding selection criteria and appointment The Remuneration Committee QSPDFEVSFT BOESFHBSEJOHUIFTJ[F DPNQPTJUJPO BQQPJOUNFOUT *OUIFGJOBODJBMZFBS UIF3FNVOFSBUJPO$PNNJUUFFXBTDPNQPTFE and reappointments to and assessment of the performance of the PG.T.BIJFVBOE.S&MWFSEJOH XJUI.T.BIJFVCFJOHUIF$IBJS 4VQFSWJTPSZ#PBSEBOEUIF&YFDVUJWF#PBSE5IF$PNNJUUFFBMTP 5IFDPNQPTJUJPOPGUIF3FNVOFSBUJPO$PNNJUUFFJTJOMJOFXJUI NPOJUPSTUIF&YFDVUJWF#PBSETQPMJDZPOTFMFDUJPODSJUFSJBBOE the provisions of the Dutch corporate governance code. appointment procedures for senior management.

0OFPGUIFUBTLTPGUIF3FNVOFSBUJPO$PNNJUUFFJTUPNBLF 5IF4FMFDUJPOBOE"QQPJOUNFOUT$PNNJUUFFNFUUISFFUJNFTJO proposals to the Supervisory Board with regard to company UIFQBTUGJOBODJBMZFBS5IF$PNNJUUFFNFNCFSTBMTPDPOTVMUFE remuneration policy, the level of remuneration and the terms of with each other a number of times outside the context of a formal employment of members of the Executive Board and the meeting. On those occasions, the members discussed the current remuneration of the members of the Supervisory Board. BOEGVUVSFTJ[FBOEDPNQPTJUJPOPGUIF4VQFSWJTPSZ#PBSEBOEUIF Executive Board. 5IF$PNNJUUFFTVCNJUUFEBQSPQPTBMUPUIF4VQFSWJTPSZ#PBSE relating to the remuneration of members of the Executive Board 5IF$PNNJUUFFQSFQBSFEUIFQSPQPTBMGPSUIFBQQPJOUNFOUPG BOEDSJUFSJBGPSUIFWBSJBCMFCFOFGJUJO*OBEEJUJPO 5IF Mr Noy as a member of the Supervisory Board, the proposal for 3FNVOFSBUJPO$PNNJUUFFBMTPQSPQPTFEBSFNVOFSBUJPOSFQPSU the reappointment of Messrs Ruis and Van Wingerden as members on the way in which remuneration policy has been implemented in of the Executive Board, and the appointment of Ms Menssen as a practice. member of the Executive Board. The preparatory work to find a *OUIFGJOBODJBMZFBS UIF$PNNJUUFFBMTPDPOTVMUFEUIF$IBJSNBO TVDDFTTPSUP.S#BBSXBTBMTPDPNNFODFE*O .S#BBSJTEVF of the Executive Board about the policy on terms and conditions of UPSFUJSFGSPNUIFDPNQBOZT4VQFSWJTPSZ#PBSE employment for directors of operating companies and executive officers of equivalent rank.

5IF$PNNJUUFFBMTPFYDIBOHFEWJFXTBCPVUUIFDPOTFRVFODFTBT of 1 January 2013 of the change in the legal relationship between new members to be appointed to the Executive Board and the company, resulting from the implementation of the Management BOE4VQFSWJTJPO 1VCMJDBOE1SJWBUF$PNQBOJFT "DU*UXBT established that the company did not need to take any special action but that an appropriate policy did need to be developed.

5IF3FNVOFSBUJPO$PNNJUUFFEJEOPUVTFUIFTFSWJDFTPGBO external independent remuneration adviser during the financial year.

5IF3FNVOFSBUJPO$PNNJUUFFNFUUISFFUJNFTEVSJOHUIFQBTU GJOBODJBMZFBS5IF$IBJSNBOPGUIF&YFDVUJWF#PBSEXBTQSFTFOUBU UIFTFNFFUJOHT5IF$PNNJUUFFNFNCFSTDPOTVMUFEXJUIFBDI other a number of times outside the context of a formal meeting. 5IF$PNNJUUFFIFMEJOEJWJEVBMQFSGPSNBODFFWBMVBUJPOJOUFSWJFXT with the members of the Executive Board as part of the assessment of the Executive Board. 102 – 2012

Composition of the Supervisory Board discussed with shareholders in the General Meeting on 21 April JOUIFDPOUFYUPGUIFBNFOENFOUTUPUIF%VUDI$PSQPSBUF On 25 April 2012, the General Meeting appointed Mr H.L.J. Noy as (PWFSOBODF$PEFNBEFJOMBUF5IF4VQFSWJTPSZ#PBSE a member of the Supervisory Board for a four-year period. CFMJFWFTUIBUUIF#PBSETDPNQPTJUJPOJTJOMJOFXJUIUIJTQSPGJMF  At the end of the General Meeting on 24 April 2013, Mr A. Baar will subject to the comment detailed in the following paragraph. More step down from his position as member of the Supervisory Board details about the profile can be found in the section on corporate when his third four-year term ends. Mr Baar has been a member of governance on page 62 of the Annual Report. UIFDPNQBOZT4VQFSWJTPSZ#PBSETJODF.S#BBSIBTTQFOU almost his entire working life in the construction sector. His 5IF.BOBHFNFOUBOE4VQFSWJTJPO 1VCMJDBOE1SJWBUF$PNQBOJFT  in-depth knowledge of the construction sector and of the Act came into force on 1 January 2013. Amongst other changes, company in particular has enabled him to make a special this Act introduces provisions relating to a more balanced contribution to the performance of the Supervisory Board. His participation of women and men in the management of direct and very pragmatic approach, which was always informed companies. The company itself and a number of major Group by his great interest in the ups and downs of the construction companies are classed as companies governed by these provisions. sector, meant he made a very valuable contribution during his The Act stipulates that participation can be said to be well- membership of the Supervisory Board, for which contribution the balanced if at least 30 per cent of the seats on the Supervisory Supervisory Board and the Executive Board are extremely grateful. Board and Executive Board (and on the boards of major Group companies) are occupied by men and at least 30 per cent by The Supervisory Board intends to fulfill the vacancy left by Mr Baar women and that companies should strive to achieve this well- and will make a recommendation for a candidate to be appointed balanced participation. as member of the Supervisory Board in due course. The six-person Supervisory Board has one woman member and the At the end of the General Meeting on 24 April 2013, Mr H. four-person Executive Board has one woman member, so the Scheffers will step down from his position as member of the Group can be said to have taken steps in the right direction 4VQFSWJTPSZ#PBSEXIFOIJTUFSNFOET*GUIF(FOFSBM.FFUJOH SFDFOUMZ CVUJUIBTOPUZFUSFBDIFEUIFEFTJSFEUBSHFUGJHVSF*O does not make any recommendations, the Supervisory Board particular, those Group companies that still do not have any intends to propose that Mr Scheffers be reappointed to the women directors need to take the necessary steps in this Supervisory Board for a four-year period by the General Meeting direction. on 24 April 2013. As a former Board member, Mr Scheffers possesses a great deal of Both the Supervisory Board and the Executive Board agree with experience and expertise in the field of managing a large UIFJNQPSUBODFPGIBWJOHCBMBODFEQBSUJDJQBUJPOJOUIF(SPVQT PSHBOJTBUJPO*OBEEJUJPO BTGPSNFS$'0IFIBTFYUFOTJWF managerial bodies. Some time ago, the company launched a knowledge and experience of financial administration and number of initiatives to this end. These are set out on page 88 of accounting. Over his past four years as Supervisory Board member, the Annual Report. The Supervisory Board encourages the Mr Scheffers has more than demonstrated his experience in these Executive Board to continue to give its strong support to these GJFMETBOEIFIBTNBEFBWFSZWBMVBCMFDPOUSJCVUJPOUPUIF#PBSET initiatives. performance, both through his work as a member and since NJEBTDIBJSNBOPGUIF"VEJU$PNNJUUFF"DDPSEJOHMZ UIF The retirement schedule for the members of the Supervisory Supervisory Board believes that it is very desirable to reappoint Board is shown on page 117 of the Annual Report and is also .S4DIFGGFSTBTBNFNCFSPGUIFDPNQBOZT4VQFSWJTPSZ#PBSE QVCMJTIFEPOUIFDPNQBOZTXFCTJUF*OBDDPSEBODFXJUIUIF%VUDI 5IF$FOUSBM8PSLT$PVODJMIBTBOOPVODFEUIBUJUEPFTOPUXJTIUP $PSQPSBUF(PWFSOBODF$PEF IFSFBGUFSUIF$PEF 4VQFSWJTPSZ exercise its right to recommend individuals for appointment to the Board members can in principle serve a maximum of three Supervisory Board in connection with the vacancy caused by Mr four-year terms of office. Their reappointment for another term of Scheffers stepping down from the Board. office will naturally be submitted to the shareholders on each occasion. The Supervisory Board had seven members in the past financial year up to the General Meeting on 25 April 2012, after which it had The particulars of the members of the Supervisory Board are six members. stated on pages 116 and 117 of the Annual Report and are an integral part of this report. A profile of the Supervisory Board has been drawn up, which is BWBJMBCMFGPSTIBSFIPMEFSTUPFYBNJOFBUUIFDPNQBOZTPGGJDFBOE The remuneration of Supervisory Board members is stated on XIJDIJTBMTPQVCMJTIFEPOUIFDPNQBOZTXFCTJUF5IJTQSPGJMFXBT page 107 of the Annual Report. 2012 – 103

BAM Rail, BAM Civiel, BAM Infratechniek, BAM Wegen. Construction of the Groningen new-build station, Europark.

The Supervisory Board members do not have any other Composition of the Executive Board SFMBUJPOTIJQTPGBCVTJOFTTOBUVSFXJUIUIFDPNQBOZ*OUIFPQJOJPO PGUIF4VQFSWJTPSZ#PBSE UIF$PEFTSFRVJSFNFOUXJUISFHBSEUP On 25 April 2012, the General Meeting reappointed Messrs J. Ruis independence has been met. BOE31WBO8JOHFSEFOBTNFNCFSTPGUIFDPNQBOZT&YFDVUJWF #PBSE.S7BO8JOHFSEFOTSFBQQPJOUNFOUXBTGPSBGPVSZFBS None of the Supervisory Board members has more than five QFSJPE.S3VJTTSFBQQPJOUNFOUXBTGPSBQFSJPEPGOPNPSFUIBO memberships of Supervisory Boards at Dutch listed companies, one year, this giving time for his successor to be found and for that UIJTCFJOHJOMJOFXJUIUIF$PEF8IFSFB4VQFSWJTPSZ#PBSE TVDDFTTPSTJOEVDUJPO NFNCFSEPFTGVMGJMNPSFUIBOGJWFAEFNBOEJOHTVQFSWJTPSZ *OBO&YUSBPSEJOBSZ(FOFSBM.FFUJOHIFMEPO"VHVTU .T5 positions as referred to in the Management and Supervision Menssen was appointed as a member of the Executive Board for a 1VCMJDBOE1SJWBUF$PNQBOJFT "DU UIJTJTQFSNJUUFECZUIJT"DUT four-year term effective from 1 October 2012. On 1 January 2013, transitional arrangement. .T.FOTTFOUPPLPWFSUIFQPTJUJPOPG$'0GSPN.S3VJT.S3VJT will step down from the Executive Board at the end of the General The Supervisory Board is not aware of any conflicts of interest Meeting to be held on 24 April 2013. between the company and members of the Supervisory Board, or Mr Ruis has been active within the Group for over forty years now. between the company and natural persons or legal entities that After joining BAM in 1971, he worked in various financial positions. hold at least 10 per cent of the shares in the company. *O IFKPJOFEUIFDPNQBOZT&YFDVUJWF#PBSEBT$'0%VSJOH his career at BAM, Mr Ruis has seen first-hand the process of change at the Group, and in particular the period of exceptional growth seen soon after the turn of the century. He played an important role in these processes. The Supervisory Board and the Executive Board are very grateful to Mr Ruis for his great commitment to the Group and for the expert, valuable and always honest way in which he performed a whole host of financial functions within the Group.

*ODPOOFDUJPOXJUIUIFFOEPGIJTGPVSZFBSUFSN .S.+3PHFSTJT stepping down as a member of the Executive Board at the end of the General Meeting on 24 April 2013. The Supervisory Board JOUFOETUPESBGUBCJOEJOHQSPQPTBMGPS.S3PHFSTSFBQQPJOUNFOU as a member of the Executive Board by the General Meeting on 24 April 2013. Mr Rogers has been a member of the Executive Board since mid-2009, and because of his extensive experience of the British construction market, has played an important role in the 104 – 2012

management of the operating companies that are active in the attendance at those meetings is extremely important and that 6OJUFE,JOHEPNBOE*SFMBOEBOEJOUIFNBSLFUTPVUTJEF&VSPQF contact between the company and shareholders outside of The Supervisory Board believes that such assets as his international TIBSFIPMEFSTNFFUJOHTDBOCFJNQPSUBOUGPSCPUIUIFDPNQBOZ experience ensure that Mr Rogers makes a very valuable and the shareholders. The Supervisory Board will ensure that the DPOUSJCVUJPOUPUIF&YFDVUJWF#PBSETQFSGPSNBODFBOEJTPGUIF DPNQBOZBDDFQUTTIBSFIPMEFSTSFRVFTUTGPSUBMLTJOUIPTFDBTFT opinion that his reappointment is very desirable. where talks are considered important. The company itself can also take the initiative and request talks with a shareholder. The During the financial year, the Executive Board was composed of company has a general policy on bilateral contacts with four members, with the appointment of Ms Menssen as at shareholders, investors, analysts and the press. 1 October 2012 temporarily increasing this figure to five members. .S3VJTTSFUJSFNFOUNFBOTUIBUBTGSPN"QSJMUIF The Supervisory Board has discussed the dividend policy and Executive Board will again be composed of four members. dividend proposal for the financial year 2011. As for previous years, the decision has been taken to propose to the General Meeting an The retirement schedule for the members of the Executive Board is optional dividend for 2011. The payout is set at about 30 per cent shown on page 92 of the Annual Report and is also published on - to fit within the range from 30 per cent to 50 per cent - which is UIFDPNQBOZTXFCTJUF considered to be responsible given the current difficult economic Members of the Executive Board are appointed for a period of four conditions. years. They retire at the end of the first Annual General Meeting to be held in the fourth year after the year in which they were appointed. The contractual agreements with members of the External auditor &YFDVUJWF#PBSEXIPXFSFBQQPJOUFECFGPSFUIF$PEFDBNFJOUP effect will be honoured; their appointment is for an indefinite Both in its discussion of the 2011 annual figures and its discussion period. of the 2012 semi-annual figures, the Supervisory Board - as usual - called on the external auditor to provide additional information. The remuneration of the members of the Executive Board is stated The Board noted that the external auditor had received the on page 113 of the Annual Report. financial information on which the quarterly figures, the semi- annual figures, the annual figures and the other interim financial None of the members of the Executive Board holds more than two reports were based and that he had been given the opportunity to AEFNBOEJOHTVQFSWJTPSZQPTJUJPOTBTSFGFSSFEUPJOUIF respond to that information. .BOBHFNFOUBOE4VQFSWJTJPO 1VCMJDBOE1SJWBUF$PNQBOJFT "DU No position of chair of a supervisory body is held. The above is in The Supervisory Board also took cognisance of the reports by the line with the Management and Supervision (Public and Private external auditor and the interim management letter for the $PNQBOJFT "DUBOEUIF$PEF financial year 2012 and discussed these documents with the external auditor and the Executive Board. The Supervisory Board The Supervisory Board has no evidence of any conflicts of interest BMTPEJTDVTTFEUIFGPMMPXVQUPUIFFYUFSOBMBVEJUPSTGJOEJOHTXJUI between the company and members of the Executive Board. the Executive Board. The external auditor was present at the Annual General Meeting of Shareholders on 25 April 2012.

Shareholders and investor relations As part of its consideration of the 2012 Annual Report and Financial Statements, the Supervisory Board assessed the The Annual General Meeting was prepared and the events at the relationship with the external auditor, based on a report from the meeting were discussed afterwards. The Supervisory Board was &YFDVUJWF#PBSEBOEUIF"VEJU$PNNJUUFF(JWFOUIF#PBSET very pleased that the General Meeting went well and that a previous good experiences with the external auditor and the thorough, substantive discussion with the shareholders present FYUFSOBMBVEJUPSTFYQFSUJTFXJUISFHBSEUPUIFDPOTUSVDUJPO had again taken place. The Supervisory Board has approved the industry in general and the Group in particular, the Supervisory use of electronic communication media for the General Meeting. Board sees no reason to propose to the shareholders that the external auditor be changed. The Supervisory Board takes cognisance of an overview of the (SPVQTJOWFTUPSSFMBUJPOTBDUJWJUJFTPOBSFHVMBSCBTJT"TSFHBSET *UJTUIFSFGPSFQSPQPTFEUPUIF(FOFSBM.FFUJOHPG"QSJM contacts with shareholders, the Supervisory Board believes that UIBU1SJDFXBUFSIPVTF$PPQFST"DDPVOUBOUT/7CFSFBQQPJOUFEBT UIJTDPOUBDUTIPVMEQSJNBSJMZUBLFQMBDFJOTIBSFIPMEFSTNFFUJOHT external auditor responsible for auditing the 2013 financial The Supervisory Board believes that a high level of shareholder statements of the Group. 2012 – 105

Corporate governance Final comments

5IFDPNQBOZTDPSQPSBUFHPWFSOBODFTUSVDUVSFBOEJUTDPNQMJBODF The 2012 financial statements, duly prepared by the Executive with that structure were discussed with the shareholders in the Board, will be submitted to the General Meeting for approval. The General Meeting on 21 April 2009. The Supervisory Board and the GJOBODJBMTUBUFNFOUTIBWFCFFOBVEJUFECZUIF(SPVQTFYUFSOBM Executive Board reviewed the corporate governance structure BVEJUPS 1SJDFXBUFSIPVTF$PPQFST"DDPVOUBOUT/7UIF during the financial year and decided that there is no reason to VORVBMJGJFEBVEJUPSTSFQPSUJTJODMVEFEPOQBHFPGUIF"OOVBM change it. However, the rules governing the Supervisory Board and Report. The Supervisory Board has discussed the financial the rules governing the Executive Board have been brought into line statements with the Executive Board in the presence of the XJUIUIFOFXMFHJTMBUJPOPODPOGMJDUTPGJOUFSFTU*ODPOOFDUJPOXJUI external auditor. The Supervisory Board is of the opinion that the this last point, a proposal will be submitted to the General Meeting financial statements, the report by the Supervisory Board and the PO"QSJMUIBUUIFDPNQBOZT"SUJDMFTPG"TTPDJBUJPOCF report by the Executive Board form a good basis on which to hold brought into line with the recent legislation. The proposed changes the Executive Board accountable for the management policies will not significantly affect the content of the above Articles. The pursued and the Supervisory Board accountable for its supervision Supervisory Board and the Executive Board are convinced that Royal of the management policies pursued. The members of the #".(SPVQTDPSQPSBUFHPWFSOBODFJTXFMMPSHBOJTFE1MFBTFSFGFSUP Supervisory Board have signed the financial statements in the corporate governance statement on page 62 of the Annual accordance with their statutory obligations under Article 2:101, 3FQPSUDPODFSOJOHUIFDPNQBOZTDPNQMJBODFXJUIUIF$PEF QBSBHSBQIPGUIF%VUDI$JWJM$PEF

The General Meeting of Shareholders to be held on 24 April 2013 will be invited to declare a dividend for the financial year 2012 of €0.10 in cash per ordinary share or in shares (2011: €0.16 in cash or in shares).

Looking back on the financial year 2012, it may be stated that the construction sector again felt the consequences of the economic DSJTJTJOBMMUIF(SPVQTIPNFNBSLFUT3PZBM#".(SPVQXBTBMTP faced with difficult economic conditions in 2012. 5IFDPOTUSVDUJPOTFDUPSJOUIF(SPVQTIPNFNBSLFUTJTFYQFDUFE to face just as difficult market conditions in 2013 as well. However, interesting opportunities can always be found, even during times of economic crisis. Given the Strategic Agenda 2013-2015, the Supervisory Board is convinced that the Group is capable of capitalising on these opportunities. This is why all our attention and energy must be devoted to the realisation of this Strategic Agenda. This will not only enable the Group to come through the economic crisis successfully but will even mean it can raise its profile as a result. The Supervisory Board feels sure the Group can do this, in view of the fact that the management and the FNQMPZFFTBSFWFSZNVDIJOWPMWFEJOUIFTFFGGPSUT*UJTWFSZ grateful to them for their commitment.

Bunnik, the Netherlands, 6 March 2013 The Supervisory Board 106 – 2012

BAM Utiliteitsbouw (in joint venture), BAM Techniek. Erasmus MC, Rotterdam. 2012 – 107

Remuneration report

The following remuneration report from the Supervisory Board Half of the individual non-financial objective for the members of describes how the remuneration policy has been put into practice the Executive Board consisted of joint corporate social during the past financial year. The report includes summaries of responsibility. This objective was to reduce the number of safety information concerning remuneration received in 2012 and also incidents, to cut $02 emissions and to reduce waste. The other half contains a summary of the remuneration policy provided by the of the individual non-financial objectives in 2012 – depending on Supervisory Board for the coming financial year and subsequent UIFNFNCFSTQPSUGPMJPoSFMBUFEUPJNQSPWJOHUIFDBTIGMPX years. Variable remuneration of 17.5 per cent was awarded to each of the members of the Executive Board for achieving the non-financial objectives (maximum variable remuneration: 20 per cent). Remuneration As regards the individual non-financial objective for the members 5IF3FNVOFSBUJPO$PNNJUUFFJTBQFSNBOFOUDPNNJUUFFPGUIF of the Executive Board for the financial year 2013 is a joint Supervisory Board consisting of at least two members of the corporate social responsibility objective in the form of a reduction 4VQFSWJTPSZ#PBSE5IF3FNVOFSBUJPO$PNNJUUFFJTTVCKFDUUP in the number of safety incidents, increase of the safety awareness

SVMFTFTUBCMJTIFECZUIF4VQFSWJTPSZ#PBSE*UDVSSFOUMZDPOTJTUTPG within the Group, a cut in $02 emissions and a reduction in the .T.BIJFV $IBJS BOE.S&MWFSEJOHBOENFUTFWFSBMUJNFTEVSJOH amount of waste produced. the past financial year. The conditional phantom share awards stated in > table 7 were 5IF3FNVOFSBUJPO$PNNJUUFFEJEOPUVTFUIFTFSWJDFTPGFYUFSOBM given to the members of the Executive Board under the long-term remuneration advisers during the financial year. benefit plan.

Annual salary of members of the Executive Board The company has not awarded any options or shares to members The Supervisory Board looked in detail at the level and structure of of the Executive Board, members of operating company remuneration of members of the Executive Board during the year management teams or employees. The remuneration of the under review. This market comparison, which included the use of Executive Board members is not affected by a change of control at scenario analyses, did not reveal any reasons for proposing the company. No loans were issued to members of the Executive amendments to the remuneration structure as explained in Board. greater detail in the remuneration policy below. The Supervisory Board did not see any reason during the financial The fixed salaries of the Dutch members of the Executive Board year to use its extraordinary powers to adjust or reclaim variable were not index-linked as of 1 January 2012 and will be raised by an or long-term remuneration that had already been awarded. JOEFYFEMJOLFEJODSFBTFPGQFSDFOUBTPG+BOVBSZ*O taking this decision, the Supervisory Board took into consideration Remuneration of the Supervisory Board members that the fact that the salaries of the Dutch members of the The annual remuneration for the members of the Supervisory Executive Board have not been index-linked for the past four years #PBSE JOBDDPSEBODFXJUIUIFQPMJDZBEPQUFEBUUIFTIBSFIPMEFST and that index-linking these salaries brings them in line with the NFFUJOHPO.BZ JTï GPSUIF$IBJSNBO ï GPS upward trend of executive salaries in the Netherlands as well as in UIF7JDF$IBJSNBOBOEï GPSUIFPUIFSNFNCFSTPGUIF line with increases under the UTA collective labour agreement Board, with a bonus of €5,000 for each member who is on any of $"0  UIF$PNNJUUFFTTFUVQCZUIF4VQFSWJTPSZ#PBSE XJUIBNBYJNVN PGPOFCPOVTQFSNFNCFS5IF$IBJSNBOBOEUIFPUIFSNFNCFST A summary of the remuneration of the individual members of the of the Supervisory Board receive an annual fixed expenses Executive Board can be found in > tables 5 and 6. No other allowance of €3,280 and €1,640 respectively. A quarter of the compensation was awarded to members of the Executive Board in annual remuneration and the annual fixed expenses allowance is the financial year other than the compensation indicated in tables paid out during the course of each quarter. 00 and 00. No remuneration was awarded to former members of the Executive Board in the past financial year. The Supervisory Board considers that the remuneration of members of the Supervisory Board is at a level which is currently Annual variable remuneration and long-term remuneration for the QSPQFSMZDPNQBSBCMFXJUICVTJOFTTFTPGBTJNJMBSTJ[FBOEOBUVSF members of the Executive Board to the Group. The members of the Executive Board were not awarded in variable The company has not awarded any options or shares to members remuneration for 2012 in relation to the financial objectives of the Supervisory Board. The remuneration of the Supervisory (maximum amount of variable remuneration is 40 per cent). #PBSENFNCFSTJTOPUBGGFDUFECZUIFDPNQBOZTSFTVMUT PSCZBOZ 108 – 2012

change of control at the company. No loans were issued to Remuneration package members of the Supervisory Board. The total remuneration of the members of the Executive Board of Royal BAM Group consists of an annual salary, variable remuneration, a remuneration plan that gives long-term rewards Remuneration policy GPSJNQSPWFNFOUT BQFOTJPOBOEPUIFSTFDPOEBSZDPOEJUJPOT*U was decided to use the median of the aforementioned 5IF4VQFSWJTPSZ#PBSEESBXTVQUIFDPNQBOZTSFNVOFSBUJPO remuneration market for this total remuneration. The company QPMJDZPOUIFCBTJTPGBEWJDFGSPNJUT3FNVOFSBUJPO$PNNJUUFF does not distribute shares to members of the Executive Board or 3PZBM#".(SPVQT(FOFSBM.FFUJOHGPSNBMMZBEPQUTUIF to anyone else working in the Group, nor are they given any remuneration policy. Once the remuneration policy has been entitlements to shares (i.e. share options). The company does not adopted, the Supervisory Board determines the remuneration for have any remuneration rules that are related to a change of the individual members of the Executive Board, again on the basis control at the company. The way in which the remuneration PGSFDPNNFOEBUJPOTCZJUT3FNVOFSBUJPO$PNNJUUFF5IF package is made up – a fixed salary and limited short and 3FNVOFSBUJPO$PNNJUUFFTSFHVMBUJPOTBSFQVCMJTIFEPO3PZBM long-term variable remuneration elements – provides a payment #".(SPVQTXFCTJUF5IFNFNCFSTPGUIF&YFDVUJWF#PBSE ceiling. Each year, using scenarios prepared by the Remuneration received remuneration in the past financial year in line with the $PNNJUUFF UIF4VQFSWJTPSZ#PBSEBOBMZTFTUIFMFWFMPGUIJTDFJMJOH remuneration policy adopted by the General Meeting on 8 May and the make-up and interrelationship of the elements in the 2007 and amended by the General Meeting on 20 April 2011 remuneration package, taking into account the relevant because of the introduction of a new long-term benefit plan. remuneration market and the remuneration ratios within the Group. Points of departure The remuneration policy is geared to attracting and retaining Fixed annual salary qualified people and motivating them to achieve Royal BAM Upon appointment, the annual salary of the individual member of (SPVQTPCKFDUJWFT1BSUJDVMBSFNQIBTJTJTQMBDFEPOFYQFSJFODFPG the Executive Board originating from the BAM organisation is UIF(SPVQT JOUFSOBUJPOBM BDUJWJUJFTBOEUIFOFDFTTBSZ usually less than the standard salary for this Board appointment. management qualities. The Supervisory Board determines the development of the NFNCFSTTBMBSZ UIFQSJODJQMFCFJOHUIBUUIFEJGGFSFODFCFUXFFO The policy is also aimed at safeguarding growth in the value of the starting salary and the standard salary will be bridged in several enterprise, motivating individuals and increasing the years if the Board Member fulfils his or her duties properly. attractiveness of the enterprise for highly qualified executives, including those from other industries, so as to interest them in The annual evaluation and change in the annual salary generally Royal BAM Group as an employer. The remuneration level and take place on 1 January of each year. The evaluation considers structure are based partly on the development of results, as well personal performance, the results of the past year, the extent to as other developments that are relevant to the company, including XIJDIUIF#PBSE.FNCFSTDVSSFOUTBMBSZJTMFTTUIBOUIFTUBOEBSE OPOGJOBODJBMJOEJDBUPSTXIJDIBSFSFMFWBOUGPSUIFDPNQBOZT salary and general changes in the remuneration market. long-term objectives. Annual variable remuneration *OPSEFSUPBDIJFWFUIFTFQPJOUTPGEFQBSUVSF SFNVOFSBUJPOJTTFU Each member of the Executive Board is eligible for annual variable at a competitive level for the relevant national general remuneration, with the level depending on the achievement in the remuneration market for directors and other senior managers of year concerned of targets agreed beforehand between the MBSHFDPNQBOJFT*OUIFDBTFPGNFNCFSTPGUIF&YFDVUJWF#PBSE  Supervisory Board and the Executive Board that support the the equivalent remuneration possibilities in their country of FYFDVUJPOPG3PZBM#".(SPVQTTUSBUFHJDBHFOEB"SFTQPOTJCMF residence are also taken into account. The Supervisory Board will balance is struck between short-term and long-term focus. The regularly check the remuneration package to ensure that it variable remuneration actually achieved is set by the Supervisory complies with the assumptions underlying the remuneration #PBSEPOUIFBEWJDFPGUIF3FNVOFSBUJPO$PNNJUUFF BUXIJDI policy. The remuneration policy will also be checked regularly; point an assessment is also made of the possible results of the changes in the policy will be put forward for adoption at the variable remuneration elements and their consequences for the General Meeting. total remuneration of members of the Executive Board. 2012 – 109

The maximum annual variable remuneration is 60 per cent of the employment agreements of Executive Board members since the GJYFEQBSUPGUIF#PBSENFNCFSTBOOVBMTBMBSZ BQFSDFOUBHF JOUSPEVDUJPOPGUIF%VUDI$PSQPSBUF(PWFSOBODF$PEF which the Supervisory Board considers at this point to be properly proportionate to the fixed element of the remuneration package. Long-term benefit When this percentage is being set, it is designed to be in line with A remuneration element that gives long-term rewards for the relevant remuneration market and the levels of variable improvements has also been incorporated in the remuneration remuneration appropriate for senior officials of Royal BAM Group. policy for members of the Executive Board.

The annual variable remuneration depends on the achievement of This long-term benefit plan is based on remuneration in the form previously set, measurable targets which are assessable and which of conditionally awarded phantom shares. These include a can be influenced. The portion of the variable remuneration that is dividend right, to which the same conditions apply as to the related to financial targets is a maximum of 40 per cent of the phantom shares. They are reinvested. Three years after the GJYFEQBSUPGUIF#PBSENFNCFSTBOOVBMTBMBSZ5IFBOOVBMSFTVMU conditional award, the phantom shares become unconditional, if PG3PZBM#".(SPVQJTEFDJTJWFJOUIJTSFHBSE*GUIFBHSFFEBOOVBM the level of performance achieved is sufficient. The unconditional result is achieved, the variable remuneration is 40 per cent, with a phantom shares are then subject to a transfer restriction for QSPQPSUJPOBUFSFEVDUJPOJGUIFCVEHFUFESFTVMUJTOPUBDIJFWFE*G another two years. The cash equivalent will only be paid out at the the annual result is a great deal less than the budgeted figure, this end of this period. A long-term benefit therefore remains valid for QBSUPGUIF#PBSE.FNCFSTSFNVOFSBUJPOJTOPUQBJEPVU five years. The award consists of phantom shares, i.e. no shares or options are issued. A maximum of 20 per cent of the annual salary is related to non-financial targets that are derived from the Royal BAM Group The amount of the unconditional long-term benefit depends on strategic agenda. The strategic agenda defines, among other the extent to which the target performance level is achieved. The things, objectives that stimulate long-term value creation for the target performance is development in the value of BAM shares (i.e. shareholders, such as further growth in specific market segments, improved share price plus dividend) as compared to the average corporate social responsibility, product development, risk development in the value of shares in the following companies management (including safety), staff development and knowledge which are similar to BAM: Balfour Beatty, Ballast Nedam, Bilfinger, management. The position in relation to these topics is also that Heijmans and Skanska. they are formulated and evaluated as far as possible in assessable terms. Performance is assessed over a three year period (referred to as UIFAQFSGPSNBODFQFSJPE TUBSUJOHPO+BOVBSZPGUIFZFBSJO The variable remuneration consists of an annual cash payment and which the long-term benefit is awarded. The development in the is paid out in the following year. TIBSFWBMVF 543 JF5PUBM4IBSFIPMEFST3FUVSO PGCPUI#".BOE the peer group (i.e. an average) is recorded at the end of each *ODBTFTXIFSFUIFWBSJBCMFSFNVOFSBUJPOJTBXBSEFEPOUIFCBTJT quarter in the performance period. The development is then of inaccurate (financial) data, the Supervisory Board can adjust the calculated based on the average of all end of quarter TSRs variable remuneration accordingly, and the company is entitled to SFDPSEFEEVSJOHUIFQFSGPSNBODFQFSJPE$POTFRVFOUMZ #".T reclaim (any part of) the variable remuneration paid to a director TSR is not absolute, but relative, as it involves comparison with a on the basis of incorrect (financial) information. peer group.

*OUIFDBTFPGOFXBXBSETPGWBSJBCMFSFNVOFSBUJPOUPEJSFDUPST  The Supervisory Board may decide in due course that future based on quantified performance criteria, the Supervisory Board QFSGPSNBODFTIPVMEOPUCFMJOLFEUPUIF5PUBM4IBSFIPMEFST has the right to amend the awards in relation to the level of Return alone, but also to other criteria such as sustainability as previous years if it considers that there would be an unreasonable soon as those criteria are sufficiently measurable. The Supervisory outcome, partly based on the remuneration policy adopted by the #PBSEDBOBMTPPQUUPDIBOHFUIFQFFSHSPVQTDPNQPTJUJPOJGJU shareholders. decides that one of the peer group companies is no longer comparable to BAM. Any companies to be added to the peer group The Supervisory Board also has the power to amend the existing must be deemed comparable to BAM by the Supervisory Board. conditional awards of variable remuneration with quantified performance criteria if, in its opinion, applying the award without The phantom shares awarded conditionally to the Executive Board amendment would have an unreasonable and unintended members are taxed when they become unconditional (i.e. three outcome. The Supervisory Board would only use these powers as a years after the award). The Executive Board members have to pay last resort. These matters have all been incorporated into the the tax themselves. The company will not provide any loans, nor 110 – 2012

can a long-term benefit be paid out in part or in full for the The authority to implement the long-term benefit plan is vested in purposes of paying the tax due on the long-term benefit. The the Supervisory Board. The Supervisory Board can at all times long-term benefit is not paid out until two years after it becomes DIBOHFPSUFSNJOBUFUIFTDIFNF*GUIF4VQFSWJTPSZ#PBSEEFDJEFT unconditional. to terminate or make material changes to the long-term benefit plan, the next General Meeting will be asked to adopt a resolution *OQSBDUJDF FBDI&YFDVUJWF#PBSENFNCFSJTBXBSEFEBDPOEJUJPOBM UPUIBUFGGFDU*OFYDFQUJPOBMDJSDVNTUBODFTBOEJOBDDPSEBODF long-term benefit (i.e. a number of phantom shares) every year on with the requirements of reasonableness and fairness, the the sixth day after the Annual General Meeting. The number of Supervisory Board can decide to make a long-term benefit conditional phantom shares awarded is equal to 50 per cent of the VODPOEJUJPOBMPSMJGUUIFUSBOTGFSSFTUSJDUJPO*OFYDFQUJPOBM NFNCFSTGJYFEBOOVBMTBMBSZEJWJEFECZUIFBWFSBHFDMPTJOHQSJDF circumstances (e.g. divisions, mergers, changes in company of BAM shares over the five trading days preceding the award date. control), the Supervisory Board is authorised to withdraw conditional and unconditional long-term benefits in exchange for The conditionally awarded long-term benefit (i.e. the phantom a cash payment at market value. shares) becomes unconditional three years after the date of the conditional award. *G#".TDBQJUBMDIBOHFT UIF4VQFSWJTPSZ#PBSEXJMMNPEJGZUIF long-term benefits (both before and after they become The number of phantom shares awarded unconditionally depends unconditional), such that the market value of the long-term POUIFFYUFOUUPXIJDI#".T5PUBM4IBSFIPMEFST3FUVSOFYDFFET benefits after modification is as close as possible to the market UIFQFFSHSPVQ5PUBM4IBSFIPMEFST3FUVSO BTBQFSDFOUBHF GPSUIF value before modification. performance period. The Supervisory Board is authorised to change the number of 5IFHSBEVBUFETDBMFTIPXOCFMPXBQQMJFT*G#".PVUQFSGPSNTUIF phantom shares to be awarded conditionally or unconditionally, if peer group by the percentages indicated, the corresponding awards the Supervisory Board determines that failure to do so would lead are given: to unreasonable results, including with respect to the < 0 percent: 0 per cent award remuneration policy adopted by the General Meeting. 0-5 percent: 35 per cent award 5-10 percent: 45 per cent award 5IF4VQFSWJTPSZ#PBSETTQFDJBMQPXFSToBTTUBUFEJOUIFMBTUUISFF 10-15 percent: 55 per cent award paragraphs about annual variable remuneration – also apply to the 15-20 percent: 65 per cent award long-term benefit plan. 20-25 percent: 75 per cent award 25-30 percent: 85 per cent award Only Executive Board members are eligible for the long-term > 30 percent: 100 per cent award benefit plan. A long-term benefit only becomes unconditional for (i.e. the percentage indicated of the number of phantom shares an Executive Board member if that member is an Executive Board conditionally awarded three years previously). member on the date when the long-term benefit becomes VODPOEJUJPOBM*GUIFQFSTPODPODFSOFEJTOPMPOHFSBO&YFDVUJWF This number of phantom shares is now an unconditional award, but Board member as of that date due to no fault of his/her own, he/ a transfer restriction then applies for a two year period known as she is entitled to the long-term benefit pro rata. The long-term UIFAMPDLVQQFSJPE%VSJOHUIFMPDLVQQFSJPE UIFMPOHUFSN benefits of former Executive Board members in this situation are benefit amount depends only on the development of the value of also subject to a two-year lock-up period. Former Executive Board BAM shares (i.e. share price plus dividend) and is therefore no members who are no longer members because of other reasons as MPOHFSBGGFDUFECZUIFQFFSHSPVQTQFSGPSNBODF of the date when the long-term benefits become unconditional will lose their right to long-term benefits which are still The company will pay out on the phantom shares that have become conditional. However, they do retain their right to long-term unconditional on the first working day after the lock-up period (i.e. benefits that are unconditional, subject to the two-year lock-up five years after the conditional award). This payout is in cash at a period. value per phantom share that is equal to the average current rate of the BAM share during the five trading days preceding the date of The Supervisory Board can decide that Executive Board members the payout. appointed after the conditional award date and before The cash amount per long-term benefit paid to an Executive Board 31 December of the award year will receive part of the long-term member will never exceed one and a half times the fixed salary of benefit awarded to Executive Board members in the year the Executive Board member on the day of the payout. concerned. 2012 – 111

BAM Utiliteitsbouw, BAM Techniek, Interflow. Isala Klinieken hospital, Zwolle. Architect: Alberts & Van Huut, a/d Amstel. 112 – 2012

"UUIFSFRVFTUPGUIF4VQFSWJTPSZ#PBSE UIFDPNQBOZTFYUFSOBM The contracts of employment of members of the Executive Board auditor will check the calculations carried out and conclusions are for an indefinite period. The members of the Executive Board reached in connection with the long-term benefit plan, in which have a notice period of six months for the company and three DBTFUIFFYUFSOBMBVEJUPSTBTTFTTNFOUXJMMCFCJOEJOH months for the member. The company regards a notice period of three months as suitable for a director. The notice period for the Pension company is twice the length of the notice to be given by the With respect to pensions, the sector regulations will be adopted director in line with the statutory rules on notice periods in wherever possible, with surplus schemes based on defined FNQMPZNFOUDPOUSBDUT0O.S3PHFSTBQQPJOUNFOU UIFSVMFTTFU contributions and contributions from the participants. Members PVUJOIJTFNQMPZNFOUDPOUSBDUXJUI#".$POTUSVDU6,-UEXFSF of the Executive Board are subject to the new pension scheme and continued. transitional arrangements with effect from 1 January 2006, as applicable from that date within Royal BAM Group for all The relationship between the members of the Executive Board and comparable employees following the introduction of the Act of the company changed as of 1 January 2013 with the introduction Parliament concerning early retirement, pre-pension and of the Management and Supervision (Public and Private life-course savings schemes (wet VPL). The costs of trend-based $PNQBOJFT "DU 8FUCFTUVVSFOUPF[JDIU "TTVDI UIF indexation of underlying pension rights have been included in the employment relationship between new members of the Executive pension contributions with effect from 2009. The company does Board and the company will not be classified as a a contract of not have any early retirement schemes. employment. The company will develop a policy to this effect. *GUIFDPNQBOZUFSNJOBUFTUIFDPOUSBDUPGB#PBSENFNCFS Other secondary conditions of employment appointed after 1 January 2004, the maximum severance payment As for all the other employees, Royal BAM Group has a competitive XJMMCFPOFZFBSTTBMBSZ*GUIBUJTDMFBSMZVOSFBTPOBCMFGPSB package of secondary conditions of employment for the members member of the Executive Board who is made redundant during or of the Executive Board. This package includes such matters as following the expiry of his first term on the Board, that Board healthcare and disability insurance, personal accident insurance, a member will be eligible for a severance payment of a maximum of DBSTDIFNFBOEEJSFDUPSTMJBCJMJUZJOTVSBODF3PZBM#".(SPVQ twice his annual salary. does not give loans, warrants and the like to members of the Executive Board or to other employees, except for the The Supervisory Board can decide on a higher payment if the arrangements set out below. Board member concerned has been employed by Royal BAM Group for a long period of time. This provision was made because $VSSFOUBOEGPSNFSNFNCFSTPGUIF4VQFSWJTPSZ#PBSEBOE of the fact that long periods of employment at the same company current and former members of the Executive Board are covered are not unusual in the construction industry. Reducing rights by the indemnity, under the Articles of Association, against claims accrued in that way may be considered undesirable or made against them in respect of actions or omissions after 1 unreasonable in certain circumstances. January 2005 in the performance of the duties of their position, unless said actions or omissions constituted wilful, deliberately The employment contracts of members of the Executive Board reckless or seriously culpable conduct and/or consisted of traffic appointed before 1 January 2004 do not include a provision offences. This facility also applies to all employees and former SFHBSEJOHTFWFSBODFQBZ*GTVDIBNFNCFSJTNBEFSFEVOEBOU UIF employees of Royal BAM Group. Supervisory Board will determine the amount of the severance pay taking into account the circumstances of the case, current 5IFDPNQBOZIBTUBLFOPVUEJSFDUPSTBOEPGGJDFSTMJBCJMJUZ practice, prevailing legislation and the requirements of good insurance under standard market terms and conditions for the corporate governance. See > table 8. members of the Supervisory Board, the members of the Executive Board, the members of the operating company management The company has no other remuneration rules, beyond the teams and all other directors and officers in Royal BAM Group. remuneration package mentioned above, in relation to payments on the departure of members of the Executive Board or members Period of appointment and contracts of employment of the Supervisory Board, nor are there any other rights to Members of the Executive Board are appointed for a period of four one-time payments. years. The contractual agreements with members of the Executive #PBSEXIPXFSFBQQPJOUFECFGPSFUIF%VUDI$PSQPSBUF (PWFSOBODF$PEFDBNFJOUPFGGFDUXJMMCFIPOPVSFEUIFJS appointment is for an indefinite period. 2012 – 113

Securities rules Remuneration policy for 2013 and subsequent The company has rules relating to the possession of and trading in years securities; these rules also include regulations for members of the Executive Board and the Supervisory Board relating to the The remuneration policy described above will remain in effect in possession of and trading in securities other than those issued by the financial year 2012 and subsequent years. No material changes UIFDPNQBOZ5IFTFSVMFTBSFQVCMJTIFEPOUIFDPNQBOZTXFCTJUF are planned in the remuneration policy in the coming period.

Bunnik, the Netherlands, 6 March 2013 Supervisory Board

Table 5 Fixed annual salary, annual variable remuneration, pension premiums and other benefits (x €1,000)

Variable Pension Other Gross salary remuneration 3 premiums 4 benefits 5 Crisis levy

2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

N.J. de Vries 610 610 107 336 142 108 46 9 126 - T. Menssen 115 1 - 20 - 5 - 2 - - - M.J. Rogers 420 2 420 2 73 2 231 2 103 97 57 1 - - J. Ruis 460 460 81 253 112 108 18 9 88 - R.P. van Wingerden 460 460 81 253 62 45 37 9 87 -

1 As of 1 October 2012 (based on 2012 annually salary of €460,000). 2 Amount in pound sterling. 3 This is the variable remuneration to be paid on an annual basis; see > table 6 and 7 for the long-term benefit plan. 4 The pension premiums are the gross pension costs recognised in the income statement. 5$POTJTUTPGUIFBOOVBMFYQFOTFTBMMPXBODF ï  UIFJOTVSBODFQSFNJVN ï  BOEDPTUTJOWPMWFEJOUIFHSBOUFEQIBOUPNTIBSFT 114 – 2012

Table 6 Long-term benefit 2011-2014 1, conditional phantom shares (value in €)

As to the award date Ultimo 2012 number value number 2 value 3 TSR- graduated performance scale N.J. de Vries 56,027 305,000 59,918 - -0.1% 0% T. Menssen ------M.J. Rogers 43,483 236,713 46,503 - -0.1% 0% J. Ruis 42,250 230,000 45,184 - -0.1% 0% R.P. van Wingerden 42,250 230,000 45,184 - -0.1% 0%

1 Awarded on 2 May 2011; award becomes unconditional on 2 may 2014; lock-up period up to and including 2 May 2016. 2*ODSFBTF JODPOOFDUJPOXJUIEJWJEFOE CZPGUIFOVNCFSPGQIBOUPNTIBSFTJOUIFQSFWJPVTZFBSUIJTSBUJPJTUIFTBNFBTUIFSBUJPGPS the dividend paid out on the ordinary shares in 2012. 3 Potential value based on the table used to calculate the closing price of BAM ordinary shares at year-end 2012 (€3,227) and on the table used to DBMDVMBUFUIFOVNCFSPGQIBOUPNTIBSFTUIBUCFDPNFVODPOEJUJPOBMUISFFZFBSTBGUFSUIFBXBSE5IF5PUBM4IBSFIPMEFST3FUVSOQFSGPSNBODFVTFE in the calculation was based on the quarterly average for 2011 and 2012. The ultimate TSR performance will be determined based on the quarterly average for the years 2011, 2012 and 2013. The long-term benefit paid out in cash will never be more than one and a half times the fixed annual salary on the day of payment.

Table 7 Long-term benefit 2012/2015 1 $POEJUJPOBMQIBOUPNTIBSFT(value in €)

As to the award date Ultimo 2012 number value number 2 value 3 TSR- graduated performance scale N.J. de Vries 112,132 305,000 112,132 126,648 3.6% 35% T. Menssen ------M.J. Rogers 94,983 258,353 94,983 107,278 3.6% 35% J. Ruis 84,559 230,000 84,559 95,505 3.6% 35% R.P. van Wingerden 84,559 230,000 84,559 95,505 3.6% 35%

1 Awarded on 4 May 2012; unconditional on 4 May 2015; lock-up period up to and including 4 May 2017. 2 Potential value determined on the basis of the closing price of BAM ordinary shares at year-end 2012 (€3,227) and on the table used to calculate the OVNCFSPGQIBOUPNTIBSFTUIBUCFDPNFVODPOEJUJPOBMUISFFZFBSTBGUFSUIFBXBSE5IF5PUBM4IBSFIPMEFST3FUVSOQFSGPSNBODFVTFEJOUIFDBMDVMBUJPO was based on the quarterly average for 2012. The ultimate TSR performance will be determined based on the quarterly average for the years 2012, 2013 and 2014. The long-term benefit paid out in cash will never be more than one and a half times the fixed annual salary on the day of payment.

Table 8 $POUSBDUTPGFNQMPZNFOUBQQPJOUNFOUTPGNFNCFSTPGUIF&YFDVUJWF#PBSE

Year Date of Period of Contract Notice period Notice period Severance employed appointment appointment type for company for director payment

N.J. de Vries 1977 28.05.1998 unlimited *OEFGJOJUF 6 months 3 months not agreed

T. Menssen 2012 01.10.2012 1 4 years 4 years 6 months 3 months ZFBSTTBMBSZ

M.J. Rogers 1979 21.04.2009 1 4 years *OEFGJOJUF 6 months 3 months minimal €600,000.–; NBYZFBSTTBMBSZ

J. Ruis 1971 07.05.2008 2 4 years *OEFGJOJUF 6 months 3 months none

R.P. van Wingerden 1988 07.05.2008 1 4 years *OEFGJOJUF 6 months 3 months NBYZFBSTTBMBSZ

1 First appointment. 2 Refers to reappointment; first appointment 7 May 2004. 2012 – 115

BAM International. Design and construction of a 2.4-kilometre LNG jetty in Papua New Guinea by BAM Clough Joint Venture. BAM Infraconsult/DMC was involved in the design. 116 – 2012

Particulars of the Supervisory Board members

P.A.F.W. Elverding (1948), Chairman A. Baar (1943) Mr Elverding graduated from the University of Amsterdam. After Mr Baar has spent a large part of his career in the construction completing his law degree in 1972, Mr Elverding began his career sector. Having started at a young age as a construction worker, JOUIFIFBMUIDBSFTFDUPS)FUIFOXFOUPOUPXPSLBU"L[P$IFNJF he went on to hold many different management positions, both Nederland and De Bijenkorf in various human resources positions. executive and administrative, at various levels. He held senior *O IFKPJOFEUIFNBOBHFNFOUUFBNPG%F#JKFOLPSG  management positions at Van Wijnen and at the Amstelland BTTVNJOHSFTQPOTJCJMJUZGPSIVNBOSFTPVSDFT*O .S Group and during his time with Amstelland acquired experience Elverding joined DSM, serving in various management positions in XPSLJOHJOUIF6OJUFE4UBUFTPG"NFSJDB.S#BBSXBT$IBJSNBOPG different parts of the DSM Group with responsibility for human the Management Board of NBM-Amstelland from 1990 to 2000. resources and general affairs. He was appointed to the DSM Mr Baar is a Dutch national. He does not own any shares in the &YFDVUJWF#PBSEJOBOECFDBNF$IBJSNBOPGUIF&YFDVUJWF $PNQBOZTDBQJUBM Board in 1999. Mr Elverding retired in 2007. Mr Baar was appointed as a member of the company’s Supervisory Mr Elverding is a Dutch national. He does not own any shares in Board in 2001 and re-appointed in 2005 and 2009. Mr Baar was UIF$PNQBOZTDBQJUBM Vice-Chairman of the Supervisory Board from 2007 to November 2011. Other offices:$IBJSNBOPGUIF4VQFSWJTPSZ#PBSEPG21BSL 7JDF$IBJSNBOPGUIF4VQFSWJTPSZ#PBSEPG*/(7JDF$IBJSNBOPG the Supervisory Board at SHV Holdings; member of the Ms C.M.C. Mahieu (1959) 4VQFSWJTPSZ#PBSEPG3PZBM'SJFTMBOE$BNQJOBNFNCFSPGUIF Ms Mahieu studied Economics at the University of Amsterdam, #PBSEPG4UJDIUJOH*OTUJUVVU(", where she graduated in 1984. She began her career at Royal Dutch Mr Elverding was appointed to the Supervisory Board in 2011 and in Shell, where she held various management positions dealing with November 2011 as Chairman of the Supervisory Board. human resources, communication and corporate strategy. After several years as a consultant (at Spencer Stuart, for example), Ms H. Scheffers (1948), Vice-Chairman Mahieu joined Royal Philips Electronics as Senior Vice-President Mr Scheffers trained as a chartered accountant. He was employed $PSQPSBUF)VNBO3FTPVSDFTJO4IFUPPLVQIFSDVSSFOU from 1974 until 1993 at Koninklijke Bunge, where he successively position as Executive Vice President and Global Head of Human IFMEUIFQPTJUJPOTPGJOUFSOBMBVEJUPS &VSPQFBO$POUSPMMFSBOE Resources at Aegon in September 2010. Ms Mahieu is a Dutch President Northern Europe. He was subsequently employed as an OBUJPOBM4IFEPFTOPUPXOBOZTIBSFTJOUIF$PNQBOZTDBQJUBM &YFDVUJWF#PBSENFNCFSBU-FBTF1MBO$PSQPSBUJPOGSPNVOUJM Other offices: member of the Supervisory Board of the )FKPJOFE4)7)PMEJOHTJO XIFSFIFXBT$'0POUIF Jeugdformaat; member of the Supervisory Board of Bakkersland; Executive Board until he retired in 2007. Mr Scheffers is a Dutch member of the Advisory Board of the Management Development OBUJPOBM)FEPFTOPUPXOBOZTIBSFTJOUIF$PNQBOZTDBQJUBM 0GGJDF "#% PGUIF.JOJTUSZPGUIF*OUFSJPS Other offices: $IBJSNBOPGUIF4VQFSWJTPSZ#PBSEPG"BMCFSUT Ms Mahieu was appointed to the Supervisory Board in 2011. *OEVTUSJFT7JDF$IBJSNBOPGUIF4VQFSWJTPSZ#PBSEPG'MJOU Holding; member of the Supervisory Board of Aon Hewitt Nederland; member of the Supervisory Board of Royal Friesland $BNQJOBNFNCFSPGUIF#PBSEPG%JSFDUPSTPG4UJDIUJOH "ENJOJTUSBUJFLBOUPPS"BOEFMFO,"4#"/,$IBJSNBOPGUIF *OWFTUNFOU$PNNJUUFFPG/1.$BQJUBM Mr Scheffers was appointed to the Supervisory Board in 2009 and in November 2011 as Vice-Chairman of the Supervisory Board. 2012 – 117

From the left: P.A.F.W. Elverding, H. Scheffers, A. Baar, C.M.C. Mahieu, H.L.J. Noy and K.S. Wester.

H.L.J. Noy (1951) K.S. Wester (1946) Mr Noy completed his studies at Eindhoven University of Mr Wester studied civil engineering at Delft University of 5FDIOPMPHZBUUIFFOEPG.S/PZXPSLFEGPS"3$"%*4 Technology. After graduating in 1969, he worked briefly for Fugro throughout his entire career. Starting in 1975, he occupied various as a geotechnical engineer, after having performed military positions within the company, which at that time still operated TFSWJDF)FUIFODPNNFODFEFNQMPZNFOUBU$PTUBJO#MBOLFWPPSU under the name Heidemij. From 1989 to 1994, he was a member and later at Ballast Nedam, working in the United Kingdom, the of the Management Board of the consultancy department of the 6OJUFE"SBC&NJSBUFTBOE,VXBJU*O IFSFUVSOFEUP'VHSP  %VUDIEJWJTJPO UIFMBTUUXPZFBSTBT$IBJSNBOPGUIF#PBSE*O where he held various management positions before being 1994, Mr Noy was appointed as a member of the Executive Board appointed to the Fugro Executive Board as a member under the BOEJOBT$&0BOE$IBJSNBOPGUIF&YFDVUJWF#PBSEPG "SUJDMFTPG"TTPDJBUJPOJOBOEHPJOHPOUPCFDPNF$IBJSNBO "3$"%*4VOUJMIFTUFQQFEEPXOJO.BZ.S/PZJTB%VUDI of the Executive Board in 2005 (a position he held until his DJUJ[FOBOEJTZFBSTPGBHF)FEPFTOPUPXOBOZTIBSFTJOUIF retirement in 2012). Mr Wester is a Dutch national and does not $PNQBOZTDBQJUBM own any shares in the company. Other offices: member of the Supervisory Board of Fugro; member Other offices: NFNCFSPGUIF4VQFSWJTPSZ#PBSEPG"$5"NFNCFS of the Supervisory Board of Nederlandse Gasunie; member of the PGUIF4VQFSWJTPSZ#PBSEPG*W(SPFQNFNCFSPGUIF4VQFSWJTPSZ #PBSEPGUIF/FUIFSMBOET"TTPDJBUJPOPG4FDVSJUJFT*TTVJOH Board of Novek $PNQBOJFT 7&60 FYUSBPSEJOBSZNFNCFSPGUIF%VUDI4BGFUZ Mr Wester was appointed to the Supervisory Board in 2011. Board. Mr Noy was appointed to the Supervisory Board in 2012.

Retirement schedule for the Supervisory Board

Year of Year of Year of Current As of January 2013 appointment re-appointment retirement term 1

P.A.F.W. Elverding 2011 2015 1 H. Scheffers 2009 2013 1 A. Baar 2001 2005, 2009 2013 3 $.$.BIJFV 2011 2015 1 H.L.J. Noy 2012 2016 1 K.S. Wester 2011 2015 1

1 Members of the Supervisory Board are appointed / reappointed for a maximum of four years.

2012 – 119

Financial statements 2012

120 $POTPMJEBUFECBMBODFTIFFUBU%FDFNCFS 121 $POTPMJEBUFEJODPNFTUBUFNFOU 122 $POTPMJEBUFETUBUFNFOUPGDPNQSFIFOTJWFJODPNF 123 $POTPMJEBUFETUBUFNFOUPGFRVJUZ 124 $POTPMJEBUFEDBTIGMPXTUBUFNFOU

125 Notes to the consolidated financial statements 125 1. General information 126  $PNQBOZQSPGJMF 127 3. Summary of significant accounting policies 141 4. Financial risk management 146  $SJUJDBMBDDPVOUJOHFTUJNBUFTBOEKVEHFNFOUT 148 6. Segment information 151 7. Overview of projects 154 8. Property, plant and equipment 156  *OUBOHJCMFBTTFUT 159 10. PPP receivables 160 11. Associates 161 12. Other financial assets 161  *OWFOUPSJFT 162 14. Trade and other receivables 164  $BTIBOEDBTIFRVJWBMFOUT 164 16. Share capital 166 17. Reserves 167  $BQJUBMCBTF 167 19. Borrowings 173 20. Derivative financial instruments 174 21. Employee benefit assets and obligations 180 22. Provisions 181 23. Deferred tax 183 24. Trade and other payables 183 25. Personnel expenses 184  *NQBJSNFOUT 184  "VEJUPSTGFFT 185 28 Finance income and expense 185 29. Tax on profit 186 30. Earnings per share 187 31. Dividends 188  $POUJOHFODJFT 188  $PNNJUNFOUT 189 34. Business combinations 189 35. Assets held for sale and discontinued operations 191 36. Related-party transactions 194 37. Joint ventures 195  $PODFTTJPOT 197 39. Government grants 197 40. Research and development 197 41. Events after balance sheet date

198 $PNQBOZCBMBODFTIFFUBU%FDFNCFS 198 $PNQBOZJODPNFTUBUFNFOU 199 Notes to the company financial statements

208 Other information 211 *OEFQFOEFOUBVEJUPSTSFQPSU 212 Overview of principal subsidiaries and associates 213 Organisational structure 214 Offices 215 Executive officers 216 Ten years of key data 218 Key financial dates 120 – 2012

Consolidated balance sheet as at 31 December (x € 1,000)

2012 2011

8 Property, plant and equipment 380,416 373,634 9 *OUBOHJCMFBTTFUT 586,474 734,480 10 PPP receivables 878,123 743,284 11 Associates 19,499 19,198 12 Other financial assets 45,461 70,861 20 Derivative financial instruments 625 802 21 Pension plan assets 163,756 137,585 23 Deferred tax assets 259,418 149,410 Non-current assets 2,333,772 2,229,254

13 *OWFOUPSJFT 1,268,010 1,514,458 14 Trade and other receivables 2,082,635 2,116,904 *ODPNFUBYSFDFJWBCMF 2,114 36,539 20 Derivative financial instruments 787 5,071 15 $BTIBOEDBTIFRVJWBMFOUT 620,090 1,012,610 35 Assets held for sale 357,012 303,242 Current assets 4,330,648 4,988,824

Total assets 6,664,420 7,218,078

16 Share capital 735,401 714,694 17 Reserves (295,690) (258,539) Retained earnings 482,194 706,253 Equity attributable to the Company’s shareholders 921,905 1,162,408 Non-controlling interest 2,145 735 Group equity 924,050 1,163,143

19 Borrowings 1,244,910 1,951,024 20 Derivative financial instruments 287,414 249,500 21 Employee benefit obligations 99,266 100,935 22 Provisions 89,731 82,529 23 Deferred tax liabilities 78,789 76,080 Non-current liabilities 1,800,110 2,460,068

19 Borrowings 512,852 240,101 24 Trade and other payables 2,986,605 3,047,808 20 Derivative financial instruments 3,468 1,988 22 Provisions 59,971 54,330 *ODPNFUBYQBZBCMF 23,224 17,509 35 Liabilities held for sale 354,140 233,131 Current liabilities 3,940,260 3,594,867

Total equity and liabilities 6,664,420 7,218,078

18 Capital base 1,045,405 1,362,408

The notes on pages 125 to 197 are an integral part of these consolidated financial statements. 2012 – 121

Consolidated income statement (x € 1,000)

2012 2011

Continuing operations

6 Revenue 7,404,283 7,697,427

Raw materials and consumables (1,438,486) (1,383,578) Subcontracted work and other external charges (3,953,300) (4,342,601) 25 Personnel expenses (1,487,745) (1,420,712) 8,9 Amortisation and depreciation (88,939) (103,338) 26 *NQBJSNFOUT (398,148) - Other operating expenses (332,370) (309,944) Exchange rate differences 1,547 (1,854) Total operating expense (7,697,441) (7,562,027)

Operating result (293,158) 135,400

28 Finance income 87,100 72,738 28 Finance expense (83,587) (98,996) 11 Result from associates (1,377) 34,376 Result before tax (291,022) 143,518

29 *ODPNFUBY 39,114 (28,050) Net result of continuing operations (251,908) 115,468

35 Net result of discontinued operations 65,000 12,259

Net result (186,908) 127,727

Attributable to: Shareholders of the company (187,415) 125,995 Non-controlling interest 507 1,732 (186,908) 127,727

Earnings per share for net result attributable to shareholders of the Company (in € per share) 2012 2011

30 $POUJOVJOHPQFSBUJPOT (1.06) 0.49 30 Discontinued operations 0.27 0.05 Total (0.79) 0.54

The notes on pages 125 to 197 are an integral part of these consolidated financial statements. 122 – 2012

Consolidated statement of comprehensive income (x € 1,000)

2012 2011

Net result for the year (186,908) 127,727

20 Fair value cash flow hedges ¹ (46,823) (73,113) $VSSFODZUSBOTMBUJPOEJGGFSFODFT– - Subsidiaries 9,589 11,047 - Associates - (81) Other comprehensive income (37,234) (62,147)

Total comprehensive income (224,142) 65,580

Attributable to: Sharholders of the company (224,566) 64,372 Non-controlling interest 424 1,208 (224,142) 65,580

Attributable to sharholders of the company arises from: $POUJOVJOHPQFSBUJPOT (289,308) 52,540 Discontinued operations 64,742 11,832 (224,566) 64,372 ¹ After tax.

The notes on pages 125 to 197 are an integral part of these consolidated financial statements. 2012 – 123

Consolidated statement of equity (x € 1,000)

Non- Equity attributable to controlling Group UIF$PNQBOZTTIBSFIPMEFST interest equity Share Retained capital Reserves earnings Total

At 1 January 2011 709,466 (196,916) 587,391 1,099,941 1,692 1,101,633

20 Fair value cash flow hedges - (72,691) - (72,691) (422) (73,113) $VSSFODZUSBOTMBUJPOEJGGFSFODFT - Subsidiaries - 11,149 - 11,149 (102) 11,047 11 - Associates - (81) - (81) - (81) Net result recognised directly in equity - (61,623) - (61,623) (524) (62,147) Net result for the year - - 125,995 125,995 1,732 127,727 Total comprehensive income - (61,623) 125,995 64,372 1,208 65,580

16 Preference shares conversion 1,407 - - 1,407 - 1,407 31 Dividend paid 3,821 - (7,133) (3,312) (2,015) (5,327) Other movements - - - - (150) (150) 5,228 - (7,133) (1,905) (2,165) (4,070)

At 31 December 2011 714,694 (258,539) 706,253 1,162,408 735 1,163,143

20 Fair value cash flow hedges - (46,708) - (46,708) (115) (46,823) $VSSFODZUSBOTMBUJPOEJGGFSFODFT - Subsidiaries - 9,557 - 9,557 32 9,589 Net result recognised directly in equity - (37,151) - (37,151) (83) (37,234) Net result for the year - - (187,415) (187,415) 507 (186,908) Total comprehensive income - (37,151) (187,415) (224,566) 424 (224,142)

31 Dividend paid 20,707 - (38,192) (17,485) (165) (17,650) Other movements - - 1,548 1,548 1,151 2,699 20,707 - (36,644) (15,937) 986 (14,951)

At 31 December 2012 735,401 (295,690) 482,194 921,905 2,145 924,050

The notes on pages 125 to 197 are an integral part of these consolidated financial statements. 124 – 2012

Consolidated cash flow statement (x € 1,000)

2012 2011

Net result for the year including discontinued operations (186,908) 127,727 Adjustments for: 29 - Taxation (39,114) 30,966 8 - Depreciation of property, plant and equipment 80,791 94,920 9 - Amortisation of intangible assets 8,148 11,096 9,26 *NQBJSNFOUPGJOUBOHJCMFBTTFUT 150,431 - 12,26 *NQBJSNFOUPGOPODVSSFOUSFDFJWBCMFT 6,225 - 13,26 *NQBJSNFOUPGJOWFOUPSJFT 241,492 - 35 - Result discontinued operations (65,000) - 35 - Result on sale PPP projects (3,500) (11,669) - Result on sale of property, plant and equipment (7,844) (4,325) 28 - Finance income (87,100) (72,801) 28 - Finance expense 83,587 99,144 11 - Result from associates 1,377 (34,376) 21,22 $IBOHFTJOQSPWJTJPOT (14,997) (40,242) $IBOHFTJOXPSLJOHDBQJUBM FYDMVEJOHOFUMJRVJEJUJFT (57,909) (90,927) Cash flow from operations 109,679 109,513 *OUFSFTUQBJE (108,700) (130,007) *ODPNFUBYQBJE (17,174) (13,458) Net cash flow from ordinary activities (16,195) (33,952) 10 PPP receivables granted (441,627) (419,002) 10 Repayment of PPP receivables 109,695 15,643 1 Net cash flow from operating activities (348,127) (437,311)

Acquisition of subsidiaries (825) (3,000) 8 *OWFTUNFOUTJOQSPQFSUZ QMBOUBOEFRVJQNFOU (107,505) (70,171) 9 *OWFTUNFOUTJOJOUBOHJCMFBTTFUT (6,010) (2,838) 12 Non-current receivables granted (6,572) (26,654) 11,12 *OWFTUNFOUTJOGJOBODJBMBTTFUT (1,450) (218) 12 Repayment non-current receivables 15,761 3,322 1 35 Divestments of discontinued operations 145,000 - 35 Divestments of PPP projects 13,000 25,429 8 Divestments in property, plant and equipment 28,442 17,251 9 Divestments in intangible assets 92 154 11,12 Divestments in financial assets 1,645 199,585 1 *OUFSFTUSFDFJWFE 87,230 72,903 11 Dividend received 2,144 41,788 Net cash flow from investing activities 170,952 257,551

19 New non-current borrowings 550,482 637,673 19 Repayment of non-current borrowings (743,185) (346,511) 31 Dividend paid (17,485) (3,312) Dividend paid to non-controlling interests (165) (2,015) Purchase finance preference shares - (314) Other movements in non-controlling interest 1,151 - Net cash flow from financing activities (209,202) 285,521

Increase/decrease in net cash position (386,377) 105,761 15 Net cash position at beginning of the year 1,008,005 912,870 35 Movement net liquidities assets and liabilities held for sale and discontinued operations (7,580) (17,165) Exchange rate difference on net cash position 4,781 6,539 15 Net cash position at end of the year 618,829 1,008,005

1$PNQBSBUJWFGJHVSFTIBWFCFFOSFTUBUFEUPCFDPOTJTUFOUXJUIUIFQSFTFOUBUJPOJOUIFDVSSFOUZFBS The notes on pages 125 to 197 are an integral part of these consolidated financial statements. 2012 – 125

Notes to the consolidated financial statements

1. General information

3PZBM#".(SPVQOW }UIF$PNQBOZ} XBTJODPSQPSBUFEVOEFS%VUDIMBX BOEJTEPNJDJMFEJOUIF/FUIFSMBOET 5IFDPOTPMJEBUFEGJOBODJBMTUBUFNFOUTGPSUIFZFBSDPWFSUIF$PNQBOZBOEJUTTVCTJEJBSJFT SFGFSSFEUPUPHFUIFS as ´the Group´), and its share in joint ventures.

Royal BAM Group is a public limited liability company with a listing on the NYSE Euronext Amsterdam.

These consolidated financial statements cover the year 2012 and were approved for publication by the Executive Board on 6 March 2013. The 2012 annual report was approved by the Supervisory Board on 6 March 2013 and will be submitted for adoption to the annual General Meeting of Shareholders on 24 April 2013. 126 – 2012

2. Company profile

5IJTTFDUJPOQSFTFOUTBTVNNBSZPGUIF(SPVQTBDUJWJUJFTGSPNBOBDDPVOUJOHQFSTQFDUJWF*UTIPVMECFCPSOFJONJOE that the information set out here is limited to that subject and that it does not form a part of the summary of significant accounting policies as described in section 3.

5IF(SPVQTBDUJWJUJFTDBOCFTVNNBSJTFEBTGPMMPXT t$POTUSVDUJPODPOUSBDUTGPSQSPKFDUTXJUIUIJSEQBSUJFT t1SPKFDUTGPSUIF(SPVQTPXOSJTL QSPQFSUZEFWFMPQNFOU  t1VCMJDQSJWBUFQBSUOFSTIJQ 111 QSPKFDUT t3FOEFSJOHPGTFSWJDFTBOEPUIFSBDUJWJUJFT

5IFNBKPSJUZPGUIF(SPVQTBDUJWJUJFTDPOTJTUPGDPOTUSVDUJPODPOUSBDUTXJUIUIJSEQBSUJFT3FWFOVFTBOESFTVMUT GSPNUIFTFDPOUSBDUTBSFBDDPVOUFEGPSJOUIFJODPNFTUBUFNFOUCBTFEPOUIFQSPHSFTTPGXPSL$POTUSVDUJPO contracts are presented in the balance sheet as receivables from or payables to customers, depending on the balance of cost incurred (including results recognised) and invoiced instalments. Please refer to Notes 3.10, 3.11, 3.21 and 3.22.

1SPKFDUTJOJUJBUFEBUUIF(SPVQTPXOSJTL QSPQFSUZEFWFMPQNFOU BSFUSFBUFEBTJOWFOUPSZPOUIFCBMBODFTIFFU Revenue, costs and (net) result are recognised in the income statement from the moment the beneficial ownership of projects is (continuously and/or partially) transferred to third parties. From that moment on, the projects on the balance sheet are also presented as receivables from or payables to customers, consistent with construction contracts with third parties. Non-recourse and other borrowings for projects are recorded separately, under borrowings. Please refer to Notes 3.9, 3.11, 3.16, 3.21 and 3.22.

Activities under public-private partnerships include projects in the context of which (public) facilities and services BSFQSPWJEFEUPUIJSEQBSUJFT*ODPNFSFDFJWFESFMBUFTQSFEPNJOBOUMZUPUIFBWBJMBCJMJUZPGGBDJMJUJFTBOE JOTPNF cases, to their actual use. These projects are accounted for on the balance sheet as financial fixed assets (PPP receivables) and intangible assets (PPP concessions), respectively. (Non-)recourse PPP loans for these projects are SFDPSEFETFQBSBUFMZ VOEFSCPSSPXJOHT*GJODPNFEFQFOETPOUIFBWBJMBCJMJUZPGBGBDJMJUZ DBTIJOGMPXTXJMMDPOTJTU PGSFQBZNFOUTBOEJOUFSFTUJODPNFXJUISFHBSEUP111SFDFJWBCMFTBOE EFGFSSFE DPODFTTJPOSFWFOVF*GJODPNF depends on the actual use of a facility, cash inflows will consist of payments actually received for using the facility. $BTIPVUGMPXTDPOTJTUPGSFQBZNFOUTPGBOEJOUFSFTUFYQFOTFGPSCPSSPXJOHTBOEUIFDPTUPGDPODFTTJPOBDUJWJUJFT The interest result, concession result and depreciation expense are accounted for in the income statement. During their construction phase, PPP projects are treated as construction contracts and construction revenue is recognised. Please refer to Notes 3.7, 3.16, 3.22.

Rendering of services consists predominantly of (maintenance) activities for third parties. Revenue and results are recognised in the income statement. Please refer to Notes 3.10 and 3.22.

*GJUJTQSPCBCMFUIBUUPUBMDPOUSBDUDPTUXJMMFYDFFEUPUBMDPOUSBDUSFWFOVF UIFFYQFDUFEMPTTXJMMCFGVMMZSFDPHOJTFE as an expense.

"DRVJTJUJPODPTUTGPSOFXQSPKFDUTBSFJOJUJBMMZSFDPHOJTFEJOUIFJODPNFTUBUFNFOU*GUIFSFJTBEFRVBUFDFSUBJOUZUIBU a project will be awarded to the Group, the costs will be subsequently capitalised. 2012 – 127

3. Summary of significant accounting policies

3.1 General

5IFDPOTPMJEBUFEGJOBODJBMTUBUFNFOUTPGUIF(SPVQIBWFCFFOQSFQBSFEJOBDDPSEBODFXJUIUIF*OUFSOBUJPOBM 'JOBODJBM3FQPSUJOH4UBOEBSET *'34 BTFOEPSTFECZUIF&VSPQFBO6OJPO

The company financial statements of Royal BAM Group nv have been prepared in accordance with the statutory QSPWJTJPOTTFUPVUJO5JUMF#PPLBOE4FDUJPOPG#PPLPGUIF%VUDI$JWJM$PEF5IFTFGJOBODJBMTUBUFNFOUT IBWFBMTPCFFOQSFQBSFEJOBDDPSEBODFXJUIUIFGBDJMJUZEFUBJMFEVOEFS4FDUJPO  PG#PPLPGUIF%VUDI$JWJM $PEF CZXIJDIUIFDPNQBOZGJOBODJBMTUBUFNFOUTBSFCBTFEPOUIFBDDPVOUJOHQPMJDJFTBTBEPQUFEJOUIF consolidated financial statements.

The consolidated financial statements have been prepared based on the historical cost convention. All non-current and financial instruments valued at amortised cost are subject to impairment testing and adjusted downwards, if required.

Derivatives are stated at fair value. Financial liabilities are initially recognised at fair value and subsequently stated at amortised cost.

New standards and interpretations applied *ODPNQBSJTPOXJUI UIF(SPVQEJEOPUBQQMZBOZOFXTUBOEBSETPSJOUFSQSFUBUJPOT

New and revised standards not yet effective The following major standards for the Group were not yet effective in 2012 and are therefore not applied in these financial statements:  *"4 SFWJTFE A&NQMPZFFCFOFGJUT5IJTSFWJTJPOSFMBUFTQSFEPNJOBOUMZUPUIFWBMVBUJPOPGBDUVBSJBMHBJOTBOE MPTTFTPOUIFDPNQBOZTCBMBODFTIFFUBTBDPOTFRVFODFPGFMJNJOBUJOHUIFVTFPGUIFDPSSJEPSNFUIPE*OBEEJUJPO  the expected return on investments is considered as equal to the discount rate of the pension liability. The revised TUBOEBSEJTBQQMJDBCMFXJUIFGGFDUGSPN+BOVBSZ POBSFUSPTQFDUJWFCBTJT5IFFGGFDUPOUIF(SPVQTFRVJUZBT at 1 January 2012 and 31 December 2012 is approximately €190 million negative and approximately €248 million OFHBUJWF SFTQFDUJWFMZ$POTFRVFOUMZ UIFTPMWFODZSBUJPDBMDVMBUFEPOUIFDBQJUBMCBTFXJMMEFDMJOFBUUIFZFBSFOE 2012 with approximately 3.5 per cent point. The effect on equity in 2013 is dependent on the development of the assumptions that underlie the pension calculations. The net result of 2012 is approximately €2 million higher.  *"4 SFWJTFE A"DDPVOUJOHGPSJOWFTUNFOUTJOBTTPDJBUFT5IFSFWJTFETUBOEBSEEFGJOFTUIFQSJODJQMFPGATJHOJGJDBOU JOGMVFODFBOEQSPWJEFTNPSFEFUBJMFEHVJEBODFPOUIFXBZJOXIJDIUIFFRVJUZNFUIPENVTUCFBQQMJFE JOTPNF cases, including exemptions from applying this method). The revised standard also prescribes the way in which investments in associates and joint ventures must be tested for impairment. The revisions do not influence the (SPVQTFRVJUZPSOFUSFTVMU  *'34A$POTPMJEBUFEGJOBODJBMTUBUFNFOUT5IFOFXTUBOEBSEDIBOHFTUIFEFGJOJUJPOPGDPOUSPM5IFTUBOEBSEJT applicable with effect from 1 January 2014, on a mandatory retrospective basis. The Group will use the possibility of applying the standard before that date. The change in the definition and its explanation is not expected to result JOTJHOJGJDBOUDIBOHFTJOUIFDPNQPTJUJPOPGUIF(SPVQTDPOTPMJEBUJPOCBTF  *'34A+PJOUBSSBOHFNFOUT6OEFSUIFOFXTUBOEBSE JUJTOPMPOHFSQFSNJUUFEUPDPOTPMJEBUFKPJOUWFOUVSFTPOB proportional basis. The standard is applicable with effect from 1 January 2014, on a mandatory retrospective basis. 5IF(SPVQXJMMVTFUIFQPTTJCJMJUZPGBQQMZJOHUIFTUBOEBSECFGPSFUIBUEBUF5IFFGGFDUPOUIF(SPVQTFRVJUZBU 1 January 2012 and 31 December 2012 is approximately €26 million positive and approximately €54 million QPTJUJWF SFUSPTQFDUJWFMZ$PNCJOFEXJUIBEFDMJOFPGUIFCBMBODFTIFFUUPUBMBUZFBSFOE UIJTMFBETUPBO improvement in the solvency ratio calculated on the capital base of approximately 4.2 per cent point. The revenue of 2012 is approximately €179 million lower and net result is unchanged. The effect on the balance sheet total in 2013 will be in line with 2012. The effect on revenue in 2013 cannot be estimated as it depends on the projects realised in 2013.  *'34A%JTDMPTVSFPGJOUFSFTUTJOPUIFSFOUJUJFT5IJTTUBOEBSESFRVJSFTBXJEFSBOHFPGEJTDMPTVSFTBCPVUJOUFSFTUT in other entities in comparison with current legislation and is mandatorily effective from 1 January 2014. As with UIFTUBOEBSET*'34A$POTPMJEBUFEGJOBODJBMTUBUFNFOUTBOE*'34A+PJOUBSSBOHFNFOUT UIF(SPVQXJMMVTFUIF 128 – 2012

QPTTJCJMJUZPGBQQMZJOHUIFTUBOEBSECFGPSF+BOVBSZ5IFSFWJTJPOTIBWFOPJOGMVFODFPOUIF(SPVQTFRVJUZPS net result.  *'34A'BJSWBMVFNFBTVSFNFOU5IJTTUBOEBSEQSPWJEFTBTJOHMFGSBNFXPSLGPSNFBTVSJOHGBJSWBMVFBOESFRVJSFT disclosures about fair value measurement. The standard is mandatorily applicable with effect from 1 January 2013. The Group expects that applying the new standard will not have an influence on its equity or net result, but that it will result in additional disclosures.

Following the simultaneous application of the above standards, the solvency ratio calculated on the capital base of the Group as at year-end 2012 slightly increases to 16.0 per cent.

The Group follows developments in the area of financial accounting closely to understand in good time the consequences for its financial statements and operations. The consequences of the above issues have been analysed and integrated into the management information systems accordingly.

3.2 Consolidation

a) Subsidiaries Subsidiaries include all entities in which the Group has direct or indirect decisive control over financial and operational policies, generally accompanied by the possession of more than half of the voting shares and taking into account the potential voting rights which are exercisable as at balance sheet date.

Subsidiaries are fully consolidated from the date on which the Group obtains control. They are deconsolidated from the moment the Group no longer has control.

5IFQVSDIBTFNFUIPEPGBDDPVOUJOHJTVTFEUPBDDPVOUGPSUIF(SPVQTBDRVJTJUJPOPGTVCTJEJBSJFT5IFDPOTJEFSBUJPO transferred for the acquisition of a subsidiary is the fair value of assets transferred, the equity instruments issued at acquisition date, and the liabilities incurred by the Group. The consideration transferred includes the fair value of any asset, consideration or liability resulting from a contingent consideration agreement. Acquisition-related costs are expensed as incurred.

Acquired identifiable assets and (contingent) liabilities acquired are initially measured at their fair value at the acquisition date. For each acquisition, the Group values a possible non-controlling interest either at fair value or at the non-controlling interest share in the identified net assets of the acquired party.

*GUIFDPOTJEFSBUJPOUSBOTGFSSFE UIFOPODPOUSPMMJOHJOUFSFTUBOEUIFGBJSWBMVFBUBDRVJTJUJPOEBUFPGBOJOUFSFTUJO UIFBDRVJSFEQBSUZUIBUBMSFBEZFYJTUFEBUUIFBDRVJTJUJPOEBUFFYDFFEUIFGBJSWBMVFPGUIF(SPVQTTIBSFJOUIF JEFOUJGJBCMFOFUBTTFUT UIFEJGGFSFODFXJMMCFSFDPSEFEBTHPPEXJMM*GUIFDPOTJEFSBUJPOUSBOTGFSSFEJTMFTTUIBOUIF fair value of the identifiable net assets, the difference will be taken directly to the income statement.

b) Associates Associates are all entities over which the Group has significant influence but no control, generally accompanied by the possession of more than one fifth of the voting shares and taking into account the potential voting rights which are exercisable as at balance sheet date.

*OWFTUNFOUTJOBTTPDJBUFTBSFJOJUJBMMZSFDPHOJTFEBUDPTUBOETVCTFRVFOUMZCBTFEPOUIFFRVJUZNFUIPE*OWFTUNFOUTJO associates include goodwill (net of any accumulated impairment losses) identified on acquisition date. The Group SFDPHOJTFTJUTQBSUPGUIFBTTPDJBUFTDIBOHFTJOSFTFSWFTBOEBUUSJCVUBCMFSFTVMUTJOUIFDBSSZJOHBNPVOUPGUIF QBSUJDJQBUJOHJOUFSFTU5IF(SPVQTTIBSFJOUIFQBSUJDJQBUJOHJOUFSFTUTSFTVMUTJTSFDPHOJTFEJOUIFJODPNFTUBUFNFOU 5IF(SPVQTTIBSFJOUIFQBSUJDJQBUJOHJOUFSFTUTDIBOHFTJOSFTFSWFTBGUFSUIFBDRVJTJUJPOEBUFJTSFDPHOJTFEJOUIF (SPVQTSFTFSWFT5IF(SPVQEPFTOPUSFDPHOJTFBOZMPTTFTFYDFFEJOHUIFDBSSZJOHBNPVOUPGUIFJOWFTUNFOU JODMVEJOH other unsecured receivables), unless it has an obligation to do so.

Associates are recognised from the date on which the Group obtains significant influence, until the date on which that significant influence ceases to exist. 2012 – 129

c) Joint ventures 5IF(SPVQTJOUFSFTUTJOFOUJUJFT JOXIJDIDPOUSPMJTDPOUSBDUVBMMZFYFSDJTFEKPJOUMZXJUIUIJSEQBSUJFT BSFBDDPVOUFE GPSCBTFEPOQSPQPSUJPOBMDPOTPMJEBUJPO5IF(SPVQDPNCJOFTJUTTIBSFJOUIFKPJOUWFOUVSFTJOEJWJEVBMSFWFOVFTBOE FYQFOTFT BTTFUTBOEMJBCJMJUJFTPOBMJOFCZMJOFCBTJTXJUIDPSSFTQPOEJOHJUFNTJOUIF(SPVQTGJOBODJBMTUBUFNFOUT d) Elimination of inter-company transactions *OUFSDPNQBOZUSBOTBDUJPOT BTTFUTBOEMJBCJMJUJFTBOEVOSFBMJTFEHBJOTPOUSBOTBDUJPOTCFUXFFOTVCTJEJBSJFTBSF eliminated. Unrealised losses are also eliminated unless the transaction results in a demonstrable impairment of the asset transferred.

Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the FYUFOUPGUIF(SPVQTJOUFSFTUJOUIFQBSUJDJQBUJOHJOUFSFTUPSKPJOUWFOUVSF5IJTBMTPBQQMJFTUPVOSFBMJTFEMPTTFT unless the transaction results in a demonstrable impairment of the asset transferred.

The accounting policies applied by subsidiaries, associates and joint ventures have been adjusted where necessary to ensure consistency with the policies adopted by the Group. e) Transactions with non-controlling interests 5IF(SPVQUSFBUTUSBOTBDUJPOTXJUIOPODPOUSPMMJOHJOUFSFTUTBTUSBOTBDUJPOTXJUIFRVJUZPXOFSTPGUIF(SPVQ*GB non-controlling interest is purchased, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non- controlling interests are also recorded in equity. f) Transactions resulting in loss of control *GUIFHSPVQDFBTFTUPIBWFDPOUSPMPSTJHOJGJDBOUJOGMVFODF BOZSFUBJOFEJOUFSFTUJOUIFFOUJUZXJMMCFSFNFBTVSFEUP its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying BNPVOUPGUIFBTTPDJBUFPSKPJOUWFOUVSF*OBEEJUJPO BOZBNPVOUTQSFWJPVTMZSFDPHOJTFEJOPUIFSDPNQSFIFOTJWF income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

*GUIFPXOFSTIJQJOUFSFTUJOBOBTTPDJBUFJTSFEVDFECVUUIF(SPVQSFUBJOTKPJOUDPOUSPMBOE4*$o+PJOUMZDPOUSPMMFE entities – Non-Monetary contributions by venturers is used, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate. g) Transactions retaining control *GUIFPXOFSTIJQJOUFSFTUJOBKPJOUWFOUVSFJTUSBOTGFSSFEUPBOPUIFSKPJOUWFOUVSF JOFYDIBOHFGPSXIJDIBOJOUFSFTUJO that joint venture is obtained, the result of such transfer is determined based on the interest that is sold and recognised in the income statement.

3.3 Segment reporting

The Executive Board has made a sector division to divide its focal areas regarding control and monitoring of the (SPVQTTVCTJEJBSJFTVOEFSUIFNFNCFST8JUIFGGFDUGSPN UIF(SPVQTPSHBOJTBUJPOBMTUSVDUVSFIBTCFFO EJWJEFEJOUPGPVSTFDUPST$POTUSVDUJPOBOEUFDIOPMPHZ $JWJMFOHJOFFSJOH BOE1SPQFSUZBOE1VCMJD1SJWBUF 1BSUOFSTIJQ5IFTFDUPS&MFDUSJDBMBOENFDIBOJDBMFOHJOFFSJOHIBTCFFOBEEFEUPUIFOFXTFDUPS$POTUSVDUJPOBOE technology.

5IFTFDUPS$POTVMUBODZBOEFOHJOFFSJOHJTQSFTFOUFEBTEJTDPOUJOVFEPQFSBUJPOTEVFUPUIFEJTQPTBMPGUIFTF operations (Tebodin) in 2012. The segmented information is in line with the internal reports as provided to the Executive Board based on this management model. 130 – 2012

3.4 Foreign currency translation

a) Functional and reporting currency 5IF(SPVQTDPOTPMJEBUFEGJOBODJBMTUBUFNFOUTBSFQSFTFOUFEJOFVSP ï XIJDIJTUIF(SPVQTGVODUJPOBMBOE SFQPSUJOHDVSSFODZ*UFNTJODMVEFEJOUIFGJOBODJBMTUBUFNFOUTPGUIF(SPVQTDPNQBOJFTBSFNFBTVSFEVTJOHUIF DVSSFODZPGUIFQSJNBSZFDPOPNJDFOWJSPONFOUJOXIJDIUIFFOUJUZPQFSBUFT AUIFGVODUJPOBMDVSSFODZ BOEBSF presented in thousands (x 1,000) unless stated otherwise.

b) Subsidiaries with financial statements denominated in foreign currencies The results and financial positions of all subsidiaries that have a functional currency which differs from the reporting currency are translated into the reporting currency as follows: (i) assets and liabilities for each balance sheet are translated at the closing rate at the date of that balance sheet; (ii) income and expenses for each income statement are translated at average exchange rates; and (iii) all resulting currency translation differences are recognised in comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of foreign entities are treated as assets and liabilities of the foreign entity and translated at the closing rate.

c) Subsidiaries with transactions denominated in foreign currencies Foreign currency transactions are translated into the functional currency using the exchange rate at the date of the transaction. For each balance sheet, monetary items denominated in foreign currencies are translated using the closing rate. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end are recognised in the income statement.

d) Exchange rates 5IFFVSPFYDIBOHFSBUFTVTFEGPSUIF(SPVQTNBKPSGPSFJHODVSSFODJFTBSFBTGPMMPXT

2012 2011 Spot rate on balance sheet date Pound sterling 0.817394 0.837521

Average rate Pound sterling 0.813074 0.869263

3.5 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and/or accumulated impairment MPTTFT$PTUJODMVEFTFYQFOEJUVSFUIBUJTEJSFDUMZBUUSJCVUBCMFUPUIFBDRVJTJUJPOPSDPOTUSVDUJPOPGJUFNT

Subsequent costs are included in the carrying amount of an asset or recognised as a separate asset, as appropriate, only if it is probable that future economic benefits will flow to the Group and the cost of the item can be measured reliably. Other costs are charged to the income statement during the financial period in which they are incurred.

Depreciation on property, plant and equipment is calculated using the straight-line method, taking into account their estimated residual values over their estimated useful lives, as stated below. Land is not depreciated.

Land (and improvements) 10% to 25% Buildings and houses 2% to 10% Equipment 12.5% to 25% Plant & equipment 15% to 50% Office equipment 10% to 25% $PNQVUFSTBOEPUIFSIBSEXBSF UP Transport equipment 25% 2012 – 131

*GBOJUFNPGQSPQFSUZ QMBOUBOEFRVJQNFOUDPNQSJTFTNBKPSDPNQPOFOUTXIJDIIBWFWBSZJOHVTFGVMMJWFT UIF components will be accounted for separately for depreciation purposes.

The useful lives and residual values of assets are reviewed annually and depreciation is adjusted, if applicable.

Gains and losses on disposals are included in the income statement by comparing the proceeds with the book amount.

Leases of property, plant and equipment for which the Group has taken over substantially all risks and rewards of PXOFSTIJQBSFDMBTTJGJFEBTGJOBODJBMMFBTFT-FBTFEBTTFUTBSFDBQJUBMJTFEBUUIFMFBTFTJODFQUJPO CBTFEPOUIFMPXFS of the fair value of an asset and the net present value of minimum lease payments. The lease payments are divided into repayments and financing costs. The financing costs are accounted for in the income statement.

Property, plant and equipment under financial leases are depreciated over the lower of their estimated useful lives and their lease term.

3.6 Intangible assets a) Goodwill (PPEXJMMSFQSFTFOUTUIFFYDFTTPGUIFDPOTJEFSBUJPOQBJEPOBOBDRVJTJUJPOPWFSUIFGBJSWBMVFPGUIF(SPVQTTIBSFJO the identifiable assets and liabilities of the acquired subsidiary at the date of acquisition. The change in value with regard to contingencies, insofar as it relates to transactions after 1 January 2010, is recognised in the income statement or comprehensive income. Goodwill is carried at cost less accumulated impairment losses.

For the purpose of impairment testing, goodwill is allocated to the cash flow generating units that are expected to benefit from the acquisition which generated the goodwill.

Goodwill on acquisitions of associates is included in investments in associates.

*NQBJSNFOUTPGHPPEXJMMBSFJSSFWFSTJCMF

Goodwill is tested for impairment every year. This involves testing the carrying amount of a cash generating unit, including allocated goodwill, against its recoverable value. The recoverable value of a cash generating unit is the higher of the value of an asset less selling expenses and its value in use. The calculation of the recoverable value involves the application of pre-tax cash flow projections based on financial budgets approved by management over a five-year period. A ten-year period is used for property operations in the Netherlands in relation to the expected NBSLFUSFDPWFSZ$BTIGMPXTBGUFSUIFGJWFZFBSPSUFOZFBSQFSJPETBSFFYUSBQPMBUFEVTJOHFTUJNBUFEHSPXUIGJHVSFT DPOTJEFSFEUPCFJOMJOFXJUIUIF(SPVQTMPOHUFSNFYQFDUBUJPOTXJUISFHBSEUPTFDUPSTBOENBSLFUT5IFGPSFDBTU cash flows are discounted to their present values using a pre-tax discount rate that reflects the market situation, the time value of money and the risks specific to the asset.

Gains and losses on disposal of entities include the carrying amount of goodwill relating to the entity sold and are recorded in the income statement. b) Non-integrated software Non-integrated software is stated at cost, less accumulated amortisation and accumulated impairment losses. Amortisation on non-integrated software is calculated using the straight-line method over their estimated useful lives (4 - 10 years), taking into account their residual values.

The useful lives and residual values of non-integrated software are reviewed annually and depreciation is adjusted, if applicable. c) PPP concessions PPP concessions consist of rights obtained from government to charge users for the use of public facilities (toll roads), based on actual usage. PPP concessions are accounted for at cost less accumulative depreciation and impairment. 132 – 2012

*OWFTUNFOUHSBOUTSFDFJWFECZHPWFSONFOUGPS111DPODFTTJPOTBSFEFEVDUFE BUGBJSWBMVF GSPNUIFWBMVBUJPOPGUIF concession if it can be stated with a reasonable degree of certainty that the grant will be received and that the conditions attached to the grant will be fulfilled.

PPP concessions are depreciated in line with the actual usage of the specific public facility, with a maximum of the duration of the concession.

Revenues from PPP concessions are reviewed annually and depreciation is adjusted, if applicable.

d) Other intangible assets Other intangible assets relate to market positions, including brand names and the management of acquired subsidiaries, and are stated at cost, less accumulated amortisation and accumulated impairment losses.

Amortisation on other intangible assets is calculated over their estimated useful lives.

3.7 PPP receivables

PPP receivables are concession payments to be received from government in relation to PPP projects, based upon the availability of the specific facility. PPP receivables are accounted for as financial assets. These receivables are initially recognised in the financial statements at fair value and subsequently measured at amortised cost, using an effective rate of interest.

3.8 Other financial assets

Other financial assets are non-derivative receivables and investments that are not quoted in an active market. The non-quoted receivables, with fixed or determinable payments, are initially recognised at fair value and subsequently measured at amortised cost.

*OWFTUNFOUTJOFOUJUJFTXIFSFUIF(SPVQIBTOPTJHOJGJDBOUJOGMVFODFJOHPWFSOJOHGJOBODJBMBOEPQFSBUJOHQPMJDJFTBSF classified as financial assets. These assets are recognised at fair value through profit and loss, or at cost if the fair value cannot be measured reliably or if the difference between the investment and the fair value is assessed as not being material to the consolidated financial statements.

3.9 Inventories

a) Land and building rights *OWFOUPSJFTPGMBOEBOECVJMEJOHSJHIUTBSFTUBUFEBUUIFMPXFSPGDPTUBOEOFUSFBMJTBCMFWBMVF5IF(SPVQDBQJUBMJTFT directly attributable interest as part of the cost from the moment that activities are carried out in relation to the realisation of building land.

b) Property development Property development consists of acquired projects for (re)development and land positions in their stage of development. These projects and positions are stated at the lower of cost and net realisable value. The Group DBQJUBMJTFTEJSFDUMZBUUSJCVUBCMFJOUFSFTUBOEPUIFSDPTUBTQBSUPGUIFDPTUPGQSPQFSUZEFWFMPQNFOU$BQJUBMJTBUJPOPG interest cost starts at the beginning of development, is suspended during the period in which active development is interrupted and ceases when the project is completed or sold.

*GUIFFRVJUBCMFUJUMFPGBQSPKFDUJTUSBOTGFSSFEJOXIPMFPSJOQBSUUPBUIJSEQBSUZ UIFDBQJUBMJTFEDPTUPGUIFQSPKFDUJT accounted for in the income statement and the related revenue is recognised.

Transfer of equitable title is deemed to take place when the control over and the risks and benefits related to the PXOFSTIJQPGUIFQSPKFDUBSFUSBOTGFSSFEUPUIFCVZFS*GUSBOTGFSUPUIFCVZFSUBLFTQMBDFPOBDPOUJOVJOHCBTJTEVSJOH development of a project, the property development projects are recognised as construction contracts. Please refer 2012 – 133

to Note 3.10. This may be the case in house-building projects as from the moment that the land and buildings, if any, have been legally transferred to the buyer. c) Raw materials and consumables *OWFOUPSJFTPGSBXNBUFSJBMTBOEDPOTVNBCMFTBSFTUBUFEBUUIFMPXFSPGDPTUBOEOFUSFBMJTBCMFWBMVF$PTUJTCBTFEPO UIFGJSTUJO GJSTUPVU '*'0 QSJODJQMFBOEJODMVEFTFYQFOEJUVSFJODVSSFEJOBDRVJSJOHUIFJOWFOUPSJFTBOEJOCSJOHJOH them to their existing location and condition.

The net realisable value of this inventory is the estimated selling price in the ordinary course of business, less the estimated cost of completion and selling expenses. Assets qualify as inventory if they are used in the normal course of business.

3.10 Construction contracts

$POTUSVDUJPODPOUSBDUTBSFTUBUFEBUDPTUJODVSSFEBOEBMMPDBUFESFTVMUJOMJOFXJUIUIFQSPHSFTTPGUIFDPOTUSVDUJPO  less identifiable losses and invoiced instalments. The cost price consists of all costs which are directly related to the project and directly attributable indirect cost based on the normal production capacity.

*GUIFPVUDPNFPGBDPOUSBDUDBOCFFTUJNBUFESFMJBCMZ QSPKFDUSFWFOVFBOEDPTUBSFBDDPVOUFEGPSJOUIFJODPNF TUBUFNFOUCBTFEPOUIFQSPHSFTTPGXPSLQFSGPSNFE*GUIFPVUDPNFPGBDPOUSBDUDBOOPUCFFTUJNBUFESFMJBCMZ  SFWFOVFJTSFDPHOJTFEPOMZUPUIFFYUFOUPGUIFDPOUSBDUDPTUTJODVSSFEUIBUBSFMJLFMZUPCFSFDPWFSBCMF*GJUJT probable that the total contract cost is higher than the total contract revenue, the total expected loss is recognised as an expense.

5IF(SPVQVTFTUIFAQFSDFOUBHFPGDPNQMFUJPONFUIPEUPEFUFSNJOFUIFBQQSPQSJBUFBNPVOUUPCFSFDPHOJTFEJOB given period. The stage of completion is measured by reference to the contract cost incurred as a percentage of total actual or estimated project cost. Revenues and result are recognised in the income statement based on this progress.

1SPKFDUTBSFQSFTFOUFEJOUIFCBMBODFTIFFUBTSFDFJWBCMFTGSPNPSQBZBCMFTUPDVTUPNFSTPOCFIBMGPGUIFDPOUSBDU*G the costs incurred (including the result recognised) exceed the invoiced instalments, the contract will be presented BTBSFDFJWBCMF*GUIFJOWPJDFEJOTUBMNFOUTFYDFFEUIFDPTUTJODVSSFE JODMVEJOHUIFSFTVMUSFDPHOJTFE UIFDPOUSBDU will be presented as a liability.

$POUSBDUTDPOUBJOJOHUIFDPOTUSVDUJPOPGBQSPKFDUBOEUIFQPTTJCJMJUZPGTVCTFRVFOUMPOHUFSNNBJOUFOBODFPGUIBU project as separate components, or for which these components could be negotiated individually in the market, are accounted for as two separate contracts. Revenue and results are recognised accordingly in the income statement as construction contracts for third parties or the rendering of services respectively.

3.11 Trade and other receivables

Trade receivables and other receivables are initially recognised at fair value and subsequently measured at amortised DPTU MFTTBDDVNVMBUFEJNQBJSNFOUMPTTFT*NQBJSNFOUTBSFBDDPVOUFEGPSJGUIFSFJTPCKFDUJWFFWJEFODFUIBUUIF (SPVQJTVOBCMFUPDPMMFDUUIFBNPVOUSFDFJWBCMF*NNJOFOUDPSQPSBUFCBOLSVQUDZ GJOBODJBMSFPSHBOJTBUJPOTPS PWFSEVFQBZNFOUTBSFDPOTJEFSFEUPCFJOEJDBUPSTGPSQPTTJCMFJNQBJSNFOUT*NQBJSNFOUTBNPVOUUPUIFEJGGFSFODF between the anticipated reduced value of the return and the carrying amount. The difference is recorded in the income statement and credited against trade receivables and other receivables on a separate account for impairments. As soon as an amount to be received is in fact uncollectable, the receivable and related provision are written off and the possible difference is accounted for in the income statement.

Trade receivables and other receivables are expected to be settled within the normal course of business, normally within twelve months. The fair value of receivables and the amounts expected to be settled after more than twelve months are disclosed as such in the notes to the financial statements. 134 – 2012

3.12 Cash and cash equivalents

$BTIBOEDBTIFRVJWBMFOUTJODMVEFDBTIBUCBOL DBTIJOIBOEBOEEFQPTJUTIFMEPODBMMXJUICBOLT JGSFQBZBCMFPO EFNBOEBOEGPSNJOHBOJOUFHSBMQBSUPGUIF(SPVQTDBTINBOBHFNFOU#BOLPWFSESBGUTJODVSSFOUBDDPVOUTBSF presented in current borrowings.

3.13 Assets held for sale and discontinued operations

Assets are classified as being held for sale if the book amount is to be recovered predominantly through a sale transaction rather than through continued use. They are stated at the lower of book amount and fair value, less selling expenses. The liabilities related to the assets held for sale are presented separately as liabilities held for sale. Depreciation stops as soon as assets are classified as assets held for sale.

Joint ventures whose joint control is retained through a partial sale transaction are presented as assets held for sale for the interest of the sale. The retained interest is proportionally consolidated.

*GBOBDUJWJUZRVBMJGJFTBTBEJTDPOUJOVFEPQFSBUJPO UIFDPNQBSBUJWFGJHVSFTJOUIFJODPNFTUBUFNFOUBSFSFTUBUFEBTJG the activity discontinued from the start of the comparable period.

3.14 Impairments

Assets that have an indefinite useful life are not subject to amortisation and are tested for impairment annually. Assets that are subject to amortisation, as well as other assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is recognised for the amount by which the carrying value of an asset exceeds its recoverable amount. The recoverable amount is UIFIJHIFSPGUIFWBMVFPGBOBTTFUMFTTTFMMJOHFYQFOTFTBOEJUTWBMVFJOVTF*GUIFWBMVFJOVTFJTBQQMJFE JNQBJSNFOUT will be assessed at the level of the cash flow generating unit.

Assets, excluding goodwill, that have been impaired are reviewed annually for a possible reversal of the impairment. A maximum reversal is the amount of the original impairment, while it cannot exceed the carrying value which the relevant asset would have had if it had not been subjected to impairment.

3.15 Equity attributable to the Company’s shareholders

a) Share capital 0SEJOBSZTIBSFTBSFDMBTTJGJFEBTFRVJUZ$POWFSUJCMFBOEOPODPOWFSUJCMFGJOBODJOHQSFGFSFODFTIBSFTBSFDMBTTJGJFEBT liabilities. The equity component of the convertible financing preference shares is represented by the difference between the issue price and the fair value of the liability component, and is recognised as such in equity.

$PTUTEJSFDUMZBUUSJCVUBCMFUPUIFJTTVFPGOFXTIBSFTBSFQSFTFOUFEJOFRVJUZBTBEFEVDUJPO OFUPGUBY GSPNUIF proceeds.

*GUIF(SPVQPSBOZTVCTJEJBSZQVSDIBTFTTIBSFTJOUIF$PNQBOZTTIBSFDBQJUBM USFBTVSZTIBSFT UIFDPOTJEFSBUJPO QBJEoOFUPGBOZEJSFDUMZBUUSJCVUBCMFDPTUTBOEUBYFToXJMMCFEFEVDUFEGSPNFRVJUZ*GTVDITIBSFTBSFTVCTFRVFOUMZ sold or reissued, any consideration received will be included in equity, net of any directly attributable costs and taxes.

b) Reserves These include reserves for cash-flow hedges and currency translation differences.

c) Retained earnings 5IFTFSFMBUFUPDVNVMBUJWFQSJPSZFBSFBSOJOHTMFTTEJWJEFOETQBZBCMFUPIPMEFSTPGPSEJOBSZTIBSFTJOUIF$PNQBOZ Dividends are recognised as liabilities upon declaration. Dividends on preference shares are recognised as interest expenses in the income statement and as liabilities in the balance sheet. 2012 – 135

3.16 Borrowings

5IFQSJODJQBMBNPVOUPGUIFTVCPSEJOBUFEMPBOJTTVCPSEJOBUFEUPBMMPUIFSDSFEJUPST*OUFSFTUQBZNFOUTBSFOPU subordinated.

Financing preference shares are classified as liabilities, less the equity component recorded under reserves in equity. Dividends on preference shares are recognised as an interest expense in the income statement.

Non-recourse loans directly relate to the corresponding (project) specific assets (PPP concessions, PPP receivables, land and building rights and property development).

Financial lease obligations (net of finance charges) are classified as liabilities. The interest element in lease payments is recognised in the income statement.

Bank overdrafts are classified as current liabilities and recognised at fair value.

Borrowings are initially recognised at fair value (net of incurred transaction costs) and subsequently measured at amortised cost.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability until at least 12 months after the balance sheet date.

3.17 Derivative financial instruments

The Group uses derivatives to hedge its exposure to interest rate and foreign exchange risks arising from operating and financing activities. Derivatives are only used as hedging instruments in case of floating interest rates on loans BOEJODBTFPGDFSUBJOGVUVSFDBTIGMPXTJOGPSFJHODVSSFODJFT*OBEEJUJPO DPNNPEJUZIFEHFT EJFTFM BSFVTFE occasionally.

Derivatives are initially recognised at fair value at the date on which they are entered into and are subsequently measured at their fair values at the reporting date. The method of recognising the resulting gain or loss depends on XIFUIFSIFEHFBDDPVOUJOHIBTCFFOBQQMJFEBOE JGTP XIFUIFSUIFIFEHFSFMBUJPOTIJQJTFGGFDUJWF*GUIFIFEHF relationship is effective, cash flow hedge accounting is applied.

At the inception of a transaction, the Group documents the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking the various hedge transactions. At hedge inception and afterwards, the Group periodically documents whether the derivatives used in hedging USBOTBDUJPOTBSF JOJUTBTTFTTNFOU FGGFDUJWFJOPGGTFUUJOHDIBOHFTJODBTIGMPXTPGIFEHFEJUFNT*GUIFZBSFFGGFDUJWF  the movement is recognised in equity; if they are not, it is accounted for in the income statement.

*GBEFSJWBUJWFNBUVSFT JTTPME PSOPMPOHFSNFFUTUIFDSJUFSJBGPSIFEHFBDDPVOUJOH DVNVMBUJWFHBJOTPSMPTTFT JG any, which are recognised in equity at the time, will continue to be recognised in equity and be recognised as soon as UIFFYQFDUFEUSBOTBDUJPOJTSFDPHOJTFEJOUIFJODPNFTUBUFNFOU*GBOFYQFDUFEUSBOTBDUJPOJTOPMPOHFSQSPCBCMF BMM cumulated gains or losses which were recognised in equity will be directly reclassified in the income statement under finance income and expense.

The movement in comprehensive income consists of: (i) additions with regard to new derivatives, (ii) the increase in the value of existing derivatives and (iii) the release to the income statement, as soon as the related transaction is recognised in the income statement.

The Group uses hedge accounting on all forward exchange contracts and interest rate swaps for projects with an equivalent value of more than €1 million. 136 – 2012

3.18 Employee benefits

a) Pension liabilities The Group has both defined benefit and defined contribution schemes. The schemes are generally funded through payments to multi-employer funds, insurance companies or trustee-administered funds. A defined benefit scheme is a pension scheme defining the amount of pension benefits that an employee will receive on retirement, dependent upon factors such as age, years of service and compensation. A defined contribution scheme is a pension scheme under which the Group pays fixed contributions to an insurance company or pension fund and has no legal or constructive obligations to pay further contributions if the fund or insurance company fails to maintain sufficient assets to pay all present and future pension benefits. Defined benefit schemes in multi-employer funds are recognised as defined contribution schemes.

Defined benefit schemes The assets and liabilities recognised in the balance sheet with regard to defined benefit schemes consist of the present value of obligations at balance sheet date, less the fair value of the assets of the scheme, adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is calculated annually by independent actuaries, by using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates for high-value corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms to maturity of the related pension liability. The Group applies the corridor method for actuarial gains and losses arising from changes in actuarial assumptions. Actuarial gains and losses exceeding 10 per cent of the higher of the assets of the scheme and defined benefit PCMJHBUJPO UIFNBYJNVNDPSSJEPS BSFDIBSHFEPSDSFEJUFEUPUIFJODPNFTUBUFNFOUPWFSUIFFNQMPZFFTFYQFDUFE average remaining working lives. Past service costs are recognised directly in the income statement, unless the DIBOHFTUPUIFQFOTJPOTDIFNFEFQFOEPOUIFFNQMPZFFTSFNBJOJOHJOTFSWJDFGPSBTQFDJGJFEQFSJPEPGUJNF UIF WFTUJOHQFSJPE *OUIJTDBTF UIFQBTUTFSWJDFDPTUTBSFBNPSUJTFEPOBTUSBJHIUMJOFCBTJTPWFSUIFWFTUJOHQFSJPE

Defined contribution schemes For defined contribution schemes, the Group pays contributions to pension funds or insurance companies on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions are paid. The contributions are recognised as personnel expense when they are due. Prepaid contributions are recognised as an asset to the extent that cash refunds or reductions in the future payments are available.

b) Other long-term employee obligations These obligations relate to jubilee benefits, temporary leaves and similar arrangements and have a non-current nature. These obligations are stated at present value.

c) Termination benefits Termination benefits are liabilities with regard to termination of employment before the standard retirement date. The Group recognises termination benefits if it is demonstrably committed to terminating the employment of employees under a formal and irrevocable plan. Benefits are stated at their present values. The liability is recorded and disclosed as such under non-current and current provisions.

d) Bonus and profit-sharing schemes The Group recognises a liability for bonuses and profit-sharing, based on the relevant performance schemes. The liability is recorded as such under other liabilities.

e) Share-based payments Based on the long-term remuneration plan (LTR plan), Executive Board members receive a variable remuneration in the form of a pre-determined number of conditionally granted phantom shares. These include a dividend right, to which the same conditions apply as to the phantom shares. They are reinvested.

Phantom shares become unconditional three years after the date of grant, while the percentage of phantom shares UIBUCFDPNFVODPOEJUJPOBMEFQFOETPOUIF(SPVQTQFSGPSNBODF5IF(SPVQTQFSGPSNBODFJTEFGJOFEBTUIFSFBMJTFE value growth of the BAM share in comparison with the average realised value growth of several companies which are 2012 – 137

comparable to BAM (the peer group) in the three-year performance period. The (average) realised value growth, or Total Shareholders Return (TSR), consists of share price performance plus (re-invested) dividend.

6QPOWFTUJOHEBUF VODPOEJUJPOBMQIBOUPNTIBSFTBSFMPDLFEVQGPSBOPUIFSUXPZFBST$BTIEJTUSJCVUJPOUBLFTQMBDF at the end of the lock-up period.

5IFGBJSWBMVFPGUIFDPNNJUNFOUBSJTJOHGSPNUIF-53QMBOJTEFUFSNJOFEVTJOH.POUF$BSMPTJNVMBUJPONPEFMT  which take into account all specific characteristics of the plan. Fair value is determined while taking into account market expectations which apply to the part of the conditional phantom shares, i.e. the performance criterion related to the increase in shareholder value, including expectations regarding the dividend.

The fair value of the variable remuneration granted to Executive Board members based on phantom shares, which is paid in cash, is recognised as a liability with a corresponding credit entry of liabilities for the period until the date on which the Executive Board members are unconditionally entitled to payment. The valuation of the liability is re-assessed on every reporting date and on the settlement date. Any changes in the fair value of the liability are recognised as personnel expenses in the income statement.

3.19 Provisions

Provisions are recognised if the Group has a legal or constructive obligation as a result of past events and if an outflow of resources is probable and can be estimated reliably. No provisions are formed for future operating losses. 5IFBNPVOUSFDPHOJTFEBTBQSPWJTJPOJTUIFCFTUFTUJNBUFPGUIFPVUGMPXPGDBTIUPTFUUMFUIFQSFTFOUPCMJHBUJPO*G the effect of the time value of money is material, the amount of the provision equals the net present value of the outflow. a) Warranties This provision relates to estimated liabilities and pending proceedings with regard to disputes about completed projects. b) Reorganisation A provision for reorganisation is recognised if the Group has approved a detailed and formal reorganisation plan and the reorganisation has commenced or has been announced publicly. Future operating losses are not provided for. c) Rental guarantees These include the estimated commitments arising from rental guarantees issued to third parties. d) Other This covers other legal and constructive obligations, for example settlement of old property development activities or continuing rental commitments for (temporarily) unused buildings.

3.20 Deferred tax

Deferred tax assets and liabilities are recorded for the forecast fiscal consequences of temporary differences arising between the tax bases of assets and liabilities and their carrying values in the consolidated financial statements. However, deferred taxes arising from initial recognition of an asset or liability in transactions (other than business combinations), which at the time of the transaction affects neither accounting nor taxable profit or loss, are not accounted for. Deferred taxes are determined using tax rates (and acts) that have been determined no later than on the balance sheet date and that are expected to apply when the related deferred tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised if it is probable that future taxable profit will be available against which the timing differences and the available losses can be utilised.

Deferred taxes are provided on timing differences arising on investments in subsidiaries and associates, except if the 138 – 2012

timing of the reversal of the timing difference is not controlled by the Group and if it is unlikely that the timing difference will reverse in the foreseeable future.

Deferred tax assets and liabilities are netted if the Group has a right to do so by law, and if the deferred tax assets and liabilities relate to taxes levied by the same tax authority from the same taxpayer.

Deferred tax assets and liabilities are classified as such and presented on the balance sheet as non-current assets and non-current liabilities.

3.21 Trade and other payables

Trade payables and other debts are stated at fair value at first recognition and subsequently, at amortised cost.

Trade payables and other debts are expected to be settled within the normal course of business, normally within twelve months. The fair value of payables and the amounts expected to be settled after more than twelve months are disclosed as such in the notes to the financial statements.

3.22 Revenue

a) Construction contracts The Group recognises revenue associated with construction contracts. Revenue consists of the initially agreed amount and the variations in contract work, claims and incentive payments.

*GUIFPVUDPNFPGBDPOUSBDUDBOCFFTUJNBUFESFMJBCMZ QSPKFDUSFWFOVFBOEDPTUBSFBDDPVOUFEGPSJOUIFJODPNF statement based on the progress of work performed. This is the case if: (i) the total contract revenue can be measured reliably; (ii) it is probable that future economic benefits will flow to the Group; (iii) the cost to complete the contract and the stage of contract completion can be measured reliably; and (iv) the contract cost can be identified and measured reliably so that the actual cost can be compared with prior estimates. The progress percentage consists of the ratio between costs recorded and the total of expected costs. *GUIFPVUDPNFPGBDPOUSBDUDBOOPUCFFTUJNBUFESFMJBCMZ SFWFOVFJTSFDPHOJTFEPOMZUPUIFFYUFOUPGUIFDPOUSBDU costs incurred that are likely to be recoverable.

b) Property development The Group recognises revenue with regard to property development. Revenue consists of the agreed upon amounts of the transactions. No revenue is recognised until the risks and rewards relating to the equitable title have been transferred to a third party. Revenue is recognised as soon as the equitable title is transferred to a third party. A transfer has taken place if (as a minimum): (i) the total contract revenue can be measured reliably; (ii) it is probable that future economic benefits will flow to the Group and (iii) the cost to complete the contract can be measured reliably. Revenue and cost are recognised by reference to the stage of completion of the project activity at the balance sheet date and if and to the extent that the equitable title has been transferred.

A transfer of equitable title is considered to have taken place if and to the extent that risks and rewards attached to ownership have been transferred to the customer. This may relate to an entire project or to significant parts thereof, if the related risks and rewards have also been transferred. This applies to land transfers, for example.

Revenue recognition of projects with a continuing transfer of risks and benefits related to the ownership takes place in accordance with construction contracts. Please refer to Notes 3.22a and 6.

c) PPP concessions 5IF(SPVQBDDPVOUTGPSDPOTUSVDUJPOSFWFOVFBOEPQFSBUJOHSFWFOVFSFMBUFEUPDPODFTTJPONBOBHFNFOU$POTUSVDUJPO revenue is recognised in accordance with construction contracts. Please refer to Notes 3.22a and 6.

Operation revenue depends on the availability of a facility (PPP receivables) or on the actual usage of a facility (PPP DPODFTTJPOT *GJODPNFEFQFOETPOUIFBWBJMBCJMJUZPGBGBDJMJUZ SFWFOVFDPOTJTUTPG J UIFGBJSWBMVFPGUIFSFOEFSJOHPG 2012 – 139

contractually agreed upon services and (ii) interest income related to the capital investment in the project. *GJODPNFEFQFOETPOUIFBDUVBMVTBHFPGBGBDJMJUZ SFWFOVFDPOTJTUTPGQBZNFOUTBDUVBMMZSFDFJWFEGPSVTBHFPGUIF facility. *OCPUIDBTFT SFWFOVFJTSFDPHOJTFEBTTPPOBTUIFSFMBUFETFSWJDFTBSFSFOEFSFE*OUFSFTUJTSFDPHOJTFEBTGJOBODJOH income in the period to which it relates. d) Provision of services and sale of goods Revenue from the provision of services is recognised if the result of the transaction can be reliably determined. 3FWFOVFJTJODMVEFEJOQSPQPSUJPOUPDPNQMFUFETFSWJDFT*GUIFSFTVMUPGBUSBOTBDUJPODBOOPUCFEFUFSNJOFESFMJBCMZ  revenue is only recognised if it is likely that the costs incurred can be recovered. Revenue from the sale of goods is recognised if products have been delivered to the customer, the customer has accepted the products and it is likely that the related receivables can be collected. Revenue consists of the amount agreed upon for the related transaction. e) Other Other revenue includes, among other items, rental income under operational lease and (sub)lease of property, equipment or installations.

3.23 Expenses a) Tender costs 5FOEFSDPTUTBSFJOJUJBMMZSFDPHOJTFEJOUIFJODPNFTUBUFNFOU*GUIFSFJTTVGGJDJFOUDFSUBJOUZUIBUUIFQSPKFDUXJMMCF BXBSEFEUPUIF(SPVQ UIFDPTUTBSFDBQJUBMJTFEGSPNUIBUNPNFOUPOXBSET*GUFOEFSDPTUTBSFSFDPHOJTFEBTBO expense in the period in which they initially occurred, they are not capitalised any more if the project is obtained in the following period. b) Operational lease payments Payments made under an operational lease (net of any incentives) are recognised in the income statement on a straight-line basis over the term of the lease. c) Financial lease payments Financial lease payments are partially accounted for as repayments of liabilities and partially as financing cost. Financing costs are charged to the income statement over the lease period so as to produce a fixed periodic rate of interest on the remaining balance of the liability. d) Government grants Grants from government are recognised at their fair values if there is reasonable certainty that the grant will be received and the Group will comply with all the conditions attached to it. Government grants relating to costs are recognised in the income statement in the period in which the related costs are accounted for. e) Research and development Research and development expenses that are directly related to projects, are recognised in the cost price of these projects. Expenses with regard to other research and development do not qualify for capitalisation and are recognised in the income statement in the period in which they were incurred. f) Financing income and expense Financing income consists of interest income and result from associates. Financing expense consist of interest costs on borrowings and financial lease arrangements as well as dividend paid on preference shares, less capitalised interest on PPP projects in the construction phase and on property development.

*GBWBSJBCMFJOUFSFTUSBUFJTGJYFECZNFBOTPGBOJOUFSFTUSBUFTXBQ UIFWBSJBCMFJOUFSFTUDIBSHF BTXFMMBTUIF EJGGFSFODFCFUXFFOUIFGJYFEJOUFSFTUBOEUIFWBSJBCMFJOUFSFTU JTSFDPHOJTFEJOUIFJODPNFTUBUFNFOU$POTFRVFOUMZ  (financing) expenses are fixed. 140 – 2012

3.24 Statement of cash flows

The statement of cash flows is prepared as per the indirect method. The liquidities position in the statement of cash flows consists of cash and cash equivalents excluding bank overdrafts. 2012 – 141

4. Financial risk management

The Group recognises financial risk factors with regard to foreign exchange rate, interest rate, price, credit and liquidity. These financial risks are not exceptional or different in nature from those that are customary in the industry. The Group applies a stringent policy designed to manage and mitigate these risks to the extent possible. This involves using general controls, such as internal procedures and instructions, as well as specific measures and/or financial instruments. These controls are accompanied by efficient reporting systems and short lines of communication. The (SPVQTGJOBODJBMSJTLGBDUPST DPOUSPMTBOESFTJEVBMSJTLBSFEFTDSJCFECFMPX

4.1 Financial risk factors a) Market risks

Foreign exchange risks The Group has substantial activities in the United Kingdom and, to a limited extent, in other non-euro countries. The (SPVQTSFTVMUTBOETIBSFIPMEFSTFRVJUZBSFUIFSFGPSFBGGFDUFECZGPSFJHOFYDIBOHFSBUFT(FOFSBMMZ UIF(SPVQJT active in the above mentioned markets through local subsidiaries. The exchange risk is therefore limited, because transactions are denominated largely in the functional currencies of the subsidiaries. The associated translation risk is not hedged.

A limited number of subsidiaries are active in markets where contracts are denominated in a different currency than their functional currency. Group policy is that costs and revenues from these projects are mainly expressed in the same currency, thus limiting foreign exchange risks. The Group hedges the residual exchange risk on a project-by- project basis, using forward exchange contracts. This involves hedging of unconditional project-related exchange risks in excess of €1 million as soon as these occur. The Group reports these hedges by means of hedge accounting. Additional exchange risks in the tender stage and arising from contractual amendments are assessed on a case-by-case basis.

Procedures have been established for proper recording of hedge transactions. Systems are in place to ensure the regular performance and analysis of the requisite hedge effectiveness measurements for hedge accounting.

With regard to financial instruments, the Group predominantly faces an exchange rate risk for current account transactions in British pound sterling. This risk is covered by forward exchange contracts. The residual effect of the FYDIBOHFSBUFSJTLXJUISFHBSEUPGJOBODJBMJOTUSVNFOUTJOQPVOETUFSMJOHBOEPUIFSDVSSFODJFTPOUIF(SPVQTSFTVMU and equity, is limited.

*OUFSFTUSBUFSJTLT 5IF(SPVQTJOUFSFTUSBUFSJTLJTBTTPDJBUFEXJUIJOUFSFTUCFBSJOHSFDFJWBCMFTBOEDBTIBOEDBTIFRVJWBMFOUT POUIF POFIBOE BOEJOUFSFTUCFBSJOHCPSSPXJOHT POUIFPUIFS*GUIFJOUFSFTUJTWBSJBCMF JUQSFTFOUTUIF(SPVQXJUIBDBTI GMPXJOUFSFTUSBUFSJTL*GUIFJOUFSFTUSBUFJTGJYFE UIFSFJTBGBJSWBMVFJOUFSFTUSBUFSJTL

The Group mitigates the cash flow interest rate risk to the extent possible through the use of interest rate swaps, under which interest liabilities based on a variable rate are converted into fixed rates. The Group does not use interest rate swaps under which fixed-rate interest liabilities are converted into variable rates in order to hedge the fair value interest rate risk.

The analysis of the cash flow interest rate risk takes into account cash and cash equivalents, the debt position and the VTVBMGMVDUVBUJPOTJOUIF(SPVQTXPSLJOHDBQJUBMSFRVJSFNFOUT*OBEEJUJPO BMUFSOBUJWFTBSFCFJOHTUVEJFEBOEIFEHFT are being considered. Under Group policy, cash flow interest rate risks with regard to long-term borrowings (mainly subordinated and PPP borrowings and bank financing) are largely hedged by interest swaps. As a result, the Group is not entirely insensitive to movements in interest rates. At year-end 2012, 69 per cent (2011: 76 per cent) of the JOUFSFTUPOUIF(SPVQTOFUEFCUQPTJUJPOXBTGJYFE5IFQBSUOPUDPWFSFEDPOTJTUTBMNPTUFOUJSFMZPGQSPKFDUGJOBODJOH and current account positions. 142 – 2012

*GUIFJOUFSFTUSBUFT &63*#03BOE-*#03 IBECFFOBOBWFSBHFPGCBTJTQPJOUTIJHIFSPSMPXFSEVSJOH UIF (SPVQTOFUSFTVMUBGUFSUBY BTTVNJOHUIBUBMMPUIFSWBSJBCMFTSFNBJOFEFRVBM XPVMEIBWFCFFOBCPVUïNJMMJPO MPXFSPSBCPVUïNJMMJPOIJHIFS BQQSPYJNBUFMZïNJMMJPOMPXFSPSIJHIFS *GUIFJOUFSFTUSBUFT &63*#03 BOE-*#03 IBECFFOBOBWFSBHFPGCBTJTQPJOUTIJHIFSPSMPXFSEVSJOH UIF(SPVQTGBJSWBMVFDBTIGMPX hedge reserve in Group equity (assuming that all other variables remained equal) would have been about €101 million higher or €111 million lower (2011: approximately €101 million higher or approximately €118 million lower).

Price risks The price risk run by the Group relates to the procurement of land and materials and subcontracting of work, and consists of the difference between the market price at the point of tendering or offering on a contract and the market price at the time of actual performance. 5IF(SPVQTQPMJDZJTUPBHSFFBQSJDFJOEFYBUJPOSFJNCVSTFNFOUDMBVTFXJUIUIFDVTUPNFSBUUIFQPJOUPGUFOEFSJOH or offering on major projects. The Group also endeavours to manage the price risk by using framework contracts, TVQQMJFSTRVPUBUJPOTBOEIJHIWBMVFTPVSDFTPGJOGPSNBUJPO

*GUIF(SPVQJTBXBSEFEBQSPKFDUBOEOPQSJDFJOEFYBUJPOSFJNCVSTFNFOUDMBVTFJTBHSFFEXJUIUIFDVTUPNFS UIF costs of land and materials, as well as the costs for subcontractors, are fixed at an early stage by establishing prices and conditions in advance with the main suppliers and subcontractors. While it is impossible to exclude the impact of price fluctuations altogether, the Group takes the view that its method of operating reflects the optimum economic balance between decisiveness and predictability. The Group occasionally uses financial instruments to hedge the (residual) price risks.

b) Credit risks The Group has credit risks with regard to financial assets including PPP receivables, derivative instruments, trade receivables, cash and cash equivalents and bank deposits.

The PPP receivables and a substantial part of the trade receivables consist of contracts with governments or government bodies. Therefore, credit risk inherent in these contracts is limited.

Furthermore, a significant part of the trade receivables is based on contracts involving prepayments or payments proportionate to progress of the work, which limits the credit risks, in principle, to the balances outstanding.

5IFDSFEJUSJTLGSPN111SFDFJWBCMFTBOEUSBEFSFDFJWBCMFTJTNPOJUPSFECZUIFSFMFWBOUTVCTJEJBSJFT$MJFOUT creditworthiness is analysed in advance and then monitored during the performance of the project. This involves UBLJOHBDDPVOUPGUIFDMJFOUTGJOBODJBMQPTJUJPO QSFWJPVTDPMMBCPSBUJPOTBOEPUIFSGBDUPST Group policy is designed to mitigate these credit risks through the use of various instruments, including retaining ownership until payment has been received, prepayments and the use of bank guarantees.

5IF(SPVQTDBTIBOEDBTIFRVJWBMFOUTBOECBOLEFQPTJUTBSFIFMEJOWBSJPVTCBOLT5IF(SPVQMJNJUTUIFDSFEJUSJTL BTTPDJBUFEXJUIDBTIBOEDBTIFRVJWBMFOUTBOECBOLEFQPTJUTIFMEJOUIFTFCBOLTBTBSFTVMUPGUIF(SPVQTQPMJDZUP work only with respectable banking institutions. This involves cash and cash equivalents as well as bank deposits in FYDFTTPGïNJMMJPOCFJOHIFMEJOCBOLTXJUIBUMFBTUBOA"SBUJOH5IF(SPVQTQPMJDZBJNTUPNJOJNJTFBOZ concentration of credit risks involving cash and cash equivalents and bank deposits. 2012 – 143

The book value of the financial assets involving a credit risk is as follows.

2012 2011 Non-current assets 10 PPP receivables 878,123 743,284 12 Non-current receivables 41,562 65,832 20 Derivatives 625 802

Current assets 14 Net trade receivables 921,968 954,421 14 Retentions 119,540 116,304 14 PPP receivables 91,144 135,364 12 Other financial assets 11,371 2,519 20 Derivatives 787 5,071 15 $BTIBOEDBTIFRVJWBMFOUT 620,090 1,012,610

2,685,210 3,036,207

*NQBJSNFOUTBSFJODMVEFEJOUIFOPODVSSFOUSFDFJWBCMFTBOEUIFOFUUSBEFSFDFJWBCMFT1MFBTFSFGFSUP/PUFTBOE 14. None of the other financial assets included in this overview were overdue at year-end 2012 or included a provision for impairment. c) Liquidity risks Liquidity risks may occur if the procurement and performance of new projects stagnate and less payments (and prepayments) are received, or if investments in land or property development would have a too large effect on the BWBJMBCMFGJOBODJOHSFTPVSDFTBOEPSPQFSBUJPOBMDBTIGMPX5IFTJ[FPGJOEJWJEVBMUSBOTBDUJPOTDBODBVTFSFMBUJWFMZ large short-term fluctuations in the liquidity position. The Group has sufficient credit and current account facilities to manage these fluctuations.

Partly to manage liquidity risks, subsidiaries prepare monthly detailed cash flow projections for the ensuing twelve months. The analysis of the liquidity risk takes into account the amount of cash and cash equivalents, credit facilities BOEUIFVTVBMGMVDUVBUJPOTJOUIF(SPVQTXPSLJOHDBQJUBMSFRVJSFNFOUT5IJTQSPWJEFTUIF(SPVQXJUITVGGJDJFOU opportunities to use its available liquidities and credit facilities as flexible as possible, and to indicate any shortfalls in a timely manner.

The first possible expected contractual outgoing cash flows from financial liabilities and derivatives as at the end of the year and settled on a net basis, consist of (contractual) repayments and (estimated) interest payments. 144 – 2012

The total expected contractual cash flow is made up as follows:

$BSSZJOH $POUSBDUVBM Not later Later than amount cash flows than 1 year 1-5 years 5 years

2012 Subordinated loan 123,500 156,086 5,372 150,714 - Non-recourse PPP loans 947,464 1,515,099 170,574 102,041 1,242,484 Non-recourse project financing 339,560 349,963 209,468 125,869 14,626 Recourse PPP loans 101,068 104,884 48,760 56,124 - Other project financing 197,868 205,713 114,906 87,305 3,502 Financial lease liabilities 42,389 46,159 8,959 32,789 4,411 Derivatives (forward exchange contracts) (1,412) (279,667) (266,650) (13,017) - Derivatives (forward exchange contracts) 3,183 281,797 268,911 12,886 - Derivatives (interest rate swaps) 287,699 355,792 45,592 170,208 139,992 Other loans 4,652 4,849 1,558 3,291 - Bank overdrafts 1,261 1,302 1,302 - - Other current liabilities 2,986,605 2,986,605 2,986,605 - - 5,033,837 5,728,582 3,595,357 728,210 1,405,015

2011 Subordinated loan 200,000 215,651 9,906 205,745 - Non-recourse PPP loans 859,654 1,177,472 108,590 112,639 956,243 Non-recourse project financing 371,813 399,136 99,320 299,298 518 Recourse PPP loans 131,652 150,083 22,472 127,611 - Other project financing 222,692 236,689 45,632 189,064 1,993 Bank facilities 360,000 377,979 13,518 364,461 - Financial lease liabilities 35,640 46,601 5,604 40,997 - Derivatives (forward exchange contracts) (5,873) (262,873) (216,925) (45,948) - Derivatives (forward exchange contracts) 1,803 264,470 219,674 44,796 - Derivatives (interest rate swaps) 249,685 301,056 31,361 140,212 129,483 Other loans 5,069 5,601 1,534 4,067 - Bank overdrafts 4,605 4,776 4,776 - - Other current liabilities 3,047,808 3,047,869 3,046,809 1,060 - 5,484,548 5,964,510 3,392,271 1,484,002 1,088,237

The expected outgoing cash flows are offset by the incoming cash flows from operational activities and (re-)financing. Besides that, the Group has syndicated and bilateral credit facilities available of €500 million (2011: €475 million) and €165 million (2011: €165 million), respectively. 2012 – 145

4.2 Capital risks

5IF(SPVQTBJNJTGPSBGJOBODJOHTUSVDUVSFUIBUFOTVSFTDPOUJOVJOHPQFSBUJPOTBOENJOJNJTFTDPTUPGFRVJUZ'PSUIJT  flexibility and access to the financial markets are important conditions. As usual within the industry, the Group NPOJUPSTJUTGJOBODJOHTUSVDUVSFVTJOHBTPMWFODZSBUJP BNPOHPUIFSGBDUPST*OUIJTDPOUFYU UIF(SPVQVTFTUXP solvency definitions, i.e. solvency including and excluding (non-) recourse PPP loans.

4PMWFODZJODMVEJOH OPO SFDPVSTF111MPBOTJTDBMDVMBUFEBTUIFDBQJUBMCBTFEJWJEFECZUPUBMBTTFUT5IF(SPVQT DBQJUBMCBTFDPOTJTUTPGFRVJUZBUUSJCVUBCMFUPUIFDPNQBOZTTIBSFIPMEFST UIFTVCPSEJOBUFEMPBOBOEUIFQSFGFSFODF shares. Please refer to Notes 18 and 19. At year-end 2012, the solvency ratio was 15.7 per cent (2011: 18.9 per cent).

4PMWFODZVTFEJOUIF(SPVQTTUSBUFHJDBHFOEBFYDMVEJOH OPO SFDPVSTF111MPBOTXBTQFSDFOUBUZFBSFOE (2011: 21.9 per cent).

4.3 Financial instruments by categories

5IF(SPVQIBTUISFFDBUFHPSJFTPGGJOBODJBMJOTUSVNFOU"TJHOJGJDBOUOVNCFSPGUIFTFBSFJOIFSFOUUPUIF(SPVQT normal commercial operations and are included in the category of borrowings and receivables/obligations. A few other financial instruments are presented in various other line items of the balance sheet. The following summary indicates the values for which financial instruments are included for each relevant balance sheet item.

Financial instruments Loans and Fair value Derivatives No receivables / through used for financial liabilities profit and loss hedging instruments Total

2012 10 PPP receivables 878,123 - - - 878,123 12 Other financial assets 41,562 2,621 - 1,278 45,461 20 Derivatives - - 1,412 - 1,412 14 Trade and other receivables 1,132,652 - - 949,983 2,082,635 15 $BTIBOEDBTIFRVJWBMFOUT 620,090 - - - 620,090 19 Borrowings 1,756,501 - - 1,261 1,757,762 20 Derivatives - - 290,882 - 290,882 24 Trade and other payables 837,760 - - 2,148,845 2,986,605 5,266,688 2,621 292,294 3,101,367 8,662,970

2011 10 PPP receivables 743,284 - - - 743,284 12 Other financial assets 65,832 3,751 - 1,278 70,861 20 Derivatives - - 5,873 - 5,873 14 Trade and other receivables 1,206,089 - - 910,815 2,116,904 15 $BTIBOEDBTIFRVJWBMFOUT 1,012,610 - - - 1,012,610 19 Borrowings 2,186,520 - - 4,605 2,191,125 20 Derivatives - - 251,488 - 251,488 24 Trade and other payables 895,790 - - 2,152,018 3,047,808 6,110,125 3,751 257,361 3,068,716 9,439,953

Of the total balance sheet position of €8.7 billion at year-end 2012 (2011: €9.4 billion), 64 per cent (2011: 67 per cent) qualifies as a financial instrument. 146 – 2012

4.4 Fair value estimation

The fair value of financial instruments not quoted in an active market is measured using valuation techniques. The Group uses various techniques and makes assumptions based on market conditions on balance sheet date.

0OFPGUIFTFUFDIOJRVFTJTUIFDBMDVMBUJPOPGUIFOFUQSFTFOUWBMVFPGUIFFYQFDUFEDBTIGMPXT %$'NFUIPE 5IFGBJS value of the interest rate swaps is calculated as the net present value of the expected future cash flows. The fair value PGUIFGPSXBSEFYDIBOHFDPOUSBDUTJTNFBTVSFECBTFEPOUIFAGPSXBSEDVSSFODZFYDIBOHFSBUFTPOCBMBODFTIFFU EBUF*OBEEJUJPO WBMVBUJPOTGSPNCBOLFSTBSFSFRVFTUFEGPSJOUFSFTUSBUFTXBQT

'JOBODJBMJOTUSVNFOUTWBMVFEBUGBJSWBMVFDPOTJTUPGPOMZJOUFSFTUSBUFTXBQTBOEGPSFJHOFYDIBOHFDPOUSBDUT*OMJOF XJUIUIFDVSSFOUBDDPVOUJOHQPMJDJFTUIFEFSJWBUJWFTBSFDMBTTJGJFEBTAMFWFM

On balance sheet date the fair value of the liability arising from the LTR plan for the Executive Board members is determined. Valuation factors include the share prices of BAM and those of the peer group at valuation date, anticipated volatility as well as anticipated dividends of the shares, and the risk-free interest rate, based on the ten-year European swap interest. Anticipated volatility is estimated based on the historically average volatility of the share prices of BAM and those of the peer group. Excluded from the determination of fair value are services and non-market related conditions.

*UJTBTTVNFEUIBUUIFOPNJOBMWBMVF MFTTFTUJNBUFEBEKVTUNFOUT PGCPSSPXJOHT USBEFSFDFJWBCMFTBOEUSBEF payables approximate to their fair value.

5. Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may reasonably occur based on the current situation.

5.1 Critical accounting estimates and assumptions in the financial statements

The Group makes estimates and assumptions concerning the future. Estimates will, by definition, seldom be identical to the actual results. Estimates and assumptions are based on historical experience and other factors, including expectations of future events that may reasonably occur based on the current situation. Estimates are continuously evaluated. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying values of assets and liabilities within the next financial year are disclosed in the notes to the financial statements.

a) Project results *GUIFSFTVMUPGBDPOUSBDUDBOCFFTUJNBUFESFMJBCMZ SFWFOVFTBOEDPTUTBSFBDDPVOUFEGPSPWFSUIFQFSJPEPGUIF contract, in proportion to the progress of the activities performed. The activities performed are measured in BDDPSEBODFXJUIUIFAQFSDFOUBHFPGDPNQMFUJPONFUIPE*GJUJTQSPCBCMFUIBUUIFUPUBMQSPKFDUDPTUXJMMFYDFFEUIF total contract revenue, the expected loss is recognised as an expense.

This system is based on periodic assessments by the project teams using project accounts, project files and the expertise of those involved. Estimates are an inherent part of this process and they may differ from the subsequent reality, especially for long-term (complex) projects. However, historical experience has also shown that estimates are, on the whole, sufficiently reliable.

b) Land and building rights The Group assesses the valuation of land banks and building rights by making estimates and assumptions based on market information. Developments of all-in prices, the level of building cost, the number of housing units per project and the moment of development are particularly important for houses. For commercial property, estimates are NBEFXJUISFHBSEUPUIFFYQFDUFENBSLFUZJFMEQFSPCKFDU UIFSFOUBMMFWFMTBOEUIFFTUJNBUFESFOUGSFFQFSJPET*O most cases, external valuations are used. As a consequence of the radical changes in market conditions with regard 2012 – 147

to property, assumptions and starting points may change significantly, partly due to the relatively long duration for project realisation. This may result in impairments of positions to lower market values. c) Property development The valuation of property positions is assessed on the basis of market information available. Based on the market information, assumptions and starting points are assessed per project. Developments of all-in prices, the level of building cost, the number of housing units per project and the moment of development are particularly important for houses. For commercial property, estimates are also made with regard to the expected market yield per object, UIFSFOUBMMFWFMTBOEUIFFTUJNBUFESFOUGSFFQFSJPET*ONPTUDBTFT FYUFSOBMWBMVBUJPOTBSFVTFE"TBDPOTFRVFODFPG the radical changes in market conditions with regard to property, assumptions and starting points may change significantly. This may result in impairments of positions to lower market values. d) Goodwill The Group tests for impairment of goodwill every year. Based on the business plans of the business units, which are approved by management, the expected cash flows before tax are determined for the next five years. A ten-year QFSJPEJTVTFEGPSQSPQFSUZPQFSBUJPOTJOUIF/FUIFSMBOETJOSFMBUJPOUPUIFFYQFDUFENBSLFUSFDPWFSZ$BTIGMPXT after the five-year or ten-year periods are extrapolated by using estimated growth figures which are considered BQQSPQSJBUFGPSUIF(SPVQTMPOHUFSNPVUMPPLXJUISFHBSEUPTFDUPSTBOENBSLFUT'PSFBDICVTJOFTTVOJU B AXFJHIUFEBWFSBHFDPTUPGDBQJUBM 8"$$ JTEFUFSNJOFECBTFEPOBSFQSFTFOUBUJWFAQFFSHSPVQ*OBEEJUJPO BO estimate is made of the expected inflation and the growth percentage. The cash flows, the inflation, the growth QFSDFOUBHFBOE8"$$JEFOUJGJFEDPOTUJUVUFUIFCBTJTGPSUIFAEJTDPVOUFEDBTIGMPXNFUIPEUPUFTUHPPEXJMM.BKPS changes in the assumptions and starting points may have an effect on the valuation of goodwill. e) PPP concessions .BSLFUWBMVFTPGUIFUPMMSPBETJO*SFMBOEBOE(FSNBOZBSFDBMDVMBUFECZVTJOHUIFGJOBODJBMNPEFMTPGUIF DPODFTTJPOT5IF8"$$VTFEQFSDPODFTTJPOJTEFUFSNJOFEXIJMFUBLJOHJOUPBDDPVOUQSPKFDUTQFDJGJDGJOBODJOH  the required profit level of equity and peer information for the Beta. Movements in cash flows during the terms PGBQQSPYJNBUFMZZFBST BOEPSDIBOHFTJOUIF8"$$NBZIBWFBNBUFSJBMJNQBDUPOUIFNBSLFUWBMVFPGUIF concessions. Particularly with regard to toll roads, where cash flows depend on traffic intensity, cash flows may be lower in the starting phase and may therefore be adjusted after several years. f) Tax on profits The Group estimates the tax position for each tax entity. Estimates are made with regard to the valuation of tax losses. The Group values deferred tax assets only to the extent that they are likely to be realised.

5.2 Critical judgements in applying the entity’s accounting policies

Pension plan obligations are considered to be cost within the normal course of business but relate to liabilities that will have to be fulfilled at some distant future date. Pension charges are determined on the basis of actuarial principles. These are based on a number of underlying assumptions such as staffing changes, discount rates, mortality rates, pensionable age, expected return on plan assets, future salary increases and the associated indexation of the payments. These assumptions are generally reassessed at the start of every financial year. Actual circumstances may deviate from these assumptions, giving rise to an altered pension obligation, which may then lead to extra income or FYQFOTFJOUIFDPOTPMJEBUFEJODPNFTUBUFNFOU$IBOHFTJOUIFSFMFWBOUQFOTJPODPTUTNBZPDDVSJOUIFGVUVSFBTB result of adjusted assumptions.

Except for the above and the elements as included in the notes to the financial statements, there are no critical BDDPVOUJOHFTUJNBUFTPSBTTVNQUJPOTJOBQQMZJOHUIF(SPVQTBDDPVOUJOHQPMJDJFTXIJDISFRVJSFGVSUIFSEJTDMPTVSF 148 – 2012

6. Segment information

Sector reporting

$POTUSVDUJPO Other Revenue and results and $JWJM including M&E services Engineering Property PPP eliminations Total 2012 $POTUSVDUJPODPOUSBDUT 2,852,278 3,478,966 364,142 420,000 - 7,115,386 Property development - - 172,424 - - 172,424 $PODFTTJPOT 26,438 - - 55,961 - 82,399 Services and other 8,203 10,903 11,853 - 3,115 34,074 Third party revenue 2,886,919 3,489,869 548,419 475,961 3,115 7,404,283 Sector revenue 449,570 269,737 - - (719,307) - Revenue 3,336,489 3,759,606 548,419 475,961 (716,192) 7,404,283

Operating result 43,058 51,482 (241,105) 7,019 (153,612) (293,158) Net finance cost 4,755 5,402 (4,569) 5,378 (7,453) 3,513 Result from associates 19 913 (3,479) 1,170 - (1,377) Result before tax 47,832 57,797 (249,153) 13,567 (161,065) (291,022) Tax 39,114 Result discontinued operations 65,000 Net result for the year (186,908)

2011 $POTUSVDUJPODPOUSBDUT 2,938,624 3,547,749 550,472 463,808 - 7,500,653 Property development - - 111,718 - - 111,718 $PODFTTJPOT 4,149 - - 43,740 - 47,889 Services and other 11,338 13,236 12,068 - 525 37,167 Third party revenue 2,954,111 3,560,985 674,258 507,548 525 7,697,427 Sector revenue 434,983 272,994 - - (707,977) - Revenue 3,389,094 3,833,979 674,258 507,548 (707,452) 7,697,427

Operating result 67,658 85,725 (16,204) 9,518 (11,297) 135,400 Net finance cost 8,530 4,974 (8,368) (336) (31,058) (26,258) Result from associates 20 1,236 1,186 1,283 30,651 34,376 Result before tax 76,208 91,935 (23,386) 10,465 (11,704) 143,518 Tax (28,050) Result discontinued operations 12,259 Net result for the year 127,727

$POTUSVDUJPO Other Balance sheet and $JWJM including M&E services Engineering Property PPP eliminations 1 Total 2012 Assets 1,584,102 2,411,465 1,560,931 1,712,891 (624,468) 6,644,921 Associates 547 4,056 9,862 3,938 1,096 19,499 Total assets 1,584,649 2,415,521 1,570,793 1,716,829 (623,372) 6,664,420

Liabilities 1,155,611 1,809,773 1,670,002 1,766,271 (661,287) 5,740,370 Group equity - - - - 924,050 924,050 Group equity and liabilities 1,155,611 1,809,773 1,670,002 1,766,271 262,763 6,664,420

2011 Assets 1,724,870 2,337,719 1,739,526 1,429,707 (32,942) 7,198,880 Associates 555 4,664 10,108 3,296 575 19,198 Total assets 1,725,425 2,342,383 1,749,634 1,433,003 (32,367) 7,218,078

Liabilities 1,351,302 1,731,499 1,635,619 1,450,226 (113,711) 6,054,935 Group equity - - - - 1,163,143 1,163,143 Group equity and liabilities 1,351,302 1,731,499 1,635,619 1,450,226 1,049,432 7,218,078

1 *ODMVEJOHOPOPQFSBUJPOBMBTTFUTBOEMJBCJMJUJFT 2012 – 149

Other information $POTUSVDUJPO Other and $JWJM including M&E services Engineering Property PPP eliminations 1 Total 2012 *OWFTUNFOUT¤ 12,311 97,118 383 398 3,305 113,515 Amortisation and depreciation 19,419 59,622 1,478 4,200 4,220 88,939 *NQBJSNFOUMPTTFT - - 398,148 - - 398,148

Average number of fte ³ 7,849 14,739 271 96 233 23,188 Number of fte at year-end 7,740 15,421 245 101 227 23,734

2011 *OWFTUNFOUT¤ 15,744 47,071 3,033 954 6,207 73,009 Amortisation and depreciation 21,899 69,678 1,966 6,267 3,528 103,338

Average number of fte ³ 8,475 14,594 324 87 222 23,702 Number of fte at year-end 8,207 14,997 314 92 220 23,830

–*ODMVEJOHOPOPQFSBUJPOBMBTTFUTBOEMJBCJMJUJFT ² Gross investments in tangible and intangible assets. ³ Fulltime equivalent.

Geographical reporting

$POTUSVDUJPO Other 4 Revenue and $JWJM including M&E services Engineering Property PPP eliminations Total 2012 Netherlands 1,584,754 1,440,856 398,212 159,864 (384,332) 3,199,354 United Kingdom 1,068,374 915,832 60,480 68,686 (71,859) 2,041,513 Belgium 215,003 630,921 88,666 85,340 (136,639) 883,291 Germany 459,911 207,304 - 116,620 (99,680) 684,155 *SFMBOE - 230,926 1,061 29,791 (14,887) 246,891 Other (worldwide) 8,447 333,767 - 15,660 (8,795) 349,079 3,336,489 3,759,606 548,419 475,961 (716,192) 7,404,283

2011 Netherlands 1,659,961 1,560,922 618,657 188,923 (468,336) 3,560,127 United Kingdom 1,090,212 917,721 3,529 64,051 (96,427) 1,979,086 Belgium 117,632 713,613 51,151 134,321 (121,159) 895,558 Germany 508,064 172,733 - 53,237 (19,113) 714,921 *SFMBOE - 227,547 921 13,525 (182) 241,811 Other (worldwide) 13,225 241,443 - 53,491 (2,235) 305,924 3,389,094 3,833,979 674,258 507,548 (707,452) 7,697,427

4 Geographical allocations based on location of projects. 150 – 2012

Assets ¹ 2012 2011

Netherlands 3,126,476 3,345,612 United Kingdom 1,210,817 1,332,558 Belgium 1,098,303 984,342 Germany 891,687 711,551 *SFMBOE 474,832 466,870 Other (worldwide) 223,117 276,553 Eliminations, associates and not allocated assets (360,812) 100,592 6,664,420 7,218,078

Investments ² 2012 2011

Netherlands 32,071 37,183 United Kingdom 11,591 8,375 Belgium 21,432 4,460 Germany 32,404 8,621 *SFMBOE 489 1,933 Other (worldwide) 15,528 12,437 113,515 73,009

1 Geographical allocations based on location of the assets. ² Gross investments in tangible and intangible assets based on geographical location. 2012 – 151

7. Overview of projects

Construction contracts and property development 5IFTFQSPKFDUTSFGMFDUBNBKPSQBSUPGUIF(SPVQTBDUJWJUJFTBOEBSFQSFTFOUFEJOWBSJPVTMJOFJUFNTPGUIFCBMBODF TIFFU4VQQMFNFOUBSZUPUIFTUBOEBSEOPUFTBOEJOPSEFSUPQSPWJEFBOJOTJHIUJOUPUIF(SPVQTPWFSBMMQPTJUJPO UIF relevant line items are stated below.

Property $POTUSVDUJPO development contracts Total

2012 Land and building rights, property development 1,244,458 - 1,244,458 Amounts due from customers 68,878 372,816 441,694 Total assets 1,313,336 372,816 1,686,152

Non-recourse project financing (339,560) - (339,560) Other project financing (197,868) - (197,868) Amounts due to customers (71,287) (787,335) (858,622) Total liabilities (608,715) (787,335) (1,396,050)

At 31 December 704,621 (414,519) 290,102

2011 Land and building rights, property development 1,492,272 - 1,492,272 Amounts due from customers 68,439 430,376 498,815 Total assets 1,560,711 430,376 1,991,087

Non-recourse project financing (371,813) - (371,813) Other project financing (222,692) - (222,692) Amounts due to customers (120,964) (815,439) (936,403) Total liabilities (715,469) (815,439) (1,530,908)

At 31 December 845,242 (385,063) 460,179

Property development Property development consists of land and building rights and property development projects. Property development projects whose transfer of equitable title takes place during development are recognised in the item of amounts receivable from clients or amounts payable to clients. At year-end 2012, the value of these projects on the balance sheet is €2 million credit (2011: €53 million credit). The amount of prepayments included at 31 December 2012 is €8 million (2011: €4 million). 152 – 2012

Construction contracts The value of construction contracts on the balance sheet at year-end 2012 is €415 million credit (2011: €385 million credit). The amount of prepayments included at 31 December 2012 is €398 million (2011: €324 million).

Property $POTUSVDUJPO development contracts Total 2012 $PTUTQSPKFDUTJODMVEJOHSFTVMU 577,879 9,898,571 10,476,450 *OWPJDFEJOTUBMNFOUT (509,001) (9,525,755) (10,034,756) Amounts due from customers 68,878 372,816 441,694

$PTUTQSPKFDUTJODMVEJOHSFTVMU 660,996 8,883,764 9,544,760 *OWPJDFEJOTUBMNFOUT (732,283) (9,671,099) (10,403,382) Amounts due to customers (71,287) (787,335) (858,622)

2011 $PTUTQSPKFDUTJODMVEJOHSFTVMU 459,925 10,439,876 10,899,801 *OWPJDFEJOTUBMNFOUT (391,486) (10,009,500) (10,400,986) Amounts due from customers 68,439 430,376 498,815

$PTUTQSPKFDUTJODMVEJOHSFTVMU 1,072,912 8,111,970 9,184,882 *OWPJDFEJOTUBMNFOUT (1,193,876) (8,927,409) (10,121,285) Amounts due to customers (120,964) (815,439) (936,403) 2012 – 153

PPP projects The overall position of PPP projects in which the Group is involved is as follows:

Overview of PPP projects Non-current $VSSFOU Total 2012 *OUBOHJCMFBTTFUT 111DPODFTTJPOT  180,884 - 180,884 PPP receivables 878,123 91,144 969,267 (Non-)recourse PPP loans (858,685) (189,847) (1,048,532) 200,322 (98,703) 101,619 Net assets and liabilities (10,549) 7,045 (3,504) PPP projects (subsidiaries) 189,773 (91,658) 98,115 PPP projects (associates and non-current receivables) 16,565 - 16,565 Net investment as at 31 December 206,338 (91,658) 114,680

2011 *OUBOHJCMFBTTFUT 111DPODFTTJPOT  184,641 - 184,641 PPP receivables 743,284 135,364 878,648 (Non-)recourse PPP loans (890,466) (100,840) (991,306) 37,459 34,524 71,983 Net assets and liabilities (11,125) 10,783 (342) PPP projects (subsidiaries) 26,334 45,307 71,641 PPP projects (associates and non-current receivables) 15,923 - 15,923 Net investment as at 31 December 42,257 45,307 87,564

0O.BZ #".111BOE1((.FTUBCMJTIFEUIFKPJOUWFOUVSF#".1111((.*OGSBTUSVDUVSF$PÚQFSBUJF6" (joint venture BAM PPP/PGGM), which makes long-term investments in PPP markets for social infrastructure and USBOTQPSUJOGSBTUSVDUVSFJOUIF/FUIFSMBOET #FMHJVN UIF6OJUFE,JOHEPN *SFMBOE (FSNBOZBOE4XJU[FSMBOE#". PPP continues to be fully responsible for issuing new project tenders, rendering services with regard to asset management for the joint venture and representing the joint venture in transactions. PGGM provides the largest part of capital required for existing projects. The first tranche of three operating PPP projects was transferred to the joint WFOUVSF#".1111((.PO%FDFNCFS XJUIBSFTVMUPGïNJMMJPO5IF(SPVQTTIBSFJOUIFTFQSPKFDUTXBT scaled down from 100 per cent to 20 per cent.

*O UIF(SPVQTPMEUPUIFKPJOUWFOUVSF#".1111((.QFSDFOUPGJUTJOUFSFTUJOUXP111QSPKFDUT"GUFS deduction of cost, the Group realised a net result of €3.5 million. Of the original four PPP projects recognised as assets held for sale at year-end 2011, the disposal of one project is no longer taken into account and one project was transferred to 2013. Please refer to Note 35.

*O UIFBTTFUTBOEMJBCJMJUJFTSFMBUFEUPUIFQMBOOFEEJTQPTBMTPGUISFF111QSPKFDUT GPVS UPUIFKPJOU venture BAM PPP/PGGM are recognised as assets and liabilities held for sale. Please refer to Note 35. 154 – 2012

8. Property, plant and equipment

Property, Plant, plant and equipment equipment Other Land and and ordered / in tangible buildings installations construction assets Total

At 1 January 2011 $PTU 226,417 586,220 5,126 171,052 988,815 Accumulated depreciation and impairment (86,377) (370,566) - (122,808) (579,751) Net book amount 140,040 215,654 5,126 48,244 409,064

2011 Net book amount at 1 January 140,040 215,654 5,126 48,244 409,064 Additions 2,595 41,869 3,912 21,795 70,171 Acquisition of subsidiaries 545 170 - 369 1,084 Disposals (1,005) (10,081) (300) (1,540) (12,926) Transfers to assets held for sale (399) - - (4,996) (5,395) Transfers from inventories 5,575 - - - 5,575 Transfers between categories 1,336 2,633 (4,077) 108 - Depreciation charge (8,103) (67,375) - (19,442) (94,920) Exchange rate differences 136 710 6 129 981 Net book amount at 31 December 140,720 183,580 4,667 44,667 373,634

At 31 December 2011 $PTU 230,478 569,576 4,667 144,604 949,325 Accumulated depreciation and impairment (89,758) (385,996) - (99,937) (575,691) Net book amount 140,720 183,580 4,667 44,667 373,634

2012 Net book amount at 1 January 140,720 183,580 4,667 44,667 373,634 Additions 2,805 64,522 20,377 19,801 107,505 Acquisition of subsidiaries - - - 71 71 Disposals (6,560) (11,888) (154) (1,996) (20,598) Transfers between categories 7 2,575 (2,582) - - Depreciation charge (7,586) (54,527) - (18,678) (80,791) Exchange rate differences 146 179 7 263 595 Net book amount at 31 December 129,532 184,441 22,315 44,128 380,416

At 31 December 2012 $PTU 217,617 584,169 22,315 140,591 964,692 Accumulated depreciation and impairment (88,085) (399,728) - (96,463) (584,276) Net book amount 129,532 184,441 22,315 44,128 380,416 2012 – 155

Tangible assets on order and under construction relate predominantly to plant, equipment and installations. Please refer to Note 33 for information on contractual obligations with regard to property, plant and equipment.

The reclassification of inventories in 2011 relates to land which was originally held for property development in Germany and is now deployed for own use.

5IFSFDMBTTJGJDBUJPOPGBTTFUTIFMEGPSTBMFJOSFMBUFTUPQSPQFSUZ QMBOUBOEFRVJQNFOUPG5FCPEJO $POTVMUBODZ and engineering sector). Please refer to Note 35.

The fair value of property, plant and equipment at year-end 2012 is €448 million (2011: €512 million).

The amount of property, plant and equipment (not leased under financial lease) is not pledged as a security for borrowings.

The net book value of property, plant and equipment leased under financial leases is presented below:

2012 2011

Land and buildings 17,779 18,612 Plant, equipment and installations 17,306 13,447 Other tangible fixed assets 235 352 35,320 32,411

The related financial lease liabilities are recorded under current and non-current borrowings. Please refer to Note 19.

Finance expense and depreciation related to these assets are recognised in the income statement. 156 – 2012

9. Intangible assets

Non- PPP integrated Goodwill concessions software Other Total

At 1 January 2011 $PTU 733,892 260,835 14,312 27,493 1,036,532 Accumulated amortisation and impairments (145,408) (7,609) (11,369) (21,990) (186,376) Net book amount 588,484 253,226 2,943 5,503 850,156

2011 Net book amount at 1 January 588,484 253,226 2,943 5,503 850,156 Additions - 954 1,884 - 2,838 Acquisition of subsidiaries - - - 2,160 2,160 Disposals - - (154) - (154) Amortisation charge - (6,135) (1,463) (3,498) (11,096) Transfer to assets held for sale (47,899) (63,404) (810) - (112,113) Exchange rate differences 2,704 - (15) - 2,689 Net book amount at 31 December 543,289 184,641 2,385 4,165 734,480

At 31 December 2011 $PTU 688,697 261,789 9,806 29,363 989,655 Accumulated amortisation and impairments (145,408) (77,148) (7,421) (25,198) (255,175) Net book amount 543,289 184,641 2,385 4,165 734,480

2012 Net book amount at 1 January 543,289 184,641 2,385 4,165 734,480 Additions - 380 3,567 2,063 6,010 Acquisition of subsidiaries - - - 1,177 1,177 Disposals - - (92) - (92) Amortisation charge - (4,137) (1,289) (2,722) (8,148) *NQBJSNFOUMPTTFTSFDPHOJTFE (150,431) - - - (150,431) Exchange rate differences 3,482 - (4) - 3,478 Net book amount at 31 December 396,340 180,884 4,567 4,683 586,474

At 31 December 2012 $PTU 692,179 259,556 12,094 32,586 996,415 Accumulated amortisation and impairments (295,839) (78,672) (7,527) (27,903) (409,941) Net book amount 396,340 180,884 4,567 4,683 586,474 2012 – 157

9.1 Goodwill

Goodwill derives predominantly from the acquisitions of HBG (2002) and AM (2006) and relates to 19 cash-generating VOJUT0GUIFTFVOJUT UIFHPPEXJMMPGUIFDBTIHFOFSBUJOHVOJU#"./VUUBMM ïNJMMJPO BOE#".$POTUSVDU6, (€66 million) is considered significant in 2012 (2011: goodwill of AM €150 million).

5IFSFDMBTTJGJDBUJPOPGBTTFUTIFMEGPSTBMFJOSFMBUFTUPUIFHPPEXJMMPG5FCPEJO TFDUPS$POTVMUBODZBOE engineering). Please refer to Note 35.

There were no material acquisitions. Please refer to Note 34.

The goodwill of the cash-generating units provides the following overview of the Group, at sector level:

2012 2011

$POTUSVDUJPOBOENFDIBOJDBMBOEFMFDUSJDBMTFSWJDFT 153,752 152,172 $JWJMFOHJOFFSJOH 226,618 224,716 Property 15,970 166,401 396,340 543,289

The (pre-tax) discount rate used in 2012 for the cash-generating units varies between 9.1 per cent (2011: 9.1 per cent) and 13 per cent (2011: 11 per cent). The increase after the budget period is 2 per cent (2011: 2 per cent).

Impairments Goodwill is tested for impairment. This involves testing the carrying amount of a cash-generating unit, including allocated goodwill, against its recoverable amount. The recoverable amount of a cash generating unit is the higher of the value of an asset less selling expenses and its value in use. The calculation of the recoverable amount involves the application of pre-tax cash flows projections based on financial budgets approved by management over a 5-year period. A 10-year period is used for property operations in the Netherlands in relation to the expected market SFDPWFSZ$BTIGMPXTBGUFSUIFZFBSPSZFBSQFSJPEBSFFYUSBQPMBUFEVTJOHFTUJNBUFEHSPXUIGJHVSFTDPOTJEFSFE UPCFJOMJOFXJUIUIF(SPVQTMPOHUFSNFYQFDUBUJPOTXJUISFHBSEUPTFDUPSTBOENBSLFUT5IFGPSFDBTUFEDBTIGMPXT are discounted to their present values using a pre-tax discount rate that reflects the market situation, the time value of money and the risks specific to the asset.

As the economic outlook continues to deteriorate in the Netherlands, the Group impaired all of the goodwill of AM (€150 million) in 2012. Future property developments are expected to be deferred in time, with fewer houses per project and at lower average selling prices. Before, it was assumed that the market would bottom out in the second half of 2012 or first half of 2013. Now, the Group anticipates a further deterioration of the market until the second half of 2014 or first half of 2015, with a decrease in average house prices of 25 per cent to 30 per cent in comparison XJUIUIFQFBLJO"VHVTU5IF(SPVQTMPOHUFSNWJFXJTUIBUCVEHFUTPGIPVTFCVZFSTXJMMCFTUSVDUVSBMMZMPXFS  based on anticipated income, more stringent mortgage conditions, and limitation of tax deduction for mortgage interest.

Sensitivity analysis 'PSUIFDBTIHFOFSBUJOHVOJUT#"./VUUBMMBOE#".$POTUSVDU6, XIJDIRVBMJGZBTTJHOJGJDBOU HPPEXJMMJNQBJSNFOU tests involve growth percentages of 2 per cent (2011: 2 per cent). The pre-tax discount rate used is 9.1 per cent (2011: 9.1 per cent).

5IFTFOTJUJWJUZBOBMZTJTGPS#"./VUUBMM $JWJMFOHJOFFSJOH BU%FDFNCFSMFBETUPUIFGPMMPXJOHJGUIFHSPXUI QFSDFOUBHFEFWJBUFTOFHBUJWFMZCZQFSDFOU UIFOFUQSFTFOUWBMVFPGDBTIGMPXEFDSFBTFTCZïNJMMJPO*GUIF discount rate used is 0.5 per cent higher, the net present value of cash flow decreases by €36 million. A combination of both sensitivities does not lead to any impairment.

5IFTFOTJUJWJUZBOBMZTJTGPS#".$POTUSVDU6, $POTUSVDUJPOBOENFDIBOJDBMBOEFMFDUSJDBMTFSWJDFT BU%FDFNCFS 2012 leads to the following: if the growth percentage deviates negatively by 0.5 per cent, the net present value of DBTIGMPXEFDSFBTFTCZïNJMMJPO*GUIFEJTDPVOUSBUFVTFEJTQFSDFOUIJHIFS UIFOFUQSFTFOUWBMVFPGDBTI flow decreases by €40.7 million. A combination of both sensitivities does not lead to any impairment. 158 – 2012

*GUIFEJTDPVOUSBUFVTFEJTQFSDFOUIJHIFS JODPNCJOBUJPOXJUIOFHBUJWFEFWJBUJPOTJOUIFHSPXUIQFSDFOUBHFTPG QFSDFOU UIFTFOTJUJWJUZBOBMZTJTPGUIF(SPVQTPUIFSDBTIHFOFSBUJOHVOJUTBUZFBSFOEEPFTOPUMFBEUPBOZ impairment.

Exchange rate differences Exchange rate differences involve predominantly goodwill and relate to currency fluctuations in the British pound TUFSMJOH*O UIFSFXBTBSJTFJOUIFFYDIBOHFSBUF BTJO

9.2 PPP concessions

111DPODFTTJPOTSFMBUFUPUPMMSPBETJO*SFMBOEBOE(FSNBOZXJUIEVSBUJPOTCFUXFFOBOEZFBST JEFN  A major factor in the valuation of these concessions is anticipated toll revenue, which relates to anticipated traffic intensity during the full lives of the concessions. Although traffic intensity in one project is still lagging behind initial FYQFDUBUJPOT MPOHUFSNBOUJDJQBUJPOTSFNBJOVODIBOHFE*GUSBGGJDJOUFOTJUJFTMBHCFIJOEFYQFDUBUJPOTTUSVDUVSBMMZ JU may lead to impairment.

The reclassification of assets held for sale in 2011 relates to one PPP project, which is also partially recognised under PPP receivables.

The PPP concessions are pledged as a security for the corresponding (non-) recourse PPP loans, which are included under current and non-current liabilities. Please refer to Note 19.

Please refer to Note 38 for further information on concessions. 2012 – 159

10. PPP receivables

2012 2011

At 1 January 878,648 765,331 Disposals - (213,091) Receivables granted 441,627 419,002 Repayment of receivables (109,695) (15,643) Exchange rate differences 4,710 1,511 Transfer to assets held for sale (246,023) (78,462) At 31 December 969,267 878,648

PPP receivables are included on the balance sheet as follows:

2012 2011

Non-current 878,123 743,284 $VSSFOU 91,144 135,364 969,267 878,648

PPP receivables consist of the amounts receivable with regard to concessions in the Netherlands, Belgium, Germany, *SFMBOE UIF6OJUFE,JOHEPNBOE4XJU[FSMBOE5IFDVSSFOUQBSUPG111SFDFJWBCMFTJTSFDPSEFEBTUSBEFSFDFJWBCMFTBOE other receivables. Please refer to Note 14.

*O UXPPQFSBUJPOBMQSPKFDUTXFSFUSBOTGFSSFEGSPNBTTFUTIFMEGPSTBMFUPUIFKPJOUWFOUVSF#".1111((.5IF Group retains a share of 20 per cent in these projects. Three projects were transferred in 2011. Three projects included under assets held for sale at year-end 2012 are expected to be transferred in 2013.

The increase in receivables granted in 2012 relates predominantly to the progress of PPP projects under construction.

The average duration of PPP receivables is 27 years (2011: 28 years). Approximately €706 million of the non-current part has a duration of more than five years (2011: €447 million).

The interest rates on PPP receivables are in line with the interest rates (after hedging) of the related non-recourse PPP loans. The contractual interest percentages are fixed for the entire duration. The average interest rate on PPP receivables is 6.0 per cent (2011: 6.6 per cent). The fair value of PPP receivables is therefore affected by changes to the same discount factors as those that may occur in the financial markets following changes in interest rates and risk margins. At year-end 2012, the fair value of non-current PPP receivables is approximately €1,030 million (2011: approximately €860 million).

PPP receivables are pledged as a security for the corresponding (non-)recourse PPP loans, which are included under current and non-current liabilities.

Please refer to Note 38 for further information on concessions. 160 – 2012

11. Associates

2012 2011

At 1 January 19,198 210,781 *OWFTUNFOUT 1,134 218 Disposals (1,139) (184,392) Share in result (1,377) 34,376 Result distributions and dividends received (2,144) (41,788) Exchange rate differences (1) (81) Other movements 3,828 84 At 31 December 19,499 19,198

Disposals in 2011 include the disposal of the interest in Van Oord on 22 December 2011.

5IFUBCMFCFMPXTQFDJGJFTUIF(SPVQTJOUFSFTUTJO VOMJTUFE BTTPDJBUFT5IFBNPVOUTSFMBUFUPUIF(SPVQTJOUFSFTUJO UIFCBMBODFTIFFUTPGUIFSFTQFDUJWFBTTPDJBUFTBUZFBSFOEBOEUIF(SPVQTTIBSFJOSFWFOVFTBOESFTVMUTGPSUIF respective financial years.

$PVOUSZPG incorpo- % ration *OUFSFTU Assets Liabilities Net assets Revenue Result 2012 *OGSBTQFFE )PMEJOHT CW Netherlands 10.54 109,832 105,892 3,940 4,550 1,170 Railpro bv Netherlands 10.00 5,585 3,395 2,190 9,124 231 Justinvest nv Belgium 33.33 68,069 67,959 110 171 9 3BCPU*OWFTUOW Belgium 25.00 28,093 27,952 141 221 3 211,579 205,198 6,381 14,066 1,413 Other 76,516 63,398 13,118 (2,790) At 31 December 288,095 268,596 19,499 (1,377)

2011 *OGSBTQFFE )PMEJOHT CW Netherlands 10.54 112,235 108,939 3,296 12,346 1,283 Railpro bv Netherlands 10.00 6,052 3,781 2,271 9,698 330 Justinvest nv Belgium 33.33 69,941 69,822 119 216 52 3BCPU*OWFTUOW Belgium 25.00 28,850 28,713 137 215 (18) 217,078 211,255 5,823 22,475 1,647 Other 77,294 63,919 13,375 32,729 At 31 December 294,372 275,174 19,198 34,376

This includes associates in which the Group holds less than 20 per cent of the (potential) voting shares, but over which the Group has significant influence through memberships of boards of management and/or supervisory boards.

Some associates are significantly restricted in their ability to transfer funds. This relates mainly to terms on the basis of which repayment of external debt has priority over dividend distribution.

5IFPUIFSQBSUJDJQBUJPOTSFMBUFUPUIF(SPVQTJOUFSFTUTJOBSBOHFPGQSPKFDUSFMBUFEFOUJUJFT*O UIFSFTVMUGSPN other participations relates to the disposal of the interest in Van Oord on 22 December 2011. The contribution to profits in 2011 amounts to €30.7 million. 2012 – 161

12. Other financial assets

Non-current receivables Other Total

At 1 January 2011 45,315 5,222 50,537 Loans granted 12,404 - 12,404 Repayment of loans (3,322) - (3,322) Exchange rate differences (296) - (296) Transfers 14,250 - 14,250 Other movements - (193) (193) 68,351 5,029 73,380 Of which current: (2,519) - (2,519) At 31 December 2011 65,832 5,029 70,861

Loans granted 6,572 - 6,572 Repayment of loans (15,761) - (15,761) Exchange rate differences (4) - (4) *NQBJSNFOUT (6,225) - (6,225) Other movements - (1,130) (1,130) 52,933 3,899 56,832 Of which current: (11,371) - (11,371) At 31 December 2012 41,562 3,899 45,461

The fair value of non-current receivables at year-end 2012 amounts to €56 million (2011: €86 million). The effective interest rate is 4.5 per cent (2011: 3.5 per cent).

The column Other consists predominantly of interests in (unlisted) associates over which the Group has no significant influence.

The impairment recognised in 2012 relates to a loan which the Group granted (through subsidiary AM) to an entity PQFSBUJOHPOUIFQSPQFSUZNBSLFU*O UIFNPSUHBHFSJHIUPGUIFMPBOXBTFYFSDJTFEBOEUIFOVNCFSPG unfinished apartments decreased.

13. Inventories

2012 2011

Land and building rights 649,553 600,856 Property development 594,905 891,416 Raw materials and consumables 20,707 18,425 Finished products 2,845 3,761 1,268,010 1,514,458

Within the ordinary course of business, the duration of land and building rights is generally non-current (longer than one year). The majority of the property development investments are current in nature.

As the economic outlook continues to deteriorate in the Netherlands, the Group, together with external valuers, conducted a comprehensive analysis of the Dutch property assets. The adjusted forecast is that future property developments will be deferred in time, with fewer houses per project and at lower average selling prices. Before, it was assumed that the market would bottom out in the second half of 2012 or first half of 2013. Now, the Group anticipates a further deterioration of the market until the second half of 2014 or first half of 2015, with a decrease in BWFSBHFIPVTFQSJDFTPGQFSDFOUUPQFSDFOUJODPNQBSJTPOXJUIUIFQFBLJO"VHVTU5IF(SPVQT 162 – 2012

long-term view is that budgets of house buyers will be structurally lower, based on anticipated income, more stringent mortgage conditions, and limited tax deduction for mortgage interest.

The analysis resulted in impairments of land and building rights in the amount of €242 million and of property EFWFMPQNFOUJOUIFBNPVOUPGïNJMMJPO*OBEEJUJPO ïNJMMJPOPGMBOEQPTJUJPOTJTSFDMBTTJGJFE"TEFWFMPQNFOUT are deferred (in time), these positions are no longer classified under property development but return to land and building rights.

The movement of cumulative impairments of the property assets is as follows:

2012 2011

At 1 January 122,200 122,200 Addition 244,492 - Reversal (3,000) - At 31 December 363,692 122,200

The position relating to property development contains the following unsold property:

2012 2011 Number / m² Number / m²

Houses - under construction 374 52,078 354 66,959 Houses - completed 157 ¹ 33,301 205 46,404 $PNNFSDJBMQSPQFSUZDPNQMFUFEBOESFOUFE 44,071 62,417 41,303 64,861 $PNNFSDJBMQSPQFSUZDPNQMFUFEBOEWBDBOU 40,432 76,030 43,152 82,188 223,826 260,412

–0GXIJDIIPVTFTSFOUFE /FUIFSMBOET *SFMBOE QFOEJOHUIFBOUJDJQBUFETBMF

*O ïNJMMJPO ïNJMMJPO PGPUIFSJOWFOUPSJFT SBXNBUFSJBMTBOEDPOTVNBCMFTBOEGJOJTIFEQSPEVDUT JT recognised in the income statement. Other inventories were not impaired in the year under review.

14. Trade and other receivables

2012 2011

Trade receivables 968,996 1,033,481 Less: impairment of receivables (47,028) (79,060) Trade receivables-net 921,968 954,421 Amounts due from customers 441,694 498,815 Amounts due from associates 21,310 25,280 Retentions 119,540 116,304 Accrued income completed projects 74,273 54,192 Accrued income work in progress 153,601 130,422 PPP receivables 91,144 135,364 Other receivables 154,419 98,857 Prepayments and accrued income 104,686 103,249 2,082,635 2,116,904 2012 – 163

The fair value of trade receivables and other receivables is almost equal to their nominal values, due to the current nature of the receivables. Normally, these receivables will be paid within the normal course of business (less than one year), except for approximately €23 million (2011: €16 million). The fair value of this non-current part is approximately €23 million (2011: €16 million) and has been calculated using an interest rate of 0.9 per cent (2011: 1.8 per cent).

There is no significant concentration of credit risk with regard to trade receivables, as the Group has a large number of national and international customers. Some of the receivables are also pledged via retention of ownership rights.

Trade receivables and impairment of receivables are made up as follows:

2012 2011 Trade Trade receivables *NQBJSNFOU receivables *NQBJSNFOU

Not past due 590,195 (164) 673,080 (4,011) Overdue < 3 months 177,116 (987) 184,499 (428) Overdue 3 - 6 months 42,214 (3,652) 36,371 (4,700) Overdue 6 - 12 months 41,099 (3,324) 37,289 (8,855) Overdue 1 - 2 years 40,868 (7,845) 24,944 (9,031) Overdue > 2 years 77,504 (31,056) 77,298 (52,035) 968,996 (47,028) 1,033,481 (79,060)

-FTT*NQBJSNFOUPGSFDFJWBCMFT (47,028) (79,060) Trade receivables-net 921,968 954,421

The movement of impairments is as follows: 2012 2011

At 1 January 79,060 80,817 *ODMVEFEJOUIFJODPNFTUBUFNFOU - Additional provisions 3,761 37,910 - Release of unused provisions (6,354) (19,413) Used during the year (29,448) (17,320) Transfer to assets held for sale - (2,847) Exchange rate differences 9 (87) At 31 December 47,028 79,060

Amounts due from customers relate to construction contracts for third parties and property development sold, and consist of the positive balance of cost incurred (including result recognised) and invoiced instalments. Please refer to Notes 3.9 and 7.

3FUFOUJPOTSFMBUFUPBNPVOUTSFUBJOFECZDVTUPNFSTPOJOWPJDFEJOTUBMNFOUT*OUIF6OJUFE,JOHEPNBOE(FSNBOZJO particular, it is common practice to retain a previously agreed percentage until completion of the project.

PPP receivables relate to the current proportion of the receivables. Please refer to Note 10.

*OBOE UIFSFXBTOPJNQBJSNFOUPGPUIFSSFDFJWBCMFT 164 – 2012

15. Cash and cash equivalents

2012 2011

$BTIBUCBOLBOEJOIBOE 604,385 856,059 Short term bank deposits 15,705 156,551 $BTIBOEDBTIFRVJWBMFOUT 620,090 1,012,610

$BTIBOEDBTIFRVJWBMFOUTBSFBUUIFGSFFEJTQPTBMPGUIF(SPVQ#BOLEFQPTJUTIBWFBUFSNUPNBUVSJUZOPMBUFSUIBO +BOVBSZ$BTIBOEDBTIFRVJWBMFOUTJODMVEFUIF(SPVQTTIBSFJODBTIPGKPJOUWFOUVSFT BNPVOUJOHUP €215 million (2011: €205 million). The liquidities balance includes €50 million (2011: €47 million) in PPP entities as part of the conditions in project-specific funding agreements.

$BTIBOEDBTIFRVJWBMFOUTBSFOPUPGGTFUBHBJOTUUIFTIPSUUFSNCBOLPWFSESBGUT DPOTJEFSJOHUIFJSHFPHSBQIJDBM QPTJUJPOTBUCBMBODFTIFFUEBUF*UJTUIF(SPVQTQPMJDZUPPGGTFUUIFTFBTGBSBTQPTTJCMFEVSJOHUIFZFBS

The details of the net cash position are as follows:

2012 2011

$BTIBOEDBTIFRVJWBMFOUT 620,090 1,012,610 Less: bank overdrafts (1,261) (4,605) Net cash position 618,829 1,008,005

The average effective interest on short-term bank deposits is 1.1 per cent (2011: 0.9 per cent). The deposits have a remaining average term to maturity of approximately one day (2011: approximately two weeks).

16. Share capital

$POWFSUJCMF Number of Ordinary preference Share shares issued shares shares premium Total

At 1 January 2011 232,585,287 23,176 1 686,289 709,466 $POWFSTJPOPGQSFGFSFODFTIBSFT 94,435 45 (1) 1,363 1,407 $BODFMMBUJPOPGQSFGFSFODFTIBSFT (473,275) - - - - Dividend paid 731,122 73 - 3,748 3,821 At 31 December 2011 232,937,569 23,294 - 691,400 714,694

Dividend paid 8,587,345 858 - 19,849 20,707 At 31 December 2012 241,524,914 24,152 - 711,249 735,401

Please refer to Note 8 of the company financial statements for further details on the number of issued shares. 2012 – 165

16.1 General

At year-end 2012, the authorised capital of the Group was four hundred million ordinary shares (2011: four hundred million) and six hundred million preference shares (2011: six hundred million), all with a nominal value of €0.10 per share (2011: €0.10 per share). All issued shares have been fully paid up. *O UIFSFNBJOJOHDPOWFSUJCMFGJOBODJOHQSFGFSFODFTIBSFTXFSFNBOEBUPSJMZDPOWFSUFEBOEUIFSFNBJOJOH non-convertible financing preference shares were redeemed and cancelled.

"DBMMPQUJPOXBTHSBOUFEUP4UJDIUJOH"BOEFMFOCFIFFS#".(SPFQJOGPS$MBTT#QSFGFSFODFTIBSFT'PSGVSUIFS JOGPSNBUJPO QMFBTFSFGFSUPUIF0UIFS*OGPSNBUJPOTFDUJPO

16.2 Ordinary shares

*O UIFOVNCFSPGJTTVFEPSEJOBSZTIBSFTJODSFBTFECZ  PXJOHUPEJTUSJCVUJPOPGEJWJEFOEJOTIBSFT

*O UIFOVNCFSPGJTTVFEPSEJOBSZTIBSFTJODSFBTFECZ   PXJOHUP NBOEBUPSZ DPOWFSTJPOPG convertible financing preference shares and 731,122 owing to distribution of dividend in shares.

16.3 Financing preference shares

At year-end 2012 and 2011, the Group no longer had any convertible financing preference shares or non-convertible financing preference shares.

*O UIFSFNBJOJOHDPOWFSUJCMFGJOBODJOHQSFGFSFODFTIBSFT  TIBSFT XFSFNBOEBUPSJMZDPOWFSUFEJOUP ordinary shares.

*O UIFSFNBJOJOHOPODPOWFSUJCMFGJOBODJOHQSFGFSFODFTIBSFTBUZFBSFOE  TIBSFT XFSF repurchased via the stock exchange and cancelled, together with the non-convertible financing preference shares that were repurchased earlier (398,517 shares).

Financing preference shares are classified as liabilities. Please refer to Note 19. 166 – 2012

17. Reserves

 $VSSFODZ translation Hedging adjustments reserve Total

At 1 January 2011 (87,963) (108,953) (196,916) Reclassification to income statement due to divestment - Fair value cash flow hedges - 55,579 55,579 - Tax on fair value cash flow hedges - (14,450) (14,450) $VSSFODZUSBOTMBUJPOEJGGFSFODFT 464 - 464

Effective cash flow hedges: - Fair value movement - (162,495) (162,495) - Tax on fair value movement - 45,323 45,323 *OFGGFDUJWFDBTIGMPXIFEHFT - Fair value movement - 4,469 4,469 - Tax on fair value movement - (1,117) (1,117) $VSSFODZUSBOTMBUJPOEJGGFSFODFT - Subsidiaries 10,604 - 10,604 11,068 (72,691) (61,623)

At 31 December 2011 (76,895) (181,644) (258,539)

Reclassification to income statement due to divestment - Fair value cash flow hedges - 8,254 8,254 - Tax on fair value cash flow hedges - (1,899) (1,899) $VSSFODZUSBOTMBUJPOEJGGFSFODFT 232 - 232

Effective cash flow hedges: - Fair value movement - (72,030) (72,030) - Tax on fair value movement - 18,967 18,967 $VSSFODZUSBOTMBUJPOEJGGFSFODFT - Subsidiaries 9,325 - 9,325 9,557 (46,708) (37,151)

At 31 December 2012 (67,338) (228,352) (295,690)

The positive movement in the translation reserve in both 2011 and in 2012 is a consequence of the rise in value of the pound sterling.

Of the negative movement in the hedge reserve in 2011, €102 million is a consequence of the fact that the long-term interest in 2011 is below the level of that in 2010. On the other hand, the hedge reserve is affected negatively by new IFEHFT ïNJMMJPO BOEBGGFDUFEQPTJUJWFMZCZEJTQPTBMTBOETFUUMFNFOUTPGFYJTUJOHDPOUSBDUT ïNJMMJPO *O UIF translation reserve includes €0.3 million positive and the hedging reserve includes €5.1 million negative with regard to assets held for sale and discontinued activities.

Of the negative movement in the hedge reserve in 2012, €52 million is a consequence of the fact that the long-term interest in 2012 is below the level of that in 2011. On the other hand, the hedge reserve is affected negatively by new IFEHFT ïNJMMJPO BOEBGGFDUFEQPTJUJWFMZCZEJTQPTBMTBOEUIFTFUUMFNFOUTPGFYJTUJOHDPOUSBDUT ïNJMMJPO *O  the hedging reserve includes €20.7 million negative with regard to assets held for sale and discontinued activities

The restrictions on distributable reserves are determined by reserves required by law and the Articles of Association that constitute a part of the company financial statements. 2012 – 167

18. Capital base

2012 2011

&RVJUZBUUSJCVUBCMFUPUIF$PNQBOZTTIBSFIPMEFST 921,905 1,162,408 Subordinated loan 123,500 200,000 1,045,405 1,362,408

19. Borrowings

2012 Non-current $VSSFOU Total

Subordinated loan ¹ 124,000 (500) 123,500 Non-recourse PPP loans 804,218 143,246 947,464 Non-recourse project financing 136,506 203,054 339,560 Recourse PPP loans 54,467 46,601 101,068 Other project financing 87,412 110,456 197,868 Financial lease liabilities 35,097 7,292 42,389 Other loans 3,210 1,442 4,652 Bank overdrafts - 1,261 1,261 1,244,910 512,852 1,757,762

Not later than 1 year 512,852 Later than 1 and not later than 5 years 858,225 Later than 5 years 386,685 1,757,762

2011 Non-current $VSSFOU Total

Subordinated loan 200,000 - 200,000 Non-recourse PPP loans 776,020 83,634 859,654 Non-recourse project financing 283,287 88,526 371,813 Recourse PPP loans 114,446 17,206 131,652 Other project financing 182,198 40,494 222,692 Bank facility 360,000 - 360,000 Financial lease liabilities 31,325 4,315 35,640 Other loans 3,748 1,321 5,069 Bank overdrafts - 4,605 4,605 1,951,024 240,101 2,191,125

Not later than 1 year 240,101 Later than 1 and not later than 5 years 1,138,053 Later than 5 years 812,971 2,191,125

¹ The nominal value amounts to €125 million. 168 – 2012

19.1 Subordinated loan

On 30 January 2012, the principal sum of the subordinated loan was reduced to €125 million (31 December 2011: €200 million) and its duration extended to 30 July 2017. The subordinated loan has an interest rate that is based on UIF(SPVQTSFDPVSTFMFWFSBHFSBUJPBOEJTFRVBMUP&63*#03QMVTBNBSHJO XIJDIDBOWBSZCFUXFFOBNJOJNVNPG 400 (2011: 325) and a maximum of 675 (2011: 525) basis points. At 31 December 2012, the margin was 400 basis points (year-end 2011: 325 basis points).

$PNNFODJOHJO'FCSVBSZ UPIFEHFBQBSUPGUIFJOUFSFTUSJTLPOUIFTVCPSEJOBUFEMPBO JOUFSFTUSBUFTXBQT were contracted with a principal sum of €200 million until mid-2012 and subsequently decreasing to a principal TVNPGïNJMMJPO*OPSEFSUPGVMMZIFEHFUIFJOUFSFTUSJTLPOUIFTVCPSEJOBUFEMPBO BOBEEJUJPOBMTXBQPGï NJMMJPOXBTDPOUSBDUFEJO5IFJOUFSFTUSBUFTXBQTGJY&63*#03BUBOBWFSBHFPGQFSDFOU QFS DFOU *ODMVEJOHUIFNBSHJOBUZFBSFOEBOEUIFBNPSUJTFECPSSPXJOHDPTUT UIFJOUFSFTUGPSUIFTVCPSEJOBUFE loan therefore amounts to 8.17 per cent (year-end 2011: 7.24 per cent).

The full amount of the subordinated loan will be contractually repaid in July 2017.

8JUISFHBSEUPUIJTMPBO UIF(SPVQJTCPVOECZDPOEJUJPOTGVSUIFSEFTDSJCFEVOEFSUIFOPUFTUP$PWFOBOUT

19.2 Preference shares

*O%FDFNCFS   DPOWFSUJCMFGJOBODJOHQSFGFSFODFTIBSFTBOE  OPODPOWFSUJCMFGJOBODJOH QSFGFSFODFTIBSFTXFSFJTTVFE*O UIFSFNBJOJOHDPOWFSUJCMFGJOBODJOHQSFGFSFODFTIBSFT  TIBSFT XFSF NBOEBUPSJMZDPOWFSUFEJOUPPSEJOBSZTIBSFT*OBEEJUJPO UIFSFNBJOJOH OPODPOWFSUJCMFGJOBODJOHQSFGFSFODF shares were repurchased via the stock exchange. At year-end 2012, the Group no longer had any convertible financing preference shares or non-convertible financing preference shares (2011: none).

The balance sheet valuation of the convertible financing preference shares is as follows:

2012 2011

Face value at 1 January - 1,454 Equity component at 1 January - (47) Liability component at 1 January - 1,407 $POWFSTJPOPGTIBSFT - (1,407) Liability component at 31 December - Equity component at 31 December - - Face value at 31 December - -

The movement of the non-convertible financing preference shares is as follows:

2012 2011

Liability at 1 January - 314 Repurchase of shares - (314) Liability at 31 December - -

The financing expense on the non-convertible financing preference shares in 2011 is calculated using the effective interest method by applying the effective interest rate of 7.90 per cent. 2012 – 169

19.3 Non-recourse PPP loans

/POSFDPVSTF111MPBOTSFMBUFUP111QSPKFDUTJOUIF/FUIFSMBOET UIF6OJUFE,JOHEPN #FMHJVN (FSNBOZ *SFMBOE BOE4XJU[FSMBOE0GUIFOPODVSSFOUQBSU BQQSPYJNBUFMZïNJMMJPOIBTBUFSNUPNBUVSJUZPGNPSFUIBOGJWFZFBST (2011: approximately €680 million). The average term to maturity of the PPP loans is 22 years (2011: 21 years).

*OUFSFTUSBUFTPO111MPBOTBSFWBSJBCMF CVUCZVTJOHJOUFSFTUSBUFTXBQTUIFZIBWFCFFOGJYFE5IFBWFSBHFJOUFSFTU SBUFPO111MPBOTJTQFSDFOU QFSDFOU *OUFSFTUNBSHJOTPGUIFTFMPBOTEPOPUEFQFOEPONBSLFU fluctuations during the term of these loans.

The related intangible assets (PPP concessions) and financial assets (PPP receivables) amount to €1,150 million in total (2011: €1,063 million) and represent a security for lenders. These loans will be payable on demand if the agreed qualitative and quantitative conditions regarding interest coverage, solvency, amongst others, are not met. Please SFGFSUPUIF/PUFTPO$PWFOBOUTGPSGVSUIFSJOGPSNBUJPOPOUIFTFUTUBOEBSETBOESFBMJTBUJPOPGUIFTFDPOEJUJPOT

19.4 Non-recourse project financing

These loans are contracted to finance land for property development and ongoing property development projects. The average term of non-recourse project financing is approximately 1.5 years (2011: approximately 2.6 years).

*OUFSFTUPOUIFTFMPBOTJTQSFEPNJOBOUMZWBSJBCMF CBTFEPO&63*#03-*#03QMVTBNBSHJO*OUFSFTUNBSHJOTPGUIFTF loans do not depend on market fluctuations during the term of these loans. For several project financing loans, the interest is partially fixed. The principal sum of these financing loans is €105 million (2011: €109 million).

The carrying amount of the related assets is approximately €357 million at year-end 2012 (2011: approximately €593 million). The assets are pledged as a security for lenders. These loans will be payable on demand if the agreed qualitative and quantitative conditions as regards interest and capital repayments, amongst others, are not met. 1MFBTFSFGFSUPUIFOPUFTUP$PWFOBOUTGPSGVSUIFSJOGPSNBUJPOPOUIFTFUTUBOEBSETBOESFBMJTBUJPOPGUIFTFDPOEJUJPOT

19.5 Recourse PPP loans

&RVJUZCSJEHFMPBOTSFMBUJOHUP111DPOUSBDUTBSFSFDPHOJTFEVOEFSSFDPVSTF111MPBOT*OUFSFTUJTGJYFEGPSBMMMPBOT The principal sum of these financing loans is €101 million (2011: €130 million). Recourse PPP loans relate directly to the accompanying assets, but also have an additional security in the form of a guarantee provided by the Group, in several cases supplemented by a bank guarantee.

The average term to maturity of the recourse PPP loans is approximately 1.5 years (2011: approximately 2 years).

1MFBTFSFGFSUPUIFOPUFTUP$PWFOBOUTGPSGVSUIFSJOGPSNBUJPOPOUIFTFUTUBOEBSETBOESFBMJTBUJPOPGUIFTFDPOEJUJPOT

19.6 Other project financing

Other project loans are contracted to finance land and building rights and property development.

The average term of other project financing is approximately 1.6 years (2011: 2.5 years).

*OUFSFTUPOUIFTFMPBOTJTQSFEPNJOBOUMZWBSJBCMF CBTFEPO&63*#03-*#03QMVTBNBSHJO*OUFSFTUNBSHJOTPGUIFTF loans do not depend on market fluctuations during the term of these loans. For several project financing loans, the interest is partially fixed. The principal sum of these financing loans is €78 million (2011: €37 million). 170 – 2012

Other project loans directly relate to the corresponding assets, that serve as collateral for the lenders. The carrying amount of the related assets amounts to approximately €344 million at year-end 2012 (2011: approximately €395 million). Furthermore, additional securities exist in the form of a guarantee provided by the Group, in several cases supplemented by a bank guarantee. These loans will be repayable on demand if the agreed qualitative and quantitative conditions as regards interest and capital repayments, amongst others, are not met. Please refer to the OPUFTUP$PWFOBOUTGPSGVSUIFSJOGPSNBUJPOPOUIFTFUTUBOEBSETBOESFBMJTBUJPOPGUIFTFDPOEJUJPOT

19.7 Bank financing

5IFCBOLGJOBODJOHBNPVOUPGïNJMMJPO VTFEUPGJOBODFUIF(SPVQTQFSNBOFOUXPSLJOHDBQJUBM XBTGVMMZSFQBJE PO+BOVBSZ5IFJOUFSFTUPOUIFCBOLGJOBODJOHPGïNJMMJPOXBTCBTFEPOUIF(SPVQTSFDPVSTFMFWFSBHF SBUJPBOEJTFRVBMUP&63*#03QMVTBNBSHJO XIJDIDPVMEWBSZCFUXFFOBNJOJNVNPGBOEBNBYJNVNPG 280 basis points. The margin was 205 basis points at 31 December 2011.

$PNNFODJOHJO+VOF BOJOUFSFTUSBUFTXBQXJUIBUFSNVOUJM"QSJMXBTDPOUSBDUFEUPIFEHFQBSUPGUIF JOUFSFTUSJTLPOCBOLGJOBODJOH5IFJOUFSFTUSBUFTXBQGJYFE&63*#03BUQFSDFOU*ODMVEJOHUIFNBSHJO UIF interest for this loan consequently amounted to 4.2 per cent at year-end 2011.

19.8 Financial lease agreements

These mainly consist of financing arrangements for buildings and equipment. The maturity of the financial lease liabilities is as follows:

2012 2011

Not later than 1 year 8,906 5,477 Later than 1 year and not later than 5 years 33,579 27,608 Later than 5 years 5,293 9,216 47,778 42,301 Future finance charges on financial leases (5,389) (6,661) Present value of financial lease liabilities 42,389 35,640

The present value of the financial lease liabilities is as follows:

2012 2011

Later than 1 year and not later than 5 years 30,442 22,730 Later than 5 years 4,655 8,595 35,097 31,325 Not later than 1 year 7,292 4,315 42,389 35,640

19.9 Other loans

The other loans relate to financing of buildings and equipment. 2012 – 171

19.10 Bank credits

At 30 January 2012, the level of the committed revolving credit facility was increased from €475 million to €500 million and its term was extended to 30 January 2016. The facility can be used for both the usual working capital financing and any other activities that may arise. Variable interest rates apply to the drawn-down proportion of the facility, with a margin between 175 and 300 (2011: 125 and 275) basis points. The margin was 175 basis points at 31 December 2012 (2011: 150 basis points).

8JUISFHBSEUPUIJTGJOBODJOH UIF(SPVQJTCPVOECZDPOEJUJPOTGVSUIFSEFTDSJCFEVOEFSUIF/PUFTUP$PWFOBOUT

At year-end 2012, the Group did not use the facility (2011: idem).

*OBEEJUJPOUPUIFTZOEJDBUFEDPNNJUUFEMPOHUFSNGBDJMJUJFT UIF(SPVQIPMETïNJMMJPOJOCJMBUFSBMDSFEJUGBDJMJUJFT (2011: €165 million), €0 of which was drawn down at year-end 2012 (2011: idem).

19.11 Covenants

With regard to the various finance arrangements, the Group is bound by qualitative and quantitative conditions, including financial ratios, which are in line with what is customary in the industry.

$POEJUJPOTGPSQSPKFDUSFMBUFEGJOBODJOH OPO SFDPVSTF111MPBOT OPOSFDPVSTFBOEPUIFSQSPKFDUGJOBODJOH SFMBUF specifically to the respective projects. A major ratio in property project financing arrangements relates to the loan to value, which expresses the ratio between the financing arrangement and the value of the project. A major ratio in PPP loans and other project financing arrangements relates to the debt service cover ratio, which expresses the ratio between the interest and repayment obligations, on the one hand, and the project cash flow, on the other. No early payments were made in 2012 as a result of not adhering to the financing conditions of project-related financing.

$POEJUJPOTGPSUIF(SPVQTCBMBODFTIFFUGJOBODJOHBSSBOHFNFOUT UIFTVCPSEJOBUFEMPBOBOEUIFDPNNJUUFE financing facility) are based on the Group as a whole, excluding non-recourse elements. The major ratios for these financing arrangements (all recourse) are: leverage ratio, interest coverage, solvency, current ratio and guarantor covers. The Group complied with all ratios in 2012.

The agreed upon covenants for new credit facilities, apart from the assets guarantor cover, are similar to the covenants at year-end 2011, including the seasonal pattern for the leverage ratio. As the committed revolving credit facility was extended on 30 January 2012, the assets guarantor cover was increased from 50 per cent to 70 per cent. The detailed rules and realisation of the recourse ratios described above, can be explained as follows:

Norm 2012 Norm 2011 Recourse leverage ratio /FUEFCU&#*5%" ≤ 2.50 (0.92) ≤ 2.50 (0.24) *OUFSFTUDPWFSBHFSBUJP &#*5%"JOUFSFTUQBJE ≥ 4.00 7.29 ≥ 4.00 4.75 Recourse solvabiliteit $BQJUBMCBTFCBMBODFUPUBM ≥ 15% 23.5% ≥ 15% 25.4% $VSSFOUSBUJP $VSSFOUBTTFUTDVSSFOUMJBCJMJUJFT ≥ 1.00 1.10 ≥ 1.00 1.39 &#*5%"HVBSBOUPSDPWFS &#*5%"HVBSBOUPSTTIBSF ≥ 60% 70% ≥ 60% 69% Activa guarantor cover Assets guarantors share ≥ 70% 88% ≥ 50% 86%

A permitted increased recourse leverage ratio of a maximum of 2.75 applied to the second and third quarter. 172 – 2012

19.12 Other information

5IF(SPVQTTVCPSEJOBUFEMPBOJTTJNJMBSJOOBUVSFUPUIFDBQJUBMCBTF3FQBZNFOUPCMJHBUJPOTBSFTVCPSEJOBUFEUP non-subordinated obligations. The requested margins of these loans relate to the margins of the long-term loans market to a (very) limited extent only. The non-recourse PPP loans relate directly to the associated receivables from government bodies. Therefore, the interest rates are influenced marginally by market adjustments applying to companies. The terms of project loans are relatively short, as a consequence of which interest margins are in line with the markets. Therefore, the carrying amounts of the loans do not differ significantly from their fair values. Other loans are subject to variable interest rates. Therefore, the carrying amounts of the loans do not differ significantly from their fair values.

The effective interest rates are as follows:

2012 2011 Pound Pound Euro sterling Euro sterling

Subordinated loan 8.2% - 7.2% - Non-recourse PPP loans 4.9% 6.0% 5.1% 6.3% Non-recourse project financing 3.1% 3.3% 4.0% 3.3% Recourse PPP loans 4.2% - 4.1% 3.9% Other project financing 3.5% - 3.2% - Bank financing 4.4% - 4.2% - Financial lease liabilities 4.2% - 4.7% 5.0% Other loans 4.9% - 4.2% -

The Group contracted interest rate swaps to mitigate the exposure of borrowings to interest rate fluctuations and contractual changes in interest rates.

"U%FDFNCFS UIF(SPVQTVOIFEHFEQPTJUJPOJTBTGPMMPXT

Not later Later than than 1 year 1-5 years 5 years Total

Total borrowings 512,852 858,225 386,685 1,757,762 Hedged with interest rate swaps (169,480) (450,980) (249,111) (869,571) At 31 December 2012 343,372 407,245 137,574 888,191

Total borrowings 240,101 1,138,053 812,971 2,191,125 Hedged with interest rate swaps (106,312) (846,842) (485,485) (1,438,639) At 31 December 2011 133,789 291,211 327,486 752,486

5IFUPUBMBNPVOUPGUIF(SPVQTCPSSPXJOHTBSFEFOPNJOBUFEJOUIFGPMMPXJOHPSJHJOBMDVSSFODJFT

2012 2011

Euro 1,482,432 1,884,407 Pound sterling 257,987 220,704 Swiss franc 17,343 86,014 1,757,762 2,191,125 2012 – 173

20. Derivative financial instruments

2012 2011 Assets Liabilities Fair value Assets Liabilities Fair value

*OUFSFTUSBUFTXBQT - 287,699 (287,699) - 249,685 (249,685) Forward exchange contracts 1,412 3,183 (1,771) 5,873 1,803 4,070 1,412 290,882 (289,470) 5,873 251,488 (245,615)

Of which current: 787 3,468 (2,681) 5,071 1,988 3,083

20.1 Interest rate swaps

At 31 December 2012, interest rate swaps are outstanding to hedge the interest rate risk on the subordinated loan, the (non-) recourse PPP loans, and some project loans with a variable interest rate. The total loans amount to €870 million (2011: €1,439 million). The fair value of the outstanding interest rate swaps amounts to €287.7 million negative (2011: €249.7 million negative). All but three interest rate swaps have terms to maturity longer than one year.

At year-end 2012, the fixed interest rates of these swaps vary from 0.3 per cent to 6.3 per cent (2011: between 1.2 per DFOUBOEQFSDFOU 5IFWBSJBCMFJOUFSFTUSBUFTPGUIFDPSSFTQPOEJOHMPBOTBSFCBTFEPO&63*#03PS-*#03QMVTB margin.

At year end 2012, almost all recognised derivatives provide an effective compensation for movements in cash flows GSPNUIFIFEHFEQPTJUJPOT5IFSFGPSF UIFNPWFNFOUTJOBSFBDDPVOUFEGPSJOTIBSFIPMEFSTFRVJUZ5IFGBJS value of outstanding derivatives which do not provide an effective compensation are accounted for in the income statement. Please refer to Note 4.1 for the anticipated cash flows of the derivatives.

20.2 Forward exchange contracts

At 31 December 2012, the total of forward exchange contracts amounts to €264 million (2011: €222 million) with a fair value of €1.8 million negative (2011: €4.1 positive).

The terms to maturity of these contracts are up to a maximum of 1 year for the amount of €251 million (2011: €201 million), between 1 and 2 years for the amount of €11 million (2011: €17 million) and between 2 to 4 years for the amount of €2 million (2011: €4 million). 174 – 2012

21. Employee benefit assets and obligations

2012 2011

Retirement benefit asset for defined benefit schemes 163,756 137,585

Retirement benefit obligation for defined benefit schemes 68,295 74,982 Other non-current employee benefits 30,971 25,953 99,266 100,935

Employee benefit obligations relate to defined benefit pension schemes and other employee benefits, such as jubilee benefits, both at home and abroad. The defined benefit pension schemes involve funded schemes to the net amount of €95 million (2011: €50 million). Other employee benefits involve non-funded schemes.

The corridor method is used to calculate actuarial gains and losses, with the exception of the effects on liabilities related to other employee benefits. Those effects are charged or credited to the income statement, as the corridor does not apply.

The defined benefit pension schemes included balance receivables in 2011 and 2012. Without applying the corridor method, the fair value of the scheme assets does not exceed pension liabilities in any of these funds. The increase in balance receivables and the decrease in balance liabilities are enhanced by the fact that employer contributions FYDFFEQFOTJPOMJBCJMJUJFTDBMDVMBUFEPOBOBDUVBSJBMCBTJT*UJTFYQFDUFEUIBUFNQMPZFSDPOUSJCVUJPOTJOXJMMCFJO line with the employer contributions in 2012.

The Group initiated a project in 2012 to mitigate its exposure with regard to pensions.

The Group has pension schemes mostly in the following countries:

The Netherlands *OUIF/FUIFSMBOET UIFHSPVQNBLFTDPOUSJCVUJPOTUPEFGJOFECFOFGJUTDIFNFTBTXFMMBTEFGJOFEDPOUSJCVUJPOTDIFNFT

The basic pension for every employee is covered by multi-employer funds. These funds have an indexed average salary TDIFNFBOEBSFUIFSFGPSFEFGJOFECFOFGJUTDIFNFT4QFDJGJDBMMZ UIFTFBSFUIFJOEVTUSZQFOTJPOGVOETGPS$POTUSVDUJPO  .FUBM5FDIOPMPHZBOE3BJMXBZT"TUIFTFGVOETBSFOPUFRVJQQFEUPQSPWJEFUIFSFRVJSFEJOGPSNBUJPOPOUIF(SPVQT proportionate share of pension liabilities and fund investments, the defined benefit plans are accounted for as defined contribution plans. The Group is obliged to pay the predetermined premium for these plans. The Group may not reclaim any excess payment and is not obliged to make up any deficit, except by way of the adjustment of future premiums.

The part exceeding the basic pension amount (top-up part), which is not covered by multi-employer funds, is covered by external insurance companies and relates to defined contribution schemes.

Until 2006, pension entitlements were partially built up in company pension funds of former legal entities. These schemes are now closed for new entrants. The build-up of future pension entitlements for these employees is covered by the multi-employer funds and external insurance companies mentioned above. At the time of the transition, supplementary schemes and guarantee schemes were agreed upon for several groups. These are defined benefit schemes.

"UZFBSFOE UIFDPWFSBHFSBUFPGUIFJOEVTUSZQFOTJPOGVOEGPS$POTUSVDUJPO CQG#PVX JTQFSDFOU  100 per cent). The industry pension fund for Metal & Technology has a coverage rate of 92 per cent at year-end 2012 (2011: 89 per cent). The coverage rate of the industry pension fund for Railways is 114 per cent (2011: 113 per cent).

*OUIFDPOUFYUPGBDDPVOUBCJMJUZGPSUIF(SPVQTQFOTJPOQPMJDZ UPCF JNQMFNFOUFE XJUISFHBSEUP JOUFSBMJB  supplements and investment performance, the Group has established an accountability committee, with representation GSPNUIF$FOUSBM8PSLT$PVODJM $8$ BOEUIF4PDJP&DPOPNJD$PNNJUUFFPGUIF#".QFOTJPOFST"TTPDJBUJPO 4&$  2012 – 175

"UZFBSFOEUIF(SPVQEFDJEFE UPEFDSFBTFUIF#".TVQQMFNFOUBSZTDIFNF*OBEEJUJPO #".TJOTVSBODFDPOUSBDU was terminated and transferred to bpfBouw. Termination of the contract means that interest bonuses and, consequently, the source of finance for index-linking cease to exist.

United Kingdom *OUIF6OJUFE,JOHEPN UIF(SPVQNBLFTDPOUSJCVUJPOTUPEFGJOFECFOFGJUQMBOTBTXFMMBTEFGJOFEDPOUSJCVUJPOQMBOT

Three defined benefit pension schemes are executed by separate trusts. They were closed to new participants in 2004 and future accumulation in the schemes closed at the end of October 2010. The Group is still responsible for making supplementary contributions to recover the historical financing deficits. The plan for supplementary contributions was last revised in 2008 and led to supplementary contributions in 2012 to the amount of approximately €28 million (2011: €26 million).

*OQMBDFPGUIFDMPTFEEFGJOFECFOFGJUQFOTJPOTDIFNFT UIF(SPVQPQFOFEBEFGJOFEDPOUSJCVUJPOTDIFNF XIJDIJT executed by an outside insurance company. Following the closure of future accumulation in defined benefit pension schemes in 2010, employees who used to participate in these schemes were invited to participate in the defined contribution schemes.

*OBEEJUJPO TFWFSBMEFGJOFECFOFGJUTDIFNFTBSFBDDPVOUFEGPSBTEFGJOFEDPOUSJCVUJPOTDIFNFTEVFUPUIFGBDUUIBU external parties administering them are not able to provide the required information. These schemes have limited numbers of members, however. The Group is obliged to pay the predetermined premium for these plans. The Group may not reclaim any excess payment and is not obliged to make up any deficit, except by way of the adjustment of future premiums.

"OJOBDDVSBDZJOUIFDBMDVMBUJPOPGUIFXJEPXTQFOTJPOPGBQFOTJPOTDIFNFJOUIF6OJUFE,JOHEPNXBTBEKVTUFEJOUIF DPNQBSBUJWFGJHVSFT"TUIFDPSSJEPSNFUIPEXBTBQQMJFE UIJTEJEOPUIBWFBNBUFSJBMFGGFDUPOUIF(SPVQT figures.

Belgium *O#FMHJVN UIF(SPVQNBLFTDPOUSJCVUJPOTUPBSFMBUJWFMZTNBMMEFGJOFECFOFGJUTDIFNFUIBUJTFYFDVUFECZBOFYUFSOBM insurance company. The Group has also made arrangements for employees to participate in a defined contribution scheme.

Germany *O(FSNBOZUIF(SPVQPQFSBUFTTFWFSBMEFGJOFECFOFGJUTDIFNFT5IFTFTDIFNFTBSFGJOBODFECZUIFFNQMPZFSBOEQBSUMZ executed by a company pension fund. The Group closed several schemes to new participants and intends to close the remaining schemes as well. Since 2006, the Group has been making contributions to a defined contribution scheme, into which employees have the opportunity to contribute on an individual basis.

Ireland 5IF(SPVQIBTBEFGJOFECFOFGJUTDIFNFJO*SFMBOE FYFDVUFECZBDPNQBOZQFOTJPOGVOE5IFNVMUJFNQMPZFSQFOTJPO scheme was fully converted from a defined benefit scheme to a defined contribution scheme with effect from 1 January 2006. 176 – 2012

The actuarial assumptions and amounts recognised in the balance sheet and income statement are as follows:

United 2012 Netherlands Kingdom Belgium Germany *SFMBOE Total

Net balance sheet asset Balance sheet obligation (30,759) - (1,084) (36,452) - (68,295) Balance sheet assets 60,380 92,846 - - 10,530 163,756 At 31 December 2012 29,621 92,846 (1,084) (36,452) 10,530 95,461

Change to the income statement 657 (6,305) (60) (1,810) (2,443) (9,961)

Change in benefit obligation At 1 January 2012 (1,031,309) (726,800) (2,340) (60,107) (77,187) (1,897,743) $VSSFODZFYDIBOHFEJGGFSFODFT - (17,836) - - - (17,836) Service cost (4,333) (202) (56) (278) (1,537) (6,406) *OUFSFTUDPTU (42,860) (34,665) (79) (2,150) (4,044) (83,798) Plan participants contributions - (71) (12) - (618) (701) $IBOHFTBOEQMBOBNFOEFNFOUT 107,862 - - - - 107,862 Benefits paid 43,990 23,660 339 4,016 1,475 73,480 Actuarial gain / loss due to assumption changes (126,946) (46,601) (263) (8,674) (17,242) (199,726) Expercience gains and losses 14,893 13,817 - (1,590) 354 27,474 At 31 December 2012 (1,038,703) (788,698) (2,411) (68,783) (98,799) (1,997,394)

Change in fair value of plan assets At 1 January 2012 961,449 648,213 1,604 19,758 67,406 1,698,430 $VSSFODZFYDIBOHFEJGGFSFODFT - 15,745 - - - 15,745 Expected return on plan assets 40,709 35,206 59 731 3,869 80,574 Employer contributions 10,925 29,282 97 3,958 4,076 48,338 Plan participants contributions - 71 12 - 618 701 $IBOHFTBOEQMBOBNFOEFNFOUT (94,147) - - - - (94,147) Benefits paid (43,990) (23,660) (339) (4,016) (1,475) (73,480) Actuarial gain / loss 82,608 13,027 (3) (210) 2,173 97,595 At 31 December 2012 957,554 717,884 1,430 20,221 76,667 1,773,756

Net balance sheet asset Funded status (81,149) (70,814) (981) (48,562) (22,132) (223,638) Unrecognised net actuarial gain / loss 110,770 163,660 (103) 12,110 32,662 319,099 At 31 December 2012 29,621 92,846 (1,084) (36,452) 10,530 95,461

Components of net periodic benefit cost Service cost (4,333) (202) (56) (278) (1,537) (6,406) *OUFSFTUDPTU (42,860) (34,665) (79) (2,150) (4,044) (83,798) Expected return on plan assets 40,710 35,206 59 730 3,869 80,574 Amortisation of actuarial gain / loss (1,428) (6,644) 16 (112) (731) (8,899) $IBOHFTBOEQMBOBNFOEFNFOUT 8,765 - - - - 8,765 Unrecognised assets (197) - - - - (197) Net periodic benefit cost 657 (6,305) (60) (1,810) (2,443) (9,961)

Key assumptions Discount rate as at 1 January 2012 4.3% 4.7% 3.8% 4.7% 5.1% Expected return on plan assets 3.0% 5.0 - 5.2% 3.3% 3.7% 5.1% Rate of compensation increase 2.0% 2.2 - 3.1% 2.0% 2.0% 0 - 2.5% Rate of benefit increase 2.0% 2.2 - 2.3% 0.0% 2.0% 2.0% Discount rate as at 31 December 2012 3.0% 4.3% 2.3% 3.7% 3.9% 2012 – 177

The actuarial assumptions and amounts recognised in the balance sheet and income statement are as follows:

United 2011 Netherlands Kingdom Belgium Germany *SFMBOE Total

Net balance sheet asset Balance sheet obligation (47,472) - (1,125) (38,601) - (87,198) Balance sheet assets 60,380 68,308 - - 8,897 137,585 At 31 December 2011 12,908 68,308 (1,125) (38,601) 8,897 50,387 Liabilities held for sale 12,216 - - - - 12,216 At 31 December 2011 25,124 68,308 (1,125) (38,601) 8,897 62,603

Change to the income statement (6,099) 118 (53) (2,210) (2,571) (10,815)

Change in benefit obligation At 1 January 2011 (1,049,276) (622,106) (2,139) (61,858) (76,504) (1,811,883) $VSSFODZFYDIBOHFEJGGFSFODFT - (14,765) - - - (14,765) Service cost (3,319) (352) (59) (314) (2,331) (6,375) *OUFSFTUDPTU (48,182) (33,719) (99) (2,814) (3,957) (88,771) Plan participants contributions - (109) (6) - (662) (777) Benefits paid 45,288 17,211 166 3,986 2,034 68,685 Actuarial gain / loss due to assumption changes 20,700 (79,728) (203) 1,571 2,413 (55,247) Expercience gains and losses 3,480 6,768 - (678) 1,820 11,390 At 31 December 2011 (1,031,309) (726,800) (2,340) (60,107) (77,187) (1,897,743)

Change in fair value of plan assets At 1 January 2011 990,302 599,693 1,621 19,622 67,604 1,678,842 $VSSFODZFYDIBOHFEJGGFSFODFT - 15,358 - - - 15,358 Expected return on plan assets 46,390 36,468 65 916 4,300 88,139 Employer contributions 6,823 26,677 75 3,677 3,959 41,211 Plan participants contributions - 109 6 - 662 777 Benefits paid (45,288) (17,211) (166) (3,986) (2,034) (68,685) Actuarial gain / loss (36,778) (12,881) 3 (471) (7,085) (57,212) At 31 December 2011 961,449 648,213 1,604 19,758 67,406 1,698,430

Net balance sheet asset Funded status (69,860) (78,587) (736) (40,349) (9,781) (199,313) Unrecognised net actuarial gain / loss 84,173 146,895 (389) 1,748 18,678 251,105 Unrecognised assets (1,405) - - - - (1,405) At 31 December 2011 12,908 68,308 (1,125) (38,601) 8,897 50,387

Components of net periodic benefit cost Service cost (3,319) (352) (59) (314) (2,331) (6,375) *OUFSFTUDPTU (48,182) (33,719) (99) (2,814) (3,957) (88,771) Expected return on plan assets 46,390 36,468 65 916 4,300 88,139 Amortisation of actuarial gain / loss (918) (2,279) 40 2 (583) (3,738) Unrecognised assets (70) - - - - (70) Net periodic benefit cost (6,099) 118 (53) (2,210) (2,571) (10,815)

Key assumptions Discount rate as at 1 January 2011 4.7% 5.4% 4.7% 5.1% 5.1% Expected return on plan assets 4.5% 5.0 - 5.33% 4.0% 4.7% 6.2% Rate of compensation increase 2.0% 3.5% 2.0% 2.0% 2.5% Rate of benefit increase 2.0% 2.5 - 3.0% 2.0% 2.0% 2.0% Discount rate as at 31 December 2011 4.3% 4.7% 3.8% 4.7% 5.1% 178 – 2012

The discount rate is based on iBoxx high-quality corporate bonds (AA) adjusted for the term to maturity of the benefit commitment.

For the (major) Dutch pension schemes, the 2010-2060 forecast mortality table is used, published by the Dutch Association of Actuaries. The table has been adjusted by a one-year reduction in age for both men and women. For the more minor Dutch schemes, the 2005-2050 forecast mortality table is used, also adjusted by a one-year reduction in age for both men and women.

Expected returns on plan assets are determined by taking into account expected returns on assets which form the basis of the current investment policy. The various funds invest in equities, index-related and fixed-rate investments. Expected returns on investments in shares and index-linked bonds and investments reflect the actual long-term return rates in the various markets. Expected returns from fixed-rate bonds are based on gross returns at the date of the balance sheet.

"TGSPN UIF(SPVQBQQMJFT*"4UPWBMVF%VUDIGVOEJOWFTUNFOUTBTUIFTDIFNFTBSFJOTVSFE5IFFGGFDU of this change is not material as a similar method was used in previous years.

The risk profiles of the various portfolios are in line with the requirements as set out in the particular pension schemes, and these profiles can be classified as ranging from average to low. Fund investments do not include any shares of the Group.

The composition of the plan assets is as follows:

United Netherlands Kingdom Belgium Germany *SFMBOE Total

$BTIBOEPUIFS 3,321 164,742 1,430 947 4,708 175,148 *OEFYSFMBUFECPOET - 107,418 - 5,811 7,314 120,543 Fixed-rate bonds - 172,387 - 13,463 8,246 194,096 Equities - 273,337 - - 56,399 329,736 *OTVSFEDPOUSBDUT 954,233 - - - - 954,233 At 31 December 2012 957,554 717,884 1,430 20,221 76,667 1,773,756

$BTIBOEPUIFS 93,546 146,503 1,604 947 2,716 245,316 *OEFYSFMBUFECPOET 11,693 22,716 - 18,811 - 53,220 Fixed-rate bonds 608,230 167,778 - - 13,920 789,928 Equities 247,980 311,216 - - 50,770 609,966 At 31 December 2011 961,449 648,213 1,604 19,758 67,406 1,698,430

*O UIFBWFSBHFSFUVSOXBTQFSDFOU QFSDFOU 

*OUIF6OJUFE,JOHEPN GVOEJOWFTUNFOUTXFSFQPTJUJWFMZJOGMVFODFECZUIFDVSSFODZUSBOTMBUJPOSFTVMUGPMMPXJOHUIF rise in the exchange rate of the pound sterling. However, there was also a corresponding increase in the defined benefit obligation. 2012 – 179

The following table provides an overview of the composition of the net balance sheet obligation at year-end for defined benefit schemes over the past few years.

2012 2011 1 2010 1 2009 1 2008 1

Benefit obligations (1,997,394) (1,897,743) (1,811,883) (1,530,428) (1,366,534) Fair value of plan assets 1,773,756 1,698,430 1,678,842 1,408,527 1,184,525 Funded status (223,638) (199,313) (133,041) (121,901) (182,009)

Unrecognised actuarial gain / loss and assets Unrecognised actuarial gain / loss and assets previous year 249,700 151,113 91,920 129,689 48,675 Unrecognised net actuarial gain / loss benefit obligation 172,252 43,857 213,411 84,725 (84,721) Unrecognised net actuarial gain / loss plan assets (97,595) 57,212 (152,916) (118,350) 172,689 Amortisation of actuarial gain / loss (8,899) (3,738) (2,978) (6,129) 788 $IBOHFTBOEQMBOBNFOEFNFOUT (4,950) - (444) - - Unrecognised assets (197) 70 11,182 (11,075) (1,469) *NNFEJBUFSFDPHOJUJPOPGBDUVBSJBMHBJOMPTT - - (11,236) 11,022 - $VSSFODZFYDIBOHFEJGGFSFODFT 8,788 1,186 2,174 2,038 (6,273) 319,099 249,700 151,113 91,920 129,689

Net balance sheet asset / (obligation) 95,461 50,387 18,072 (29,981) (52,320) Liabilities held for sale - 12,216 - - - Net balance sheet asset / (obligation) 95,461 62,603 18,072 (29,981) (52,320)

1$PNQBSBUJWFGJHVSFTIBWFCFFOBEKVTUFE 180 – 2012

22. Provisions

Reorganisation Rental Other Warranties costs guarantees provisions Total

At 1 January 2012 73,689 16,240 16,296 30,634 136,859 $IBSHFEUPUIFJODPNFTUBUFNFOU - additional provisions 21,030 32,072 - 8,118 61,220 - release of unused provisions (7,431) (1,777) - (3,567) (12,775) Used during the year (16,375) (17,095) (3,365) (3,717) (40,552) Reclassifications 4,930 - (206) 206 4,930 Exchange rate differences 1 - - 19 20 At 31 December 2012 75,844 29,440 12,725 31,693 149,702

Provisions are classified in the balance sheet as follows:

2012 2011

Non-current 89,731 82,529 $VSSFOU 59,971 54,330 149,702 136,859

The provision for warranties relates to estimated liabilities and pending proceedings with regard to disputes about DPNQMFUFEQSPKFDUT$PTUTJODVSSFEVOEFSXBSSBOUJFTBSFDIBSHFEUPUIJTQSPWJTJPO5IFMFWFMPGUIFQSPWJTJPOJTUFTUFE periodically, based on an estimate of risks. Approximately 38 per cent of the provision has a current nature (2011: approximately 50 per cent).

The reorganisation provision relates to cost involved in reorganisations already initiated. Reorganisation provisions are recognised as soon as the decision to make organisational changes has been made and announced. Approximately 86 per cent of the provision has a current nature (2011: approximately 76 per cent).

The rental guarantee provision consists of commitments arising from rental guarantees issued to third parties (predominantly Germany), taking into account expected revenue from subleases. The rental guarantee obligations in Germany relate to several properties and are predominantly non-current in nature. For one property, the remaining duration of the rental guarantee obligation is long; until 2017.

For an amount of €15 million, other provisions relate to the dividend guarantee issued in the context of the disposal of the interest in Van Oord. Other provisions also relate to the liquidation of the German activities of Tebodin, old project development activities, claims and legal obligations in Germany and continuing rental commitments resulting from (temporarily) unused premises. Approximately 9 per cent of the provisions have a current nature (2011: 7 per cent).

The non-current part of the provisions has been discounted at an interest rate of approximately 3 per cent (2011: approximately 3 per cent). 2012 – 181

23. Deferred tax

2012 2011

Deferred tax assets: - To be recovered after more than 1 year 248,883 131,601 - To be recovered within 1 year 10,535 17,809 259,418 149,410 Deferred tax liabilities: - To be recovered after more than 1 year 58,823 60,388 - To be recovered within 1 year 19,966 15,692 78,789 76,080

Net amount of assets and liabilities (180,629) (73,330)

The gross movement in the net amount of tax assets and liabilities is as follows:

2012 2011

At 1 January (73,330) (107,700) $IBSHFE DSFEJUFE UPJODPNFTUBUFNFOU (96,288) 49,307 $IBSHFE DSFEJUFE UPFRVJUZ (18,621) (29,889) Acquisition of subsidiaries - 260 $IBOHFPGJODPNFUBYSBUF (967) (608) Transfer to assets / liabilities held for sale 8,219 3,815 Reclassification including scope changes - 11,014 Exchange rate differences 358 471 At 31 December (180,629) (73,330)

The movement in deferred taxes, before offsetting the balances within the same tax jurisdiction, is as follows:

Fair value Deferred tax assets Provisions Tax losses gains Other Total

At 1 January 2011 6,042 142,927 41,580 12,798 203,347 $IBSHFE DSFEJUFEUPUIFJODPNF statement (1,034) (29,143) (609) (1,803) (32,589) $IBSHFE DSFEJUFEUPFRVJUZ - - 30,857 - 30,857 $IBOHFPGJODPNFUBYSBUF (30) - - - (30) Transfer to assets held for sale (1,759) - (1,736) (522) (4,017) Reclassification including scope changes 139 - - 231 370 Exchange rate differences 34 - 159 48 241 At 31 December 2011 3,392 113,784 70,251 10,752 198,179

$IBSHFE DSFEJUFEUPUIFJODPNF statement 10 84,238 (344) (1,569) 82,335 $IBSHFE DSFEJUFEUPFRVJUZ - - 17,878 - 17,878 $IBOHFPGJODPNFUBYSBUF (244) - - - (244) Transfer to assets held for sale - - (8,219) - (8,219) Exchange rate differences 28 - 219 84 331 At 31 December 2012 3,186 198,022 79,785 9,267 290,260 182 – 2012

Accelerated Deferred tax liabilities $POTUSVDUJPO tax Fair value contracts depreciation gains Other Total

At 1 January 2011 46,931 5,625 913 42,178 95,647 $IBSHFE DSFEJUFEUPUIFJODPNF statement 5,201 (4,584) (272) 16,373 16,718 $IBSHFE DSFEJUFEUPFRVJUZ - - 968 - 968 Aquisition of subsidiaries - 260 - - 260 $IBOHFPGJODPNFUBYSBUF - (23) - (615) (638) Transfer to liabilities held for sale - - (10) (192) (202) Reclassification including scope changes 186 1,419 - 9,779 11,384 Exchange rate differences 3 201 - 508 712 At 31 December 2011 52,321 2,898 1,599 68,031 124,849

$IBSHFE DSFEJUFEUPUIFJODPNF statement (558) 1,858 (540) (14,713) (13,953) $IBSHFE DSFEJUFEUPFRVJUZ - - (743) - (743) $IBOHFPGJODPNFUBYSBUF - - - (1,211) (1,211) Exchange rate differences 4 284 - 401 689 At 31 December 2012 51,767 5,040 316 52,508 109,631

Deferred tax assets in a country are recognised only to the extent that it is probable that future taxable profits in that country will be available against which the temporary differences and tax loss carry-forwards can be utilised.

The tax losses incurred by the Royal BAM Group tax entity in the Netherlands in 2009 and 2010 are approximately €220 million. Based on the current time limits with regard to tax loss compensation, these losses can be offset BHBJOTUUBYBCMFQSPGJUTJOUIFQFSJPEVQUPBOEJODMVEJOHBOE SFTQFDUJWFMZ*O UIF3PZBM#".(SPVQ tax entity in the Netherlands incurred a tax loss of approximately €250 million as a consequence of impairments of inventories and non-current receivables. Based on the current time limits with regard to tax loss compensation, this loss can be offset against taxable profits in the period up to and including 2021.

The liquidation of old property development activities in Germany was completed in 2011. The resulting tax loss can be offset against other taxable profits realised by the Royal BAM Group tax entity in the Netherlands. Offsetting will largely take place against other-year results. Based on the current time limits with regard to tax loss compensation, the Group will be able to offset the liquidation loss against taxable profits in the period from 2013 up to and including 2020.

With the liquidation of old property development activities in Germany, a part of the tax losses available in Germany has ceased to exist. Tax losses to a minimum of €400 million are expected to remain available for the companies in Germany, which can be offset against future profits in Germany. 2012 – 183

24. Trade and other payables

2012 2011

Trade payables 837,760 895,790 Amounts due to customers 858,622 936,403 Amounts due to associates 24,036 17,299 Social security contribution and other taxation 141,000 131,294 Pension premiums 12,073 8,321 Accrued cost completed projects 146,773 154,089 Accrued costs work in progress 383,810 400,302 Accruals and deferred income 387,478 345,091 Other current liabilities 195,053 159,219 2,986,605 3,047,808

The fair value of trade payables and other payables is almost equal to their nominal value, due to the current nature of these liabilities. Normally, these payables will be paid in the ordinary course of business (less than one year).

Amounts due to customers relate to construction contracts for third parties and sold property development and consist of the negative balance of cost incurred (including result recognised) and invoiced instalments. Please refer to Notes 3.9 and 7.

Other current liabilities include costs yet to be paid as part of the ordinary conduct of business.

25. Personnel expenses

2012 2011

Salaries and wages 1,172,591 1,131,497 Social security cost 206,289 184,927 Other employee benefit costs 3,176 2,365 Pension cost (defined contribution schemes) 95,728 91,322 Pension cost (defined benefit schemes) 9,961 10,601 1,487,745 1,420,712

At year-end 2012, the Group had 23,734 employees expressed in full-time equivalent (2011: 27,007 of which 23,830 relating to continuing operations). The average number of employees expressed in full-time equivalent amounted to 23,188 (2011: 26,639 of which 23,702 relating to continuing operations).

Please refer to Note 21 for further information on pension cost. 184 – 2012

26. Impairments

2012 2011

Goodwill 150,431 - Non-current receivables 6,225 - *OWFOUPSJFT 241,492 - 398,148 -

As the economic outlook continues to deteriorate in the Netherlands, the Group, together with external valuers, conducted a comprehensive analysis of the Dutch property order book. The adjusted forecast is that future property developments will be deferred in time, with fewer houses per project and at lower average selling prices. Before, it was assumed that the market would bottom out in the second half of 2012 or first half of 2013. Now, the Group anticipates a further deterioration of the market until the second half of 2014 or first half of 2015, with a decrease in BWFSBHFIPVTFQSJDFTPGQFSDFOUUPQFSDFOUJODPNQBSJTPOXJUIUIFQFBLJO"VHVTU5IF(SPVQT long-term view is that budgets of house buyers will be structurally lower, based on anticipated income, more stringent mortgage conditions, and limited tax deduction for mortgage interest.

The analysis resulted in impairments of goodwill in the amount of €150 million, of non-current receivables in the amount of €6 million, of land and building rights in the amount of €242 million, and of property development in the BNPVOUPGïNJMMJPO*OBEEJUJPO BQSPQFSUZEFWFMPQNFOUJNQBJSNFOUPGïNJMMJPOXBTSFWFSTFE

There were no impairments in 2011.

27. Auditors’ fees

The total audit fee for the audit of the financial statements 2012 amounts to €4.9 million (2011: €4.4 million), ïNJMMJPO ïNJMMJPO PGXIJDISFMBUFTUP1SJDFXBUFSIPVTF$PPQFST"DDPVOUBOUT/7 SFTQPOTJCMFGPS BVEJUJOHUIF(SPVQTGJOBODJBMTUBUFNFOUT5IFZXFSFBMTPQBJEïNJMMJPO ïNJMMJPO GPSPUIFSBVEJUSFMBUFE services, €0.3 million (2011: €0.3 million) for fiscal advice and €0.2 million (2011: €0.2 million) for other non-audit related services. 2012 – 185

28. Finance income and expense

2012 2011

Finance income: *OUFSFTUJODPNFPODBTIBUCBOLT 3,904 4,883 - Other financial fixed assets - interest income 4,592 2,981 - Other finance income 3,046 3,955 - PPP receivable - finance income 75,558 60,919 87,100 72,738

Finance expense: - Subordinated loan 6,546 9,857 $PTUPGTVCPSEJOBUFEMPBO 500 150 - Non-recourse PPP loans 46,227 36,345 - Other non-recourse loans 8,277 11,919 - Bank financing 1,089 13,214 $PTUPGCBOLGJOBODJOH - 5,639 - Banks 899 4,213 - Financial leases 1,688 2,005 - Other borrowings 14,714 12,513 $PTUPUIFSCPSSPXJOHT 543 4,247 $BQJUBMJTFEJOUFSFTUPO(SPVQTPXOQSPKFDUT (25,691) (31,503) - Result on cash flow hedges 28,795 30,397 83,587 98,996

Net finance income / (expense) 3,513 (26,258)

$PTUPGPUIFSMPBOTSFMBUFTQSFEPNJOBOUMZUPSFGJOBODJOHDPTUJODVSSFE

Please refer to Note 19 for an overview of the weighted average interest rates for the capitalisation of interest.

29. Tax on result

2012 2011

$VSSFOUUBY 57,174 (21,257) Deferred tax (96,288) 49,307 (39,114) 28,050

*ODPNFUBYPOUIF(SPVQTQSPGJUCFGPSFUBYFTEJGGFSTGSPNUIFUIFPSFUJDBMBNPVOUUIBUXPVMEBSJTFVTJOHUIFXFJHIUFE average tax rate applicable to profits of the consolidated companies. 186 – 2012

The difference is specified as follows:

2012 2011

Result before tax (291,022) 143,518

Tax calculated at Netherlands tax rate (72,751) 35,882 Tax effects of: - Tax rates in other countries 1,188 5,770 *ODPNFOPUTVCKFDUUPUBYBOEVOSFDPHOJTFEUBYMPTTFT 8,995 2,075 $IBOHFJOUBYSBUFPOEFGFSSFEUBY (945) (608) - Tax filings and previously unrecognised temporary differences (4,141) (1,297) - Previously unrecognised tax carry forward (9,455) (3,081) "TTPDJBUFTSFTVMUOFUPGUBY (1,298) (11,206) - Other including expenses not deductable for tax purposes 1,685 515 *NQBJSNFOUPGHPPEXJMM 37,608 - Effective tax charge / (gain) (39,114) 28,050

Effective tax rate 13.4% 19.5%

The weighted average tax rate applicable was 24.6 per cent (2011: 29.0 per cent). The difference is attributable to a different spread of results over the countries.

*O UIFUBYCVSEFOXBTJOGMVFODFEQSFEPNJOBOUMZCZUIFJNQBJSNFOUPGHPPEXJMMXJUISFHBSEUP". BTXFMMBT the usual non-deductible expenses and the tax rates applied in the various countries.

The tax burden in 2011 was still influenced significantly by the tax exemption for subsidiaries.

30. Earnings per share

2012 2011

Weighted average number of ordinary shares in issue (x 1,000) 238,193 232,378

Net result attributable to shareholders (187,415) 125,995 Basic earnings per share (€) (0.79) 0.54

Net result from continuing operations attributable to shareholders (252,415) 113,850 Basic earnings per share from continuing operations (€) (1.06) 0.49

Net result form discontinued operations attributable to shareholders 65,000 12,145 Basic earnings per share from discontinued operations (€) 0.27 0.05

Shares that have been issued as a consequence of conversion do not count fully in determining the weighted average number of outstanding ordinary shares, but on a time-weighted basis. 2012 – 187

Allowing for dilution, the earnings per share are as follows:

2012 2011

Weighted average number of ordinary shares in issue (x 1,000) 238,193 232,378 *NQBDUPGDPOWFSTJPOPGDPOWFSUJCMFDVNVMBUJWFGJOBODJOHQSFGFSFODFTIBSFT - 287 Weighted average number of ordinary shares (diluted) (x 1,000) 238,193 232,665

Net result attributable to shareholders (187,415) 125,995 Dividend on convertible cumulative financing preference shares (after tax) - - Net result attributable to shareholders (diluted) (187,415) 125,995

Fully diluted earnings per share (€) (0.79) 0.54

Net result from continuing operations attributable to shareholders (diluted) (252,415) 113,850 Fully diluted earnings from continuing operations per share (€) (1.06) 0.49

Net result from discontinued operations attributable to shareholders (diluted) 65,000 12,145 Fully diluted earnings from discontinued operations per share (€) 0.27 0.05

31. Dividends

The dividends paid to shareholders of ordinary shares in 2012 were €38.2 million, €17.5 million in cash (€0.16 per share) and €20.7 million in shares (€0.1675 per share). The cash dividends paid to shareholders of ordinary shares in 2011 were €7.1 million, €3.3 million in cash (€0.03 per share) and €3.8 million in shares (€0.0.315 per share).

As a consequence of the full conversion of convertible financing preference shares into ordinary shares and the repurchase of non-convertible financing preference shares in 2011, dividend payable with regard to the financing preference shares no longer exists in 2012.

The cash dividends paid to shareholders of convertible financing preference shares in 2011 were €0.13 million (€0.37086 per share).

The cash dividends paid to shareholders of non-convertible financing preference shares in 2011 were €0.03 million (€0.38346 per share).

The company proposes to declare a dividend for the financial year 2012 at €0.10 in cash per ordinary share or in shares (2011: €0.16 in cash or in shares, at the option of the shareholders). Based on the number of ordinary shares outstanding at year-end 2012, a maximum of €24 million will be distributed as dividend on the ordinary shares. As yet, the dividend proposal has not been deducted from retained earnings under equity. 188 – 2012

32. Contingencies

5IF(SPVQJTDMBJNJOHDPOTJEFSBCMFBNPVOUTVOEFSQFOEJOHQSPDFFEJOHTBOEEJTQVUFTXJUIDMJFOUT*UJTJNQPTTJCMFUP reasonably determine the extent and timing of possible inflow of economic benefits. These rights are therefore not recognised.

*OUIFPSEJOBSZDPVSTFPGCVTJOFTT HVBSBOUFFTBSFJTTVFEUP QSPTQFDUJWF DMJFOUTBOEDPOUSBDUJOHQBSUJFT5IFTF DPOUJOHFOUMJBCJMJUJFTBSFOPUSFDPHOJTFEJOUIFCBMBODFTIFFU*UJTOPUFYQFDUFEUIBUBOZNBUFSJBMSJTLTXJMMBSJTFGSPN these contingent liabilities.

Guarantees are issued either by the Group itself (corporate guarantees) or by banks and surety companies (bank guarantees, suretyships and surety bonds). These guarantees can be demanded in case of non-compliance, with or without the intervention of an independent third party. The corporate guarantees issued amount to €267 million in total (2011: €272 million). Guarantees issued by banks and surety companies amount to €1,797 million (2011: €1,749 million).

Total liabilities towards third parties of companies for which the Group bears joint and several liability (such as HFOFSBMQBSUOFSTIJQT BNPVOUUPï NJMMJPOBUZFBSFOE ï NJMMJPO 5IF(SPVQTTIBSFJOUIFTF liabilities, amounting to €2,072 million (2011: €2,568 million), is included in de consolidated balance sheet.

33. Commitments

At year-end 2012, the Group has commitments for capital expenditure in tangible assets for an amount of €22 million (2011: €3 million). These commitments relate primarily to equipment, machines and installations.

The Group has conditional contractual obligations to acquire land for property development activities to the amount of approximately €196 million (2011: approximately €332 million). The conditional nature of these obligations relate, BNPOHPUIFSUIJOHT UPUIFBNFOENFOUPG[POJOHQMBOT UIFBDRVJSFNFOUPGQMBOOJOHQFSNJTTJPOTBOEUIFBDUVBM realisation of projects. The Group also has approximately €118 million (2011: €165 million) of commitments related to unpaid share capital in PPP projects.

The Group leases various company cars, buildings and equipment from third parties under non-cancellable operational lease agreements. The leases have varying durations, escalation clauses and renewal rights. The lease expenditure, including lease bonuses received, forms a linear charge against the income statement during the term PGUIFMFBTF*OUIFGJOBODJBMZFBS UIFDPTUPGPQFSBUJPOBMMFBTFTBNPVOUTUPïNJMMJPO ïNJMMJPO 

The total minimum lease payments are as follows:

2012 2011

Not later than 1 year 53,616 76,572 Later than 1 year and not later than 5 years 127,138 145,047 Later than 5 years 18,267 28,649 199,021 250,268

The decrease in the total minimum lease payments after 2012 relates predominantly to the disposal of Tebodin. 2012 – 189

The Group leases equipment and buildings to third parties under non-cancellable operational lease agreements. The leases have varying durations, escalation clauses and renewal rights. The book amount of the related assets amounts to €28 million at year-end 2012 (2011: €15 million). The lease income, including lease bonuses, is recognised BTSFWFOVFJOUIFJODPNFTUBUFNFOU*OUIFGJOBODJBMZFBS SFWFOVFGSPNPQFSBUJPOBMMFBTFTBNPVOUTUP €1.8 million (2011: €3.1 million).

The total minimum lease payments to be received are as follows:

2012 2011

Not later than 1 year 1,982 1,787 Later than 1 year and not later than 5 years 9,424 8,451 Later than 5 years 8,007 8,910 19,413 19,148

34. Business combinations

There were no material acquisitions in 2011 or 2012.

35. Assets held for sale and discontinued operations

On 24 April 2012, the Group sold the Tebodin firm of consulting engineers to Bilfinger for €145 million at a net result of €65 million.

*O UIF(SPVQTPMEUPUIFKPJOUWFOUVSF#".1111((.QFSDFOUPGJUTJOUFSFTUJOUXP111QSPKFDUT"GUFS deduction of cost, the Group realised a net result of €3.5 million. Of the original four PPP projects recognised as assets held for sale at year-end 2011, one project was deferred to 2013 and one project was deferred to 2014.

*O UIF(SPVQTPMEUPUIFKPJOUWFOUVSF#".1111((.QFSDFOUPGJUTJOUFSFTUJOUISFF111QSPKFDUT"GUFS deduction of cost, the Group realised a net result of €11.7 million.

*O UIFBTTFUTBOEMJBCJMJUJFTIFMEGPSTBMFSFMBUFUPUIFJOUFOEFEEJTQPTBMTPGUISFF111QSPKFDUT GPVS UPUIF joint venture BAM PPP/PGGM. 190 – 2012

Assets and liabilities held for sale 2012 2011 PPP projects PPP projects Tebodin Other Total Property, plant and equipment - - 5,395 - 5,395 *OUBOHJCMFBTTFUT - 63,404 48,709 - 112,113 PPP receivables 275,504 77,848 - - 77,848 Deferred tax assets 8,218 1,811 2,272 - 4,083 Other financial assets - 42 14 96 152 Trade and other receivables 63,024 8,214 76,504 - 84,718 $BTIBOEDBTIFRVJWBMFOUT 10,266 5,822 13,111 - 18,933 Assets held for sale 357,012 157,141 146,005 96 303,242

Non-controlling interest - - 179 179 Long term borrowings 311,271 120,722 - - 120,722 Derivative financial instruments 28,909 6,966 - - 6,966 Employee benefit obligations - - 13,400 - 13,400 Provisions - - 119 - 119 Deferred tax liabilities - 10 192 - 202 Short term borrowings - 12,923 1,700 - 14,623 Trade and other payables 13,960 14,414 60,404 - 74,818 Other current liabilities - - 2,102 - 2,102 Liabilities held for sale 354,140 155,035 78,096 - 233,131

Net result from discontinued operations 2012 2011

Revenue 61,364 222,681 Total operating expenses (56,555) (207,421) Finance income / (expense) (45) (85) Revenue sale discontinued operation 61,417 - Result before tax from discontinued operations 66,181 15,175 *ODPNFUBY (923) (2,916) Result after tax from discontinued operations 65,258 12,259 Pre-tax gain / (loss) recognised on fair value cash flow hedges and currency translation differences (267) - *ODPNFUBY 9 - After-tax gain / (loss) recognised on fair value cash flow hedges and currency translation differences (258) - Net result from discontinued operations 65,000 12,259

Cash flow discontinued operations 2012 2011

Net cash flow from operating activities (564) 1.166 Net cash flow from investing activities (769) (3.078) Net cash flow from financing activities - (9.484) (1.333) (11.396) 2012 – 191

36. Related-party transactions

The Group identifies the following related parties: joint ventures, associates, the Executive Board, the Supervisory #PBSEBOEUIFUIJSEQBSUJFTXIJDIFYFDVUFUIF(SPVQTQFOTJPOQMBOT

Joint ventures and associates

"NBKPSJUZPGUIF(SPVQTBDUJWJUJFTJTDBSSJFEPVUJOKPJOUWFOUVSFT*NQPSUBOUUSBOTBDUJPOTJOUIJTDPOUFYUJODMVEFUIF assignment and/or financing of land as well as carrying out projects for third parties. Please refer to Note 37 for a NPSFEFUBJMFEEJTDMPTVSFPGUIF(SPVQTTIBSFPGUIFSFWFOVFTBOECBMBODFTIFFUTPGUIFKPJOUWFOUVSFT

The Group carried out transactions with associates related to the sale of goods and services for €82.4 million (2011: €65.6 million) and related to the purchase of goods and services for €11.7 million (2011: €10.3 million).

The 2012 year-end balance of receivables arising from aforementioned transactions with associates amounts to €28.5 million (2011: €24.4 million) and the liabilities to €24.0 million (2011: €17.3 million).

"UZFBSFOE UIF(SPVQHSBOUFEMPBOTUPBTTPDJBUFTGPSUIFBNPVOUïNJMMJPO ïNJMMJPO *OUFSFTUT GPSUIFTFMPBOTBSFBUBSNTMFOHUI

Executive Board

The remuneration of the Executive Board charged to the income statement is as follows:

2012 2011

Gross Pension Other $SJTJT Gross Pension Other salary Bonus premium benefits levy Total salary Bonus premium benefits Total

N.J. de Vries 610 107 142 46 126 1,031 610 336 108 9 1,063 T. Menssen ¹ 115 20 5 2 - 142 - - - - - M.J. Rogers 2 517 90 103 57 - 767 483 266 97 1 847 J. Ruis 460 81 112 18 88 759 460 253 108 9 830 R.P. van Wingerden 460 81 62 37 87 727 460 253 45 9 767 J.A.P. van Oosten 3 ------763 - 61 - 824 3,426 4,331 ¹ With effect from 1 October 2012. ² Gross salary for 2012 based on £420 thousand (2011: £420 thousand). Bonus for 2012 based on £73 thousand (2011: £231 thousand). ³ Gross salary 2011 includes a one-off payment of €610 thousand.

Pension charges relate to the gross pension charges recognised in the income statement. They are determined on the CBTJTPGBDUVBMBOEJOEJWJEVBMQFOTJPOPCMJHBUJPOT*OUFSFTUBOEJOWFTUNFOUSFTVMUTGSPNEFQPTJUTBSFOPUBMMPDBUFEPOBO individual basis. Some segments of the pension obligations are conditional and only paid out if employment continues until the pensionable age.

Other benefits relate to fixed expense allowances and costs involved in the granted phantom shares.

When determining variable remunerations for 2012, members of the Executive Board were not granted variable remunerations related to financial targets (maximum variable remuneration 40 per cent). The individual non-financial UBSHFUTGPSUIF&YFDVUJWF#PBSENFNCFSTBSFEFSJWFEGSPNUIF(SPVQTTUSBUFHJDBHFOEB5IFTUSBUFHJDBHFOEBEFGJOFT  among other things, objectives that stimulate long term value creation for the shareholders, such as further growth in specific market segments, corporate social responsibility, product development, risk management (including safety), 192 – 2012

staff development and knowledge management. Each of the Executive Board members was granted a variable remuneration of 17.5 per cent (maximum variable remuneration 20 per cent) for achieving the non-financial objectives.

The long-term remuneration plan (LTR plan) was determined in the Annual General Meeting of Shareholders of 20 April 2011. The following number of conditional phantom shares were granted to the members of the Executive Board:

Number of conditional granted phantom shares

1 January 31 December 2012 Granted ¹ Dividend ² 2012

N.J. de Vries 56,027 112,132 3,891 172,050 T. Menssen - - - - M.J. Rogers 43,483 94,983 3,020 141,486 J. Ruis 42,250 84,559 2,934 129,743 R.P. van Wingerden 42,250 84,559 2,934 129,743 184,010 376,233 12,779 573,022 ¹ Granted on 4 May 2012. ¤ *ODSFBTFEVFUPEJWJEFOE

The number of conditionally granted phantom shares is calculated by dividing 50 per cent of the fixed salary of the relevant member of the Executive Board on the date of grant by the average closing price of the share over the five business days preceding the date of grant.

The phantom shares, granted in 2011 and 2012, will become unconditional at 2 May 2014 and 4 May 2015, respectively. 5IFQFSDFOUBHFPGQIBOUPNTIBSFTUIBUCFDPNFTVODPOEJUJPOBMEFQFOETPOUIF(SPVQTQFSGPSNBODF5IF(SPVQT performance is defined as the realised value growth of the BAM share in comparison with the average realised value growth of several companies that are comparable to BAM (the peer group) in the three-year performance period. The performance period starts on 1 January of the calendar year in which the phantom shares were granted and ends on 31 December of the calendar year immediately preceding the year in which the shares will become unconditional. The average realised value growth, or Total Shareholders Return (TSR), consists of share price performance plus (re-invested) dividend. The peer group on balance sheet date consists of Balfour Beatty, Ballast Nedam, Bilfinger, Heijmans and Skanska.

The percentage of conditionally granted phantom shares that will become unconditional depends on the percentage with which the average TSR of BAM, determined on a quarterly basis, exceeds the TSR of the peer group, determined on a quarterly basis, in accordance with the graduated scale below:

Performance Vesting

< 0 0% 0 - 5 35% 5 - 10 45% 10 - 15 55% 15 - 20 65% 20 - 25 75% 25 - 30 85% > 30 100%

Upon vesting date, the unconditional phantom shares are locked up for another two years, up to and including 2 May 2016 and 4 May 2017, respectively, after which distribution in cash takes place. Dividend distributions between the date of grant and the date of distribution are re-invested and will therefore increase the number of granted phantom shares. The cash amount that is distributed to a member of the Executive Board will not exceed 150 per cent of the fixed gross salary as applicable on the date of distribution. 2012 – 193

The personnel expenses amount charged to the income statement arising from the LTR plan is €108 thousand (2011: nil). At year-end 2012 the liability amounts to €108 thousand (2011: nil).

This outcome is a consequence of the positive performance realised in 2012 in comparison with that of the peer group, and of aligning the market details, such as dividend development and volatility of the BAM share, with those of the peer group in the fair value model.

Supervisory Board

The remuneration of the members of the Supervisory Board is charged to the income statement and amounts to €293 thousand (2011: €302 thousand).

2012 2011

P.A.F.W. Elverding, chairman 1 55 32 H. Scheffers, vice-chairman 50 46 A. Baar 40 49 J.A. Dekker 2 15 45 $.$.BIJFV1 45 31 H.L.J. Noy 3 30 - K.S. Wester 1 45 31 W.K. Wiechers 2 13 54 W. van Vonno 4 - 14 293 302 1 With effect from 20 April 2011. 2 Retired with effect from 25 April 2012. 3 With effect from 25 April 2012. 4 Retired with effect from 20 April 2011.

No option rights for shares have been granted to the members of either the Executive Board or the Supervisory Board. The members of the Executive Board and the Supervisory Board do not hold any shares in the company.

No loans or advances have been granted to these officers.

Other related parties

The Group has not entered into any material transaction with other related parties. 194 – 2012

37. Joint ventures

"NBKPSQBSUPGUIF(SPVQTBDUJWJUJFTJTDBSSJFEPVUJOKPJOUWFOUVSFT5IJTBQQMJFTUPBMMBDUJWJUJFTBOEBMMDPVOUSJFTJOXIJDI the Group operates. The Group participates in approximately 740 joint ventures (2011: approximately 740). These DPMMBCPSBUJWFBSSBOHFNFOUTSFNBJOJOQMBDFVOUJMBQSPKFDUJTGJOJTIFE BOEUIFZBSFBDDPSEJOHMZGJOJUF*OBDUVBMQSBDUJDF  the duration of many joint ventures is limited to a period of between approximately 1 and 4 years, with the exception of joint ventures which hold strategic land positions. None of the joint venture interests are regarded as being of material significance in the context of the requirement set out in the Notes to the financial statements.

5IF(SPVQTTIBSFJOUIFSFWFOVFPGUIFTFKPJOUWFOUVSFTBNPVOUTUPBQQSPYJNBUFMZïCJMMJPOJO  BQQSPYJNBUFMZïCJMMJPO XIJDISFQSFTFOUTBQQSPYJNBUFMZQFSDFOUPGUIF(SPVQTSFWFOVF QFSDFOU 

5IF(SPVQTTIBSFJOUIFCBMBODFTIFFUTPGKPJOUWFOUVSFTJTBTGPMMPXT

(€x million) 2012 2011

Assets: - Non-current assets 951 881 $VSSFOUBTTFUT 1,145 1,786 2,096 2,667 Liabilities: - Non-current liabilities 1,051 1,175 $VSSFOUMJBCJMJUJFT 1,022 1,393 2,073 2,568

Net assets: 23 99

The Group has no contingent liabilities or investment obligations under joint ventures. 2012 – 195

38. Concessions

The Group operates various concessions. These activities consist of constructing, operating, and disposing of (a share in) concessions and are mostly performed in separate legal entities, either alone or with third parties. An entity is (proportionately) consolidated if the Group has (joint) control. An entity is accounted for as an associate if the Group has significant influence but no decisive control.

The Group is involved in the following PPP contracts: $PODFTTJPO Opera- period *OUFSFTU Type $PVOUSZ tional As from (in years) PPP projects in BAM PPP: Accomodations: East Ayrshire Hospital 100% Health UK Yes 2000 25 Wharfedale Hospital 75% Health UK Yes 2004 30 Derby Police 100% Justice UK Yes 2000 30 $IFTIJSF1PMJDF 100% Justice UK Yes 2003 30 Peacehaven Schools 100% Education UK Yes 2001 25 Bromsgrove Schools 20% Education UK Yes 2008 30 Solihull Schools 20% Education UK Yes 2010 25 West Dunbartonshire Schools 20% Education UK Yes 2010 30 Somerset Schools 18% Education UK Yes 2012 25 $BNEFO4DIPPMT 90% Education UK Yes 2012 25 *SJTI4DIPPMT#VOEMF 100% Education *SFMBOE No 2014 25 Gent Universiteit 100% Education Belgium Yes 2011 33 Beveren Prison 100% Justice Belgium No 2013 25 Dendermonde Prison 100% Justice Belgium No 2013 25 Schiphol 100% Justice Netherlands Yes 2012 25 Potsdam 100% Other Germany No 2013 30 Bremervoerde Prison 100% Justice Germany Yes 2012 25 Burgdorf Prison 88% Justice Swiss Yes 2012 25

Infrastructure: Dundalk By-pass 33,3% Roads *SFMBOE Yes 2005 28 Waterford By-pass 33,3% Roads *SFMBOE Yes 2009 30 Portlaoise 33,3% Roads *SFMBOE Yes 2010 30 A59 14% Roads Netherlands Yes 2005 15 N31 33,3% Roads Netherlands Yes 2007 15 A12 100% Roads Netherlands Yes 2012 25 N33 100% Roads Netherlands No 2014 20 *OGSBTQFFE)4- 10,5% Railroads Netherlands Yes 2006 25 A8 25% Roads Germany Yes 2010 30 A9 50% Roads Germany No 2014 17 Liefkenshoektunnel 50% Railroads Belgium No 2013 38

PPP projects in other entities: Accomodations: Gerechtsgebouw Gent 25% Justice Belgium Yes 2006 27 Gerechtsgebouw Antwerpen 33,3% Justice Belgium Yes 2005 27 Stadium Dresden 100% Other Germany Yes 2009 30 Sonderschule Frechen 100% Education Germany Yes 2005 25 "MGPOT,FSO4DIVMF 1GPS[IFJN 100% Education Germany Yes 2011 30 JVA München 100% Justice Germany Yes 2009 20

Infrastructure: Broadland Environmental Services 90% Other UK Yes 1999 20 196 – 2012

#".5FDIOJFLJTBMTPJOWPMWFEJOGJWF&4$PT &OFSHZ4FSWJDF$PNQBOJFT 

*O #".111HFOFSBUFESFWFOVFPGïNJMMJPOGSPNDPODFTTJPOT ïNJMMJPO XJUIBQSPGJUCFGPSFUBYFT of €13.6 million (2011: €10.5 million). Please refer to Note 6.

5IF(SPVQTUPUBMOFUJOWFTUNFOUTJO111QSPKFDUTBSFïNJMMJPOBUZFBSFOE ZFBSFOEïNJMMJPO  Please refer to Note 7. The Group also has approximately €118 million of liabilities with regard to capital to be paid in PPP projects (2011: €165 million).

Revenue yet to be realised from construction activities on PPP projects in their realisation phases amounts to approximately €0.5 billion (2011: €0.7 billion).

A more detailed disclosure of operational concessions is as follows.

Accommodation

These operating concessions relate to schools, police stations, hospitals, sports complexes, a penitentiary institution and a laboratory building. The concessions are located in the United Kingdom, Germany, Belgium, the Netherlands BOE4XJU[FSMBOE$PODFTTJPOQBZNFOUTEFQFOEFOUJSFMZPOUIFBWBJMBCJMJUZPGUIFBDDPNNPEBUJPO5IFBDUVBMVTFPG the accommodation has no impact on the payments. The concessions (sometimes) include support services for the accommodation, such as maintenance and facility management. Revenue and results are recognised on the basis of UIF GJYFE GFFTSFDFJWFEGSPNHPWFSONFOU*GBGFFSFMBUFTUP TVQQPSU TFSWJDFT JUJTBDDPVOUFEGPSJOQSPQPSUJPOUP the services rendered.

During the concession periods, fees are based on the availability of the accommodation and the support services. The majority of concession arrangements contain indexation clauses. (Some of) the services are periodically benchmarked against the market, generally once every 5 years. The relevant parts of the fees can be adjusted on this basis. However, the volatility of the total revenue and result is limited.

Infrastructure

5IFTFPQFSBUJOHDPODFTTJPOTSFMBUFUPNPUPSXBZTJO*SFMBOE UIF/FUIFSMBOETBOE(FSNBOZ BSBJMXBZUVOOFMJO Belgium and a railway line in the Netherlands, and a coastal defence scheme in the United Kingdom.

$PODFTTJPOGFFTJOUIF/FUIFSMBOET #FMHJVNBOEUIF6,BSFCBTFEPOUIFBWBJMBCJMJUZPGUIFSFMBUFEJOGSBTUSVDUVSF This availability is tested against contractually established criteria. These criteria cover the intensity of usage, UFNQPSBSZDMPTVSFTBOENBJOUFOBODF*GBWBJMBCJMJUZEPFTOPUNFFUUIFDPOUSBDUVBMDSJUFSJB UIFDPODFTTJPOGFFDBO be (temporarily) adjusted. Revenue and results are recognised on the basis of fees received from government. The volatility of the revenue and results is limited.

*O*SFMBOEBOE(FSNBOZ DPODFTTJPOGFFTBSFEJSFDUMZCBTFEPOUIFWPMVNFPGUSBGGJD UPMMDPMMFDUJPO 5IFSFWFOVF and results of this entity therefore depend on road traffic and, hence, they are volatile to some extent.

The concessions started between 1999 up to and including 2011, for periods varying from 15 to 30 years. 2012 – 197

39. Government grants

Government grants received during the financial year amount to approximately €2 million (2011: approximately €3 million). Government grants relate predominantly to education.

40. Research and development

Research and development costs, which predominantly relate to projects, are included in the cost of projects. Other research and development costs, in the amount of approximately €0.2 million (2011: approximately €1 million), are recognised directly in the income statement.

41. Events after balance sheet date

At 21 January 2013, the option was used to renew the committed revolving credit facility by an additional year until 30 January 2017. As from 30 January 2016, the level of the credit facility will be €442.5 million.

"GUFSUIFCBMBODFTIFFUEBUF #".$POTUSVDU6,BDRVJSFE4VUUPO(SPVQ-UE UIFGBDJMJUZNBOBHFNFOUTQFDJBMJTU  and Sutton Maintenance Ltd, the subsidiary. The acquisition of Sutton Group Ltd is expected to contribute €16 million to the revenue which the Group will generate from facility management in the United Kingdom. 198 – 2012

Company balance sheet at 31 December (before profit appropriation, x €1,000)

2012 2011

2 Tangible assets 20,616 21,879 3 *OUBOHJCMFBTTFUT 388,169 576,500 4 Financial assets 1,803,040 1,836,417 1 5 Deferred tax assets 99,962 101,943 Non-current assets 2,311,787 2,536,739

6 Receivables 18,303 23,149 7 $BTIBOEDBTIFRVJWBMFOUT 88,187 397,352 Current assets 106,490 420,501

Total assets 2,418,277 2,957,240

*TTVFEBOEQBJEVQDBQJUBM 24,152 23,294 Share premium reserve 711,249 691,400 Exchange rate differences / Hedging reserve (295,690) (258,539) Other reserves 669,609 580,258 Net result for the year (187,415) 125,995 8 Shareholders' equity 921,905 1,162,408

Employee benefit obligations 4,265 5,930 Provisions 64,273 32,019 1 9 Provisions 68,538 37,949

Borrowings 132,920 569,320 10 Non-current liabilities 132,920 569,320

Borrowings 63,676 5,412 Other current liabilities 1,231,238 1,182,151 11 Current liabilities 1,294,914 1,187,563

Total equity and liabilities 2,418,277 2,957,240

1$PNQBSBUJWFGJHVSFTIBWFCFFOBEKVTUFE

Company income statement (x € 1,000)

2012 2011

Result of participating interests after tax (21,438) 159,358 Other income and expense after tax (165,977) (33,363) Net result for the year (187,415) 125,995 2012 – 199

Notes to the company financial statements

1. Summary of significant accounting policies

1.1 General

The company financial statements of Royal BAM Group nv are included in the consolidated financial statements and are QSFQBSFEJOBDDPSEBODFXJUIUIFMFHBMSFRVJSFNFOUTPG1BSU #PPL PGUIF/FUIFSMBOET$JWJM$PEF*OQSFQBSJOHUIFTF GJOBODJBMTUBUFNFOUT UIFQSPWJTJPOPG"SUJDMFTVCTFDUJPO PGUIF$JWJM$PEFJTBQQMJFE VOEFSXIJDIUIFDPNQBOZ financial statements may be prepared in accordance with accounting policies as adopted in the consolidated financial statements. 5IFFYFNQUJPOMBJEEPXOJO"SUJDMF#PPLPGUIF/FUIFSMBOET$JWJM$PEFIBTCFFOVTFEXJUISFHBSEUPUIFDPNQBOZ income statement of Royal BAM Group nv.

*GOPPUIFSQPMJDJFTBSFNFOUJPOFE UIFBQQMJDBCMFQPMJDJFTBSFUIPTFPGUIFDPOTPMJEBUFEGJOBODJBMTUBUFNFOUTPG3PZBM BAM Group nv. The consolidated financial statements of Royal BAM Group nv should be consulted for an appropriate interpretation of the company financial statements.

5IF(SPVQTDPOTPMJEBUFEGJOBODJBMTUBUFNFOUTBSFQSFQBSFEJOBDDPSEBODFXJUI*OUFSOBUJPOBM'JOBODJBM3FQPSUJOH 4UBOEBSET *'34 BTFOEPSTFECZUIF&VSPQFBO6OJPO

1.2 Financial assets

Subsidiaries Subsidiaries include all entities over which Royal BAM Group nv has the power to control financial and operational policies. Subsidiaries are accounted for based on the equity method. The equity value is measured by valuation of assets, provisions and liabilities and determination of results based on the accounting policies of the consolidated financial statements.

Associates with significant influence Associates are all entities over which Royal BAM Group nv has significant influence but no control, generally accompanied by the possession of more than one fifth of the voting shares and taking into account the potential voting rights which are exercisable at the balance sheet date.

*OWFTUNFOUTJOBTTPDJBUFTBSFJOJUJBMMZSFDPHOJTFEBUDPTUBOETVCTFRVFOUMZCBTFEPOUIFFRVJUZNFUIPE*OWFTUNFOUT in associates include goodwill (net of any accumulated impairment losses) identified on acquisition. Royal BAM Group OWSFDPHOJTFTJUTQBSUPGUIFBTTPDJBUFTDIBOHFTJOSFTFSWFTBOEBUUSJCVUBCMFSFTVMUTJOUIFDBSSZJOHBNPVOUPGUIF participating interest.

5IF3PZBM#".(SPVQTTIBSFJOUIFQBSUJDJQBUJOHJOUFSFTUTSFTVMUTJTSFDPHOJTFEJOUIFJODPNFTUBUFNFOU5IF3PZBM #".(SPVQTTIBSFJOUIFQBSUJDJQBUJOHJOUFSFTUTDIBOHFTJOSFTFSWFTBGUFSUIFBDRVJTJUJPOEBUFJTSFDPHOJTFEJOUIF 3PZBM#".(SPVQTSFTFSWFT5IF3PZBM#".(SPVQOWEPFTOPUSFDPHOJTFBOZMPTTFTFYDFFEJOHUIFDBSSZJOHBNPVOU of the investment (including other unsecured receivables), unless it has an obligation to do so.

Associates are recognised from the date on which the Royal BAM Group nv obtains significant influence, until the date on which that significant influence ceases to exist.

Associates: recognition of losses *GUIFTIBSFJOMPTTFT BUUSJCVUBCMFUP3PZBM#".(SPVQOW FYDFFETUIFDBSSZJOHBNPVOUPGUIFJOWFTUNFOU JODMVEJOH separately presented goodwill and other unsecured receivables), further losses will not be recognised, unless the (SPVQIBTQSPWJEFETFDVSJUJFTUPUIFBTTPDJBUF DPNNJUUFEUPMJBCJMJUJFTPSQBJEPOCFIBMGPGUIFBTTPDJBUF*OUIBUDBTF  the excess will be provided for. 200 – 2012

1.3 Shareholders’ equity

Reserves pursuant to articles Pursuant to the Articles of Association, Royal BAM Group nv has to form a reserve for the outstanding convertible financing preference shares. As a consequence of the policies applied in accordance with the consolidated financial statements, the convertible financing preference shares are presented as a liability. Except for the option price, to be presented as a liability, the reserve pursuant to the Articles of Association is only recognised for this equity component.

Exchange differences / hedging reserve These include reserves for fair value adjustments to deferred result regarding cash flow hedges. No distribution to shareholders can be made against this reserve.

Other legal reserves This reserve concerns the reserve for associates as required by law. No distribution to shareholders can be made against this reserve. 2012 – 201

2. Tangible assets

Other Buildings tangible and land assets Total

At 1 January 2011 $PTU 25,600 11,435 37,035 Accumulated depreciation and impairments (7,278) (6,272) (13,550) Net book amount 18,322 5,163 23,485

Movements in book value Additions - 1,565 1,565 Disposals - (55) (55) Depreciation charge (1,328) (1,788) (3,116) Net movements (1,328) (278) (1,606)

At 31 December 2011 $PTU 25,320 10,803 36,123 Accumulated depreciation and impairments (8,326) (5,918) (14,244) Net book amount 16,994 4,885 21,879

Movements in book value Additions - 2,199 2,199 Depreciation charge (1,325) (2,137) (3,462) Net movements (1,325) 62 (1,263)

At 31 December 2012 $PTU 25,320 12,999 38,319 Accumulated depreciation and impairments (9,651) (8,052) (17,703) Net book amount 15,669 4,947 20,616 202 – 2012

3. Intangible assets

Non- integrated Goodwill software Total

At 1 January 2011 $PTU 467,065 - 467,065 Accumulated amortisation and impairments (5,300) - (5,300) Net book amount 461,765 - 461,765

Movements in book value Additions - 624 624 Amortisation charge - (54) (54) Reclassification 111,030 - 111,030 $VSSFODZFYDIBOHFEJGGFSFODFT 3,135 - 3,135 Net movements 114,165 570 114,735

At 31 December 2011 $PTU 581,230 624 581,854 Accumulated amortisation and impairments (5,300) (54) (5,354) Net book amount 575,930 570 576,500

Movements in book value Additions - 1,100 1,100 Amortisation charge - (376) (376) Sale of subsidiary (42,100) - (42,100) *NQBJSNFOUT (150,431) - (150,431) $VSSFODZFYDIBOHFEJGGFSFODFT 3,476 - 3,476 Net movements (189,055) 724 (188,331)

At 31 December 2012 $PTU 542,606 1,724 544,330 Accumulated amortisation and impairments (155,731) (430) (156,161) Net book amount 386,875 1,294 388,169

The goodwill shown above represents goodwill on directly acquired subsidiaries and associates. For the annual impairment test, this goodwill is allocated to the relevant cash flow generating units. 2012 – 203

4. Financial assets

Receivables Other Other loans Shares in from participating and subsidiaries subsidiaries interests receivables Total

At 1 January 2011 927,583 983,780 191,423 125 2,102,911 Net result for the year 128,707 - 30,651 - 159,358 Dividend received (76,980) - (38,121) - (115,101) *OWFTUNFOUT - - 313 - 313 Disposals - - (183,761) - (183,761) Reclassification 1 17,019 - - - 17,019 $BQJUBMDPOUSJCVUJPOT 5,410 - - - 5,410 Loans granted / repayments - (77,933) - - (77,933) Exchange rate differences 8,014 - (82) - 7,932 Movement hedge reserve (79,731) - - - (79,731) At 31 December 2011 930,022 905,847 423 125 1,836,417

Net result for the year (21,438) - - - (21,438) Dividend received (98,242) - - - (98,242) *OWFTUNFOUT - - 517 - 517 Reclassification 1 192,095 (159,841) - - 32,254 Adjustments in group structure 34,259 - - - 34,259 $BQJUBMDPOUSJCVUJPOT 14,800 - - - 14,800 Loans granted / repayments - 42,775 - - 42,775 Exchange rate differences 6,343 - - - 6,343 Movement hedge reserve (44,645) - - - (44,645) At 31 December 2012 1,013,194 788,781 940 125 1,803,040

1$PODFSOTUIFQSFTFOUBUJPOPGUIFTVCTJEJBSJFTXJUIBOFHBUJWFCPPLBNPVOUEFEVDUFEGSPNUIFSFDFJWBCMFTGSPNTVCTJEJBSJFT  which are considered part of the net investment in the subsidiary or as provision subsidiaries with a negative book amount. The comparative figures have been adjusted accordingly.

For a breakdown of the principal subsidiaries and associates, please refer to Other information.

5. Deferred tax

2012 2011

Deferred tax assets 99,962 101,943 99,962 101,943

*ODMVEFEJOUIFEFGFSSFEUBYFTBSFUIFEFGFSSFEUBYSFDFJWBCMFPXJOHUPUIFMJRVJEBUJPOPGPMEQSPQFSUZEFWFMPQNFOU activities in Germany (€80 million), the AM losses from previous years and deferred tax liabilities. Please refer to Note 23 of the consolidated financial statements. 204 – 2012

6. Receivables

2012 2011

Amounts due from subsidiaries 10,326 17,488 Other amounts receivable and prepayments 7,977 5,661 18,303 23,149

The maturity of receivables is less than one year.

7. Cash and cash equivalents

2012 2011

Cash at bank 88,187 397,352 88,187 397,352

$BTIJTBUGSFFEJTQPTBM

8. Shareholders’ equity

*O UIFSFNBJOJOHDPOWFSUJCMFGJOBODJOHQSFGFSFODFTIBSFTXFSFNBOEBUPSJMZDPOWFSUFEBOEUIFSFNBJOJOH non-convertible financing preference shares were redeemed and cancelled.

"UZFBSFOE UIF(SPVQTBVUIPSJTFEDBQJUBMXBTGPVSIVOESFENJMMJPOPSEJOBSZTIBSFT GPVSIVOESFE million) and six hundred million preference shares (2011: six hundred million), all with a nominal value of €0.10 per share (2011: €0.10 per share). All issued shares have been fully paid up.

The movement of the number of issued and fully paid-up shares is as follows:

Non- $POWFSUJCMF convertible Ordinary preference preference shares shares shares Total

At 1 January 2011 231,765,736 346,276 473,275 232,585,287 $POWFSTJPOPGQSFGFSFODFTIBSFT 440,711 (346,276) - 94,435 $BODFMMBUJPOPGQSFGFSFODFTIBSFT - - (473,275) (473,275) Dividend paid 731,122 - - 731,122 At 31 December 2011 232,937,569 - - 232,937,569

Dividend paid 8,587,345 - - 8,587,345 At 31 December 2012 241,524,914 - - 241,524,914 2012 – 205

The total number of issued ordinary shares increased by 8,587,345 in 2012 following the distribution of dividends in shares.

*O UIFOVNCFSPGJTTVFEPSEJOBSZTIBSFTJODSFBTFECZ    GPMMPXJOHUIF NBOEBUPSZ DPOWFSTJPO of convertible financing preference shares and 731,122 following the distribution of dividends in shares.

5IFTQFDJGJDBUJPOPGNPWFNFOUJOTIBSFIPMEFSTFRVJUZJTTUBUFECFMPX

Exchange *TTVFEBOE Share Reserve differences/ paid up premium pursuant hedging Other legal Other Net result capital reserve to articles reserve reserves reserves for the year Total

At 1 January 2011 23,177 686,242 47 (196,916) 94,185 477,880 15,326 1,099,941 Net result for the year ------125,995 125,995 Appropriation of the result of the preceding year - - - - - 15,326 (15,326) - Preference shares conversion 44 1,410 (47) - - - - 1,407 Dividend paid 73 3,748 - - - (7,133) - (3,312) Movement in fair value cash flow hedges - - - (72,691) - - - (72,691) Exchange rate differences - - - 11,068 - - - 11,068 Other movements - - - - (94,185) 94,185 - - At 31 December 2011 23,294 691,400 - (258,539) - 580,258 125,995 1,162,408

Net result for the year ------(187,415) (187,415) Appropriation of the result of the preceding year - - - - - 125,995 (125,995) - Dividend paid 858 19,849 - - - (38,192) - (17,485) Movement in fair value cash flow hedges - - - (46,708) - - - (46,708) Exchange rate differences - - - 9,557 - - - 9,557 Other movements - - - - - 1,548 - 1,548 At 31 December 2012 24,152 711,249 - (295,690) - 669,609 (187,415) 921,905

The exchange differences reserve amounts to €67.3 million negative (2011: €76.9 million negative) and the hedging reserve amounts to €228.4 million negative (2011: €181.6 million negative).

5IFSFTUSJDUJPOJOEJTUSJCVUBCMFSFTFSWFTBNPVOUTUP[FSPJOBTBDPOTFRVFODFPGUIFEJTQPTBMPGUIFJOUFSFTUJO Van Oord. The restriction of other reserves, due to a negative exchange difference reserve and hedging reserve, amounts to €295.7 million (2011: €258.5 million).

The company proposes to declare a dividend for the financial year 2012 at €0.10 in cash per ordinary share or in shares (2011: €0.16 in cash or in ordinary shares, at the option of the shareholders). Based on the number of ordinary shares outstanding at year-end 2012, a maximum of €24 million will be distributed as dividend on the ordinary shares. As yet, the dividend proposal has not been deducted from the other reserves under equity.

As a consequence of the full conversion of convertible financing preference shares into ordinary shares and the repurchase of non-convertible financing preference shares, dividend payable with regard to the financing preference shares no longer exists.

Result appropriation The dividends paid to holders of ordinary shares in 2012 were €38.2 million, €17.5 million in cash (€0.16 per share) and €20.7 million in shares (€0.1675 per share). The dividends paid to holders of ordinary shares in 2011 were €7.1 million, €3.3 million in cash (€0.03 per share) and €3.8 million in shares (€0.0315 per share). 206 – 2012

As a consequence of the full conversion of convertible financing preference shares into ordinary shares and the repurchase of non-convertible financing preference shares in 2011, dividend payable with regard to the financing preference shares no longer exists in 2012.

The cash dividends paid to holders of convertible financing preference shares in 2011 were €0.13 million (€0.37086 per share).

The cash dividends paid to holders of non-convertible financing preference shares in 2011 were €0.03 million (€0.38346 per share).

9. Provisions

2012 2011

Employee benefit obligations 4,265 5,930 Provision for negative book amount subsidiaries 49,273 17,019 Other provisions 15,000 15,000 68,538 37,949

The provision for negative book amount subsidiaries is the result of the development of the hedging reserve.

Other provisions include the dividend guarantee provision relating to the disposal of the interest in Van Oord.

10. Non-current liabilities

2012 2011

Subordinated loan 1 124,000 200,000 Financial lease liabilities 7,886 7,886 Bank facility - 360,000 Other loans 1,034 1,434 132,920 569,320

For more information on non-current liabilities, please refer to the Note 19 of the consolidated financial statements.

11. Current liabilities

2012 2011

Bank overdrafts 63,767 5,012 Subordinated loan 1 (500) - Other loans 400 400 Amounts due to subsidiaries 1,180,445 1,154,956 Taxation and social security contributions 2,660 79 Other liabilities 48,133 27,116 1,294,914 1,187,563

1 The nominal value amounts to €125 million. 2012 – 207

12. Employees

During the year 2012, Royal BAM Group nv had 251 (2011: 237) employees on average.

13. Executive Board and Supervisory Board members

For a specification of the remuneration of Executive Board and Supervisory Board members, please refer to Note 36 to the consolidated financial statements.

14. Contingencies

Third-party liability

5IF$PNQBOZIBTBKPJOUBOETFWFSBMMJBCJMJUZGPSUIFEFCUTPG/FUIFSMBOETCBTFETVCTJEJBSJFTBSJTJOHGSPNMFHJTMBUJPO JO4FDUJPOPG#PPLPGUIF/FUIFSMBOET$JWJM$PEF

0XJOHUPUIFQBSUJDJQBUJPOJOUIF(SPVQTDBTIQPPM UIF$PNQBOZIBTBKPJOUBOETFWFSBMMJBCJMJUZ UPHFUIFSXJUIPUIFS participants, for deficits in the cash pool as a whole.

5IF$PNQBOZIBTJTTVFEDPSQPSBUFHVBSBOUFFT NBJOMZUPDMJFOUTDPNNJTTJPOJOHQSPKFDUT JOTUFBEPGCBOL guarantees. At year-end 2012, this involves an amount of €267 million (year-end 2011: €272 million).

5IF$PNQBOZJTUIFQBSFOUDPNQBOZPGUIF%VUDIGJTDBMFOUJUJFTGPSDPSQPSBUJPOUBYBOE7"5 BOEJTKPJOUMZBOE severally liable for the tax liabilities of these fiscal entities.

Bunnik, the Netherlands, 6 March 2013

Supervisory Board: Executive Board: P.A.F.W. Elverding N.J. de Vries H. Scheffers T. Menssen A. Baar M.J. Rogers $.$.BIJFV +3VJT H.L.J. Noy R.P. van Wingerden K.S. Wester 208 – 2012

Other information

Proposed appropriation of profit for 2012

5IFOFUMPTTGPS JOUIFTVNPGïNJMMJPO IBTCFFOBDDPVOUFEGPSJOTIBSFIPMEFSTFRVJUZ

The company proposes to declare a dividend for the financial year 2012 at €0.10 in cash per ordinary share or in shares (2011: €0.16 in cash or in ordinary shares, at the option of the shareholders). Based on the number of ordinary shares outstanding at year-end 2012, a maximum of €24 million will be distributed as dividend on the ordinary shares. The dividend proposal was not recognised in the figures of the annual report.

Provisions of the Articles of Association concerning profit appropriation (Summary of Article 32 of the Articles of Association)

From the profit realised in any financial year, an amount will first be distributed, where possible, on the class B cumulative preference shares, calculated by applying the percentage stated below to the mandatory amount paid up on those shares as at the start of the financial year for which the distribution is made. The percentage referred to BCPWFXJMMCFFRVBMUPUIFBWFSBHFPGUIF&63*#03SBUFTGPSNPOFZNBSLFUMPBOTXJUIBNBUVSJUZPGUXFMWFNPOUIT – weighted according to the number of days for which these rates prevailed – during the financial year for which the EJTUSJCVUJPOJTNBEF QMVTPOFQFSDFOUBHFQPJOU&63*#03SFGFSTUPUIF&VSP*OUFSCBOL0GGFSFE3BUFBTEFUFSNJOFE BOEQVCMJTIFECZUIF&VSPQFBO$FOUSBM#BOL

Subsequently, if possible, a dividend will be distributed on each financing preference share of a certain series and sub-series, with due consideration of the provisions of this article, equal to an amount calculated by applying a percentage to the nominal amount of the financing preference share concerned at the start of that financial year, plus the amount of share premium paid up on the financing preference share issued in the series and sub-series concerned at the time of initial issue of the financing preference shares of that series and sub-series, less the amount paid out on each financing preference share concerned and charged to the share premium reserve formed at the time of issue of the financing preference shares of that series and sub-series prior to that financial year.

*GBOEUPUIFFYUFOUUIBUBEJTUSJCVUJPOIBTCFFONBEFPOUIFGJOBODJOHQSFGFSFODFTIBSFTDPODFSOFEJOUIFDPVSTFPG the year and charged to the share premium reserve formed at the time of issue of the financing preference shares of the series and sub-series concerned, or partial repayment has been made on such shares, the amount of the distribution will be reduced pro rata over the period concerned according to the amount of the distribution charged to the share premium reserve and/or the repayment with respect to the amount referred to in the preceding sentence. The calculation of the dividend percentage for the financing preference shares of a certain series will be made for each of the series of financing preference shares referred to below, in the manner set forth for the series concerned.

Series FP1-FP4: The dividend percentage will be calculated by taking the arithmetical mean of the yield to maturity on euro government loans issued by the Kingdom of the Netherlands with a remaining term matching as closely as possible the term of the series concerned, as published in the Official Price List of Euronext Amsterdam, plus two percentage points. 2012 – 209

Series FP5-FP8: 5IFEJWJEFOEQFSDFOUBHFXJMMCFFRVBMUPUIFBWFSBHFPGUIF&63*#03SBUFTGPSNPOFZNBSLFUMPBOTXJUIBNBUVSJUZPG 12 months – weighted according to the number of days for which these rates prevailed – during the financial year for which the distribution is made, plus two percentage points. The above percentages may be increased or reduced by an amount of no more than three hundred basis points. The above percentages apply for the following periods: series FP1 and FP5: five years; series FP2 and FP6: six years; series FP3 and FP7: seven years; and series FP4 and FP8: eight years. After a period expires, the percentage will be modified in accordance with the rules laid down in Article 32 paragraph 6(c) of the Articles of Association.

The Supervisory Board shall determine, on the basis of a proposal by the Executive Board, what part of the profit remaining after application of the above provisions will be added to the reserves. The part of the profit that remains thereafter is at the disposal of the General Meeting, subject to the provision that no further dividends will be distributed on the preference shares and with due consideration of the other provisions of Article 32 of the Articles of Association.

Anti-takeover measures

The company has taken the following measures to protect itself against any undesired developments that might have an impact on the independence, continuity and/or identity of the Group.

Pursuant to a resolution passed by the General Meeting held on 12 June 1972, the Articles of Association include the possibility of issuing preference shares. Stichting Aandelenbeheer BAM Groep (hereafter referred to as “the Foundation”) was founded with a view to this possibility in 1978. 5IFPCKFDUPGUIF'PVOEBUJPOJTUPMPPLBGUFSUIFJOUFSFTUTPGUIF$PNQBOZBOEUIFDPNQBOJFTUIBUBSFIFMECZUIF $PNQBOZBOEUIFHSPVQPGDPNQBOJFTBTTPDJBUFEXJUIUIF$PNQBOZ4QFDJGJDBMMZ UIF'PVOEBUJPOTFFLTUPFOTVSF UIBUUIFJOUFSFTUTPGUIF$PNQBOZBOEPGUIPTFDPNQBOJFTBOEBMMUIFJSTUBLFIPMEFSTBSFTBGFHVBSEFEBTXFMMBT possible and that influences which could undermine the independence and/or continuity and/or identity of the $PNQBOZBOEUIPTFDPNQBOJFTBOEXIJDIBSFJODPOGMJDUXJUIUIPTFJOUFSFTUTBSFBWFSUFEUPUIFCFTUPGUIF 'PVOEBUJPOTBCJMJUZ5IF'PVOEBUJPOBUUFNQUTUPBDIJFWFJUTPCKFDUJWFCZBDRVJSJOHoXIFUIFSPSOPUCZFYFSDJTJOHUIF PQUJPOSFGFSSFEUPBCPWFoBOEIPMEJOHDMBTT#DVNVMBUJWFQSFGFSFODFTIBSFTJOUIF$PNQBOZTDBQJUBM CZFYFSDJTJOH the rights connected with those shares and/or by using its right of enquiry.

As announced at the General Meeting held on 4 June 1992 and considered at the General Meeting on 8 June 1993, the $PNQBOZHSBOUFEUIF'PVOEBUJPOBOPQUJPOUPBDRVJSFDMBTT#DVNVMBUJWFQSFGFSFODFTIBSFTJOUIF$PNQBOZTDBQJUBM on 17 May 1993. This option was granted up to such an amount as the Foundation might require, subject to a maximum of a nominal amount that would result in the total nominal amount of class B cumulative preference shares JOJTTVFBOEOPUIFMECZUIF$PNQBOZFRVBMMJOHOPNPSFUIBOOJOFUZOJOFQPJOUOJOFQFSDFOU QFSDFOU PGUIF nominal amount of the issued share capital in the form of shares other than class B cumulative preference shares and OPUIFMECZUIF$PNQBOZBUUIFUJNFPGFYFSDJTJOHPGUIFSJHIUSFGFSSFEUPBCPWF5IF&YFDVUJWF$PNNJUUFFPGUIF Foundation has the exclusive right to determine whether or not to exercise this right to acquire class B cumulative preference shares.

0O0DUPCFS UIF$PNQBOZHSBOUFEUIF'PVOEBUJPOUIFSJHIU VOEFS"SUJDMF D PGUIF%VUDI$JWJM$PEF UP TVCNJUBQFUJUJPOBTSFGFSSFEUPJO"SUJDMFPGUIF%VUDI$JWJM$PEF SJHIUPGFORVJSZ 

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– 2012

5IFDVSSFOUDPNQPTJUJPOPGUIF&YFDVUJWF$PNNJUUFFJT +,MFJUFSQ $IBJSNBO " R. de Jong (B) R. Pieterse (B)

5IF$IBJSNBOPGUIF'PVOEBUJPOT&YFDVUJWF$PNNJUUFFSFDFJWFTBOBOOVBMGFFPGï GSPNUIF'PVOEBUJPO 5IF'PVOEBUJPOQBZTBOBOOVBMGFFPGï UPFBDIPGUIFPUIFSNFNCFSTPGJUT&YFDVUJWF$PNNJUUFF

5IFQBSUJDVMBSTPGUIF&YFDVUJWF$PNNJUUFFNFNCFSTBSF

J. Kleiterp (1933), Chairman .FNCFSPGUIF'PVOEBUJPOT&YFDVUJWF$PNNJUUFFTJODFBOE$IBJSNBOTJODF%VUDIOBUJPOBM'PSNFS $IBJSNBOPGUIF&YFDVUJWF#PBSEPG.FFT1JFSTPO

R. de Jong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

R. Pieterse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

No class B cumulative preference shares have been issued at this time.

5IF4VQFSWJTPSZ#PBSEBOEUIF&YFDVUJWF#PBSESFTFSWFUIFSJHIU JOUIFJOUFSFTUTPGUIF$PNQBOZBOEJUTBTTPDJBUFE companies, to resolve to take measures other than the issue of class B preference shares in order to protect the $PNQBOZBHBJOTUJOGMVFODFTUIBUNJHIUCFSFHBSEFECZUIF4VQFSWJTPSZ#PBSEBOEUIF&YFDVUJWF#PBSE BGUFS CBMBODJOHUIFJOUFSFTUTPGUIF$PNQBOZBOEBMMPGUIFTUBLFIPMEFSTJOUIF(SPVQ BTCFJOHQPUFOUJBMMZEBNBHJOHUPUIF independence, continuity and/or identity of the Group. 2012 – 211

Independent auditor’s report

To: the General Meeting of Shareholders of Royal BAM Group

Report on the financial statements control. An audit also includes evaluating the appropriateness of accounting policies used and the We have audited the accompanying financial statements reasonableness of accounting estimates made by the 2012 of Royal BAM Group nv, Bunnik, as set out on pages Executive Board, as well as evaluating the overall 119 to 207. The financial statements include the presentation of the financial statements. consolidated financial statements and the company financial statements. The consolidated financial We believe that the audit evidence we have obtained is statements comprise the consolidated balance sheet as sufficient and appropriate to provide a basis for our at 31 December 2012, the consolidated income audit opinion. statement, the consolidated statement of comprehensive income, the consolidated statement of Opinion with respect to the consolidated financial equity and the consolidated cash flow statement for the statements year then ended and the notes, comprising a summary of *OPVSPQJOJPO UIFDPOTPMJEBUFEGJOBODJBMTUBUFNFOUT significant accounting policies and other explanatory give a true and fair view of the financial position of Royal information. The company financial statements comprise BAM Group nv as at 31 December 2012, and of its result the company balance sheet as at 31 December 2012, the and its cash flows for the year then ended in accordance company income statement for the year then ended and XJUI*OUFSOBUJPOBM'JOBODJBM3FQPSUJOH4UBOEBSETBT the notes, comprising a summary of accounting policies adopted by the European Union and with Part 9 of Book and other explanatory information. PGUIF%VUDI$JWJM$PEF

Executive Board’s responsibility Opinion with respect to the company financial statements The Executive Board is responsible for the preparation *OPVSPQJOJPO UIFDPNQBOZGJOBODJBMTUBUFNFOUTHJWFB and fair presentation of these financial statements in true and fair view of the financial position of Royal BAM BDDPSEBODFXJUI*OUFSOBUJPOBM'JOBODJBM3FQPSUJOH Group nv as at 31 December 2012, and of its result for Standards as adopted by the European Union and with the year then ended in accordance with Part 9 of Book 2 1BSUPG#PPLPGUIF%VUDI$JWJM$PEF BOEGPSUIF PGUIF%VUDI$JWJM$PEF preparation of the Executive Board report in accordance XJUI1BSUPG#PPLPGUIF%VUDI$JWJM$PEF Furthermore, the Executive Board is responsible for such Report on other legal and regulatory internal control as it determines is necessary to enable requirements the preparation of the financial statements that are free from material misstatement, whether due to fraud or Pursuant to the legal requirement under Section 2:393 error. TVCBUFBOEGPGUIF%VUDI$JWJM$PEF XFIBWFOP deficiencies to report as a result of our examination Auditor’s responsibility whether the Executive Board report, to the extent we Our responsibility is to express an opinion on these can assess, has been prepared in accordance with Part 9 financial statements based on our audit. We conducted PG#PPLPGUIJT$PEF BOEXIFUIFSUIFJOGPSNBUJPOBT our audit in accordance with Dutch law, including the required under Section 2:392 sub 1 at b-h has been Dutch Standards on Auditing. This requires that we annexed. Further we report that the Executive Board comply with ethical requirements and plan and perform report, to the extent we can assess, is consistent with the audit to obtain reasonable assurance about whether the financial statements as required by Section 2:391 the financial statements are free from material TVCPGUIF%VUDI$JWJM$PEF misstatement. Rotterdam, 6 March 2013 An audit involves performing procedures to obtain audit 1SJDFXBUFSIPVTF$PPQFST"DDPVOUBOUT/7 evidence about the amounts and disclosures in the financial statements. The procedures selected depend on J.G. Bod RA UIFBVEJUPSTKVEHNFOU JODMVEJOHUIFBTTFTTNFOUPGUIF risks of material misstatement of the financial TUBUFNFOUT XIFUIFSEVFUPGSBVEPSFSSPS*ONBLJOH those risk assessments, the auditor considers internal DPOUSPMSFMFWBOUUPUIFDPNQBOZTQSFQBSBUJPOBOEGBJS presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an PQJOJPOPOUIFFGGFDUJWFOFTTPGUIFDPNQBOZTJOUFSOBM 212 – 2012

Overview of principal subsidiaries and associates

Construction and mechanical and electrical services % t#".6UJMJUFJUTCPVXCW #VOOJL /FUIFSMBOET  100 t#".8POJOHCPVXCW #VOOJL /FUIFSMBOET  100 t)FJMJKHFSTCW "NFSTGPPSU /FUIFSMBOET  100 t#"..BUFSJFFMCW -FMZTUBE /FUIFSMBOET  100 t#".5FDIOJFLCW #VOOJL /FUIFSMBOET  100 t*OUFSCVJMEOW 8JMSJKL"OUXFSQ #FMHJVN  100 t#".$POTUSVDU6,-UE )FNFM)FNQTUFBE 6OJUFE,JOHEPN  100 t#".%FVUTDIMBOE"( 4UVUUHBSU (FSNBOZ  100

Civil engineering t#".$JWJFMCW (PVEB /FUIFSMBOET  100 t#".*OGSBUFDIOJFLCW $VMFNCPSH /FUIFSMBOET  100 t#".3BJMCW #SFEB /FUIFSMBOET  100 t#".8FHFOCW 6USFDIU /FUIFSMBOET  100 t#".*OGSBDPOTVMUCW (PVEB /FUIFSMBOET  100 t#".*OUFSOBUJPOBMCW (PVEB /FUIFSMBOET  100 t#".8BMMPOJFTB -JÒHF #FMHJVN  100 t#FUPOBDOW 4JOU5SVJEFO #FMHJVN  100 t$&*%F.FZFSOW #SVTTFMT #FMHJVN  100 t#"./VUUBMM-UE $BNCFSMFZ 4VSSFZ 6OJUFE,JOHEPN  100 t#".$POUSBDUPST-UE ,JMM $PVOUZ,JMEBSF *SFMBOE  100 t8BZTT'SFZUBH*OHFOJFVSCBV"( 'SBOLGVSUBN.BJO (FSNBOZ  100

Property t".CW /JFVXFHFJO /FUIFSMBOET  100 t".3FBM&TUBUF%FWFMPQNFOU 6USFDIU /FUIFSMBOET  100 t,BÕSPTOW 8JMSJKL"OUXFSQ #FMHJVN  100

Public-Private Partnerships (PPP) t#".111CW #VOOJL /FUIFSMBOET  100

Associates t*OGSBTQFFE )PMEJOHT CW )BBSMFN /FUIFSMBOET  10.5 t3BJMQSPCW )JMWFSTVN /FUIFSMBOET  25 t+VTUJOWFTUOW 8JMSJKL"OUXFSQ #FMHJVN  33.3 t3BCPU*OWFTUOW 8JMSJKL"OUXFSQ #FMHJVN  10.0

"MJTUPGBTTPDJBUFTBTSFGFSSFEUPJO4FDUJPOTBOE #PPL PGUIF/FUIFSMBOET$JWJM$PEFIBTCFFOEFQPTJUFEBU the Office of the Trade Register in Utrecht.

*OSFTQFDUPGUIFTFTVCTJEJBSJFT 3PZBM#".(SPVQOWIBTEFQPTJUFEBEFDMBSBUJPOPGKPJOUBOETFWFSBMMJBCJMJUZQVSTVBOUUP4FDUJPO  1BSU #PPLPGUIF/FUIFSMBOET$JWJM$PEF 2012 – 213

Organisational structure

Construction and Civil engineering Property Public Private Partnerships M&E services

Netherlands BAM Utiliteitsbouw BAM Civiel AM BAM PPP

BAM Woningbouw BAM Infratechniek AM Real Estate Development

Heilijgers BAM Rail

BAM Techniek BAM Wegen

Galère Galère

Belgium BAM Technics BAM Technics

Betonac

CEI-De Meyer CEI-De Meyer Immo BAM

Interbuild Kaïros

United Kingdom BAM Construction * BAM Nuttall BAM Properties *

Ireland BAM Building ** BAM Civil ** BAM Property **

Germany BAM Deutschland W&F Ingenieurbau

Worldwide BAM International BAM International

Sector

Operating company

Active in this sector

#".$POTUSVDUJPOBOE#".1SPQFSUJFTUPHFUIFSGPSN#".$POTUSVDU6, #".#VJMEJOH #".$JWJMBOE#".1SPQFSUZUPHFUIFSGPSN#".$POUSBDUPST BAM Utiliteitsbouw, BAM Woningbouw and Heilijgers also operate as developers on construction projects in the property sector. 214 – 2012

Offices

Luxembourg Construction and M&E services Civil engineering BAM Luxembourg - Luxembourg Netherlands Netherlands BAM Utiliteitsbouw - Bunnik - Amsterdam - BAM Civiel - Gouda - Amsterdam - Breda - Elsloo - United Kingdom Arnhem - Breda - The Hague - Eindhoven - Emmen - ;VJECSPFL BAM Nuttall$BNCFSMFZ-POEPO#SJEHFOE Enschede - Groningen - Leeuwarden - Maastricht - BAM Civiel Prefab Beton;VJECSPFL Glasgow - Halesowen - Leeds - Maidstone - 3PFSNPOE3PUUFSEBN6USFDIU;XPMMF Newcastle upon Tyne - Northwich - Southampton - BAM Advies & Engineering - Bunnik BAM Energie - Gouda Wigan BAM Gebouwbeheer - Bunnik BAM GO-Park - Ravenstein BAM Ritchies(MBTHPX$MFWFEPO&SJUI%VCMJO BAM HABO - The Hague BAM Speciale Technieken - Amsterdam Wigan OfficeUp - Bunnik BAM Infratechniek$VMFNCPSH#BSFOESFDIU Rail North - Wigan Schakel & Schrale - Amsterdam - The Hague - #VEFM)BMGXFHT)FSUPHFOCPTDI/JFVXMFVTFO Rail South - Edenbridge Roermond Ootmarsum - Schiphol - Susteren - Utrecht Nuttall Hynes - Tunbridge Wells Vitaal ZorgVast - Bunnik Nuttall John Martin - Thetford BAM Infratechniek Telecom;XBNNFSEBN Ireland BAM Woningbouw - Bunnik - Alkmaar - "NTUFSEBN%FMGU.POUGPPSU;PFUFSXPVEF Amsterdam - Breda - The Hague - Deventer - BAM Civil%VCMJO,JMM $PVOUZ,JMEBSF-JUUMF*TMBOE  Meer, Belgium Drachten - Nieuwegein - Rotterdam - Weert $PSL(BMXBZ BAM Leidingen & Industrie - Nieuwleusen - Bouwbedrijf Pennings - Rosmalen BAM Rail%VCMJO,JMM $PVOUZ,JMEBSF-JUUMF*TMBOE  $VMFNCPSH $PSL(BMXBZ BAM Infratechniek Mobiliteit$VMFNCPSH Heilijgers - Amersfoort Germany BAM Rail - Breda - Dordrecht - Eindhoven - BAM Materieel - Lelystad Wayss & Freytag Ingenieurbau - Frankfurt am Rotterdam Main - Düsseldorf - Hamburg - Kamsdorf - BAM Techniek - Bunnik - Amsterdam - Apeldoorn - BAM Wegen - Utrecht - Apeldoorn - Bergen #FOOJOHCSPFL$BQFMMFBBOEFO*+TTFM5IF)BHVF Ludwigsfelde - München - Stuttgart PQ;PPN5IF)BHVF)FMNPOE5ZOBBSMP Emmen - Groningen - Leeuwarden - Roermond - ;BBOEBN Veenendaal Worldwide BAM Betonwegen/Betontechnieken - Interflow - Wieringerwerf BAM International(PVEB"DDSB$BJSP$PMPNCP Hardinxveld-Giessendam - Dar es Salaam - Doha - Dubai - Jakarta - Longmont - BAM Geleiderail - Drachten BAM Techniek – Energy Systems - Bunnik Perth - Tripoli BAM Milieu - Hardinxveld-Giessendam BAM Techniek – Integrated Works - HABO GWW - The Hague Nieuw-Vennep HOKA VerkeerstechniekT)FSUPHFOCPTDI Property Susteren Belgium Mostert De Winter - Hardinxveld-Giessendam Netherlands Interbuild - Wilrijk Nootenboom/Nootenboom Sport - Barendrecht AM - Nieuwegein - Amsterdam - Rotterdam - Redubel - Geldermalsen 5FSOFV[FO;XPMMF United Kingdom AM Real Estate Development - Utrecht BAM Construct UK - Hemel Hempstead BAM Infraconsult - Gouda - Amsterdam - IPMMC Consult - Utrecht BAM Construction-POEPO#SJTUPM$BSEJGG Apeldoorn - Breda - The Hague - Ravenstein - $PWFOUSZ%FSCZ%FXFTCVSZ&EJOCVSHI 6USFDIU;VJECSPFL+BLBSUB4JOHBQPSF Belgium Exeter - Gateshead - Glasgow - Leeds - Manchester - Immo BAM - Brussels St. Albans - Wellingborough BAM Infra Asset Management - Utrecht Kaïros - Wilrijk BAM Facilities Management$PWFOUSZ(MBTHPX BAM Infra Projectmanagement - Utrecht United Kingdom Ireland Belgium BAM Properties - London - Bristol - Glasgow - BAM Building%VCMJO,JMM $PVOUZ,JMEBSF BAM Wallonie$IBVEGPOUBJOF Manchester -JUUMF*TMBOE $PSL(BMXBZ Galère$IBVEGPOUBJOF$IBSMFSPJ Balteau - Louveigné Ireland Germany Balteau ie - Saint-Nicolas BAM Property%VCMJO,JMM $PVOUZ,JMEBSF BAM Deutschland - Stuttgart - Berlin - Dresden - -JUUMF*TMBOE $PSL Düsseldorf - Frankfurt am Main - Munich Betonac - Sint-Truiden

BAM Immobilien-Dienstleistungen - Stuttgart CEI-De Meyer#SVTTFMT&LF /B[BSFUI Public-Private Partnerships BAM Sports - Düsseldorf BAM PPP - Bunnik - Birmingham - Brussel - Dublin - Switzerland Frankfurt am Main - Glasgow BAM Swiss - Basel 2012 – 215

Executive officers (As at 24 April 2013)

Royal BAM Group nv Civil engineering

Bunnik (Netherlands) N.J. de Vries, Chairman T. Menssen MBA, CFO Belgium M.J. Rogers Betonac, Sint-Truiden M. Peeters R.P. van Wingerden  (%F$PDL L. Luyten T.P.L.M. van Beek, Human Resources $&*%F.FZFS #SVTTFMT .1FFUFST H. Bree, Property Investments  (%F$PDL M. von Devivere, Business P. Depreter Development Infra (BMÒSF $IBVEGPOUBJOF 1%BOBVY P.F. Jaeger, Legal Affairs and BAM Technics, V. Pissart Company Secretary $IBVEGPOUBJOF 43J[[P T.W. Muntinga, Finance  8+WBO/JFLFSL $orporate Social United Kingdom Responsibility #"./VUUBMM $BNCFSMFZ 4$'PY G.J. Maas, Strategy D.K. Belsham "$1SPOL Public Relations R.A.E. James A. Sundermeijer, ICT G. Renshaw

*Seland #".$POUSBDUPST ,JMM 5.$VMMJOBOF #& $&OHGJFJ Construction and M&E services  -')BSNPO #& $&OHNJFJ

Netherlands Germany BAM Utiliteitsbouw, Bunnik H.W.J. Bol 8BZTT'SFZUBH %JQM*OH4$VSSMF J.J. Kempkens *OHFOJFVSCBV  %S*OH.#MBTDILP M.J.E. de Vreede Frankfurt am Main BAM Woningbouw, Bunnik P.M.L. Born T.M. Krouwels Worldwide J.G. Nelis #".*OUFSOBUJPOBM (PVEB (,.B[MPVNJBO #4D )POT $&OH .*$& Heilijgers, Amersfoort R.J. Jansen M.R. Bellamy, MSc BAM Techniek, Bunnik J.F.M. Al  +")B[FMFHFS  3"$WBO;JKM Property

Belgium *OUFSCVJME 8JMSJKL"OUXFSQ 85BIPO Netherlands AM, Nieuwegein drs. R. Vollebregt United Kingdom ir. M.J.S. Broos #".$POTUSVDU6, -POEPO ($BTI H. de Pater MBA MMO R. Bailey AM Real Estate Development, M. Verwoert J.R. Burke 6USFDIU NS#$,VJM drs. F.P Trip MRE Germany BAM Deutschland, Stuttgart A. Naujoks Belgium A. Häberle Kaïros, Wilrijk-Antwerpen P. Penen M. Hager M. Koch Public-Private Partnerships

Civil engineering #".111 #VOOJL (MBTHPX 3'JFMEFS #4D '3*$4  ,.FBEF #4D )POT .3*$4 Netherlands #".$JWJFM (PVEB #+8JFSFOHB H.M.E. te Duits W.R. Remmelts #".*OGSBUFDIOJFL  .EF3PPJK $VMFNCPSH )(,VJQFST  #4DIVMU[F BAM Rail, Breda S.H. van Royen M.A. van Raaij B.H. Regtuijt BAM Wegen, Utrecht W. Konings R.L.M. van Hulst T. Winter 216 – 2012

Ten years of key data (in € million, unless otherwise indicated)

2012 2011 2010 2009 5 2008 2007 2006 2005 2004 2003 IFRS *'34 *'34 *'34 *'34 *'34 *'34 *'34 *'34 NL GAAP

Revenue 7,465 7,920 7,611 8,324 8,835 8,954 8,646 7,425 7,493 7,770 Revenue Operating result excluding fines (288.4) 150.7 (30.3) (68.5) 233.4 340.7 262.6 235.3 232.7 172.6 Operating result excluding fines Operating result (288.4) 150.7 (30.3) (68.5) 233.4 340.7 255.2 235.3 192.7 145.2 Operating result Result before tax (286.3) 158.7 26.0 (52.8) 252.5 428.1 228.4 229.9 172.3 112.6 Result before tax Net result attributable to shareholders (187.4) 126.0 15.3 31.3 161.9 349.0 137.0 153.3 106.4 56.0 Net result attributable to shareholders Net result attributable to holders of ordinary shares (187.4) 126.0 15.3 31.3 161.9 349.0 137.0 153.3 91.1 38.2 Net result attributable to holders of ordinary shares

Revenue from continuing operations 7,404 7,697 7,611 8,324 8,835 8,539 8,150 7,425 7,493 7,770 Revenue from continuing operations Operating result from continuing operations (293.2) 135.4 (30.3) (68.5) 233.4 327.2 237.2 235.3 192.7 145.2 Operating result from continuing operations Result from continuing operations before tax (291.0) 143.5 26.0 (52.8) 252.5 341.8 209.8 229.9 172.3 112.6 Result from continuing operations before tax Net result from continuing operations before tax Net result from continuing operations before tax attributable to shareholders (187.4) 113.9 15.3 31.3 161.9 268.3 124.8 153.3 106.4 56.0 attributable to shareholders

Earning per ordinary share (in €1) 6 (0.79) 0.54 0.08 0.18 1.21 2.80 1.11 1.46 1.06 0.52 Earning per ordinary share (in €1) 6 Fully diluted result per ordinary share (in €1) 6 (0.79) 0.54 0.08 0.18 1.20 2.60 1.04 1.28 0.87 0.45 Fully diluted result per ordinary share (in €1) 6 Dividend per ordinary share (in €1) 1 0.10 0.16 0.03 0.10 0.50 0.90 0.45 0.40 0.31 0.31 Dividend per ordinary share (in €1) 1

Equity attributable to shareholders 921.9 1,162.4 1,099.9 875.0 847.4 993.5 692.6 581.7 435.1 441.1 Equity attributable to shareholders Subordinated loans 2 123.5 200.0 199.9 200.0 200.0 200.0 150.0 155.1 121.3 125.9 Subordinated loans 2 Preference shares - - 1.7 1.7 1.8 23.3 48.2 53.6 - - Preference shares Third-party shareholders AM - - - - 49.0 49.0 49.0 - - - Third-party shareholders AM $POWFSUJCMFTVCPSEJOBUFECPOEMPBO2 ------17.4 $POWFSUJCMFTVCPSEJOBUFECPOEMPBO2 $BQJUBMCBTF 1,045.4 1,362.4 1,301.5 1,076.7 1,098.2 1,265.8 939.8 790.4 556.4 584.4 $BQJUBMCBTF

Net additions to property, plant and equipment 86.9 57.2 68.5 83.3 89.7 131.7 119.2 101.0 92.9 86.0 Net additions to property, plant and equipment Depreciation/amortisation/impairment of: Depreciation/amortisation/impairment of: - Property, plant and equipment 80.8 94.9 97.3 93.0 86.0 93.6 96.5 97.6 92.5 134.1 - Property, plant and equipment *OUBOHJCMFBTTFUT 158.6 11.1 10.9 51.3 109.5 7.7 3.4 8.0 2.7 35.4 *OUBOHJCMFBTTFUT - Other impairments 247.7 - 127.3 92.7 - - - 1.0 - - - Other impairments $BTIGMPXCFGPSFEJWJEFOE 299.7 232.0 250.9 268.3 357.3 450.3 230.9 259.9 201.6 225.4 $BTIGMPXCFGPSFEJWJEFOE

Total impairments 398.1 - 128.2 134.3 100.0 (1.0) 1.0 16.0 4.0 2.9 Total impairments

Order book 3 11,000 10,400 12,100 11,100 13,100 13,800 13,100 10,400 8,900 9,100 Order book 3

Average number of fte 23,188 26,639 26,840 28,464 28,544 28,007 28,330 26,914 26,801 29,551 Average number of fte Number of fte at year-end 23,734 27,007 26,088 27,212 29,050 27,578 30,338 27,190 26,651 26,837 Number of fte at year-end

Ratios (in %) Ratios (in %) Result before tax, impairments and fines as % of revenue 4 1.5 2.0 2.0 1.0 4.0 4.8 2.7 3.3 2.9 2.3 Result before tax, impairments and fines as % of revenue 4 Result before tax and impairment of goodwill as % of revenue 4 (1.8) 2.0 2.0 (0.2) 4.0 4.8 2.6 3.1 2.3 1.9 Result before tax and impairment of goodwill as % of revenue 4 Result from continuing operations before tax and impairment Result from continuing operations before tax and impairment of goodwill as % of revenue 4 (1.9) 1.9 0.3 (0.2) 4.0 4.0 2.6 3.1 2.3 1.9 of goodwill as % of revenue 4 Net result as % of revenue (2.5) 1.6 0.2 0.4 1.8 3.9 1.6 2.1 1.4 0.7 Net result as % of revenue Net result as % average equity (18.0) 11.1 1.6 3.6 17.6 41.4 21.5 37.8 28.2 13.2 Net result as % average equity

$BQJUBMSBUJPT $BQJUBMSBUJPT - Equity attributable to shareholders as % of total assets 13.8 16.1 15.4 12.9 12.6 14.2 10.7 11.7 9.2 14.1 - Equity attributable to shareholders as % of total assets $BQJUBMCBTFBTPGUPUBMBTTFUT 15.7 18.9 18.2 15.8 16.3 18.1 14.5 15.9 11.7 18.7 $BQJUBMCBTFBTPGUPUBMBTTFUT

$VSSFOUSBUJP 1.10 1.39 1.23 1.21 1.28 1.28 1.16 1.09 0.99 0.92 $VSSFOUSBUJP

1 Dividend proposal 2012. 2*ODMVEJOHUIFDVSSFOUQBSU 3 The order book comprises both signed contracts and verbally agreed upon orders. 2012 – 217

2012 2011 2010 2009 5 2008 2007 2006 2005 2004 2003 IFRS *'34 *'34 *'34 *'34 *'34 *'34 *'34 *'34 NL GAAP

Revenue 7,465 7,920 7,611 8,324 8,835 8,954 8,646 7,425 7,493 7,770 Revenue Operating result excluding fines (288.4) 150.7 (30.3) (68.5) 233.4 340.7 262.6 235.3 232.7 172.6 Operating result excluding fines Operating result (288.4) 150.7 (30.3) (68.5) 233.4 340.7 255.2 235.3 192.7 145.2 Operating result Result before tax (286.3) 158.7 26.0 (52.8) 252.5 428.1 228.4 229.9 172.3 112.6 Result before tax Net result attributable to shareholders (187.4) 126.0 15.3 31.3 161.9 349.0 137.0 153.3 106.4 56.0 Net result attributable to shareholders Net result attributable to holders of ordinary shares (187.4) 126.0 15.3 31.3 161.9 349.0 137.0 153.3 91.1 38.2 Net result attributable to holders of ordinary shares

Revenue from continuing operations 7,404 7,697 7,611 8,324 8,835 8,539 8,150 7,425 7,493 7,770 Revenue from continuing operations Operating result from continuing operations (293.2) 135.4 (30.3) (68.5) 233.4 327.2 237.2 235.3 192.7 145.2 Operating result from continuing operations Result from continuing operations before tax (291.0) 143.5 26.0 (52.8) 252.5 341.8 209.8 229.9 172.3 112.6 Result from continuing operations before tax Net result from continuing operations before tax Net result from continuing operations before tax attributable to shareholders (187.4) 113.9 15.3 31.3 161.9 268.3 124.8 153.3 106.4 56.0 attributable to shareholders

Earning per ordinary share (in €1) 6 (0.79) 0.54 0.08 0.18 1.21 2.80 1.11 1.46 1.06 0.52 Earning per ordinary share (in €1) 6 Fully diluted result per ordinary share (in €1) 6 (0.79) 0.54 0.08 0.18 1.20 2.60 1.04 1.28 0.87 0.45 Fully diluted result per ordinary share (in €1) 6 Dividend per ordinary share (in €1) 1 0.10 0.16 0.03 0.10 0.50 0.90 0.45 0.40 0.31 0.31 Dividend per ordinary share (in €1) 1

Equity attributable to shareholders 921.9 1,162.4 1,099.9 875.0 847.4 993.5 692.6 581.7 435.1 441.1 Equity attributable to shareholders Subordinated loans 2 123.5 200.0 199.9 200.0 200.0 200.0 150.0 155.1 121.3 125.9 Subordinated loans 2 Preference shares - - 1.7 1.7 1.8 23.3 48.2 53.6 - - Preference shares Third-party shareholders AM - - - - 49.0 49.0 49.0 - - - Third-party shareholders AM $POWFSUJCMFTVCPSEJOBUFECPOEMPBO2 ------17.4 $POWFSUJCMFTVCPSEJOBUFECPOEMPBO2 $BQJUBMCBTF 1,045.4 1,362.4 1,301.5 1,076.7 1,098.2 1,265.8 939.8 790.4 556.4 584.4 $BQJUBMCBTF

Net additions to property, plant and equipment 86.9 57.2 68.5 83.3 89.7 131.7 119.2 101.0 92.9 86.0 Net additions to property, plant and equipment Depreciation/amortisation/impairment of: Depreciation/amortisation/impairment of: - Property, plant and equipment 80.8 94.9 97.3 93.0 86.0 93.6 96.5 97.6 92.5 134.1 - Property, plant and equipment *OUBOHJCMFBTTFUT 158.6 11.1 10.9 51.3 109.5 7.7 3.4 8.0 2.7 35.4 *OUBOHJCMFBTTFUT - Other impairments 247.7 - 127.3 92.7 - - - 1.0 - - - Other impairments $BTIGMPXCFGPSFEJWJEFOE 299.7 232.0 250.9 268.3 357.3 450.3 230.9 259.9 201.6 225.4 $BTIGMPXCFGPSFEJWJEFOE

Total impairments 398.1 - 128.2 134.3 100.0 (1.0) 1.0 16.0 4.0 2.9 Total impairments

Order book 3 11,000 10,400 12,100 11,100 13,100 13,800 13,100 10,400 8,900 9,100 Order book 3

Average number of fte 23,188 26,639 26,840 28,464 28,544 28,007 28,330 26,914 26,801 29,551 Average number of fte Number of fte at year-end 23,734 27,007 26,088 27,212 29,050 27,578 30,338 27,190 26,651 26,837 Number of fte at year-end

Ratios (in %) Ratios (in %) Result before tax, impairments and fines as % of revenue 4 1.5 2.0 2.0 1.0 4.0 4.8 2.7 3.3 2.9 2.3 Result before tax, impairments and fines as % of revenue 4 Result before tax and impairment of goodwill as % of revenue 4 (1.8) 2.0 2.0 (0.2) 4.0 4.8 2.6 3.1 2.3 1.9 Result before tax and impairment of goodwill as % of revenue 4 Result from continuing operations before tax and impairment Result from continuing operations before tax and impairment of goodwill as % of revenue 4 (1.9) 1.9 0.3 (0.2) 4.0 4.0 2.6 3.1 2.3 1.9 of goodwill as % of revenue 4 Net result as % of revenue (2.5) 1.6 0.2 0.4 1.8 3.9 1.6 2.1 1.4 0.7 Net result as % of revenue Net result as % average equity (18.0) 11.1 1.6 3.6 17.6 41.4 21.5 37.8 28.2 13.2 Net result as % average equity

$BQJUBMSBUJPT $BQJUBMSBUJPT - Equity attributable to shareholders as % of total assets 13.8 16.1 15.4 12.9 12.6 14.2 10.7 11.7 9.2 14.1 - Equity attributable to shareholders as % of total assets $BQJUBMCBTFBTPGUPUBMBTTFUT 15.7 18.9 18.2 15.8 16.3 18.1 14.5 15.9 11.7 18.7 $BQJUBMCBTFBTPGUPUBMBTTFUT

$VSSFOUSBUJP 1.10 1.39 1.23 1.21 1.28 1.28 1.16 1.09 0.99 0.92 $VSSFOUSBUJP

4*ODMVEJOHHPPEXJMMBNPSUJTBUJPOJO 5*OSFWFOVF PQFSBUJOHSFTVMUBOEPSEFSCPPLBSFBEKVTUFEEVFUP*'3*$ 6 2009 adjusted for rights issue. 218 – 2012

Key financial dates

24 April 2013 General Meeting of Shareholders 26 April 2013 Ex-dividend listing 30 April 2013 Record date for dividend rights 2 May 2013 Start of dividend option period 16 May 2013 End of dividend option period 17 May 2013 Adoption and publication of stock dividend conversion ratio (after hours) 20 May 2013 Declaration of dividend

16 May 2013 *OUFSJNNBOBHFNFOUTUBUFNFOUVOEFS"SUJDMFFPGUIF%VUDI'JOBODJBM4VQFSWJTJPO"DU 22 August 2013 Publication of half-year results 14 November 2013 *OUFSJNNBOBHFNFOUTUBUFNFOUVOEFS"SUJDMFFPGUIF%VUDI'JOBODJBM4VQFSWJTJPO"DU 20 February 2014 Publication of annual results for 2013 23 April 2014 General Meeting of Shareholders

8 May 2014 *OUFSJNNBOBHFNFOUTUBUFNFOUVOEFS"SUJDMFFPGUIF%VUDI'JOBODJBM4VQFSWJTJPO"DU 21 August 2014 Publication of half-year results 6 November 2014 *OUFSJNNBOBHFNFOUTUBUFNFOUVOEFS"SUJDMFFPGUIF%VUDI'JOBODJBM4VQFSWJTJPO"DU

5IF(FOFSBM.FFUJOHPG4IBSFIPMEFSTXJMMCFIFMEPO8FEOFTEBZ"QSJM TUBSUJOHBUQN JOUIF,PFQFM[BBMPG UIF3FOBJTTBODF"NTUFSEBN)PUFM ,BUUFOHBU 4;"NTUFSEBN

The adoption of the stock dividend conversion ratio will be based on the volume-weighted average price of the Royal BAM Group nv shares traded on the NYSE Euronext Amsterdam stock exchange on 14, 15 and 16 May 2013.

Colofon

Layout: #PVMPHOF+POLFST7PSNHFWJOH ;PFUFSNFFS UIF/FUIFSMBOET

Printing: RotoSmeets GrafiServices, Utrecht, the Netherlands

Illustrations: 'SFFLWBO"SLFM %F#FFMESFEBLUJF (FSBSEWBO#FFL .JDIBFM#PVMPHOF '1IPUPHSBQIZ *NSF$TBOZ +FBO-VD%FSV %BZMJHIU .JDIJFM&JKTJOL 3PZ&YUFSLBUF 'FSSZNFO'PUPHSBGJF %JOBOU(SPFOFWFME )FBSUQIPUPHSBQIDPN *NFD  Jane Fotografie, Joop van Houdt, Lourdas Photography, Rob Melchior, Alf Mertens, Diego Rossero, Grant Smith, United Photos/Rob van Wieringen, Arjan Veldt, Ruben van Vliet Fotografie

1SJOUFEPO3FWJWF-JWFTPG#àISNBOO6CCFOT ;VUQIFO UIF/FUIFSMBOET 5IJT'4$¥DFSUJGJFEQBQFSJTNBEFGSPNQFSDFOUSFDZDMFEGJCSFT

18.03.2013 Front cover: BAM Construct UK. Headquarters The Co-operative Group, Manchester. Royal BAM Group nv Runnenburg 9 3981 AZ Bunnik P.O. Box 20 3980 CA Bunnik The Netherlands Telephone +31 (0)30 659 89 88 [email protected] www.bam.eu

Established at Bunnik. Trade Register Utrecht Number 30058019.

This is an English translation of the original Dutch-language report. Should different interpretations arise, the Dutch version prevails.

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