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% Netherlands 9% United Kingdom Belgium

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 $POTUSVDUJPO
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CBTF 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
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Royal BAM Group presents its annual report for 2012.

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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 OFFEFE
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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 EPXOHSBEJOH
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excellent project implementation. OPU
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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. TFQBSBUF
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BAM is committed to corporate social responsibility across the

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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 SFWJFX
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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 UIF
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fund). presented in more detail starting on page 18 of this Annual Report. The Group foresees various market developments, but in *O

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general expects to see only limited improvement in conditions in performances. This report includes photos of many projects of JUT
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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 VOBDDFQUBCMF
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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
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#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
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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

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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). B


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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 USBOTQBSFOU
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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 
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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%

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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 QMFBTF
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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

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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

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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 *OUFSFTUCFBSJOH
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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 ï
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a period to maturity until January 2016. The latter facility was amounted to €87 million (2011: €57 million) and depreciation/ VOVTFE
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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 JO
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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 1SPQFSUZ
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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
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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 TIBSFIPMEFST
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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. (SPVQT
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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 ï
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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).

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at 31 December 2012 includes projects in progress with a total 14 – 2012

balance of €417 million (year-end 2011: €437 million). The balance OFU
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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 JO
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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 % $POTUSVDUJPO
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TFSWJDFT 47.8 3,336 76.2 3,389 $JWJM
FOHJOFFSJOH 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 *NQBJSNFOU
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(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.

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unrealised actuarial gains and losses will be transferred to the share capital, resulting in a drop in the share capital. The BQQMJDBUJPO
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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
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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 JOUP
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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 OPX
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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

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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 

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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 DMJFOUT
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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
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continuous operational improvements. Mission, vision, and values

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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 CVJMU
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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. NBSLFUT
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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 NBOBHFNFOU
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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.

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and mechanical and electrical services

Royal BAM Group is active in the construction and mechanical 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.

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

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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.

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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

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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

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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

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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.

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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

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

its results reflect the returns from investment activities only.

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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.

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platform within which equity can be made eight new schools on seven sites. available for new investments. 60 – 2012

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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

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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.

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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

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

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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 JOUSPEVDUJPO
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framework of the remuneration policy, based on a will assess the amount of the severance pay, taking into account SFDPNNFOEBUJPO
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long-term focus. The Supervisory Board analyses the possible options plans, and there is no serious intention to introduce such 66 – 2012

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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 #PBSET
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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
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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, VQ
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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.

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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 SFGFSSFE
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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
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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.

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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. 5IF
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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 UIF
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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
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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 AXSJUUFO
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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 DPNQBOZT
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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 DPNQBOZT
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and/or identity of the Group, the company has the facility for 21 April 2009. The company will always submit any substantial JTTVJOH
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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.

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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 *O
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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 SFMBUJPO
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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 BNPVOU
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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

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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 TVCTFSJFT
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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. "T
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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 GPVOEBUJPOT
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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*#03
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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 5IF
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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 POF
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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 GPS
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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 EFQPTJUBSZ
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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 DPNQBOZT
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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 DPOTJEFSFE
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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.

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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
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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 PCKFDUJWFT
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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 A3JTL
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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 DPOUSPMMFE
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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 *O
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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
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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
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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 BMM
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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 QPMJDJFT
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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 BUUBDIFE
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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 DPOTFOU
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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

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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
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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)

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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. UIF
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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. #".T
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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

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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
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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 QSPGJMF
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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

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Safety and health

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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
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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 BCMF
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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.

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

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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
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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 SFDPHOJUJPO
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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

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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
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Particulars of the Executive Board

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

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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 DPOUJOVFE
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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 PG
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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 UPUBM
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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
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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

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

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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 TVQQMFNFOUFE
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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.

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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 $PNNJUUFF
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employment for directors of operating companies and executive officers of equivalent rank.

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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. UIF
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page 107 of the Annual Report. 2012 – 103

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

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stepping down as a member of the Executive Board at the end of the General Meeting on 24 April 2013. The Supervisory Board JOUFOET
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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
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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. .S
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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 AEFNBOEJOH
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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 BMTP
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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.

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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 (SPVQT
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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

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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 GJOBODJBM
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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 #".
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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).

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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 FNQMPZFFT
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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 UIF
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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 GPS
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usually less than the standard salary for this Board appointment. management qualities. The Supervisory Board determines the development of the NFNCFST
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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 XIJDI
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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 GJYFE
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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 DIBOHF
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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 MPOHFS
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BAM Utiliteitsbouw, BAM Techniek, Interflow. Isala Klinieken hospital, Zwolle. Architect: Alberts & Van Huut, a/d Amstel. 112 – 2012

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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 DBTF
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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
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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. *G
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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 $VSSFOU
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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 SFHBSEJOH
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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 #PBSE
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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 UIF
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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

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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


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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%

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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 
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M.J. Rogers 1979 21.04.2009 1 4 years *OEFGJOJUF
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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, JO
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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 5FDIOPMPHZ
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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

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125 Notes to the consolidated financial statements 125 1. General information 126 
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$PNNJUNFOUT 189 34. Business combinations 189 35. Assets held for sale and discontinued operations 191 36. Related-party transactions 194 37. Joint ventures 195 
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208 Other information 211 *OEFQFOEFOU
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Consolidated balance sheet as at 31 December (x € 1,000)

2012 2011

8 Property, plant and equipment 380,416 373,634 9 *OUBOHJCMF
BTTFUT 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 *ODPNF
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FRVJWBMFOUT 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 *ODPNF
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QBZBCMF 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 *ODPNF
UBY 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 $POUJOVJOH
PQFSBUJPOT (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) $VSSFODZ
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– - 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: $POUJOVJOH
PQFSBUJPOT (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
$PNQBOZT
TIBSFIPMEFST 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) $VSSFODZ
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EJGGFSFODFT - 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) $VSSFODZ
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EJGGFSFODFT - 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 
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JOWFOUPSJFT 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 $IBOHFT
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QBJE (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 *OWFTUNFOUT
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SFDFJWFE 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
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Notes to the consolidated financial statements

1. General information

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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

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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.

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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.

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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 BSF
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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.

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3. Summary of significant accounting policies

3.1 General

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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.

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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: 

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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.

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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.

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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.

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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

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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 FYUFOU
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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
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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 *G
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its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying BNPVOU
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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.

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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 *G
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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 (SPVQT
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technology.

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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

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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 5IF
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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
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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% $PNQVUFST
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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 PXOFSTIJQ
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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 (PPEXJMM
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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.

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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 NBSLFU
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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

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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.

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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 *OWFOUPSJFT
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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 DBQJUBMJTFT
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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.

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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 PXOFSTIJQ
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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 *OWFOUPSJFT
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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

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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.

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probable that the total contract cost is higher than the total contract revenue, the total expected loss is recognised as an expense.

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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.

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the costs incurred (including the result recognised) exceed the invoiced instalments, the contract will be presented BT
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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
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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

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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.

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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 UIF
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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 0SEJOBSZ
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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.

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proceeds.

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

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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

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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 BOE
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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 XIFUIFS
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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 USBOTBDUJPOT
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the movement is recognised in equity; if they are not, it is accounted for in the income statement.

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any, which are recognised in equity at the time, will continue to be recognised in equity and be recognised as soon as UIF
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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
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average remaining working lives. Past service costs are recognised directly in the income statement, unless the DIBOHFT
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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 UIBU
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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.

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at the end of the lock-up period.

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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. 5IF
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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.

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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. *G
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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.

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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 
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2012 – 139

contractually agreed upon services and (ii) interest income related to the capital investment in the project. *G
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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. 3FWFOVF
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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.

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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.

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(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 (SPVQT
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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 (SPVQT
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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 FYDIBOHF
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and equity, is limited.

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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 VTVBM
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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 JOUFSFTU
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and current account positions. 142 – 2012

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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
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or offering on major projects. The Group also endeavours to manage the price risk by using framework contracts, TVQQMJFST
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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.

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creditworthiness is analysed in advance and then monitored during the performance of the project. This involves UBLJOH
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work only with respectable banking institutions. This involves cash and cash equivalents as well as bank deposits in FYDFTT
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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 $BTI
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2,685,210 3,036,207

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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 BWBJMBCMF
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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 BOE
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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

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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).

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(2011: 21.9 per cent).

4.3 Financial instruments by categories

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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 $BTI
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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 $BTI
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FRVJWBMFOUT 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.

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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.

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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.

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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 NBEF
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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, UIF
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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 QFSJPE
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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 FYQFOTF
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EJTDMPTVSF 148 – 2012

6. Segment information

Sector reporting

$POTUSVDUJPO
Other Revenue and results and $JWJM
including M&E services Engineering Property PPP eliminations Total 2012 $POTUSVDUJPO
DPOUSBDUT 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 $POTUSVDUJPO
DPOUSBDUT 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

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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 *NQBJSNFOU
MPTTFT - - 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

–

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MJBCJMJUJFT 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

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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 $PTUT
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JOTUBMNFOUT (509,001) (9,525,755) (10,034,756) Amounts due from customers 68,878 372,816 441,694

$PTUT
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JOTUBMNFOUT (732,283) (9,671,099) (10,403,382) Amounts due to customers (71,287) (787,335) (858,622)

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

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JOTUBMNFOUT (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 *OUBOHJCMF
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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

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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

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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

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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.

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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) *NQBJSNFOU
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SFDPHOJTFE (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 VOJUT
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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:

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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
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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

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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.

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PG incorpo- % ration *OUFSFTU Assets Liabilities Net assets Revenue Result 2012 *OGSBTQFFE
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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
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OW 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)

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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
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OW 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.

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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 PQFSBUJOH
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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 BWFSBHF
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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 EFWFMPQNFOU
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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 $PNNFSDJBM
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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)

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The movement of impairments is as follows: 2012 2011

At 1 January 79,060 80,817 *ODMVEFE
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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.

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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.

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164 – 2012

15. Cash and cash equivalents

2012 2011

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IBOE 604,385 856,059 Short term bank deposits 15,705 156,551 $BTI
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€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.

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2012 2011

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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 $POWFSTJPO
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TIBSFT 94,435 45 (1) 1,363 1,407 $BODFMMBUJPO
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TIBSFT (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

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non-convertible financing preference shares were redeemed and cancelled.

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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.

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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) 
$VSSFODZ
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Effective cash flow hedges: - Fair value movement - (162,495) (162,495) - Tax on fair value movement - 45,323 45,323 *OFGGFDUJWF
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EJGGFSFODFT - 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) 
$VSSFODZ
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EJGGFSFODFT 232 - 232

Effective cash flow hedges: - Fair value movement - (72,030) (72,030) - Tax on fair value movement - 18,967 18,967 $VSSFODZ
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EJGGFSFODFT - 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
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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

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TIBSFIPMEFST 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
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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).

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

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19.2 Preference shares

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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 $POWFSTJPO
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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

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(2011: approximately €680 million). The average term to maturity of the PPP loans is 22 years (2011: 21 years).

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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 SFGFS
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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).

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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. 1MFBTF
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19.5 Recourse PPP loans

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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).

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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).

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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 OPUFT
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19.7 Bank financing

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280 basis points. The margin was 205 basis points at 31 December 2011.

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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).

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

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(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.

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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.

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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:

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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

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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.

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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

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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

*OUFSFTU
SBUF
TXBQT - 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 DFOU
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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 FYDFFE
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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:

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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.

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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).

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supplements and investment performance, the Group has established an accountability committee, with representation GSPN
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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).

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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.

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insurance company. The Group has also made arrangements for employees to participate in a defined contribution scheme.

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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.

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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) $VSSFODZ
FYDIBOHF
EJGGFSFODFT - (17,836) - - - (17,836) Service cost (4,333) (202) (56) (278) (1,537) (6,406) *OUFSFTU
DPTU (42,860) (34,665) (79) (2,150) (4,044) (83,798) Plan participants contributions - (71) (12) - (618) (701) $IBOHFT
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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 $VSSFODZ
FYDIBOHF
EJGGFSFODFT
- 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 $IBOHFT
BOE
QMBO
BNFOEFNFOUT
(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) *OUFSFTU
DPTU (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) $IBOHFT
BOE
QMBO
BNFOEFNFOUT
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) $VSSFODZ
FYDIBOHF
EJGGFSFODFT - (14,765) - - - (14,765) Service cost (3,319) (352) (59) (314) (2,331) (6,375) *OUFSFTU
DPTU (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 $VSSFODZ
FYDIBOHF
EJGGFSFODFT
- 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) *OUFSFTU
DPTU (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.

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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

$BTI
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PUIFS 3,321 164,742 1,430 947 4,708 175,148 *OEFYSFMBUFE
CPOET
- 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 *OTVSFE
DPOUSBDUT 954,233 - - - - 954,233 At 31 December 2012 957,554 717,884 1,430 20,221 76,667 1,773,756

$BTI
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PUIFS 93,546 146,503 1,604 947 2,716 245,316 *OEFYSFMBUFE
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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

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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 $IBOHFT
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MPTT - - (11,236) 11,022 - $VSSFODZ
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EJGGFSFODFT 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
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22. Provisions

Reorganisation Rental Other Warranties costs guarantees provisions Total

At 1 January 2012 73,689 16,240 16,296 30,634 136,859 $IBSHFE
UP
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TUBUFNFOU - 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

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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
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(18,621) (29,889) Acquisition of subsidiaries - 260 $IBOHF
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SBUF (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

DSFEJUFE
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statement (1,034) (29,143) (609) (1,803) (32,589) $IBSHFE

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- - 30,857 - 30,857 $IBOHF
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(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

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statement 10 84,238 (344) (1,569) 82,335 $IBSHFE

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(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
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statement 5,201 (4,584) (272) 16,373 16,718 $IBSHFE
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statement (558) 1,858 (540) (14,713) (13,953) $IBSHFE
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- - - (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 BHBJOTU
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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 BWFSBHF
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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 BNPVOU
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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), ï
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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: 
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Finance expense: - Subordinated loan 6,546 9,857 
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Net finance income / (expense) 3,513 (26,258)

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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

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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 
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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.

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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 *NQBDU
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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

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reasonably determine the extent and timing of possible inflow of economic benefits. These rights are therefore not recognised.

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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 HFOFSBM
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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, BNPOH
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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 PG
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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 BT
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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.

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Assets and liabilities held for sale 2012 2011 PPP projects PPP projects Tebodin Other Total Property, plant and equipment - - 5,395 - 5,395 *OUBOHJCMF
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- 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 $BTI
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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 *ODPNF
UBY (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) - *ODPNF
UBY 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 #PBSE
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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).

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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 CBTJT
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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 UBSHFUT
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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. ¤
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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. 5IF
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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 $.$
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1 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

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(€x million) 2012 2011

Assets: - Non-current assets 951 881 
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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 $IFTIJSF
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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 $BNEFO
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 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
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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
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Infrastructure: Broadland Environmental Services 90% Other UK Yes 1999 20 196 – 2012

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of €13.6 million (2011: €10.5 million). Please refer to Note 6.

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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 BOE
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Infrastructure

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Belgium and a railway line in the Netherlands, and a coastal defence scheme in the United Kingdom.

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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.

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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 *OUBOHJCMF
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Total assets 2,418,277 2,957,240

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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

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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 QSFQBSFE
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income statement of Royal BAM Group nv.

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BAM Group nv. The consolidated financial statements of Royal BAM Group nv should be consulted for an appropriate interpretation of the company financial statements.

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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.

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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.

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separately presented goodwill and other unsecured receivables), further losses will not be recognised, unless the (SPVQ
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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 $VSSFODZ
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EJGGFSFODFT 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) $VSSFODZ
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EJGGFSFODFT 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 $BQJUBM
DPOUSJCVUJPOT 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 $BQJUBM
DPOUSJCVUJPOT 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

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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

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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

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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 $POWFSTJPO
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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.

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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).

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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

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guarantees. At year-end 2012, this involves an amount of €267 million (year-end 2011: €272 million).

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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 $.$
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Other information

Proposed appropriation of profit for 2012

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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 BCPWF
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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

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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. 5IF
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No class B cumulative preference shares have been issued at this time.

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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 *O
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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
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the notes, comprising a summary of accounting policies adopted by the European Union and with Part 9 of Book and other explanatory information. 
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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 1BSU

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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. TVC

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212 – 2012

Overview of principal subsidiaries and associates

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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

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Executive officers (As at 24 April 2013)

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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 $POWFSUJCMF
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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

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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

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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 $POWFSUJCMF
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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

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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

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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.

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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.

Follow us on @BAMGroup_EU www.facebook.com/RoyalBAM