TRANSPARENCY REPORT 2012 - 2013 Mazars Paardekooper Hoffman Accountants N.V

TRANSPARENCY REPORT 2012 - 2013 Mazars Paardekooper Hoffman Accountants N.V. 1 TABLE OF CONTENTS Introduction I. Mazars’ Description II. Mazars’ Quality Assurance and Risk Management Policy III. Clients IV. Human Resources V. Mazars’ Presence in The Netherlands VI. Mazars’ Global Presence VII. Organisation Chart Mazars Netherlands VIII. Legal Structure Mazars Netherlands 2 INTRODUCTION Paving new ways together We are pleased to introduce the 2012/2013 transparency report for Mazars in The Netherlands. Mazars is a global partnership providing professional services in the areas of audit, advisory, accountancy, tax and legal to businesses, not for profits, governments and individuals. Mazars is a collective of talented people committed to delivering the best service to their clients and one another. As of August 31, 2013, Mazars is present in 71 countries around the world, with more than 13,500 highly qualified professionals. Our consolidated turnover for the year 2012-2013 is €1,046M, an increase of 3.3% over last year. Fully aware of our public responsibility The financial crisis exposed a fundamental separation in our system between business and society. Business and society are part of an intricate and fragile ecosystem. This ecosystem needs to be finely balanced, in an increasingly global and interdependent world. In this context Mazars' core purpose is to: bring confidence, trust and transparency to stakeholder reporting which in turn will help to provide balance and stability both to businesses and society. provide the best advice to support any business in enhancing performance, and to always act in a way which promotes the overall balance of the interests of society and business. Our global community makes Mazars unique in the marketplace. We understand the complexities facing a modern, global business, and are committed to making our society one where people with strong ethics and values drive quality relationships, equality and societal progress. Mazars has the objective of achieving high quality and reliable audits. A reliable system of auditing that installs confidence in the financial information used in our markets is essential to the effective and efficient functioning of the aforementioned ecosystem including capital markets. “Tomorrow’s Audit”, turning knowledge into opportunities To underline the objective of achieving high quality and reliable audits, Mazars has launched the Tomorrow’s Audit project. This project has three key objectives: Reposition and innovation of the value of audit and auditors; Enhancing audit quality; Supporting audit efficiency. The project repositions the purpose and value of audit and auditors by reinventing the meaning of assurance. It prevents all Mazarians involved in becoming just « ticking the boxes » auditors and provides them an instrument for business performance enhancement and economic stability. In Tomorrow’s Audit project we capitalise on fresh global thinking and build on the concept of Collective Intelligence, so we remain in the vanguard of audit innovation. Entrepreneurship requires knowledge and ideas. You need to use both sides of your brain. Mazars employs accountants and tax advisers that do more than just analyse and structure; our accountants also inspire. Analysing and creating opportunities is something that sets Mazars apart. 3 Moreover, the project has the objective of enhancing the quality of our audit work delivered to the client everywhere, by enhancing and improving consistency in the skills and abilities across the entire global audit team. The Mazarians that have been supported in the development through a program of training, coaching including e- learning and passed the related tests will be provided with the Mazars Passport to demonstrate their audit skills and abilities. We encourage our teams to challenge the client through our approach to providing audit opinions and broader value in terms of fraud, going-concern and other assurance products, such as Human Right Audits and Anti-corruption audits. To support the efficiency of our work, Tomorrow’s Audit optimizes processes and ways of working, shares best practices and initiates and supports technology to automate certain back office functions including data analytics. Looking back on another dynamic year Again, 2012/13 was a dynamic year in many senses. The attention for the audit profession from many stakeholders, such as regulators, market parties and last but not least, the political arena in The Netherlands is unmatched globally. The European developments, amongst which the Green Paper debate, are passed by the changes triggered by the legislative amendments that form part of the adoption of the Dutch Audit Profession Act (Wet op het accountantsberoep) on December 11, 2012. The amendments affect the services carried out by audit firms at public interest entities (PIEs) and have been incorporated into the Audit Firms Supervision Act (Wet toezicht accountantsorganisaties, Wta), with an aim to increase the independence of auditors of PIEs by prohibiting audit firms from performing services other than audit services and by introducing mandatory audit firm rotation. Also, in 2012/13, the market conditions in which we have to manage and build our practices have not improved. If our clients are suffering from the ongoing crisis, Mazars suffers with them, which has an impact on our profitability. And within professional services firms like Mazars, investments in quality, teams and talents, ICT etc. are funded out of its profits. In anticipation of the difficult times, Mazars Netherlands made sufficient changes in its structure, modus operandi and cost base to safeguard its profitability. With a significantly increased profitability compared to 2011/12 we have been able to realize the developments and investments that are needed to bring and keep our practices into the right shape and to make them ready for the future. In March 2013, a publication was made by the Dutch Authority for Financial Markets (Autoriteit Financiële Markten, AFM) regarding their inspections of nine audit firms, not including the Big-4 audit firms, that have a licence to perform audits for public interest entities. Mazars is amongst the firms inspected. The inspection took place in the period October 2011 – April 2012 and regarded our files on the audits performed on financial statements 2010. Of course, our auditors have informed the clients involved about AFM’s findings regarding our files on their audits and the other findings regarding our organization in general. Although Mazars was rated in the upper class of the nine inspections, we do take the conclusions of the AFM very seriously as we are fully committed to the quality of our audits, now and in the future. A clear and relevant analysis, addressing the essential and critical elements of the organizations of our clients and their financial statements, sound professional scepticism in the dialogue we sometimes have to have with them regarding findings in our audits and, of course, transparent reporting of our findings and recommendations to their management and supervisory boards. But above all, we strive for auditors’ reports that our clients’ stakeholders can rely on by doing our utmost to bring and keep the relevance and quality of the audit profession in The Netherlands and abroad at the required level. The inspection has given us good, professional and sometimes confronting input for further improvements or clarifications of our policies and procedures regarding quality, the tools we use for our audits and the selection and evaluation of our professionals. The measurements and adjustments to be made, have been implemented as the inspection was finalized almost twenty months ago. Based on the subsequent meetings we had with the AFM, we are fully confident that we have addressed their observations adequately. We regret that our profession had to attract so much negative attention. 4 Mazars’ commitment is based upon our ambition to expand our audit practice and as our response to the call for more diversity in the audit market. Not only in The Netherlands, Mazars is actively involved in the debate of enhanced diversity. As a demonstration of our commitment, Mazars signed the Audit Firm Governance Code (Code Accountantsorganisaties) on June 28, 2012. We have implemented all elements of the values and the governance principles that are fundamental to safeguarding the public interest. They are: • Values: Tone at the top, Internal code of conduct, accountability of the governance structure; • The operations principle: The importance of the public interest, appointment, assessment and remuneration of boardmembers, quality control, human resources policy, risk management and complaints; • The accountability principle: Audited financial statements, annual report and the report on independent oversight, transparency report, reporting findings and stakeholder dialogue; • The oversight principle. As a global integrated partnership Mazars has chosen to implement the oversight principle at group level, resulting in the Public Interest Committee being incorporated in the Group Governance Council as one of the four sub- committees. By doing so, we have positioned the committee as an integrated part of our international oversight structure. The two (external) members of the Public Interest Committee are involved in reviewing the Dutch decision-making by the Executive Board, the quality control system, the remuneration policies, risk management, the procedure for handling reports

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