Ackermans & van Haaren NV

Untitled ANNUAL REPORT 2021 Ackermans & van Haaren NV Begijnenvest 113 2000 Antwerp - Belgium Tel. +32 3 231 87 70 [email protected] www.avh.be ANNUAL REPORT 2021 YOUR PARTNER FOR SUSTAINABLE GROWTH May 19, 2022 .................................................. Interim statement Q1 2022 May 23, 2022 .................................................. General meeting August 31, 2022 ......................................... Half-year results 2022 November 23, 2022 ................................ Interim statement Q3 2022 FINANCIAL CALENDAR ANNUAL REPORT 2021 YOUR PARTNER FOR SUSTAINABLE GROWTH 4 Your partner for sustainable growth CONTENTS • DEME .............................................................................................................................. 82 • CFE .................................................................................................................................... 86 • Rent-A-Port ............................................................................................................. 90 • Green Offshore ................................................................................................... 91 • Delen Private Bank ........................................................................................ 96 • Bank Van Breda ................................................................................................ 99 • Nextensa .................................................................................................................... 104 • Anima ............................................................................................................................ 108 • Mission statement ........................................................................................... 6 • 2021 at a glance .............................................................................................. 8 • Key events 2021 ............................................................................................... 10 • Message from the chairmen .............................................................. 14 • Annual report on the statutory annual accounts .... 18 • Annual report on the consolidated annual accounts 20 • Corporate governance statement ............................................... 24 • Remuneration report ................................................................................... 35 • Sustainability report ..................................................................................... 44 • Daily management and staff members ................................ 76 12 80 92 102 ANNUAL REPORT MARINE ENGINEERING & CONTRACTING PRIVATE BANKING REAL ESTATE & SENIOR CARE 5Annual report 2021 • Agidens ........................................................................................................................ 122 • AXE Investments .............................................................................................. 123 • Biolectric ..................................................................................................................... 124 • Biotalys ......................................................................................................................... 125 • EMG ................................................................................................................................. 126 • HealthQuad ............................................................................................................ 127 • Indigo Diabetes .................................................................................................. 128 • Manuchar .................................................................................................................. 129 • Mediahuis ................................................................................................................. 130 • Medikabazaar ...................................................................................................... 131 • MRM Health .......................................................................................................... 132 • OMP ................................................................................................................................. 133 • OncoDNA .................................................................................................................. 134 • Telemond Group .............................................................................................. 135 • Turbo’s Hoet Groep ...................................................................................... 136 • Van Moer Logistics ........................................................................................ 137 • Venturi Partners ................................................................................................ 138 • Contents ..................................................................................................................... 143 • Consolidated annual accounts ....................................................... 144 • Statutory annual accounts ................................................................... 221 • General information regarding the company and the capital ................................................................................................... 226 • Lexicon ......................................................................................................................... 228 • Key figures 2021 ....................................................................... Appendix Pursuant to the Royal Decree of November 14, 2007 on the obligations of issuers of financial instruments admitted to trading on a Belgian regulated market, Ackermans & van Haaren is required to publish its annual financial report. This report contains: • the combined statutory and consolidated annual report of the board of directors prepared in accordance with Article 119, last paragraph of the Companies Code, • a condensed version of the statutory annual accounts prepared in accordance with Article 105 of the Companies Code, • and the full version of the consolidated annual accounts. The full version of the statutory annual accounts has been deposited with the Na- tional Bank of Belgium, pursuant to Articles 98 and 100 of the Companies Code, together with the annual report of the board of directors and the audit report. The auditor has approved the statutory and consolidated annual accounts without qualification. In accordance with Article 12, §2, 3° of the Royal Decree of November 14, 2007, the members of the executive committee (i.e. Jan Suykens, Tom Bamelis, John-Eric Bertrand, Piet Bevernage, André-Xavier Cooreman, Piet Dejonghe, An Herremans and Koen Janssen) declare that, to their knowledge: a) the annual accounts contained in this report, which have been prepared in ac- cordance with the applicable standards for annual accounts, give a true view of the assets, financial situation and the results of Ackermans & van Haaren and the companies included in the consolidation; b) the annual accounts give a true overview of the development and the results of the company and of the position of Ackermans & van Haaren and the companies included in the consolidation, as well as a description of the main risks and un- certainties with which they are confronted. The annual report, the full versions of the statutory and consolidated annual ac- counts, as well as the audit reports regarding said annual accounts are available on the website (www.avh.be) and may be obtained upon simple request, without charge, at the following address: Begijnenvest 113 - 2000 Antwerp - Belgium - Tel. +32 3 231 87 70 - [email protected] 118 141 GROWTH CAPITAL FINANCIAL STATEMENTS • SIPEF ............................................................................................................................... 112 • Verdant Bioscience .......................................................................................... 116 • Sagar Cements ................................................................................................... 117 110 ENERGY & RESOURCES 6 Your partner for sustainable growth MISSION Ackermans & van Haaren positions itself as the long-term partner of choice of family businesses and management teams to help build high-performing market leaders and contribute to a more sustainable world. Ackermans & van Haaren • is an independent, diversified group established in 1876, • listed on Euronext Brussels (BEL20) since 1984 and with solid family ties, • led by an experienced, multidisciplinary team, • using its own resources to invest, • in a balanced combination of a limited number of strate- gic long-term participations and a diversified portfolio of growth capital investments. Inspired by 150 years of entrepreneurship and strong people-oriented family values • We make clear agreements with our participations regarding strategic, operational and financial goals; • guided by our long-term strategy, we are prepared to help finance strate- gic projects of our participations through capital increases; • our participations remain responsible for their own financial position; • we strive for annual recurring growth of the results of each participation and of the group as a whole. Long-term perspective Active ownership • We are proud of a successful track record of partnerships with families, co-shareholders and management teams; • we invest in both majority and minority interests on the basis of balanced shareholder agreements; • our experienced investment managers are actively involved in the gov- erning bodies of the participations, assisted where necessary by external consultants and/or independent directors; • we are a networked organisation, based on a diversity of personalities and backgrounds and on a permanent exchange of best practices between the group companies; • we are in constant dialogue with the management teams of the participa- tions and are involved in: • selecting the senior management, • defining the long-term strategy, • actively supporting strategic projects (M&A, internationalisation, inno- vation and operational improvements). • We pay particular attention to sustainable development and growth of the activities of our participations, with respect for people, environment and society; • we have developed an ESG policy based on UN Sustainable Development Goals and UN PRI guidelines, and we apply this policy within the group and to our own investment decisions; • our investment philosophy is based on transparent reporting and commu- nication, clear agreements in terms of corporate governance and business ethics, and strict financial discipline and healthy balance sheets; • we want to help build a more sustainable world by investing in line with societal trends such as climate change, reduction of greenhouse gases (e.g. through renewable energy projects), sustainable food chain, popula- tion growth and ageing and digitalisation. Sustainable • We are a group of entrepreneurs with the ambition to build leading com- panies through internationalisation, innovation and diversification in the long term; • we create long-term shareholder value thanks to a recurring increase of the consolidated shareholders’ equity, supported by a steady long-term dividend growth; • we focus on recurring growth of the activities, long-term growth of the operating cash ﬂow and shareholders’ equity of the participations, rather than on absolute profitability targets or short-term dividend maximisation. Growth 8 Your partner for sustainable growth 2021 AT A GLANCE “ I am extremely proud of the record result of 407 million euros that the group realised in the still volatile pandemic year 2021. Moreover, this result is almost entirely recurrent, and all segments contributed to the increase. The banks continue to be the largest prot engine of the group with record inows of nearly 5.6 billion euros. With an order backlog of 5.9 billion euros, DEME has reached a new record, driven by large-scale marine infrastructure works worldwide and the growth of the oshore wind market in Asia and now also in the US. The companies in the diversied portfolio of ‘growth capital invest- ments’ have also realised strong operating results. The creation of the real estate development and investment group Nextensa and the planned de- merger of DEME and CFE are important strategic initiatives that should create even greater trans- parency and value creation potential for the group. With the sale of Manuchar, which we expect to close in the second quarter of 2022, AvH will have more than 200 million euros in cash at its disposal to keep investing in a more sustainable and digital world. ” Jan Suykens, CEO Chairman of the executive committee (The full video message can be viewed at www.avh.be/en/investors/results-centre/year/2022.) • Although the corona pandemic still disrupts their day-to-day operations, both DEME and CFE achieved a vigorous recovery of their results. The profit contribu- tion of ‘Marine Engineering & Contracting’ again surpassed that of pre-COVID year 2019. • Delen Private Bank and Bank Van Breda reported impressive results in 2021 also: the strong increase of assets under management is reﬂected in record re- sults for both banks. • The creation of Nextensa as an integrated real estate investor and developer laid the foundations for a further optimisation of the investment portfolio and project developments. The 1,631 staff members of Anima continued in 2021, under difficult (corona) circumstances, to give the best of themselves to offer their more than 2,100 residents the best possible care. • Excellent production results at SIPEF and Sagar Cements, in combination with good price levels, also translated into a record contribution of ‘Energy & Re- sources’. • Virtually all ‘Growth Capital’ participations, too, realised markedly better results, with Mediahuis, Manuchar, Turbo’s Hoet Groep and OMP as particular high- lights. With the IPO of Biotalys and a successful new capital round at Medikaba- zaar (India), the first results were recognised on a series of investments that were made in recent years in young and promising companies. Breakdown of the consolidated net result (part of the group) (€ million) 2021 2020 2019 Marine Engineering & Contracting 99.0 46.7 91.9 Private Banking 183.1 141.3 127.3 Real Estate & Senior Care 42.7 32.7 50.2 Energy & Resources 30.0 6.8 -1.5 Contribution from core segments 354.8 227.5 267.9 Growth Capital 71.3 12.7 17.6 AvH & subholdings -18.1 -13.5 -3.5 Net capital gains(losses) -1.2 3.1 112.9 Consolidated net result 406.8 229.8 394.9 9Annual report 2021 5,651 (million euros) 168.70 (euros per share) 3,957 (million euros) 119.37 (euros per share) Net result Net equity (part of the group - before allocation of profit) Market capitalization (31/12/2021) (1) Based on consolidated figures 2021, pro forma: all (exclusive) control interests incorporated in full, the other interests proportionally. Belgium Europe Rest of the world Energy & Resources AvH & Growth Capital (€ mio) 2021 2020 Shareholders’ equity (part of the group - before allocation of profit) 3,957.2 3,562.0 Net cash position of AvH 77.7 68.0 Key figures - consolidated balance sheet Marine Engineering & Contracting Private Banking Real Estate & Senior Care Economic footprint of the AvH group Pro forma (1) personnel per segment Pro forma (1) turnover Contribution to AvH group result Shareholders’ equity (part of the group) Pro forma (1) personnel per region 407 (million euros) 12.27 (euros per share) 22,653 22,653 € 3,957 (mio) € 6,020 (mio) € 407 (mio) 8,225 3,686 1,451 1,171 1,679 7,917 3,661 1,354 513 218 163 598 289 466 1,238 99 183 52 30 43 10,137 7,793 4,723 10 Your partner for sustainable growth January • DEME: maintenance dredging on the Scheldt for the first time powered by LNG • DEME: start of construction work on Fehmarnbelt project May • Leasinvest Real Estate and Extensa: intention to become an integrated real estate group announced in May, transaction finalised in July and name change to Nextensa in September June • AvH: new participations in Venturi Partners (20.0%) and in Van Moer Logistics (21.7%) • Delen Private Bank: mark of 50 billion euros assets under management exceeded April • DEME: first offshore contract in US (Vineyard Wind) • DEME: joint venture with Penta-Ocean in Japan • SIPEF: sale of PT Melania (rubber and tea) KEY EVENTS 2021 05 06 04 01 05 01 DEME DEME Nextensa NextensaSIPEF Van Moer Logistics 11Annual report 2021 August • AvH: improvement of Sustainalytics rating to 12.5 in ‘low risk’ category • DEME: delivery of cutter suction dredger ‘Spartacus’ December • DEME and CFE: intention to split CFE with own listing for DEME and CFE • Delen Private Bank: reopening of refurbished head office in Antwerp • Mediahuis: acquisition of Aachener Verlagsgesellschaft November • DEME: ‘Balance of Plant’ contract for Coastal Virginia Wind Farm, largest offshore wind farm in US • Nextensa: opening of Food Market in Gare Maritime (Tour & Taxis) • Anima: acquisition of residential care centre Saint-Vincent (Jumet) September • AvH: increase of participation in Medikabazaar by subscribing to Series C funding round (total economic shareholding per- centage 10%, direct 8.7%) October • Green Offshore: SeaMade offshore wind farm (487 MW) officially inau- gurated (operational since 4Q 2022) 09 12 07 July • Bank Van Breda: opening of new branch in Tournai • Agidens: sale of Agidens Infra Automation division • Biotalys: listing on Euronext Brussels 10 KEY EVENTS 2022 January • AvH: agreement on sale of Manuchar with expected capital gain of 75 million euros in Q2 2022 February • AvH: announcement of succession of Jan Suykens as CEO by Piet Dejonghe and John-Eric Bertrand as co-CEOs 08 11 Delen Private Bank Green Offshore Medikabazaar Anima DEME Bank Van Breda 12 Your partner for sustainable growth YOUR PARTNER FOR SUSTAINABLE GROWTH ANNUAL REPORT 2021 14 Your partner for sustainable growth Dear shareholders, We are currently living in turbulent times marked by human suffering, an uncertain economic outlook and volatile financial markets. In the present circumstances it is impossible to tell what the impact in the short and the long term may be of the Russian-Ukrainian crisis. The short-term financial impact for the AvH group is small, since our participations are not, or only to a minor extent, active in the region. Our greatest concern is for the employees who work in the region or who have Ukrainian nationality. We hope that a diplomatic solution may soon bring peace and tranquillity. This geopolitical conflict casts a shadow over the record results for 2021 of the AvH group and the excellent outlook for 2022. AvH realised a record consolidated group result of 407 million euros in 2021. Particularly noteworthy is the exceptional quality of this record result: all segments contributed to this growth, and nine participations in the portfolio (Delen Private Bank, Bank Van Breda, CFE, SIPEF, Mediahuis, Manuchar, Turbo’s Hoet Groep, Telemond and OMP) reported a record profit. With this result, AvH realises a 13.3% growth of its consolidated equity, which is slightly above the weighted average historical growth (1984-2021) of 12.2% since the IPO. AvH watches over financial soundness within the group at the level of the balance sheets of its participations, the recurrence of its growth, and the contributions of the different segments. The banking segment (Delen Private Bank/Bank Van Breda) represents 37% of the consolidated equity and contributes 45% to the consolidated net result; the construction & marine enginee- ring activities represent 31% of the consolidated equity and contribute 24% to the consolidated net result, while the other one-third (32%) of the equity (real estate & senior care, energy & resources, growth capital) also contributed to the same degree (31%) to this net result. Luc Bertrand & Jan Suykens during the royal visit to Oman 16 Your partner for sustainable growth At year-end 2021, AvH had a net cash position of 77.7 million euros. If we take into account the proceeds from the sale of the participation in Manuchar, which should take place in the second quarter of 2022, AvH will have a net cash position of more than 200 million euros. If we include the confirmed bank credit lines and the unre- alised capital gains within the group, the group’s financial intervention capacity is a multiple of the visible available cash. DEME realised an increase of its turnover by 14% to 2,511 million euros, an opera- ting cash flow (+27%) of 469 million euros, and a net result of 114.6 million euros. Thanks to a favourable working capital position, the net debt position decreased to 393 million euros. The recovery was strongest in the traditional dredging market with a 29% turnover increase, thanks in particular to major contracts in Egypt, Germany, Poland and Africa. The commissioning of the ‘Spartacus’, the world’s most powerful cutter, immediately contributed to this. Pending the start of major new projects in Europe and the US, DEME Offshore reported a slightly lower turnover. The commissioning of the new installation vessel ‘Orion’ (with a lifting capacity of 5,000 tonnes) in April 2022 will become a major asset in the execution of the many new contracts. DEME’s order backlog increased to a record level of 5,905 million euros. The first major contracts for offshore wind in the US made an important contribution to this increase: Vineyard Wind (800 MW) and Coastal Virginia Offshore Wind (2.6 GW). DEME has the expertise and the technical resources to play an important part in the necessary energy transition to a more sustainable and low-carbon economy and society. DEME hopes to become one of the first producers of green hydrogen at its port concession in Duqm (Oman). DEME stands firm in its belief that the harvesting of deep-sea minerals can - more than ever before - make an important contribution to reinforcing the West’s energy and raw materials independence, provided that a clear regulatory and environmen- tal framework is agreed within the International Seabed Authority. On the strength of its record order backlog, DEME should be able to increase its turnover, EBITDA and net result in 2022. CFE realised a record result of 39.5 million euros on a slightly increased turnover (1,125 million euros). As a construction and real estate development group, CFE is active in Belgium, Luxembourg and Poland. The rather recurring contribution of the - mainly residen- tial - real estate development activities accounts for more than half of the result. Along with the traditional construction activities, the Multitechnics and Rail Infra- structure activities in particular are experiencing a fast and profitable growth. In December 2021, AvH and CFE announced their intention to obtain a separate lis- ting for DEME on Euronext Brussels by effecting a partial demerger. The expectation is still that this transaction can be realised before the summer. With a 62% stake, AvH will remain the majority shareholder of both CFE and DEME. The separate listing of the two companies will further strengthen their reputation and will create additional dynamics, while the increased transparency should help to turn the existing value creation potential to even better account. Our two banks (Delen Private Bank and Bank Van Breda) reported yet again impressive growth figures in 2021. Based on a gross inflow of 5.6 billion euros, the assets under management increased from 45.1 billion euros to 54.3 billion euros. Thus Delen Private Bank and Bank Van Breda realised a combined record net result of 233 million euros. The focus, cost efficiency and strong capital position put Delen Private Bank and Bank Van Breda among the best performing private banks in Europe. All activities are client-driven. 85% of the assets are managed under discretionary mandates, of which 83% through 7 patrimonial funds. 86% of the fee income is based on recur- ring commission income, and only 14% is dependent on interest income. Bank Van Breda continues to successfully assist its target group clients of entrepre- neurs and liberal professionals in their asset accumulation. Thanks to the carefully focused credit strategy, only very limited loan losses are recorded (in 2021 even positive by a partial reversal of the ECL provision). Delen Private Bank is also systematically developing its digital service model, offe- ring the client full transparency of his/her overall wealth. The combined cost-income ratio of 52% is based on 40% for Delen Private Bank, 87% for JM Finn and 55% for Bank Van Breda. The combined shareholders’ equity of 1,691 million euros represents a solid CET1 ratio of 23.8%. The combined strength of the 13 Belgian Delen branches and the 31 Van Breda branches, and the thorough client focus augur well for the future growth potential of our banks. Meanwhile, however, the present geopolitical crisis weighs on the stock market climate and affects the underlying valuation of the entrusted assets. The ‘Real Estate & Senior Care’ segment increased its contribution to the group result to 42.7 million euros. The ‘merger’ between Leasinvest and Extensa, renamed Nextensa, has created a mixed real estate investment and development group that wants to be a leading player in sustainable inner city (re)developments. With a shareholders’ equity of 780 million euros, Nextensa is the highest-capitali- sed real estate group on Euronext Brussels. An active management of its investment portfolio and an accelerated development of its projects on Tour & Taxis (Brussels) and Cloche d’Or (Luxembourg) should make its results evolve in such a way as to permit a recurring dividend increase of 5 to 10%. The results of Anima were still impacted in 2021 by the corona infection wave. From the summer of 2021, Anima was able to report increasing occupancy rates at its residential care centres. The limited network, the focus on care, and the modern - mostly new-build - resi- dences make Anima a top-quality operator in the senior care market. At year-end 2021, Anima had 2,567 beds in operation, spread over 24 residential care centres. 17Annual report 2021 SIPEF, too, realised record results thanks to an almost 17% increase of the total group production (384,178 tonnes) of RSPO compliant, certified ‘segregated’ sus- tainable palm oil. Thanks in part to the steady increase of palm oil prices on the world market (on average 1,195 USD per tonne), the turnover increased to 416 million USD and the net profit to 93.7 million USD. The capital gain on the sale of PT Melania (rubber and tea), however, accounted for 11 million USD (group share) of that result. The net debt position decreased to just 49 million USD (compared to 151 million USD at year-end 2020). Based on the newly planted and still to be planted hectares, SIPEF should have the capacity to increase its production volume to 600,000 tonnes by 2030. SIPEF continues to position itself as a producer of sustainable palm oil and invests in the improvement of the productivity per hectare, in particular through Verdant Bioscience that develops new F1 hybrid palm oil seeds. AVH also wants to strengthen its presence in India and Southeast Asia. Sagar Cements reported a turnover increase of 21% in a market with rapidly rising energy prices. AvH has committed 15 million USD as an anchor investor in HealthQuad II, a fund focused on health care and services in India. Together with HealthQuad, AvH par- ticipated in a capital increase of Medikabazaar, which now puts our beneficial sha- reholding percentage at 10%. Medikabazaar is the online market leader for the distribution of medical equipment and consumables for the small and medium-sized hospitals in India. In July 2021, AvH also committed 20 million USD as an anchor investor in Venturi Partners, which invests in consumer oriented industries in Southeast Asia. AvH has also hired a local investment manager to join the team of Venturi and represent AvH on the local market. The ‘Growth Capital’ portfolio has also generated a record contribution of 71 mil- lion euros to the consolidated result of the AvH group. Of that figure, 53 million euros represents the contribution of the consolidated participations. Mediahuis, Manuchar, THG, Telemond and OMP each realised record results. AvH has over the past few years also invested in a number of young and promising companies, either directly or through specialist investment funds, primarily in ‘Life sciences’ and ‘Healthcare’. As a result of an IPO (Biotalys) or capital operations (Medikabazaar, HealthQuad), these participations need to be remeasured at their fair value, which generated a contribution of 18 million euros to the group result. As ‘Your partner for sustainable growth’, AvH wants to pursue a sustainable investment policy with special focus on a number of important social themes. Together with its participations, AvH makes substantial efforts to create a growing commitment to implement a targeted ESG policy expressed in concrete SDG objec- tives and ESG criteria. This has already earned it an ‘ESG Industry Top Rated’ label from the Sustainalytics rating agency. On the strength of DEME’s solid order backlog, the underlying favourable commer- cial dynamic of Delen Private Bank and Bank Van Breda, the capital gain potential in the portfolio of Nextensa, the market evolution of palm oil and the strong market position of a number of growth capital companies, as well as the expected capital gain (approximately 75 million euros, 2Q22) on the sale of the participation in Manuchar, the board of directors expects to be able in 2022 to further improve on the record group result of 2021. In this context, the board of directors wishes to express its confidence in the strong market position of the group and its participations by proposing to the general meeting to increase the dividend by 17% to 2.75 euros (gross) per share. We must repeat that the recent geopolitical tensions obviously create a great deal of uncertainty and volatility, of which the impact on society, the economy and the markets is difficult to judge. We can only hope for a quick and peaceful solution. After the COVID pandemic, this crisis once more calls for much ‘resilience’ from many of our colleagues in the group. We wish to express our sincerest gratitude to everyone for their dedication and perseverance, and also for their creativity and inventiveness to keep reinventing themselves and their businesses and so put them in a strong position for the future. March 22, 2022 Luc Bertrand, Chairman of the board of directors Jan Suykens, Chairman of the executive committee 18 Your partner for sustainable growth ANNUAL REPORT OF THE BOARD OF DIRECTORS Dear shareholder, It is our privilege to report to you on the activities of our company during the past financial year and to submit to you for approval both the statutory and consolidated annual accounts closed on December 31, 2021. In ac- cordance with Article 3:32 §1 last paragraph of the Code of Companies and Associations, the annual reports on the statutory and consolidated annual accounts have been combined. I. Statutory annual accounts 1. Share capital and shareholding structure No changes were made to the company’s share capital during the last finan- cial year. The share capital amounts to 2,295,278 euros, and is represented by 33,496,904 shares with no nominal value. All shares have been paid up in full. In 2021, 55,000 options were granted within the framework of the stock option plan. As at December 31, 2021, the options not yet exercised entitled their holders to acquire an aggregate of 306,250 Ackermans & van Haaren shares (0.91%). The company received a transparency notice on October 31, 2008 under the transitional regulations of the Act of May 2, 2007, whereby Scaldis Invest NV - together with Stichting Administratiekantoor ‘Het Torentje’ - communicated its holding percent- age. The relevant details of this transparency notice can be found on the company’s website (www.avh.be). 2. Activities For an overview of the group’s main activities during the 2021 financial year, we refer to the Message from the chairmen (page 14) and to the Key events (page 10). 3. Comments on the statutory annual accounts 3.1 Financial situation as at December 31, 2021 The statutory annual accounts have been prepared in accordance with Belgian ac- counting principles. The balance sheet total at year-end 2021 amounted to 2,214 million euros, which is an increase with 175 million euros compared with the previous year (2020: 2,039 million euros). The assets consist of 9 million euros in tangible fixed assets (primarily the office building located at Begijnenvest and Schermersstraat in Antwerp), 55 million euros in short-term investments, 18 million euros in cash, and 2,067 million euros in financial fixed assets. On the liabilities side of the balance sheet, the profit for the financial year of 234,4 million euros and the proposed dividend of maximum 92.1 million euros for the 2021 financial year resulted in a shareholders’ equity of 2,062 million euros (2020: 1,921 million euros). In 2021, short-term financial debts mainly related to treasury certificates (commercial paper). At year-end 2021, Ackermans & van Haaren owned 347,092 treasury shares. 3.2 Appropriation of the result The board of directors proposes to appropriate the result (in euros) as follows: Profit carried forward from the previous financial year 1,691,398,852 Profit for the financial year 234,382,350 Total for appropriation 1,925,781,201 Allocation to the legal reserve 0 Allocation to the non-distributable reserves 8,317,277 Allocation to the distributable reserves 0 Dividends (1) 92,116,486 Directors’ fees 630,000 Profit premium for employees (2) 301,900 Profit to be carried forward 1,824,415,539 (1) It will be proposed to the ordinary general meeting of shareholders of May 23, 2022 to approve a divi- dend of 2.75 euros per share. This corresponds to a maximum dividend payment of 92,116,486 euros. (2) Profit participation in favour of Ackermans & van Haaren employees in accordance with the provisions of the profit sharing bonus plan approved by the board of directors on January 11, 2022. The board of directors proposes to pay a gross dividend of 2.75 euros per share. After deduction of the withholding tax (30%), the net dividend will amount to 1.925 euros per share. Since the treasury shares are not entitled to a dividend in accordance with Article 7:217 §3 of the Code of Companies and Associations, the total dividend amount depends on the number of treasury shares for account of Ackermans & van Haaren, on May 27, 2022 at 11.59 pm CET (i.e. the day before the ex-date). The board of directors proposes to be authorised accordingly to enter the final total dividend amount (and the resulting change) in the statutory financial statements. The maximum proposed total amount is 92,116,486 euros. If the annual general meeting approves this dividend proposal, the dividend will be payable from June 1, 2022. Following this appropriation, taking into account the maximum proposed total dividend amount, the shareholders’ equity will stand at 2,061,898,509 euros, and will be composed as follows: 19Annual report 2021 Capital Subscribed 2,295,278 Issue premiums 111,612,041 Reserves Legal reserve 248,081 Non-distributable reserves 40,419,885 Tax-exempt reserves 0 Distributable reserves 82,907,686 Profit carried forward 1,824,415,539 Total 2,061,898,509 3.3 Outlook As in previous years, the results for the current financial year will to a large extent depend on the dividends paid by the companies within the group and on the reali- sation of any capital gains or losses. 4. Major events after the closing of the financial year We refer for this to II.4 and II.7 on page 23. 5. Research and development The company regularly organises knowledge exchange related to innovation and to reseach and development between the participations. 6. Financial instruments Companies within the group may use financial instruments for risk management purposes. Specifically, these are financial instruments principally intended to hedge the risks associated with ﬂuctuating interest and exchange rates. The counterpar- ties in the related transactions are exclusively first-ranked banks. At the end of 2021, Ackermans & van Haaren didn’t have any such instruments outstanding. 7. Notices 7.1 Application of Article 7:96 of the Code of Companies and Associations The regulations of Article 7:96 of the Code of Companies and Associations regard- ing conﬂicts of interest did not have to be applied in 2021. 7.2 Additional remuneration for the auditor Pursuant to Article 3:65, §3 of the Code of Companies and Associations, we inform you that a fee was paid to to EY Bedrijfsrevisoren of 5,000 euros (excluding VAT) for a review of the first implementation of ESEF and of 3,350 euros (excluding VAT) for an audit of the personnel administration and to EY Tax Consultants of 5,950 euros (excluding VAT) for tax advice. 7.3 Acquisition or disposal of treasury shares On November 9, 2020, the extraordinary general meeting authorised the board of directors of Ackermans & van Haaren to acquire treasury shares within a well-de- fined price range during a period of five years. In the course of 2021, Ackermans & van Haaren purchased 266,979 treasury shares and sold 270,140. These trans- actions result from the implementation of the stock option plan and of the liquidity agreement with Kepler Cheuvreux. More details about this can be found in the financial statements (note 22). The situation as at December 31, 2021 was as follows: Number of treasury shares 347,092 (1.04%) Par value per share 0.07 euros Average price per share 116.35 euros Total investment value 40,385,132 euros 7.4 Notice pursuant to the law on takeover bids By letter dated February 18, 2008, Scaldis Invest sent a notice to the company in accordance with Article 74, §7 of the Act of April 1, 2007 on public takeover bids. From this notice, it appears that Scaldis Invest owns 33% of the securities with voting rights in Ackermans & van Haaren, and that Stichting Administratiekantoor ‘Het Torentje’ exercises ultimate control over Scaldis Invest. 7.5 Protection schemes On November 9, 2020, the extraordinary general meeting renewed the authorisa- tion of the board of directors, in the case of a public takeover bid for the securities of Ackermans & van Haaren, to proceed with a capital increase in accordance with the provisions and within the limits of Article 7:202 of the Code of Companies and Associations. The board of directors is allowed to use these powers if the notice of a takeover bid is given to the company by the Financial Services and Markets Authority (FSMA) not later than three years after the date of the aforementioned extraordinary general meeting (i.e. November 9, 2023). The board of directors is also authorised, for a period of three years from the date of publication in the Annexes to the Belgian Official Gazette (i.e. until November 25, 2023), to acquire or dispose of treasury shares in the event that such action is required in order to safeguard the company from serious and imminent harm. 20 Your partner for sustainable growth II. Consolidated annual accounts 1. Risks and uncertainties This section describes, in general terms, the risks facing Ackermans & van Haaren as an international investment company on the one hand, and the operational and financial risks associated with the various segments in which it is active (either directly or indirectly through its subsidiaries) on the other. With regard to non-fi- nancial risks, reference is also made to the Sustainability report chapter (page 44). The executive committee of Ackermans & van Haaren is responsible for the prepa- ration of a framework for internal control and risk management, which is submitted to the board of directors for approval. The board of directors is responsible for as- sessing the implementation of this framework, taking the recommendations of the audit committee into account. At least once a year, the audit committee evaluates the internal control systems that the executive committee has set up, in order to ascertain that the main risks have been properly identified, reported and managed. The subsidiaries of Ackermans & van Haaren are responsible for the management of their own operational and financial risks. These risks, which vary according to the sector, are not centrally managed by Acker- mans & van Haaren. The management teams of the subsidiaries in question report to their board of directors or the audit committee on their risk management. • Risks at the level of Ackermans & van Haaren Strategic risk The objective of Ackermans & van Haaren is to create shareholder value by long- term investment in a limited number of strategic participations. The availability of opportunities for investment and divestment is, however, subject to geopolitical and macroeconomic conditions, and is impacted by the increasing competition, a.o. due to the private equity market that is becoming more and more international. The definition and implementation of the strategy of the group companies is also dependent on the aforementioned conditions, for example in the case of geo- political tensions (such as the military conﬂict between Russia and Ukraine) or a pandemic (such as COVID-19). By focusing on long-term value creation and the maintenance of operational and financial discipline, Ackermans & van Haaren, as a proactive shareholder, endeavours to limit those risks as far as possible. Ackermans & van Haaren believes that a well-considered and strategically oriented ESG policy contributes to a sustainable growth of AvH and its participations. ESG risks and opportunities are monitored at portfolio level. A sustainable mix of activ- ities is pursued. More information can be found in the chapter Sustainability report (ESG), 3. ESG approach (page 44). In its role as proactive shareholder, AvH also sees to it that the companies in which it participates organise themselves in such a way as to comply with current laws and regulations, including all kinds of international and compliance rules. Ackermans & van Haaren works together with partners in several group companies. At Delen Private Bank, for example, control is shared with the Jacques Delen family, with strategic decisions requiring the prior consent of both partners. Ackermans & van Haaren has a minority stake in certain group companies. The diminished control that can result from this situation could lead to relatively greater risks; this is offset as far as possible, however, by a close cooperation with, and an active representa- tion on the board of directors of the group companies concerned. Risk related to the stock market listing As a result of its listing on Euronext Brussels, Ackermans & van Haaren is subject to regulations regarding information requirements, transparency reporting, takeover bids, corporate governance and insider trading. Ackermans & van Haaren pays the necessary attention to keeping up and complying with the constantly changing laws and regulations in this area. The volatility of the financial markets has an impact on the value of the share of Ackermans & van Haaren and of some of its listed group companies. As men- tioned above, Ackermans & van Haaren seeks to systematically create long-term shareholder value. Short-term share price ﬂuctuations can produce a momentarily different risk profile for the shareholder. Liquidity risk Ackermans & van Haaren has sufficient resources at its disposal to implement its strategy, and seeks to achieve a positive net cash position. The subsidiaries are re- sponsible for their own financing, it being understood that, in principle, Ackermans & van Haaren does not provide credit lines or guarantees to or for the benefit of its participations. The external financial debts of ‘AvH & subholdings’ were limited to 42.0 million euros on December 31, 2021, more particularly commercial paper issued by AvH. Ackermans & van Haaren has confirmed credit lines (280 million euros) available from various banks with whom it has a long-term relationship, which amply exceed the outstanding commercial paper obligations. The board of directors believes that the liquidity risk is fairly limited. Several fully consolidated companies have agreed on certain ratios (covenants) in their credit agreements and these were respected as at December 31, 2021. • Risks at the level of the participations Marine Engineering & Contracting The operational risks of this segment are essentially associated with the execu- tion of often complex land-based and marine contracting projects and, among other things, are related to: (i) the technical design of the projects and the integration of new technologies; (ii) the setting of prices for tenders and, in case of deviation, the possibility or impossibility of hedging against extra costs and price increases; (iii) performance obligations (in terms of cost, conformity, quality, turnaround time) with the direct and indirect consequences associated with these; (iv) the time dif- ference between the quotation and the actual execution; (v) the evolution of the regulatory framework; and (vi) the relationships with subcontractors, suppliers and partners. DEME is involved, both as claimant and as defendant, in discussions with customers about the financial consequences of deviations in the execution of con- tracting projects. In a small number of cases they may result in lawsuits. In so far as the consequences of such lawsuits can be reliably estimated, provisions are made for this in the accounts. In new markets, such as the development of concessions, the companies are confronted with a changing regulatory framework, technological developments, and the financing of large-scale projects. In order to cope with these risks, the various group companies work with qualified and experienced staff. By taking part in risk and audit committees at DEME and CFE, Ackermans & van Haaren monitors the operational risks of the main projects from the tendering stage. The construction and dredging sector is subject to economic ﬂuctuations on both the domestic and international markets. This has an impact on the investment policy of private sector customers (e.g. oil companies or mining groups) and of local and national authorities. DEME, CFE and Rent-A-Port, which are or were active in coun - tries such as Oman, Qatar, Vietnam and Nigeria, are exposed to political risks. Credit insurance and a strong local network are the primary risk management instruments in that respect. 21Annual report 2021 DEME is to a significant degree active outside the euro zone, and accordingly runs an exchange rate risk. As a rule, DEME hedges against exchange rate ﬂuctuations or enters into foreign currency futures. Certain materials or commodities, such as fuel, can also be hedged. Most of CFE’s activities are within the euro zone, and, where relevant, exposure to foreign exchange ﬂuctuations is limited as much as possible. Rent-A-Port primarily operates in Southeast Asia and is essentially exposed to an exchange rate risk relating to the USD and the Vietnamese dong. Since the subsidiaries of Rent-A-Port mainly effect purchases and sales in local currencies, the group’s exposure to exchange rate ﬂuctuations in commercial transactions is limited in a natural way. Given the size of the contracts in this segment, the credit risk is also closely mon- itored. Both DEME and CFE have procedures to limit the risk to their trade receiva- bles. To contain the risk, the group companies concerned constantly monitor their outstanding trade receivables and adjust their position where necessary. For the pur- poses of major foreign contracts, for instance, DEME regularly uses the services of the Credendo Group, insofar as the country concerned qualifies for this service and the risk can be covered by credit insurance. Furthermore, a large part of the consolidated turnover is realised through the public sector or public sector-related customers. The level of counterparty risk is limited by the large number of customers. For large-scale infrastructural dredging contracts, DEME is dependent on the ability of customers to obtain financing and can, if necessary, help to organise the project financing. Rent-A-Port has a small number of customers and counterparties owing to the very nature of the group’s activities. Consequently, it runs a higher credit risk. The group is able to adequately curtail this risk by providing sufficient contractual safeguards and by building and maintaining strong relations with its customers. The companies from the ‘Marine Engineering & Contracting’ segment usually invoice as the work progresses. The liquidity risk is limited by spreading the credit and guarantee lines over several banks, and preferably over the long term. DEME permanently monitors its balance sheet structure and pursues a balance between a consolidated shareholders’ equity position and consolidated net debts. DEME predominantly invests in equipment with a long life, which is written off over several years. For that reason, DEME seeks to structure a substantial part of its debts as long-term debt. DEME has worked out a new bank financing structure since 2015, based on bilateral unsecured long-term fi- nancing with several banks. Some loan agreements include ratios (covenants), which DEME must adhere to. This was also the case at year-end 2021. DEME monitors its procedures for the avoidance of fraud and integrity risks and adjusts them if necessary. DEME applies a ‘Code of ethics and business integrity’ and various specific policy documents (‘Compliance policy & practices’, ‘Human Rights Policy’ & ‘Whistle-blower policy & procedures’). An annual mandatory training is linked to this ‘Code of ethics and business integrity’. The procedures for cooperation with third parties have also in 2021 been strictly applied. As publicly known, the Public Prosecutor’s office has started an investigation in 2016 into the circumstances under which a contract was awarded in April 2014 in the context of a private tender to Mordraga, a Russian joint venture company of the DEME group, for the execution of dredging works in the port of Sabetta (Russia). The works were carried out in the summer months of 2014 and 2015. The contract was completed in 2016.The investigation was initiated after a complaint was filed by a competitor who was not awarded the contract in question, and is based exclu- sively on selective information provided by this competitor. The Public Prosecutor summoned certain companies and (former) staff members of the DEME group at the end of December 2020 to appear before the Council Chamber. The Council Chamber decided on February 21, 2022 to refer the case to the competent court. An appeal has been lodged against the decision of the Council Chamber. It should be empha- sised that the Council Chamber does not pronounce any judgment on the merits of the case, but merely rules on the question whether or not there are sufficient incriminating elements to have a case judged on its merits by the competent court. In light of the foregoing, DEME cannot for the time being make a reliable assessment of the possible financial impact of the pending investigation. DEME remains confident about the further development of the procedure. Private Banking As Delen Private Bank and Bank Van Breda are both specialist niche players with a culture of prudence, the operational risk has a limited impact on both banks. Operational departments and control functions work together closely in a ‘three lines of defence’ model to monitor the quality of operations. They are backed up by an efficient IT system that automates the main processes and provides built-in controls. To ensure the continuity of operations in the event of contingencies, both organisations have detailed continuity and recovery plans. The credit risk and risk profile of the investment portfolio have been deliberately kept very low for many years now by Delen Private Bank and Bank Van Breda. The banks invest in a conservative manner. The volume of lending at Delen Private Bank is very limited, as this is merely a supporting product in the context of asset man- agement. The loans that are extended are usually temporary bridge loans that are amply guaranteed by pledges on securities. The credit risk at JM Finn is very limited. The credit portfolio of Bank Van Breda is very widely spread among a client base of local entrepreneurs and liberal professionals. The bank applies concentration limits per sector and maximum credit amounts per client. The fraud and compliance risk has always been a priority concern of Delen Private Bank and Bank Van Breda. The banks invest in further digitalisation of their client acceptance policy, such as through the development of Delen Family Services. Bank Van Breda adopts a cautious policy with regard to the interest rate risk, well within the standards set by the NBB. Where the terms of assets and liabilities do not match sufficiently, the bank deploys hedging instruments (a combination of interest rate swaps and options) to correct the balance. The interest rate risk at Delen Private Bank is limited, due to the fact that it primarily focuses on asset management. Delen Private Bank aims to limit the exchange rate risk, and the foreign currency positions are systematically monitored and hedged. The net exposure to the pound sterling is partly limited by the impact of an exchange rate ﬂuctuation on the equity of JM Finn being offset by an opposite impact on the liquidity obligation with regard to the 7% minority shareholders of JM Finn. The liquidity and solvency risk is continuously monitored by a proactive risk management. The banks want to be sure at all times that they satisfy the regulatory requirements and maintain a capitalisation level that amply covers the level of ac- tivity and risk that is taken. Furthermore, the two groups have more than sufficient liquid assets to meet their commitments, even in unforeseen market conditions, as well as sound CET1 ratios. Both banks are adequately protected against income volatility risk. The operat- ing costs of Delen Private Bank are amply covered by the regular income, while, in the case of Bank Van Breda, the income from relationship banking is diversified in terms of clients as well as products, and is supplemented by the specialist vendor activity for car dealers (Van Breda Car Finance). The market risk may arise from the limited short-term investments in the name of Delen Private Bank and Bank Van Breda, or may manifest itself on outstanding positions on suspense accounts over which securities for client portfolios are traded. The intention is that the positions on those suspense accounts should be liquidated systematically so that the bank is not exposed to a market risk. The fair value of the assets under management for clients is partly determined by the developments on the financial markets. Although this has no direct impact on the equity position of the two banks, the total volume of assets under management is a determining factor for their revenues. 22 Your partner for sustainable growth Real Estate & Senior Care A first crucial element related to the operational risks in the real estate sector is the quality of the offering of buildings and services offered. In addition, long- term lease contracts with solvent tenants are expected to guarantee the highest possible occupancy rate and a recurrent ﬂow of income, and should limit the risk of non-payment. Finally, the renovation and maintenance risk is also continuously monitored. For Anima, top-quality care for the residents is the priority. There is a strong focus on working methods, operating systems and human resources man- agement to guarantee a pleasant living environment with a high quality of service. The real estate development activity is subject to cyclical ﬂuctuations (cyclical risk). The income of Nextensa and the value of its portfolio are to a very large extent related to the type of real estate that makes up its portfolio (offices, retail and other) and the location (Luxembourg, Belgium and Austria). The spread of real estate operations over different segments and countries limits this risk. Nextensa possesses with its banks the necessary long-term credit facilities and backup lines for its commercial paper to cover present and future investment needs. Those credit facilities and backup lines serve to hedge the financing risk. The liquidity risk is limited by having the financing spread over several financial counterparties and by tapping various sources of funding, as well as by diversifying the expiration dates of the credit facilities. On November 20, 2019, Nextensa closed a private placement of bonds with seven-year maturity and a fixed annual coupon of 1.95% for an amount of 100 million euros. Its subsidiary, Extensa Group, had previously closed two private placements for an amount of 45 million euros (fixed interest rate of 3.00% and maturing on June 29, 2022) and of 40 million euros (fixed interest rate 3.38% and maturing on June 5, 2024). The amounts drawn down on the bilateral bank loans of Nextensa were 415.0 million euros in the long term and 134.4 million euros in the short term at year-end 2021. The hedging policy for the real estate activities is aimed at confining the interest rate risk as much as possible. Financial instruments are used for that purpose. Energy & Resources The focus of this segment is on businesses in growth markets, such as India, Sin- gapore and Indonesia. As the companies involved are active to a significant extent outside the euro zone (Sagar Cements in India, Verdant Bioscience in Indonesia, SIPEF in Indonesia, Papua New Guinea and Ivory Coast), the exchange rate risk (both on the balance sheet and in the income statement) is more relevant here than in the other segments. The geopolitical developments in those areas also call for special attention. In order to guarantee and expand the production in the different countries, the preservation of rights of ownership and use are essential for SIPEF. To this end, the group maintains a constructive relationship with the competent authorities and continuously monitors those rights. The production volumes and the turnover and margins realised by SIPEF are inﬂu- enced by climatic conditions such as rainfall, sunshine, temperature and humid- ity. The potential physical impact of climate change is uncertain and may vary by region and product. With the growing concern over sustainability, tighter rules may be imposed on companies. SIPEF’s oil palm plantations adhere to the RSPO standards and are in compliance with the RSPO principles and criteria. If SIPEF should be unable to continue to meet stricter requirements, it may lose its certification, or this may be suspended. The group is also exposed in this segment to ﬂuctuations in commodity prices (SIPEF: mainly palm oil and palm kernel oil; Sagar Cements: coal and electricity). SIPEF is also confronted with an export levy on palm oil from Indonesia. In view of the uncertainty of the determination of the local reference price for palm oil, the available palm oil volumes in Indonesia are put on the market on a monthly basis, and the projected volumes of SIPEF’s plantations are no longer hedged in the long term. Verdant Bioscience is a biotechnology firm that specialises in the development of high-yielding F1 hybrid palm oil seeds. Since the results of this development will only become known in a few years, the activity of Verdant Bioscience is character- ised by a higher risk profile. Growth Capital Ackermans & van Haaren makes venture capital available to a limited number of companies with international growth potential. The investment horizon is longer on average than that of the typical players on the private equity market. The in- vestments are usually made with conservative debt ratios, with, in principle, no advances or securities being granted to or for the benefit of the group companies concerned. Moreover, the diversified nature of these investments contributes to a spread of economic and financial risks. Ackermans & van Haaren will usually finance these investments with shareholders’ equity. The economic situation has a direct impact on the results of the participations. The fact that the activities of the group companies are spread over various seg- ments affords a partial protection against the risk. Each participation is subject to specific operational risks, such as the ﬂuctuation in the prices of services and raw materials, the ability to adjust the selling price and competition risks. The companies monitor those risks themselves and can try to limit them by operational and financial discipline and by strategic focus. Monitoring and control by Ackermans & van Haaren as a proactive shareholder also play an important role in that respect. Various participations (e.g. Manuchar, Telemond Group, Turbo’s Hoet Groep) are active to a significant extent outside the euro zone. This may lead to increased risks as a result of geopolitical evolutions or events. In such cases, the exchange rate risk is always monitored and controlled at the level of the participation itself. 23Annual report 2021 2. Comments on the consolidated annual accounts The consolidated annual accounts were prepared in accordance with International Financial Reporting Standards (IFRS). The group’s consolidated balance sheet total as at December 31, 2021 amounted to 17,233 million euros, which is an increase of 6% compared to 2020 (16,229 million euros). This balance sheet total is obviously impacted by the manner in which certain group companies are included in the consolidation. In particular, the full consolidation of the stake in Bank Van Breda has a major impact on the con- solidated balance sheet. The shareholders’ equity (group share) at the end of 2021 was 3,957 million euros, which represents an increase of 395 million euros compared to 2020 (3,562 million euros). In May 2021, Ackermans & van Haaren paid out a gross dividend of 2.35 euros per share, resulting in a decrease of the shareholders’ equity by 78 million euros. In 2021, Ackermans & van Haaren focused on the development of its core partici- pations, the participation in the capital increase of Biotalys (within the framework of its successful IPO at the beginning of July 2021), Medikabazaar and Biolectric, and on investment in certain new participations, more particularly Venturi Partners (20 million USD committed over 4 years), and Van Moer Logistics (12.5 million euros). The consolidation scope underwent some minor changes in 2021, which are explained in note 2. At year-end 2021, Ackermans & van Haaren (including subholdings) had a net cash position of 77.7 million euros, compared to 68.0 million euros at year-end 2020. Besides cash and short-term deposits, this cash position consists of short-term debts in the form of commercial paper amounting to 42.0 million euros, short-term investments amounting to 48.2 million euros and treasury shares. The contribution of the core segments to the group profit in 2021 amounted to 354.8 million euros (2020: 227.5 million euros). A detailed description of the re- sults of the various group participations is shown in the ‘Key figures’ appendix and in the activity report (page 78) of the annual report. • Marine Engineering & Contracting: Although the corona pandemic still disrupts their day-to-day operations, both DEME and CFE achieved a vigor- ous recovery of their results. The profit contribution of ‘Marine Engineering & Contracting’ again surpassed that of pre-COVID year 2019. • Private Banking: Delen Private Bank and Bank Van Breda reported impressive results in 2021 also: the strong increase of assets under management is reﬂected in record results for both banks. • Real Estate & Senior Care: The creation of Nextensa as an integrated real estate investor and developer laid the foundations for a further optimisation of the investment portfolio and project developments. The 1,631 staff members of Anima continued in 2021, under difficult (corona) circumstances,to give the best of themselves to offer their more than 2,100 residents the best possible care. • Energy & Resources: Excellent production results at SIPEF and Sagar Cements, in combination with good price levels, also translated into a record contribution of ‘Energy & Resources’. • AvH & Growth Capital: Virtually all ‘Growth Capital’ participations, too, realised markedly better results, with Mediahuis, Manuchar, Turbo’s Hoet Groep and OMP as particular highlights. With the IPO of Biotalys and a successful new capital round at Medikabazaar (India), the first results were recognised on a series of investments that were made in recent years in young and promising companies. 3. Major events after the closing of the financial year Early 2022, an agreement has been signed with Lone Star Funds for the sale of 100% of the share capital of Manuchar. The realisation of the transaction, which is expected in the second quarter of 2022, will generate cash revenue for AvH of approximately 140 million euros and a capital gain estimated at approximately 75 million euros. Some time ago, Jan Suykens expressed his desire to pass on the torch as CEO - chairman of the executive committee. He will be succeeded after the upcoming general meeting of May 23 by Piet Dejonghe and John-Eric Bertrand, who will take over the leadership of the group as co-CEOs. Jan Suykens will continue to provide his expertise to the AvH group as senior advisor. In this role, he will continue to actively exercise a number of board mandates, amongst others as chairman of Bank Van Breda and as vice-chairman of Delen Private Bank. 4. Research and development At the fully consolidated participations of Ackermans & van Haaren, the DEME teams of R&D and the Central Competence Centre develop groundbreaking, in- novative technologies, while the engineering departments of CFE are involved in civil engineering and construction projects. Ackermans & van Haaren and SIPEF are involved in the development of seeds of high-yielding oil palms through a stake in Verdant Bioscience. Both Bank Van Breda and Delen Private Bank invested in the development of specific management software. The recently acquired participations - Biolectric, Biotalys, Indigo Diabetes, Medikabazaar, MRM Health and OMP - are innovative companies in their field. Their constant focus on technological innova- tion helps to strengthen their competitive position in the short and medium term. 5. Financial instruments Within the group (including DEME, Rent-A-Port, Bank Van Breda, Nextensa), a cautious policy is pursued in terms of interest rate risk by using interest swaps and options. A large number of the group companies operate outside the euro zone (in- cluding DEME, Rent-A-Port, Delen Private Bank, SIPEF, Manuchar, Telemond Group, Sagar Cements, Turbo’s Hoet Groep). Hedging activities for interest rate and ex- change rate risk are carried out and managed at the level of the individual company. 6. Outlook 2022 Although certain companies of the group are still experiencing a disruption of their activities in the first months of 2022 due to the corona pandemic, and the economy is being confronted with a resurgence of inﬂation, the board of directors expects that Ackermans & van Haaren will in 2022 be able to surpass the record result of the past year. The board bases this outlook on: i) The positive dynamic in DEME’s markets, underpinned by an order backlog of nearly 6 billion euros; ii) The strong inﬂow of assets at both Delen Private Bank and Bank Van Breda, enabling them to start 2022 with a record level of assets under management; iii) Nextensa which in 2022 will continue to work on the streamlining of its portfo- lio, which will open up the prospect of realising capital gains and create room on its balance sheet for new investments; iv) The market price for the sustainable palm oil that SIPEF produces and which is at an all-time high; v) The Growth Capital participations which are generally well positioned; vi) The realisation of the previously announced sale of Manuchar, which is expected in the second quarter, and which will yield a capital gain of approximately 75 million euros. Increasing geopolitical tensions have in the meantime led to a military conﬂict in Eu- rope, the effects of which on the economy in general and on the group’s businesses are currently difficult to assess. 24 Your partner for sustainable growth III. Corporate governance statement 1. General information Ackermans & van Haaren applies the Belgian Corporate Governance Code (the ‘Code’) as its reference code. The Code can be consulted on the website of the Corporate Governance Committee (www.corporategovernancecommittee.be). The Committee published a new (third) version of the Code on May 9, 2019, which replaces that of March 12, 2009, and became effective as of January 1, 2020. On April 14, 2005, the board of directors of Ackermans & van Haaren adopted the first Corporate Governance Charter (‘Charter’). The board of directors has subse- quently updated this Charter several times. • On April 18, 2006, the Charter was aligned to various Royal Decrees adopted pursuant to European regulations on market abuse. • On January 15, 2008, the board of directors amended Article 3.2.2 (b) of the Charter in order to clarify the procedure regarding investigations into irregu- larities. • On January 12, 2010, the Charter was modified to reﬂect the 2009 Code and the new legal independence criteria. • On October 4, 2011, the board of directors deliberated on the adaptation of the Charter to the Act of April 6, 2010 on the reinforcement of corporate governance in listed companies and the Act of December 20, 2010 on the exercise of certain shareholders’ rights in listed companies. On that occasion, the board of directors also tightened its policy on the prevention of market abuse (Section 5 of the Charter) with the introduction of a prohibition on short selling and speculative share trading. • On October 10, 2016, the Charter was amended to align it to Regulation (EU) no. 596/2014 of the European Parliament and of the Council dated April 16, 2014 on market abuse and repealing Directive 2003/6/EC of the European Par- liament and of the Council and Commission Directives 2003/124/EC, 2003/125/ EC and 2004/72/EC. • On February 24, 2017, the Charter was aligned to the Act of December 7, 2016 on the organisation of the profession and the public supervision of company auditors. • On February 25, 2019, the board of directors eased the age limit. • On November 19, 2020, the board of directors amended the Charter to align it to the 2020 Code. Board of directors - from left to right: Alexia Bertrand, Thierry van Baren, Jacques Delen, Frederic van Haaren, Julien Pestiaux, Marion Debruyne, Victoria Vandeputte, Luc Bertrand, Pierre Willaert, Pierre Macharis 25Annual report 2021 The Charter is available in three languages (Dutch, French and English) on the company website (www.avh.be). This chapter (‘Corporate governance statement’) contains the information referred to in Articles 3:6, §2 and 3:32, §1, second paragraph, 7° of the Code of Companies and Associations. In accordance with the Code, this chapter specifically focuses on factual information involving corporate governance matters and explains any derogations from certain provisions of the Code during the past financial year in accordance with the principle of ‘comply or explain’. 26 Your partner for sustainable growth 2. Board of directors Luc Bertrand Alexia Bertrand Marion Debruyne BV (1) Jacques Delen Pierre Macharis (°1951, Belgian) Chairman of the board of directors Executive director (1985-2016) Non-executive director (since 2016) (°1979, Belgian) Non-executive director (since 2013) permanently represented by Marion Debruyne (°1972, Belgian) Independent, non-executive director (since 2016) (°1949, Belgian) Non-executive director (since 1992) (°1962, Belgian) Non-executive director (since 2004) Chairman of the remuneration committee (since 2011) Luc Bertrand graduated in 1974 as a commercial engineer (KU Leuven). He began his career at Bankers Trust, as Vice-President and Regional Sales Manager, North- ern Europe. He has been with Ackermans & van Haaren as a director since 1985, where he joined as financial director in 1986 and was chairman of the executive committee from 1990 to 2016. He is chairman of the board of directors of CFE, DEME and SIPEF and a director of Delen Private Bank, JM Finn, Bank Van Breda and Verdant Bioscience. He is also chairman of the Duve Institute and Middelheim Promoters, member of a number of other boards of directors of non-profit associa- tions and public institutions, such as Museum Mayer van den Bergh and Europalia, chairman of the board of trustees of Guberna, and member of the general board of Institute of Tropical Medicine. Mandate ends 2023 Alexia Bertrand obtained a law degree (Université Catholique de Louvain - 2002) and a master of laws (Harvard Law School - 2005). As of May 2019 she is a Member of Parliament of the Brussels-Capital Region and she is leader of the first opposition party. From 2012 to 2019 she worked as an adviser at the office of the Deputy Prime Minister and Minister of Foreign Affairs, and was appointed ‘chef de cabinet’ for general policy on October 1, 2015. She regularly gives courses in negotiation techniques. From 2002 to 2012, she worked as a lawyer specialising in financial and company law (with Clifford Chance and later with Linklaters). For part of that time, she was a teaching assistant at the Law Faculty of the Université Catholique de Louvain and a research assistant at the Katholieke Universiteit Leuven. Mandate ends 2025 Professor Marion Debruyne has a degree in civil engineering (RU Ghent - 1995) and a PhD in applied economic sciences (RU Ghent - 2002). She has lectured at Wharton School, Kellogg Graduate School of Management, and Goizueta Business School, all in the USA. Marion Debruyne was appointed dean of Vlerick Business School in 2015. She is a director at Kinepolis and Guberna. Mandate ends 2024 (1) References in this annual report to ‘Marion Debruyne’ should be read as Marion Debruyne BV, permanent- ly represented by Marion Debruyne. Jacques Delen obtained the diploma of stockbroker in 1976. He has been chairman of the board of directors of Delen Private Bank since July 1, 2014. He is also a di- rector of the listed plantation group SIPEF, of Bank Van Breda and of Scaldis Invest. Jacques Delen was chairman of the board of directors of Ackermans & van Haaren from 2011 to 2016. Mandate ends 2022 Pierre Macharis graduated in commercial and financial sciences (1986) and also obtained the degree of industrial engineer in automation (1983). He is currently CEO and chairman of the executive committee of VPK Packaging Group. He is also chairman of Cobelpa, the Belgian association of paper and pulp producing com- panies, a director at CEPI, the European association of paper and pulp producing companies and a director at Sioen Industries. Mandate ends 2024 2.1 Composition remuneration committee nomination committee audit committee 27Annual report 2021 Frederic van HaarenJulien Pestiaux Pierre Willaert Thierry van Baren Menlo Park BV (2) (°1960, Belgian) Non-executive director (since 1993) (°1979, Belgian) Independent, non-executive director (since 2011) (°1959, Belgian) Non-executive director (since 1998) Chairman of the audit committee (since 2004) (°1967, French / Dutch) Non-executive director (since 2006) permanently represented by Victoria Vandeputte (°1971, Belgian) Independent, non-executive director (since 2018) Frederic van Haaren is an independent entrepreneur and Alderman of the Munici- pality of Kapellen, in charge of public works, environment, green spaces and cem- eteries. He is also director of Belfimas, co-chairman of Bosgroepen Antwerpse Gor- del, as well as member of the environment commission at Intercommunale Igean. Mandate ends 2025 Pierre Willaert holds a master’s degree in commercial and financial sciences, and obtained the diploma of the Belgian Association of Financial Analysts (ABAF-BVFA). Pierre Willaert was a managing partner, and member of the audit committee, at Bank Puilaetco, until the acquisition by KBL in 2004. He worked for many years as a financial analyst at Bank Puilaetco and covered the main sectors represented on the Belgian stock exchange. He later became responsible for the Institutional Management department. He is also a director at Tein Technology, an ICT company in Brussels specialising in, among other things, control rooms. Mandate ends 2024 Julien Pestiaux graduated in electromechanical civil engineering with specialisation energy (Université Catholique de Louvain - 2003), and also obtained a master’s degree in engineering management (Cornell University - USA). Julien Pestiaux is a partner at Climact, an agency that provides advice on energy and climate issues. He is now leading a team developing a model for the EU Commission which assesses the potential for EU Member States to reduce energy consumption and greenhouse gases in the medium to long term. He worked for five years as a consultant and project leader at McKinsey & C°. Mandate ends 2023 Thierry van Baren holds a master’s degree and a teaching qualification in philoso- phy, and obtained an MBA, with specialisation marketing (Solvay Business School). He is currently an independent consultant. He worked for 13 years in MarCom as executive at TBWA Belgium and BDDP Belgium and in management functions at Ammirati Puris Lintas, Ogilvy Brussels and DDB. Mandate ends 2022 Victoria Vandeputte is a civil engineer in electromechanics (KU Leuven - 1995) and holds a master’s degree in risk management (Ecole Supérieure de Commerce de Bordeaux - 1996). She is currently a member of the executive committee and Chief Innovation & Marketing Officer of Diversi Foods (Geschwister Oetker) and director at Acomo. Mandate ends 2022 (2) References in this annual report to ‘Victoria Vandeputte’ should be read as Menlo Park BV, permanently represented by Victoria Vandeputte. The mandates of Jacques Delen, Thierry van Baren and Victoria Vande- putte expire at the ordinary general meeting of May 23, 2022. The board of directors will propose to the ordinary general meeting to (i) renew the mandates of Thierry van Baren and Victoria Vandeputte for a period of four years, and renew the mandate of Jacques Delen for a period of 1 year. Although Jacques Delen has already exceeded the age limit of 70, the board is of the opinion that, with his knowledge and experience, he can still make an exceptional and meaningful contribution to the delib- erations of the board of directors. Pierre Macharis decided to resign his mandate at the annual general meeting of May 23, 2022. The board of directors is extremely grateful to Pierre Macharis for the exceptional added value he provided over the past 18 years. In its meeting of March 22, 2022, the board of directors decided to nominate Bart Deckers as a candidate independent director at the next annual meeting. 28 Your partner for sustainable growth 2.2 Independent directors • Marion Debruyne • Julien Pestiaux • Victoria Vandeputte Marion Debruyne, Victoria Vandeputte and Julien Pestiaux meet the independence criteria of Article 3.5 of the Code 2.3 Other directors • Alexia Bertrand • Luc Bertrand • Jacques Delen • Pierre Macharis • Thierry van Baren • Frederic van Haaren • Pierre Willaert Luc Bertrand, Jacques Delen and Frederic van Haaren are directors of Scaldis In- vest, which, with a stake of 33%, is the principal shareholder of Ackermans & van Haaren. Luc Bertrand and Frederic van Haaren are also directors of Belfimas, which holds a controlling interest of 92.25% in Scaldis Invest. Scaldis Invest and Belfimas are holding companies that exclusively invest (directly and indirectly) in Ackermans & van Haaren shares. 2.4 Activity report Meetings Attendance 98 % 9 In 2021, the board of directors convened nine times and discussed and regular- ly updated the budget for the current financial year, monitored the results and activities of the group companies on the basis of reports prepared by the execu- tive committee, examined the off-balance-sheet commitments, and discussed the recommendations of the advisory committees. Various investments were discussed during the course of the financial year, such as the participation in the capital increases of Biotalys and Medikabazaar, the in- vestments in Venturi Partners and Van Moer Logistics, the increase of the stake of Rent-A-Port in Infra Asia Investment, and the sale of the stake in Manuchar. The board of directors also thoroughly examined and prepared two major opera- tions for the group, more particularly the contribution of Extensa Group to the cap- ital of Leasinvest Real Estate (subsequently renamed Nextensa) and the announced partial demerger of DEME by CFE. The board of directors also paid ample attention to the life sciences strategy, the preparation of the annual general meeting of May 25, 2021, the profit sharing bonus plan for white-collar employees, and follow-up of the pending judicial inquiry involving DEME. The board of directors invited the management of Leasinvest Real Estate, DEME, Bank Van Breda, OMP, SIPEF and Delen Private Bank in 2021 to give presentations on specific investments or on the strategy of the company concerned. In accordance with Article 2.8 of the Charter, assessment procedures are carried out periodically within the board of directors. These assessments take place on the initiative and under the supervision of the chairman. The annual assessment of the relationship between the board of directors and the executive committee took place on March 24, 2021. On that occasion, the non-ex- ecutive directors expressed their general satisfaction with the good quality of the collaboration between the two bodies and made a number of suggestions to the chairman of the executive committee in this respect. Attendance Luc Bertrand 9 Alexia Bertrand 9 Marion Debruyne 8 Jacques Delen 9 Pierre Macharis 8 Julien Pestiaux 9 Thierry van Baren 9 Victoria Vandeputte 9 Frederic van Haaren 9 Pierre Willaert 9 For the sake of completeness, it should be mentioned that the members of the executive committee attend the meetings of the board of directors. 2.5 Code of conduct regarding conﬂicts of interest In the Charter (Articles 2.10 and 4.7), the board of directors published its policy regarding transactions between Ackermans & van Haaren or a company affiliated to it on the one hand, and members of the board of directors or executive committee (or their close relatives) on the other, which may give rise to a conﬂict of interest (within the meaning of the Code of Companies and Associations or otherwise). In 2021, one decision had to be made to which this policy applied. 2.6 Code of conduct regarding financial transactions The board of directors published its policy on the prevention of market abuse in the Charter (Section 6). At the meeting of October 10, 2016, the Charter was amended to align it to Regulation (EU) no. 596/2014 of the European Parliament and of the Council dated April 16, 2014 on market abuse and repealing Directive 2003/6/ EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC. 3. Audit committee 3.1 Composition Pierre Willaert Non-executive director Chairman Marion Debruyne Independent, non-executive director Julien Pestiaux Independent, non-executive director All members of the audit committee have the necessary accounting and audit ex- pertise: Pierre Willaert (°1959) holds a master’s degree in commercial and financial sciences, and obtained the diploma of the Belgian Association of Financial Analysts (ABAF-BVFA). He worked for many years as a financial analyst at Bank Puilaetco. He later became responsible for the Institutional Management department. Pierre Willaert was managing partner and member of the audit committee of Bank Puilae- tco until 2004. He was appointed as a director at Ackermans & van Haaren in 1998, and has been chairman of the audit committee since 2004. 29Annual report 2021 Marion Debruyne (°1972) graduated as a civil engineer from Ghent University (1995) and obtained her PhD in applied economics (2002). Marion Debruyne has lectured at Wharton School, Kellogg Graduate School of Management and Goizue- ta Business School, all in the USA. She has been active as dean of the Vlerick Busi- ness School since 2015. Marion Debruyne was appointed director of Ackermans & van Haaren in 2016 and as a member of the audit committee in 2018. In addition, she holds directorships at Kinepolis and Guberna. Julien Pestiaux (°1979) graduated in electromechanical civil engineering (spe- cialisation energy) from the Université Catholique de Louvain in 2003, and also obtained a master’s degree in engineering management at Cornell University (USA). The focus of the master in engineering management was on financial and economic analyses. Most of the course was given at the ‘Johnson Graduate School of Man- agement’ of Cornell. Julien Pestiaux is a partner at Climact, a company that advises on energy and climate themes with numerous business customers. Before that, he worked for five years as a consultant and project leader at McKinsey & C°, where he became acquainted with various aspects of accounting. Julien Pestiaux was ap- pointed director at Ackermans & van Haaren in 2011. 3.2 Activity report Meetings Attendance 100 % 4 On February 19 and August 23, 2021, in the presence of the financial management and the auditor, the audit committee mainly focused on the reporting process and the analysis of the annual and half-yearly financial statements, respectively. The members of the audit committee received, in advance, the available reports of the audit committees of the operational subsidiaries of Ackermans & van Haaren. The audit committee of March 17, 2021 focused on the financial reporting, as published in the annual report over 2020, and an analysis of the off-balance-sheet commitments. Attention was also paid to the statement on non-financial infor- mation and to the main issues that the auditor is obliged to include in his report. On December 21, 2021, the audit committee discussed the ESG reporting, deliber- ated on the internal audit and control, ICT and human resources, the off-balance- sheet commitments and the advisability of renewing the mandate of the statutory auditor. The audit committee reported systematically and extensively to the board of direc- tors on the performance of its duties. 4. Remuneration committee 4.1 Composition Pierre Macharis Non-executive director Chairman Julien Pestiaux Independent, non-executive director Victoria Vandeputte Independent, non-executive director 4.2 Activity report Meetings Attendance 100 % 3 At its meeting of March 24, 2021, the remuneration committee discussed the draft remuneration report, which, in accordance with Article 3:6, §3 of the Code of Com- panies and Associations, constitutes a specific part of the Corporate governance statement, and ensured that the draft report contains all the information required by law. The committee also reviewed the payment of the variable remuneration to the members of the executive committee, against the recommendations it had made on this subject at its meeting of November 19, 2020, and discussed with the CEO the conclusions of the feedback interviews with the members of the executive committee. At its meeting of June 22, 2021, the remuneration committee discussed a new proposal of career paths for the staff members of AvH. At the meeting of November 19, 2021, the committee discussed the following sub- jects and made recommendations to the board of directors in this respect: the fixed and variable remuneration of the members of the executive committee for 2022, the remuneration of the directors, and the number of stock options to be granted to the members of the executive committee. The committee also recommended increasing the fixed remuneration for the chairman to 100,000 euros and for the directors to 50,000 euros, with effect from financial year 2022. 5. Nomination committee On January 12 and February 23, 2021, the board of directors, in the role of the nomination committee, deliberated on the future composition of the board of direc- tors, and, in accordance with the procedure of Article 2.2.2 of the Charter, decided to propose to the ordinary general meeting of May 25, 2021 to renew the mandates of Alexia Bertrand and Frederic van Haaren for a period of 4 years, and to renew the mandate of Luc Bertrand for a period of 2 years. 30 Your partner for sustainable growth 6. Executive committee 6.1 Composition On September 1, 2021, An Herremans was appointed as a new member of the executive committee. Tom Bamelis (°1966, Belgian) CFO and member of the executive committee After completing his studies as a com- mercial engineer (KU Leuven - 1988), Tom Bamelis also obtained a mas- ter’s degree in financial management (VLEKHO - 1991). He joined Touche Ross (now Deloitte) and later Groupe Bruxelles Lambert. Since 1999 at Ackermans & van Haaren From left to right: Piet Dejonghe, Tom Bamelis, André-Xavier Cooreman, Koen Janssen, An Herremans, Piet Bevernage, Jan Suykens, John-Eric Bertrand André-Xavier Cooreman (°1964, Belgian) Member of the executive committee Following his law degree (KU Leu- ven - 1987), André-Xavier Cooreman studied international law (at the Johns Hopkins University, Bologna Campus - 1988) and tax management (ULB - 1991). He worked for the Internation- al Development Law Institute (course assistant, Italy), the Shell Group (legal counsel, The Netherlands), Fortis Bank (Corporate & Investment Banking), McKinsey & C° (consultant) and Bank Degroof (public sector manager). Since 1997 at Ackermans & van Haaren Piet Dejonghe (°1966, Belgian) Member of the executive committee After his studies for a law degree (KU Leuven - 1989), Piet Dejonghe obtained a postgraduate degree in business administration (KU Leuven - 1990) and an MBA (Insead - 1993). He worked as a lawyer for Loeff Claeys Verbeke (now Allen & Overy) and as a consultant for The Boston Consulting Group. Since 1995 at Ackermans & van Haaren Koen Janssen (°1970, Belgian) Member of the executive committee After his studies as a civil engineer, electromechanics (KU Leuven - 1993), Koen Janssen also obtained an MBA (IEFSI, France - 1994). He worked for Recticel, ING Investment Banking and ING Private Equity. Since 2001 at Ackermans & van Haaren 31Annual report 2021 Jan Suykens (°1960, Belgian) Chairman of the executive committee Jan Suykens holds a degree in applied economic sciences (UFSIA - 1982) and subsequently obtained an MBA (Co- lumbia University -1984). He worked for a number of years in Corporate & Investment Banking at the Generale Bank. Since 1990 at Ackermans & van Haaren Piet Bevernage (°1968, Belgian) Legal counsel and member of the executive committee Piet Bevernage holds a law degree (KU Leuven - 1991) and an LL.M. (Univer- sity of Chicago Law School - 1992). He worked as a lawyer in the Corporate and M&A Department at Loeff Claeys Verbeke. Since 1995 at Ackermans & van Haaren John-Eric Bertrand (°1977, Belgian) Member of the executive committee Following his studies as a commer- cial engineer (UCL Louvain - 2001), John-Eric Bertrand obtained a master’s degree in international management (CEMS - 2002) and an MBA (Insead - 2006). He worked at Roland Berger as a senior consultant and at Deloitte as a senior auditor. Since 2008 at Ackermans & van Haaren An Herremans (1982, Belgian) Member of the executive committee An Herremans trained as a commercial engineer (KU Leuven, 2005) and ob- tained a master’s degree in financial management at Vlerick Management School (2006). An began her career as a consultant at Roland Berger (2006- 2011) and subsequently worked as Corporate Business Development Manager and Strategy Office Manager at Barco (2011-2014). Since 2014 at Ackermans & van Haaren 32 Your partner for sustainable growth 6.2 Activity report The chairman of the board of directors attends the meetings of the executive com- mittee as an observer. Meetings Attendance 97 % 24 On November 9, 2020, the extraordinary general meeting adapted the company’s articles of association to the relevant provisions of the new Code of Companies and Associations. On that occasion, the meeting also expressly opted for a one-tier gov- ernance structure, and confirmed the possibility of setting up a committee around the CEO in which the general management of the company is discussed. In this respect it should be pointed out that the board of directors decided at its meeting of October 6, 2020 to assign, with effect from that date, the daily man- agement exclusively to the CEO. The new-style executive committee is essentially tasked with discussing the general management of the company, and prepares the decisions to be taken by the board of directors. During the past financial year, as in 2020, the executive committee devoted a great deal of attention to the economic impact of the COVID-19 crisis on the group and the health of the employees. As usual, the committee also primarily prepared and followed up on the participation in the boards of directors of the subsidiaries, exam- ined new investment proposals (both in the current group companies and outside), prepared the quarterly, half-yearly and annual financial reports, and investigated the impact of changes in the law that are relevant for the company. 7. Diversity policy Ackermans & van Haaren is convinced of the positive inﬂuence of a diversity-based personnel policy on the strength and innovative culture of its participations, and is itself actively striving for a complementary composition of its board of directors and executive committee (in terms of professional background and skills, as well as gender). At group level, the attraction, education and counselling of talented staff members with complementary knowledge and experience is a priority. At the level of the board of directors, this policy is reﬂected in the selection proce- dure for new candidate directors (as included in section 2.2.2 of the Charter): the first selection criterion ensures the complementarity in terms of professional skills, knowledge and experience, while the fourth criterion sets an obligation to consider candidates of different gender, as long as and when the board of directors is not composed of at least one third of directors of the opposite gender. The current board of directors has 3 female directors (30%) and 7 male directors (70%), with a diversity of education and professional experience. On December 31, 2021, 4 directors were aged 50 or younger (40%) and 6 directors were older than 50 (60%). With regard to the composition of the executive committee (see Charter, para- graph 4.2), the board of directors must also ensure that the members have diverse professional backgrounds with complementary skills. It is the aim of the board of directors that the long-term vision of Ackermans & van Haaren should be supported by executives who actively promote the values of the company and, in this sense, contribute to value creation. This translates, among other aspects, into a prefer- ence for providing talented staff members with career development options within the group. All members of the executive committee have been appointed from the Ackermans & van Haaren team based on their personal merits. A sound diversity policy starts with the recruitment. In 2021, Ackermans & van Haaren recruited an investment manager who will be based in Singapore to build a local investment team and a sustainability manager, both in the age category of 30 to 40 years and with diverse backgrounds, to strengthen the multidisciplinary team. Finally, investments in the training, career counselling and retention of staff mem- bers are also made on a permanent basis. This is done through a combination of broadening and deepening knowledge through training programmes, seminars and workshops, career perspectives both within Ackermans & van Haaren itself and in the group, and through a market-compliant remuneration policy. For further information regarding the personnel policy, reference is made to the Sustainability report. 8. External and internal audit 8.1 External audit The company’s statutory auditor is EY Bedrijfsrevisoren BV, represented by Patrick Rottiers and Wim Van Gasse. The statutory auditor conducts the external audit of both the consolidated and statutory figures of Ackermans & van Haaren, and re- ports to the board of directors twice a year. The statutory auditor was appointed at the ordinary general meeting of May 27, 2019 for a three-year term, which expires at the ordinary general meeting of 2022. An annual fee of 66,150 euros (excluding VAT) was paid to the auditor in 2021 for auditing the statutory and consolidated annual accounts of Ackermans & van Haaren. In addition, a fee was paid to to EY Bedrijfsrevisoren of 5,000 euros (ex- cluding VAT) for a review of the first implementation of ESEF and of 3,350 euros (excluding VAT) for an audit of the personnel administration and to EY Tax Consult- ants of 5,950 euros (excluding VAT) for tax advice. The total fees for audit activities paid to EY by Ackermans & van Haaren and its consolidated subsidiaries in the past financial year amounted to 2,854,484 euros (including the above-mentioned 66,150 euros). 8.2 Internal audit The internal audit is conducted by the group controllers, who report to the executive committee. The group controllers report directly to the audit committee at least once a year. 8.3 Principal features of the internal control and risk management systems with regard to the process of financial reporting and preparation of the consolidated annual accounts The board of directors of Ackermans & van Haaren is responsible for assessing the effectiveness of the internal control and risk management systems. By means of the present system, the board of directors aims to ensure that the group’s objectives are attained at the group level, and, at a subsidiary level, to monitor the implemen- tation of systems appropriate for each kind of company (size, type of activities, etc.) and its relationship with Ackermans & van Haaren (controlling interest, sharehold- ers’ agreement, etc.). Given the diversified portfolio and the small number of staff working at the holding company, the group opted for a customised internal control model that nevertheless has all the essential features of a conventional system. The internal control and risk management system is characterised by a transparent and collegiate structure. The executive committee deliberates and decides by consensus. Risks are identified on an ongoing basis, and are properly analysed. Appropriate measures are proposed to accept, limit, transfer or avoid the identified risks. These assessments and decisions are clearly minuted and documented to allow a strict follow-up. The board of directors also regards the timely provision of complete, reliable and 33Annual report 2021 relevant financial information in accordance with IFRS and with the other Belgian reporting requirements to all internal and external stakeholders as an essential el- ement of its corporate governance policy. The internal control and management systems for financial reporting endeavour to satisfy those requirements as fully as possible. 8.3.1 Control environment The control environment is the framework within which internal control and risk management systems are set up. It comprises the following elements: a. Integrity and ethics The family values that underlie the historical development of the group are trans- lated into a respectful relationship between the various stakeholders: the share- holders, management, the board of directors and the staff, but also the commercial partners. These values were explicitly included in the ‘Vademecum’ (internal com- pany guidelines), so that they are clear to all staff members and can be propagated by them. In order to emphasise the importance of ethical and responsible business and to promote sustainable growth within the group, the board of directors approved an integrity code on March 19, 2018. The integrity code can be consulted on the web- site. The integrity code will be regularly reviewed and updated. b. Skills Another cornerstone of the policy of Ackermans & van Haaren is the way in which its members work together as a professional team. Particular attention is paid to a balanced and qualitative content of the various positions within the organisation. In addition, the necessary training is provided to ensure that knowledge is constantly honed and fine-tuned. Highly skilled people with the right experience and attitude in the right job form the basis of the group’s internal control and risk management system. This also applies at the level of the board of directors and the audit com- mittee, who seek to ensure that the backgrounds and experience of the members are complementary. c. Governance body / audit committee The operation and responsibilities of the board of directors and, by extension, its advisory committees, including the audit committee, are clearly described in the Charter. The audit committee oversees the financial reporting of the group, the internal control and risk management system, and the external and internal audit procedures. d. Organisational structure, responsibilities and powers As already pointed out, Ackermans & van Haaren can pride itself on a transparent organisational structure, where decisions are adopted collectively by the executive committee. The organisational structure and powers are clearly described in the ‘Vademecum’ 8.3.2 Risk management process The risks in terms of financial reporting can be summarised as follows. Risks at the level of the subsidiaries: these are typically highly diverse and are ad- dressed by the attendance by the investment managers of Ackermans & van Haaren at the meetings of the boards of directors and advisory committees of the subsidiar- ies, clear reporting instructions to the subsidiaries with deadlines and standardised reporting formats and accounting principles, and an external audit of the half-yearly and annual figures that also takes into account internal control and risk manage- ment features at the level of each individual company. Risks related to information provision: these are covered by a periodic IT audit, a proactive approach involving the implementation of updates, backup facilities and timely testing of the IT infrastructure. Business continuity and disaster recovery plans have also been put in place. Risks related to changing regulations: these are addressed by close monitoring of the legislative framework on financial reporting, and by a proactive dialogue with the auditor. Finally, there is the integrity risk, which is addressed by maximum integration of accounting and reporting software, extensive internal reporting at different levels, and proactive assessment of complex and important transactions. 8.3.3 Control activities As already pointed out above in the description of the risks, various controls are built into the financial reporting process in order to meet the objectives with regard to this reporting as fully as possible. First, a number of basic controls such as segregation of duties and delegation of powers are built into the administrative cycles at group level: purchasing, payroll and (dis)investments. This ensures that only permissible transactions are processed. The integration of accounting and reporting software serves to cover a number of integrity risks. Additionally, a stable IT infrastructure with the necessary back-up systems guarantees an adequate communication of information. Clear reporting instructions with timely communication of deadlines, standardised reporting formats and uniform accounting principles are in place to address certain quality risks in the reporting by the subsidiaries. There is also a cycle of external audit of both the consolidated reporting and the reporting by the subsidiaries. One of the purposes of this external audit is to assess the effectiveness of the internal control and risk management systems implemented by the subsidiaries and to report on this to the statutory auditor of Ackermans & van Haaren. Finally, there is a system of internal audit on the financial reporting which is carried out by different policy and management levels. This internal audit is completed prior to the external reporting. Changes in the legislative framework on financial reporting are closely monitored and the impact on the group reporting is discussed proactively with the financial management and the external auditor. 34 Your partner for sustainable growth 8.3.4 Information and communication The Charter provides that every staff member of Ackermans & van Haaren can approach the chairman of the board of directors and/or the chairman of the audit committee directly to inform them of any irregularities in financial reporting or other matters (whistle-blowing). 8.3.5 Control Each year, the internal control and risk management system is reviewed by one of the group controllers for effectiveness and compliance. The internal auditor reports his findings to the audit committee. 9. Shareholder structure 9.1 Shareholder structure Scaldis Invest holds 11,054,000 shares in the capital of Ackermans & van Haaren, i.e. a stake of 33%. Scaldis Invest is in turn controlled by Belfimas, which holds 92.25% of the capital of Scaldis Invest. The ultimate control of Scaldis Invest is held by Stichting Administratiekantoor ‘Het Torentje’. 9.2 Cross-participations Ackermans & van Haaren holds 347,092 treasury shares as at December 31, 2021. These shares were mainly acquired with a view to covering the stock option plan. 9.3 Graphic representation The shareholder structure, as known on December 31, 2021, is represented as shown below: Stichting Administratiekantoor ‘Het Torentje’ Control Belfimas NV 92.25% Scaldis Invest NV 33% Ackermans & van Haaren NV 9.4 Reference shareholder Belfimas is the (indirect) reference shareholder of Ackermans & van Haaren. Belfi- mas’ sole purpose is to invest in the shares of Ackermans & van Haaren, directly or indirectly. Any transfer of securities issued by Belfimas is subject to a statutory right of approval of the board of directors of Belfimas. Two of Ackermans & van Haaren’s directors, Luc Bertrand and Frederic van Haaren, are members of the board of di- rectors of Belfimas. The board of directors is not aware of any agreements between Ackermans & van Haaren shareholders. 10. Comply or explain The Charter of Ackermans & van Haaren complies with the provisions of the Code (as it applied in 2021) in all but one point: • Composition of the nomination committee In accordance with Article 4.19 of the Code, the majority of the members of the nomination committee should be independent non-executive directors. The Acker- mans & van Haaren nomination committee consists of all the members of the board of directors. The board of directors is of the view that, as a collective, it is better placed to evaluate its size, composition and succession planning. 35Annual report 2021 IV. Remuneration report Remuneration policy 1. Introduction In pursuance of the Act of April 28, 2020 (the Act), listed companies are from now required: (i) to submit a remuneration policy for approval to the shareholders every four years, for the first time at the annual general meeting of May 25, 2021, and (ii) to provide even greater transparency in their remuneration report - which forms part of the annual report - on the remuneration of their management. This should contribute to effective and lasting shareholder engagement, which in turn should help to strengthen the corporate governance of listed companies. The European regulator sought with this greater shareholder engagement also to con- tribute to the improvement of both the financial and non-financial performance of companies, such as the environmental, social and governance (ESG) factors. The positions expressed by shareholders and an analysis by external advisers led to a number of explicitations and adjustments that will be submitted for approval to the annual shareholders’ meeting of May 23, 2022. 2. Remuneration policy 2.1 Strategy • Long term • Sustainability With its mission ‘Your partner for sustainable growth’, AvH wants to be the pre- ferred partner of family businesses and management teams, and to co-invest with them in the long term with the ambition of letting them grow into market leaders that develop sustainable solutions to the major global challenges. AvH strives for a balanced combination of a limited number of strategic long-term participations and a diversified portfolio of growth capital investments. AvH is an entrepreneurial group that seeks to develop its businesses in the long term through internationalisation, innovation and diversification. AvH does not set absolute targets for its participations in terms of return, but instead focuses on recurring growth of the activities, cash ﬂow generation and shareholders’ equity. AvH prefers long-term growth over short-term dividend max- imisation, and seeks to create long-term shareholder value by a recurring increase of its consolidated shareholders’ equity, supported by a steadily growing dividend in the long term. AvH implements for the whole group and for its investment decisions an ESG frame- work based on the UN Sustainable Development Goals and the UN PRI guidelines, and promotes a sustainable development and growth of the activities of its partici- pations, with respect for people, environment and society. The investment philosophy is based on transparent reporting and communication, clear agreements in terms of corporate governance and business ethics, and strict financial discipline and healthy balance sheets. AvH also wants to contribute as an investment company to a more sustainable world and respond to societal challenges such as climate change, renewable ener- gy, sustainable food chain, population ageing and growth, and digitisation. AvH achieves all of this with a team of staff who, through their diverse backgrounds and continuous development, seek to add value to the management teams of the participations. Inclusive talent management is therefore an integral part of AvH’s ESG policy, which is described in detail in the Sustainability report starting on page 44. AvH wants to attract and retain talented people to keep assuring the quality of the support which AvH, as an active shareholder, wants to give to its participations. Within AvH a vision of ‘Who do we want to be’ has been developed. The three main priorities are the following: (i) “We create the conditions that should allow our management teams to lead their company successfully, develop their activities and create sustainable shareholder value. It is not our ambition to take over the management’s role. However, AvH has the capacity to support the management teams where nec- essary and/or desired. We think in the long term and give strategic impulses. (ii) By building relationships and offering support we create a basis of trust and a sense of ownership that is necessary to evolve towards a transparent partnership. (iii) We uphold a long-term vision and create a context in which our management teams are not hesitating to share their challenges and concerns with us in a timely manner.” In line with its mission ‘Your partner for sustainable growth’ and its ambition re- garding ‘Who do we want to be’, AvH endeavours not only to promote sustaina- bility and long-term thinking with its remuneration policy. AvH is also focused on achieving goals together and meeting its sustainable growth commitment to the shareholders. By linking a substantial proportion of the remuneration of the members of AvH’s executive committee to the achievement of those long-term objectives and sustain- ability parameters, AvH tries to make a significant contribution to the implementa- tion of its corporate strategy with the proposed remuneration policy. Frameworks for a sound remuneration policy are also developed in the remunera- tion committees of the participations and periodically optimised. To determine AvH’s positioning in terms of total financial remuneration, the group benchmarks itself against other relevant companies. AvH wants to position its CEO and members of the executive committee, as well as all other positions in the com- pany, above the median in terms of total remuneration, in line with the quality expectations vis-à-vis the team. AvH takes part in a benchmark exercise every three years to assess its relative position. AvH is a strongly networked environment and invests in engagement and in achiev- ing success together. AvH therefore resolutely opts not to employ individual targets in its remuneration policy, but instead to use common performance benchmarks. The annual performance appraisal interviews focus on individual development in terms of skills and as a person, and on each staff member’s individual contribution to the realisation of the corporate strategy. 2.2 Scope The board of directors of AvH has 10 members, its executive committee 8 mem- bers. AvH, AvH Growth Capital and Ackermans & van Haaren Singapore has a total of 37 staff members, who together put the aforementioned strategy into practice. The proposed remuneration policy is valid for the financial years 2021 through 2024 and, in accordance with Article 7:89/1 of the Code of Companies and Asso- ciations, applies to the 10 directors, the persons entrusted with the daily manage- ment, in this case the CEO, and the other persons in charge of the management of the company, in this case the 7 other members of the executive committee. (1) The Act of April 28, 2020 transposes into Belgian law Directive (EU) 2017/828 of the European Parliament and of the Council of May 17, 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement. This Directive had to be transposed into domestic law by June 10, 2019. 36 Your partner for sustainable growth The approved remuneration policy for the period 2021-2024 has undergone certain adjustments (1) effective from 2022, prompted by interviews with various stakehold- ers and a professional adviser. 2.3 Remuneration committee The remuneration committee advises the board of directors on the remuneration of the members of the board of directors and the executive committee. More particularly, the remuneration committee will: • make recommendations to the board of directors with regard to the remunera- tion policy for the directors and the members of the executive committee and the resulting resolution proposals for the general meeting; • make recommendations with regard to the individual remuneration of directors and members of the executive committee (including bonuses, long-term incen- tive programmes such as stock options and other financial instruments and sev- erance packages) and any resulting resolution proposals for the general meeting; • appraise the performance of the members of the executive committee, in con- sultation with the chairman of the executive committee, except as regards his/ her own performance; • evaluate the accomplishment of the corporate strategy by the executive commit- tee on the basis of the agreed performance benchmarks and objectives; • prepare the remuneration report which the board of directors incorporates in the Corporate governance statement; and • explain the remuneration report at the ordinary general meeting. The remuneration committee determines the frequency of its meetings, but meets at least twice a year. At meetings where the individual remuneration of a member of the remuneration committee is discussed, the person concerned may be present, but must not act as chairman of the meeting and must refrain from any feedback concerning him/herself. 2.4 Remuneration components (i) Board of directors The remuneration of non-executive directors consists exclusively of a fixed remu- neration. This fixed remuneration consists of a basic amount, an additional amount for the director’s membership of a specific committee and an attendance fee for each meeting of the board of directors, the audit committee or the remuneration committee. The remuneration of non-executive directors is periodically reviewed by the remuneration committee against other relevant companies. Any modifications proposed by the committee are submitted to the general meeting for approval. Non-executive directors are required to invest part of their remuneration, namely at least ten thousand euros (€ 10,000), in shares of the company, unless they already hold a direct or indirect interest in the Company corresponding to that value. Those shares must be retained for at least one year after the non-executive director has left the board of directors, and for at least three years after their acquisition. (ii) Executive committee The remuneration paid to the members of the executive committee consists of four components: (a) a fixed remuneration, (b) a variable remuneration (STI or short- term incentive), (c) stock options (LTI or long- term incentive), (d) a group insurance scheme and other benefits. The members of the executive committee must each hold at least 1,000 Ackermans & van Haaren shares that may be acquired, either by exercising options or other- wise, over a period of 5 years. (a) Fixed remuneration The fixed remuneration, which is indexed annually on the basis of the health index, evolves towards the chosen market position. If the fixed remuneration has not yet reached the level of the chosen market position, the fixed remuneration will grow towards that point in so far as the individual concerned also evolves in terms of taking responsibility and the development of relevant competencies and skills. Any increases in the fixed remuneration are discussed each year by the remuneration committee and are submitted to the board of directors for approval. (b) Variable remuneration (STI - short-term incentive) The STI is initially calculated as a per mille of the consolidated net result (group share) and is then linked to financial and non-financial criteria. The total STI is capped at 1.5 times the annual fixed remuneration. (i) 80% of the total STI is dependent on the financial objective ‘consolidated net re- sult’. No variable remuneration will be paid if the consolidated net result (group share) falls below the threshold of 100 million euros. This cash incentive plan is based on long-term ambitions. Although this STI is based on a per mille of the consolidated net result over one year and may therefore be viewed prima facie as a short-term incentive, it should be borne in mind that, in its long-term strat- egy, AvH seeks recurring results and when considering new investments always looks at the undertaking’s potential to generate value in the long term, year after year. Participations are coached over a long term by AvH’s management, which prioritises long-term equity growth over short-term profit maximisation. (ii) 20% of the total STI is dependent on non-financial parameters that are deter- mined each year by the remuneration committee and submitted for approval to the board of directors. The proposed criteria (KPIs) fundamentally contribute to AvH’s ESG policy. Each year, the remuneration committee sets the targets that are expected for the proposed KPIs. The practical implementation, as well as any one-off bonuses or a justified devia- tion from policies, is determined by the board of directors at the suggestion of the remuneration committee. (c) Variable remuneration (LTI - long-term incentive) The purpose of the stock option plan is to remunerate the beneficiaries for their contribution to the long-term value creation. The board of directors decides on the granting of stock options to members of the executive committee based on the recommendation of the remuneration commit- tee. Stock options are granted under a stock option plan that was approved in 1999 by the board of directors, which also serves as an incentive for persons who are not members of the executive committee. In accordance with applicable tax law, the members of the executive committee are taxed on the stock options that are granted. The value of this remuneration element is dependent on how the share price evolves. The stock options granted under AvH’s stock option plan have the following char- acteristics: • Offer: mid-January. • Exercise price: price determined on the basis of the lowest of (i) the closing price of the share preceding the date of the offer, and (ii) the average closing price of the share during the 30 days preceding the date of the offer. • Exercise period: the options may be exercised from the expiration of the third calendar year following the year in which the offer took place, up to the end of the eighth year following the date of the offer. The number of stock options granted may be reviewed each year by the board of directors, at the suggestion of the remuneration committee. (1) The adjustments concern a.o. a floor and a cap on the STI, good leaver principle as a condition for pro rata payment of the STI, introduction of KPIs for the non-financial factor of the STI, scope of the sign-on bonus and limitation of notice periods for the future. (2) In 2021, the remuneration of the directors was reviewed against the corresponding remuneration figures of the BEL20 companies. 37Annual report 2021 (d) Insurance schemes and other benefits AvH provides for a ‘defined contribution’ group insurance scheme (supplementary pension, death benefit, disability allowance, and orphan’s pension) and a hospital- isation insurance scheme. Everyone is also offered a smartphone and a laptop and/or tablet computer. AvH also has a mobility & ﬂexibility policy under which electric cars are offered, along with bicycles and telework. To promote the well-being, gym and yoga sessions are organised as well, at the office or virtually. (e) Relative weighting of each remuneration component The relative share of each component in the overall remuneration paid to members of the executive committee is heavily dependent on the results of the group, with a weighting of 80% in the variable remuneration, and by any gain that can be realised at the moment of exercising the options. The targeted standard ratios are: • fixed remuneration: 30% • a variable remuneration (in cash) related to the consolidated net result (short term incentive or STI): 30% • stock options (long-term incentive or LTI) (1) : 30% • group insurance and other benefits: 10% These components are evaluated each year in November by the remuneration com- mittee and reviewed for compliance with market practices. This review is carried out based on public information (for example, the remuneration data disclosed in the annual reports of other comparable listed companies) and/or salary studies. The adjustments proposed by the remuneration committee are then submitted to the board of directors for approval. The company strives to achieve an incentive mix of a market-based fixed remuneration on the one hand, and a combination of short-term incentives (such as the annual variable remuneration) and long-term incentives (stock options) on the other. (f) Sign-on bonus When a new member of the executive committee or a senior professional is hired, the remuneration committee may decide to grant a sign-on bonus to make up for part of the lost variable remuneration from the previous employer. 2.5 Contractual conditions The contracts between the company and the members of the executive commit- tee contain the usual clauses regarding remuneration (both fixed and variable), non-competition and confidentiality. The contracts also contain clauses regarding the criteria for granting variable remu- neration, and give the company the right to claw back variable remuneration that was granted on the basis of incorrect financial information over the five previous financial years. The contracts apply for an indefinite period. The current CEO is entitled to unilaterally terminate his contract subject to a notice period of 6 months. The company is entitled to unilaterally terminate this contract subject to a notice period of 24 months. The other current members of the executive committee are entitled to unilaterally terminate their contract subject to a notice period of 6 months. The company is entitled to unilaterally terminate the contract of these members subject to a notice period of 18 months. For certain members of the executive committee, this period may increase to a maximum of 24 months depending on the age of the executive committee member in question at the time of the unilateral termination of the contract by the company. For future appointments of members of the executive committee, unilateral termi- nation of the contract will be subject to a notice period of maximum 12 months. When a member of the executive committee or a senior professional leaves AvH in a good relationship (‘good leaver’), regardless of whether the notice is given by the company or the person concerned, the latter is entitled to the average of his or her variable remuneration over the last three financial years, prorated if the departure takes place before the end of the year. Upon recommendation of the remuneration committee the board of directors might decide that it is justified to deviate from this policy. 2.6 Staff members The standards that are used to determine the remuneration policy of the members of the executive committee are also applied to the other staff members: • focus on long-term elements (stock options, group and hospitalisation insur- ance, and an identical benefits policy); • positioning the total remuneration above the median in the market; • collective share of success (profit sharing bonus). 2.7 Changes The remuneration policy for 2021-2024 was defined with the cooperation and input of the CHCO, the executive committee, the remuneration committee, the board of directors and external experts, and was approved at the annual meeting of May 25, 2021. The positions expressed by shareholders and an analysis by external advisers led to a number of explicitations and adjustments that will be submitted for approval to the annual meeting of May 23, 2022. (1) The share of the stock options offered is calculated according to the Black & Scholes method. 38 Your partner for sustainable growth Implementation of remuneration policy in 2021 1. Introduction This remuneration report was prepared in accordance with Article 3:6, §3 of the Code of Companies and Associations (Remuneration report). In its preparation of the Remuneration report, the board of directors was also in- spired by: • Principle 7 of the Belgian Corporate Governance Code 2020 on the remunera- tion of directors and members of the executive management of listed companies (Code 2020); • (the draft) ‘Guidelines on the standardised presentation of the remuneration report under Directive 2007/36/EC, as amended by Directive (EU) 2017/828, as regards the encouragement of long-term shareholder engagement’, drawn up by the European Commission (Directive), and • the feedback from shareholders and an external analysis of the Remuneration Policy 2021-2024. Ackermans & van Haaren has a one-tier governance structure, where the board is authorised to perform all acts that are necessary or useful to the accomplishment of the corporate purpose, except those for which the general meeting is authorised by law. On October 6, 2020, the board of directors decided to delegate the daily management of the company exclusively to the CEO. The executive committee, of which the CEO is a member, is responsible for discussing the general management of the company. The remuneration of the members of the executive committee, except for the CEO, is disclosed in aggregate in the Remuneration report for the financial year 2021. The remuneration committee made adjustments to the Remuneration Policy 2021- 2024, which is included in its entirety in the annual report (page 35 and further) for the financial years 2022 through 2024, on the basis of feedback from shareholders and external advisers. This Remuneration report gives an overview of the current remuneration policy as applied in the financial year 2021. Besides a busy investment year with two promising investments in companies such as Van Moer Logistics and the Southeast Asian investment fund Venturi Partners, follow-up investments in a.o. Biotalys, Medikabazaar and Rent-A-Port, and the creation of the real estate group Nextensa (following the contribution of Extensa Group into Leasinvest Real Estate), the existing participations, without exception, reported very good to record results. Consequently, the consolidated net result for the financial year 2021 increased by 77% compared to the previous year, which was impacted by the COVID-19 crisis. Accordingly, the exceptionally good results of 2021 are reﬂected in an increase of the variable remuneration (short-term incentive or STI), i.e. a 1-year cash bonus for the members of the executive committee (+77%). The amounts in question do not exceed the cap set for the STI. No extraordinary bonuses were paid in respect of 2021. 2. Remuneration procedure On January 11, 2022, the remuneration committee discussed the draft Remu- neration report, which constitutes a specific part of the Corporate governance statement, and ensured that the draft report contains all the information required by law. To position the fixed remuneration of the members of the executive committee for 2022, the benchmark data of 2020 were used, and the fixed remuneration of 2 members of the executive committee was aligned with the benchmark. The fixed remuneration of the other members was adjusted on the basis of the health index. The committee also reviewed the payment of the variable remuneration (short- term incentive or STI) to the members of the executive committee against the recommendations it had made on this subject at its meeting of November 19, 2021. It should be recalled that the extraordinary general meeting on November 25, 2011 authorised the board of directors to depart from Article 7:91, second paragraph of the Code of Companies and Associations, and to link the entire variable remuner- ation of the members of the executive committee to predetermined and objectively quantifiable performance criteria measured over a one-year period. The committee proposed at its meeting of November 19, 2021 not to change the calculation to determine the STI of the members of the executive committee relative to the previous year. On February 24, 2022, the remuneration committee assessed the results for the non-financial ESG parameters, which account for 20% of the STI. The committee also proposed updated objectives for 2022 to the board of directors. As a company, AvH prioritises social parameters such as Diversity & Inclusion. As a responsible investor, AvH stresses ESG as an essential parameter in asset allocation and investment decisions, as well as social parameters such as sustainable talent management and ethical business management. In order to maintain the focus on long-term performance, it was decided to increase the number of stock options granted (long-term incentive or LTI) by 1,000 options per member of the executive committee. Finally, the committee proposed to keep the fixed remuneration of the directors (including attendance fees) for the financial year 2021 at the same level as in 2020. However, based on a benchmark with the remuneration of the directors of other BEL20 companies, the fixed remuneration (excl. attendance fees) will be increased effective from financial year 2022. The last adjustment in this respect dates back to 2013. 3. Board of directors The remuneration of non-executive directors consists exclusively of a fixed re- muneration. Since the remuneration, director’s fees and attendance fees are not linked to the company’s results, they may be classed as fixed, non-performance-re- lated remuneration. The remuneration of non-executive directors is periodically re- viewed by the remuneration committee. The modifications proposed by the board of directors, as advised by the remuneration committee, are submitted to the general meeting for approval. On the recommendation of the remuneration committee, the board of directors pro- posed on February 24, 2022 to adjust the remuneration of the directors as follows from the financial year 2022: • Fixed remuneration for the chairman of the board of directors: 100,000 euros • Fixed remuneration for the directors: 50,000 euros The other remuneration remains unchanged: • Additional fee for the members of the remuneration committee: 2,500 euros • Additional fee for the chairman of the audit committee: 10,000 euros • Additional fee for the members of the audit committee: 5,000 euros • Attendance fee per meeting of the board of directors or the audit or remunera- tion committee: 2,500 euros This proposal will be submitted for approval to the ordinary general meeting of May 23, 2022. Having regard to the fact that Luc Bertrand was appointed chairman of the board of directors on May 23, 2016, succeeding Jacques Delen, and that, additionally, and in the interest of the group, he became or remained chairman of CFE, DEME and SIPEF, and remained a director of Delen Private Bank and Bank Van Breda, the 39Annual report 2021 remuneration committee proposed to grant him a fixed remuneration of 350,000 euros per year with effect from June 1, 2016, as well as placing a company car at his disposal. This proposal was announced at the annual general meeting of May 23, 2016. For the sake of completeness, it should be noted that Luc Bertrand also received a director’s fee of 60,000 euros from SIPEF in 2021, half of which is trans- ferred to Ackermans & van Haaren. Jacques Delen received, directly and indirectly, remuneration in 2021 in his capacity as chairman of the board of directors of Delen Private Bank, to the amount of 250,000 euros (including pension insurance) and has a company car at his disposal. He also received a director’s fee from SIPEF to the amount of 29,000 euros in 2021. The remuneration which SIPEF paid to Luc Bertrand and Jacques Delen is mentioned in SIPEF’s annual report (Remuneration report - Remuneration of non-executive directors) for the financial year 2021. All directors declared that they have invested at least 10,000 euros in shares of the company. Table 1 shows for each director the remuneration he/she is entitled to in respect of his/her mandate during the financial year 2021. This remuneration will be paid after approval of the annual accounts by the general meeting, scheduled for May 23, 2022. 4. Executive committee 4.1 Total remuneration The remuneration paid to the members of the executive committee consists of the following components: (i) a fixed remuneration; (ii) a variable remuneration (in cash) related to the consolidated net result (short- term incentive or STI); (iii) stock options (long-term incentive or LTI); (iv) group insurance and other benefits These components are evaluated each year in November by the remuneration com- mittee and reviewed for compliance with market practices. This review is carried out based on public information (for example, the remuneration data disclosed in the annual reports of other comparable listed companies) and/or salary studies. The adjustments proposed by the remuneration committee are then submitted to the board of directors for approval. The company strives to achieve an incentive mix of a market-based fixed remuneration on the one hand, and a combination of short-term incentives (such as the annual variable remuneration) and long-term incentives (stock options) on the other. The fixed remuneration for the members of the executive committee evolves according to their responsibilities and according to market developments. The variable remuneration that is granted to the members of the executive com- mittee is based on an objectively quantifiable performance criterion, namely the consolidated net result, measured over a period of one financial year. The variable remuneration is paid out in cash after the board of directors has established the consolidated net result of the previous financial year (i.e. at the end of March). Although this STI is based on a per mille of the consolidated net result over one year and may therefore be viewed prima facie as a short-term incentive, it should be borne in mind that, in its long-term strategy, AvH seeks recurring results and when considering new investments always looks at the undertaking’s potential to generate value in the long term, year after year. Participations are coached over a long term by AvH’s management, which prioritises long-term equity growth over short-term profit maximisation. In this light, non-recurring, accounting profits (such as remeasurement gains) are excluded from the calculation of the STI. For the first time for financial year 2021, 20% of this STI is made dependent on the results for the proposed ESG parameters. The group insurance scheme is of the ‘defined contribution’ type and covers the following risks: supplementary pension, death benefit, disability allowance, and or- phan’s pension. Both the company and the member of the executive committee in question contribute to the constitution of a reserve. The other benefits include the conventional benefits in kind, such as company car, smartphone and tablet computer, and hospitalisation insurance. The con- tributions to the hospitalisation policy are paid entirely by the company. The stock options are discussed under 4.2. The members of the executive committee declared their intention to each hold at least 1,000 Ackermans & van Haaren shares, to be acquired over a period of 5 years. Table 1: Remuneration of the board of the board of directors (financial year 2021) (€) Fixed remuneration Attendance fees (1) Total remunerationName Chairman of the board of directors Director Chairman of the audit committee Member of the audit committee Member of the remuneration committee Board of directors Committees Luc Bertrand 60,000 22,500 82,500 Alexia Bertrand 30,000 22,500 52,500 Marion Debruyne 30,000 5,000 20,000 10,000 65,000 Jacques Delen 30,000 22,500 52,500 Pierre Macharis 30,000 2,500 20,000 7,500 60,000 Julien Pestiaux 30,000 5,000 2,500 22,500 17,500 77,500 Thierry van Baren 30,000 22,500 52,500 Victoria Vandeputte 30,000 2,500 22,500 7,500 62,500 Frederic van Haaren 30,000 22,500 52,500 Pierre Willaert 30,000 10,000 22,500 10,000 72,500 Total 630,000 (1) An attendance fee of 2,500 euros is granted per participation to a meeting of the board of directors, the audit committee and/or the remuneration committee. In 2021, 9 board of directors took place, 4 audit committtees and 3 remuneration committtees. 40 Your partner for sustainable growth Table 2 shows for the members of the executive committee in average and for the CEO individually the remuneration they received in respect of their mandate during the financial year 2021. One member of the executive committee (An Herremans) is not yet included in the report since this person was only appointed to the executive committee with effect from September 1, 2021. 4.2 Stock options Stock options are granted annually under a stock option plan that was approved in 1999 by the board of directors, and that also serves as an incentive for persons other than members of the executive committee. The stock option plan was formu- lated in accordance with the provisions of the Act of March 26, 1999 concerning the 1998 Belgian Action Plan for Employment and containing various provisions. The board of directors decides on the granting of stock options to members of the executive committee based on the recommendation of the remuneration commit- tee. The granting of stock options is not linked to predetermined and objectively quantifiable performance criteria. In accordance with applicable tax law, the mem- bers of the executive committee are taxed on the stock options that are granted. The company does not offer the beneficiaries any hedging instruments against the risks associated with the stock options. The stock options granted under the stock option plan have the following charac- teristics: • Offer: mid-January. • Exercise price: price determined on the basis of the lowest of (i) the closing price of the share preceding the date of the offer, and (ii) the average closing price of the share during the 30 days preceding the date of the offer. • Exercise period: the options may be exercised from the expiration of the third calendar year following the year in which the offer took place, up to the end of the eighth year following the date of the offer. During 2021, no (non-exercised) stock options expired that were held by members of the executive committee. 5. Severance packages and claw-back rights The contracts with the members of the executive committee contain the usual claus- es regarding remuneration (both fixed and variable), non-competition and confi- dentiality. The contracts are of indefinite period. The current CEO is entitled to unilaterally terminate his contract subject to a notice period of 6 months. The company is entitled to unilaterally terminate this contract subject to a notice period of 24 months. The other members of the executive committee are entitled to unilaterally terminate their contract subject to a notice period of 6 months. The company is entitled to unilaterally terminate the contract of these members subject to a notice period of between 18 and 24 months. For every new appointment of a member of the executive committee, the notice period upon termination by the company will be set at maximum 12 months. The contracts between the company and the members of the executive committee also contain provisions regarding the criteria for granting variable remuneration, and give the company the right to claw back variable remuneration that was grant- ed on the basis of incorrect financial information over the 5 previous financial years. No severance packages or claw-back rights had to be exercised during the past financial year. 6. Deviations from the remuneration policy There were no deviations from the remuneration policy in effect during the past financial year. Table 2: Individual remuneration of the CEO and average remuneration of the other members of the executive committee (financial year 2021) (€) Fixed remuneration Variable remuneration Group insurance (fixed contribution paid by the company) Hospitalisation insurance Total remuneration Proportion of fixed remuneration in total remuneration Proportion of variable remuneration in total remuneration Proportion STI in fixed remuneration Name Fixed remunera- tion Benefits in kind (1) Total STI LTI in the form of stock options (2) Total Jan Suykens (CEO) 712,320 5,957 718,277 985,635 212,720 1,198,355 53,804 896 1,971,332 36% 61% 137% Other EC members - average (3) 381,700 4,346 386,046 390,147 137,382 527,529 49,374 814 963,763 40% 55% 101% (1) Benefits in kind: company car, smartphone and tablet computer. (2) The market value of the stock options offered & accepted in 2021 was calculated according to the Black & Scholes method. (3) Based on the members who were part of the exutive committee for the entire year. 41Annual report 2021 Table 3: Stock options 2014-2021 (Number of offered and accepted options calculated based on the Black & Scholes method) Opening balance (1) Offer Offer Offer Offer Offer Offer Offer Offer Exercise period Closing balance Jan Suykens (CEO) 1/01/2021 2/01/2014 5/01/2015 4/01/2016 13/01/2017 12/01/2018 14/01/2019 13/01/2020 15/01/2021 06/12/2021 Options outstanding 43,000 5,500 5,500 8,000 8,000 8,000 8,000 8,000 (2) -5,500 (3) Exercise price € 82.32 € 100.23 € 130.95 € 128.30 € 148.64 € 132.52 € 124.67 - Black & Scholes € 15.35 € 13.76 € 27.72 € 25.70 € 27.32 € 24.92 € 26.59 - Value based on Black & Scholes € 84,425 € 75,680 € 221,760 € 205,600 € 218,560 € 199,360 € 212,720 - Balance on 31/12/2021 45,500 Tom Bamelis 1/01/2021 2/01/2014 5/01/2015 4/01/2016 13/01/2017 12/01/2018 14/01/2019 13/01/2020 15/01/2021 12/03/2021 Options outstanding 33,000 4,000 4,000 5,000 5,000 5,000 5,000 5,000 5,000 (2) -4,000 (3) Exercise price € 82.32 € 100.23 € 130.95 € 128.30 € 148.64 € 132.52 € 141.09 € 124.67 Black & Scholes € 15.35 € 13.76 € 27.72 € 25.70 € 27.32 € 24.92 € 22.43 € 26.59 Value based on Black & Scholes € 84,425 € 55,040 € 138,600 € 128,500 € 136,600 € 124,600 € 112,150 € 132,950 Balance on 31/12/2021 34,000 John-Eric Bertrand 1/01/2021 2/01/2014 5/01/2015 4/01/2016 13/01/2017 12/01/2018 14/01/2019 13/01/2020 15/01/2021 17/12/2021 Options outstanding 27,000 2,000 2,000 4,000 4,000 5,000 5,000 5,000 5,000 (2) -2,000 (3) Exercise price € 82.32 € 100.23 € 130.95 € 128.30 € 148.64 € 132.52 € 141.09 € 124.67 Black & Scholes € 15.35 € 13.76 € 27.72 € 25.70 € 27.32 € 24.92 € 22.43 € 26.59 Value based on Black & Scholes € 30,700 € 27,520 € 110,880 € 102,800 € 136,600 € 124,600 € 112,150 € 132,950 Balance on 31/12/2021 30,000 Piet Bevernage 1/01/2021 2/01/2014 5/01/2015 4/01/2016 13/01/2017 12/01/2018 14/01/2019 13/01/2020 15/01/2021 21/12/2021 Options outstanding 28,000 4,000 4,000 5,000 5,000 5,000 5,000 5,000 (2) -4,000 (3) Exercise price € 82.32 € 100.23 € 130.95 € 128.30 € 148.64 € 132.52 € 124.67 Black & Scholes € 15.35 € 13.76 € 27.72 € 25.70 € 27.32 € 24.92 € 26.59 Value based on Black & Scholes € 61,400 € 55,040 € 138,600 € 128,500 € 136,600 € 124,600 € 132,950 Balance on 31/12/2021 29,000 André-Xavier Cooreman 1/01/2021 2/01/2014 5/01/2015 4/01/2016 13/01/2017 12/01/2018 14/01/2019 13/01/2020 15/01/2021 Options outstanding 29,000 4,000 4,000 5,000 5,000 5,000 5,000 5,000 5,000 (2) Exercise price € 82.32 € 100.23 € 130.95 € 128.30 € 148.64 € 132.52 € 141.09 € 124.67 Black & Scholes € 15.35 € 13.76 € 27.72 € 25.70 € 27.32 € 24.92 € 22.43 € 26.59 Value based on Black & Scholes € 61,400 € 55,040 € 138,600 € 128,500 € 136,600 € 124,600 € 112,150 € 132,950 Balance on 31/12/2021 34,000 Definition of the terms used in Table 3: (1) Opening balance: number of options held by the beneficiary on January 1, 2021 and not yet exercised in 2021 (2) Number of options offered: the number of options offered and accepted in 2021 (3) Number of options acquired: number of options acquired during 2021 (following the expiry of the vesting period) 42 Your partner for sustainable growth Opening balance (1) Offer Offer Offer Offer Offer Offer Offer Offer Exercise period Closing balance Piet Dejonghe 1/01/2021 2/01/2014 5/01/2015 4/01/2016 13/01/2017 12/01/2018 14/01/2019 13/01/2020 15/01/2021 5/01/2021 Options outstanding 33,500 4,000 4,000 5,500 6,000 6,000 6,000 (2) -8,000 (3) Exercise price € 82.32 € 100.23 € 128.30 € 148.64 € 132.52 € 124.67 Black & Scholes € 15.35 € 13.76 € 25.70 € 27.32 € 24.92 € 26.59 Value based on Black & Scholes € 61,400 € 55,040 € 141,350 € 163,920 € 149,520 € 159,540 Balance on 31/12/2021 31,500 An Herremans 1/01/2021 2/01/2014 5/01/2015 4/01/2016 13/01/2017 12/01/2018 14/01/2019 13/01/2020 15/01/2021 28/12/2021 Options outstanding 8,000 1,500 1,500 1,500 1,500 2,000 2,500 (2) -1,500 (3) Exercise price € 130.95 € 128.30 € 148.64 € 132.52 € 141.09 € 124.67 Black & Scholes € 27.72 € 25.70 € 27.32 € 24.92 € 22.43 € 26.59 Value based on Black & Scholes € 41,580 € 38,550 € 40,980 € 37,380 € 44,860 € 66,475 Balance on 31/12/2021 9,000 Koen Janssen 1/01/2021 2/01/2014 5/01/2015 4/01/2016 13/01/2017 12/01/2018 14/01/2019 13/01/2020 15/01/2021 13/12/2021 Options outstanding 28,000 4,000 4,000 5,000 5,000 5,000 5,000 5,000 (2) -4,000 (3) Exercise price € 82.32 € 100.23 € 130.95 € 128.30 € 148.64 € 132.52 € 124.67 Black & Scholes € 15.35 € 13.76 € 27.72 € 25.70 € 27.32 € 24.92 € 26.59 Value based on Black & Scholes € 61,400 € 55,040 € 138,600 € 128,500 € 136,600 € 124,600 € 132,950 Balance on 31/12/2021 29,000 Definition of the terms used in Table 3: (1) Opening balance: number of options held by the beneficiary on January 1, 2021 and not yet exercised in 2021 (2) Number of options offered: the number of options offered and accepted in 2021 (3) Number of options acquired: number of options acquired during 2021 (following the expiry of the vesting period) 7. Evolution of the remuneration and of the performance of the company 7.1 Annual change in the remuneration The fixed remuneration of the directors remained unchanged in 2021. The total fixed remuneration of the members of the executive committee increased in 2021 by 2.39% as a result of an adjustment of the benchmark for two members and the application of the health index by 0.96% for the other members. Their STI increased by 77% as a result of the increase of the consolidated net result, which reached a record level thanks to the very good performance of the participations. The STI did not exceed the cap that was set for 2022 for any member of the exec- utive committee. No extraordinary bonuses were paid in respect of the financial year 2021. Table 4 shows the evolution, in percentage terms, of the average of the total fixed and variable remuneration of the members of the executive committee, relative to the development of the consolidated net result and the stock market price. 7.2 Annual change in the development of the company’s performance As was mentioned earlier, a substantial part of the remuneration (notably the varia- ble remuneration and the stock options) of the members of the executive committee is dependent on the evolution of the consolidated net result and on the develop- ment of the stock market price. These two parameters developed as follows in 2021 relative to 2020: • Consolidated net result: +77.0% • Stock market price: +35.5% For financial year 2021, 80% of the STI was calculated on the basis of the consoli- dated net result and 20% on the basis of ESG performance. 7.3 Annual change in the average remuneration of the staff As of December 31, 2021, the company employed 22 staff members. Their aver- age fixed gross remuneration (excl. employer’s contributions) was indexed at 0.96% in 2021. A number of staff members received a pay rise above indexation based on benchmark and performance. As a result, the salaries increased on average by 43Annual report 2021 3.3%. Their average variable remuneration increased by 26.4% in 2021. For staff members, AvH adopts a categorised profit-sharing bonus plan, in the context of which the board of directors decides each year whether or not to pay a share of the profit to the staff. The two categorisation criteria are job title and length of service. The maximum ratio between highest and lowest profit-sharing bonus is 1 to 10 (from 3,500 euros to 35,000 euros over 2021). The board of directors decides each year on the application of a profit-sharing bonus plan and its terms and conditions. For 2021, it was decided to create an extra category, to increase the basic amount, and to merge two categories. The 26.4% increase is connected with the increase of the basic amount, the new categories, and increased length of service. Table 5 shows the evolution, in percentage terms, of the average total fixed and variable remuneration of the staff, relative to the development of the consolidated net result and the stock market price. 7.4 Pay gap The ratio between the average fixed remuneration of the members of the executive committee and that of the staff of the company is 1 to 5.1 on the basis of the following data: • Average fixed remuneration of the members of the executive committee: 428,931 euros • Average fixed remuneration (gross annual salary) of the staff of AvH: 83,257 euros. The ratio between the fixed remuneration of the CEO and the lowest staff salary is 1 to 14.6. Table 4: Evolution of the average of the total fixed and variable remuneration of the members of the executive committee (€) 2017 2018 2019 2020 2021 Fixed remuneration 358,210 374,039 (+4.4%) 415,570 (+11.1%) 418,902 (+0.8%) 428,931 (+2.4%) Variable remuneration (1) 490,323 478,672 (-2.4%) 702,384 (+46.7%) 316,477 (-54.9%) 623,361 (+97.0%) Consolidated net result (000) 302,530 289,639 (-4.3%) 394,900 (+36.3%) 229,791 (-41.8%) 406,813 (+77.0%) Stock market price on 31/12 145.9 131.8 (-9.6%) 141.6 (+7.4%) 124.5 (-12.1%) 168.7 (+35.5%) (1) ‘Variable remuneration’ means the average of the STI + the stock options offered and accepted for that year calculated according to the Black & Scholes method. (2) ‘Variable remuneration’ includes here the profit-sharing bonus and extraordinary gross bonuses. The options offered to certain staff members are excluded from this calculation. IV. Statement regarding non-financial information In accordance with Art. 3:32, §2 of the Code of Companies and Associations, the annual report must include a Statement of Non-financial Information. This state- ment is included in the next chapter of this annual report, of which it is an integral part. On behalf of the board of directors, March 22, 2022 Luc Bertrand Chairman of the board of directors Table 5: Evolution of the average total fixed and variable remuneration of the staff (€) 2017 2018 2019 2020 2021 Fixed remuneration 71,670 69,400 (-3.2%) 74,109 (+6.8%) 80,577 (+8.7%) 83,257 (+3.3%) Variable remuneration (1) 7,245 9,511 (+31.2%) 9,908 (+4.2%) 11,809 (+19.2%) 14,926 (+26.4%) Consolidated net result (000) 302,530 289,639 (-4.3%) 394,900 (+36.3%) 229,791 (-41.8%) 406,814 (+77.0%) Stock market price on 31/12 145.9 131.8 (-9.6%) 141.6 (+7.4%) 124.5 (-12.1%) 168.7 (+35.5%) 44 Your partner for sustainable growth Ackermans & van Haaren: a sustainable investment company Responsible ownership Solvency and long term return Human capital development Risk management Responsible investment policy Corporate governance Reporting Innovation Business ethics R e s p e c t L o n g - t e r m v i s i o n E n t r e p r e n e u r s h i p F a m i l y v a l u e s F o c u s o n m a t e r i a l t o p i c s A c t i v e i n t e r a c t i o n w i t h p a r t i c i p a t i o n s SUSTAINABILITY REPORT (ESG) This chapter contains the statement regarding non-financial information of Ackermans & van Haaren (‘AvH’) in accordance with Article 3:32 §2 of the Companies and Associations Code and relates to the financial year closed on December 31, 2021. 1. ESG overview 2021 ... responding to social themes Climate change and energy transition Energy-efficient and circular construction Sustainable wealth management Sustainable food Health and well-being Sustainable supply chain and logistics Digitisation ... in a structured way. 12.5 Member since 2020 SDGs as reference model with focus on 4 themes 45Annual report 2021 ESG • Carbon footprint of AvH group identified (856,000 ton CO 2 eq) ESG • EU taxonomy potentially important for AvH group (46% turnover eligible and 15% already aligned) ESG • Attention for talent and corporate culture ESG • Sense of purpose as an important factor to attract and retain talent ESG • Growing commitment of participations to strategically implement ESG policy “ AvH always pursues a long-term vision with ESG as part of its investment philosophy ‘Your partner for sustainable growth’. ” “ We did not wait for the Glasgow COP26 climate summit to put ESG on the agenda throughout the AvH group.” 91 % of the consolidated shareholders’ equity has an ESG policy ESG highlights 2021 at Ackermans & van Haaren Luc Bertrand, Chairman of the board of directors Jan Suykens, CEO, Chairman of the executive commitee Ackermans & van Haaren: shareholder of sustainable companies Consolidated shareholders’ equity AvH 31% 37% 13% 12% 7% Marine Engineering & Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Growth capital • Focus on ESG and innovative developments (Biolectric, Biotalys, HealthQuad, Indigo Diabetes, Mediahuis, Medikabazaar, MRM Health, OncoDNA) • Efficient supply chain and intermodal transport (OMP, Van Moer Logistics) SIPEF • 100% sustainable RSPO certified palm oil production Sagar Cements • Important efforts related to energy efficiency, circularity and renewable energy Nextensa • Sustainable buildings and urban development Anima • High-quality senior care Delen Private Bank • A+ rating for ‘strategy and governance’ UN PRI • More than 30 billion euros patrimonial funds are UN PRI compliant • High client satisfaction (NPS: 58) Bank Van Breda • High client satisfaction (NPS: 53) and Great Place to Work DEME • World leader in offshore wind • Sustainable innovations (a.o. green hydrogen, GSR) • EU Taxonomy: 28% turnover eligible and 24% aligned CFE • Circularity, sustainable logistics, wood construction, digitisation and energy- efficient buildings Green Offshore/DEME • Beneficial investment in 155 MW of offshore wind and award of 2 new concessions ScotWind 46 Your partner for sustainable growth 2. ESG key figures, goals and SDG focus The progress made in the rollout of AvH’s ESG policy is explained on the follow- ing pages using quantitative KPIs. ESG key figures marked with the symbol concern KPIs that are monitored as a matter of priority and for which a target was defined by AvH, or that are monitored as a matter of priority by AvH at the participations. Reporting perimeter AvH reports on ESG based on its accounting consolidation perimeter (See Note 2 - Section 1 Fully consolidated subsidiaries). Although, as an investment company, AvH uses as benchmark for its ESG policy the assets it manages, in accordance with the approach of UN PRI, as reﬂected by the relative investment value of a partici- pation in relation to the consolidated shareholders’ equity of AvH. Certain KPIs are reported more widely on the basis of AvH’s shareholding percentage. Certain key figures are only relevant to the investment company itself (‘AvH as a company’) and the associated (investment) team, so that they only relate to the parent company (AvH NV) or subholdings through which the investment policy is conducted. The 7 ESG material participations - DEME, CFE, Delen Private Bank, Bank Van Bre- da, SIPEF, Nextensa and Anima - together represent more than 85% of the net assets. Responsible investment policy of AvH as an investment company: Sustainable mix of activities in portfolio ESG screening for each new investment. Goal Trend 2021 2020 2019 ESG and investment policy ESG screening of new acquisitions 100% Since sept. ESG training of investment team 91% Corporate governance and risk management AvH ESG policy AvH Corporate governance charter AvH Audit committee AvH Remuneration committee Business ethics AvH Integrity code Solvency and long-term return Value creation Market capitalisation 11.4% (1) 12.6% (2) 8.6% (2) 11.8% (2) Growth shareholders’ equity 9.4% (3) 9.4% (3) 9.8% (3) Net cash Positive 78 million euros 68 million euros 267 million euros (1) Growth of BEL20 index plus dividends paid (CAGR 2011-2021). (3) Growth of AvH share plus dividends paid (CAGR 2011-2021, 2010-2020, 2009-2019). (4) Growth of shareholders’ equity plus dividends paid (CAGR 2011-2021, 2010-2020, 2009-2019). 47Annual report 2021 Responsible ownership: Interaction with participations and impact on their ESG policy ESG strategy is being integrated in policy by increasing number of participations. First CO 2 reporting of AvH shows controllable level of CO 2 emissions. EU Taxonomy shows potential of AvH group. Goal Trend 2021 2020 2019 Responsible ownership ESG policy (1) > 80% 91% 86% 85% ESG interaction with participations (1) 92% Innovation Innovation policy (1) > 80% 77% 72% 72% Corporate governance and risk management Corporate governance charter (1) > 80% 96% 85% 78% Audit and/or risk committee (with attendance of AvH) (1) > 80% 95% 94% 90% Remuneration committee (1) > 80% 94% 88% Business ethics Integrity code (1) > 80% 92% 85% 79% CO 2 emissions of AvH group AvH head office scope 1 & 2 0.2 ktons CO 2 eq 0.2 ktons CO 2 eq 0.4 ktons CO 2 eq AvH consolidated financial statements - scope 1 & 2 (1) 856 ktons CO 2 eq 685 ktons CO 2 eq AvH participations - scope 1 & 2 (2) See section 4.2 See section 4.2 (1) Expressed as a % of the consolidated shareholders’ equity of AvH. (2) 2021 based on the entities with the largest CO 2 footprint, as known on the date of publication and on the basis of the consolidation perimeter. (3) 2021 based on the entities with the largest CO 2 footprint, as known on the date of publication and on the basis of the shareholding percentage. The CO 2 footprint of the participations of the Growth Capital segment will be completed in the next few years. (4) The proposed EU Taxonomy template is excluding financial institutions. (5) The opex as defined in scope of the EU Taxonomy includes a restrictive list of non-capitalised costs. As the participations prepare their financial statements on the basis of IFRS, these are largely already included in the capex. EU Taxonomy (4) Turnover: % eligible turnover EU Taxonomy 46% % aligned turnover EU Taxonomy 15% Capex: % eligible capex EU Taxonomy 39% % aligned capex EU Taxonomy 25% Opex (5) : % eligible opex EU Taxonomy - % aligned opex EU Taxonomy - 48 Your partner for sustainable growth Talent central in AvH organisation (1) Talent management strongly developed in 2021. Goal Trend 2021 2020 2019 Talent management - AvH staff members (in headcount) Total number of staff members 37 36 34 Diversity men/women 20 / 17 19 / 17 17 / 17 Average number of training days per person 5 days 9.7 4.9 Costs for training (as % of general costs) 534,204 euros (2.8%) 392,474 euros (2.35%) 378,450 euros (2.1%) Talent management - AvH investment team Total number of staff members 23 21 19 Diversity men/women 17 / 6 15 / 6 13 / 6 Diversity by degree Economic 43% 43% 41% Legal 23% 24% 23% Scientific 23% 21% 23% Others 11% 12% 13% Average number of years of relevant experience per person > 10 years 19.5 years 19.8 years 19.6 years Employee turnover (excl. intra-group and retirement, over 3 years) < 10% 1% 1% 1% Performance review 90% 100% 100% (1) The figures relate to the parent company (AvH NV) or subholdings through which the investment policy is conducted. 49Annual report 2021 spent by AvH’s team on ESG in addition to the participations’ own efforts 1,153 h 3. ESG approach AvH believes that a well defined and strategically focused ESG policy contributes to the ‘licence to operate’ and to the growth of AvH and its participations. The ESG policy is designed to support and strengthen the strategy pursued by the participa- tions. For AvH, ESG is more than just a compliance or reporting exercise. It ensures a proper identification and management of risks, but also helps to create opportuni- ties for sustainable solutions. AvH therefore firmly believes in the link between ESG and innovation. The SDGs of the United Nations are used as framework. Many employees find it increasingly important to work for companies that are both innovative and contribute to a better planet. That is why a well-designed ESG policy is an extra asset to find and retain motivated talent. AvH first decides in which sectors it wants to be active (AvH as a responsible in- vestor) and then aims for its participations to become best-in-class in the sectors in which they operate (AvH as a responsible owner). For that reason, AvH helps its participations to formalise their individual ESG policies and to formulate underlying action plans. Defining priorities, ambitions and progress reporting on the basis of underlying goals and KPIs should lay the foundations for relevant action plans. In order to emphasise AvH’s ESG ambitions, the overall ESG policy is overseen directly by a member of the executive committee. As an investor, AvH uses three levers with its participations: (1) active interaction with the participations on ESG, (2) an ESG materiality matrix that takes into account the views of relevant stakeholders, and (3) a long-term perspective supported by family values. To illustrate the commitment of the executive committee to ESG, as of 2021 part of the bonus of all members of the executive committee is linked to the progress made in terms of ESG. 3.1 Active interaction with participations on ESG AvH interacts all the year round with the individual ESG teams of the participations. In order to give shape to the policy and arrive at a relevant reporting, AvH’s invest- ment team, the ESG working group and the ESG steering committee spent 1,153 working hours on ESG-related topics in 2021, in addition to the time spent by the ESG teams of the participations. An approach by internal staff was deliberately opted for to ensure that ESG thinking becomes fully embedded in the various processes. To strengthen AvH’s ESG team, the position of sustainability manager was created in 2021, to which Bart Vercauteren was appointed. He was recruited from outside AvH and has 17 years of experience in ESG policy. He works full-time on the struc- tural development of AvH’s commitment to ESG, supports the participations in this area, and assists the teams with the analysis of investments from an ESG perspec- tive. The sustainability manager is a member of AvH’s investment team and attends every investment committee meeting. Once a year, the specific ESG action plan of the 7 ESG material participations, which together represent more than 85% of the net assets, is discussed with the ESG team and the management of the companies. AvH also facilitates ESG working meet- ings between participations with focus on climate, talent, EU Taxonomy and other relevant ESG topics, with experiences being shared between participations. In 2021, external consultants were called in to screen the CO 2 footprint of the main participations, and to help those partici- pations with preparations for the EU Tax- onomy. For further details of the interaction with the participations, see the section ‘AvH as a responsible owner’. More information about the ESG policy and ESG methodology can be found on the website: www.avh.be/en/sustainability More information about the ESG risks can be found in the section Annual report of the board of directors, II.1. Risks and uncertainties. More information about the link between the bonus of the executive committee and the progress made on ESG can be found in the secti- on Annual report of the board of directors, IV.2.1. Remuneration report: Strategy - Long term - Sustainability. 50 Your partner for sustainable growth ESG materiality analysis Material topic Description Relevant SDG Responsible ownership Structured monitoring as a shareholder of sector-relevant ESG aspects in participations (e.g. defining and monitoring an ESG strategy and related processes). If AvH wishes to become or remain active in a certain sector, AvH uses a ‘best in class’ approach. Business ethics Respect for people and society, including compliance with laws and regulations (including anti-cor- ruption laws), internal guidelines (including respect for human rights) and group values (respect, integrity, partnership, teamwork, independence, entrepreneurship, sustainability, long-term vision). Corporate governance Organisation and processes of the managing bodies that define the strategy and monitor its imple- mentation. Solvency and long-term return Healthy balance sheet structures with business plans and strategies that make it possible to achieve a fair return in the long term and enable the investments required for that purpose. Talent management Taking care of the human capital needed for the proper functioning of the company concerned (such as recruitment, training, personal development, appraisal, well-being), where the talents of staff members can emerge and be used in the best possible way. Innovation Innovative approaches in all areas that lead to new product/market combinations or more efficient processes. Risk management Structured handling of risks (by audit and control, approval processes, procedures, manuals, committees, etc.). Reporting Financial and non-financial reporting, with emphasis on materiality. Responsible investment policy Investing with a view to a sustainable mix of activities. This means that investments are first examined in terms of whether the company is active in a sector that AvH wishes to invest in, whether in sensitive sectors it scores well on relevant ESG aspects, and whether it is active in a sector that has a positive impact on ESG goals. It may also lead to divestments from companies. 3.2 ESG materiality analysis and interaction with stakeholders In 2019, AvH performed an analysis to identify its material ESG topics. Nine materi- al topics were identified in the materiality matrix that constitute the cornerstones of AvH’s ESG policy and methodology. They all have a major potential (positive or neg- ative) impact on the long-term consolidated results or the balance sheet of AvH and are closely monitored for that reason. In 2019, the first 4 topics were rated as ‘of high importance’ related to impact. Each topic is also linked to the applicable SDG. AvH liaises with various stakeholders shown in the table on the next page in order to identify what is important and how this evolves. These stakeholders were also involved in the survey held at the end of 2021 to update the materiality matrix and to make changes to AvH’s ESG policy where nec- essary. AvH deliberately broadened the range of stakeholders in this recent survey in order to capture even better the views of the different stakeholders. The response rate of the survey was 77%, which gives an indication of the good relationship that was developed with the stakeholders. 51Annual report 2021 Interaction with stakeholders (stakeholder consultation) Stakeholders Dialogue Participations • Involved in AvH’s ESG stakeholder consultation • CEO sounding boards • HR sounding boards, innovation and ESG workshops • ESG questionnaire (annual) for all participations • ESG strategic sessions with participations • ESG sector initiatives for real estate and financial institutions AvH staff, investment team & executive committee • Involved in AvH’s ESG stakeholder consultation (investment team) • ESG training and awareness sessions • Monthly information sessions (AvH What’s Up) AvH board of directors • Involved in AvH’s ESG stakeholder consultation • ESG explained annually in the audit committee and discussed and approved by the board of directors Shareholders/investors • Selection involved in AvH’s ESG stakeholder consultation • Financial institutions (bankers and analysts) involved in AvH’s ESG stakeholder consultation • Feedback from broader shareholder groups • AvH presentations for investors The largest ESG-related potential impact on the AvH group is situated at the level of the participations. This means that an ESG topic in a participation can potentially also have a major (positive or negative) impact on the consolidated shareholders’ equity or net result of AvH, taking into account the shareholding percentage owned by AvH. For this reason, an annual survey is conducted at the participations and the invest- ment team of AvH, which is validated by the executive committee and the audit committee of AvH. ESG aspects of participations that can be material for the AvH group Participation Environment Social (including human rights) Corporate governance (including anti-corruption) Climate and energy Health, safety and well-being Business ethics Sustainable innovation n. m. n. m. Corporate governance n. m. n. m. Asset protection Business ethics Responsible investment policy Protection of data and privacy n. m. n. m. Safe harbour Business ethics Protection of data and privacy n.m.: (not material) no material ESG aspect at AvH level, measured by the impact on AvH’s consolidated shareholders’ equity and net result, and taking into account the shareholding percentage of AvH in the participation. The table below summarises the results of these analyses (taking into account the shareholding percentage). This shows that all the participations mentioned (DEME, CFE, Delen Private Bank and Bank Van Breda) have a potentially material impact as regards corporate governance, but that only DEME has a potential impact as regards environment or social aspects in the consolidated financial statements of the AvH group. Other participations (such as Anima, Nextensa or SIPEF) or other ESG topics than those mentioned below are included in these analyses, but based on the current insights they are not deemed to have a material impact on the AvH group. 52 Your partner for sustainable growth Materiality matrix at the level of AvH as an investment company (1) Environment Social Governance Business ethics Corporate governance Solvency and long term return Innovation Risk management Reporting Responsible ownership Responsible investment policy Human capital development Impact on stakeholders High Medium High Impact on business Anti-bribery & anti-corruption ESG proof partnerships Subsidiarity Diversity and equal opportunity Economic growth and employment Responsible products and services Stakeholder relationship and governance (1) Version approved by the board of directors on November 20, 2019. New version updated in first quarter 2022 will be the basis for ESG policy in 2022. 53Annual report 2021 3.3 Long-term perspective supported by family values 145 years after the first partnership between two entrepreneurs in 1876, AvH has grown into a diversified international listed group, which is still supported by the values of AvH’s family shareholders. AvH invests long-term in a limited number of participations with a focus on sus- tainable growth, starting from a healthy financial structure, and in cooperation with partners who share the same vision. This centres on a model of entrepreneurship and partnership, where stimulating the participations to grow further in a sustain- able manner is the first priority. Through its Growth Capital activities, AvH seeks out innovative sectors and family businesses with an international and sustainable growth potential. 3.4 Monitoring progress in ESG policy Internal organisation Since 2019, the ESG policy has been coordinated by a member of the executive committee (André-Xavier Cooreman). Twice a year, an ESG steering committee, composed of the CEO, CFO, Secretary-General and the member of the executive committee responsible for the ESG policy, evaluates the ESG policy, the progress made, and the ambitions and priorities at the suggestion of an ESG working group. The executive committee approves those evaluations and reports on them once a year to the audit committee and the board of directors of AvH. The ESG working group meets on average every two months and is in charge of the operational rollout of the ESG policy, both at the level of AvH as a ‘responsible owner’ and at the level of the participations. The ESG working group is coordinated by the sustainability manager and is composed of the member of the executive com- mittee responsible for AvH’s ESG policy, representatives of the investment team, the chief human capital officer (CHCO), legal, investor relations and finance. ESG rating agencies AvH uses the questionnaires of ESG rat- ing agencies as a source of inspiration to improve its ESG policy. AvH was able to further improve its good ESG rating at Sus- tainalytics - from 15.9 to 12.5 - in the ‘low risk’ category by better formalising and communicating what has already been done. Sustainalytics’ ESG risk ratings are categorised across five risk levels: ‘negli- gible’ (0-10), ‘low’ (10-20), ‘medium’ (20- 30), ‘high’ (30-40) and ‘severe’ (40+). The lower the score, the better. This makes the efforts by AvH in the area of ESG even more appreciated. AvH’s risk rating relative to its peers in the ‘Multi-Sector Hold- ings’ category is also very good, with AvH belonging to the upper quartile of its peer group on the day of its rating (end of August 2021), according to Sustainalytics. AvH also interacts with other rating agencies such as CDP, although it has not yet fully completed their questionnaires. It remains the intention to further develop the collaboration with several rating agencies over the next years. 3.5 International ESG standards and reference models used Sustainable Development Goals (SDGs) AvH uses the international ESG standard ‘Sustainable Development Goals’ (SDGs) of the United Nations to structure its sustainability reporting. Based on the material- ity analysis that was performed, AvH focuses, as a sustainable investment company, on four SDGs around which the KPIs mentioned in the annual report are structured and which the executive committee uses as guiding principles for its policy. ESG standard Sustainable Development Goals (SDGs) at the level of AvH as a sustainable investment company SDG Description ‘SDG 3 Good Health and Well-being’: well-trained and motivated employees ‘SDG 8 Decent Work and Economic Growth’: financially sustainable business models and strategies ‘SDG 9 Industry, Innovation and Infrastructure’: a sustainable policy supported by permanent innovation ‘SDG 16 Peace, Justice and Strong Institutions’: formalisation of business ethics (including the policy to prevent corruption), corporate governance and interaction as a responsible owner AvH has obtained a ‘low risk’ rating from Sustainalytics 12.5 54 Your partner for sustainable growth Sustainable Development Goals (SDGs) at the 7 ESG material participations (as a % of the consolidated shareholders’ equity of AvH) The participations are also asked to link their own materiality analysis to the SDGs. As a result, a wide spectrum of SDGs is being worked on. The 7 ESG material participations (DEME, CFE, Delen Private Bank, Bank Van Breda, SIPEF, Nextensa, Anima) focus on the 17 SDGs, but in particular SDGs 8 (Decent Work and Economic Principles for Responsible Investment (UN PRI) Since 2019, AvH has drawn inspiration from the Principles for Responsible Invest- ment (UN PRI), the framework of the United Nations that seeks to integrate the implications of sustainability for investors in investment decisions, as well as with regard to the interactions with companies in the portfolio. AvH formally subscribed to the principles of UN PRI in 2020. The principles of UN PRI that are implemented within AvH are the following: • Incorporating ESG aspects into investment analyses and decisions • Including ESG aspects in shareholder decisions as an active shareholder • Supervising that there is a correct ESG reporting by the participations • Promoting the application of ESG principles within its own sector • Collaborating with others to give concrete form to the ESG principles • Reporting annually on the activities and the progress made The first reports were submitted to UN PRI in 2021. Due to operational problems at UN PRI, however, UN PRI postponed the delivery of evaluation and transparency reports to June 2022, and will not be able to process a similar report for 2021. This does not prevent AvH from continuing to work with the principles formulated by UN PRI. Growth), 12 (Responsible Consumption and Production), 13 (Climate Action), and 16 (Peace, Justice and Strong Institutions). As a result, the ESG policy of the individ- ual participations makes a positive contribution to the realisation of the Sustainable Development Goals. 26-50% 0-25% 51-75% 76-100% 55Annual report 2021 4. ESG activities in 2021 4.1 AvH as a sustainable investment company Responsible investment • Responsible investment policy AvH sees to it that the composition of its portfolio and the developments in the participations evolve in line with long-term themes. This means that investments are first examined in terms of whether the company is active in a sector that AvH wishes to invest in, whether the company is active in sensitive sectors and scores well on relevant ESG aspects, and whether it is active in a sector that has a positive impact on ESG themes. This analysis may also lead to divestments from companies. ESG is integrated in all stages of the investment cycle based on the UN PRI frame- work. AvH’s responsible investment policy is summarised in the table below. Approach to responsible investment and stewardship Investment cycle Guidelines Pre-acquisition phase opportunities • ESG screening of each investment opportunity Acquisition phase of new investments • ESG screening by AvH, supplemented where appropriate with advice from a third party for ESG-related topics • Inclusion of the conclusions of the screening in the consultation with the management for integration in the business operations (e.g. through a materiality matrix or the ESG policy). ESG stewardship • ESG, innovation and HR policies are, in principle, discussed once a year by the board of directors or in a relevant committee • The executive committee of AvH is responsible for ESG within AvH, including for the interac- tion with each participation • Annual ESG strategic session with each partic- ipation that may potentially have a material impact on AvH • Each participation reports in accordance with AvH’s methodology for monitoring ESG risks and opportunities on the basis of ESG materiality • Annual training in ESG and exchange of best practices at C level and between participa- tions Exit from existing participations • Description of ESG policy and action plan, adapted to sectoral needs • ESG screening (due diligence) The performance of an ESG screening enables AvH to manage risks better and to respond to opportunities. AvH performs an ESG screening on all potential acquisi- tions. ESG is an integral part of the investment memos. On the basis of an initial internal screening that takes into account the sector, the business model and the geographical distribution, a more detailed assessment is made of identified risks and opportunities. In 2021 the investment team was trained on international reference models such as SASB (Sustainability Accounting Standards Board) to be used as canvas for the ESG screening. If investments are made through funds, the exclusion policy and the screening and monitoring procedures used by the fund manager are examined before entry in the fund. • Responsible ownership Arrangements are made with the manage- ment for each new investment, taking into account the results of the ESG screening. The progress made in terms of implemen- tation is periodically monitored by the board of directors and/or the audit committee of the participations concerned. The participations are actively involved in AvH’s ESG approach. This ESG approach centres on a ‘best in class’ approach for each participation in its sector. For more information, we refer to the sections ‘ESG approach’ and ‘AvH as a responsible owner’. Talent is central to AvH • Talent development Taking and increasing opportunities from a sense of entrepreneurship is a typical feature of AvH’s HR policy. For that reason, focus is on giving, requesting and getting feedback, as well as on mentoring and training. The performance reviews have one purpose: how can each staff member grow, as a person and as a professional, in line with AvH’s strategic ambitions? In the charter ‘Who we want to be’, AvH defines that it wants to put technical skills and smart capital at the disposal of the participations, and that it also wants to help them with the development of their management teams and HR policy. To this end, a training program was start- ed in 2021 in ‘empathic communication’ and ‘unconscious bias’. The themes in which co-workers have grown through coaching or training in 2021 are varied. Besides empathic com- munication and unconscious bias, various other themes were discussed as well, such as smarter working by using more efficient software applications, negotiating, giving feedback, personal coaching, role as direc- tor, learning to ‘pitch’, language training, team development, biotech insights and valuation of companies. AvH complies with the applicable sectoral CLAs and even goes much further in cer- tain respects. AvH has set itself the target of giving its staff 5 days’ training per year. This target was amply exceeded in 2021 with 9.7 training days per staff member. ESG screening of new acquisitions 100 % of staff members had a back & forward performance review 100 % training days per AvH staff member 9.7 56 Your partner for sustainable growth “ Creating an inclusive and diversied work environment is a lever for sustainable talent management. People who feel noticed, supported, challenged and appreciated fully develop their talents and create value for the organi- sation and for society. ” • Diversity, equity and inclusion Increasing opportunities is key in AvH’s policy on diversity, equity and inclusion (DEI). AvH aims to increase the diversity of perspectives, both at the level of the investment company and at the participations. AvH strives for diversity in the investment team on the basis of educational, cultural and professional background. For the further expansion of its activities in Asia, a local investment manager was hired who is based in Singapore. This makes it possible to gain a better understanding of the local culture and to be more closely connected with the participations in that part of the world. AvH is taking measures to improve the diversity of the inﬂow of new employees, in a sector which is still perceived as very male-dominated. Those measures include gender-neutral job vacancies and the requirement that the inﬂow of applicants for a vacancy is evenly divided between men and women. In the composition of teams, both the technical skills and the personal skills are taken into consideration to ensure that a team is diverse and complementary in its composition. Diversity in the investment team • Work environment During the COVID-19 pandemic, AvH - like other organisations - found a new bal- ance in its way of working together. Systematic hybrid working, with sufficient moments for physical meetings, has a positive effect on stress levels and on the working experience, and offers sufficient opportunity for spontaneous exchanges and creativity. All of this was supported by a ‘Digital for You’ (D4Y) programme, with the whole organisation being involved in the development and rollout. Although this project initially involves extra work, once rolled out employees are able to work far more efficiently as information becomes easier to find, supporting templates are made available, and email and meeting hygiene improved. The acquisition of HR soft- ware that makes it easier for each employee to keep track of talent development is another example. Finally, AvH also pays special attention to people’s well-being by promoting a healthy diet and sport. The mobility policy focuses on ‘standard’ electric driving, a bicycle policy, as well as time and place-independent work. Overall absenteeism is just 0.46%. Employee turnover is very low too. In 2021, one staff member left AvH to be promoted to the executive committee of a participation. Contribution to society Employees and AvH are strongly commit- ted to helping others both financially and with time and personal involvement. Mit- igating deprivation in society was chosen as the central theme. The Solidarity Fund that AvH set up in part- nership with the King Baudouin Founda- tion for that purpose raised 782,254 euros in 2020 and 2021, with personal contri- butions being increased threefold by AvH. AvH used one KPI to measure the impact: how many people have we helped through the AvH Solidarity Fund and given them more opportunities than they had before? More than 27,000 people were reached in this way thanks to the commit- ment of 43 organisations that were supported by AvH and are dedicated every day to the cause of reducing deprivation. AvH also strives to contribute to a dignified society through its patronage policy. In Antwerp, art and entrepreneurship have gone hand in hand since the time of Rubens, Stevin and Plantin. Galleries, museums, artists and scientists have great added value for society. In 2021, AvH provided 251,000 euros (excluding the effort in that area through the participations) to support projects in the field of culture, scientific research, the fight against poverty and human rights. The main projects are shown in the overview on the next page. people were given opportunities thanks to the AvH Solidarity Fund 27,270 Hilde Haems, Chief Human Capital Officer Breakdown men/womenBreakdown by degree Economic Legal Scientific Others Men Women 43% 23% 23% 11% 6 17 57Annual report 2021 4.2 AvH as a responsible owner Partnerships and active involvement As an active shareholder, AvH takes part in the formulation and implementation of strategic policies through its representa- tion on the board of directors of the partic- ipations, with attention to social themes, the relevant organisation and processes, and compliance with the legal require- ments. Policy proposals are presented to the board of directors and, once approved, are implemented by the management of the participations. In this way, maximum account is taken of the specific character- istics of the sector in which the company operates. With its multidisciplinary team, AvH also provides support in specific areas, such as in the different ESG-related themes (e.g. environment, HR, innovation). • Main objectives In the development of partnerships and active engagement, AvH pursues the fol- lowing main objectives as regards ESG: • ESG approach: annual discussion by the board of directors of the policy pursued, the ambitions, underlying action plans, goals and KPIs to monitor progress • HR policy: remuneration committees with AvH representation, which discuss the HR policy pursued and the composition and operation of the management (in- cluding attention to succession and high potentials) • Depending on the size of the participation, the underpinning of the ESG policy based on materiality and taking relevant stakeholders into consideration of the consolidated shareholders’ equity has a corporate governance charter of the consolidated shareholders’ equity has an integrity policy of the consolidated shareholders’ equity has an ESG policy • Integrity policy and compliance procedures (including anti-corruption policy and human rights policy) • Corporate governance charter adapted to sector-specific standards • Risk management systems adapted to sector-specific conditions with appropri- ate processes (which are monitored by audit and/or risk committees with rep- resentation of AvH) Progress has been made on each of these main objectives by the development of policies at the participations and in terms of the qualitative implementation of the policies by the participations. The efforts in this respect are focused on an alignment of the policy pursued with the strategic objectives of the companies concerned. The detailed results are shown in the tables in the section ‘ESG key figures, goals and SDG focus’. Cultural Social Scientific tajo.be www.insead.eduwww.itinera.bewww.deduveinstitute.be www.santegidio.be www.mercyships.be www.uza.be www.bivro.org www.ﬂagey.be www.middelheimmuseum.be www.leconcertolympique.eu www.europalia.eu 91 % 96 % 92 % 58 Your partner for sustainable growth As regards the formulation of a future-proof HR policy, the following activities took place: • CEO sounding boards where the CEOs exchange experiences with the handling of the pandemic and resulting changes in organisation, purpose and the HR challenges of tomorrow • monthly HR sounding boards with the HR managers of the participations and 4 workshops around HR concerns: ‘culture of purpose’, ‘contingent worker’, ‘role of HR during M&A’ and ‘adaptive quotient’ to exchange experiences regarding the role of HR as a business partner, the corporate culture and the well-being of employees in times of change • ‘Best in class’ approach and priorities at portfolio level It is of prime importance to AvH to be ‘best in class’ in the sectors in which AvH is active. Each participation conducts its own ESG policy, with AvH acting as partner and providing (pro-)active input. Given the diversity of companies in the investment portfolio, it is not relevant to develop action plans based on aggregate figures; rather, the context and needs of each company have to be understood. Concerning the ‘environment’ theme, an aggregate reporting and objective at port- folio level is being devised for CO 2 . Concerning the ‘social’ theme, AvH interacts with the participations on the matter of dealing respectfully with employees (in- cluding the respect for human rights), challenges in the area of talent, purpose and diversity, equity and inclusion. Concerning the ‘governance’ theme, emphasis is on long-term thinking, reporting, solvency, and the integrity and anti-corruption policy. • Support given to participations AvH’s greatest added value lies in long-term thinking, with attention to the stra- tegic impact. The support that AvH gave to the participations in 2021 is shown in the table below. ESG support to participations Support Environment Social Governance Inspiration sessions on social trends AvH event Knowledge sharing between participations • ESG working group for the 7 ESG material participations • Sector-specific ESG workshops • CEO sounding boards • HR sound- ing boards and specific innovation and ESG workshops - Support of management teams • Transition to low-carbon ac- tivities and lower consumption of materials • Organisational structure and development of management teams and inclusive organisations • Sounding board for the compilation of documentation on corporate governance (e.g. charters) AvH organised ESG workshops with participations engaged in similar activities, with focus on transition to a low-carbon economy and on the challenges facing the management teams in the area of talent, purpose, diversity, equity and inclusion, and HR organisation. Regarding the transition to a low-carbon economy, the activities included: • the analysis of reporting requirements and associated strategic implications of the EU Taxonomy regulation and fine-tuning of the methodology to determine the CO 2 footprint of the main participations • regarding the real estate and construction sector: fine-tuning of CO 2 measure- ments and elaborating a relevant strategy (e.g. supply chain, energy efficiency and circular construction) • regarding the financial sector: exchange of experiences with the implementation of the EU Sustainable Finance Action Plan, the SFDR and the EU Taxonomy 59Annual report 2021 Scope 1 & 2 CO 2 emissions - AvH as a responsible owner - tonnes CO 2 equivalents 2021 2020 CO 2 absolute emissions Shareholding percentage CO 2 emissions weighted at the shareholding percent- age (‘share AvH’) CO 2 absolute emissions Shareholding percentage CO 2 emissions weighted at the shareholding percent- age (‘share AvH’) IFRS - AvH and fully consolidated participations (head office) 229 100% 229 222 100% 222 832,800 62% 517,169 660,000 62% 409,860 16,489 62% 10,240 17,684 62% 10,982 1,388 79% 1,093 1,681 79% 1,324 (1) 123 59% 72 138 59% (2) 81 3,513 93% 3,250 3,909 93% 3,616 Other 1,389 1,125 1,149 991 Total scope 1 & 2 emissions - accounting consolidation perimeter 855,932 533,177 684,783 427,075 Selection of equity accounted participations (3) 79% 1,348 79% 1,099 22% 421,493 (4) 22% 459,889 (4) 14% 1,784 22% 7,605 (1) Bank Van Breda’s CO 2 measurement is a two-yearly measurement. The figure for 2020 is based on the CO 2 emissions of 2019. (2) In 2020, AvH held 100% of Extensa and 30% of Leasinvest Real Estate. For reasons of comparability, the shareholder percentage of 2021 was also used for 2020. (3) SIPEF’s carbon footprint for 2020 and 2021 is being calculated and is not yet available at the time of publication. (4) Sagar’s carbon footprint for 2021 is based on SAGAR’s accounting year 2020/2021. The carbon footprint for 2020 is based on Sagar’s accounting year 2019/2020. (5) Mediahuis’ carbon footprint for 2021 was not yet available at the time of publication. Focus on sustainable growth Society acknowledges the need to transition to a low-carbon economy, with the EU having the ambition to become climate neutral by 2050. The carbon reduction targets for 2030 have been tightened to at least 55%. As a long-term investor, AvH takes account of the impact of risks and opportunities on a longer time horizon and of social themes. Sustainable growth and the transition to a low-carbon econ- omy are challenges that are inherent in AvH’s long-term strategy. There are many examples in the AvH group which show that AvH can offer part of the solutions, although there are still many challenges. This section discusses four building blocks: (1) CO 2 emissions of the investment portfolio, (2) EU Taxonomy, (3) innovation and (4) solvency and long-term return. • CO 2 emissions of AvH including investment portfolio Climate change and transition to a low-carbon economy have an impact on how sustainable growth should be implemented. An increase of turnover often comes with an increase of CO 2 emissions, even if they contribute to the solution of the problem. The current supply chain disruptions, for example, are also causing a tem- porary increase of CO 2 emissions. For that reason, focus in 2021 was on screening the CO 2 footprint of the core segments, as well as on Growth Capital participations that are potentially active in CO 2 -intensive industries. The method used to deter- mine the carbon footprint was also screened, which led to the conclusion that it makes little sense to aggregate the footprints of businesses that operate in widely differing sectors. For that reason the following figures are mentioned separately: on the one hand the total CO 2 emissions (in CO 2 equivalents scope 1 and 2) based on the consolidation perimeter, and on the other hand, from the perspective of an investment company, the CO 2 emissions of AvH’s head office (the investment team) and those of the main participations based on the shareholding percentage owned. This exercise should be seen in light of the transparency that AvH wishes to provide in this matter, and also to enable the investment teams to develop action plans with the management teams to reduce the footprint where possible. The CO 2 footprint of the AvH group amounted to 855,932 tonnes of CO 2 eq in 2021 and is related to a consolidated revenue of 4.3 billion euros. The increase relative to 2020 (684,783 tonnes of CO 2 eq at a consolidated revenue of 3.9 billion euros) is primarily attributable to the higher utilization rate of DEME’s vessels. The table below shows the CO 2 emissions by participation as known to AvH. This covers 85% of the portfolio (expressed as a percentage of the consolidated shareholders’ equity of AvH). The CO 2 footprint of AvH’s head office is very limited. At the participations this should be related to the emissions of the sectors in which they operate. So far there are few good points of comparison available. (5) 60 Your partner for sustainable growth For many non-fully consolidated participations (e.g. SIPEF, Mediahuis, etc.), the determination of the CO 2 footprint was still in progress at the time of publication of the annual report. These results will be published on the website of AvH as soon as they are available. The data for the smaller participations are often not yet available or not determined in a consistent manner. As far as is known, this would have no material impact at AvH level. Nevertheless, AvH encourages the participations to start up or to fine-tune those measurements so that they can be included in the future reporting. Scope 3 CO 2 emissions are not being reported yet. The necessary data are only partly available at the participations. As soon as the data and the underlying methodology and processes are properly understood, the participations can start to think about drawing up an action plan that, where possible, is in line with the Paris Agreement (inspired by the Science Based Targets - SBTi). In 2022, AvH will analyse whether it will set a target for GHG emissions at portfolio level. • Taxonomy The EU Taxonomy aims to achieve the transformation to a low-carbon economy through generally accepted definitions and reporting methods for ‘green’ activities. So far this has been done for two of the six climate and environmental goals, no- tably the mitigation of and the adaptation to climate change. It should be pointed out that the definitions are not always clear and that they will probably still evolve. This also involves major adaptations of the reporting methodology and the required associated reporting processes to those definitions. For 2021 AvH has to report whether the activities of a participation are ‘eligible’ as ‘green’, in other words, whether they fall under the EU Taxonomy. This indicates that for those activities the participations in question may potentially use opportu- nities that will be acknowledged as ‘green’. For 2022 it is expected that for those activities it will be determined whether they are ‘aligned’ with the EU Taxonomy by reviewing them against technical screening criteria (TSC) without doing significant harm (Do not significantly harm - DNSH) to the other goals defined within the EU Taxonomy. Since the law formulates TSC in very ambitious terms, it would seem that many activities that make a positive contribution to climate will not be ac- knowledged as ‘aligned’. Nevertheless, this will not stop AvH from supporting this type of activities if they contribute to a low-carbon society. AvH reports the EU Taxonomy based on its accounting consolidation perimeter. The participations adopted a conservative approach to determine whether or not an activity is eligible for the EU Taxonomy. From this it may be inferred that AvH is already substantially active in different sectors that are capable of contributing to the transformation to a low-carbon econ- omy, even if the EU Taxonomy has so far only been defined for two criteria. The main contributors are the renewable energy activity (DEME, Green Offshore and Biolectric Group), circular construction and contracting activities (CFE), and sustain- able real estate development (BPI and Nextensa). The following paragraphs offer a more detailed discussion of DEME, CFE and Nextensa, which make the biggest contributions in terms of the EU Taxonomy. Based on the current interpretation, DEME’s activities in offshore wind will be con- sidered as being both ‘eligible’ and largely ‘aligned’ with the EU Taxonomy. Based on the current definitions, 28% of the total turnover is ‘eligible’ and 24% is already ‘aligned’. Likewise, 32% of the total capex is already ‘eligible’ and can already be considered ‘aligned’. DEME is also active in other ‘green’ activities such as the construction of bridges and tunnels for rail infrastructure, and the construction or modernisation of port infrastructure. For those activities the EU Taxonomy leaves room for interpretation, while the further ‘alignment’ at project level has yet to be analysed. The impact of the four climate and environmental goals that have to be published has to be analysed too. More than 95% of CFE’s turnover and capex is ‘eligible’ for the EU Taxonomy and primarily relates to the construction, electrical installation, utility and rail infrastruc- ture, and real estate development (BPI) activities. The ‘alignment’ analysis will be carried out in 2022. For Nextensa, more than 90% of its turnover and more than 85% of its capex are ‘eligible’ for the EU Taxonomy and primarily relate to real estate development and the letting of real estate from its own investment portfolio. The ‘alignment’ analysis will be carried out in 2022. The EU Taxonomy reporting for Delen Private Bank and Bank Van Breda is included in their respective sustainability reports and annual reports that are available on the website. EU Taxonomy ‘Eligible’ ‘Aligned’ ‘Non-eligible’ Turnover 46% 15% 54% Capital expenditure (capex) 39% 25% 61% Operating expenditure (opex) (1) - - - (1) The opex, as defined in the scope of the EU Taxonomy, comprises a restrictive list of non-capitalised costs. As the participations draw up their annual financial statements on the basis of IFRS, they are already to a large extent contained in the capex. • Innovation AvH wishes all participations to pursue an innovation policy that is assessed each year by their board of directors. AvH strongly believes in the interaction between ESG and innovation to mitigate risks or to capitalise on opportunities. This relates not only to ecological aspects, but also to the promotion of sustainable growth by seeking out innovative prod- uct/market combinations or improving operational processes (e.g. by digitisation and/or data analysis). AvH made extensive efforts in 2020 and 2021 to support the participations in the methodologies that may be implemented, as well as in the exchange of mutual experiences. More and more participations have formalised their innovation policy. The programme based on ‘10 Types of Innovation’ by Larry Keeley, with innova- tion workshops facilitated by an external consultant, clearly had an impact in this respect. 20 participations and more than 50 people, including the AvH investment team, took part in the programme. • Solvency and long-term return AvH has sufficient resources at its disposal to implement its strategy, and seeks to achieve a positive net cash position. AvH has 280 million euros in confirmed credit lines from several banks with which it has a long-term partnership. AvH also monitors the value creation, which can implicitly show that AvH’s perfor- mance goes hand in hand with the ESG policy that has been defined. The necessary resources are available to finance the objectives that have been set. AvH monitors the growth of the shareholders’ equity (including dividends paid) over a 10-year period, since this impact can be entirely attributed to its policy. AvH also compares the evolution of its share price with the BEL20 index over the same period. 77 % of the consolidated shareholders’ equity has an innovation policy 61Annual report 2021 4.3. Action plan 2022 AvH wishes to continue its ESG approach in 2022 as indicated in the action plan below. It remains AvH’s ambition in 2022 to carry on investing through its participa- tions or new initiatives in social themes such as climate change and energy transi- tion, energy-efficient and circular construction, sustainable investment, sustainable food, health and well-being, sustainable supply chain and logistics, and digitisation. ESG action plan 2022 AvH as a sustainable investment company ESG policy Materiality matrix Updating the materiality matrix on the basis of the survey conducted among different groups of stakeholders, and reviewing the business impact of the identified topics Environment CO 2 emissions of AvH Defining a CO 2 ambition at AvH level (see below for ambition at portfolio level) Social Talent development Fine-tuning the talent management policy where staff members attend at least 5 training days per year Diversity, equity and inclusion (DEI) Fine-tuning a ‘DEI’ policy and developing an underlying training programme Governance Responsible investment Formalising a sector exclusion and recommendation policy AvH as a responsible owner ESG stewardship Focused ESG plans in the participations Supporting participations, so that at least 90% of the consolidated shareholders’ equity has an action plan with priority ESG topics that are evaluated each year by their board of directors Environment CO 2 emissions of investment Defining a CO 2 ambition at the participations with high emissions, as well as at portfolio level EU Taxonomy Supporting participations with the interpretation and rollout of the EU Taxonomy Social Diversity, equity and inclusion (DEI) Raising DEI awareness at the participations Governance Business ethics Further formalising business ethics at the participations where necessary (policy, action plan, …) This shows that AvH, despite the COVID-19 context, is in good shape and that AvH’s corporate values and approach are also structurally reﬂected in the figures. AvH always has the necessary independence and scope to respond to opportunities or to support its participations where necessary and justified. 62 Your partner for sustainable growth 5.1 DEME DEME is active in the specialised fields of dredging, solutions for the offshore energy industry, infra marine and environmental works. Based on DEME’s material topics and the materiality analysis at AvH group level, all the material topics of DEME have been grouped together in 4 major topics that are considered material at AvH level: ‘Climate and energy’ (including energy transition, energy efficiency, air emissions incl. CO 2 , and climate adaptation), ‘Health, safety and well-being’, ‘Sustainable innovation’ and ‘Business ethics’. DEME may be regarded as a pioneer in its sector in the area of energy transition and sustainable innovation. Climate and energy DEME carries on with its ambitious strategy to accelerate the energy transition and to make society more resilient against the impact of climate change. This is reﬂected in most of the activities that DEME develops, but particularly in offshore wind, in which DEME is a market leader. In 2021, DEME was engaged on the offshore wind projects Triton Knoll, Hornsea Two, Saint-Nazaire and Dolwin6. Last year, DEME won several major contracts, including the first EPCI contract (Engineering, Pro- curement, Construction and Installation) for a ﬂoating offshore wind farm in France and the T&I (Transportation & Installation) scope for the turbines and foundations for Vineyard, the first large-scale offshore wind farm in the US. This was soon fol- lowed by a major BoP contract (Balance of Plant) for the construction of the 2.6 GW Coastal Virginia Offshore Wind project, the largest offshore wind installation contract ever awarded in the US. Based on the current interpretation of the rules, DEME’s activity in offshore wind will be considered as being both ‘eligible’ and largely ‘aligned’ with the EU Taxonomy. Based on the current definitions, 28% of the total turnover is ‘eligible’ and 24% of the total turnover is ‘aligned’. DEME is also active in other green activities such as the construction of bridges and tunnels for rail infrastructure and the construction or modernization of port infrastructure. For these activities, the EU Taxonomy leaves room for interpretation, therefore these activities currently are being regarded as ‘likely eligible’, accounting for 43% of total turnover. Besides the achievement in offshore wind, DEME continues to focus on green hy- drogen. In May 2021, DEME joined the Hyve consortium, which pursues the cost-ef- fective and sustainable production of hydrogen. In mid-July, HYPORT ® Duqm, an initiative of DEME Concessions and Omani Partners OQ, signed a partnership agree- ment with the German energy company Uniper to further investigate and lay down the conditions for buying green ammonia. For several decades now, DEME has been delivering solutions for the construc- tion of infrastructure that is better adapted to climate-related risks, such as ﬂoods. Along with groundbreaking projects such as Coastbusters, which centres on de- signs inspired by nature, the Bankbusters project has been launched as well. DEME Climate and energy Breakdown of turnover by activity in 2021 5. ESG highlights 2021 at participations The following pages indicate for each participation which topics can have a poten- tial material impact on the AvH group, which actions the participations have under- taken in 2021 on those aspects, how this is framed in their ESG policy, and which objectives they pursue. The progress made is indicated by KPIs where possible. The participations are working on far more themes and concrete programmes than mentioned here. Although they may be material to the participations concerned, they are not reported here because according to the currently available knowl- edge and information they are considered not to have a potential material financial impact on AvH (in terms of both opportunities and risks). AvH supports those in- itiatives through the boards of directors of participations without them having to be disclosed in this report. Readers who are interested can find more information about the ESG policy and performance of the companies in the activity report of this annual report, and in the individual reports or on the websites of the respective participations. The materiality matrix of each of the participations can be found on AvH’s website and on the websites of the respective companies. All topics identi- fied by means of a materiality matrix are considered important by the companies concerned, although they do not necessarily have a material impact, as indicated by the ranking from low to high on the various axes. Offshore Capital dredging Maintenance dredging Infra Environmental Other 2021 2020 2019 EU Taxonomy eligible turnover 28% likely eligible 43% potentially eligible (eligible and likely eligible) 28%-71% aligned turnover 24% MW installed wind turbines 2,378 1,477 1,057 MW offshore wind (beneficial ownership) 144 144 99 GHG in kton CO 2 -equivalents (1) 833 660 681 of which scope 1 832 659 676 of which scope 2 1 1 5 (1) Greenhouse gas emissions scope 1 & 2: DEME follows the Greenhouse Gas Protocol (ISO14064). More information about AvH’s ESG approach can be found on the web- site: www.avh.be/en/sustainability 36% 35% 10% 10% 6% 3% 63Annual report 2021 lenges of COVID-19. All the year round, several teams worked 24/7 to ensure that projects could carry on safely during the pandemic. Sustainable innovation, finance and business ethics Besides the development of innovation in green hydrogen, there were several re- markable innovation achievements in 2021. MPVAqua, a research programme in which DEME is a partner, won the Blue Innovation Swell Award. The partners in the joint venture are committed to the development of large-scale offshore solar farms. DEME also continues to invest in sustainable technology for the collection of minerals on the seabed through its subsidiary GSR. In April 2021, the deep-sea ro- bot ‘Patania II’ successfully demonstrated that it can ride on the seabed and collect polymetallic nodules at a depth of 4.5 kilometres. DEME is often active in countries that have a higher risk profile in terms of business ethics. The objective is always to conduct business with integrity and to proactively prevent corruption or bribery. The company is also actively committed to respecting and protecting labour and human rights, which is emphasised by its strict ‘Code of ethics and business integrity’ and its ‘Code of ethics for business partners’. CFE and DEME achieved a joint Sustainalytics rating of 27.8 (‘medium risk’) in June 2021, which puts them among the best performing companies in their sector. In 2021, the process was initiated to convert existing long-term loans into sustain- able financing (‘sustainability linked loans’). This conversion was finalised at the beginning of 2022. DEME has committed itself to further improving safety in the workplace, as well as to focusing on low-carbon fuels. Health, safety and well-being 2021 2020 2019 Frequency rate of accidents (1) 0.19 0.19 0.24 Severity rate of accidents (2) 0.07 0.04 0.01 Sustainable innovation and business ethics 2021 2020 2019 Number of approved innovation initiatives 14 18 11 Number of approved green initiatives 125 128 105 Permanent evaluation of compliance processes % employees compliance awareness training 99% 97% 88% (1) Number of accidents with incapacity for work (worldwide) x 200,000, divided by the number of working hours. (2) Number of calendar days of absence (worldwide) x 1,000, divided by the number of working hours. Together with its partners, DEME will study and design an engineered tidal marsh. DEME continues to build its future-proofed ﬂeet. ‘Spartacus’, the world’s most pow- erful megacutter, has been brought into service. This vessel can run on LNG and has several energy-saving features. ‘Groenewind’, a vessel specially designed for the maintenance of offshore wind farms and capable of saving up to 50% fuel, has also joined the ﬂeet. DEME is also investigating the potential of alternative fuels (e-fuels) for its ﬂeet. DEME’s total scope 1 and 2 CO 2 emissions amounted in 2021 to 833 kton CO 2 eq. compared to 660 kton CO 2 eq. in 2020. The increase in emissions is primarily attributable to a higher utilisation rate of the vessels in 2021. The utilisation rate of both the hopper and cutter vessels was approximately 15% higher than in the previous year. This is essentially the result of its activities in large-scale projects such as Abu Qir I and II in Egypt. By 2050, DEME wants to achieve climate-neutral operations. By 2030, DEME wants to reduce greenhouse gas emissions by 40% relative to 2008 per unit of work. In 2021, DEME for the first time obtained the ISO 50001 certificate for the manage- ment and continuous improvement of its energy performance. It also allows DEME to integrate energy management and the related CO 2 emissions. Health, safety and well-being DEME is a major employer with 4,880 employees (FTE), and pays special attention to the social and physical well-being of the whole workforce, regardless of whether they are employees or not. Since DEME operates on every continent, the workplace is characterised by diversity as regards nationality, culture, experience and person- ality. There are more than 80 different nationalities working in the crews and staff. There is also a programme to promote an inclusive workplace. DEME sometimes has to work in very challenging circumstances. A safe and healthy workplace for everyone - whether on a vessel, project location or office - is there- fore a constant point of attention. The safety standards are continuously monitored through KPIs that form part of the bonus system for the staff. In 2021, various company-wide initiatives took place, such as the Safety Stand-Down and Safety Moment Day, where 214 safety successes were shared. In April, DEME was one of the three finalists of the Port of Antwerp Sustainability Award 2021 in the context of ‘SDG 3 Good Health and Well-being’ thanks to its preventive health programme ‘Resilience and well-being at DEME’ to make employees resilient against the chal- More information about sustainability is available in the activity and sustainability report of DEME and on the website Sustainability | DEME Group (www.deme-group.com/sustainability) 64 Your partner for sustainable growth 5.2 CFE (excluding DEME) CFE is active in construction, multitechnics and rail/utilities, and also encompasses real estate development (BPI). Based on CFE’s material topics and the materiality analysis at AvH group level, ‘Corporate governance’ was regarded as material at AvH level. A coherent and efficient interaction of all processes and parties involved can have a decisive impact on the activities as a whole and their impact on people and the environment. Various other topics are also considered to be material at the level of CFE Contracting and BPI: ‘Health and safety’, ‘Circularity’, ‘Optimisation of logistics’, ‘Waste reduction’, ‘Energy efficiency’, ‘Mobility’, ‘Decent working condi- tions for all’, ‘Talent management’ and ‘Innovation’. On the basis of those topics, CFE formulated 5 key principles that have priority on account of their social impact and their economic relevance, and have already led to concrete actions. Those key principles are: (1) CFE conceives tomorrow’s habitat, (2) CFE continuously searches for innovative solutions, (3) CFE’s strength is the direct result of the talent of its teams, (4) CFE is committed to the reduction of CO 2 emissions, and (5) CFE engages with a constantly changing world. Concrete goals were defined during 2021. CFE Contracting is committed to reducing its direct CO 2 emissions (scope 1 and 2) by 2030 by 40% compared to 2020. The greening of the vehicle ﬂeet, the optimisation of the logistics on building sites, the monitoring and optimisation of energy consumption, the use of 100% green energy and a rational management of water and materials are all means to achieve those goals. Similarly, BPI incorporates multimodal mobility in its projects so that they can be sustainably integrated in the heart of the city. A selection of relevant material topics for CFE is explained in more detail in the following paragraphs. Sustainable and innovative construction CFE Contracting and BPI aim to provide sustainable solutions to the current eco- logical, social and economic challenges and consciously address the impact of their activities on the environment. CFE Contracting wants to introduce circularity in the construction industry through the use of recycled materials or the reuse of materials. Circularity is at the heart of the ZIN project, which endeavours to preserve, reuse or recycle 95% of the weight of the existing buildings, and certify cradle-to-cradle 95% of the new materials. The choice of more sustainable materials is also an important parameter to reduce the CO 2 impact. In that respect, the ZIN project is a pioneering project in Belgium, in which CFE Contracting is pushing the envelope. Transport will be a major challenge for CFE Contracting and BPI. For that reason, an innovative mobility strategy is being developed for the workers and materials, with an optimisation of transportation through the use of logistical consolidation centres. Through its MOBIX division, CFE Contracting is actively involved in the expansion of the rail network in Belgium, in particular in the modernisation of the safety systems. An advanced waste and water management policy is being rolled out as well. The lean construction processes applied at the various construction sites also help to reduce the impact on the environment. For BPI, the CO 2 ambition is central to its construction projects, in particular by fo- cusing on refurbishment, systematically opting for green or renewable energy where feasible (with a preference for geothermal energy), reuse of materials and the inte- gration of multimodal mobility. In 2020, CFE Contracting and BPI pooled their know-how in the joint venture Wood Shapers in order to offer integrated, sustainable and effective solutions for devel- opment and construction, using wood and prefab materials. Wood Shapers joined forces with sister company BPC for the Monteco project, the tallest wooden building in the Brussels Region. CFE Corporate governance Overview of corporate governance charters/codes CFE CFE Contracting BPI Corporate governance charter Risk procedures n.a. (1) (2) Anti-corruption code n.a. (1) (1) Transferred to CFE Contracting and BPI (2) Internal guidelines in the field of financial transactions 2021 2020 2019 GHG in kton CO 2 -equivalents (1) 16.5 17.7 17.8 of which scope 1 14.6 15.8 14.8 of which scope 2 1.9 1.9 3.1 Frequency rate of accidents (2) 22.37 26.12 13.72 Severity rate of accidents (3) 0.69 0.61 0.44 Number of training hours per FTE 13 14 18 (1) Greenhouse gas emissions: CFE follows the Greenhouse Gas Protocol. (2) Number of accidents with incapacity x 1 million, divided by the number of working hours. (3) Number of calendar days of absence x 1,000, divided by the number of working hours. CFE - Wooden building Monteco - Brussels 65Annual report 2021 At the end of 2021, CFE Contracting launched its VMANAGER, which focuses on energy saving, the management of the energy ﬂows and, in general, the manage- ment of the construction techniques. This innovative instrument permits a smart and sustainable management of new or refurbished buildings by combining the technical knowledge of VMA with intensive monitoring and with tools to oversee and control their actual energy performance. Health, safety and well-being CFE wants to create the best possible working conditions and ease the pressure on physically demanding occupations. The cornerstone of that commitment is safety in the workplace. Each activity of the group strives for ‘zero accidents’ and develops practical awareness-raising and information strategies on that subject. The seri- ousness and frequency of occupational accidents receive special attention at each meeting of the board of directors. CFE outperforms the sector in Belgium in this area. CFE also seeks to constantly improve the working conditions and environment with a view to creating a workplace where every person can grow and feel good. Corporate governance The corporate governance charter and all the main policies and procedures were updated in 2021. The different parties involved in projects, such as employees and subcontractors, must get the same attention. The corporate governance charter and the procedures set out minimum requirements in terms of ethics, non-discrimination and respect for human rights. The idea is also to ensure that every person involved in the projects is treated with respect. CFE and DEME achieved a joint Sustainalytics rating of 27.8 (‘medium risk’) in June 2021, which puts them among the best performing companies in their sector. DEME - SeaMade More information about sustainability is available in the annual report of CFE and on the website Sustainability Strategy | CFE (www.cfe.be/en/sustainability-strategy) 66 Your partner for sustainable growth 5.3 Delen Private Bank Delen Private Bank specialises in discretionary asset management for private in- dividuals. Based on the material topics of Delen Private Bank and the materiality analysis at AvH group level, ‘Asset protection’, ‘Responsible investment policy’, ‘Business ethics’ and ‘Protection of data and privacy’ were regarded as material at AvH level. Additionally, Delen Private Bank considered several other topics as material: ‘Client satisfaction’, ‘Employee satisfaction’, ‘Innovative mindset’, ‘Talent management’ and ‘Financial resilience’. Asset protection Asset protection is a priority for its clients. Delen Private Bank strives to invest its client assets in a dynamic and prudent manner. In addition to the existing thorough financial analysis, non-financial parameters are also integrated into the manage- ment process. The day-to-day implementation of the responsible investment policy, which has been broadened and deepened over the past five years, ensures long- term thinking and risk mitigation. Responsible investment policy As a member of UN PRI, Delen Private Bank is consistently committed to making its investment process fundamentally sustainable by integrating several ESG-related criteria. The annual evaluation by UN PRI is an important KPI, whereby the A+ as- sessment for strategy and policy encourages Delen Private Bank to continue on the chosen path. Due to operational problems at UN PRI, UN PRI postponed the deliv- ery of evaluation and transparency reports for 2021 to the second quarter of 2022. Delen Private Bank also monitors and communicates openly on the CO 2 intensity of its patrimonial funds. It aims to ensure that these funds have a lower CO 2 intensity than the global benchmark (e.g. MSCI ACWI). Besides the integration of non-fi- nancial parameters, Delen Private Bank is strongly committed to engaging with the businesses in which it invests. For this purpose, a partnership was entered into with EOS of Federated Hermes, a leading service provider, to interact with businesses on a global scale on ESG matters. Business ethics and protection of data and privacy Business ethics is particularly relevant for a bank. After all, financial institutions play a key role in the economic fabric of a country and in the wealth accumulation and protection of individuals. Based on its core values, Delen Private Bank has drawn up an integrity policy that all employees are expected to respect, in both the spirit and the letter. Given the background of increasing cybercrime worldwide, the protection of data and privacy receives a considerable amount of attention within the bank. Delen Private Bank invests heavily in its own IT systems and support services in order to be able to comply with legal obligations and to guarantee the protection of data and privacy. Assets under management 2021 2020 2019 Funds managed according to sustainable investment principles (billion euros) 35.4 29.5 26.7 Engagement scope (1) 70% 71% 70% Average ESG rating of own funds (2) 19.4 19.7 22.2 (1) Ratio of the number of companies with an engagement procedure to the total number of com- panies in the portfolio. The engagement programme sets the bank’s priorities according to the urgency of certain themes, the openness of the company in question, and the possible impact of a particular engagement action. (2) Sustainalytics: ESG risk scores between 0 and 100, where a lower score is better and less risk. A score of 20 is regarded as a low risk. (3) Bi-annual measurement (4) Belgium and UK Core ratios 2021 2020 2019 CET1 ratio 38.0% 40.5% 36.7% Client satisfaction 2021 2020 2019 Net Promoter Score (3) 58 n.a. 43 Environmental efforts 2021 2020 2019 GHG in kton of CO 2 equivalents (4) 1.7 1.4 1.7 of which scope 1 1.4 1.1 1.4 of which scope 2 0.3 0.3 0.3 Sustainable investment Delen Private Bank 67Annual report 2021 International recognition The collaborative aspect of UN PRI is also not to be underestimated: within the financial sector, investors can learn from each other and work to- gether to tackle social problems decisively. For example, Delen Private Bank supports the ClimateAction100+ initiative through its partnership with EOS. They encourage the world’s main greenhouse gas emitters to take action against climate change and accelerate the energy transition. Exclusion As an investor, it is important to choose what does not belong in the portfolio. Engagement Active and constructive dialogue with the participations. Integration Inclusion of non-financial parameters in the investment process. UN PRI is the global network that pursues a more sustainable financial system within the UN. Delen Private Bank and its 100% subsidiary fund manager Cadelam endorse these principles, and, for many years, have committed to making the investment process fundamentally sustainable. That is not without obligations. Every year, Delen Private Bank reports extensively to UN PRI on its responsible investment efforts, based on exclusion, engagement and integration. After a thorough evaluation, Delen Private Bank received the maximum A+ score for the ‘Strategy & policy’ module in 2020. Due to operational problems at UN PRI, UN PRI postponed the delivery of evaluation and transparency reports for 2021 to the second quarter of 2022. Client satisfaction Client satisfaction remains a top priority for Delen Private Bank. Following the client satisfaction survey in 2019, a new survey was conducted in 2021, in which the bank saw its NPS (Net Promoter Score) increase to 58. This result clearly shows that clients appreciated the bank’s open and clear communication during the COVID-19 crisis. ESG performance At the corporate level, Delen Private Bank closely monitors its ecological footprint. A new mobility policy was defined in 2021 so that the bank can offer its staff a full range of (green) mobility alternatives from 2022. It was also decided that all the Belgian branches under the bank’s management would change to European green electricity as of 2022. The development and well-being of its staff are an important lever for Delen Private Bank to protect its assets and mitigate risks. The bank therefore pays a lot of atten- tion to developing its human capital, the well-being of its employees and diversity. In 2021, too, the bank responded to the COVID-19 situation and continued to support staff working from home. Employees were also able to work at the office in a safe and hygienic manner. More information about sustainability will be available as of Q2 2022 in the sustainability report of Delen Private Bank and on the website Sustainability Policy | Delen Private Bank (www.delen.bank/en-be/about-us/sustainability-policy) 68 Your partner for sustainable growth 5.4 Bank Van Breda Bank Van Breda is a specialised advisory bank that focuses exclusively on entrepre- neurs and liberal professions. Based on the material topics of Bank Van Breda and the materiality analysis at AvH group level, ‘Safe harbour’, ‘Business ethics’ and ‘Protection of data and privacy’ were regarded as material at AvH level. Addition- ally, Bank Van Breda considered several other topics as material: ‘Wealth accumu- lation and protection’, ‘Respect for laws and regulations’, ‘Employee satisfaction’ and ‘Client satisfaction’. Safe harbour ‘Safe harbour’ inherently encompasses safeguarding the financial stability of the bank and, in a broader sense, the Belgian economic fabric. Thanks to prudent man- agement, the bank’s equity was never under threat during crisis periods and in turbulent financial markets. The bank has never received state aid. The solvency expressed as shareholders’ equity to assets (leverage ratio) stands at 8.1%. This is well above the 3% that the regulators have set and is one of the highest in the Belgian banking sector. During the corona crisis, entrepreneurs and liberal professions suddenly found themselves in the eye of the storm. The bank reaffirmed its role as a safe harbour, and chose to be close to the client. During the corona crisis, Bank Van Breda signed charters for deferment of professional and mortgage loan repayments, and applied those charters more widely and readily than the sector. The bank realised more reversals than additions to credit provisions in 2021. The resilience of its clients proved to be very great. With the credit portfolio, Bank Van Breda focuses on a highly specific niche of target group clients with an economic activity in Belgium: liberal professions, family businesses and independent entrepreneurs. Because of this focus and the Belgian legislation in this area, the bank rules out credit pro- vision in the following situations: (1) violations of human and labour rights, (2) production of fossil fuels such as coal, oil and gas, and (3) threat to public health and environment, such as groundwater contamination and industrial activities in protected natural areas. The self-employed clients have to accumulate and protect their own retirement capital. They appreciate the long-term advice given by the bank, which was once more reﬂected in an increase of the client assets by 3.2 billion euros to 21.1 billion euros. The Net Promoter score of 53 confirms the high level of client satisfaction compared to other players in the Belgian banking sector. Client satisfaction 2021 2020 2019 Net Promoter Score 53 60 55 Employee satisfaction 2021 2020 2019 Great Place to Work (1) 98% - 95% Environmental efforts 2021 2020 2019 GHG in kton CO 2 (2) 1.4 - 1.7 of which scope 1 1.4 - 1.7 of which scope 2 0 - 0 Bank Van Breda Safe harbour Core ratios 2021 2020 2019 CET1 ratio 16.8% 14.7% 13.1% Provision for credit losses (excl. ECL) 0.01% 0.02% 0.02% Delen Private Bank - Solar panels on the roof of the refurbished head office in Antwerp (1) Bi-annual measurement - statement ‘Generally speaking, I can say that this is a very good organi- sation to work for’ (2) Bi-annual measurement 69Annual report 2021 Business ethics and protection of data and privacy The deontology and ethical values of the staff are decisive for the way in which Bank Van Breda interacts with its clients and suppliers. Cyber crime and phishing are a growing worldwide threat. Clients are attaching increasing importance to the protection of their personal data and respect for their privacy. In this context, Bank Van Breda handles and protects each person’s data in compliance with the laws and regulations, in an honest and transparent manner. ESG performance Entrepreneurs and liberal professions play a crucial role in the transition to a more sustainable economy. The importance of ESG factors (environment, social responsi- bility and corporate governance) has increased further in the discussion of credit ap- plications. An energy performance certificate (EPC) has become a standard require- ment since January 1, 2021 in applications for real estate loans. Energy efficiency and the transition to a low-carbon economy are becoming increasingly important in any business plan for the future. The bank believes that by bringing together its network of clients it can inspire its clients to make a meaningful contribution to this transition. The bank also intends, in the context of responsible asset management (including in close collaboration with Delen Private Bank) and the home funds, to commit even more strongly to the combination of three sustainability strategies: exclusion, engagement and integration of non-financial parameters. Bank Van Breda also regards the health and well-being as a crucial asset. The bank pays a great deal of attention to attracting new talent, developing financial expertise and promoting cohesion and diversity. A resilience barometer revealed in 2021 that the teams remained strongly cohesive during the corona crisis. The ´Great Place to Work´ survey that was conducted in November 2021 showed that 98% of the staff consider the bank to be a very good organisation to work for. Bank Van Breda - Digital session of Van Breda The Square on international women’s day More information about sustainability is available in the annual report of Bank Van Breda and on the website Corporate Social Responsibility | Bank Van Breda (www.bankvanbreda.be/maatschappelijk-verantwoord-ondernemen) 70 Your partner for sustainable growth 5.5 SIPEF SIPEF is a listed agro-industrial group active in tropical agriculture, mainly in the production of sustainable, certified crude palm oil in Southeast Asia. Sustainability has been at the core of SIPEF’s business model for many years now. The group is committed to making a positive contribution to the environment and to society by managing its plantations in an ecologically and socially responsible manner, and by creating major employment and development opportunities in rural and remote are- as. SIPEF pays special attention to the following material topics: ‘Human rights and fair labour practices’, ‘Traceability’, ‘Deforestation’, ‘Smallholder inclusion’, ‘Peat management’, ‘Productivity and quality’, ‘Transparency’, ‘Sustainability standards and certifications’, ‘Community rights’, ‘Climate change’, ‘Health and safety’, and ‘R&D and innovation’. Based on these material topics identified by SIPEF and the materiality analysis at AvH group level, no topics were identified that may be ESG material for the AvH group. A selection of relevant material topics for SIPEF is ex- plained in the following paragraphs. Sustainable production SIPEF’s Responsible Plantations Policy (RPP) defines its sustainability strategy and contains its commitment not to undertake any deforestation or new plantings on peatlands and not to violate human rights. As the company’s general ESG policy, this RPP commits SIPEF to the sustainable production of fully certified and traceable products. SIPEF is a leader in traceability: all its products can be traced back to the place where they were produced, regardless of whether that is a plantation that is oper- ated by SIPEF or the plot of a smallholder. All the palm oil produced by SIPEF meets the sustainability standards of the Roundtable on Sustainable Palm Oil (RSPO). Likewise, SIPEF’s banana production meets the Rainforest Alliance Sustainable Ag- riculture Standard, the Global Good Agricultural Practice (GLOBAL G.A.P.) and Fair Trade standards. SIPEF is convinced that palm oil is and will remain an essential part of the solution to meet the fast-growing demand for vegetable oils. Compared to other oil crops, palm oil can yield 2 to 8 times as much oil per hectare, which means that far less land is needed. Sustainable palm oil production therefore leads to lower ecological and economic costs. In this respect, palm oil producers such as SIPEF play an impor- tant role to show that sustainable palm oil production is possible. Palm oil production versus other liquid oils Palm Rape seed Soya Source: https://theoilpalm.org/davos-and-food-security-the-facts-on-oilseed-efficiency/ Return Fertiliser Pesticides Energy input 3.62 0.79 0.3 2 11 29 0.5 0.7 2.947 99 315 Tons of oil produced per hectare Kg to produce 1 ton of oil Kg to produce 1 ton of oil Gj to produce 1 ton of oil SIPEF - Palm fruit 71Annual report 2021 Climate change SIPEF has quantified its CO 2 footprint at group level, using the ISO 14064 stand- ards. This evaluation made it possible to establish a baseline, which is essential to set the targets for the reduction of greenhouse gas emissions. The global warming capacity of methane is 25 times higher than that of CO 2 . That is why it is important for SIPEF to reduce methane emissions as much as possible. This reduction can be achieved by capturing the methane. By fermenting the wastewater from the oil mill in tanks or covered ponds, the methane produced can be captured and used as biogas or ﬂared. So far, SIPEF has already installed methane capturing systems at 5 of the 9 palm oil mills. Responsible employer and good neighbour SIPEF wants to be a responsible employer and a good neighbour, and aims to have a positive social impact. Where possible, SIPEF offers employment and development opportunities to members of the local community in the context of its activities. As an employer, SIPEF aims to treat all employees fairly, with respect for human rights, and in line with the local and international laws, such as the ‘Declaration of Fun- damental Principles and Rights at Work’ and the ‘Universal Declaration of Human Rights’ of the United Nations. Through its programmes for smallholders in Indonesia and Papua New Guinea, SIPEF also supports more than 8,000 local farmers by offering them services such as training, agronomic advice and high-quality seeds for a better harvest. Corporate governance In 2021, SIPEF strengthened its ESG commitments in its operations as well as in its organisation. In June 2021, a new Chief Operating Officer Asia Pacific (COO APAC) joined the executive committee. With her background and several years of experi- ence in sustainability, this new person will significantly reinforce the ESG leadership within SIPEF. SIPEF has also made commitments in terms of sustainability and transparency, and has set up the appropriate structure to ensure the implementation and constant de- velopment of those commitments. In 2021, a lot of attention was paid to the review of the materiality assessment process to ensure that SIPEF’s strategy and reporting SIPEF - Sprinkler irrigation on young oil palm seedlings in a nursery - Indonesia take into account the latest and most important ESG topics that are relevant to its activities and stakeholders. SIPEF’s commitment to improving its sustainability performance and reporting is reﬂected in the ratings that are awarded by leading not-for-profit benchmarking programmes to assess companies for their sustainability commitment and transpar- ency. In 2021, SIPEF was ranked fourth out of 350 companies by Forest 500, which identifies and ranks the most inﬂuential companies and financial institutions active in its value chain. SIPEF was also ranked ninth out of 100 palm oil companies by the Sustainability Policy Transparency Toolkit (SPOTT), developed by the Zoological Society of London (ZSL). SIPEF has improved its score in both these rankings since 2020. More information about sustainability will be available as of Q2 2022 in the annual report and the sustainability report of SIPEF and on the website www.sipef.com/sustainability/sustainable-approach/ The Responsible Plantations Policy is available on www.sipef.com/hq/sustainability/policies/responsible-plantations-policy/ 72 Your partner for sustainable growth 5.6 Nextensa The tag line ‘Places you Prefer’ reﬂects the mission of the new integrated real estate group Nextensa: to excel as next-generation real estate investor and developer in sustainable urban development with a positive social impact by creating places where it is good to live, work, shop and relax. The topics ‘Climate Adaptive Buildings’ and ‘Sustainable Societies’, along with ‘Hu- man Investments’, constitute the cornerstones of the policy with which Nextensa will work in the coming years on the creation of climate-neutral and healthy build- ings that are harmoniously integrated in liveable and lively urban environments, using innovative technologies and processes. Nextensa pays special attention to the following material topics: ‘CO 2 neutrality’ (with focus on renewable and clean energy and low-carbon materials), ‘Water’, ‘Healthy buildings’ and ‘Nextensa as an exemplary organisation’. Based on these material topics identified by Nextensa and the materiality analysis at AvH group level, no topics were identified that may be ESG material for the AvH group. Climate Adaptive Buildings Nextensa aims to be CO 2 -neutral for scope 1 and 2 by 2030, and for scope 3 by 2050. In order to achieve this, Nextensa will focus on minimising energy consump- tion, on the exclusive use of renewable and green energy, and on discontinuing the use of fossil fuels. When sourcing goods and materials, Nextensa will focus on its CO 2 footprint with a positive impact in scope 3. With these ambitious goals, Nex- tensa wants to play a leading role in the engagements that have been formulated as part of the European Green Deal, which promotes the transition to a low-carbon economy. To accomplish this, there is close cooperation and exchange of experi- ences with CFE Contracting. The energy-neutral development of Gare Maritime on the Tour & Taxis site won several prestigious awards in 2021 for its exemplary role in circular construction and for its innovative nature. Preparations were also made in 2021 to submit an application for the creation of an Energy Community on the Tour & Taxis site. In this way, surplus electrical energy generated by the photovoltaic panels on Gare Mari- time can be used at low cost by other users on the site (such as the apartments sold to low-income families). This system may subsequently be rolled out to the other electricity-generating office buildings on the site. Energy optimisation systems were also invested in at the Royal Warehouse in Brussels and Monnet 4 in Luxembourg. Nextensa aims to have all buildings under development and in portfolio certified with a sustainability certificate by 2030 at the latest. In 2021, Gare Maritime re- ceived a BREEAM Outstanding certificate for the refurbishment of the outer shell. BREEAM-in-use assessments were carried out for the Belgian portfolio. In 2021, the Belgian portfolio was fully equipped with a monitoring system to re- cord and analyse all energy and water consumption. Sustainable Societies Nextensa wants to contribute to pleasant living environments with a mixed range of functions at walking distance, with emphasis on green and biodiverse surroundings and priority for pedestrians and cyclists, the so-called ‘5-minute neighbourhoods’. In Park Lane, the first large residential estate on the Tour & Taxis site featuring sus- tainable materials, greenery and a rich architectural design, several housing units of the first phase were delivered in 2021 and occupied by the new residents. Addition- ally, more than 50 apartments of this project were sold to low-income families in 2021. Planning permission has been granted for the second phase, which will start in the second quarter of 2022. In Gare Maritime, the Food Market, an innovative, culinary and plastic-free meet- ing place where local, seasonal and organic products in different price ranges are offered, opened at the end of November. Nextensa Climate Adaptive Buildings 2021 2020 GHG in kton CO 2 - equivalent - own activity of Nextensa 0.12 0.14 of which scope 1 0.11 0.10 of which scope 2 0.01 0.04 Nextensa - Gare Maritime More information about sustainability is available in the annual report of Nextensa and on the website nextensa.eu/en/about-us/sustainability/ 73Annual report 2021 5.7 Anima Anima is active in the up-market segment of accommodation and care for the elder- ly in Belgium. Anima pays special attention to the material topics of ‘Quality of care for residents’, ‘Well-being of the care staff’, ‘Sustainable and in line with the latest real estate regulations’, ‘Relations with stakeholders’ and ‘Compliance’. ‘Quality of care for residents’ and ‘Well-being of the care staff’ will be discussed below, along with ‘CO 2 reduction’ to reduce carbon emissions at the care centres. Based on these material themes identified by Anima and the materiality analysis at AvH group level, no themes were identified that may be ESG material for the AvH group. Quality of care for residents Anima is getting ready for the challenges of the future. It wants to give its residents top-quality care and accommodation, and has therefore set up its own quality man- agement programme (QMS). The QMS starts from the individual requirements and needs of the residents and of their closest relatives, and on that basis it formulates processes and procedures. These form the basis of Anima’s quality culture, in which the quality of care and accommodation is continuously monitored and optimised. The input from different consultative structures and the expertise of the staff are also a major strength in this quality process. Audits are conducted to gauge the desired result of the processes and procedures so that adjustments can be made to them if necessary in order to achieve and guarantee the desired result. Besides a quality management system, Anima provides more staff in each of its residential care centres than the legal minimum requirement. Well-being of the care staff Anima chooses employees who give the best of themselves in the interest of the residents, day in, day out. Their well-being received special attention during the COVID-19 pandemic. In November 2021, Anima again participated in the ‘Great Place to Work’ survey to gauge the satisfaction of its staff. This enabled Anima to evaluate and adjust the impact of the actions it had taken on the basis of the previous survey. As an operator of residential care facilities, Anima obviously endorses the full vacci- nation of all the care staff. Anima campaigned unrelentingly to encourage its own care staff to have themselves vaccinated. CO 2 reduction at care centres Flemish residential care centres are obliged to emit 21% less CO 2 over a period of 10 years (2021-2031). In pursuance of its climate vision plan, Anima carried out a baseline measurement in 2021 for its Flemish care centres. For this purpose, an extensive survey was used to find out how those care centres perform on a number of environmental themes such as energy, mobility and use of materials. This base- line measurement will be carried out in 2022 for the care centres in Wallonia and Brussels as well. The idea is to improve the score year by year and so further reduce the environmental impact of Anima’s activities. As part of its objective to reduce its CO 2 emissions by 2031, Anima switched over to 100% green electricity as of January 1, 2021. As a result, CO 2 emissions have already diminished by 11%. Raising awareness among its residents and staff is also an important component of Anima’s ESG policy. Residents and staff are informed each quarter of the ESG initiatives taken. Anima - Au Privilège - Haut-Ittre Anima - Zonnesteen - Zemst More information about sustainability is available on the website animagroup.be/MVO/ 74 Your partner for sustainable growth 5.8 Other participations Various initiatives regarding ESG were also taken at the other participations. These are discussed in the activity reports of the various participations. The investment managers involved apply the same approach to the other participations as to the 7 above-mentioned participations. The following ESG initiatives are worth mentioning: • Rent-A-Port supports the energy transition in Belgium by building a battery park for electricity storage in Bastogne. Large-scale electricity storage can help to increase security of supply and to ensure stability of the grid. • Green Offshore participates as shareholder in the development and operation of the offshore wind farms Rentel and SeaMade. The SeaMade offshore wind farm, which supplies energy to 500,000 households, was brought into service off the Belgian coast. 2021 was the first full year of production. • Sagar Cements wants to be a leading Indian cement manufacturer in terms of sustainability aspects with constant focus on reducing its energy requirements (such as through process heat recovery), using renewable energy (hydroelectric power and solar energy), as well as reducing fossil fuels through the use of alternative fuels (such as waste/biomass), and 100% water supply for industrial use from rainwater. Sagar offers its workforce accommodation and recreation- al facilities, health care and medical insurance, life insurance, pension saving schemes, help with obtaining loans, fair compensation and other benefits. Sagar also regularly works together with local communities and actively invests in their inclusion and empowerment. • Agidens focuses on process automation to increase the efficiency and control of production processes. This results in a positive ESG impact by limiting consump- tion of energy and raw materials. As a supplier, Agidens also helped build the vaccine production lines in Belgium and the Netherlands. • Biolectric produces and puts up biogas installations at farms to convert meth- ane gas from manure into renewable electricity and heat. Methane is a very potent greenhouse gas. This process captures more methane than it releases into the atmosphere. The avoided emissions give rise to a process with a net negative CO 2 footprint. • EMG innovates with ‘remote’ technology that saves travel kilometres and has a positive impact on the CO 2 footprint. The CO 2 footprint was quantified in the UK for the first time. • Manuchar has a CO 2 neutral head office. • Mediahuis is a member of the Belgian Alliance for Climate Action (BACA) and is actively engaged in reducing its ecological footprint at its printing plants, and takes various initiatives to promote freedom of the press, such as through its participation in Pluralis. • Medikabazaar set up the ‘COVID Combat Collaboration Platform’. • Turbo’s Hoet Groep works closely together with manufacturers who focus on lower fuel consumption and emissions, and who develop alternative ‘clean’ power trains (e.g. electricity, hydrogen). • Van Moer Logistics is totally committed to multimodal transport, combining inland shipping with rail and road transport. The number of LNG trucks has been increased, and more than half the forklift ﬂeet runs on electricity. Van Moer is also pioneering with a ‘dual fuel’ truck powered by hydrogen and diesel to reduce CO 2 emissions, and by proactively offering CO 2 -friendly logistical alter- natives to its customers. The following participations are engaged on ESG by the very nature of their activities: • Verdant Bioscience develops high-yielding F1 hybrid oil palms. • Biotalys develops technology for crop and food protection. • HealthQuad invests in the Indian healthcare sector. • Indigo Diabetes develops an invisible chip sensor to monitor the health of people with diabetes. • Medikabazaar operates a B2B platform for medical supplies in India. • MRM Health develops innovative technologies based on healthy intestinal bacteria. • OncoDNA is engaged in theranostics and genomics with expertise in precision oncology. Sagar Cements - Quality control Van Moer Logistics - Dual fuel truck Lexicon: An ESG-related glossary with definitions of the abbreviations and terms used is included at the end of the annual report. 75Annual report 2021 ENVIRONMENTAL, SOCIAL & GOVERNANCE ASPECTS ARE FULLY INTEGRATED IN OUR INVESTMENT POLICY. WE INVEST IN COMPANIES AROUND THE WORLD WITH WHOM WE SHARE THE SAME VISION OF ADDRESSING GLOBAL CHALLENGES THROUGH SUSTAINABLE INVESTMENTS. Watch the new AvH corporate movie www.avh.be/en/about/who-we-are 76 Your partner for sustainable growth Jan Suykens Chairman of the executive committee - CEO Tom Bamelis Member of the executive committee - CFO John-Eric Bertrand Member of the executive committee Piet Bevernage Member of the executive committee - Secretary-general Executive committee Staff members Piet Dejonghe Member of the executive committee André-Xavier Cooreman Member of the executive committee Koen Janssen Member of the executive committee An Herremans Member of the executive committee DAILY MANAGEMENT AND STAFF MEMBERS Bart Bressinck Accountant Peter Florus Tax officer Hilde Delabie Senior group controller Isabelle Bernaerts Reception Ann Bex Management assistant Sarah Franssens Management assistant Patricia Bielen Management assistant 77Annual report 2021 Nele Govaert Legal counsel Bart Vercauteren Sustainability manager Anke Jeurissen Legal counsel Jens Van Nieuwenborgh Investment director Jeroen Vangindertael Investment associate Philip Heylen International relations & public affairs officer Thijs Hoste Investment associate Sonja Goossens Personnel administration Hari Rajmohan Investment manager Thomas Ternest Investment director Hilde Haems Chief Human Capital Officer Iris Meirlaen Paralegal Garry Suy Maintenance Jean-Claude Janssens Treasurer Gilles Huyghebaert Group controller Ans Matthysen Accountant Lydie Makiadi Management assistant Robin Muller Reception Brigitte Stockman Management assistant Petra Van de Velde Management assistant Katia Waegemans Communication manager Kim Vander Haegen Group controller Michaëla Goelen Office manager Filip Portael IT consultant ACTIVITY REPORT 2021 YOUR PARTNER FOR SUSTAINABLE GROWTH 79Annual report 2021 31/12/2021 (1) Incl. participation via AXE Investments (2) Incl. participations via HealthQuad Fund I + II (3) Fully diluted AvH & Growth Capital Marine Engineering & Contracting Energy & Resources Private Banking Nextensa 59% Delen Private Bank 79% SIPEF 35% DEME 62% Agidens (1) 85% Anima 93% Bank Van Breda 79% Verdant Bioscience 42% CFE 62% AXE Investments 48% Sagar Cements 22% Rent-A-Port 81% Biolectric 56% OMP 20% Mediahuis 13% Telemond 50% Fair value investments (3) Biotalys 12% HealthQuad I Fund 36% HealthQuad II Fund 10% Medikabazaar (2) 10% MRM Health 16% OncoDNA 10% Venturi Partners Fund I 20% Indigo Diabetes 9% Green Offshore 81% EMG 23% Turbo’s Hoet Groep 50% Manuchar 30% Van Moer Logistics 22% Real Estate & Senior Care ACKERMANS & VAN HAAREN 80 Your partner for sustainable growth Although the corona pandemic still disrupts their day-to-day operations, both DEME and CFE achieved a vigorous recovery of their results. The profit contribution of ‘Marine Engineering & Contracting’ again surpassed that of pre-COVID year 2019. DEME DEME is one of the largest and most diversified dredging and marine construction compa- nies in the world. 62 % Contribution to the AvH consolidated net result (€ million) 2021 2020 2019 DEME 68.6 28.6 73.9 CFE 23.5 7.8 13.5 Rent-A-Port 2.9 1.0 0.5 Green Offshore 4.0 9.3 4.0 Total 99.0 46.7 91.9 DEME - Living Stone - Dogger Bank - UK Intention to split CFE By means of a partial demerger, CFE will transfer its 100% stake in DEME to a new company (DEME Group) and will compensate the shareholders of CFE for this transaction by issuing DEME Group shares, for which an application will be made for listing on Euronext Brussels. At a later stage, DEME Group could merge with DEME. Once the transaction is closed, which is expected in the summer of 2022, the present CFE will have been split into two separate listed groups: (i) the industrial group CFE, with strong market positions in contracting and real estate development in Belgium, Luxembourg and Poland, and ii) DEME, a dredging and marine engineering group active worldwide. AvH will remain the majority shareholder of the two listed companies, and will not be selling shares of either DEME or CFE by this demerger. CFE CFE is a listed Belgian indus- trial construction group with activities in Belgium, Luxem- bourg and Poland. GREEN OFFSHORE Green Offshore holds minority participations in offshore wind farms. 62 % 81 % 81 % RENT-A-PORT Rent-A-Port develops port- related industrial zones in Vietnam. 82 Your partner for sustainable growth 25.3 weeks for the cutters (2021: 11.1 weeks). DEME Offshore realised a turnover of 899.6 million euros in 2021, which is 35 million euros less than in 2020, although the decrease of procurement mentioned earlier has an impact here as well. The turnover of own projects, however, in- creased slightly, and the utilisation rate of DEME Offshore’s ﬂeet was 42.2 weeks. DEME Infra realised a vigorous turnover increase to 263.0 million euros (2020: 208.8 million euros). DEME realised an EBITDA in 2021 of 469.3 million euros (18.7% of the turnover), which is not only a significant increase compared to 369.5 million euros in 2020, but is also markedly higher than the 437.0 million euros (16.7%) reported in 2019. The net profit for 2021 amounted to 114.6 million euros, which is more than double that of the corona year 2020, but still below the level of 2019. Order backlog DEME’s order backlog increased in 2021 to 5,905 million euros, compared to 4,500 million euros at the end of 2020. This figure does not include projects for which final contracts have yet to be concluded (such as the works in Taiwan, for which DEME is preferred bidder, and the works on the Right Bank of the Oosterweel Link). DEME Offshore won major contracts in Europe and in the United States in 2021: • Coastal Virginia Offshore Wind Farm (US, 2.6 GW): BoP contract for the trans- port and installation of 176 monopile foundations with transition pieces, three offshore substations, erosion protection and the procurement and installation of subsea export and infield cable systems (1.1 billion euros); • Vineyard Wind 1 (US, 800 MW): installation of offshore wind turbine founda- tions for the first large-scale offshore wind installation in the US (order of mag- nitude: between 50-150 million euros), transport and installation of the mono- pile foundations, transition pieces and erosion protection for the wind turbine foundations, as well as the foundation and platform for the offshore electrical substation (order of magnitude: between 150-300 million euros); • Arcadis Ost 1 (Germany, 257 MW): EPCI for 28 XXL monopile foundations, the biggest ever in Europe (order of magnitude: between 150-300 million euros); • Hinkley Point (UK, order of magnitude: between 150-300 million euros); • Dogger Bank C (UK, 3.6 GW): engineering, procurement, construction and installation of inter-array cables (order of magnitude: between 50-150 million euros); • Leucate (30 MW): first EPCI contract for ﬂoating offshore wind farm in France. Financial overview 2021 DEME made a good recovery in 2021 from the downturn in the corona year 2020. The turnover increased again by 14% to 2,510.6 million euros, although this is just short of the 2,622.0 million euros recorded in 2019. It should be pointed out in this respect that this turnover figure for 2019 contained a substantial sum of procurement, which was less the case in 2021. If just the turnover on DEME’s own works is compared with 2019, the turnover for 2021 was more than 10% higher than in the pre-COVID year 2019, which better illustrates DEME’s high level of activity over the past year. The recovery was strongest in DEME’s dredging activity: the turnover increased by 29% to 1,132.9 million euros. The intense activity is also illustrated by the high utilisation rate of the ﬂeet: 41.4 weeks for the hoppers (2020: 38.4 weeks) and Offshore Capital dredging Maintenance dredging Infra Environmental Other Europe Asia Pacific Africa Middle East & India America Split of turnover Activity Region DEME is a world leader in the specialised fields of dredging, solutions for the offshore energy industry, infra marine and environmental works. The compa- ny can build on more than 140 years of know-how and is a front runner in innovation. DEME Els Verbraecken Eric Tancré Philip Hermans Hugo Bouvy Luc Vandenbulcke Shareholding percentage AvH 62 % 36% 74% 35% 4% 10% 19% 10% 6% 1% 3% 2% DEME - Spartacus - Abu Qir - Egypt Fleet investment programme DEME has embarked on a multi-year ﬂeet investment programme with the aim of making its ﬂeet the most modern, efficient and sustainable in the industry. 2021 was a milestone year as the new mega cutter suction dredger ‘Spartacus’ joined the ﬂeet. With a total installed power of 44,180 kW and 12,000 kW on the cutterhead, ‘Spartacus’ has more cutting power than any other cutter suction dredger in the market. Sustainability is a continual focus of the ﬂeet investment strategy in line with DEME’s ambition to become carbon neutral by 2050. Consequently, several in- novative features have been introduced on ‘Spartacus’ to reduce emissions and make this huge dredger as energy efficient as possible. As well as having dual fuel engines, the vessel is equipped with an installation to recover waste heat from the engine exhausts, generate steam and convert this by means of a steam turbine into up to 2,000 kW of electrical power. Additionally, a cold recovery system reduces the electrical power consumption on board. After delivery, ‘Spartacus’ headed directly to its first project, Abu Qir 2 in Egypt. This is the largest dredging and land reclamation project in DEME’s history. The efficiency of this powerful dredger is already showing some impressive results with high production levels, coupled with a substantial reduction in fuel consumption. The pioneering new offshore installation vessel ‘Orion’ is also nearing completion. ‘Orion’, featuring a 5,000-tonne crane, will be able to handle the enormous tur- bines and foundations of the future and it will be equipped with an integrated motion compensated pile gripper. This innovative technology, coupled with the vessel’s DP3 capability, will enable to drive monopiles in the most efficient way. CSBC-DEME Wind Engineering’s pioneering DP3 vessel ‘Green Jade’, under con- struction in Taiwan, is also taking shape. Equipped with a 4,000-tonne crane, the new vessel is perfectly suited for the next generation of foundations and turbines. DEME’s first ever Service Operation Vessel, ‘Groenewind’, was added to the ﬂeet in June 2021 and is already deployed at the Rentel and SeaMade offshore wind farms in Belgium. The vessel has moved the boundaries of low emission wind farm maintenance and crew/technician ergonomy. Additionally, two major conversions are set to take place as DEME prepares for the next generation of wind turbines. The two DP2 jack-up installation vessels ‘Sea In- staller’ and ‘Sea Challenger’ will see their crane capacity increased to 1,600 tonnes. 84 Your partner for sustainable growth Operational overview 2021 Dredging 2021 was a milestone year in terms of the number of projects. A whole green ﬂotilla has been working on the mammoth Abu Qir 2 project (Egypt) throughout the year. Ultimately, Abu Qir 2 will see a new city and greenfield port constructed. In a stag- gering accomplishment, DEME’s ﬂeet reclaimed well over 130 million m 3 of material and managed to achieve volumes of 800,000 m 3 in a single day. In another remarkable project, the DEME ﬂeet travelled beyond the Arctic Circle. The team completed a second highly successful campaign for the ‘Sea Channel’ project. DEME is dredging the access channel to Sabetta port, where a LNG facility is being developed. DEME also successfully completed the two-year River Elbe (Germany) deepening and widening project, and well within the schedule. This project enables the new generations of container vessels to access the Port of Hamburg independently of the tides. Meanwhile in Poland, DEME and its joint venture partner had a busy year at the Świnoujście - Szczecin fairway project and faced several complex challenges, par- ticularly the presence of thick ice and the largest UXO campaign (Unexploded Ord- nances) in the company’s history. Despite these challenges, the team was firmly on track and on the verge of completing the two artificial islands in the lagoon by the end of 2022. In line with DEME’s sustainable solutions, these two islands are created from dredged material and will become nature habitats. The Tuas Terminal Phase 1 megaproject in Singapore was largely completed. TTP1 included the construction of an 8.8 km quay wall and the reclamation of 88 million m 3 of land from the sea. Offshore DEME Offshore’s impressive achievements in 2021 include a major breakthrough in the US market and the Saint-Nazaire offshore wind farm project in France, where DEME Offshore is showcasing its unrivalled capabilities. DEME is the first contractor in the world to install an entire wind farm into a rock soil, featuring XL monopiles foundations. DEME Offshore was awarded the major Dominion Energy Group’s Balance of Plant (BoP) contract for the construction of the Coastal Virginia Offshore Wind (CVOW) project in a consortium with Prysmian Powerlink. Representing a total capacity of 2.6 GW, this is not only the largest offshore wind installation contract ever awarded in the US, it is also the biggest single cable contract in DEME’s history. The BoP contract includes the transport and installation of 176 monopile transition piece foundations, three offshore substations, scour protection and the supply and instal- lation of export and inter-array submarine cable systems. CVOW followed directly on from awards for Vineyard Wind 1, the first utility-scale offshore wind project in the US, and the South Fork offshore wind farm (US). DEME Offshore successfully completed the installation of the final and 165th wind turbine at Hornsea Two (UK), the world’s largest offshore wind farm. Both the turbine and monopile foundation installation scopes were performed in record time, enabling Hornsea Two to generate its first renewable power in December 2021. DEME is also building up local partnerships all over the world so it can play a role in supporting countries as they take up the exciting opportunities in the offshore wind sector. In Japan, DEME Offshore and Penta-Ocean Construction Co. Ltd., Japan’s leading marine contractor, have established a new company named Japan Offshore Marine Co., Ltd. JOM has been supporting developers in the first offshore wind farm rounds and has already signed one ‘Preferred Supplier Agreement’. Additionally, DEME has entered into a commitment to develop the Vietnamese offshore wind market by starting a cooperation with the oil & gas EPCI contractor, Vietsovpetro. Infra 2021 was a crucial year for the Fehmarnbelt Fixed Link project, heralded as the infrastructure project of the century. On January 1st work started in Denmark, and then in December, construction had officially kicked off in Puttgarden in Germa- ny. DEME is delighted that the project is solidly progressing in both countries. In Denmark, the integrated joint venture team started work on one of six production facilities in Rødby where the huge tunnel elements will be constructed. Work on three megaprojects in the Netherlands continued apace. Highlighting the enormous scale of the Blankenburg Connection project, the BAAK joint venture, of which DEME is part, worked day and night pouring all of the underwater concrete into the tunnel approaches of the 825 m immersed Maasdeltatunnel. At the New Lock Terneuzen, DEME and its partners achieved several major mile- stones. The concrete works in the inner and outer lock heads, which include form- work, steel fixing and pouring the concrete, are ongoing. The project highlights DEME’s multi-skilled dredging and infra expertise. In an important landmark at the RijnlandRoute, the eight crossing passages (used for emergency evacuation and maintenance activities), which connect the two bored tunnel tubes, were successfully installed. In Belgium, DEME has secured a second contract for the ‘Oosterweel link’ project, which will complete the Antwerp Ring Road. In 2021, design and preparation activ- ities for the 1,800 m Scheldt tunnel and construction dock for the tunnel elements were well underway. In August, the team was also awarded the Oosterweel con- nection Lot 3b for the Right Bank. Environmental Under an ‘Early Contractor Involvement’ agreement, DEME Environmental is pre- paring to start works on a major contract to remediate the former ExxonMobil site in Bowling near Glasgow. This project highlights DEME’s focus on promoting a sustainable and circular economy. With a keen focus on sustainability, more than 90% of the material will be cleaned and reused. In Belgium, DEME is still working on the second phase of Blue Gate in Antwerp, a heavily polluted brownfield site which is being turned into a sustainable business park. Additionally, in the largest rehabilitation project in the Port of Antwerp ever, (€ 1,000) 2021 2020 2019 Turnover 2,510,607 2,195,828 2,621,965 EBITDA 469,309 369,458 437,011 EBIT 143,282 64,281 141,146 Net result (group share) 114,581 50,410 125,041 Shareholders’ equity (group share) 1,579,543 1,467,492 1,435,482 Net financial position -392,678 -489,030 -708,453 Balance sheet total 4,049,597 3,941,494 3,944,779 Order backlog 5,905,000 4,500,000 3,750,000 Capex 282,044 201,572 434,669 Personnel 4,880 4,976 5,089 DEME NV 85Annual report 2021 DEME Environmental and its consortium members, successfully completed work on encapsulating the heavily polluted ruins of Fort Sint-Filips. DEME Concessions DEME Concessions is broadening its portfolio of offshore wind farm developments outside of Europe. In May, DEME signed a ‘Memorandum of Understanding’ to develop a 1,000 MW wind farm in Binh Thuan Province in Vietnam, known as the Vinh Phong Offshore Wind Project. Under a cooperation agreement, DEME Conces- sions and local developer BI Energia, are set to develop the first wind farm in Brazil. DEME Concessions has a substantial participation in Belgium’s largest offshore wind farm, SeaMade. DEME successfully completed the construction on schedule, in just 16 months, and the wind farm achieved its Commercial Operation Date at the end of June. As part of a consortium, DEME Concessions was awarded a 40-year port concession for Port-La-Nouvelle (France) in May. This concession directly fits in with DEME’s sustainability goals because the port is undergoing a major redevelopment, which includes establishing a strategic hub for the offshore and ﬂoating wind industry. Several key milestones were reached at the Port of Duqm in Oman, where DEME Concessions is in a partnership with Port of Antwerp International and the Gov- ernment of Oman, and holds the port concession. In 2021 the liquid bulk berths have been commissioned and an agreement with the future operator of the facility has been signed. Logistics sites are also proving popular. Eighty hectares is already operational, and a further 70 hectares will be levelled in 2022, preparing it for new tenants. Duqm is playing a crucial role in DEME Concessions’ ambitions to facilitate the growth of clean fuels. DEME and its partners will establish an industrial-scale, green hydrogen plant at the port. This ﬂagship green hydrogen project has been devel- oping rapidly in 2021. In July, HYPORT ® Duqm signed a cooperation agreement with energy giant Uniper. This agreement marks another important milestone for HYPORT ® Duqm, after having secured its 150 km² renewable generation site in the Special Economic Zone earlier in the year. www.deme-group.com PARTNERS FOR SUSTAINABLE GROWTH • To push sustainable value creation forward, DEME continuously chal- lenges itself to develop more sustainable solutions within the portfolio so that the operations become more environmentally friendly. • DEME identified its key sustainability themes supporting the Sustain- able Development Goals of the United Nations, and on which DEME has an economic, environmental or social impact: ‘climate and ener- gy’, ‘sustainable innovation’, ‘health, safety & well-being’ and ‘ethical business’. • More information can be found in the DEME sustainability report 2021. DEME - Innovation Global Sea Mineral Resources Global Sea Mineral Resources (GSR), DEME’s deep-sea exploratory division, con- tinues to take a step-by-step precautionary approach in pursuing its ambition to responsibly collect metal-rich nodules from the deep ocean ﬂoor. In 2021, DEME’s team of world-class engineers successfully tested GSR’s pre-prototype nodule col- lector, Patania II, at a depth of 4,500 metres. Patania II was deployed in the GSR (Belgian) and BGR (German) contract areas of the Clarion-Clipperton Zone. The vehicle successfully demonstrated its ability to drive and manoeuvre on the deep seabed and collect nodules. The success of this ultra-deep-water trial, which was independently monitored by a consortium of EU scientists, helps pave the way to delivering a much-needed source of high-grade, low carbon minerals. GSR is working closely with multiple scientific research institutions focused on es- tablishing environmental baseline measurements and impact assessments to better understand the effect of nodule collection on the marine environment and to ensure decisions are based on the best science possible. Environmental monitoring is a key component of GSR’s development programme, ensuring the effects of the activities are understood, can be accurately predicted and improved upon, and will lead to the development and implementation of appropriate environmental strategies. GSR continues to study the impact and comparisons with other resources, and is engag- ing in global dialogues with stakeholders on the outcome of those studies. Outlook 2022 Based on its order backlog and the present market conditions, DEME expects for 2022 a further increase of turnover, EBITDA and net result. The military conﬂict in Ukraine will not have a substantial direct impact on DEME’s activities. However, the indirect impact is currently difficult to predict. As a result of the delivery of the long-awaited and groundbreaking installation vessel ‘Orion’ in the first half of the year, the acquisition of the cable installation vessel ‘Viking Neptun’ by year-end 2022, and the planned dry-docking of several vessels, DEME projects for 2022 an investment budget of approx. 500 million euros and a controlled increase of the net debt position. 86 Your partner for sustainable growth The operating result (EBIT) increased to 25.3 million euros, which is a 69.8% increase. The EBIT margin was 2.4%. While the direct impact of the pandem- ic was far less marked in 2021 than in 2020, the indirect effects, particularly the increasing cost of materials and sup- ply chain disruptions, weighed on the results. The net result of CFE Contracting increased by 152.7% to 13.9 million euros, compared to 5.5 million euros in 2020. Even relative to 2019 there was a significant increase by 46.3%. The order book of CFE Contracting increased by 5% to 1,567 million euros, com- pared to 1,493 million euros in 2020. In the Real Estate Development division (BPI), the total real estate portfolio remained stable at 190 million euros (2020: 192 million euros). BPI is currently developing 477,000 m² (group share) on some forty projects, of which 68,000 m² are under construction. BPI’s net result amounted to 23 million euros, a 74.2% increase compared to 2020. This excellent performance is explained by the good quality of the programmes being marketed and by the result on the sale of the Samaya (sale of 50%), Renais- sance and Sadowa projects. Operational overview 2021 Construction The solid recovery of business in the Construction division in 2021 was particularly noticeable at CLE (Luxembourg) and CFE Polska, and also in the Multitechnics divi- sion (VMA). In Belgium, the ZIN project in the Brussels North Quarter is one of the many new projects. This project not only testifies to the progress made by CFE in the area of sustainability, but also to the continuous strengthening of the synergies between the different entities. The teams of BPC, Van Laere and VMA are pooling their talents here to accelerate the breakthrough of circular construction, new build- ing methods such as BIM and LEAN, and smart building management. Circularity is at the heart of this project for mixed and ﬂexible use. The aim is also to preserve, reuse or recycle 95% of the weight of the existing buildings, and for 95% of the new materials to be cradle-to-cradle (C2C) certified. The improvement of BPC’s results in 2021 was accompanied by a well-filled order book and a more balanced distribution over the different markets. After a quiet start to the year, several contracts were won, including two large-scale projects - the Na- tional Bank of Belgium and the Kanal Centre Pompidou Museum in Brussels - and a series of contracts each worth between 15 and 25 million euros. For MBG, the highlights of the year were the ZNA hospital project in Antwerp, the design & build project of the wonderful Stock Exchange site in Bruges, the Sky Financial overview 2021 At CFE, despite a complex socio-economic context due to the impact of the persis- tent health crisis, 2021 was marked by a solid recovery of business which also trans- lated into a significant turnover increase compared to 2020 as well as to pre-COVID year 2019. The turnover increased to 1,125.3 million euros, compared to 1,026.2 million euros in 2020. CFE Contracting reported a turnover of 1,039.7 million euros (2020: 911.9 million euros). The increase was 14% relative to 2020 and 4% relative to 2019. In the Construction division there was a very strong activity increase in Poland, where CFE was able to position itself successfully on the construction market for logistics centres and industrial buildings. Turnover in Belgium increased slightly, but was still lower than in 2019. Operational problems persist on certain projects in Flanders; consequently, emphasis will be more than ever on project selectivity and operation- al excellence. The Multitechnics division (VMA) realised a 19% turnover increase thanks to several major projects. In the Rail & Utilities division (MOBIX), too, several major rail projects and the ramp-up of the LuWa project contributed to the higher volume of business. Following the partial demerger, CFE will be listed on Euronext Brussels as a Belgian integrated industrial group, focusing on four complementary core activities: construction, multitechnics, rail and real estate development. CFE Jacques Lefèvre Raymund Trost Valerie Van Brabant Yves Weyts Alexander Hodac Fabien De Jonge Manu Coppens Piet Dejonghe Shareholding percentage AvH 62 % (€ 1,000) 2021 2020 Turnover 1,125,346 1,026,600 EBITDA 68,538 45,258 EBIT 57,976 38,135 Net result (group share) 39,506 17,689 Shareholders’ equity (group share) 133,831 95,311 Net financial position -112,995 -112,400 Balance sheet total 1,002,598 945,598 Order book 1,620,619 1,549,061 Personnel 3,043 3,137 CFE NV (excluding DEME) (1) (1) Figures anticipate financial statements CFE post-demerger, based on segment information: excluding DEME (‘held for sale’ in CFE IFRS presentation 2021) and including contribution Rent-A-Port (50%) and Green Offshore (50%). 87Annual report 2021 CFE - Bruges Meeting & Convention Center - Bruges 88 Your partner for sustainable growth Tower in Ostend, and the residential project Waterzicht in Vilvoorde. In a highly competitive context, exacerbated by the scarcity and unprecedented price increases of materials, MBG worked on cost efficiency and organisational processes - such as BIM - to maintain its position. The same applies to Van Laere, which experienced a difficult year on a highly competitive market. Nevertheless, it realised some splendid projects, such as the Zuiderdokken underground car park in Antwerp and the resi- dential projects Aequor in Antwerp, Park Lane on the Tour & Taxis site in Brussels, and Elysia Park in Edegem. CLE reported a solid growth of business in Luxembourg, in particular thanks to the Mertert and Gravity projects which were developed together with BPI Real Estate. The dedication of the teams allowed the adverse impact of the COVID-19 pandemic to be overcome and exceptional projects to be delivered. The finest example is undoubtedly the residential tower block Aurea in Differdange, the first Luxembourg project to use low-carbon aluminium. Another remarkable achievement was the introduction of a Construction Consolidation Centre (CCC), an innovative logistical system to optimise transport and storage. CFE Polska celebrated its 25th anniversary in 2021. In that quarter of a century, it has built a strong brand image for CFE and reinforced its relationship of trust with its various partners. The overall picture remains very positive, with a turnover increase of 170% relative to 2016 and projects which despite the COVID-19 pan- demic were delivered on time. Timber and hybrid constructions are by definition sustainable and will play an increasingly important role on the market, as the projects of Wood Shapers and LTS testify. Wood Shapers was set up in 2020 by CFE Contracting and BPI Real Estate, and was developed further in 2021. After the iconic Wooden project in Luxembourg, executed by CLE, Wood Shapers is now collaborating with BPC on the Monteco project, the tallest wooden building of the Brussels Region. LTS confirms its success with an order book that projects a record turnover figure, particularly in the Netherlands. Numerous accomplishments demonstrate the huge potential of this business line, such as Nonnenwiesen, a project with an extraordinary envi- ronmental dynamic that integrates several aspects of sustainable development and for which the teams have built 36 wooden homes within just one year. Similarly, the Cité Moderne project in Brussels was the first prefab 3D modular apartment building in Belgium. Multitechnics All activities of VMA experienced a strong growth, with the exception of the Au- tomotive segment, which had to contend with the uncertainties facing the sector, and in particular the cancellation of a major project that was planned for 2021. The regrouping of the four segments - Building Technologies, Infra, Automotive and Processing & Manufacturing Technologies - into two segments, Building Technolo- gies and Industrial Automation, will enable VMA to become even more successful on its target markets and to provide even more efficient integrated solutions. The new VMAnager platform is an evolution of the VEMAS solution for smart building management which integrates energy, environmental and maintenance aspects. VMAnager reinforces VMA’s ‘one stop shopping’ strategy, which was exemplified in 2021 by several projects: the Grand Hôpital in Charleroi, the J building of UZA in Antwerp, Epicura in Ath, etc. The order book of Building Technologies has grown substantially and offers the prospect of promising developments in the future. Rail & Utilities The LuWa project has made a substantial contribution to MOBIX’s growth. The project involves the modernisation of the public lighting on the motorways and highways in Wallonia, with new technologies that permit both innovative and sus- tainable solutions and lay the foundations for the mobility of the future. Howev- er, this should not obscure the achievements of the Rail division, in particular the ENVES signalling project for the installation of the ETCS-2 safety system on the Belgian railway network. MOBIX also established a new record with the L50A line between Jabbeke and Ostend, where the replacement of 22 kilometres of catena- ries necessitated only nine days of service interruption. MOBIX took advantage of these successes to initiate a large-scale plan for the training and career develop- ment of its employees, along with specific investments in digitisation and especially in the safety of its staff. CFE (excluding DEME): Breakdown by division (1) Including contribution Rent-A-Port (50%) and Green Offshore (50%) to CFE (€ million) Turnover Net result Order book Shareholders’ equity 2021 2020 2021 2020 2021 2020 2021 2020 Construction 718.3 634.8 1,166.0 1,058.7 Multitechnics 196.4 164.9 236.4 251.1 Rail & Utilities 125.0 112.2 164.6 182.8 Contracting 1,039.7 911.9 13.9 5.5 1,567.0 1,492.6 90.4 78.4 Real estate development 106.3 131.1 23.0 13.2 190.0 192.0 104.4 85.5 Holding, non-transferred activities and eliminations (1) -20.6 -16.8 2.6 -1.0 -61.0 -68.6 Total 1,125.3 1,026.2 39.5 17.7 133.8 95.3 CFE - Monteco - Brussels (artist impression) 89Annual report 2021 PARTNERS FOR SUSTAINABLE GROWTH • CFE is aware of its social responsibility and is ready to face the crucial challenges of climate change and mobility. • CFE decided to set itself concrete goals and is committed to reducing its direct CO 2 emissions by 40% (scope 1 and 2) by 2030. Greening of the vehicle ﬂeet, optimisation of the logistics on building sites, mon- itoring and optimisation of energy consumption, use of 100% green energy and rational management of water and materials are all means to achieve those goals. • Following on the highly successful experiences with the pilot projects in Belgium and Luxembourg in 2020, logistical coordination centres will be used again this year for new projects, allowing a new approach to logistics. The CO 2 reductions linked to the transport of materials that were measured on the Aurea project in Luxembourg reached ap- proximately 46%. • The carbon ambition is also central to BPI’s projects. Renovation, geo- thermal energy and reuse of materials are important elements of its new developments, as is best exemplified by the Key West and Arbo- reto projects. More than ever, BPI is striving for multimodal mobility in its projects so that they can be sustainably integrated in the heart of the city. • The strength of a company lies in the men and women that make it up. For that reason, the safety and well-being of every employee remains a top priority. • Thanks to this sustainability strategy, based on the analysis of the 17 sustainable development goals of the United Nations and an effective management of the ESG risks, CFE was able to achieve remarkable results in the analysis by the rating agency Sustainalytics. With a rating of 27.8 (‘medium risk’), the CFE group is one of the best in class in its sector. www.cfe.be Real Estate Development Sustainability and innovation are the two main features of the recent activity of BPI Real Estate (BPI). This is evidenced by the increasing investments in smart building, such as the connected apartments of the PURE project, and in the reduction of CO 2 emissions through the use of geothermal energy, as in the BrouckR project in Brus- sels. This project will be entirely heated and cooled with open geothermal energy, without fossil fuels. This multifunctional project on a communication hub comprises a hotel, residential units, offices and retail spaces in the heart of the Belgian capital. Another example is Serenity, a mixed residential and office project in which the office building will be constructed in a mixed timber/concrete structure using the most efficient and sustainable materials. Once it has reached the end of its life cycle, it can be completely dismantled and recycled. It will be heated by geothermal energy and co-generation, without consumption of fossil fuels. This project strives to obtain BREEAM Excellent certification and WELL Platinum certification. Further- more, Serenity is situated at a metro station and will provide Smart Office and Smart Parking systems to reduce the mobility needs of the users. There is also the positive impact of the redevelopment of Grand Poste, the building that opened in Septem- ber with spaces for co-working, start-ups and centre for starters, with a view to the development of a digital precinct and creative district in Liège. It won the ‘Grand Prix du Patrimoine de Liège’ and also received other nominations. Several major residential projects in the Brussels Region were delivered in 2021: Ernest The Park (Ixelles), the final phase of Les Hauts Prés (Ukkel) and the Park West residence (European quarter). Around 90% of the apartments of these projects have been sold. Construction work on Patio (Erasmus Gardens, Anderlecht) has begun, with more than 80% of the apartments already having found a buyer by the end of 2021. In Liège, BPI and its partner closed the sale of the company Ernst 11, owner of a 5,000 m² office building that is rented by FOREM. On the Baviere site, the sale and construction of the first residential building continued. The redevelopment project around Ottignies station, a real estate project with ac- companying services and functions, perfectly illustrates BPI’s long-term vision. It is structured by a nearly one kilometre long scenic ridge that will link up several neigh- bourhoods, each with its own identity. The many public spaces will offer meeting and recreational opportunities for the residents. The project will apply the circularity principles and reuse 36,000 tonnes of demolition materials. It will be a fossil-free project aimed at exemplary sustainability. In Luxembourg, four projects are under construction and commercialisation. Nearly 100% of the residential units are sold. The development of sustainable projects is central to BPI’s strategy, with two highly remarkable examples in Luxembourg. First, there is the Wooden project in Leudelange, an office building rented by the company Baloise Assurances. This wooden building is designed in such a way that it can be dismantled at the end of its life. Secondly, construction work began in 2021 on the Gravity project, which will use (shared) urban heating on the basis of biomass or pellets. In Poland, BPI continued to renew and expand its real estate development portfolio. Three new sites were acquired during the year: a land position ideally situated near Warsaw’s central station, where more than 240 housing units will be built; a land position in the Mokotow district, in the heart of one of the main business centres of the capital, where BPI will develop a micro-living concept with 600 rental homes; and a land position on the outskirts of Wroclaw city centre, where more than 10,000 m² of residential space will be developed for more than 185 housing units. Once the last apartments and retail spaces were sold, BPI was able in 2021 to focus on the preparation and design of the 7 projects it now has in its portfolio. Outlook 2022 On the strength of a solid order book, CFE Contracting should realise a further growth of its activity and keep improving its operational performance. BPI’s net result should remain on a high level, though lower than in 2021. The Holding division should benefit from the recovery of activity in Vietnam (Rent-A-Port) and should increase its contribution to the group’s net result, unless the health situation should deteriorate once more. 90 Your partner for sustainable growth Steven Theunissen During the fourth quarter, AvH and CFE increased the capital of Rent-A-Port by 11.5 million euros jointly. Rent-A-Port used this money to finance the redemp- tion of shareholder loans to IAI. In De- cember 2021, Rent-A-Port concluded an agreement to acquire an additional 32.6% stake in IAI, bringing its total participa- tion to 94%. The closing of the transaction is planned for the first quarter of 2022. Green Energy In October 2021, the construction of a first battery energy storage system (10 MW / 20 MWh) in Bastogne was completed. This project was successfully developed by Rent-A-Port Green Energy (Rent-A-Port 66.67%) and its partners to meet the de- mand for ﬂexible solutions in the supply of energy. This battery energy storage system can now be tested in practice in good market conditions with a growing demand. Meanwhile, the management is looking forward to starting up new pro- jects in 2022. Vietnam Rent-A-Port was unable in 2021 to fully live up to the expectations due to the persistent practical challenges presented by COVID-19 with regard to commercialisation. At 64 hectares, sales remained below the level of 2020 (89 hec- tares). The order book for 2022, however, remains well filled. Development of the DEEP C Indus- trial Zones in Haiphong was accelerated by the subsidiary IAI. At present IAI already owns a land portfolio of approximately 3,400 hectares near the new deep-sea port of Lach Huyen. This represents around 25% of all the available industrial land in northern Vietnam. DEEP C also provides support services. Substantial investments were made in a fibre optic network, in the underground electricity grid, and in the water distribution platform. The zone’s own ISO (9001 and 14001) certified waste- water treatment plant is operated by sister company DEEP C Blue. Furthermore, 22,000 m² of warehouses were built, while an expansion of the transshipment capacity is planned as well. These services ensure that one-third of the turnover in 2021 can be attributed to recurring operations. Due to the strategic location and the growing demand, the management remains confident that a significant increase in land sales may be expected in the coming years. Rent-A-Port specialises in the development of port-related industrial zones in Vietnam. RENT-A-PORT Ruben Baeckelandt Bruno Jaspaert Shareholding percentage AvH 81 % www.rentaport.be PARTNERS FOR SUSTAINABLE GROWTH • DEEP C has been selected by UNIDO (United Nations Development Organisation) in association with MPI (Ministry of Planning & Invest- ment) as a pioneer for the development of an Eco Industrial Park. This should become the blueprint of a new standard that will be imposed on Industrial Zones in the future. • DEEP C has during the past two years developed, on the basis of the UN’s SDGs, an action plan to transform those goals into clear and quantifiable standards, applied to the reality of an industrial en- vironment in Vietnam. For example, by 2030 it wants to obtain at least 50% of the energy needs of the DEEP C cluster from renewable sources. • These industrial zones create a lot of local employment and thus con- tribute to increasing prosperity. (€ 1,000) 2021 2020 2019 Turnover 50,527 72,706 32,828 EBITDA 8,656 16,894 6,416 EBIT 6,167 14,248 4,063 Net result (group share) 3,578 1,174 2,172 Shareholders’ equity (group share) 79,555 60,154 64,401 Net financial position -29,698 -66,106 -42,874 Balance sheet total 254,687 248,279 238,618 Rent-A-Port NV Rent-A-Port - DEEP C - Vietnam 91Annual report 2021 PARTNERS FOR SUSTAINABLE GROWTH • Rentel and SeaMade generate a total capacity of just under 800 MW, producing approximately 2.7 TWh a year. This is a substantial share of the total annual expected offshore production of approximately 8 TWh, which with 10% of the total electricity consumption in Belgium contributes to the increasing objective of obtaining more energy from renewable sources. • The two offshore wind farms together supply renewable energy to 700,000 households, allowing a reduction of 1,200,000 tonnes of CO 2 emissions on an annual basis. The realisation of SeaMade con- stitutes - for now - the final stage of the currently available conces- sion zone for offshore wind energy production. This brings the total capacity in the Belgian part of the North Sea at this stage to more than 2,200 MW. • Otary is very closely monitoring the future expansion of the Belgian offshore wind capacity to 5.8 GW, including the Princess Elisabeth zone, towards 2030 with a view to further strengthening its position in the Belgian offshore market. largest offshore wind farm in Belgium. The SeaMade wind farm generated nearly 1.6 TWh green power in 2021. Otary is shareholder of offshore wind farms in the Belgian North Sea with a total installed capacity of 796 MW. It operates and maintains the two wind farms from the port of Ostend. In order to improve the level of safety, convenience and efficiency, the service op- eration vessel Groenewind, a Small Waterplane Area Twin Hull (SWATH) vessel, was launched in June 2021. This vessel of DEME is deployed on the Rentel and SeaMade offshore wind farms. The ‘Groenewind’ is fitted with a motion compen- sated gangway to allow the safe transfer of the maintenance crews to the turbines of the offshore wind farms, even when there are waves of up to 2.5 metres. Thanks to the DP2 technology, the vessel can maintain its position in rough seas, and an impressive fuel consumption reduction of up to 50% can be achieved compared to a monohull SOV. Green Offshore holds (directly and indirectly) stakes in the Belgian offshore wind farms Rentel (12.5%) and SeaMade (8.75%), as well as a participating interest in the umbrella company Otary (12.5%). The Rentel offshore wind farm lies approximately 34 km from Ostend and has 42 wind turbines of 7.35 MW. With a total installed capacity of 309 MW, Rentel sup- plies renewable energy to approximately 300,000 households. In 2021, the Rentel wind farm generated almost one TWh green energy. This production fell short of expectations due to the fact that in 2021 there was less wind than usual. The SeaMade wind farm comprises the Mermaid and Seastar concession zones in the Belgian North Sea - respectively 50 km and 38 km off the Ostend coast - and has 58 wind turbines of 8.4 MW. With a total capacity of 487 MW, SeaMade is the Green Offshore is active in the development and operation of offshore wind farms. GREEN OFFSHORE Bruno Verbeke Wendy Goossens Christophe De Winter Mathias Verkest Shareholding percentage AvH 81 % Green Offshore - SeaMade (€ 1,000) 2021 2020 2019 Production (in GWh) Rentel 922 1,136 1,012 SeaMade 1,592 524 - Net result (group share) 4,831 11,430 4,926 Shareholders’ equity (group share) 26,622 14,749 15,642 Net financial position -7,853 -13,916 -11,340 Balance sheet total 38,610 29,096 29,575 Green Offshore NV 92 Your partner for sustainable growth Delen Private Bank and Bank Van Breda reported impressive results in 2021 also: the strong increase of assets under management is reﬂected in record results for both banks. Contribution to the AvH consolidated net result (€ million) 2021 2020 2019 FinAx -0.2 -0.2 -0.2 Delen Private Bank 132.0 103.5 93.4 Bank Van Breda 51.3 38.0 34.1 Total 183.1 141.3 127.3 Bank Delen DELEN PRIVATE BANK Delen Private Bank focuses on discretionary asset management for private clients. BANK VAN BREDA Bank Van Breda is a specialised advisory bank that focuses exclusively on entrepreneurs and liberal professions. 79 % 79 % 94 Your partner for sustainable growth Notwithstanding continuous investment in a.o. staff and IT, the combined gross operating income increased faster than the costs, causing the cost-income ratio (including 15.9 million euros bank taxes) to decrease to 52%, compared to 54% at the end of 2020. This cost-income ratio is exceptionally good compared to the market and is due to the efficient organisation with robust processes and a high degree of digitalisation, competent staff, good cooperation between Delen Private Bank and Bank Van Breda, and the quality of the assets under management. The combined net profit increased by 29.7% to the record level of 233.5 million eu- ros (2020: 180.2 million euros), of which 167.6 million euros contributed by Delen Private Bank (including 8.1 million euros by JM Finn) and 65.2 million euros by Bank Van Breda. The provisions for credit losses are positive, namely +2.2 million euros due to greater reversals than additions of provisions. Due to the adjustment of the macroeconomic outlook, the COVID-related ECL provisions were partly reversed. The shareholders’ equity increased to 1,691 million euros (compared to 1,562 mil- lion euros at year-end 2020). Solvency and liquidity remain exceptionally strong, with a combined common equity tier1 ratio (CET1) based on the ‘Standardised approach’ of 23.8% and a leverage ratio of 13.2%, well above the industry aver- age and the legal requirements. Despite this conservative balance sheet, the group achieved an above-average ROE of 14.4%. The excellent commercial results of both Delen Private Bank and Bank Van Breda, combined with a positive stock market climate, resulted in a new record level of client assets of 63.9 billion euros, compared to 59.8 billion euros at June 30, 2021 and 54.1 billion euros at December 31, 2020. The increase was both attributable to the record (gross and net) inﬂow of capital and to the value increase of the assets. Both Delen Private Bank and Bank Van Breda managed to retain the confidence of their customers throughout the corona crisis. As in previous years, inﬂow at Delen Private Bank and Bank Van Breda is approximately evenly spread between new clients and additional deposits by existing clients. This is due to the commercial efforts of the account managers, high client satisfaction (e.g. Net Promoter Score of 58 at Delen Private Bank and of 53 at Bank Van Breda), and the expansion of the branch network of Delen Private Bank in recent years. The 11.5 billion euros from clients of Bank Van Breda that are managed by Delen Private Bank is evidence of the good cooperation between the two financial institutions. The combined (Delen Private Bank + Bank Van Breda) gross operating income increased by 18.7% to 633 million euros (534 million euros over 2020). This is primarily due to the strong commercial performance mentioned earlier, with the ac- companying evolution from cash and advisory management towards discretionary management. Over 2021, 86% of the total combined operating income consisted of commission income, which makes the result only to a limited degree dependent on interest result. Nevertheless this also experienced a modest increase, thanks to the above-mentioned volume increase in the loan portfolio and the participation in the TLTRO III programme, an ECB instrument that encourages banks to provide loans to businesses and consumers, and also reduces the bank’s finance costs. PRIVATE BANKING Delen Private Bank and Bank Van Breda reported impressive results in 2021 also: the strong increase of assets under management is reﬂected in record results for both banks. Delen Private Bank - Refurbished headquarters - Antwerp 95Annual report 2021 Total client assets Key figures Delen Private Bank and Bank Van Breda combined (100%) (€ mio) 2021 2020 2019 Total client assets Delen Private Bank (AuM) 54,346 45,116 43,566 of which discretionary 85% 84% 83% Delen Private Bank 40,340 33,771 32,118 Delen Private Bank Netherlands 1,154 859 629 JM Finn (1) 14,006 11,345 11,448 Bank Van Breda Off-balance sheet products 14,720 11,948 10,651 Client deposits 6,368 5,907 5,416 AuM at Delen (2) -11,502 -8,873 -7,761 Delen and Van Breda combined (100%) 63,932 54,098 51,872 Gross inflow AuM 5,598 3,585 3,234 (1) AuM JM Finn in £: 11,769 mio (2021), 10,200 mio (2020), 9,740 mio (2019) (2) Already included in Delen Private Bank AuM (€ mio) Delen and Van Breda combined (100%) Delen Private Bank Bank Van Breda 2021 2020 2019 2021 2020 2021 2020 Profitability Operating income (gross) 633 534 504 506 412 185 164 Net profit 233 180 163 168 131 65 48 Gross fee and commission income as % of gross operating income 86% 83% 82% 99% 99% 54% 48% Gross fee and commission income as % of total AuM 1.0% 0.9% 0.9% 1.0% 1.0% 0.7% 0.7% Cost-income ratio 52% 54% 56% 50% (1) 54% 55% 56% Balance sheet Total equity (incl. minority interests) 1,691 1,562 1,384 1,024 940 678 620 Total assets 10,072 9,117 8,667 2,429 2,054 7,792 7,211 Customer deposits 6,368 5,907 5,416 - - 6,368 5,907 Customer loans 6,458 5,885 5,656 710 470 5,748 5,415 Risk-weighted assets 5,614 5,605 5,818 1,806 1,488 3,849 4,153 Cost of risk (2) -0.04% 0.09% 0.03% - - -0.04% 0.10% Key ratios Return on equity 14.4% 12.2% 12.1% 17.0% 15.0% 10.0% 8.1% CET1 ratio 23.8% 21.7% 19.5% 38.0% 40.5% 16.8% 14.7% Leverage ratio 13.2% 13.3% 12.9% 30.2% 32.4% 8.1% 8.2% LCR 208% 249% 327% 495% 614% 160% 171% (1) JM Finn: 87.3% (2) Of which ECL (expected credit loss) -0.05% (2021), 0.07% (2020), 0.01% (2019) 96 Your partner for sustainable growth This significant increase to more than 40 billion euros was explained, besides the value increase of the underlying assets, by the net inﬂow that reached a record level. This inﬂow of assets - from both existing and new clients - related almost exclusively to discretionary as- set management. All Belgian branches contributed to this inﬂow. The outﬂow of capital was low in 2021 thanks to the good support given to clients, which validates the strategy of opening new branches. The strengthened Dutch team also reported a strong inﬂow thanks to the sustained commercial efforts. As of 2022, the Dutch branch operates under the name Delen Private Bank, an important mile- stone. Under this new name, the Dutch team will foster the further growth of the ‘Delen formula’. At the British asset management company JM Finn (Delen Private Bank 93.4%), the assets under management reached a record level of 14,006 million euros (11,769 million pounds sterling) at year-end 2021 (2020: 11,345 million euros, 10,200 million pounds sterling). The increase was primarily attributable to the record gross and net inﬂow of capital and the value increase of the assets. The assets under management expressed in euros increased further due to the strong pound against the euro (+7%). Increase of the net result by 27.5% The average assets under management at Delen Private Bank in 2021 was slightly above the average of 2020. The shift from cash to management, which began in 2020, continued, driven by persistently strong stock market performance, consist- ently attractive returns of the funds, and the low interest rates. This resulted not only in a record consolidated gross inﬂow of assets, but also in higher gross operat- ing income (506.8 million euros in 2021, compared to 412.4 million euros in 2020). Delen Private Bank continued to keep a tight rein on costs in 2021. On the one hand, the corona crisis kept marketing expenditure, in particularly the costs of events, at a low level. On the other hand, the bank continued to invest in IT and IT security and, out of solidarity with the victims of the pandemic and the ﬂoods, the budget for charity work was increased. Also worth noting is the huge effort to hire extra staff - an increase of as many as 71 new people in one year. At JM Finn, the costs increased as a result of higher costs for IT and staff, despite lower market- ing costs. Overall, the cost-income ratio decreased further to 50.17% (39.91% at Delen Private Bank, 87.27% at JM Finn), an exceptionally strong figure in the sec- tor. Financial overview 2021 Record inﬂow thanks to favourable stock market context and strong customer confidence The economic downturn in 2020 was followed by a vigorous economic recovery in 2021. The stock markets followed in the wake of favourable macroeconomic figures and exceptionally strong operating profits. In this fertile context, Delen Private Bank was able to bring the seed of trust that was planted in the crisis year 2020 to full bloom. Clients felt reassured by the prudent portfolio decisions and the clear pro- active communication, and became ambassadors of the bank. 2021 was a record year in terms of gross and net inﬂow in Belgium, the Netherlands and the United Kingdom. The assets under management of Delen Group (consolidated) reached a record level of 54,346 million euros at year-end 2021 (2020: 45,116 million euros). At Delen Private Bank (Belgium, the Netherlands, Luxembourg, Switzerland), the assets under management amounted to 40,340 million euros at year-end 2021 (2020: 33,771 million euros). Of that amount, 1,154 million euros originates from the branch of Delen Private Bank in the Netherlands (2020: 859 million euros). Consolidated assets under management Delen Private Bank focuses on the management and planning of assets of primarily private clients. The group has developed into an established name in Belgium, and has a growing presence in the other Benelux countries and in the United Kingdom (JM Finn). DELEN PRIVATE BANK Shareholding percentage AvH 79 % Katrin Eyckmans Eric Lechien Bart Menten Alexandre Delen Matthieu Cornette Michel Buysschaert René Havaux 50,000 40,000 30,000 20,000 10,000 7,938 (€ million) 46,408 (€ million) Discretionary mandates Under custody and advisory 54,346 (€ million) 97Annual report 2021 The net profit of Delen Group increased to 167.6 million euros in 2021 (compared to 131.4 million euros in 2020). JM Finn’s contribution to the net result of the group was 8.1 million euros (in 2020: 7.8 million euros). The consolidated equity of Delen Group amounted to 1,022.5 million euros as at December 31, 2021, compared to 940.3 million euros as at December 31, 2020. The group’s common equity tier1 capital, after deduction of primarily intangible assets, amounted to 686.7 million euros at year-end (year-end 2020: 603.4 million euros). Delen Private Bank is more than adequately capitalised, and fully meets the Basel III requirements in terms of shareholders’ equity. The common equity tier1 ratio of 38.0% is well above the industry average. Delen Group has a solid and easily understandable balance sheet. The return on the (average) equity amounted to 17%, a highly satisfactory figure. Operational overview 2021 by activity Delen Private Bank (Benelux and CH) The only certainty in 2020 and 2021 was uncertainty. This threw the mission of Delen Private Bank, who wants peace of mind for its clients, into sharp relief: pro- tection and prudent management of the client assets. To achieve this, the bank relies on its fund manager Cadelam, which consistently abided by its long-term investment strategies: diversified, sustainable and thematic. This was translated into solid returns for the portfolios of the clients. The fund managers of Cadelam responded proactively to the strong economic re- covery and the steadily rising inﬂation, in particular by rotation from growth to value stocks and a slight decrease of the duration of the bond portfolio. At year-end 2021, 86% (30,508 million euros) of the entrusted assets in Belgium were managed directly under a discretionary management mandate or through the bank’s own patrimonial beveks (open-ended investment trusts). Expressed in num- ber of accounts, the share of discretionary management accounts is 96%. Delen Private Bank continues to gain market share in the Belgian private banking niche, also thanks to the strong increase in new private capital. The increased local embedding of the bank is bearing fruit. This encourages Delen Private Bank to con- tinue to invest in staff and infrastructure. In 2021, Delen Private Bank announced it would open a new branch in Zellik (West Brabant) by mid-2022. The end of 2021 also saw the reopening of the splendidly refurbished head office in the historic buildings on the Jan Van Rijswijcklaan in Antwerp. The town houses with numbers 174 to 192 were transformed into a harmonious, comfortable and modern building where Delen Private Bank can receive its clients in the typical homely Delen style. As a protector of the Belgian heritage, the bank also paid much attention to the preservation of the original soul and architecture of the building. Naturally, green electricity and modern energy-saving and sustainable technologies were opted for too. Besides physical presence, the bank also invests heavily in its digital channels. The pandemic highlighted the need and desire for a safe and efficient service, wherever and whenever the client wants it. Delen Private Bank meets this need by continu- ously updating and renewing the functionalities on its Delen ap and Delen OnLine. With Delen Family Services, the bank also offers the client a service that gives him 24/7 a full overview of his assets, including a digital archive for his important doc- uments. This forms the basis for the analysis of his financial situation and for the planning of his accumulated wealth. In the Netherlands, the commercial efforts of the well-integrated and reinforced team were also rewarded with solid figures. The threshold of 1 billion euros assets under management was exceeded. The strategy in the Netherlands is fully aligned with that of Delen Private Bank and also encompasses the Delen Family Services. (€ 1,000) 2021 2020 2019 Gross revenues 506,760 412,422 388,642 Net result (group share) 167,556 131,387 118,609 Shareholders’ equity (group share) 1,022,453 940,277 809,625 Assets under management 54,345,999 45,116,280 43,564,970 Cost-income ratio 50.2% 53.6% 55.3% Return on equity 17.1% 15.0% 15.3% CET1 ratio 38.0% 40.5% 36.7% Personnel 829 757 718 Delen Private Bank Delen Private Bank - AntwerpDelen Private Bank - Antwerp 98 Your partner for sustainable growth PARTNERS FOR SUSTAINABLE GROWTH • Responsible investment and asset protection are the cornerstones of Delen Private Bank’s ESG policy. Delen Private Bank is a member of the UN PRI, consistently integrates sustainability parameters into its investment process and has in the past been awarded the A+ rating by the UN PRI for its strategy and policy. Through its partnership with EOS, Delen Private Bank also enters into dialogue with the companies in its funds. Furthermore, the principle of dynamic and good steward- ship forms the basis for thorough asset protection. • The main capital of Delen Private Bank are the clients. Listening to the client is the best way to self-improvement. Besides regular contact between client and account manager, Delen Private Bank organises a formal feedback moment every two years through a client satisfaction survey. These are the main findings in 2021: • The Net Promoter Score (recommendation percentage) increased from 43 (2019) to 58. This is far above the industry average. • 9 in 10 clients appreciate the sustainable conduct of the bank as an organisation and the philosophy of responsible investment. • The wide range of its services (such as Delen Family Services) and the advantages of the digital channels still appear to be insuffi- ciently known. The bank will step up its efforts to remedy this. Bank Van Breda once again made a significant contribution to the result and repre- sented approximately 28.5% of the total assets under management. On December 31, 2021, Delen Private Bank managed 9,759 million euros on behalf of clients in- troduced by the Bank Van Breda network. In addition, Delen Private Bank handled the securities administration of Bank Van Breda (1,743 million euros). JM Finn (UK) The UK stock market can look back on a strong year. The asset managers of JM Finn took advantage of this favourable context. They maintained a strong geographical diversification of their portfolio and their choice of British multinationals, making them less dependent on the British economy. Like Delen Private Bank in Belgium and the Netherlands, JM Finn was able to report a record gross inﬂow of assets. The relocation to a new office in London and the renewed management team created an extra positive dynamic that resulted in a growing commercial commitment. Since the acquisition of JM Finn in 2011, Delen Private Bank increased its direct shareholding to 93.4%. At year-end 2021, JM Finn managed 14,006 million euros (11,769 million pounds sterling) of entrusted funds, 83% of which in discretionary management. The level of the assets under management and the expansion of the discretionary management segment confirmed that JM Finn is a healthy company with growth potential. The position of JM Finn in the British onshore asset manage- ment market, combined with the dedication and experience of Delen Private Bank, will enable JM Finn to continue to expand and to evolve into a prominent player in the British market. The impact of Brexit on JM Finn is very limited: JM Finn is a British asset manager with British clients. Expenses and revenues are expressed in pounds sterling. Outlook 2022 2022 began with some uncertainties. Corona will continue to have an impact this year too. Inﬂation will remain an important issue. Geopolitical developments must be monitored, with the impact of the Ukraine crisis on financial markets being an additional factor of volatility. Besides asset management, Delen Private Bank will continue in 2022 to improve its estate planning services. Delen Family Services will be developed further, including through the Delen app. To support its growth, the bank will continue to hire new staff. Delen Private Bank, in Belgium and the Netherlands, and JM Finn will in 2022 continue their efforts to attract new capital, with a focus on regions where the banks’ name is becoming better known. Besides internal growth opportunities, the group will look into opportunities for acquisition whenever interesting parties with a similar strategy cross our path. www.delen.be Delen Private Bank - Antwerp 99Annual report 2021 and despite an 11% increase in costs. This result was driven by a very strong commercial performance and an incre- ase of commercial volumes, both in ban- king services for entrepreneurs and libe- ral professionals and at Van Breda Car Finance. The provisions for credit losses are positive, namely +2.2 million euros due to greater reversals than additions of provisions. Due to the adjustment of the macroeconomic outlook, the COVID-related ECL provisions were partly reversed. The commercial volumes (total invested by clients + lending) increased to 26.8 billion euros in 2021 (2020: 23.3 billion euros). The bank’s shareholders’ equity increased to 678 million euros, and a 10% return on equity (ROE) was realised. Increase of commercial volumes The capital invested by clients increased by 3.2 billion euros to 21.1 billion euros (2020: 17.9 billion euros). This amount consists of 6.4 billion euros (+8%) client deposits and 14.7 billion euros (+23%) off-balance sheet products. This increase of the off-balance sheet products is due to the positive stock market development and, to a greater extent, to a strong net inflow thanks to a greater focus of the commercial network to position Bank Van Breda as an asset partner. The market share increased of both target group clients, entrepreneurs as well as liberal profes- sionals. The total loan portfolio increased by 6% to 5.7 billion euros. The consolidated operating income increased by 13% to 184 million euros. Reali- sed capital gains, dividend income and results of hedging instruments represented less than 2% of the total operating income, which is therefore almost entirely com- mercially driven. The interest result increased slightly (+1.2% compared to 2020). On the one hand, the bank realised a solid growth in the volume of loans despite falling interest rates and high competitive pressure on the interest rate margin. The fee income increased by 27%, primarily thanks to the strong increase in off-balance sheet investments of clients. This is on the other hand attributable to the participation in the TLTRO III programme, an ECB instrument that encourages banks to provide loans to busines- ses and consumers, and also reduces the bank’s finance costs. The costs increased by 11% to 101.6 million euros. Apart from the increased bank levy (+15%), the personnel costs in particular have increased (+21%), due to a further increase of staff numbers and of the performance-related compensation such as the stock options for staff and directors, the variable remuneration of sales staff, and profit-sharing bonuses for the entire staff complement. This increase is explained by the exceptional commercial and financial performance. In 2021 the world remained in the grip of the coronavirus. It had a significant impact on the global and Belgian economy, the educational and healthcare sectors, everyone’s private life and the professional activities of the clients of Bank Van Breda. Its first priority was to protect, inform and support colleagues and clients. The investments in IT and digitalisation of the past few years allowed the bank to carry on providing its services without interruption, usually from home. The bank kept in close touch with its clients and managed to communicate with them as personally as possible. Financial overview 2021 Despite the persistent corona crisis, the economy already experienced a strong reco- very in 2021. Additionally, there was a positive stock market climate in 2021. In this context, Bank Van Breda reported an excellent result of 65.2 million euros, which is a 35% increase compared to 2020. The gross operating result (operating income - costs) increased by 11.5 million euros (+16%) to 82.6 million euros thanks to a 13% increase in operating income Bank Van Breda is a specialised niche bank that focuses on supporting entre- preneurs and liberal professions in building up, managing and protecting their assets. BANK VAN BREDA Vic Pourbaix Marc Wijnants Véronique Léonard Tom Franck Dirk Wouters Shareholding percentage AvH 79 % Invested by clients Off-balance sheet products Client deposits Loan portfolio 15,000 14,000 13,000 12,000 10,000 11,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 14,720 (€ million) 6,368 (€ million) 21,088 (€ million) 100 Your partner for sustainable growth HAPPY CLIENTS, HAPPY STAFF MEMBERS In reply to the question “To what extent would you recommend Bank Van Breda to other entrepreneurs or liberal professionals?”, 62.40% of the clients gives us a score on a ten-point scale of 9 or 10 (‘promoters’) and 9.83% gave a score of 6 or lower (‘detractors’). This gives the bank an excellent Net Promo- ter Score (NPS) of +53. This is one of the best figures in the Belgian banking sector. In addition to high client satisfaction, Bank Van Breda also enjoys high staff satisfaction. From the ´Great Place to Work´ survey that was conducted in November 2021, it appeared that 98% of the staff members consider the bank to be a very good organisation to work for. Bank Van Breda was again nominated as Best Employer and was awarded first place as ‘Best Workplace’ in the ranking of large companies with more than 500 employees. Over the past two years, the costs have increased on average by 5% per year. This somewhat discounts the corona year 2020, in which costs were lower than normal. Despite the increasing costs in 2021 but thanks to the stronger increase in opera- ting income, the cost-income ratio improved from 56% in 2020 to 55% in 2021. This makes Bank Van Breda one of the better performing Belgian banks. Impact of the corona crisis The bank did not report any significant losses on specific loans in 2021. Impairment losses on loans (excluding ECL) were limited to 0.6 million euros in 2021, or just 0.01% of the average loan portfolio (compared to 0.02% in 2020). Moreover, the bank reduced the provisions for expected credit losses (ECL) to 7.1 million euros, after having increased them in 2020 to 9.9 million euros because of the uncertainties linked to the corona crisis. Taking into account the (partial) reversal of 2.8 million euros in provisions for expected credit losses, the credit cost ratio (including ECL) was -0.04% in 2021, compared to 0.10% in 2020. The minus sign means that this has a positive effect on the results. Strong liquidity and solvency Based on its prudent approach, the bank always ensures a generous liquidity posi- tion. The Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR) amount to 160% and 135% respectively, well above the required lower limit of 100%. The credit portfolio is fully financed through client deposits, so the bank is not dependent on external financing on the international markets. The shareholders’ equity (group share) increased from 620 million euros to 678 million euros, contributing to the strong solvency, which is the main protection for the deposit holders. The common equity ratio (CET1 ratio) stood at 16.8%, and the solvency expressed as shareholders’ equity to assets (leverage ratio) was 8.1%, a multiple of the legally required 3%. Operational overview 2021 by activity Bank Van Breda The commercial expansion continued apace in 2021. In another unusual corona year, not only was there a bullish market but the total assets under management of entrepreneurs and liberal professions grew by 3.2 billion euros to 20.7 billion euros. Despite a context of low interest income, the client deposits increased by 469 milli- on euros (+8%) to a total volume of 6.2 billion euros. The off-balance sheet products increased by 2.8 billion euros (+23%) to 14.6 billion euros. Of this amount, 11.5 billion euros has been entrusted to Delen Private Bank in the form of asset management and funds. Despite the stiff competition and the expiry of corona measures such as principal deferment (deferred repayments), the volume of loans to entrepreneurs and liberal professionals increased by 297 million euros (+6%) to a volume of 5.2 billion euros. Bank Van Breda (€ 1,000) 2021 2020 2019 Operating income 184,193 162,681 149,564 Net result (group share) 65,178 48,295 43,362 Shareholders’ equity (group share) 678,459 620,249 573,343 Balance sheet total 7,791,801 7,211,370 6,380,896 Invested by clients 21,087,881 17,855,170 16,066,871 Loan portfolio 5,748,252 5,414,654 5,232,650 Net loan loss provision -0.04% 0.10% 0.03% Cost-income ratio 55.1% 56.3% 61.3% Return on equity 10.0% 8.1% 7.7% CET1 ratio 16.8% 14.7% 13.1% Solvency ratio (RAR) 17.9% 15.7% 14.2% Personnel 518 502 486 101Annual report 2021 PARTNERS FOR SUSTAINABLE GROWTH Bank Van Breda opts to systematically and expressly integrate its econo- mic, social and environmental commitment in its corporate policy. The Sustainable Development Goals (SDGs) of the United Nations provide a global framework for this. From its specialisation in services for entrepre- neurs and liberal professions, the bank primarily endorses these three goals: ‘SDG 3 Good Health and Well-being’, ‘SG 8 Decent Work and Economic Growth’, and ‘SG 16 Peace, Justice and Strong Institutions’. • For a bank, sustainability means, in the first place, that it is solvent and that it is always able to meet its commitments without having to rely on society to support it. The banking crisis of 2007-2008 was the ultimate proof. Bank Van Breda remained at all times a ‘healthy bank’ and a ‘safe harbour’. With a leverage ratio of 8.1% (shareholders’ equity to assets) and only 0.01% impairment losses on loans, the bank is still in a very strong position to play its economic and social role to the full today. The bank is not dependent on the financial markets to finance its loan portfolio (90% loans vs. client deposits). • Bank Van Breda protects the wealth that clients have accumulated over the long term - often across several generations. It does so by helping entrepreneurs and liberal professionals to make the right fi- nancial choices. This is socially relevant, since entrepreneurs are the engine of the economy. The liberal professions guarantee health care, legal certainty and financial transparency. Together, they make a cru- cial contribution to our prosperity and well-being. • Staff satisfaction (98%) and spontaneous recommendation by clients (Net Promoter Score of +53) rank among the best in the Belgian financial sector for several years now. The bank intends to at least maintain, and where possible further strengthen, this pole position. Moreover, the bank is paying more explicit attention to the broader social relevance of its activities. ESG factors (Environment - Social - Governance) play an increasingly important role in the policy on client acceptance, lending, investments, choice of suppliers, and reducing the bank’s ecological footprint. Van Breda Car Finance 2021 was still a challenging year for the automotive industry. The consequences of the corona crisis continued to be felt in the delays in delivery of new cars. This was reflected in the trend of new car registrations on the Belgian market (11.2% fewer passenger cars and 0.3% more commercial vehicles according to Febiac). On the other hand, the market for second-hand vehicles grew substantially (+7.5% accor- ding to Traxio). Thanks to strong partnerships, Van Breda Car Finance was flexible in its ability to respond to these market trends. In 2021, Van Breda Car Finance once again reported a strong commercial per- formance, thanks to investments in building intensive customer relations and launching new partnerships. The production volume increased by 17%, while the portfolio increased by 10% to 544 million euros. Outlook 2022 The continuing presence of the coronavirus has meant that these record results were achieved in what is still a very challenging economic context. The impact of this public health crisis as well as the measures adopted by both governments and central banks will continue in the coming years to make for considerable uncertain- ty. At the end of 2021, there was an unmistakeable rise in inflation, although for the moment interest rates remain low. Despite the ongoing pressure on interest rate margins, high bank levies, essential investments in the future and uncertainty about possible credit losses as a conse- quence of the continuing corona crisis, Bank Van Breda remains very well equipped for the future. www.bankvanbreda.be Bank Van Breda - Antwerp • The commercial strength and positioning should ensure the continued increase of entrusted assets. The impact of this increase on the operational result will also depend on the interest rate climate, the competitive environment and the impact of the geopolitical tensions on the financial markets. • Bank Van Breda continues to invest in the future. New initiatives in the field of digitalisation, such as the asset management app ‘My Plan’ for entrepreneurs and liberal professionals, will continue to play a crucial role. A team of competent staff, satisfied clients, the reputation, positioning, ongoing investments and sound financial structure of the bank all serve as a solid basis for healthy financial growth over the long term. 102 Your partner for sustainable growth The creation of Nextensa as an integrated real estate investor and developer laid the foundations for a further optimisation of the investment portfolio and project developments. The 1,631 staff members of Anima continued in 2021, under difficult (corona) circumstances, to give the best of themselves to offer their more than 2,100 residents the best possible care. Contribution to the AvH consolidated net result (€ miljoen) 2021 2020 2019 Nextensa 38.6 - - Leasinvest (1) - 3.3 15.7 Extensa Group (1) - 25.9 29.5 Anima 4.1 3.4 5.0 Total 42.7 32.7 50.2 Nextensa - Tour & Taxis - Brussels (1) Figures as of 2021 included in Nextensa figures NEXTENSA Nextensa is a mixed real estate investor and developer with focus on Belgium, Luxem- bourg and Austria. ANIMA Anima focuses on the up-market segment of accommodation and care for the elderly in Belgium. 59 % 93 % 104 Your partner for sustainable growth This had various consequences related to the extension of the asset classes with the addition of the residential develop- ment and event activities and to the further strengthening of the position in Luxembourg. The synergy between the two groups also occasioned a complete sustainability transition for the company. This change has also been felt in the financial sphere. The financing of the former Leasinvest Real Estate had to be completely reappraised, with all banks, bond- holders and holders of commercial paper being asked to agree to revised financial covenants, although the commercial conditions were not changed. The tax-transparent SICAV-FIS status in Luxembourg was renounced at the same time and the old structures that remained for the Knauf shopping centres were reformed and/or liquidated. In the difficult COVID-19 context, the Food Court opened at Gare Maritime at the end of November 2021, and received no less than 36,000 visitors in the first month after the opening. The Knauf shopping centres in Luxembourg and Frunpark in Asten also experienced strong growth in visitor numbers, even compared with 2019 (pre-coronavirus). The evolution of the corona pandemic seems promising, with the revival of the event sector expected in the near future, which will allow the strengths of the Tour & Taxis site to be fully turned to good account. 2021 was a year of great change for Leasinvest and Extensa. Nextensa emerged from the combination of both companies, and will contribute to new urban projects and the development of high-grade real estate on a larger scale, driven by an in- novative approach in the area of sustainability. Nextensa will develop real estate from the perspective of managing a sustainable portfolio and realising capital gains on the sale of projects. Leasinvest Real Estate renounced its REIT status on July 19, and Nextensa emerged from the business combination with Extensa Group. Nextensa is now a mixed real estate investor and developer focused on Belgium, Luxembourg and Austria. In the context of this transaction, AvH contributed 100% of Extensa and Leasinvest Real Estate Management to Leasinvest. These contributions represented a joint val- ue of 293.4 million euros and were compensated by the issue of 4,075,458 new shares. As a consequence, AvH owns 58.5% of the capital following the transac- tion. Since the summer of 2021, the whole Tour & Taxis site, with its iconic ﬂagship Gare Maritime, one of the most sustainable buildings in Brussels, belongs to Nextensa. Nextensa positions itself as a real estate investor and developer active in Bel- gium, Luxembourg and Austria. NEXTENSA Olivier Vuylsteke Tim Rens Peter De Durpel Michel Van Geyte Shareholding percentage AvH 59 % Nextensa - Cloche d’Or - Luxembourg Real estate portfolio (% based on fair value) Offices Retail Other Luxembourg Belgium Austria Countries Asset classes 45% 42% 51% 39% 13% 10% Nextensa - Gare Maritime - Food Market - Brussels Financial overview 2021 Following the contribution in kind of Extensa Group, the results of Nextensa as of December 31, 2021 consist of the twelve-month results of Leasinvest and the results of the second half of 2021 of Extensa. This change in the consolidation scope makes it difficult to compare the annual figures for 2021 with those of the previous year. The net profit of the new group amounted to 53.2 million euros as of December 31, 2021. Extensa’s 14.5 million euros contribution in the first half of 2021 (before the creation of Nextensa) is included in Nextensa’s 38.6 million euros contribution for the full year 2021. Nextensa’s investment portfolio was valued at 1.4 billion euros on December 31, 2021. To Leasinvest Real Estate’s original portfolio of approximately 1.1 billion euros were added the historic buildings on the Tour & Taxis site from the former Extensa portfolio. Those properties include Gare Maritime, Maison de la Poste, the Sheds, Hôtel des Douanes and the (underground) car parks on the site. As a result of this addition, the share of Belgium in the portfolio increased to 42%. Neverthe- less, Luxembourg remains the biggest market with 45%, while Austria represents 13%. According to type of assets, the portfolio comprises 51% offices and 39% retail. The remaining 10% represents ‘other’ real estate, such as car parks and real estate for events. In 2021, Nextensa was still confronted with temporary shop closures and manda- tory telework due to the corona pandemic. Where in 2020 the pandemic was still responsible for a loss of rental income of approximately 4 million euros, the impact in 2021 remained limited to around 1 million euros. The occupancy rate decreased slightly to 89.1%, primarily because the retail space in the Gare Maritime could not yet be let because of the corona pandemic. In view of the success of the Food Market and the significant increase in visitor numbers on the site, Nextensa is hopeful about the commercialisation of the retail units. The yield on the real estate portfolio was 5.20% based on the fair value (5.08% based on the investment value), a decrease by half a percent compared to 2020 and in line with the market trend. The participation in Retail Estates, which in accordance with IFRS is reported as a financial fixed asset but is analytically regarded as part of the investment portfolio, was remeasured by an amount of 16.6 million euros following the upturn of the stock market price in 2021. The participation was worth 96.5 million euros at year- end 2021. Since the business combination with Extensa Group, Nextensa also has inventories and work in progress. The inventories, worth 113 million euros, primarily comprise the vacant lots on the Tour & Taxis site which will be developed in the future (Park Lane Phase II and Lake Side), while the work in progress concerns the residential development project Park Lane Phase I (65.5 million euros). The development project on Cloche d’Or in Luxembourg is accounted for in the consolidated figures according to the equity method, and represented a value of 51 million euros on the balance sheet. The shareholders’ equity increased substantially as a result of the contribution in kind of the shares of Extensa and Leasinvest Real Estate Management on July 19, 2021 (+293 million euros). The financial debt ratio, i.e. the financial debt divided by the balance sheet total, was 48.6% (compared to 54.0% in 2020). The loan-to-value of the investment portfolio is still 55.6%, although it is expected that this will decrease drastically as a result of the sale of three buildings. 106 Your partner for sustainable growth Operational overview 2021 Investment portfolio Belgium The Monteco office building (Brussels, Montoyer 14) is a prime example of Nexten- sa’s sustainability ambitions. The timber structure convinced Bank Nagelmackers to sign a 12-year lease. The new building is scheduled for completion in Q4 2022. The high-grade mixed project Hangar 26/27 in Antwerp was developed in associa- tion with Danish architecture firm CF Moller, with the extension of both office and retail space. In this exceptional and unique location in the city, special attention was given to ensuring harmonious connections between the private spaces of the project and the public spaces of the quays. The last tenant vacated the ground ﬂoor on June 30, 2021. Renovation work began on the ground ﬂoor (1,000 m²) and the façade in September 2021. Discussions on a new food concept have reached an advanced stage. Brewery AB InBev and Nextensa have joined forces for a brand-new food concept. At the end of November they opened a Food Market in Gare Maritime, the bustling commercial heart of Tour & Taxis. This innovative culinary concept has immediate- ly won the hearts of the people of Brussels, attracting more than 36,000 visitors in the first month since opening. This is far above expectations given the corona pandemic. A 12-year lease was concluded with Unicef for 900 m² in the office part of Gare Maritime. The lease commences on April 1, 2022 and fits in perfectly with Unicef’s sustainability strategy. Grand Duchy of Luxembourg The extension of the shopping centre Knauf Schmiede (approx. 8,500 m²) will be completed in the summer of 2022. This extension will encompass a broader com- mercial offering, an innovative catering concept, and an activity and relaxation area for families. Except for one unit, the new phase is virtually fully let, albeit in the form of Letters of Intent (LOI). The new three-storey car park is now operational at the Knauf Pommerloch shop- ping centre in the north of the Grand Duchy close to the Belgian border. A number of new tenants, including Fressnapf, New Yorker and Foot Locker, have moved in, driving footfall back up to the 2019 level. The EBBC Business Park, now renamed ‘Moonar’, will be completely repositioned as a new office campus in Luxembourg. The concept will emphasise community and outdoor green spaces, with various places to meet, such as libraries, coffee bar and terraces. The estimated renovation budget is 34 million euros, with completion expected in the course of 2023. A number of currently vacant spaces are no longer offered on the market, enabling their gradual renovation to be started and contin- ued. The first negotiations have now been initiated with potential tenants. Divestments The remaining semi-industrial premises in the Brixton Business Park were sold in February 2021, generating a profit of approximately 3 million euros. A non-strategic supermarket in Diekirch (Luxembourg) was also sold at a profit of approximately 1 million euros. Nextensa’s strategy is aimed at aligning the portfolio to the new investment criteria. In this connection, sales agreements with conditions precedent were signed for three buildings, more particularly The Crescent (Anderlecht, Belgium), Monnet 4 (Kirch- berg, Luxembourg) and Titanium (Cloche d’Or, Luxembourg). These three properties together are worth 140 million euros. The Crescent and Monnet 4 have meanwhile been sold in February 2022. The sale of Titanium is planned for the end of 2022. Nextensa NV (€ 1,000) 2021 2020 (2) Rental income 65,174 (1) 59,848 Result of development projects 15,373 (1) - Net result (group share) 53,244 (1) 7,683 Shareholders’ equity (group share) 779,970 487,211 Real estate portfolio (fair value) 1,407,919 1,141,190 Rental yield (%) 5.20 5.63 Occupancy rate (%) 89.1 91.6 Loan-to-value of investment portfolio (%) 55.6 54.3 Financial debt ratio (%) 48.6 54.0 Personnel 48 25 (1) 2021: 12 months Leasinvest Real Estate, 6 months Extensa (2) Reported as Leasinvest Real Estate Nextensa - Hangar 26/27 - Antwerp 107Annual report 2021 PARTNERS FOR SUSTAINABLE GROWTH • Nextensa positions itself as a sustainable developer/investor that targets projects that add value to society in an urban context. • The themes ‘Climate Adaptive Buildings’ and ‘Sustainable Societies’, along with ‘Human Investments’, constitute the cornerstones of the policy with which Nextensa will work in the coming years on the cre- ation of climate-neutral and healthy buildings that are harmoniously integrated in liveable and lively urban environments, using innovative technologies and processes. • Nextensa focuses on sustainable buildings and urban development. Its turnover is considered to be largely (more than 90%) ‘eligible’ with the EU Taxonomy. • Nextensa aims to be CO 2 -neutral for scope 1 and 2 by 2030, and for scope 3 by 2050. Developments Belgium Park Lane Phase I is a residential development of 319 apartments situated next to Gare Maritime on the Tour & Taxis site. This development has been a success, with just 11 apartments still available for sale at year-end 2021. The last apartments will be delivered in May 2022, and residents will gradually move in. Planning permission for Park Lane Phase II was obtained during 2021. The project will start up in April 2022 with the construction of the underground car park, which will form the basis for 346 apartments, spread over 11 buildings. Prospective resi- dents and investors have both already shown much interest. Luxembourg A joint venture has been set up with Promobe, a Luxembourg-based developer, for all developments in Luxembourg. All projects are situated in Cloche d’Or, a new district formed of offices, retail and housing on the southern outskirts of Lux- embourg City. Together with Promobe, Nextensa is only active in the office and housing segments. • Offices In the second half of 2021, the Banca project was sold to the end user, Banca Intesa Sanpaolo. The office building (10,000 m²) was sold for approximately 89 million euros. The Kockelscheuer office building (4,100 m²) was sold for 48 million euros at the beginning of January 2022. The whole building had been pre-let to Regus. Two more office buildings are under construction. Darwin I (5,000 m² of office space) is already more than 90% pre-let, and an option has been taken on the rest. The building will be delivered in September 2022. Darwin II (4,700 m² of office space) is pre-let in its entirety to the Luxembourg state. This tenant also has a pur- chase option valid for three years from delivery (March 2022). Hence, this building remains in the portfolio. Given the continuing high demand for office buildings, preparations are ongoing for the development of two additional 7,000 m² office buildings. An LOI has already been signed for the lease of 40% of one of these buildings. • Residential The D-Sud residential project is virtually fully completed and sold in its entirety (except for the retail units and ground ﬂoor). It consists of 151 apartments and 11 retail units. LOIs have already been signed for the lease of some of the retail units. The D-Nord project consists of 194 apartments, 176 of which have already been sold off-plan. Construction is well under way, with completion expected in early 2023. As virtually all apartments under construction have already been pre-sold, the commercialisation of the next residential development - the D5-D10 project - has already begun. This consists of around 150 apartments, some 60 of which have already been sold off-plan. The purchase option on the land was exercised and the financing signed at the end of 2021, so that the works can start in the spring of 2022. Consequently, this project will begin to contribute to Nextensa’s results from the second half of 2022. Preparations were also started for the commercialisation of D-Tours, the last res- idential project at îlot D. This comprises three residential towers with a combined 350 apartments totalling 33,000 m² of ﬂoor space. Commercialisation is expected to begin in the second half of 2022. Outlook 2022 Nextensa sees recurrent annual profits based on the optimisation of a sustainable investment portfolio and the scheduled project developments at Cloche d’Or and Tour & Taxis, with a dividend growth averaging 5-10% per year. The further sales programme will generate exceptional capital gains, but will also drastically reduce the debt ratio on the investment portfolio. Nextensa positions itself as a sustainable developer/investor that targets projects that add value to society in an urban context. As a result of the synergy generated, Nextensa controls the entire real estate project cycle from the purchase of a land position to the management of the asset. This means that projects such as Lake Side (Tour & Taxis - 130,000 m²) will be completed with the greatest possible atten- tion to carbon neutrality and optimal energy consumption, based on a well-consid- ered choice of materials and use of the most state-of-the-art technology available. Nextensa’s mantra will be ‘Places you prefer’, where users will live, work, shop and relax in an ecologically responsible environment. www.nextensa.eu 108 Your partner for sustainable growth and resources were deployed to give maximum support and protection to the local teams and residents. Thanks to the recovery of occupancy rates and the support given by the government to cov- er the extra expenditure to control the coronavirus, Anima realised an EBITDA in 2021 of 21.4 million euros (20.7 mil- lion euros in 2020) and a net profit of 4.4 million euros (3.7 million euros in 2020). Anima invested 13.5 million euros in 2021, of which the majority in its new-build projects. These investments led to an increase of the net financial debt (incl. IFRS 16 Leases) from 151.4 million euros at December 31, 2020 to 157.1 million euros at December 31, 2021, and to an increase of the balance sheet total from 264.3 million euros to 279.5 million euros. Operational overview 2021 Focus in 2021 continued to be primarily on controlling the corona crisis. The care centres again came under pressure from the third corona infection wave in the spring. Normal life in the care centres was largely resumed in the summer months, albeit with maintenance of certain corona measures. Thanks to the vaccination campaign, there were no more large-scale COVID-19 deaths to be reported in 2021. During the crisis, Anima made every possible effort to keep guaranteeing the quality of service. As of December 31, 2021, Anima had 2,567 beds in operation, of which 2,178 nursing home beds, 130 convalescence beds and 259 service ﬂats, spread over 24 care centres (9 in Flanders, 7 in Brussels, 8 in Wallonia). Financial overview 2021 The results of Anima were still impacted in 2021 by the corona crisis. The occupancy rate reached a low point in the second quarter, during the third corona infection wave. Thanks to the vaccination campaign, the impact of the virus could be mitigat- ed and normal activity was largely resumed in the care centres. This was reﬂected in increasing occupancy rates at all care centres from the summer of 2021. Anima realised a turnover of 99.2 million euros in 2021 (95.8 million euros in 2020). The increase is primarily due to the increased occupancy rate at the new- build sites Nuance (Vorst) and Kristallijn (Bilzen), and the contribution of the re- cently acquired Les Trois Arbres (Mellet), which only began to contribute to the consolidated results in the second half of 2020, and Saint-Vincent (Jumet), which was taken over in the last quarter of 2021. Anima continued to focus on quality by investing in the strengthening of its teams. During the corona crisis, extra staff Anima specialises in the care and health sector in Belgium, focusing on the up-market segment of residential care for the elderly. In residential senior care, Anima invests in both the operational activities and the real estate. ANIMA Erwin Lips Eric Maes Ingrid Van de Maele Jeroen Versnick Frank Foucart Olivier Fassin Luc Devolder Johan Crijns Shareholding percentage AvH 23 24 13 16 15 20 22 1 7 21 14 8 9 6 12 2 3 19 17 4 5 18 1. De Toekomst - Aalst 2. Alegria - Anderlecht 3. Edelweiss - Anderlecht 4. La Roseraie - Anderlecht 5. Home Scheut - Anderlecht 6. Château d’Awans - Awans 7. Kruyenberg - Berlare 8. Kristallijn - Bilzen 9. Les Comtes de Méan - Blegny 10. Le Rossignol - Braine-l’Alleud 11. Villa 34 - Braine-l’Alleud 12. Duneroze - Wenduine 13. Au Privilège - Haut-Ittre 14. Aquamarijn - Kasterlee 15. Atrium - Kraainem 16. Résidence St. James - La Hulpe 17. Arcade - Sint-Lambrechts-Woluwe 18. Neerveld - Sint-Lambrechts-Woluwe 19. Nuance - Vorst 20. Zevenbronnen - Walshoutem 21. Zonnesteen - Zemst 22. Ravelijn - Zoutleeuw 23. Les Trois Arbres - Mellet 24. Saint-Vincent - Jumet 93 % 109Annual report 2021 PARTNERS FOR SUSTAINABLE GROWTH • Making residents happy, giving them good care and offering them a warm home: that is the mission of Anima. Anima chooses employ- ees who give the best of themselves, day in, day out, to accomplish this mission. In 2022, too, Anima will continue to focus on further improving the quality of its service. Concrete action plans are drawn up on the basis of quality measurements and surveys, and efforts are invested in the improvement and development of a top-quality and professional group. (€ 1,000) 2021 2020 2019 Turnover 99,193 95,819 89,276 EBITDA 21,350 20,739 19,459 EBIT 9,773 9,474 10,579 Net result (group share) 4,416 3,711 5,382 Shareholders’ equity (group share) 73,398 68,699 64,981 Net financial position -157,140 -151,448 -140,337 Balance sheet total 279,482 264,347 244,723 Personnel 1,631 1,553 1,511 Anima NV www.animagroup.be Even during the corona crisis, Anima continued to invest in the development of the group: • Construction work continued on the new residential care centre (196 beds) on the Tour & Taxis site in Brussels and the new care centre (129 nursing home beds and 32 service ﬂats) on the Parc de l’Alliance site in Braine-l’Alleud, which is being realised in partnership with AG Real Estate and AXA. • In November, Anima acquired the real estate and operation of the residential care centre Saint-Vincent (53 beds) in Jumet. • With a view to the future development of the group, a number of new staff members joined the central team. • Anima invested in the further professionalisation of the existing systems in the areas of IT, quality, staff planning, accounting and reporting. Outlook 2022 Now that the corona crisis is more under control, Anima expects that operational activities will continue to recover to the level before the crisis, and especially that the four new-build sites that opened at the end of 2019 and the beginning of 2020 will develop further to the occupancy target. In the residential care centres De Toekomst and Ravelijn, the convalescence beds will be converted into nursing home beds during the second quarter of 2022, as is provided for in the certification schedule. The new-build site Tour & Taxis in Brussels, with a capacity of 196 beds, will open in the second quarter of 2022. The Parc de l’Alliance site in Braine-l’Alleud will be delivered after the summer of 2022. Construction of the new-build residence in Oudenaarde (64 nursing home beds and 22 service ﬂats) will begin in 2022. Likewise, the construction of a new care centre in Putte (98 nursing home beds and 16 service ﬂats) is in full preparation. Anima - Kristallijn - BilzenAnima - Alegria - Anderlecht 110 Your partner for sustainable growth Excellent production results at SIPEF and Sagar Cements, in combination with good price levels, also translated into a record contribution of ‘Energy & Resources’. Contribution to the AvH consolidated net result (€ million) 2021 2020 2019 SIPEF 27.7 4.3 -2.3 Verdant Bioscience -0.9 -0.6 - Sagar Cements 3.2 3.1 0.8 Total 30.0 6.8 -1.5 SIPEF SIPEF SIPEF produces certified sus- tainable tropical agricultural products, primarily palm oil. VERDANT BIOSCIENCE Biotech company Verdant Bioscience develops F1 hybrid palm oil seeds (Singapore/ Indonesia). 35 % 42 % 22 % SAGAR CEMENTS Sagar Cements, with head- quarters in Hyderabad (India), is a listed cement manufac- turer. 112 Your partner for sustainable growth oil increased by 60.9% due to a combi- nation of higher production volumes and a higher world market price for CPO. The turnover in the banana segment increased (in USD) by 6.1% due to an in- crease in volumes sold. The turnover for rubber and tea decreased due to lower production and the loss of direct sales by PT Melania, which was sold in 2021. The total turnover increased by 51.8% to 416 million USD (2020: 274 million USD). In Indonesia the export levy and export tax increased significantly. For the entire year 2021, the total impact of the export levy and export tax is estimated at approx- imately 349 USD per tonne, compared to 74 USD per tonne in 2020. On April 30, 2021 an agreement was signed with Shamrock Group concerning the conditional sale of PT Melania for 36 million USD. PT Melania (SIPEF 95%) owned about half of SIPEF’s rubber operations and the entire tea operations in Java. A total capital gain of 11.6 million USD (group share 11.0 million USD) was realised on this transaction. In the second quarter of 2021, 40% of the shares were sold for 19 million USD. The second tranche of 60% of the shares (of which 55% are held by SIPEF) will be transferred no later than 2024 for 17 million USD, once SIPEF will have fulfilled a number of conditions. The net recurring result (group share) amounted to 82.7 million USD, which is al- most six times higher than the result of 14.1 million USD in 2020. Including the cap- ital gain on the sale of PT Melania, the record result amounted to 93.7 million USD. Thanks to the positive free cash ﬂows, the net financial debt decreased by more than two-thirds to a level below 50 million USD. The listed agro-industrial group SIPEF produces sustainable certified tropical agri- cultural commodities, in particular crude palm oil and palm products in Indonesia and Papua New Guinea (PNG) and bananas in Ivory Coast. These labour-intensive activities are characterised by a broad engagement of different stakeholders, which supports these long-term investments in a sustainable manner. SIPEF is convinced that palm oil, as the most productive and efficient vegetable oil, is an essential part of a balanced diet for an increasingly large and wealthy global population. SIPEF aims to be a reliable partner for its customers, suppliers, employ- ees and other stakeholders in the production and sale of sustainable palm products. As a tropical agricultural company, SIPEF is focused on the production and sale of palm products: crude palm oil, palm kernel oil and palm kernels. SIPEF continues to do that within the framework of certified goods ﬂows in line with the regulations of the RSPO and the International Sustainability and Carbon Certification (ISCC), for use in the food industry and green energy production respectively. Similar standards are also applied to the production of bananas, which is also certified, with full traceability of the product, which respects people and nature. In recent years, SIPEF has taken an important step forward in the ‘No Deforestation, No Peat, No Exploitation’ movement with its own ‘Sustainable Plantation Policy’, which is constantly fine-tuned. This guarantees that the palm oil that SIPEF puts on the market is not only certified, but also caused no harm to people or the environ- ment in the process of expansion. Financial overview 2021 SIPEF reported a record performance year in 2021, both in terms of production and result. The total group production of RSPO compliant, certified ‘segregated’ sustainable palm oil increased by 16.7% to 384,178 tonnes, compared to 329,284 tonnes in 2020. This increase was the result of very favourable weather conditions, that were conducive to palm growth and fruit development of all palm oil operations in Indonesia and Papua New Guinea, and of the swift recovery of the areas in PNG that had been affected by the volcanic eruptions in 2019. The good climate also led to higher oil extraction ratios, which averaged 24.0%, which is 0.6% higher than in 2020. This is again a record for the palm oil mills of the SIPEF group. The palm oil market experienced a steady increase in prices throughout the year. In 2021, the average world market price for crude palm oil (CPO) was 1,195 USD per tonne CIF Rotterdam, compared to 715 USD in 2020. The turnover for palm Production (Tonnes) (1) SIPEF specialises in certified sustainable production of tropical agricultural products, primarily palm oil. SIPEF Petra Meekers Johan Nelis Robbert Kessels Thomas Hildenbrand Charles De Wulf François Van Hoydonck Shareholding percentage AvH 35 % 2021 384,178 2021 32,200 2020 329,284 2020 31,158 2019 312,514 2019 32,849 (1) Own + outgrowers SIPEF 114 Your partner for sustainable growth Operational overview 2021 Palm oil • Indonesia In the fourth quarter, the palm oil production in the own plantations grew at a slower pace, as an erratic rainfall pattern hampered harvesting and transport. In addition, it was mainly the already mentioned more limited fruit development, with lower bunch weights that effectively continued in the fourth quarter in most of the mature plantations in North Sumatra (-1.4%) and in Bengkulu (-0.2%). Only in the UMW/TUM plantations with organic soils, due to controlled water management, the growth continued in the last quarter (+5.6% compared to the same period of last year). Year-on-year, the combined palm oil production in the mature planta- tions of North Sumatra and Bengkulu increased by 6.6% compared to 2020. In South Sumatra 10,195 hectares of young-mature plantings are now being har- vested. These are spread over 8,748 hectares of new plantations in Musi Rawas and 1,447 replanted hectares in Dendymarker. The Dendymarker mill (under ex- pansion) converted the harvested fruits into 24,540 tonnes of palm oil, exceeding last year’s volume by 39.9%. (USD 1,000) 2021 2020 2019 Turnover 416,053 274,027 248,310 EBITDA 188,031 (1) 73,682 47,225 EBIT 139,416 (1) 30,778 4,940 Net result (group share) 93,749 (1) 14,122 -8,004 Shareholders’ equity (group share) 727,329 638,688 628,686 Net financial position -49,192 -151,165 -164,623 Balance sheet total 991,765 946,641 943,125 SIPEF NV SIPEF • Papua New Guinea In 2021, the annual growth of palm oil volumes from the own estates was 41.9%. However, there was a slight weakening of the growth rate to 28.0% in the fourth quarter. This exceptional increase in volume was mainly thanks to the favourable agronomic effects of a moderate rainfall. The precipitation level was a third lower than the average of the last five years. On the other hand, there was also the unex- pectedly fast recovery of production on the areas in Papua New Guinea which were most affected by the ash from the volcanic eruptions in 2019. The production of palm oil from the harvests of smallholders, where the palms were less affected by the ashfall, increased by 14.1% year-on-year. This growth was mainly due to the growth-promoting rainfall. Harvesting by local smallholders was also encouraged by the high world market prices for their delivered fruit. The oil extraction ratios (OER) of the three mills in Papua New Guinea reached a record annual average of 25.6%, compared to 24.6% in 2020. Other products: bananas After a production slowdown in the third quarter, the exported banana volumes from Ivory Coast showed the anticipated strong growth in the fourth quarter (+10.8%). As a result, the annual production, based on an identical area, increased again by 3.3% compared to 2020. The profitability of the banana and horticulture activities was confirmed with a gross margin of 3.8 million USD. Investments SIPEF’s total capital expenditures amounted to 68.7 million USD and mainly related to the expansion in South Sumatra in Indonesia. The cultivated areas in Musi Rawas increased, in RSPO compliance, by 956 hectares to a total surface area of 14,970 hectares. An additional 2,630 hectares were also replanted in the nearby Dendy- marker plantation. Due to COVID-19 related logistic and operational impediments, total investments remained however below expectations. As a result of these recent achievements, a total of 76,691 hectares was planted with oil palms in the SIPEF group by the end of 2021, and the supply base is now nearly 100,000 hectares, for delivery to nine palm oil processing mills in Indonesia and Papua New Guinea. SIPEF - Offloading of cages from the sterilised bunches in threshing station (1) Including capital gain on PT Melania: 11.6 million USD (group share: 11.0 million USD) 115Annual report 2021 PARTNERS FOR SUSTAINABLE GROWTH • Sustainability is an essential aspect of the business model of SIPEF. The management of plantations is inextricably linked to respect for the planet and for people. SIPEF undertakes to establish and manage plan- tations in a safe, responsible and sustainable way with focus on best practices. All palm oil produced by SIPEF meets RSPO’s sustainability standards. The group also directly and indirectly creates employment and prosperity in often remote areas. • The ESG policy of SIPEF is reﬂected in its ‘Responsible Plantation Pol- icy’ and its ‘Responsible Purchasing Policy’, which is reviewed annu- ally by the board of directors, and in which the corporate values are translated into the following principles: 1) no new use of peatlands, 2) no deforestation, and 3) no violation of human rights. Since 2019, the company publishes an extensive sustainability report on an annual basis. • SIPEF was ranked fourth by ‘Forest 500’ out of the 350 most inﬂuential companies in the supply chains of commodities that are seen as a po- tential risk for forests (FRC) and ninth out of 100 palm oil companies by the ‘Sustainability Policy Transparency Toolkit’. These rankings by high-profile not-for-profit benchmarking programmes reﬂect SIPEF’s efforts to continuously improve its sustainability commitments, per- formance and reporting. • SIPEF continued its comprehensive programme to vaccinate against COVID-19 its employees and their dependants free of charge. In In- donesia (47% of national population fully vaccinated), SIPEF made the most progress: 92% of the SIPEF employees and their depend- ants had been double-vaccinated by November 2021. A booster pro- gramme will begin in 2022. In Ivory Coast (8% of national population fully vaccinated), 45% of employees had been double-vaccinated and 15% had received a single dose. Due to limited vaccine availability the programme could not be continued. The group will continue its programme in 2022, when more vaccines become available. In Papua New Guinea (2.5% of national population fully vaccinated), SIPEF has also offered free full vaccination while providing clear information and establishing supporting policies. More time will be needed to allow vaccine confidence to grow in order to increase the vaccination rate, which is currently below the targeted number of 10%. In 2021, the banana area in Ivory Coast was expanded with a new plantation, of which 28 hectares were already planted in the fourth quarter. The annual produc- tion should therefore increase by 18% in 2022, mainly due to the new harvests in the second half of the year. Outlook 2022 In 2022, the annual volume of palm oil produced should exceed 400,000 tonnes for the first time in SIPEF’s history, although the expected increase will be rather limited to around 4%. Considering the exceptional strong growth of 16.7% in 2021, SIPEF will, nevertheless, be able to record an annual average growth of 10% over the last two years, as foreseen in the multi-annual plan. All in all, the vegetable oil market remains in a very narrow balance of supply and demand on almost all fronts and a longer-term elevated price level is foreseen. Only a negative macro-environment or governmental decisions could change that outlook. Thanks to the combination of increasing annual production volumes and a contin- uing strong palm oil market, SIPEF expects also in 2022 very satisfactory recurring results. www.sipef.com SIPEF 116 Your partner for sustainable growth Stephen Nelson Pending these new products, the limited seed trade and plantation activity pro- duced a loss of 2.5 million USD. VBS works together with a.o. SIPEF to test commercial varieties of candidate oil palms at its plantations in Sumatra. VBS agronomists and crop protection staff make recommendations in order to realise the potential of existing plantations, mainly by increasing yields per hectare and innovatively enriching the soil. High-yielding F1 hybrid oil palms are expected to deliver a significant potential in terms of yield and productivity enhancement in the global palm oil industry. Increasing yields per unit area is considered the only real solution to meeting the world’s growing demand for vegetable oil without increasing planted areas. This could remove the risk of further loss of rainforests and biodiversity. Such a yield increase would be unique for a crop like oil palm. VBS is the first Indonesian seed producer to bring semi-clonal seeds to the market, based on clones produced as female seed palms through a tissue culture process. This production of semi-cloned seeds enables VBS to produce selected elite crosses in commercial quantities under the brand name Verdant Select, which have been thoroughly tested in both Papua New Guinea and Indonesia. Besides the semi-cloned seeds, VBS is focusing a specific F1 hybrid programme. Despite the challenges of operating during a pandemic, the F1 hybrid programme has made good progress. Candidate F1 hybrid crosses grown in the nursery were field planted in 2021. Further testing of new F1 hybrid crosses will now continue each year with female plants from different genetic backgrounds. VBS is on track to commercialise the first fully tested F1 hybrid palm oil seeds in 2028. Verdant Bioscience (VBS) is a biotech company established in 2013 with the primary objective of developing high-yielding F1 hybrid palm oil seeds. VERDANT BIOSCIENCE Juan-Carlos Martinez Brian Forster Brian Dyer Shareholding percentage AvH 42 % PARTNERS FOR SUSTAINABLE GROWTH • Higher yields from Verdant seed will mark a very significant step for- ward for the environment and will help to meet the market demand for vegetable oil, while at the same time removing the pressure to destroy forests and biodiversity. • VBS also works on further optimising the good agricultural practices that underpin the sustainable manner in which plantations are operat- ed. In this respect, preference is given to biological control of pests and the minimum use of pesticides. With all these developments, VBS aims to improve the circularity and carbon positive impacts. www.verdantbioscience.com Verdant Bioscience (USD 1,000) 2021 2020 Turnover 3,319 2,880 EBITDA -1,754 -2,086 EBIT -2,412 -2,777 Net result (group share) -2,514 -2,645 Shareholders’ equity (group share) 11,191 13,704 Net financial position -19,077 -17,316 Balance sheet total 33,665 33,451 Personnel 617 349 Verdant Bioscience 117Annual report 2021 Despite the pandemic and spiralling energy prices, Sagar reported a nice growth in 2021 with turnover increasing by 21% to 15.1 billion INR (172 million euros). However, the EBITDA decreased during this period by 6% to 3.3 billion INR (37 million euros). This reduction stems from the significant increase in im- ported fuel prices (petroleum coke, coal) and reduced demand during the heavy monsoon season. These two factors neutralised the favourable price environment and the efforts to control costs, such as the improvement of energy efficiency and the increased consumption of alternate fuels. By the end of 2021, Sagar successfully completed its expansion projects in Madhya Pradesh (capacity of 1 million tonnes) and Orissa (capacity of 1.5 million tonnes) increasing its total cement capacity to 8.25 million tonnes. This is in line with Sagar Cements’ strategy aimed at increasing its capacity to 10 million tonnes by 2025, and at further expanding its reach into attractive markets. Like most economies, India continued to experience pandemic induced challenges in 2021, though the economic shock was weaker than in 2020. The second wave of infection peaked in May 2021 and the recovery gained momentum in the second half of the year. Supply chain disruptions and rising commodity prices pushed inﬂa- tion upwards, giving rise to major increase in raw material costs for cement man- ufacturers in the country, including Sagar. Overall, the OECD projects India’s GDP to grow at 9.4% in 2021 and at 8.1% in 2022. The cement industry is expected to benefit considerably from the government’s push to increase capital expenditure by 35% in 2022-2023, with a focus on improving infrastructure and affordable housing. Sagar Cements is a listed cement manufacturer headquartered in Hyderabad (India). The factories in the states of Telangana and Andhra Pradesh (south India), Madhya Pradesh (central India) and Orissa (east India) have a total production capacity of 8.25 million tonnes per year. SAGAR CEMENTS Prasad Kolluru Sreekanth Reddy Shareholding percentage AvH 22 % PARTNERS FOR SUSTAINABLE GROWTH • Sagar manages its environmental footprint in a prudent way with a focus on reducing the carbon and water footprint via investments in renewable energy, efficiency enhancement programmes, circularity in operations and stringent emission controls. • In 2021, Sagar replaced approximately 5% of carbon-based fuels by alternative fuels at the factory in Mattampally. The aim is to increase this to 15% over the next three years. • Other priorities include good mining practices, technology and data driven manufacturing processes and proactive limitation of waste. • Sagar believes in inclusive growth and regularly works with local com- munities to create self-sufficient ecosystems. It contributed approx. 200,000 euros to CSR initiatives in 2021. www.sagarcements.in 2021 2020 2019 € 1,000 INR (mio) INR (mio) INR (mio) Turnover 172,203 15,128 12,572 12,374 EBITDA 37,496 3,294 3,492 2,052 EBIT 28,250 2,482 2,673 1,303 Net result (group share) 14,545 1,278 1,374 441 Shareholders’ equity (group share) 150,795 12,765 12,128 9,480 Net financial position -115,170 -9,749 -5,693 -4,683 Balance sheet total 385,175 32,605 23,032 18,711 Personnel 914 731 738 Sagar Cements LTD Sagar Cements 118 Your partner for sustainable growth Virtually all ‘Growth Capital’ participations, too, realised markedly better results, with Mediahuis, Manuchar, Turbo’s Hoet Groep and OMP as particular highlights. With the IPO of Biotalys and a successful new capital round at Medikabazaar (India), the first results were recognised on a series of investments that were made in recent years in young and promising companies. Contribution to the AvH consolidated net result (€ million) 2021 2020 2019 Contribution of participations 71.3 12.7 17.6 Contribution 53.2 Fair value 18.1 AvH & subholdings -18.1 -13.5 -3.5 Net capital gains/ losses -1.2 3.1 112.9 Total 52.0 2.3 127.0 Telemond 120 Your partner for sustainable growth AvH & GROWTH CAPITAL AvH makes venture capital available to a limited number of companies with international and sustainable growth potential. The investment horizon is longer on average than that of the typical private equity providers. The diversified nature of these investments and the healthy balance sheet structures that are employed in that respect contribute to a spread of the economic and financial risks. A selective investment policy takes account of a number of global trends, a sus- tainable growth potential, and realistic long-term business plans. Special attention is paid to the quality of the management team, talent development, operational improvements, innovation and ESG aspects. A restricted number of participations allows the AvH team to build up an in-depth understanding and to help shape the strategy in an informed manner. Despite the frequent lockdowns due to COVID-19, with implications in various re- spects, the AvH model once more proved its strength. The focus on strong corporate cultures with concern for the well-being of staff and other partners was reﬂected in the resilience and the operating results of the participations. The financial markets experienced a sharp downturn at the beginning of 2021, but then recovered vigorously, driven by sectors where (digital) innovation plays an important role. The venture capital market experienced a spectacular growth - now also in Europe - with emphasis on high-tech companies or companies in the health- care sector. The cheap money and the large sums of capital in search of return led to a record year in the M&A markets, both in private equity and on the stock markets. The sharply increased valuations still call for selectivity. Sustainability is getting more attention, which makes AvH’s approach popular. Many management teams are acknowledging the merit of strong shareholders who, besides a financial contribution, also provide a value-driven approach, active support and networks with a long-term perspective. The interaction between in- vestment teams and boards of directors, which offer a sounding board to manage- ment teams, is a success factor which AvH keeps focusing on. AvH has examined numerous projects and can look back on a busy investment year, with a mix of new and follow-up investments. The high expectations of sell- ers, however, meant that AvH decided on several occasions not to pursue certain projects further despite their merits. (Additional) investments were made in venture capital firms, such as Biotalys and in the fast-growing sector of (digital) health care in India (Medikabazaar). Investments were also made through funds in fast-grow- ing sectors in Asia, such as HealthQuad II and Venturi, where AvH assumes the role of anchor investor. In June, a 22% participation was taken in Van Moer Logistics, which focuses on sustainable logistics. (1) Including through AXE Investments AvH & Growth Capital Agidens (1) 85% AXE Investments 48% Biolectric 56% OMP 20% Mediahuis 13% Telemond 50% Fair value investments (2) Biotalys 12% HealthQuad I Fund 36% HealthQuad II Fund 10% Medikabazaar (3) 10% MRM Health 16% OncoDNA 10% Venturi Partners Fund I 20% Indigo Diabetes 9% EMG 23% Turbo’s Hoet Groep 50% Manuchar 30% Van Moer Logistics 22% (2) Including through HealthQuad Fund I + II (3) Fully diluted Contribution of the participations After the satisfactory results in 2020, the participations reported a strong perfor- mance in 2021, despite the lockdowns or the disruption of the supply chains. As a result, the contribution of Growth Capital to AvH’s results increased vigorously. This is explained by, among other things, record results reported by about five participa- tions. Not a single participation made an important loss in 2021. Mediahuis reported a record result in a difficult sector, with a strong turnover in- crease. A number of one-off windfalls made up for one-off restructuring or acquisi- tion costs. Through Mediahuis Ventures, the range of activities is being expanded in the long term. The sound management of the supply chains had, on balance, a highly positive impact for Manuchar and Turbo’s Hoet Groep, while OMP re- ported record results thanks to a strong demand for its services. The solid result of Agidens achieved thanks to the Life Sciences activities was also characterised by a substantial capital gain on the disposal of the infrastructure activities. EMG made a vigorous recovery under a new management team. Van Moer recorded a satisfactory result despite the increasing fuel costs and the shortage of drivers. Biolectric was able to further limit its loss in a scale-up phase, although it is being impeded by the increasingly stringent permit requirements for investments at the end customers. Medikabazaar continues to grow successfully, while HealthQuad was able to successfully complete its first divestments. Biotalys had a successful IPO, and like Indigo, MRM Health and OncoDNA continues to invest in the devel- opment of its products. Fair value investments AvH has over the past few years invested in a number of young and promising companies, either directly or through specialist investment funds. As they become successful and subsequent capital transactions take place, this may give rise to the recognition of fair value remeasurements. This was the case in the second half of 2021 following the successful IPO of Biotalys and a new capital round at Medi- kabazaar. AvH & subholdings and net capital gains/losses The decrease of the result contribution of ‘AvH & subholdings’ is mainly due to the adjustment to the fair value of other non-consolidated investments and the investment portfolio, which together had a negative impact of approximately 4 million euros negative. The sale of a few small participations resulted on balance to a limited capital loss of 1.2 million euros. Biotalys - Trials with biological crop protection products 122 Your partner for sustainable growth PARTNERS FOR SUSTAINABLE GROWTH • Agidens pursues a sustainable ESG policy, guided by the UN SDGs. Agidens is committed to respect, well-being and positive development for all stakeholders, and stimulates safe working and lifelong learning of its employees, the human capital of the company. As a technology firm, Agidens focuses strongly on innovation, and through its activities makes an important contribution to improving the production process- es of its customers. Oil & Gas faced challenging market dy- namics for tank terminals, with increas- ing oil and commodity prices having a negative impact on investment decisions of customers. A growing demand for digitalisation of the tank terminal indus- try opens up prospects for the future. Food & Beverages and Fine Chemicals reported a slowdown in order intake during the first half of 2021, but this was subsequently fully compensated (+3% over the full year). The importance of im- proving productivity and the increased digital connectivity, including data analytics, have over the past year led to a stronger market position with new projects in MES (Manufacturing Execution Systems) and in process automation. In July, an agreement was reached with BESIX Group on the sale of Agidens Infra Automation, the division that specialises in government contracts for infrastructure projects. This transaction enables Agidens, through an increased focus and invest- ments, to grow further into a European player in the process automation market. In 2022, Agidens will take further steps to transform into a divisional structure organised around the segments Automation Projects, Software and Services. This will allow it to turn its industry expertise to full account and so create substantial added value for its customers. 2021 was another year with solid growth figures, despite volatile market condi- tions. The strong order intake of 79 million euros (+13%) and the turnover of 75 million euros (+3%) led to better results, driven primarily by Life Sciences. Life Sciences realised a strong turnover increase, partly thanks to its contribution in the automation of production installations for the COVID-19 vaccine. Its industry expertise, combined with the references from pharmaceutical multinationals, are important growth factors for its validation services, in which Agidens saw its market share increase. Agidens, an independent systems integrator, provides advice, engineering and automated solutions for industrial processes. The group currently has about 500 employees, spread across Belgium, the Netherlands, France, Switzerland and the US. AGIDENS Steven Peeters Jeff Krbec Arnoud den Hoedt Hedwig Maes Pieter Tilkens Shareholding percentage AvH 85 % www.agidens.com (€ 1,000) 2021 2020 2019 Turnover 74,807 91,688 92,875 EBITDA 10,758 7,363 6,297 Net result (group share) 5,410 1,299 1,326 Shareholders’ equity (group share) 23,068 17,583 16,548 Net financial position 1,959 -11,873 -16,021 Agidens NV Agidens 123 PARTNERS FOR SUSTAINABLE GROWTH • Human experience is crucial. The recurring theme of human progress at customers originated in Xylos’ own HR vision. A ﬂexible workplace at the office or elsewhere, jobs in which mutual trust and efficiency are prioritised, attention to personal growth and well-being are the means with which Xylos enthuses employees. Everyone shares the Xylos DRIVE values: Diversity, Respect, Innovation, Vision and Entre- preneurship. This emphasis on human progress is also central to the strategic coaching of customers. Xylos always makes sure that they fully attune their technology to fundamental needs and requirements. In 2021, Xylos made its customers even more resilient in the modern workplace, helping them with digital workplace technology and end user support: coaching, training and e-learning. It also paid a lot of attention to user awareness around cyber security. For this purpose, Xylos commercialised the digital learning solution InviQta and developed a new inter- active game for users of its Escape Room App, a learning application in Microsoft Teams. Finally, Xylos invested heavily in the development of its cloud services at the end of 2021. The Xylos group employs 250 people and has offices in Brussels, Antwerp, Heren- tals and Ghent. Bagaar, an expert in software platforms and smart products, is also part of the Xylos group. Bagaar provides strategic advice, creates mobile, IoT (Internet of Things) and web applications to transform organisations and the way they work. It always creates a rock-solid design and a ﬂawless user experience (UX). The annual result of AXE Investments comprises the results from the participation in Xylos and the rental income from the Ahlers building. The contribution of Xylos is accounted for using the equity method. The contribution of the 26.23% participa- tion of AXE in Agidens is shown on the line Agidens. Xylos is a pioneering IT player on the Belgian market. With its expertise and nearly 40 years of experience in the implementation of technology, it keeps people and or- ganisations digitally fit and safe. For this purpose, the company combines 360° user adoption (a special focus on users and change management), IT-related training programmes and digital coaches, as well as digital learning products and platforms. AXE Investments is an investment company with participations in the IT group Xylos and in Agidens. It also owns part of the Ahlers building on the Noorder- laan in Antwerp. AXE INVESTMENTS Veerle Peeters Christian Leysen Shareholding percentage AvH 48 % www.axe-investments.com (€ 1,000) 2021 2020 2019 Turnover 542 568 630 EBITDA 255 168 122 Net result (group share) -223 -434 -68 Shareholders’ equity (group share) 14,184 14,407 14,841 Net financial position 5,045 4,470 4,463 AXE Investments NV (1) (1) The figures of Agidens are not consolidated at the level of AXE Investments. AXE Investments 124 Your partner for sustainable growth Hans Degrande PARTNERS FOR SUSTAINABLE GROWTH • The global livestock population is responsible for about 10% of all greenhouse gas emissions. A solution to the emission of methane gas, a greenhouse gas that is 28 times (even 34 times according to some sources) more harmful than CO 2 , will therefore have a huge impact on efforts to control global warming. Biolectric can make a significant contribution to these efforts. By installing one digester, an average Belgian farm can avoid 270 tonnes of CO 2 equivalents of methane gas emissions, which corresponds to the annual emissions from 150 cars. Biolectric’s solution thus creates a win-win situation for farming and the environment. tle industry and pig farming to reduce methane and nitrogen emissions. The shareholders of Biolectric, AvH Growth Capital and founder and CEO Philippe Jans, together with executive Klaas Vanhee, confirmed their confi- dence in the future of the group by in- creasing the capital of the company by 1.5 million euros at the end of December 2021. As in 2020, Biolectric experienced a challenging year due to the impact of various corona measures in its main markets and the ongoing nitrogen issue in the Neth- erlands and Flanders. These circumstances impeded the commercial efforts and the timely obtaining of permits as a result of administrative delays. Nevertheless, Biolectric was able to close the year with 102 orders for biogas instal- lations (+15% compared to last year), of which 35% from Belgium and 32% from France. A remarkable trend is the growing interest in digesters shown in Wallonia, where 17 orders were placed compared to just 2 in 2020. In 2021, a turnover of 10 million euros was realised, which is 11% more than in 2020. 49 digesters were installed at customers in several countries, of which 9 with retention of ownership by Biolectric in Belgium and the Netherlands. Biolectric continues to invest in strengthening its direct sales organisation, a top-quality after-sales service and the development of a project management team to shorten the lead time between signing the contract and putting up the biogas installation. The group has also adopted new ERP software which, among other things, provides a clearer picture of the cost structure. The group reported a net loss of 1.0 million euros, primarily because of those in- vestments and the longer lead time of the direct sales. Biolectric remains however convinced that it provides an innovative and affordable solution to the dairy cat- Biolectric is market leader in the production and sale of compact biogas instal- lations (11 to 74 kW) intended for dairy cattle and pig farms and water purifi- cation stations. Thanks to the anaerobic digestion technique, methane gas from manure and sludge is converted into sustainable electricity and heat, avoiding the emission of harmful greenhouse gases. BIOLECTRIC Els Van Brussel Sam Bhansali Philippe Jans Klaas Vanhee Shareholding percentage AvH 56 % www.biolectric.be (€ 1,000) 2021 2020 2019 Turnover 9,521 8,588 5,830 EBITDA -876 199 75 Net result (group share) -1,013 -125 -127 Shareholders’ equity (group share) 9,767 9,774 9,902 Net financial position -6,069 -3,691 -3,323 Biolectric NV Biolectric 125 PARTNERS FOR SUSTAINABLE GROWTH • Biotalys was awarded a 6 million USD multi-year grant from the Bill & Melinda Gates Foundation to discover novel antifungal biocontrols for deployment to smallholder farmers to control leaf spot disease affect- ing cowpeas and other legumes. • The long-term development of Biotalys as a frontrunner in the market of environmentally friendly and sustainable crop protection is built on several trends: population growth, the need for efficiency improve- ment in agriculture (including tackling the 30% food waste challenge), the trend towards healthy and environmentally friendly food, and the ever stricter rules on the use of chemical pesticides. Following the successful completion of extensive field trials and regulatory studies, Biotalys submitted in December 2020 its first protein-based biocontrol, Evoca™, to the Environmental Protec- tion Agency (EPA) in the US for approv- al, and subsequently in March 2021 in the European Union. Evoca™ targets diseases such as Botrytis cinerae and powdery mildew and is on track to reach select regions in the US market in the second half of 2022 as a product to calibrate the market. Biotalys’ highly qualified research team continued making progress on the pipeline of additional biocontrols addressing pests, bacterial diseases and fungi. The company has been recognized with a number of Industry Awards, such as the inclusion in the Fast Company’s 2021 World Changing Ideas Awards and the 2021 SEAL Award for Sustainable Innovation. Despite the COVID-19 crisis, Biotalys achieved several important milestones in 2021, the most important being the successful listing on Euronext Brussels (symbol ’BTLS‘) since July 2, 2021 and the raising of 52.8 million euros new capital through an initial public offering (IPO). The order book included support from high-quality long-term investors across Europe, including AvH which contributed 4 million euros, and retail investors in Belgium. Biotalys announced a strategic partnership agreement with Biobest (Belgium) for the distribution of 5 products in the global covered crop and berry market, a long- term manufacturing agreement with Olon (Italy) and an agreement with Kwizda (Austria) to act as formulator of its protein-based biocontrol products. Building on Biotalys’ AGROBODY Foundry™ technology platform, the engineering and manufacturing teams managed to achieve more than 500% increase in produc- tion of the active protein of Evoca™ in the yeast Pichia pastoris. This breakthrough has the potential to create a product providing commercial value at competitive efficacy and cost to growers. Biotalys, a spin-off of VIB (Flemish Institute for Biotechnology) founded in 2013, is a fast-growing listed crop and food protection company. It disposes of a groundbreaking technology platform to develop effective and safe products with novel modes of action, addressing key crop pests and diseases across the whole food value chain. BIOTALYS Luc Maertens Wim Ottevaere Patrick McDonnell Patrice Sellès 12 % www.biotalys.com Shareholding percentage AvH (fair value investment) Biotalys 126 Your partner for sustainable growth PARTNERS FOR SUSTAINABLE GROWTH • EMG has set up a number of international project groups in the area of ESG and DEI. The aim is to further intensify the policy already being implemented in the different countries, to formulate concrete group goals and to monitor these in all group companies. • The development of Remote Production has in 2021 led to a substan- tial reduction of travel mileage, both by the crew of EMG and by the staff of its customers. • In the United Kingdom, all production vehicles run on HVO (Hydro- treated Vegetable Oil) Green D+ fuel. This has resulted in a reduction of CO 2 emissions by up to 90%. Other countries in the group will follow in 2022. • EMG is certified ISO 14001 in several countries and collaborates on various specific media programmes for corporate social responsibility such as ALBERT. the streamers and traditional broadcast- ers. Along with films and series, sport is increasingly being offered exclusively over streaming platforms. Viewers want more viewing angles, more statistics and more spectacular camera shots. Thanks to investments in Remote Production and IP technology during the COVID-19 lockdowns, EMG is now a global market leader in IP broadcasting pro- duction with an entirely self-developed network topology called diPloy. This tech- nique was used at the (postponed) Olympic Games in Tokyo in 2021 and at the Winter Olympics in Beijing at the beginning of 2022. EMG’s turnover increased from 240.9 million euros in 2020 to 366.8 million euros in 2021. As a result, the profitability has been restored, and EMG reported a break- even result of 0.2 million euros (2020: -44.7 million euros). The new management team led by CEO Shaun Gregory now focuses on the further growth and positioning of EMG. EMG is active in 10 countries: France, Belgium, the Netherlands, Germany, the United Kingdom, Switzerland, Italy, Luxembourg, the US and Australia. In those countries, and in other countries too, EMG works for a growing group of broadcast- ers and production houses. In 2021, EMG was again actively engaged with crew and technology on the most watched television broadcasts worldwide. 2020 was a difficult year for EMG as numerous major events were postponed due to the COVID-19 pandemic. In 2021, however, EMG was able to catch up on many events and television productions. The pandemic also had certain positive conse- quences for EMG. Developments in media consumption were accelerated by the fact of working from home and audiences staying at home. One of the trends is that the recording of sporting events and entertainment is becoming even more extensive, smarter and more complex. This is reﬂected in the increasing competition between EMG (formerly Euro Media Group) is a leading player in broadcast and media solutions for live sports, entertainment and events. EMG Stephane vermersch Lucy O’Brien Bevan Gibson Shaun Gregory Shareholding percentage AvH 23 % www.emglive.com (€ 1,000) 2021 2020 2019 Turnover 366,845 240,850 337,541 EBITDA 59,666 13,806 53,848 Net result (group share) 152 -44,690 -9,636 Shareholders’ equity (group share) (1) 88,269 82,081 104,240 Net financial position -162,470 -147,687 -149,373 Financière EMG (1) Included in shareholders’ equity and not in the net financial position: 2021: € 17.5 mio shareholder loan, 2020: € 125.4 mio convertible bonds and shareholder loan, 2019: € 100.5 mio convertible bonds. EMG 127 Ajay Mahipal PARTNERS FOR SUSTAINABLE GROWTH • HealthQuad aims to create a structural and sustainable social impact by focusing on the following objectives: • Improving access to health care • Making health care affordable • Increasing health awareness • Improving the quality of health care • Positive social impact factors take a central place in the decision-mak- ing process and go beyond the improvement of health results. • Through its investments, HealthQuad aspires to create social impact and align its operations to contribute to the United Nations Sustaina- ble Development Goals (SDGs). • HealthQuad believes that environmental, social and governance (ESG) issues can inﬂuence investment risks and returns and incorporates ESG risk considerations throughout its investment lifecycle. • HealthQuad has formalized an ESG policy to recognize its commit- ments to responsible and ethical investments and has developed a proprietary ESG Management System to help operationalize the fund’s ESG commitments. Besides AvH, the second fund will be supported by Teachers Insurance and Annuity Association of America (TIAA), UK-based CDC, the Indian-based SIDBI, Swedfund and Merck & Co. Inc. AvH has earmarked 15 million USD for HealthQuad II. This sum will be invested over a period of 4 years. In line with its active investment strategy, AvH will be represented on the investment committee and on the advisory board of HealthQuad Fund II, and seeks to co-invest with the fund in a few prom- ising portfolio companies. The Indian healthcare sector has experienced a double-digit growth over the past 10 years and is expected to grow further by 12% per year to 340 billion USD in 2025. This growth is driven by the need for adequate medical infrastructure in the context of India’s growing population, rising incomes and improved access to health insurance. The HealthQuad I fund participates in 7 companies in the Indian healthcare sector, including Medikabazaar. The fund invests in growth companies with potentially unique and innovative solutions to improve the efficiency, accessibility and quality of the Indian healthcare sector. Focus segments include specialised hospitals, med- ical devices and technology, IT and related services. With the medical background and expertise of the management and its extensive network, HealthQuad adds op- erational and strategic value to its participations. The HealthQuad I fund is now fully invested and completed already two exits in 2021. In December 2021, HealthQuad successfully completed the second closing of its second fund with more than 150 million USD in committed capital from distin- guished domestic and international institutional investors. AvH participated in the initial closing as an anchor investor. During 2021, the HealthQuad II fund has al- ready deployed approx. 21 million USD across 4 companies: Medikabazaar, THB, ImpactGuru and Healthifyme. It has plans to deploy upto 60 million USD in 2022 and 50 million USD in 2023 to build a portfolio of 10 to 15 companies across the Indian healthcare ecosystem. HealthQuad is an Indian venture & growth capital fund that focuses on the fast-growing Indian healthcare sector. HEALTHQUAD Amit Varma Manish Jha Charles-Antoine Janssen Pinak Shrikhande Sunil Thakur 36 % www.healthquad.in HealthQuad I Fund Shareholding percentage AvH (fair value investment) HealthQuad II Fund Shareholding percentage AvH (fair value investment) 10 % HealthQuad 128 Your partner for sustainable growth PARTNERS FOR SUSTAINABLE GROWTH • As a young company with a potentially great socio-economic impact, Indigo Diabetes prioritised ESG right from the start in its various policy choices. • Today, Indigo’s multidisciplinary team numbers some forty experts of 12 different nationalities. The HR policy is geared towards an inclusive organisation supported by its diversity. • Its product development prioritises sustainable product life cycle man- agement, with minimal packaging and no-waste processes. • Its operational policy, even as a small business, is also focused on sustainability. designed to evaluate the safety of the sensor and the short-term integration into the tissue. It was conducted at the Antwerp University Hospital, Belgium. Results are currently being evaluated and due to be submitted for publication over the next few months. Over the next year, Indigo will incorporate the learnings from the GLOW study to further opti- mize its sensor and aims to launch a second clinical study to evaluate the sensor’s performance. Indigo Diabetes recruited several new senior members to the team during 2021 who will play a critical role as the company expands and progresses the develop- ment of its technology. Paul Moraviec was appointed as chairman of the board of directors and Daniël Verstappen joined Indigo Diabetes as VP Quality Assurance and Regulatory Affairs. In addition, Indigo appointed 7 internationally recognised experts in endocrinology, diabetes and metabolic disease to form its newly created Scientific Advisory Board (SAB). The SAB members are all leaders in their field and will serve as a strategic resource to Indigo as it progresses its device and continues its journey to transform- ing diabetes management. Indigo Diabetes is a high-tech scale-up on a mission to improve the lives of millions of people living with diabetes using its innovative medical technology. INDIGO DIABETES Danaë Delbeke Barbara Freitag Gijs Klarenbeek Juan Ordonez Tom Segers Daniel Verstappen 9 % www.indigomed.com Shareholding percentage AvH (fair value investment) The company is developing a technology platform to continuously and discreet- ly measure blood glucose and other metabolite levels using a chip sensor that is placed just under the skin. The invisible sensor monitors the levels of glucose and other metabolites in real-time and can alert the user if these levels ﬂuctuate outside their normal range. The patented technology that underlies Indigo’s innovative ap- plication is an on-chip miniature optical sensor, the world’s smallest spectrometer that can be inserted under the skin. Indigo Diabetes was founded at the end of 2016 as a spin-off of Ghent University and imec, together the cradle for integrated photonics worldwide. The company developed the technology from ‘paper-concept’ to ‘pre-clinical prototypes’ at an incredible speed. This pace has continued, making 2021 another important year for Indigo Diabetes. The first clinical study of Indigo’s continuous multi-metabolite (‘CMM’) sensor designed for the continuous measurement of glucose, ketone and lactate levels in people with diabetes was concluded. This GLOW study was a pro- spective, single-center early feasibility study which enrolled 7 participants and was Indigo - Sensor 129 PARTNERS FOR SUSTAINABLE GROWTH • Manuchar continued with the implementation of different pro- grammes around the SDGs of the United Nations. Local projects were set up and supported in more than 10 countries, primarily focused on education and providing internship and development opportunities for the local community. • Thanks to its officially CO 2 neutral headquarters, initiatives to reduce scope 3 emissions from shipping and general ESG improvements, Manuchar positions itself among the 25% best-in-class companies in terms of sustainability and obtained the ’Silver status’ at Ecovadis. built in San Nicolas (Argentina), and a project was started up for the treatment of manure in Buga (Colombia). Ma- nuchar currently has a total storage ca- pacity of 557,000 m², of which 262,000 m² is owned or in concession. Generally speaking, Manuchar was able to further increase its gross margin and at the same time keep its costs under con- trol, in the context of a strong volume growth, coupled with advantageous freight rates and rising prices. This resulted in a doubling of the EBITDA and an increase of the net profit to 62.6 million USD. At the beginning of 2022, an agreement was signed with Lone Star Funds for the sale of 100% of the shares in Manuchar. The transaction is expected to be realised in the second quarter of 2022. 2021 was marked by a heavily disrupted global logistic chain and rising prices for products and for maritime shipping. This was translated into production delays, unprecedented waiting times, container shortages for shipping and obstacles in the local logistics. Thanks to its unique worldwide logistics network, Manuchar was able to keep max- imum control over the entire supply chain and to keep supplying its existing and new customers, whereas many other players had to throw in the towel. Manuchar is proud that, thanks to the dedication of its teams throughout 2021, it was able to realise its mission ‘We keep your production running. Anytime. Anywhere.’ This resulted in an accelerated growth of business volume, customer portfolio and finan- cial results. Manuchar also made accelerated progress in its strategy of diversifica- tion to other end markets in the distribution of chemicals. A strong and profitable growth was realised in artificial fertilisers, mining, human and animal nutrition in particular. The non-chemical international trade also experienced a very solid development. A strong growth in terms of volume and profitability was reported particularly in steel and polymers, also in markets with rising prices. Manuchar continued in 2021 to invest heavily in infrastructure at strategic locations in order to support its further growth. A new river port and accompanying ware- houses were brought into service in Bao Long (Vietnam), new warehouses were Manuchar is active in the distribution of (mainly) dry bulk chemicals, with focus on emerging markets. The company is also active in international trading (back- to-back) of steel, plastics, paper and other commodities. MANUCHAR Barry Collard Sofie Beernaert Bart Troubleyn Dirk Aerts Ben De Voecht Philippe Huybrechs Matthias De Raeymaeker Shareholding percentage AvH 30 % www.manuchar.com (USD 1,000) 2021 2020 2019 Turnover 2,481,657 1,497,853 1,518,033 EBITDA 162,312 80,249 76,755 Net result (group share) 62,610 23,620 28,484 Shareholders’ equity (group share) 173,831 113,068 99,382 Net financial position -319,373 -238,078 -347,151 Manuchar NV Stephan Van den Eynde Stefan Van Loock Anthony Maas Marc Jacobs 130 Your partner for sustainable growth PARTNERS FOR SUSTAINABLE GROWTH • As part of its sustainability policy, Mediahuis in 2021 was one of the founders of Pluralis, an impact investment fund that wants to help safeguard independent journalism and pluralism of information in Eu- ropean countries where this is not always the case today. • In the context of the green transition, Mediahuis committed itself in 2021 to setting science based targets. The group wants to reduce its CO 2 footprint by more than half by 2030 and to evolve towards an entirely emission-neutral company by 2050. The measures that are intended to contribute towards this goal include efforts in the area of printing and distribution of newspapers, a critical look at the low-en- ergy character of the building, and the conversion of the car ﬂeet to electric vehicles. The investment policy of Mediahuis focused in 2021 on strengthening the position of Mediahuis Ventures in the education, media and human resources technolo- gy market. Besides investments in the leadership coach app BUNCH, the online training platform myskillcamp and the online university library Perlego, the venture capital firm of Mediahuis increased its participations in training expert Lepaya and in the subscription intelligence firm Mather Economics. Just before the year-end, Mediahuis reached an agreement with the German Aachener Verlagsgesellschaft on the acquisition by Mediahuis. This acquisition makes Mediahuis the majority shareholder (70%) of Medienhaus Aachen, publisher of the newspapers Aachener Zeitung and Aachener Nachrichten. Mediahuis realised a consolidated turnover of 1,131 million euros in 2021 and increased its net result from 58.6 million euros in 2020 to 117.3 million euros in 2021. At year-end 2021, Mediahuis was (net) free of bank debts for the first time since its inception, amongst others thanks to the sale of Keesing Media Group. Mediahuis in 2021 once again realised a solid result. The group saw the total num- ber of print and digital subscriptions increase further by 3%, driven by a strong in- crease in the number of digital subscriptions by 20%. Today, 38% of all subscribers read the Mediahuis publications in digital format. Besides a general recovery of the advertising market in the second half of the year, an expansion of the digital advertising offering and the creation of strong local partnerships led to an increase of advertising income. In the Netherlands, Media- huis Nederland, Mediahuis Limburg and Mediahuis Noord combined their national advertising sales in a joint proposition: Mediahuis Connect. The new Belgian advertising sales house Ads & Data, the partnership between Me- diahuis, Telenet/SBS, Pebble Media and Proximus, started up in the spring of 2021 and at year-end 2021 recorded a solid growth for the news brands of Mediahuis. Mediahuis is one of the leading media groups in Belgium, the Netherlands, Ireland, Luxembourg and since recently in the German North Rhine-Westphalia region. The national and regional news titles of Mediahuis supply more than 10 million readers each day with online and printed news. MEDIAHUIS Paul Verwilt Kristiaan De Beukelaer Gert Ysebaert Shareholding percentage AvH 13 % www.mediahuis.be (€ 1,000) 2021 2020 2019 Turnover 1,130,790 990,527 857,942 EBITDA 240,480 172,010 82,064 Net result (group share) 117,321 58,592 14,723 Shareholders’ equity (group share) 482,477 378,525 324,568 Net financial position -151,880 -228,139 -277,897 Mediahuis NV Mediahuis - NRC Podcast 131 Vivek Tiwari Rejoy Manjuran PARTNERS FOR SUSTAINABLE GROWTH • During the second wave of COVID-19, Medikabazaar played a major role in creating awareness on the necessity to wear masks with its ’Don’t show me your face’ campaign. It donated 100,000 masks. • Medikabazaar also launched ‘Project Breathe’, the COVID combat collaboration platform. Addressing the huge demand supply gap of oxygen and respiratory products, the collaboration platform brought together the healthcare institutions, suppliers, and industry experts to support each other and help the country fight the pandemic. In 2021, Medikabazaar delivered 50 million masks, more than 2,000 ventila- tors, 10,000 oxygen concentrators and 10 million PPE (personal pro- tective equipment) kits. • Medikabazaar also launched an innovative product ‘Vaccicool’, a pro- prietary cold-chain vaccine transportation and storage device, which was distributed to various partner hospitals and vaccination centres across India. The Vaccicool devices have been used extensively for last mile delivery of vaccines all over the country. • Finally, Medikabazaar also helped governments, various corporates and NGOs to set up COVID test centres and COVID hospitals at various remote locations to fight the pandemic. In 2021, Medikabazaar continued its strong and consistent growth trajectory, increasing gross revenues from 114 mil- lion USD in 2020 to 290 million USD in 2020, whilst remaining EBITDA positive. AvH subscribed in September 2021 to the Series C financing round (75 million USD or 64 million euros) of Medikabazaar. This investment will be used to strength- en Medikabazaar’s digital capabilities, expand its distribution network, and acceler- ate its international expansion. Medikabazaar, founded in 2015 by Vivek Tiwari and Ketan Malkan, focuses on the main obstacles of the Indian medical sector: affordability, accessibility, availability and awareness. The company has clients in nearly 20,000 zip codes, providing its services throughout the country. In 2021, Medikabazaar received its patent for VIZI, its AI/ML (Artificial Intelligence/ Machine Learning) powered SaaS product and the industry’s first predictive invento- ry management tool enabling lower procurement cost. Medikabazaar also launched MBARC, a hospital asset management tool, with the aim to become the largest on-demand aggregation platform in India for medical equipment services, asset management and repair. This platform enables both equipment services and spare parts to be ordered through an in-app marketplace. Medikabazaar’s other major initiative, VPO (Value Procurement Organization), has seen great traction in the market. VPO helps the partner hospitals to enter an exclusive procurement arrange- ment wherein Medikabazaar takes over the responsibility of the entire healthcare procurement needs. This provides significant operational efficiencies and cost sav- ings for the hospitals. Medikabazaar is India’s pioneering and largest online B2B platform for medical supplies, from high-end medical equipment to specialty medical supplies including pharma, non-pharma & dental products. MEDIKABAZAAR Jitesh Mathur Manoj Mani Ketan Malkan Shareholding percentage AvH (fair value investment) 10 % www.medikabazaar.com Medikabazaar 132 Your partner for sustainable growth bowel diseases such as colitis ulcerosa, is an optimised consortium of 6 specific bacteria. After securing a successful up- scaling of the production, it is now being tested in Belgium, Poland and the Czech Republic. A second clinical trial will be started up in 2022 in an additional niche indication. In 2021, MRM Health also further devel- oped and validated its unique CORALTM technology platform. Based on an advanced bioinformatics platform, CORALTM makes it possible to select the right bacteria with maximum impact on specific dis- eases. Patented technologies are used to develop combinations of bacteria that are both highly efficacious and are easy to produce. The strength of CORALTM was also demonstrated in the current programmes focusing on spondyloarthritis, Parkinson’s disease, type 2 diabetes and liver diseases. PARTNERS FOR SUSTAINABLE GROWTH • MRM Health focuses on the improvement of health in society and puts the patient first in strategic choices. • In the pursuit of its strategic growth, the use of innovative technolo- gies and making decisions, MRM Health prioritises ethics, sustainabil- ity, good governance, society and environment. The intestines harbour a large population of bacteria (the microbiome). Recent re- search has shown that this microbiome has an important regulatory function in the body, and that disruptions are closely associated with local diseases of the intestine, such as inﬂammatory bowel disease, as well as disorders in the rest of the body, such as arthritis, diabetes and even Parkinson’s disease. MRM Health was established at the beginning of 2020 by the Ghent-based micro- biome expert MRM Technologies, in collaboration with the VIB research institute. For this purpose, 14.25 million euros worth of capital was raised, including an investment of 4 million euros committed by AvH, in combination with a first strate- gic partnership with IFF (ex-DuPont) for the development of medicines for treating metabolic diseases. In 2021, the company received approval to test the most advanced programme, MH002, on patients. MH002, a candidate medicine for treating inﬂammatory MRM Health develops innovative medicines based on healthy intestinal bacteria. On the basis of a new technology that allows the optimisation and production of combinations of specific intestinal bacteria, MRM Health develops medicines for treating inﬂammatory diseases, neurological disorders and metabolic diseases. MRM HEALTH Christiane Verhaegen Nigel Horscroft Ludo Haazen Sam Possemiers 16 % www.mrmhealth.com Shareholding percentage AvH (fair value investment) MRM Health 133 Despite all these challenges, the tar- gets of the 2021 budget were exceed- ed. Attention continued to go to the well-being of employees. In 2021, OMP continued to hire new staff at a solid pace (186 employees in total), both at the head office and at the branches in the EU, the US, Brazil and China. The software was further developed, both the basic software and the specific solutions for the different industries. The cloud-related services experienced a strong growth, particularly among the customers in the chemical, FMCG (fast moving consumer goods) and metal industries. The advisory and user engagement services also expe- rienced a strong growth, along with the implementation and support services. OMP invests heavily in the development of an alliance network to support growth and to be able to offer a global service package for the digital transformation projects of its global customers. OMP has more than 650 employees and has branches in more than 10 countries. OMP is known for its industry knowledge and integrated planning solution. For example, for many years now it has been regarded by Gartner as a leading company with the capacity and the expertise to successfully realise large-scale supply chain planning projects. The fast-growing group realised a turnover of 116 million euros in 2021, with an EBITDA margin of 27%. The persistent COVID-19 crisis had a strong impact on activity in 2021, although this did not slow down OMP’s growth trajectory. OMP was again able to carry out most of its activities remotely. Globally operating firms in the chemical, life sciences or consumer goods industries launched or speeded up their supply chain planning projects, especially as now it is even more important to have a clear overview of the whole logistic chain. Customers from more traditional sectors such as the metal and packaging industries also continued to invest in digital supply chain planning. New customers were attracted, even in the continued absence of traditional conferences or trade fairs; for the first time, the OMP conference went ahead entirely virtually. OMP is a leading company in the fast-growing digital market of supply chain planning (SCP). OMP implements its leading Unison Planning™ solution worldwide. OMP Kurt Gillis Bart Stijnen Jan Geuens Marc Scherens Georges Schepens Luc Schepens Anita Van Looveren Abhi Patel 20 % Shareholding percentage AvH Philip Vervloesem Paul Vanvuchelen Pieter Van Nyen PARTNERS FOR SUSTAINABLE GROWTH • OMP’s activities make the supply chain more efficient and more sus- tainable, for example by reducing inventory requirements and lead times, thereby saving energy and raw materials. Moreover, Unison Planning provides practical tools that allow companies to reduce the CO 2 emissions of their entire supply chain. • Teamwork, an in-depth industry knowledge, the willingness to keep learning, and the focus on long-term partnerships are at the heart of OMP’s DNA. (€ 1,000) 2021 2020 Turnover 115,713 96,951 EBITDA 30,716 28,280 Net result (group share) 23,777 17,753 Shareholders’ equity (group share) 83,494 60,853 Net financial position 64,844 46,517 OMP www.omp.com 134 Your partner for sustainable growth Pierre Flamant Jean-Pol Detiffe François Degrave PARTNERS FOR SUSTAINABLE GROWTH • OncoDNA takes the view that each cancer is different and that oncol- ogists should therefore have the best clinical decision-making tools. In this way, they can prescribe the best medication for their patients, keep better track of how the cancer evolves, and check how the dis- ease responds to the treatment. Multiple new long-term collabora- tions are paving the way for future growth. Among others, the group signed a strategic agreement with Radiomics (Belgium) to deliver its testing capabilities in the scope of its clinical trial study in lung cancer, partnered with C2i Genomics (US/Israel) to bring AI-powered liquid biopsy for cancer diagnostics across Europe and started to deliver blood and tissue-based biomarker tests for Bergonié Cancer Institute (France). OncoDNA is also planning to further develop its presence in Europe through tech transfer agreements with laboratories, and through the development of a decen- tralised offer targeting laboratories with limited bioinformatics capabilities offering them the ability to perform large panel sequencing and subsequent interpretation. Last, OncoDNA has initiated research in personalized cancer vaccine based on mRNA technology with Belgian academics’ partners. The group continues to invest in quality assurance and regulatory compliance in or- der to be able to collaborate with best-in-class biopharma companies and hospitals/ academics players. Also, the group will further develop its ESG policy. The company helps clinicians, academic researchers and biopharma companies to outsmart molecular complexity with the mission of delivering the promise of preci- sion medicine. The company not only provides clinical guidance for the treatment and real-time monitoring of late-stage cancer patients but also supports research and drug development in cancer and genetic diseases. The group offers a unique portfolio that combines NGS services (Next Generation Sequencing), biomarker testing, data interpretation software, and clinical decision support tools. OncoDNA employs over 110 employees across 9 countries, works with an interna- tional network of 35 distributors and is active in all 5 continents. Despite the pandemic related constraints, OncoDNA achieved a double-digit growth revenue in 2021, to 15.6 million euros. This performance proved the resilience of its business model and demonstrated the successful integration of IntegraGen, a French listed company acquired via a friendly takeover in 2020. OncoDNA is a genomic and theranostic company specializing in precision medicine for the treatment of cancer and genetic diseases. ONCODNA Gregori Ghitti Berengere Genin Emmanuel Martin Bernard Courtieu 10 % Shareholding percentage AvH (fair value investment) OncoDNA www.oncodna.com 135 PARTNERS FOR SUSTAINABLE GROWTH • Telemond is increasingly focused on reducing its carbon footprint. The company is examining to cover all suitable surfaces with solar panels, which would amount to nearly 5 ha. The group is also making great efforts to reduce waste in all the support functions of the operations. • The group was able to limit the effects of the COVID-19 waives on its employees, by implementing group wide protective measures and rolling out a vaccination program for employees and their families as early as March 2021. where the company further broadened its customer base on the back of the growing onshore wind market. Henschel Engineering Automotive, a tier 1 supplier of drop side bodies and three- way tippers for light utility vehicles, also delivered a strong performance despite very challenging market conditions. The dis- ruptions in the auto industry caused by the lack of semi-conductor availability and increased raw material prices led to a strong decline in the company’s revenues. The company’s lean cost structure and broad customer portfolio have nevertheless helped mitigate the effects of the market downturn. The organisation’s resilience makes the group optimistic that higher sales and profitability will be achieved, once the market picks up again. Teleyard, the group’s offshore division, further strengthened its organisation ahead of the important ramp up in volumes for serial production anticipated as of end 2022. The company has further expanded its capabilities in automation and in the application of innovative welding processes to produce large steel structures in high strength steel with substantially lowered production costs. In consideration of the global trends towards renewables and large-scale infra- structural investments, the group is well positioned for further sustainable growth. Telemond Group delivered a strong result over 2021, aided by the recovery of its core markets. Turnover increased by 18% to 99 million euros, resulting in an in- crease of net profit to 8.9 million euros. Telemond, supplying telescopic and lattice structure booms to the crane industry, saw its market recover strongly, driven by substantial growth from the US and by the ramp up in the construction industry. Telemond’s agile management structure and its continued focus on process optimization and automation allowed the company to stay ahead of competition and further strengthen its position as one the global leaders in its sector. This was in particular the case in the lattice structure segment, Telemond Group is a manufacturer of high-grade steel structures and modules for the hoisting, automotive and civil maritime sectors. TELEMOND GROUP Alicja Ozimek Tobias Müller Dieter Schneider Christopher Maas Grego Peters Shareholding percentage AvH (€ 1,000) 2021 2020 2019 Turnover 98,953 84,050 98,575 EBITDA 12,622 9,973 12,665 Net result (group share) 8,888 6,074 8,194 Shareholders’ equity (group share) 59,823 54,451 55,735 Net financial position -3,888 -3,516 -9,792 Telemond Group 50 % Telemond Group www.telemond.be 136 Your partner for sustainable growth PARTNERS FOR SUSTAINABLE GROWTH • THG attaches great importance to sustainable and ethical enterprise, with respect for the individual and for society as a whole. • In 2022, THG will start monitoring the evolution of its CO 2 footprint on a monthly basis. • THG joins in taking the lead in fostering a general awareness raising and in the search for more environmentally friendly sustainable trans- port solutions. TH Turbos has in recent years strategically repositioned itself from being a distributor of mainly new turbos to a remanufactur- er (and repairer) of turbos. • THG attaches great importance to the development of its staff, and has a compliance programme that commits and stimulates every staff member to pursue the objectives of sustainable and ethical enterprise. • In the context of ethically responsible enterprise, several initiatives have been developed and implemented, such as the TH Compliance programme and training sessions. THG realised a turnover increase of 39% to 620 million euros, an EBITDA increase of 26% to 36.5 million euros, and a record result of 18.1 million eu- ros. In 2021, the group was again able to substantially improve its net financial position to -89.5 million euros. For 2022, the manufacturers expect a European market (+16T) of around 260,000 to 300,000 vehicles. Due to the long delivery times, THG’s order book is better filled than usual, and a further turnover increase was predicted for 2022. This was however before the start of the military conﬂict in Ukraine which will undoubtedly have an impact on these projections, although at this moment it is not yet possible to make an accurate estimate of the situation. Today, THG is making every effort to ensure continuity for its staff, customers and partners at the branches affected by the conﬂict. With 78 branches in 8 countries, TH Trucks is one of the biggest DAF dealers world- wide, and also a dealer of a.o. Iveco, Ford Trucks, Nissan, Isuzu, Fiat Professional, Fuso and Kögel. In Belgium, TH Lease is the largest independent leasing company for commercial vehicles with a ﬂeet of 4,292 vehicles. It also provides these services in the other countries where TH operates. TH Turbos is a major European turbo distributor for the aftermarket of passenger cars, trucks and industrial applications, with own branches in 5 countries. THG was able to report its best results ever in 2021 despite the continuing ma- jor impact of the COVID-19 pandemic on its activities: the international disruption of the supply chain, the significant price increases and the substantial extension of delivery times. The European truck market (+16T) increased in 2021 by 19% to 279,000 vehicles, although this is still substantially lower than the pre-corona market. Turbo’s Hoet Groep (THG) is a leading European truck dealer and leasing com- pany for commercial vehicles. In addition, THG is also one of the major Europe- an turbo distributors for the aftermarket. TURBO’S HOET GROEP Bart Dobbels Serge Van Hulle Georgi Zagorov Gheorghe Chita Peter Tytgadt Kristof Derudder Sergei Tarasiuk Piet Wauters Filip Matthijs Shareholding percentage AvH 50 % www.th-group.eu (€ 1,000) 2021 2020 2019 Turnover 620,486 447,935 602,016 EBITDA 36,455 29,049 32,423 Net result (group share) 18,083 7,178 9,951 Shareholders’ equity (group share) 132,806 118,363 116,476 Net financial position -89,514 -106,319 -136,338 Turbo’s Hoet Groep NV Turbo’s Hoet Groep 137 VAN MOER LOGISTICS Eric Noterman Anne Verstraeten Carl Ghekiere Joris Emanuel Ann Cools Bert Calluy Iwan De Block Jo Van Moer Shareholding percentage AvH 22 % (€ 1,000) 2021 Turnover 222,378 EBITDA 14,520 Net result (group share) 1,328 Shareholders’ equity (group share) 36,266 Net financial position -15,806 Van Moer Logistics NV (1) Yves Hebb Steven Pauwels PARTNERS FOR SUSTAINABLE GROWTH • In partnership with CMB TECH, Van Moer Logistics introduced its first dual fuel hydrogen truck at the end of 2021. The truck has the po- tential to reduce CO 2 emissions by up to 80%. After a trial period of 12 months, it will be examined how the technology will be further implemented in the current ﬂeet. Nearly 10% of the 500 trucks run on natural gas. 67% of the industrial rolling stock is powered by electric- ity and is charged by 11,100 m² of own solar panels. • At the end of 2021, the ‘Van Moer Academy’ was launched to central- ise and further expand the existing training initiatives. With this initia- tive, Van Moer Logistics is committed to a culture of lifelong learning for both blue-collar and white-collar workers. • Van Moer Logistics has a diverse workforce with no less than 44 dif- ferent nationalities spread over all its divisions. • The Van Moer Logistics Cycling team started off in 2021 with 128 cyclists and for the first time also welcomed 16 women to the cycling club. This makes it the largest youth club in the Waasland region. part of the ﬂeet being idle. In both divi- sions there was an impact from the dis- ruption of the global logistics ﬂows and the disrupted container traffic caused by the blockage of the Suez Canal. For 2022, Van Moer Logistics expects that the impact of the pandemic will decrease and operations will gradually return to normal. In 2021, Van Moer Logistics real- ised a turnover increase of 35 mil- lion euros or 19%, both by organic growth and by acquisitions, to 222 million euros. In the first quarter of 2021, Van Moer Logistics completed the ac- quisitions of Trimodal Terminal Brussels, NDB Logistics and Bertels International. The organic growth manifested it- self in all divisions (warehousing, transport, ports & intermodal, chemicals). Profita- bility improved primarily in the ‘ports & intermodal’ and ‘chemicals’ divisions (bulk and tank container logistics). This evolution is in line with the strategic policy of investing heavily in sustainable and alternative transport modes, with focus on the (petro)chemical industry. The ‘transport’ and ‘warehousing’ divisions had, especial- ly in peak periods, to contend with a shortage of labour (dockworkers and logistics staff) due to a tight labour market and the COVID-19 pandemic, which resulted in Van Moer Logistics is an integrated logistics service provider active in road transport, intermodal transport and goods warehousing. The group has 25 lo- cations in Belgium, Germany and Romania, and employs 1,650 people. Van Moer has a ﬂeet of 500 trucks, 9 barges and manages 480,000 m² of ware- houses. www.vanmoer.com Van Moer Logistics 138 Your partner for sustainable growth Sarvesh Nevatia Nicholas Cator PARTNERS FOR SUSTAINABLE GROWTH • Venturi believes that the fund’s interests are best aligned with those of its investors and of its portfolio companies when environmental, social and governance (ESG) considerations are applied to the investment decision-making process. This allows better management of risks and the generation of sustainable, responsible, long-term value creation for Venturi’s investors. Venturi has a prohibited list of industries in which it cannot invest and also monitors any ESG issues in its portfolio companies. • Venturi is also committed to playing an active role in the sustainable development of Asia. The fund manager, Venturi Partners Pte Ltd, will donate 2% of its revenues and a meaningful proportion of its carried interest to charitable foundations focused on advancing sustainable initiatives across Asia, including empowerment and education of women and mitigation of climate change. More specifically, Ventu- ri has partnered with The Asia Foundation to help bridge the digital and skills gap for women in India and with the Environmental Bambu Foundation to regenerate lands in Indonesia. Venturi Fund I intends to make up to 8 investments, allowing it to be a truly active investor. It will focus on custom- er centric, purpose-driven brands in education, healthcare and fast-moving consumer goods. AvH aims at co-invest- ing alongside the fund in selected high growth companies with disruptive business models. Collectively the Venturi team has decades of investment and operating experience combined with an impressive network and track record in the consumer space in the region. This puts them in a unique position to identify tomorrow’s new consumer trends and winning companies and to help Venturi’s portfolio companies build their brands successfully. In June 2021, the first closing of Venturi Partners Fund I, in which AvH is one of the anchor investors, was completed with 100 million USD in committed capital. It made its maiden investment in Livspace, an interior design and renovation services company in Singapore and India, in July 2021. The fund aims to offer up to 100% of fund commitments in co-investment opportunities to its investors. AvH is a cornerstone investor in Venturi Fund I and a member of the investment committee. AvH has committed 20 million USD, to be invested over a period of 4 years. Other key investors include Peugeot Invest, a listed Peugeot family invest- ment vehicle, and Generation P, a holding company set up by Frédéric de Mévius, founder of Verlinvest and Planet First Partners, and Alexander de Wit, former exec- utive cirector at Verlinvest and co-founder of Planet First. Asia is well positioned to lead the global post-pandemic recovery with strong un- derlying growth prospects for the next decade. While consumer habits have forev- er been transformed by COVID-19, the consumer industry in Asia has rebounded fast to pre-pandemic levels. The accelerated shift in digital transformation and to e-commerce aligns with Venturi’s core areas of focus and expertise. Venturi Partners is a Singapore-based growth stage fund manager with a sin- gular focus on the consumer space in India and South-East Asia. VENTURI PARTNERS Lauren Burns Rishika Chandan www.venturi.partners 20 % Shareholding percentage AvH (fair value investment) Venturi Partners - Livspace Hari Rajmohan 139 140 Your partner for sustainable growth FINANCIAL STATEMENTS 2021 YOUR PARTNER FOR SUSTAINABLE GROWTH 142 Your partner for sustainable growth CONTENTS • Income statement .................................................................................................................................................................... 144 • Statement of comprehensive income .............................................................................................................. 145 • Balance sheet ................................................................................................................................................................................ 146 • Cash flow statement (indirect method) ........................................................................................................ 148 • Statement of changes in consolidated equity ....................................................................................... 149 • Statutory annual accounts ............................................................................................................................................ 221 • Comments on the statutory annual accounts ....................................................................................... 225 1. IFRS valuation rules ....................................................................................................................................................... 150 2. Subsidiaries and jointly controlled subsidiaries ........................................................................... 157 3. Associated participating interests ................................................................................................................ 162 4. Business combinations and disposals ..................................................................................................... 164 5. Assets and liabilities held for sale ................................................................................................................ 165 6. Segment information ................................................................................................................................................... 166 7. Intangible assets ................................................................................................................................................................ 180 8. Goodwill ....................................................................................................................................................................................... 181 9. Tangible assets .................................................................................................................................................................... 182 10. Investment property at fair value .................................................................................................................. 183 11. Participations accounted for using the equity method ...................................................... 185 12. Financial assets and liabilities ........................................................................................................................... 187 13. Banks - receivable from credit institutions and clients ...................................................... 192 14. Inventories and construction contracts ................................................................................................. 194 15. Minorities .................................................................................................................................................................................... 195 16. Lease ................................................................................................................................................................................................ 197 17. Provisions .................................................................................................................................................................................... 198 18. Financial debts ..................................................................................................................................................................... 200 19. Banks - debts to credit institutions, clients and securities ............................................ 201 20. Financial instruments ................................................................................................................................................... 203 21. Taxes ................................................................................................................................................................................................ 205 22. Share based payment .................................................................................................................................................. 206 23. Rights and commitments not reflected in the balance sheet .................................... 208 24. Employment ............................................................................................................................................................................. 209 25. Raw materials, consumables, services and subcontracted work .......................... 209 26. Pension liabilities .............................................................................................................................................................. 209 27. Related parties ..................................................................................................................................................................... 212 28. Earnings per share ........................................................................................................................................................... 214 29. Proposed and distributed dividends .......................................................................................................... 214 30. Major events after balance sheet date .................................................................................................. 215 • Statutory auditor’s report ............................................................................................................................................... 216 144 221 150 CONSOLIDATED ANNUAL ACCOUNTS STATUTORY ANNUAL ACCOUNTS NOTES TO THE FINANCIAL STATEMENTS 143Annual report 2021 144 | Your partner for sustainable growth Income statement (€ 1,000) Note 2021 2020 Revenue 4,312,374 3,910,250 Rendering of services 99,279 95,880 Real estate revenue 10 225,495 226,468 Interest income - banking activities 103,801 102,803 Fees and commissions - banking activities 98,566 77,857 Revenue from construction contracts 14 3,664,508 3,264,108 Other operating revenue 120,726 143,134 Operating expenses (-) -4,023,991 -3,773,047 Raw materials, consumables, services and subcontracted work (-) 25 -2,673,943 -2,532,009 Interest expenses Bank J.Van Breda & C° (-) -22,759 -22,710 Employee expenses (-) 24 -877,690 -816,589 Depreciation (-) -350,553 -350,772 Impairment losses (-) -45,810 -9,592 Other operating expenses (-) -52,687 -39,797 Provisions 17 -550 -1,579 Profit (loss) on assets/liabilities designated at fair value through profit and loss 34,048 -3,805 Financial assets - Fair value through P/L (FVPL) 12 41,077 -35,201 Investment property 10 -7,029 31,396 Profit (loss) on disposal of assets 34,699 90,666 Realised gain (loss) on intangible and tangible assets 7,182 12,172 Realised gain (loss) on investment property 4,403 2,211 Realised gain (loss) on financial fixed assets 22,951 75,837 Realised gain (loss) on other assets 163 446 Profit (loss) from operating activities 357,130 224,063 Financial result -27,227 -73,718 Interest income 11,941 13,737 Interest expenses (-) 18 -33,694 -39,576 (Un)realised foreign currency results 7,056 -16,698 Other financial income (expenses) -12,530 -31,182 Derivative financial instruments designated at fair value through profit and loss 20 6,018 -5,242 Share of profit (loss) from equity accounted investments 11 255,191 179,253 Other non-operating income 548 0 Other non-operating expenses (-) 0 0 Profit (loss) before tax 591,659 324,356 Income taxes 21 -79,449 -46,742 Deferred taxes 5,624 44,693 Current taxes -85,073 -91,435 Profit (loss) after tax from continuing operations 512,210 277,614 Profit (loss) after tax from discontinued operations -150 0 Profit (loss) of the period 512,060 277,614 Minority interests 15 105,246 47,823 Share of the group 406,814 229,791 Earnings per share (€) 2021 2020 1. Basic earnings per share 1.1. from continued and discontinued operations 28 12.27 6.93 1.2. from continued operations 28 12.28 6.93 2. Diluted earnings per share 2.1. from continued and discontinued operations 28 12.26 6.93 2.2. from continued operations 28 12.26 6.93 We refer to Note 6. Segment information for more comments on the consolidated results. Annual report 2021 | 145 Statement of comprehensive income (€ 1,000) Note 2021 2020 Profit (loss) of the period 512,060 277,614 Minority interests 15 105,246 47,823 Share of the group 406,814 229,791 Other comprehensive income 67,061 -44,382 Items that may be reclassified to profit or loss in subsequent periods Changes in revaluation reserve: bonds - Fair value through OCI (FVOCI) 12 -8,456 5,333 Taxes 21 2,114 -1,330 -6,341 4,003 Changes in revaluation reserve: hedging reserves 20 41,063 6,543 Taxes 21 -7,657 1,241 33,405 7,783 Changes in revaluation reserve: translation differences 36,941 -50,418 Items that cannot be reclassified to profit or loss in subsequent periods Changes in revaluation reserve: shares - Fair value through OCI (FVOCI) 12 137 7 Taxes 21 -34 -2 103 5 Changes in revaluation reserve: actuarial gains (losses) defined benefit pension plans 26 3,820 -7,510 Taxes 21 -866 1,754 2,954 -5,756 Total comprehensive income 579,122 233,232 Minority interests 15 125,981 51,741 Share of the group 453,141 181,491 For a breakdown of the item ‘Share of the group and Minority interests’ in the results, we refer to Note 6. Segment information. In accordance with the accounting standard “IFRS 9 Financial Instruments”, finan- cial assets are broken down into three categories on the balance sheet and fluctu- ations in the fair value of financial assets are reported in the consolidated income statement. The only exception to this rule are the fair value fluctuations in the investment portfolio of Bank Van Breda and Delen Private Bank, which in the table above are divided into shares and bonds. Hedging reserves arise from fluctuations in the fair value of hedging instruments used by group companies to hedge against risks. Several group companies (a.o. DEME, Nextensa and Rentel/SeaMade) have hedged against a possible rise in in- terest rates. As a result of the evolution of the (expected) market interest rates in 2021, the market value of these hedges has evolved positively, and the unrealised loss on the hedging instruments has decreased by 33.4 million euros (including minority interests). Translation differences arise from fluctuations in the exchange rates of group com- panies that report in foreign currencies. In 2021, the euro decreased in value against most relevant currencies, which is reflected in positive translation differ- ences of 36.9 million euros (including minority interests). With the introduction of the amended IAS 19 accounting standard in 2013, the actuarial gains and losses on certain pension plans are recognized directly in other comprehensive income. 146 | Your partner for sustainable growth Balance sheet - assets (€ 1,000) Note 2021 2020 I. Non-current assets 11,301,905 10,952,870 Intangible assets 7 149,391 147,762 Goodwill 8 327,829 325,937 Tangible assets 9 2,762,846 2,825,552 Land and buildings 426,584 415,415 Plant, machinery and equipment 1,944,209 1,835,423 Furniture and vehicles 55,051 53,525 Other tangible assets 7,009 4,736 Assets under construction 329,992 516,454 Investment property 10 1,267,150 1,414,057 Participations accounted for using the equity method 11 1,647,196 1,456,070 Non-current financial assets 12 336,038 260,413 Financial assets : shares - Fair value through P/L (FVPL) 177,351 131,391 Receivables and warranties 158,687 129,022 Non-current hedging instruments 20 1,816 3,279 Deferred tax assets 21 150,279 140,439 Banks - receivables from credit institutions and clients after one year 13 4,659,360 4,379,362 Banks - loans and receivables to clients 4,634,354 4,327,706 Banks - changes in fair value of the hedged credit portfolio 25,007 51,656 II. Current assets 5,700,443 5,274,000 Inventories 14 376,218 382,451 Amounts due from customers under construction contracts 14 478,499 400,034 Investments 12 575,982 546,322 Financial assets : shares - Fair value through P/L (FVPL) 48,190 51,155 Financial assets : bonds - Fair value through OCI (FVOCI) 507,529 474,991 Financial assets : shares - Fair value through OCI (FVOCI) 259 173 Financial assets - at amortised cost 20,005 20,003 Current hedging instruments 20 4,129 8,399 Amounts receivable within one year 12 775,043 765,168 Trade debtors 628,710 616,808 Other receivables 146,332 148,361 Current tax receivables 21 42,595 34,554 Banks - receivables from credit institutions and clients within one year 13 2,477,238 2,242,735 Banks - loans and advances to banks 138,014 163,712 Banks - loans and receivables to clients 1,113,898 1,086,948 Banks - changes in fair value of the hedged credit portfolio 698 269 Banks - cash balances with central banks 1,224,628 991,806 Cash and cash equivalents 883,730 842,408 Deferred charges, accrued income and other current assets 87,010 51,930 III. Assets held for sale 5 230,679 1,874 Total assets 17,233,026 16,228,744 The breakdown of the consolidated balance sheet by segment is presented in Note 6. Segment information. This reveals that the full consolidation of Bank Van Breda (Private Banking segment) has a significant impact on both the balance sheet total and the balance sheet structure of AvH. Bank Van Breda contributes for 7,791.8 million euros to the balance sheet total of 17,233.0 million euros, and although this bank is solidly capitalized with a Common Equity Tier 1 ratio of 16.8%, its balance sheet ratios, as explained by the nature of its activity, are different from those of the other companies in the consolidation scope. To improve the readability of the consolidated balance sheet, certain items from the balance sheet of Bank Van Breda have been summarized in the consolidated balance sheet. Annual report 2021 | 147 Balance sheet – equity and liabilities (€ 1,000) Note 2021 2020 I. Total equity 5,235,002 4,782,169 Equity - group share 3,957,228 3,562,038 Issued capital 113,907 113,907 Share capital 2,295 2,295 Share premium 111,612 111,612 Consolidated reserves 3,943,016 3,592,273 Revaluation reserves -66,445 -112,772 Financial assets : bonds - Fair value through OCI (FVOCI) 1,620 6,614 Financial assets : shares - Fair value through OCI (FVOCI) 126 45 Hedging reserves -31,050 -46,080 Actuarial gains (losses) defined benefit pension plans -24,458 -27,236 Translation differences -12,682 -46,115 Treasury shares (-) 22 -33,251 -31,370 Minority interests 15 1,277,774 1,220,131 II. Non-current liabilities 2,537,913 3,414,785 Provisions 17 45,149 46,175 Pension liabilities 26 81,739 83,250 Deferred tax liabilities 21 161,849 159,777 Financial debts 18 1,419,899 1,869,486 Bank loans 1,025,574 1,395,608 Bonds 171,345 241,934 Subordinated loans 61,625 44,680 Lease debts 149,514 138,093 Other financial debts 11,841 49,170 Non-current hedging instruments 20 74,034 97,324 Other amounts payable 70,598 52,713 Banks - non-current debts to credit institutions, clients & securities 19 684,646 1,106,061 Banks - deposits from credit institutions 0 298,417 Banks - deposits from clients 644,663 767,701 Banks - debt certificates including bonds 39,983 39,943 III. Current liabilities 9,460,112 8,031,790 Provisions 17 35,670 38,083 Pension liabilities 26 305 342 Financial debts 18 961,720 689,864 Bank loans 527,129 319,771 Bonds 74,819 0 Subordinated loans 33,527 20,974 Lease debts 36,198 33,939 Other financial debts 290,047 315,181 Current hedging instruments 20 16,315 8,914 Amounts due to customers under construction contracts 14 341,883 309,192 Other amounts payable within one year 1,564,689 1,454,021 Trade payables 1,145,112 1,092,826 Advances received 101,080 60,643 Amounts payable regarding remuneration and social security 220,085 207,031 Other amounts payable 98,411 93,521 Current tax payables 21 109,196 94,895 Banks - current debts to credit institutions, clients & securities 19 6,354,225 5,378,292 Banks - deposits from credit institutions 425,353 28,875 Banks - deposits from clients 5,723,461 5,139,401 Banks - debt certificates including bonds 205,412 210,016 Accrued charges and deferred income 76,108 58,187 IV. Liabilities held for sale 5 0 0 Total equity and liabilities 17,233,026 16,228,744 148 | Your partner for sustainable growth Cash flow statement (indirect method) (€ 1,000) 2021 2020 I. Cash and cash equivalents - opening balance 842,408 887,985 Profit (loss) from operating activities 357,130 224,063 Reclassification ‘Profit (loss) on disposal of assets' to cash flow from divestments -34,699 -90,666 Dividends from participations accounted for using the equity method 112,496 38,042 Other non-operating income (expenses) 548 0 Income taxes (paid) -78,797 -70,441 Non-cash adjustments Depreciation 350,553 350,772 Impairment losses 45,861 9,652 Share based payment 4,896 -2,566 Profit (loss) on assets/liabilities designated at fair value through profit and loss -34,048 3,805 (Decrease) increase of provisions -4,268 2,142 Other non-cash expenses (income) 1,197 3,711 Cash flow 720,869 468,514 Decrease (increase) of working capital 60,876 118,570 Decrease (increase) of inventories and construction contracts 18,796 68,001 Decrease (increase) of amounts receivable -62,748 97,678 Decrease (increase) of receivables from credit institutions and clients (banks) -538,081 -746,754 Increase (decrease) of liabilities (other than financial debts) 109,076 -85,915 Increase (decrease) of debts to credit institutions, clients & securities (banks) 555,645 769,629 Decrease (increase) other -21,812 15,931 Cash flow from operating activities 781,745 587,084 Investments -637,527 -780,577 Acquisition of intangible and tangible assets -319,018 -236,598 Acquisition of investment property -36,479 -46,388 Acquisition of financial fixed assets (business combinations included) -66,523 -240,476 Cash acquired through business combinations 1,187 2,274 New amounts receivable -20,059 -15,849 Acquisition of investments -196,635 -243,539 Divestments 266,205 385,295 Disposal of intangible and tangible assets 34,687 21,071 Disposal of investment property 26,987 35,404 Disposal of financial fixed assets (business disposals included) 28,169 141,357 Cash disposed of through business disposals -517 0 Reimbursements of amounts receivable 13,192 10,240 Disposal of investments 163,687 177,223 Cash flow from investing activities -371,322 -395,282 Financial operations Dividends received 8,441 7,838 Interest received 11,941 11,654 Interest paid -32,651 -39,313 Other financial income (costs) -13,343 -54,864 Decrease (increase) of treasury shares -3,132 -1,635 Increase of financial debts 218,432 436,630 (Decrease) of financial debts -447,831 -460,145 (Investments) and divestments in controlling interests 1,174 -17,830 Dividends paid by AvH -77,890 -76,813 Dividends paid to minority interests -35,649 -36,234 Cash flow from financial activities -370,508 -230,712 II. Net increase (decrease) in cash and cash equivalents 39,915 -38,910 Impact of exchange rate changes on cash and cash equivalents 1,406 -6,667 III. Cash and cash equivalents - ending balance 883,730 842,408 Annual report 2021 | 149 Statement of changes in consolidated equity (€ 1,000) Issued capital & share premium Consolidated reserves Bonds -Fair value through OCI (FVOCI) Shares - Fair value through OCI (FVOCI) Hedging reserves Actuarial gains (losses) defined benefit pension plans Translation differences Treasury shares Equity - group share Minority interests Total equity Opening balance, 1 January 2020 113,907 3,439,322 3,469 41 -43,889 -23,019 -1,074 -32,648 3,456,109 1,225,725 4,681,834 Profit 229,791 229,791 47,823 277,614 Unrealised results 3,145 4 -2,191 -4,217 -45,041 -48,300 3,918 -44,382 Total of realised and unrealised results 0 229,791 3,145 4 -2,191 -4,217 -45,041 0 181,491 51,741 233,232 Distribution of dividends -76,813 -76,813 -36,234 -113,047 Operations with treasury shares 1,278 1,278 1,278 Other (a.o. changes in consol. scope / beneficial interest %) -27 -27 -21,100 -21,128 Ending balance, 31 December 2020 113,907 3,592,273 6,614 45 -46,080 -27,236 -46,115 -31,370 3,562,038 1,220,131 4,782,169 Impact IFRS amendments 0 0 Opening balance, 1 January 2021 113,907 3,592,273 6,614 45 -46,080 -27,236 -46,115 -31,370 3,562,038 1,220,131 4,782,169 Profit 406,814 406,814 105,246 512,060 Unrealised results -4,994 81 15,030 2,778 33,432 46,327 20,735 67,061 Total of realised and unrealised results 0 406,814 -4,994 81 15,030 2,778 33,432 0 453,141 125,981 579,122 Distribution of dividends -77,890 -77,890 -34,682 -112,572 Operations with treasury shares -1,881 -1,881 -1,881 Other (a.o. changes in consol. scope / beneficial interest %) 21,820 21,820 -33,656 -11,836 Ending balance, 31 December 2021 113,907 3,943,016 1,620 126 -31,050 -24,458 -12,682 -33,251 3,957,228 1,277,774 5,235,002 More details on the unrealised results can be found in the section “Statement of comprehensive income”. After the General Meeting of May, 25 2021, AvH paid a dividend of 2.35 euros per share, resulting in a total dividend payment of 77.9 million euros. In 2021, AvH has purchased 55,000 treasury shares in order to hedge options for the benefit of staff. Over the same period, beneficiaries of the share option plan exercised options on 53,500 AvH shares. On December 31, 2021, 306,250 options were outstanding on AvH shares. In order to hedge these (and future) obligations, AvH owned 345,250 treasury shares on that date. In addition, 211,979 AvH shares were purchased and 216,604 shares were sold in 2021 in the context of the contract that AvH entered into with Kepler Cheuvreux in order to support the liquidity of the AvH share. These transactions are initiated entirely autonomously by Kepler Cheuvreux, but as they take place on behalf of AvH, the net sale of 4,625 AvH shares has an impact on AvH’s equity. On Decem- ber 31, 2021, the number of treasury shares in the portfolio in the context of this liquidity agreement amounts to 1,842. The item "Other" in the "Minority interests" column arises, among other aspects, from the changes in the consolidation scope of AvH or its affiliates. We refer to Explanatory Note 6. Segment reporting for more details. The item “Other” in the colomn "Consolidated reserves" includes a.o. the impact of the regrouping in the Real Estate segment (contribution in kind of Extensa and LREM to Leasinvest Real Estate, all controlling interests), the eliminations of results on sales of treasury shares, the impact of the acquisition of minority interests and the impact of the remeasurement of the purchase obligation on certain shares. General data regarding the capital The issued capital amounts to 2,295,277.90 euros. The capital is fully paid-up and is represented by 33,496,904 shares without nominal value. Please refer to the Section ‘General information regarding the company and the capital’. 150 | Your partner for sustainable growth Note 1: IFRS valuation rules 1. Statement of compliance The consolidated annual accounts are prepared in accordance with the Interna- tional Financial Reporting Standards and IFRIC interpretations effective on 31 De- cember 2021, as approved by the European Commission. New and amended standards and interpretations Following new standards and amendments to existing standards published by the IASB, are applied as from January 1, 2021. • Amendments to IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures, and IFRS 16 Leases • Interest Rate Benchmark Reform – phase 2 The application of the new and amended standards and interpretations has no significant impact on the group’s financial statements. 2. Main assumptions and estimates The preparation of financial statements under IFRS requires estimates to be used and assumptions to be made that affect the amounts shown in the financial state- ments, particularly as regards the following items: • the period over which non-current assets are depreciated or amortized; • the measurement of provisions and pension obligations; • the measurement of income or losses on construction contracts using the per- centage of completion method; • estimates used in impairment tests; • the measurement of investment property and financial instruments at fair value; • the assessment of control; • the qualification of a company acquisition as a business combination or an ac- quisition of assets; • the assumptions used to determine the financial liabilities in accordance with IFRS 16. • The estimates used in the assessment of income taxes or uncertain tax positions. These estimates assume the operation is a going concern and are made on the basis of the information available at the time. Estimates may be revised if the cir- cumstances on which they were based alter or if new information becomes avail- able. Actual results may be different from these estimates. The valuation rules, which are part of the annual report, are approved annually by AvH's board of directors. The most recent deliberation on and approval of these valuation rules by AvH's board of directors took place on March 22, 2022. 3. Principles of consolidation The consolidated annual accounts contain the financial details of the parent AvH, its subsidiaries and jointly controlled companies, as well as the share of the group in the results of the associated companies. 3.1 Subsidiaries Subsidiaries are entities which are controlled by the group. Control exists when AvH (a) has power over the subsidiary; (b) is exposed, or has rights, to variable returns from its involvement with the subsidiary; and (c) has the ability to affect those returns through its power over the subsidiary. The participating interests in subsidiaries are consolidated in full as from the date of acquisition until the end of the control. The financial statements of the subsidiaries have been prepared for the same re- porting period as AvH and uniform IFRS valuation rules have been used. All intra- group transactions and unrealised intra-group profits and losses on transactions between group companies have been eliminated. Unrealised losses have been eliminated unless they concern an impairment. 3.2 Jointly controlled subsidiaries and associated partici- pating interests Jointly controlled subsidiaries Companies which are controlled jointly (defined as those entities in which the group has joint control, among others via the shareholders’ percentage or via con- tractual agreement with one or more of the other shareholders and that are con- sidered to be joint ventures) are included on the basis of the equity method as from the date of acquisition until the end of the joint control. Associated participating interests Associated participating interests in which the group has a significant influence, more specifically companies in which AvH has the power to participate (without control) in the financial and operational management decisions, are included in accordance with the equity method, as from the date of acquisition until the end of the significant influence. The equity method According to the equity method, the participating interests are initially recorded at cost and the carrying amount is subsequently modified to include the share of the group in the profit or loss of the participating interest, as from the date of purchase. The financial statements of these companies are prepared for the same reporting period as AvH and uniform IFRS valuation rules are applied. Unrealised intra-group profits and losses on transactions are eliminated to the extent of the interest in the company. Joint operations A joint operation is a joint arrangement in which the parties (joint operators) have direct rights over the assets and direct obligations with respect to the entity’s lia- bilities. Joint control is the contractually agreed sharing of control of an arrange- ment, which exists only when decisions about the relevant activities require unan- imous consent of the parties sharing control. When a subsidiary of AvH starts a joint operation, that subsidiary recognises: • its assets, including its share of any assets held jointly; • its liabilities, including its share of any liabilities incurred held jointly; • its revenue from the sale of its share of the output arising from the joint opera- tion; • its share of the revenue from the sale of its share of the output by the joint operation; • its expenses, including its share of any expenses incurred jointly. 4. Intangible fixed assets Intangible fixed assets with a finite useful life are stated at cost, less accumulated amortisation and any accumulated impairment losses. Intangible fixed assets are amortised on a straight-line basis over the useful eco- nomic life. The useful economic life is reviewed per annum and this is also the case for any residual value. The residual value is assumed to be zero. Intangible fixed assets with indefinite useful life, stated at cost, are not amortised but are subject to an impairment test on an annual basis and whenever indications of a possible impairment occur. Costs for starting up new activities are included in the profit or loss at the time they occur. Research expenses are taken into profit or loss in the period in which they arise. Development expenses that meet the severe recognition criteria of IAS 38 are cap- italised and amortised over the useful life. The valuation rules applied when accounting for acquisitions of residential care centres are as follows: • Authorizations and operating licenses that have been acquired are initially rec- ognised in the consolidation at their value in use or fair value at the time of acquisition. • Executable building permits that have been acquired are initially recognised in the consolidation at their value in use or fair value at the time of acquisition. This only takes into account the potential net capacity expansion. Annual report 2021 | 151 • These authorization and advanced licences and permits are recognised under intangible assets and amortised over a period of 33 years. If a long lease is concluded, the amortisation period is the same as the term of the long lease. Amortisation starts when the building is provisionally completed and operated. Operating licences are not amortised since in principle they are of unlimited du- ration. • In accordance with IAS 36, intangible fixed assets with an indefinite useful life are subject to an annual impairment test by comparing their carrying amount with their recoverable amount. The recoverable amount is the higher of the fair value less cost to sell and the value in use. 5. Goodwill Goodwill is the positive difference between the cost of the business combination and the share of the group in the fair value of the acquired assets, the acquired liabilities and contingent liabilities of the subsidiary, jointly controlled subsidiary or associated participating interests at the time of the acquisition. Goodwill is not amortised but is subject to an annual impairment test and when- ever indications of a possible impairment have occurred. 6. Tangible fixed assets Tangible fixed assets are carried at cost or production cost less accumulated amor- tisations and any impairments. Tangible fixed assets are amortised on a straight-line basis over the useful eco- nomic life. The useful life is reviewed on a yearly basis and this is also the case for any residual value. The depreciation periods as defined by DEME of the floating and other construction materials range from 3 years (such as for pipelines) to 21 years. The principal com- ponent of trailing suction hopper dredgers and cutter suction dredgers is depreci- ated over a period of 18 years. For new hopper dredgers, cutter suction dredgers, cable lay vessels and DP3 Offshore crane vessels in production since 2019 the principal component is depreciated over a period of 20 years and a second com- ponent is depreciated over a period of 10 years. For major jack-up vessels this depreciation rule was already applicable. The principal component mainly includes the hull and machinery and the second component relates to parts of a vessel for which the lifespan is shorter than the economic life cycle of the vessel. Repair and maintenance expenses for tangible assets are recognized as an expense in the period in which they occur, unless they result in an increase of the future economic benefit of the respective tangible fixed assets, which justifies their capi- talisation. Assets under construction are amortised as from the time they are taken into use. Government grants are recorded as deferred income and taken into profit as in- come over the useful life of the asset following a systematic and rational basis. 7. Impairment of fixed assets On each closing date, the group verifies whether there are indications that an asset is subject to an impairment. In the event that such indications are present, an es- timation is made of the recoverable amount. When the carrying amount of an asset is higher than the recoverable amount, an impairment is recorded in order to bring the carrying amount of the asset back to the recoverable amount. The recoverable amount of an asset is defined as the higher of the fair value minus costs to sell (assuming a voluntary sale) and the value in use (based upon the net present value of the estimated future cash flows). Any resulting impairments are charged to the profit and loss account. Previously recorded impairments, except on goodwill, are reversed through the profit and loss account when they are no longer valid. 8. Leases 8.1 Lessor accounting When the Group acts as a lessor, it determines at lease inception whether a lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is considered a finance lease. As part of the assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset. If the lease agreement contains both lease and non-lease components, the Group applies IFRS 15 to allocate the consideration in the contract. 8.2 Lessee accounting IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model. IFRS 16 replaces IAS 17 “Leases”, IFRIC 4 “Determining Whether an Arrangement Contains a Lease”, SIC 15 “Operating Leases – Incen- tives” and SIC 27 “Evaluating the Substance of Transactions in the Legal Form of a Lease”. Under IFRS 16, a contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consid- eration. The Group recognises a right-of-use asset and a corresponding lease liability at the lease commencement date. Assets and liabilities arising from a lease are initially measured on a present value basis, discounted using the incremental borrowing rate of the lessee. The right-of-use asset is subsequently depreciated and/or im- paired when deemed necessary. The right-of-use asset is also adjusted for certain remeasurements of the lease liability. The lease liability is subsequently increased by the interest cost on the lease liability and reduced by lease payment made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable, or a change in the reassessment of whether a purchase or extension option is reasonably certain to be exercised (or a termination option curtained not to be exercised). The Group has applied judge- ment to determine the lease term for lease contracts containing renewal options. In accordance with the standard on lease contracts, the Group elected to use fol- lowing exemptions when applying IFRS 16 accounting for: • short-term leases, i.e. contracts with a duration of less than one year; • leases for which the underlying asset is of low value; • intangible assets. The most important judgements and assumptions in determining the lease asset and liability are as follows: • The lease payments are discounted using the interest rate implicit in the lease agreement. If that rate cannot be readily determined, which is generally the case for leases in the group, the lessee has used judgement to determine its incre- mental borrowing rate, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. • In determining the lease term, management considers all facts and circum- stances that create an incentive to exercise an extension option, (or not exercise a termination option). Extension options (or periods after termination options) are only included in the lease term if the lease agreement is reasonably certain to be extended (or not terminated). 152 | Your partner for sustainable growth 9. Investment property - leased buildings and pro- ject developments These investments cover buildings which are ready to be leased (real estate invest- ments) as well as buildings under construction or being developed for future use as operative real estate investments (project development). Investment property is measured at fair value through profit or loss. On a yearly basis, the fair value of the leased buildings is determined based upon valuation reports. 10. Financial instruments 10.1 Recognition and derecognition of financial instru- ments • Financial assets and liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument. Financial assets bought and sold in accordance with standard market conventions are recognized on the transac- tion date. • Financial assets are derecognized when the contractual rights to receive cash flows from the assets have expired or have been transferred and the Group has transferred all risks and rewards of ownership of those assets. • Financial liabilities are derecognized when the obligation specified in the con- tract is discharged, cancelled, or expires. 10.2 Classification and measurement of financial assets When another financial asset is acquired or invested in, the contractual terms de- termine whether it is an equity instrument or a debt instrument. Equity instruments give entitlement to the remaining interest in the net assets of another entity. Classification and measurement of debt instruments The assessment of the contractual cash flow characteristics or SPPI test is carried out per product group (financial assets with similar cash flow characteristics) or, where necessary, on an individual basis. It is assessed whether the instrument gen- erates cash flows on specified dates that are solely payments of principal and in- terest on the principal amount outstanding (SPPI: solely payments of principal and interest). It is also investigated how these cash flows fit in with the business model of the entity in question. The relevant classification and measurement method follows from those assess- ments: i) measured at amortised cost (AC): debt instruments that pass the SPPI test and are held under an HTC business model (Held-to-collect). At initial recognition, they are measured at fair value plus transaction costs that are directly attributable to their acquisition. Subsequently, the effective interest rate method is applied where the difference between the measurement at initial recognition and the repayment value is recognized pro rata temporis in profit or loss on the basis of the effective interest rate. ii) fair value measurement with value changes recognized in other comprehensive income (FVOCI): debt instruments that pass the SPPI test and are held under an HTC&S business model (Held-to-collect & sell). On dis- posal, the cumulative fair value changes are reclassified to profit or loss. iii) fair value measurement with value changes recognized in profit or loss (FVPL): debt instruments that fail the SPPI test and/or are not held under an HTC or HTC&S model must mandatorily be measured in this way. Irrespective of these assessments, one can make an irrevocable election to desig- nate, at initial recognition, a financial asset as measured at FVTPL (fair value op- tion) if doing so eliminates or significantly reduces a measurement or recognition inconsistency (‘accounting mismatch’). For the aforementioned financial assets that are measured at amortised cost and at fair value with value changes recognized in other comprehensive income, a loss allowance for expected credit losses is required (see section 6. Impairment of fi- nancial assets). Classification and measurement of equity instruments Equity instruments held for trading must mandatorily be measured at fair value with value changes recognized in profit or loss (FVTPL). For other equity instruments, the Group can make an irrevocable election, at initial recognition, to measure those instruments at fair value with value changes recog- nized in other comprehensive income (FVTOCI). This election can be made instru- ment by instrument (per share). On disposal, the cumulative fair value changes must not be reclassified to profit or loss. Only dividend income may be recognized in profit or loss. For equity instruments, no loss allowance is required for expected credit losses. 10.3 Classification and measurement of financial liabilities For the classification and measurement of financial liabilities, other than deriva- tives, there are the following possibilities: • fair value measurement with value changes recognized in profit or loss (FVTPL): - if the financial liability is held for trading; - if the Group opts for this method (fair value option), more specific regarding Bank Van Breda) • measurement at amortised cost: at initial recognition, they are measured at fair value, less transaction costs that are directly attributable to their issue. 10.4 Derivative financial instruments The operational subsidiaries belonging to the AvH-group are responsible for their risk management, such as exchange risk, interest risk, credit risk, commodity risk, etc. The risks vary according to the particular business where the subsidiaries are active and therefore they are not managed centrally at group level. The respective executive committees report to their board of directors or audit committee regard- ing their hedging policy. Derivative instruments are initially valued at cost. Subsequently, these instruments are recorded in the balance sheet at their fair value; the changes in fair value are reported in the income statement unless these instruments are part of hedging transactions. The recognition of derivative instruments is in accordance with IFRS 9, except for macro hedge accounting for which IAS 39 is applied. Cash flow hedges The value fluctuations of a derivative financial instrument that complies with the strict conditions for recognition as a cash flow hedge are recorded in other com- prehensive income for the effective part. The ineffective part is recorded directly in the profit and loss account. The hedging results are transferred from of 'other com- prehensive income' into the profit and loss account at the same moment the hedged transaction has impact on the result. Fair value hedges Changes in fair value of a derivative instrument that is formally allocated to hedge the changes of fair value of recorded assets and liabilities, are recognized in the profit and loss account together with the profits and losses caused by the fair value revaluation of the hedged component. The value fluctuations of derivative financial instruments, which do not meet the criteria for fair value hedge or cash flow hedge are recorded directly in the profit and loss account. 10.5 Cash and cash equivalents Cash and cash equivalents consist of cash and short-term investments and are recorded on the balance sheet at nominal value. 10.6 Impairment of financial assets Under IFRS 9, a loss allowance is made at initial recognition for expected credit losses (ECLs) for: • financial assets measured at amortised cost; • debt instruments measured at fair value with value changes recognized in other comprehensive income; Annual report 2021 | 153 • finance lease receivables; • loan commitments and financial guarantee contracts. • for the purpose of determining the loss allowance for expected credit losses, the financial assets are classified in three stages: - Stage 1: performing assets, for which at initial recognition a one-year ex- pected credit loss allowance is made based on the probability that events will occur within 12 months that give rise to default; - Stage 2: underperforming assets for which a lifetime expected credit loss al- lowance is made if there has been a significant increase in credit risk since initial recognition; - Stage 3: for non-performing assets an estimate is made of the recoverable amount. When the carrying amount of an asset is higher than the recoverable amount, an impairment is recorded in order to bring the carrying amount of the asset back to the recoverable amount. Changes in loss allowances are recognized under the item ‘Impairment losses’ in profit and loss. The loss allowance for expected credit losses is presented: • as deducted from the gross carrying amount of financial assets that are meas- ured at amortised cost (incl. lease receivables); • as a loss allowance in other comprehensive income for debt instruments meas- ured at fair value with value changes recognized in other comprehensive income; • as a loss allowance under obligations resulting from loan commitments and fi- nancial guarantee contracts. The staging in the event of a significant increase (or decrease) in credit risk is done on an individual contract level (‘bottom-up’ staging) based on certain criteria such as payment arrears, renegotiations, and rating category. The internal credit rating is used for the individual staging of loans. As this is a criterion based on past his- tory, a distinct ‘collective staging’ logic is used as well to take into account the macroeconomic outlook. For the bond portfolio, the ‘low credit risk exemption’ is applied: as long as bonds retain their investment grade rating category, they remain in stage 1. On the basis of the low credit risk at the reporting date it may be concluded that there has been no significant increase in credit risk. Should a bond migrate to a non-investment grade rating category, the bank will either sell the bond or transfer it to stage 2 and determine an appropriate lifetime ECL. A valuation model calculates the expected credit losses for contracts in stages 1 and 2 in line with the literature on IFRS9 ECL modelling. They are determined with- out any deliberate optimistic or conservative bias, and are based on all reasonable and substantiated information available by justifiable cost or effort. This includes information about past history, present circumstances and future projections. They also reflect the expected value that the bank deems possible in the foreseeable future. These one-year expected credit losses and lifetime expected credit losses are cal- culated for each individual contract on the basis of the future cash flows and the following model parameters: • PD stands for ‘Probability of Default’ in a given period. The PD modelling has been set up using migration matrices based on existing internal credit ratings for loans and supplied by rating agency DBRS for the bond portfolio. • Loss Given Default (LGD) stands for expected loss in the event of default. The LGD figure is obtained from the ‘exposure at default’ and the pledged collateral. • ‘Survival Probability’ is the probability that a contract is still liable to credit losses. The Survival Probability is determined on the basis of: - the probability that a contract has not disappeared from the balance sheet following an earlier default, and - the probability that a contract has not yet disappeared from the balance sheet following full early repayment. - Effective Interest Rate’ (EIR) is the effective interest rate at which the losses are discounted. For fixed-rate contracts this is the contractual effective inter- est rate; for variable-rate contracts, the most recent fixing is used. On each closing date, an investigation is performed whether there are objective indications that a financial asset is becoming non-performing and therefore trans- fers to stage 3, based on one of the following objectively observable events: • major financial difficulties at the borrower; • breach of contract, including failure to meet due dates for principal and/or in- terest repayments; • the granting by the bank of certain terms, for economic or legal reasons, which the Group under normal circumstances would not grant to the borrower; • the likelihood of the borrower going bankrupt or being restructured; • for bonds, the extinction of an active market due to financial difficulties or other indications threatening the recoverability of the acquisition value; • objective criteria showing a measurable deterioration of the expected future cash flows from a collective group of financial assets, even though such deteri- oration cannot be detected on an individual basis, or criteria indicating a dete- rioration of the creditworthiness or financial capacity of the borrowers of the group, or national or economic circumstances specific to that group of borrow- ers. For stage 3 contracts, an estimate is made of the recoverable amount. When the carrying amount of an asset is higher than the recoverable amount, an impairment is recorded in order to bring the carrying amount of the asset back to the recover- able amount. The net recoverable amount of an asset is defined as the higher of the following values: • the net sale price (assuming a voluntary sale), and • the value in use (based on the present value of the expected future cash flows). 11. Inventories / construction contracts Inventories are valued at cost (purchase or production cost) or at net realisable value when this is lower. The production cost comprises all direct and indirect costs incurred in bringing the inventories to their completion at balance sheet date and this corresponds with the estimated sales prices in normal circumstances, minus the handling, marketing and distribution costs (net realizable value). Construction contracts are valued according to the Percentage of Completion method whereby the result is recognized in accordance with progress of the works. Expected losses are immediately recognized as an expense. 12. Capital and reserves Costs which are related to a capital transaction are deducted from the capital. The purchase of treasury shares is deducted from equity at purchase price. Subse- quent sale or cancellation at a later date does not affect the result. Profits and losses with regard to treasury shares are recorded directly in equity. 13. Translation differences Transactions in foreign currency are recorded at the exchange rate on the date of the transaction. Positive and negative unrealised translation differences, resulting from the calculation of monetary assets and liabilities at closing rate on balance sheet date, are recorded as income or cost respectively in the profit and loss ac- count. Based upon the closing rate method, assets and liabilities of the consolidated sub- sidiary are converted at closing rate, while the income statement is converted at the average rate of the period, which results in translation differences included in the consolidated 'other comprehensive income'. 14. Provisions A provision is recognized if a company belonging to the group has a (legal or con- structive) obligation as a result of a past event, and it is probable that the settle- ment of this obligation will require an outflow and the amount of this obligation can be determined in a reliable manner. In the event that the difference between the nominal and discounted value is significant, a provision is recorded for the amount of the discounted value of the estimated expenses. The resulting increase of the provision in proportion to the time is recorded as an interest charge. 154 | Your partner for sustainable growth Restructuring Provisions for restructuring costs are only recognized when the group already has a detailed and approved restructuring plan and the planned restructuring has al- ready started or been announced to the relevant staff members. No provisions are made for costs relating to the normal activities of the group. Guarantees A provision is made for warranty obligations relating to delivered products, services and contracts, based upon statistical data from the past. 15. Contingent assets and liabilities Contingent assets and liabilities are mentioned in the note “Rights and commit- ments not reflected in the balance sheet”, if their impact is important. 16. Taxes Taxes concern both current taxes on the result as deferred taxes. Both types of taxes are recorded in the profit and loss accounts except when they relate to com- ponents being part of the equity and therefore allocated to the equity. Deferred taxes are based upon the balance sheet method applied on temporary differences between the carrying amount of the assets and liabilities of the balance sheet and their tax base. The main temporary differences consist of different amortisation percentages of tangible fixed assets, provisions for pensions, carry-forward tax losses and tax credits. Deferred tax liabilities are recognized for all taxable temporary differences: • except when the deferred tax liability arises from the original recognition of goodwill or the initial recording of assets and liabilities in a transaction that is not a business combination and that at the time of the transaction has no impact on the taxable profit; • except with regard to investments in subsidiaries, joint and associated compa- nies, where the group is able to control the date when the temporary difference will be reversed, and it is not likely that the temporary difference will be reversed in the foreseeable future. Deferred tax assets are recorded for all deductible temporary differences and on carry-forward tax credits and tax losses that can be recovered, to the extent that it is probable that there will be taxable profits in the near future in order to be able to enjoy the tax benefit. The carrying amount of the deferred tax assets is verified on every balance sheet date and impaired to the extent that it is no longer probable that sufficient taxable profit will be available to credit all or part of the deferred taxes. Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. IFRIC 23, which became effective as from January 1, 2019 onwards, clarifies how to apply the recognition and measurement requirements in IAS 12 income taxes when an uncertainty over current and deferred income tax treatments exists. The acceptability of a particular tax treatment under tax law may not be known until the relevant taxation authority or a court takes a decision in the future. In assessing whether and how an uncertain tax treatment affects the determination of taxable results, the Group assumes that a taxation authority will examine amounts it has a right to examine and has full knowledge of all related information when making those examinations. If the Group concludes it is probable that the taxation author- ity will accept an uncertain tax treatment, it determines the taxable result consist- ently with the tax treatment used or planned to be used in its income tax filings. If the Group concludes that it is not probable that a taxation authority will accept an uncertain tax treatment, it reflects the effect of uncertainty in determining its ac- counting tax position. If the possible outcomes are binary or concentrated to one value, the uncertain tax position is measured using the most likely amount. In case there exists a range of possible outcomes that are neither binary nor concentrated on one value, the sum of the weighted amounts in a range of possible outcomes might best predict the resolution of the uncertainty. 17. Employee benefits Employee benefits consist of short-term employee benefits, postemployment ben- efits, other long-term employee benefits, redundancy pay and rewards in equity instruments. The post-employment benefits include the pension plans, life insur- ance policies and insurance policies for medical assistance. Pension plans with fixed contribution or defined benefit plans are provided through separate funds or insurance plans. In addition, employee benefits consisting of equity instruments also exist. Pension plans Defined Contribution Plans Several subsidiaries within the group have taken out group insurance policies for the benefit of their employees. Since Belgian subsidiaries are obliged to make ad- ditional payments if the average return on the employers’ contributions and on the employees’ contributions is not attained, those plans should be treated as “defined benefit” plans in accordance with IAS19 (Revised). Defined Benefit Plans The group has a number of defined benefit pension plans. The costs of the defined benefit pension plans are actuarially determined using the ‘projected unit credit’ method. Remeasurements, composed of actuarial gains and losses, the effect of changes to the asset ceiling and the return on plan assets, are directly recognized in the bal- ance sheet; a corresponding amount is credited or charged to retained earnings through other comprehensive income in the period in which they arise. Remeasurements are not reclassified to profit or loss in subsequent periods. Past service costs are recognized in profit or loss on the effective date of the change or restriction of the pension plan or the date on which the group accounts for reorganization costs, whichever occurs first. Net interest is calculated by applying the discount rate to the net defined benefit asset or liability and is recognized in consolidated profit or loss. Employee benefits in equity instruments On different levels stock option plans exist within the AvH, giving employees the right to buy AvH shares or the shares of some subsidiary at a predefined price. This price is determined at the time when the options are granted and it is based on the market price or the intrinsic value. The performance of the beneficiary is measured (at the moment of granting) on the basis of the fair value of the granted options and warrants and recognized in profit and loss when the services are rendered during the vesting period. 18. Revenue recognition (IFRS 15) Revenue is recognised in accordance with the IFRS standards, taking into account the specific activities of each segment. Revenue recognition Revenue is recognised when or as each performance obligation is satisfied, at the amount of the transaction price allocated to that performance obligation. Control of an asset refers to the ability to direct the use of and obtain substantially all the remaining benefits from the asset. When a performance obligation is satisfied by transferring a promised good or service to the customer before the customer pays consideration or before payment is due,the Group presents the contract as a contract asset, unless the Group's rights to that amount of consideration are unconditional, in which case the Group recognises a receivable. When an amount of consideration is received from a customer prior to the Group transferring a good or service to the customer, the Group presents the contract as a contract liability. The main streams of revenue are recognised if it meets the criteria outlined below. Annual report 2021 | 155 Identifying the separate performance obligations in a contract with a customer Most of the revenue recognised by the construction companies in the group relates to contracts with customers for the sale of properties and services revenue gener- ated from construction, project management and selling activities. In accounting for these contracts, the Group is required to identify which goods or services are distinct and therefore represent separate performance obligations to which reve- nue can be assigned. Management uses judgement to determine whether a promised good or service is distinct by assessing if the customer can benefit from the good or service on its own or together with other resources that are readily available to the customer and by ascertaining whether the Group's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. Determination of transaction prices for revenue recognition The Group is required to determine the transaction price in respect of each of its contracts with customers. Where consideration is variable due to a performance bonus, the Group estimates the amount of variable consideration to be included in the transaction price. Allocation of transaction price to performance obligations in con- tracts with customers The Group uses the stand-alone selling price of the distinct goods and services underlying each performance obligation to apportion the transaction price to iden- tified performance obligations. This occurs for a limited number of EPCI contracts in the "Marine Engineering & Contracting" segment, where the multiple perfor- mance obligations (procurement activities and installation activities) give rise to a separate revenue recognition pattern. Satisfaction of performance obligations for revenue recognition The Group assesses each of its customer contracts to determine whether perfor- mance obligations are satisfied over time or at a point in time in order to determine when revenue is recognised. For sales of properties under development the Group recognises revenue over time, according to the percentage of completion method, because control transfers over time. Its performance creates an asset that the cus- tomer controls as the asset is created. It does not create an asset with alternative use as the Group has an enforceable right to payment for performance completed to date. For the EPCI contracts, revenue on the procurement activities are recog- nised at a point in time and the installation activities are recognised over time. Method of measuring progress of completion of performance obli- gations and recognition of revenue For performance obligations satisfied over time, contract revenue is recognized ac- cording to the percentage of completion of the contract activity at the closing date by using an input method calculated as the proportion of contract costs at the closing date and the estimated total contract costs. An expected loss on a con- struction contract is immediately recognized. Other Contracts for the sale of properties contain certain warranties covering a period of up to ten years after completion of the property. The Group assessed that these conditions represent 'assurance-type' warranties that are legally required to be provided as quality guarantees and will continue to be accounted for under IAS 37, consistent with its current practice. A variation may lead to an increase or a decrease in contract revenue. A variation is an instruction by the customer for a change in the scope of the work to be per- formed under the contract. These contract modifications form typically part of the performance obligation that is partially satisfied at the date of the contract modi- fication, hence the effect is recognised as an adjustment to revenue. Dividend revenue is recognised when the Group's right to receive the payment is established. Other revenue is recognised when it is received or when the right to receive pay- ment is established. 19. Discontinued operations The assets, liabilities and net results of the discontinued operations are reported separately in a single item on the consolidated balance sheet and profit and loss account. The same reporting applies for assets and liabilities held for sale (meas- ured at the lower of its carrying amount and fair value less costs to sell). 20. Events after balance sheet date Events may occur after the balance sheet date which provide additional infor- mation with regard to the financial situation of the company at balance sheet date (adjusting events). This information allows the adjustment of estimations and a better reflection of the actual situation on the balance sheet date. These events require an adjustment of the balance sheet and the profit and loss account. Other events after balance sheet date are mentioned in the notes if they have a signifi- cant impact. 21. Earnings per share The group calculates both the basic earnings per share and the diluted earnings per share in accordance with IAS 33. The basic earnings per share are calculated on the basis of the weighted average number of outstanding shares during the period. Diluted earnings per share are calculated according to the average number of shares outstanding during the period plus the diluted effect of the warrants and stock options outstanding during the period. 22. Segment reporting AvH is a diversified group which is active in the following core sectors: 1. Marine Engineering & Contracting with DEME, one of the largest dredging companies in the world, CFE a construction group with headquarters in Belgium, Rent-A-Port and Green Offshore. 2. Private Banking with Delen Private Bank, one of the largest independent pri- vate asset managers in Belgium and asset manager JM Finn in the UK and Bank Van Breda, a niche-bank for entrepreneurs and liberal professions in Belgium. 3. Real Estate & Senior Care with Nextensa, a listed integrated real estate group and Anima, active in the health & care sector. 4. Energy & Resources, SIPEF, an agro-industrial group in tropical agriculture, Verdant Bioscience and Sagar Cements. 5. AvH & Growth Capital with AvH Growth Capital and their respective Growth Capital participations. The segment information in the financial statements of AvH is published in line with IFRS 8. 156 | Your partner for sustainable growth This page has been intentionally left blank Annual report 2021 | 157 Note 2: Subsidiaries and jointly controlled subsidiaries 1. Fully consolidated subsidiaries Name of subsidiary Registration nr Registered office Beneficial interest % 2021 Beneficial interest % 2020 Minority interest % 2021 Minority interest % 2020 Marine Engineering & Contracting CFE (1) 0400.464.795 Belgium 62.10% 62.10% 37.90% 37.90% DEME (1) 0400.473.705 Belgium 62.10% 62.10% 37.90% 37.90% Rent-A-Port (2) 0885.565.854 Belgium 81.05% 81.05% 18.95% 18.95% International Port Engineering and Management (IPEM) 0441.086.318 Belgium 81.05% 81.05% 18.95% 18.95% Infra Asia Consultancy and Project Management 0891.321.320 Belgium 81.05% 81.05% 18.95% 18.95% Rent-A-Port Green Energy 0648.717.687 Belgium 54.04% 54.04% 45.96% 45.96% IPEM Holdings Cyprus 81.05% 81.05% 18.95% 18.95% Port Management Development Cyprus 81.05% 81.05% 18.95% 18.95% Infra Asia Consultancy Hong Kong 81.05% 81.05% 18.95% 18.95% OK SPM FTZ Enterprise Nigeria 81.05% 81.05% 18.95% 18.95% Infra Asia Investments (subgroup Rent-A-Port) (2) IPEM Reclamation Cyprus 49.78% 49.78% 50.22% 50.22% Rent-A-Port Reclamation Hong Kong 49.78% 49.78% 50.22% 50.22% Infra Asia Investment Green Utilities Hong Kong 49.78% 49.78% 50.22% 50.22% Infra Asia Investment HK Hong Kong 49.78% 49.78% 50.22% 50.22% Warehousing Workshop Worldwide Hong Kong 44.80% 44.80% 55.20% 55.20% Deep C Blue (Hong Kong) Hong Kong 49.78% 49.78% 50.22% 50.22% IPEM Vietnam Hong Kong 49.78% 49.78% 50.22% 50.22% Dinh Vu Industrial Zone jsc Vietnam 40.72% 40.72% 59.28% 59.28% Hong Duc Industrial Zone jsc Vietnam 50.40% 50.40% 49.60% 49.60% Hai Phong Industrial Park jsc Vietnam 50.09% 50.09% 49.91% 49.91% Deep C Blue Hai Phong Company Vietnam 49.78% 49.78% 50.22% 50.22% DC Red Hai Phong Vietnam 44.80% 44.80% 55.20% 55.20% Deep C Management Vietnam 49.78% 49.78% 50.22% 50.22% Green Offshore 0832.273.757 Belgium 81.05% 81.05% 18.95% 18.95% Private Banking Bank Van Breda 0404.055.577 Belgium 78.75% 78.75% 21.25% 21.25% Beherman Vehicle Supply (3) 0473.162.535 Belgium 63.00% 37.00% Van Breda Immo Consult 0726.963.530 Belgium 78.75% 78.75% 21.25% 21.25% FinAx (4) 0718.694.279 Belgium 100.00% 100.00% Real Estate & Senior Care Extensa Group (5) 0425.459.618 Belgium 100.00% Extensa 0466.333.240 Belgium 100.00% Extensa Development 0446.953.135 Belgium 100.00% Extensa Invest I 0753.977.139 Belgium 100.00% Extensa Romania J40.24053.2007 Romania 100.00% Gare Maritime 0696.803.359 Belgium 100.00% Grossfeld Developments 2012.2448.267 Luxembourg 100.00% (1) The annual report of CFE, a listed company, contains the list of subsidiaries. DEME is a wholly-owned subsidiary of CFE. At the beginning of December 2021, the intention to split CFE was announced. By means of a partial demerger, CFE will transfer its 100% stake in DEME to a new company (DEME Group) and will compensate the shareholders of CFE for this transaction by issuing DEME Group shares, for which an application will be made for listing on Euronext Brussels. At a later stage, DEME Group could merge with DEME. Once the transaction is closed, which is expected in the summer of 2022, the present CFE will have been split into two separate listed groups: (i) the industrial group CFE, with strong market positions in contracting and real estate development in Belgium, Luxembourg and Poland, and ii) DEME, a dredging and marine engineering group active worldwide. AvH will remain the majority shareholder of the two listed companies, and will not be selling shares of either DEME or CFE by this demerger. (2) In December 2021, Rent-A-Port concluded an agreement to acquire an additional 32.6% stake in IAI, which will bring its total participation to 94%. The closing of the transaction is planned for the first quarter of 2022. (3) The activity of Beherman Vehicle Supply (BVS) consisted of purchasing and supplying Mitsubishi vehicles to the dealer network (stock financing). Mitsubishi Motor Company decided in July 2020 not to launch any more new models on the European market and to withdraw from Europe. As a result, the activity of this subsidiary has ceased entirely, and the company was liquidated as of 21/12/2021. (4) AvH has, through its 100% subsidiary FinAx, a direct 78.75% stake in Delen Private Bank and Bank Van Breda. (5) Nextensa (AvH 58.5%), which positions itself as a real estate investor and developer active in Belgium, Luxembourg and Austria, emerged from the combination of Leasinvest and Extensa in 2021. The new group will contribute to new urban projects and the development of high-grade real estate on a larger scale, with focus on sustainability. Since then, the subsidiaries of Extensa have become included in the consolidation scope of Nextensa. 158 | Your partner for sustainable growth Name of subsidiary Registration nr Registered office Beneficial interest % 2021 Beneficial interest % 2020 Minority interest % 2021 Minority interest % 2020 Real Estate & Senior Care (continued) Implant 0434.171.208 Belgium 100.00% RFD 0405.767.232 Belgium 100.00% RFD CEE Venture Capital 801.966.607 The Netherlands 100.00% Project T&T 0476.392.437 Belgium 100.00% T&T Public Warehouse 0863.093.924 Belgium 100.00% T&T Parking 0863.091.251 Belgium 100.00% T&T Property Management 0628.634.927 Belgium 100.00% T&T Tréfonds 0807.286.854 Belgium 100.00% T&T Services 0628.634.927 Belgium 100.00% T&T Douanehotel 0406.211.155 Belgium 100.00% T&T Food Experience 0473.705.438 Belgium 100.00% Beekbaarimmo 19.992.223.718 Luxembourg 100.00% Vilvolease 0456.964.525 Belgium 100.00% Nextensa (Leasinvest Real Estate) (1) 0436.323.915 Belgium 58.53% 30.01% 41.47% 69.99% Leasinvest Real Estate Management (1) 0466.164.776 Belgium 100.00% Anima (2) 0469.969.453 Belgium 92.50% 92.50% 7.50% 7.50% Anima Vlaanderen 0698.940.725 Belgium 92.50% 92.50% 7.50% 7.50% Gilman 0870.238.171 Belgium 92.50% 92.50% 7.50% 7.50% Engagement 0462.433.147 Belgium 92.50% 92.50% 7.50% 7.50% Le Gui 0455.218.624 Belgium 92.50% 92.50% 7.50% 7.50% Anima Wallonië 0428.283.308 Belgium 92.50% 92.50% 7.50% 7.50% Huize Philemon & Baucis 0462.432.652 Belgium 92.50% 92.50% 7.50% 7.50% Anima Cura 0480.262.143 Belgium 92.50% 92.50% 7.50% 7.50% Glamar 0430.378.904 Belgium 92.50% 92.50% 7.50% 7.50% Zorgcentrum Lucia 0818.244.092 Belgium 92.50% 92.50% 7.50% 7.50% Résidence Parc des Princes 0431.555.572 Belgium 92.50% 92.50% 7.50% 7.50% Résidence St. James 0428.096.434 Belgium 92.50% 92.50% 7.50% 7.50% Château d'Awans 0427.620.342 Belgium 92.50% 92.50% 7.50% 7.50% Home Scheut 0458.643.516 Belgium 92.50% 92.50% 7.50% 7.50% Le Birmingham 0428.227.284 Belgium 92.50% 92.50% 7.50% 7.50% Zandsteen 0664.573.823 Belgium 92.50% 92.50% 7.50% 7.50% Les Résidences de l'Eden 0455.832.197 Belgium 92.50% 92.50% 7.50% 7.50% Résidence Arcade 0835.637.281 Belgium 92.50% 92.50% 7.50% 7.50% La Roseraie 0466.582.668 Belgium 92.50% 92.50% 7.50% 7.50% Patrium 0675.568.178 Belgium 92.50% 92.50% 7.50% 7.50% Elenchus Invest 0478.953.930 Belgium 92.50% 92.50% 7.50% 7.50% Résidence Edelweiss 0439.605.582 Belgium 92.50% 92.50% 7.50% 7.50% Résidence Neerveld 0427.883.628 Belgium 92.50% 92.50% 7.50% 7.50% Villa 34 0432.423.822 Belgium 92.50% 92.50% 7.50% 7.50% Le Rossignol 0432.049.381 Belgium 92.50% 92.50% 7.50% 7.50% Immo Markant 0537.654.073 Belgium 92.50% 92.50% 7.50% 7.50% Les 3 Arbres 0435.646.893 Belgium 92.50% 92.50% 7.50% 7.50% Saint-Vincent 0465.771.630 Belgium 92.50% 7.50% (1) On July 19, 2021, the extraordinary general meeting of Leasinvest approved the proposal to become an integrated real estate group through a business combination with Extensa. By bringing together both real estate players, a unique market position has been created, entitled to both recurring rental income from real estate investments, as well as, having a capital gain potential of development activities that prioritise authenticity and sustainability. In this context, it was also decided to relinquish the REIT status of Nextensa (previously Leasinvest Real Estate) and to convert the company into a public limited company. Upon the creation of Nextensa, AvH contributed 100% of the shares of Extensa and LREM for a joint value of 293.4 million euros and this in exchange for the issue of 4,075,458 new Leasinvest Real Estate shares to AvH. Subsequent to this transaction, Nextensa’s capital (previously Leasinvest Real Estate) consists out of 10,002,102 issued shares, of which 5,853,817 shares (including 1,778,359 initial shares) are held by AvH, maintaining a controlling interest of 58.5 %. We refer to the annual report of Nextensa, a listed company, which contains the list of subsidiaries. (2) In November, 2021 Anima acquired the real estate and operation of the residential care centre Saint-Vincent (53 beds) in Jumet. Annual report 2021 | 159 Name of subsidiary Registration nr Registered office Beneficial interest % 2021 Beneficial interest % 2020 Minority interest % 2021 Minority interest % 2020 Energy & Resources AvH Resources India U74300DL2001 PTC111685 India 100.00% 100.00% AvH & Growth Capital AvH Growth Capital 0434.330.168 Belgium 100.00% 100.00% Sofinim Luxemburg 2003.2218.661 Luxembourg 100.00% 100.00% Agidens International (1) 0468.070.629 Belgium 84.98% 86.25% 15.02% 13.75% Agidens Life Sciences 0411.592.279 Belgium 84.98% 86.25% 15.02% 13.75% Agidens Infra Automation (2) 0630.982.030 Belgium 86.25% 13.75% Agidens Proces Automation 0465.624.744 Belgium 84.98% 86.25% 15.02% 13.75% Agidens Proces Automation BV 005469272B01 The Netherlands 84.98% 86.25% 15.02% 13.75% Agidens Life Sciences BV 850983411B01 The Netherlands 84.98% 86.25% 15.02% 13.75% Agidens Infra Automation BV (2) 856220024B01 The Netherlands 86.25% 13.75% Agidens Inc 32.067.705.379 USA 84.98% 86.25% 15.02% 13.75% Agidens SAS 10.813.818.424 France 84.98% 86.25% 15.02% 13.75% Agidens GmbH 76301 Germany 84.98% 86.25% 15.02% 13.75% Agidens AG 539301 Switzerland 84.98% 86.25% 15.02% 13.75% Argus Technologies 0844.260.284 Belgium 84.98% 86.25% 15.02% 13.75% Baarbeek Immo 651.662.133 Belgium 84.98% 86.25% 15.02% 13.75% Biolectric Group (1) 0422.609.402 Belgium 55.83% 60.00% 44.17% 40.00% Biolectric 0879.126.440 Belgium 55.83% 60.00% 44.17% 40.00% Biolectric Ltd UK 55.83% 60.00% 44.17% 40.00% Subholdings AvH Anfima 0426.265.213 Belgium 100.00% 100.00% AvH Singapore (3) 202118768G Singapore 100.00% Brinvest 0431.697.411 Belgium 100.00% 100.00% Profimolux 1992.2213.650 Luxembourg 100.00% 100.00% (1) The exercise of options (by the management) at Agidens and the entry of the management/new partner at Biolectric resulted in a decrease of the controlling interests by 1.26% and 4.2% respectively. (2) Agidens has sold its division Agidens Infra Automation (AIA) to the BESIX Group in the third quarter of 2021. (3) In order to follow up on investments in Asia, AvH has recently hired a first investment manager in Singapore and opened a local office there. 160 | Your partner for sustainable growth 2. Jointly controlled subsidiaries accounted for using the equity method – 2021 (€ 1,000) Name of subsidiary Registration nr Registered office Beneficial interest % 2021 Minority interest % 2021 Total assets Total liabilities Turnover Net result Marine Engineering & Contracting Rent-A-Port Infra Asia Investments (subgroup Rent-A-Port) (1) Euro Jetty (Hong Kong) Hong Kong 24.89% 25.11% 14,132 9 406 1,764 Deep C Green Energy (Hong Kong) Hong Kong 24.89% 25.11% 14,642 211 406 411 Deep C Green Energy (Vietnam) Vietnam 24.89% 25.11% 14,495 12,687 26,307 374 Euro Jetty (Vietnam) Company Vietnam 24.89% 25.11% 4,453 1,687 4,133 2,200 DC Russia Vietnam 24.89% 25.11% 23,141 4,368 0 -680 Bac Tien Phong Industrial Zone Vietnam 24.89% 25.11% 61,965 19,010 11,739 5,074 Rent-A-Port Utilities (2) 0846.410.221 Belgium Infra Asia Investment Fund 0648.714.620 Belgium 40.53% 9.47% 32,182 30,787 0 17 ESTOR-LUX 0749.614.317 Belgium 24.32% 5.68% 9,689 7,792 432 158 S Channel Management Limited (liquidated) Cyprus Private Banking Delen Private Bank (3) 0453.076.211 Belgium 78.75% 2,429,155 1,406,702 506,760 167,556 Real Estate & Senior Care Extensa Group (4) CBS Development 0831.191.317 Belgium CBS-Invest 0879.569.868 Belgium Grossfeld PAP SICAV-RAIF 2005.2205.809 Luxembourg Grossfeld Immobilière 2001.2234.458 Luxembourg NEIF 3 Kockelscheuer 2019.2481.814 Luxembourg Darwin I 2020.2460.950 Luxembourg Darwin II 2020.2460.985 Luxembourg Banca II 2020.2460.969 Luxembourg Les Jardins de Oisquercq 0899.580.572 Belgium Energy & Resources SIPEF (USD 1.000) (5) 0404.491.285 Belgium 35.13% 991,765 264,436 416,053 93,749 Verdant Bioscience (USD 1.000) (6) Singapore 42.00% 33,665 22,475 3,319 -2,514 AvH & Growth Capital Amsteldijk Beheer 33.080.456 The Nether- lands 50.00% 5,529 4,835 847 -1,160 Manuchar (USD 1.000) (7) 0407.045.751 Belgium 30.00% 796,436 622,605 2,481,657 62,610 Turbo's Hoet Groep 0881.774.936 Belgium 50.00% 352,875 220,069 620,486 18,083 Telemond 0893.552.617 Belgium 50.00% 87,727 27,904 98,953 8,888 Subholdings AvH GIB (8) 0404.869.783 Belgium (1) In December 2021, Rent-A-Port concluded an agreement to acquire an additional 32.6% stake in IAI, which will bring its total participation to 94%. The closing of the transaction is planned for the first quarter of 2022. (2) In 2021, Rent-A-Port disposed of its participation in Rent-A-Port Utilities. (3) FinAx holds a 78.75% stake in Delen Private Bank NV. The shareholder agreements between AvH and the Jacques Delen family, which holds a 21.25% stake through Promofi NV, include, among other things, agreements concerning representation on the board of directors and decision-making at the level of the board of directors and the shareholders’ meeting. The special majority requirements specified for certain key decisions lead to joint control. (4) Since the contribution of the Extensa shares to Leasinvest Real Estate on July 19, 2021, the jointly controlled subsidiaries of Extensa are included in the consolidation scope of Nextensa (see Note 2: Fully consolidated subsidiaries). (5) The shareholders’ agreement between the Baron Bracht family and AvH results in joint control of SIPEF. AvH’s stake in SIPEF increased from 34.68% to 35.13% in 2021. (6) AvH holds 42% in Verdant Bioscience, a strategic investment in line with its 35.13% interest in SIPEF. SIPEF holds a 38% interest in VBS. (7) Early 2022, an agreement has been signed with Lone Star Funds for the sale of 100% of the share capital of Manuchar. In view of the announced sale of the participation in Manuchar, which is expected to be completed during the second quarter of 2022, this participation was already reclassified to ‘Assets held for sale’ at year-end 2021. (8) GIB was liquidated at the end of 2021. Annual report 2021 | 161 3. Jointly controlled subsidiaries accounted for using the equity method – 2020 (€ 1,000) Name of subsidiary Registration nr Registered office Beneficial interest % 2020 Minority interest % 2020 Total assets Total liabilities Turnover Net result Marine Engineering & Contracting Rent-A-Port Infra Asia Investments (subgroup Rent-A-Port) Euro Jetty (Hong Kong) Hong Kong 24.89% 25.11% 13,082 9 421 -71 Deep C Green Energy (Hong Kong) Hong Kong 24.89% 25.11% 7,256 197 421 -126 Deep C Green Energy (Vietnam) Vietnam 24.89% 25.11% 5,643 5,136 12,771 -362 Euro Jetty (Vietnam) Company Vietnam 24.89% 25.11% 4,865 2,678 7,072 1,873 DC Russia Vietnam 24.89% 25.11% 19,969 2,105 0 -426 Bac Tien Phong Industrial Zone Vietnam 24.89% 25.11% 35,639 1,183 0 -941 Rent-A-Port Utilities 0846.410.221 Belgium 40.53% 9.47% 1,616 1,941 3 -42 Infra Asia Investment Fund 0648.714.620 Belgium 40.53% 9.47% 32,047 31,912 14 16 ESTOR-LUX 0749.614.317 Belgium 24.32% 5.68% 4,650 2,911 0 -102 S Channel Management Limited (liquidated) Cyprus 40.53% 9.47% 0 0 0 3 Private Banking Delen Private Bank 0453.076.211 Belgium 78.75% 2,053,679 1,113,402 412,422 131,387 Real Estate & Senior Care Extensa Group CBS Development 0831.191.317 Belgium 50.00% 4,448 6,997 30 7 CBS-Invest 0879.569.868 Belgium 50.00% 8,288 2,043 355 -305 Grossfeld PAP SICAV-RAIF 2005.2205.809 Luxembourg 50.00% 109,058 110,634 890 40,384 Grossfeld Immobilière 2001.2234.458 Luxembourg 50.00% 56,358 57,381 179 717 NEIF 3 Kockelscheuer 2019.2481.814 Luxembourg 45.00% 30,748 19,467 0 -18 Darwin I 2020.2460.950 Luxembourg 50.00% 33,338 13,015 0 -15 Darwin II 2020.2460.985 Luxembourg 50.00% 21,720 16,681 0 -16 Banca II 2020.2460.969 Luxembourg 50.00% 63,022 37,854 0 -16 Les Jardins de Oisquercq 0899.580.572 Belgium 50.00% 3,393 5,232 0 -399 Energy & Resources SIPEF (USD 1.000) 0404.491.285 Belgium 34.68% 946,641 307,953 274,027 14,122 Verdant Bioscience (USD 1.000) Singapore 42.00% 33,451 19,747 1,319 -2,645 AvH & Growth Capital Amsteldijk Beheer 33.080.456 The Nether- lands 50.00% 3,325 1,271 666 188 Manuchar (USD 1.000) 0407.045.751 Belgium 30.00% 586,079 473,011 1,497,853 23,620 Turbo's Hoet Groep 0881.774.936 Belgium 50.00% 334,822 216,459 447,935 7,178 Telemond 0893.552.617 Belgium 50.00% 78,134 23,684 84,050 6,074 Subholdings AvH GIB 0404.869.783 Belgium 50.00% 91 52,813 0 -310 162 | Your partner for sustainable growth Note 3: Associated participating interests 1. Associated participating interests accounted for using the equity method - 2021 (€ 1,000) Name of associated participating interest Registration nr Registered office Beneficial interest % 2021 Minority interest % 2021 Total assets Total liabilities Turnover Net result Marine Engineering & Contracting Green Offshore (1) Rentel 0700.246.364 Belgium 10.13% 2.37% 933,616 837,698 138,307 29,698 SeaMade 0543.401.324 Belgium 7.09% 1.66% 1,373,451 1,322,510 145,762 12,220 Otary RS 0833.507.538 Belgium 10.13% 2.37% 84,142 1,551 10,254 18,605 Otary BIS 0842.251.889 Belgium 10.13% 2.37% 54,330 171 0 8,437 Private Banking Bank Van Breda Informatica J.Van Breda & C° (2) 0427.908.174 Belgium Energy & Resources Sagar Cements (INR million) L26942AP19 81PLC002887 India 21.85% 32,605 19,840 15,128 1,278 AvH & Growth Capital Axe Investments 419,822,730 Belgium 48.34% 14,230 47 542 -223 Financière EMG 801.720.343 France 22.51% 381,248 310,442 366,845 152 Mediahuis (3) 439.849.666 Belgium 13.51% 1,107,536 625,059 1,130,790 117,321 OM Partners 428.328.442 Belgium 20.01% 125,662 42,167 115,713 23,777 Van Moer Logistics (4) Belgium 21.74% 119,051 82,785 222,378 1,328 Agidens International (5) Keersluis Limmel Maintenance BV (MTC) 62.058.630 The Netherlands SAS van Vreeswijk (MTC van Beatrix) 65.067.096 The Netherlands (1) The stakes in the offshore wind farms Rentel and SeaMade (and the intermediate holdings Otary RS and Otary BIS) are held through Green Offshore, which is a 50/50 investment vehicle of AvH and CFE. AvH has a (transitive) participation of 10.13% in Rentel and 7.09% in SeaMade. When DEME’s interests in Rentel and SeaMade are also taken into account, the (beneficial) interests of AvH amount to 21.9% and 15.3% respectively. (2) Bank Van Breda disposed of its participation in Informatica J.Van Breda as part of the full internalisation of its IT infrastructure. (3) AvH has at the end of 2021 a 49.9% stake in Mediacore, the controlling shareholder (53.5%) in Mediahuis Partners. Mediahuis Partners has a controlling share of 50.57% in Mediahuis. The participation percentage of AvH in Mediahuis is therefore 13.51%. (4) At the end of June 2021, AvH invested 12.5 million euros in a capital increase of Van Moer Logistics, thereby acquiring a participation of 21.7%. (5) Agidens has sold its division Agidens Infra Automation (AIA) to the BESIX Group in the third quarter of 2021. 2. Associated participating interests not accounted for using the equity method - 2021 (€ 1,000) Name of associated participating interest Registration nr Registered office Beneficial interest % 2021 Reason for exclusion Total assets Total liabilities Turnover Net result AvH & Growth Capital Bio Cap Invest (31-12-2020) 0719 433 261 Belgium 40.00% (1) 1,881 0 0 -2 Société d'investissement Brabant Wallon (31-12-2020) 0430.636.943 Belgium 25.00% (1) 65,599 54,664 586 300 Pribinvest (31-12-2020) 0107957 Luxembourg 78.75% (1) 4,339 992 0 -43 Transpalux 0582.011.409 France (2) (1) Investment of negligible significance (valued at cost). (2) The participation in Transpalux was disposed of at year-end 2021. Referring to the organisation chart (page 79), the participations in Biotalys (12%), Indigo Diabetes (9%), Medikabazaar (10%), MRM Health (16%) and OncoDNA (10%), in view of the beneficial interest, are not consolidated but instead recog- nised under ‘Non current financial assets’ (see Note 12). The same applies to the interests in HealthQuad I Fund (36%), HealthQuad II Fund (10%) and Venturi Part- ners Fund I (20%) because of their typical fund structure. Annual report 2021 | 163 3. Associated participating interests accounted for using the equity method - 2020 (€ 1,000) Name of associated participating interest Registration nr Registered office Beneficial interest % 2020 Minority interest % 2020 Total assets Total liabilities Turnover Net result Marine Engineering & Contracting Green Offshore Rentel 0700.246.364 Belgium 10.13% 2.37% 1,007,559 943,473 152,870 59,923 SeaMade 0543.401.324 Belgium 7.09% 1.66% 1,378,017 1,367,578 49,488 44,529 Otary RS 0833.507.538 Belgium 10.13% 2.37% 83,747 2,839 11,208 33,933 Otary BIS 0842.251.889 Belgium 10.13% 2.37% 53,869 157 0 -12 Private Banking Bank Van Breda Informatica J.Van Breda & C° 0427.908.174 Belgium 31.50% 8.50% 5,253 4,036 11,504 5 Energy & Resources Sagar Cements (INR million) L26942AP19 81PLC002887 India 21.85% 23,032 22,916 12,572 1,374 AvH & Growth Capital Axe Investments 419,822,730 Belgium 48.34% 14,520 113 568 -434 Financière EMG 801.720.343 France 22.51% 390,090 433,425 240,850 -44,690 Mediahuis 439.849.666 Belgium 13.51% 1,122,745 744,220 990,527 58,592 OM Partners (31-12-2019) 428.328.442 Belgium 20.01% 89,073 37,722 85,673 14,192 Agidens International Keersluis Limmel Maintenance BV (MTC) 62.058.630 The Netherlands 43.12% 852 852 504 0 SAS van Vreeswijk (MTC van Beatrix) 65.067.096 The Netherlands 17.25% 946 592 4,197 354 4. Associated participating interests not accounted for using the equity method - 2020 (€ 1,000) Name of associated participating interest Registration nr Registered office Beneficial interest % 2020 Reason for exclusion Total assets Total liabilities Turnover Net result AvH & Growth Capital Bio Cap Invest (31-12-2019) 0719 433 261 Belgium 40.00% (1) 843 0 0 -7 Nivelinvest (31-12-2019) 0430.636.943 Belgium 25.00% (1) 64,492 53,337 551 2,860 Pribinvest (31-12-2019) 0107957 Luxembourg 78.75% (1) 4,371 980 0 -46 Transpalux 0582.011.409 France 45.02% (2) 19,878 13,949 26,402 562 (1) Investment of negligible significance (valued at cost). (2) Unable to present audited figures on time. 164 | Your partner for sustainable growth Note 4: Business combinations and disposals 1. Business combinations On December 22, 2021, VMA NV, a wholly-owned subsidiary of the CFE group, increased its participation in VMA R. Robotics Sp. z o.o. from 51% to 100%. This company, which was integrated under the equity method, is now fully consoli- dated. In accordance with IFRS 3 Business combinations, the historical participa- tion of 51% was remeasured at fair value through profit and loss. On December 22, 2021, VMA NV, also acquired 100% of the shares of the com- panies Rolling Robotics Sp. z o.o., Rolling Robotics Sp. komandytowa, Power Au- tomation Sp. z o.o. and Power Automation Sp. komandytowa. Those companies were fully consolidated. This business combination has no material effect on the financial statements of AvH. The evaluation of all the identifiable assets and liabilities obtained by this acquisi- tion has been finalized. The market value of the identified assets and liabilities is shown below: (€ 1,000) Rolling Robotics Goodwill and intangible assets 54 Tangible assets 64 Inventory 0 Cash and cash equivaltents 1,063 Other assets 1,468 Total assets 2,649 Equity (group share) 1,479 Minority interests 0 Current and non-current financial debts 0 Other liabilities 1,170 Total equity and liabilities 2,649 Total assets 2,649 Total liabilities -1,170 Minority interests 0 Net assets (100%) 1,479 Remeasurement gain of 51% stake in VMA R. Robotics Sp.z o.o. 379 Goodwill (including remeasurement gain) 2,203 Purchase price 3,303 The recognition of residual goodwill is justified by the fact that, through this ac- quisition, CFE is expanding its competencies in production line automation, partic- ularly in the design and programming of automated productions. At the end of 2021, Anima acquired the residential care centre Saint-Vincent in Jumet. 2. Business disposals (€ 1,000) Agidens Infra Goodwill and intangible assets 0 Tangible assets 913 Inventory 8,847 Cash and cash equivaltents 481 Other assets 3,187 Total assets 13,429 Equity (group share) 875 Minority interests 0 Current and non-current financial debts 719 Other liabilities 11,835 Total equity and liabilities 13,429 Total assets 13,429 Total liabilities -12,554 Minority interests 0 Net assets (100%) 874 Capital gain 4,235 Sales price 5,110 Agidens has sold its division Agidens Infra Automation (AIA) to the BESIX Group in the third quarter of 2021. This transaction will not only strengthen AIA’s market position, but will also clear the way for a thoroughgoing focus and investments in the remaining Agidens entities. Annual report 2021 | 165 Note 5: Assets and liabilities held for sale The assets held for sale amounted to 230.7 million euros at year-end 2021 and consisted of: • DEME’s offshore installation vessel ‘Thor’. • The participation in Manuchar as a result of the announced sale, which is ex- pected to be completed during the second quarter of 2022. • Three buildings of Nextensa, of which two (The Crescent and Monnet) have been sold in February 2022. We refer to Note 6. Segment information for more details on those transactions. 166 | Your partner for sustainable growth Note 6: Segment information Segment 1 Marine Engineering & Contracting: DEME (full consolidation 62.10%), CFE (full consolidation 62.10%), Rent-A-Port (full consolidation 81.05%) and Green Offshore (full consolidation 81.05%). Segment 2 Private Banking: Delen Private Bank (equity method 78.75%), Bank Van Breda (full consolidation 78.75%) and FinAx (full consolidation 100%). Segment 3 Real Estate & Senior Care: Extensa (full consolidation 100% H1 2021), Leasinvest Real Estate (full consolida- tion 30% H1 2021), Leasinvest Real Estate Management (full consolidation 100% H1 2021), Nextensa (full consolidation 58.5% as of H2 2021) and Anima (full consolidation 92.5%). On July 19, 2021, the extraordinary general meeting of Leasinvest approved the proposal to become an integrated real estate group through a business combina- tion with Extensa. By bringing together both real estate players, a unique market position has been created, entitled to both recurring rental income from real estate investments, as well as, having a capital gain potential of development activities that prioritise authenticity and sustainability. In this context, it was also decided to relinquish the REIT status of Nextensa (previously Leasinvest Real Estate) and to convert the company into a public limited company. Upon the creation of Nextensa, AvH contributed 100% of the shares of Extensa and LREM for a joint value of 293.4 million euros and this in exchange for the issue of 4,075,458 new Leasinvest Real Estate shares to AvH. Subsequent to this transaction, Nextensa’s capital (pre- viously Leasinvest Real Estate) consists out of 10,002,102 issued shares, of which 5,853,817 shares (including 1,778,359 initial shares) are held by AvH, maintaining a controlling interest of 58.5 %. Segment 4 Energy & Resources: SIPEF (equity method 35.13%), Verdant Bioscience (equity method 42%), AvH In- dia Resources (full consolidation 100%) and Sagar Cements (equity method 21.85%). AvH’s stake in SIPEF increased from 34.68% to 35.13% in 2021. AvH India Resources holds no other participations than in Sagar Cements. Segment 5 AvH & Growth Capital: • AvH, AvH Growth Capital & subholdings (full consolidation 100%) • Participations fully consolidated: Agidens (85.0%) and Biolectric Group (55.8%) • Participations accounted for using the equity method: Amsteldijk Beheer (50%), Axe Investments (48.3%), Financière EMG (22.5%), Manuchar (30.0%, reclassed to ‘Held for sale’), Mediahuis Partners (26.7%), Mediahuis (13.5%), MediaCore (49.9%), OM Partners (20.0%), Telemond (50%), Turbo’s Hoet Groep (50%) and Van Moer Logistics (21.7%). • Non-consolidated participations: Biotalys (11.9%), Bio Cap Invest (40%), HealthQuad Fund I (36.3%), HealthQuad Fund II (10%), Indigo Diabetes (9.1%), Medikabazaar (8.7%), MRM Health (16.2%), OncoDNA (9.8%) and Venturi Partners Fund I (20.0%). The exercise of options (by the management) at Agidens and the entry of the management/new partner at Biolectric resulted in a decrease of the controlling interests by 1.26% and 4.2% respectively. Early 2022, an agreement has been signed with Lone Star Funds for the sale of 100% of the share capital of Manuchar. In view of the announced sale of the participation in Manuchar, which is expected to be completed during the second quarter of 2022, this participation was already reclassified to ‘Assets held for sale’ at year-end 2021. At the end of June 2021, AvH invested 12.5 million euros in a capital increase of Van Moer Logistics, thereby acquiring a participation of 21.7%. Van Moer is a leading logistics player and is totally committed to multimodal transport: inland shipping combined with rail and road transport. Biotalys is quoted on Euronext Brussels as of 2021, July 2nd as the result of the raising of 52.8 million euros new capital through an initial public offering (IPO). In the context of this IPO, AvH invested an additional 4 million euros in Biotalys, which brings its participation to 13.04% (11.85% fully diluted). HealthQuad (HQ I: AvH 36.3%, HQ II: AvH 10%) successfully completed in De- cember 2021 the second closing of its second fund with more than 150 million USD committed funds from leading domestic and international institutional inves- tors. AvH has earmarked 15 million USD for HealthQuad II. This sum will be in- vested over a period of 4 years. As a consequence, the stake in HQ II decreased to 10% (2020: 22.1%). AvH subscribed in September 2021 to the Series C financing round (75 million USD or 64 million euros) of Medikabazaar. With an investment of 10 million euros, AvH increases its direct participation in Medikabazaar from 5.4% to 8.7%. AvH will have a beneficial interest of 10%, taking into account its participation in the Health-Quad I fund (AvH 36.3%) and the HealthQuad II fund (AvH 10%). In June 2021, AvH committed to invest 20 million USD in Venturi Partners (AvH 20%) over a four-year period. The first closing of Venturi Partners Fund I, in which AvH is one of the anchor investors, was completed with 100 million USD in com- mitted capital. Venturi Partners is a Singapore-based fund manager with a strong focus on the consumer industry in India and Southeast Asia. Annual report 2021 | 167 Note 6: Segment information – income statement 2021 (€ 1,000) Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Marine Engineering & Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Eliminations between segments Total 2021 Revenue 3,782,502 205,011 237,428 18 89,529 -2,114 4,312,374 Rendering of services 0 0 99,193 0 2,074 -1,988 99,279 Real estate revenue 106,300 0 119,195 0 0 225,495 Interest income - banking activities 0 103,801 0 0 0 103,801 Fees and commissions - banking activities 0 98,566 0 0 0 98,566 Revenue from construction contracts 3,580,181 0 0 0 84,328 3,664,508 Other operating revenue 96,021 2,644 19,041 18 3,128 -126 120,726 Operating expenses (-) -3,612,459 -122,400 -175,942 -58 -116,029 2,898 -4,023,991 Raw materials, consumables, services and subcontracted work (-) -2,518,605 -24,176 -80,876 -58 -53,125 2,898 -2,673,943 Interest expenses Bank J.Van Breda & C° (-) 0 -22,759 0 0 0 -22,759 Employee expenses (-) -697,784 -57,533 -75,769 0 -46,604 -877,690 Depreciation (-) -326,558 -7,220 -11,967 0 -4,808 -350,553 Impairment losses (-) -36,202 2,181 -793 0 -10,995 -45,810 Other operating expenses (-) -32,884 -12,483 -6,810 0 -510 0 -52,687 Provisions -425 -409 272 0 13 -550 Profit (loss) on assets/liabilities designated at fair value through profit and loss 0 0 9,593 0 24,456 0 34,048 Financial assets - Fair value through P/L (FVPL) 0 0 16,621 0 24,456 41,077 Investment property 0 0 -7,029 0 0 -7,029 Profit (loss) on disposal of assets 26,003 492 4,984 0 3,221 0 34,699 Realised gain (loss) on intangible and tangible assets 6,071 492 581 0 39 7,182 Realised gain (loss) on investment property 0 0 4,403 0 0 4,403 Realised gain (loss) on financial fixed assets 19,931 0 0 0 3,019 22,951 Realised gain (loss) on other assets 0 0 0 0 163 163 Profit (loss) from operating activities 196,045 83,103 76,062 -40 1,176 784 357,130 Financial result -14,378 208 -15,317 7 3,037 -784 -27,227 Interest income 8,142 16 2,493 0 2,406 -1,116 11,941 Interest expenses (-) -18,778 -2 -15,514 0 -516 1,116 -33,694 (Un)realised foreign currency results 7,313 0 -87 4 -174 7,056 Other financial income (expenses) -11,055 193 -2,208 4 1,320 -784 -12,530 Derivative financial instruments designated at fair value through profit and loss 0 376 5,642 0 0 6,018 Share of profit (loss) from equity accounted investments 23,615 131,950 20,724 30,232 48,669 255,191 Other non-operating income 0 0 0 0 548 548 Other non-operating expenses (-) 0 0 0 0 0 0 Profit (loss) before tax 205,282 215,636 87,111 30,199 53,430 0 591,659 Income taxes -45,293 -19,599 -13,674 0 -884 0 -79,449 Deferred taxes 13,700 -1,274 -7,685 0 882 5,624 Current taxes -58,993 -18,325 -5,989 0 -1,766 -85,073 Profit (loss) after tax from continuing operations 159,989 196,038 73,438 30,199 52,546 0 512,210 Profit (loss) after tax from discontinued operations 0 0 0 0 -150 -150 Profit (loss) of the period 159,989 196,038 73,438 30,199 52,396 0 512,060 Minority interests 60,943 12,936 30,744 222 402 105,246 Share of the group 99,046 183,102 42,694 29,978 51,994 406,814 168 | Your partner for sustainable growth Comments on the segment information - income statement There were only minor changes in AvH’s consolidation scope in 2021 (see note 6 of this report): AvH Growth Capital acquired a 21.74% participation in Van Moer Logistics that is accounted for using the equity method, and in the third quarter of 2021 Leasinvest Real Estate and Extensa (both fully consolidated) merged into the new integrated real estate group Nextensa, which is also fully consolidated. The comparison of the 2021 income statement with that of the previous year is there- fore not distorted by significant changes in the composition of the AvH group. In 2021, AvH realised a group profit of 406.8 million euros, which is 177.0 million euros (+77%) more than the previous year. This substantial increase is due to a vigorous increase in the profit from operating activities (+133.1 million euros) and from equity-accounted investments (+75.9 million euros), supplemented by an im- provement of the financial result by 46.5 million euros. These higher results, how- ever, led to an increase in income taxes of 32.7 million euros, as well as an increase of the minority interests in the result by 57.4 million euros. The revenue increased by 10% in 2021 to 4,312.4 million euros (2020: 3,910.3 million euros). This means that AvH realised more revenues even than in 2019, a year that was not yet adversely affected by the corona pandemic. The solid growth in revenue compared to 2020 was generated primarily by “Ma- rine Engineering & Contracting”, where DEME and CFE respectively reported 314.8 million euros (+14%) and 123.6 million euros (+14%) in additional project reve- nues. The increase at DEME in 2021 was situated for the most part in the dredging and infra-activities. CFE reported growth in 2021 mainly in the multitechnics (+19%) and construction (+13%, mainly in Poland and Luxembourg) segments. “Marine Engineering & Contracting” contributed 96.0 million euros to the other operating revenue in 2021. At DEME, this item includes oa. 15.0 million euros compensation received for the (late) delivery of the ‘Spartacus’, the world’s most powerful cutter suction dredger. At CFE, the other operating revenue amounted to 43.7 million euros and includes rental income, rebilling and other payments re- ceived. The strong commercial performance of Bank Van Breda is reflected in a solid in- crease of the assets invested by clients and the resulting commissions. Increased lending to liberal professionals and entrepreneurs account for a limited yet positive increase in interest income. Although Anima still experienced a disruption of its activity in 2021 from resur- gences of the corona pandemic, its occupancy rate began to recover in the second half of the year. In combination with a limited growth of its network to 2,567 beds (+1%), Anima was able to increase its revenue to 106.1 million euros (+5%). Thanks to the upturn in residential property sales and rental income from the assets that Nextensa obtained from Extensa and from Leasinvest Real Estate, Nextensa contributed a total of 131.3 million euros to the revenue of the AvH group. The project revenue in “Growth Capital” comes from the fully consolidated partic- ipations Biolectric and Agidens. Agidens sold its Agidens Infra branch during 2021, which resulted in a decrease of turnover. In comparison with the 402.1 million euros higher revenue, the operating ex- penses increased by 250.9 million euros (+7%). This increase is most marked in employee expenses (+7%), followed by raw materials and consumables, services and subcontracted work with a 6% increase. Impairment losses of 45.8 million euros were charged to profit and loss for 2021 (2020: 9.6 million euros), including 25.5 million euros by DEME on two older cutter suction dredgers, 9.6 million euros on trade receivables at CFE and DEME, and 11.0 million euros on financial fixed assets at AvH. In the “Private Banking” segment, the operating expenses at Bank Van Breda in- creased on balance by only 2.4 million euros, whereas 20.6 million euros additional revenue was reported. Although the reversal of 2.2 million euros of earlier impair- ment losses had a positive impact, this mainly illustrates the bank’s tight rein on costs, with a cost-income ratio that decreased further from 56.6% in 2020 to 55.1% in 2021. Difficult working conditions as a result of resurgences of the corona pandemic in 2021, in combination with an albeit limited capacity expansion, caused Anima’s operating expenses to increase to 96.9 million euros. This increase of 5.1 million euros compared to the previous year is to a large extent explained by the employee expenses that increased by 4.0 million euros. The total depreciation cost amounted to 350.6 million euros, remaining on the same level as in 2020. DEME accounts for 304.8 million euros of that amount, which is also virtually unchanged relative to the previous year. DEME’s substantial investments in 2021 did not lead to a material increase of the depreciation cost in 2021, which is explained by the pro rata temporis depreciation of vessels that were brought into service during the course of the year (2021: ‘Spartacus’, ‘Groene Wind’ and 2020: ‘Scheldt River’, ‘Thames River’) and the accelerated depreciation of certain vessels in 2020. Assets/liabilities designated at fair value made a positive contribution of 34.0 million euros in 2021, compared to a negative contribution of 3.8 million euros in 2020. Nextensa accounted for 9.6 million euros of that amount in 2021. This is the balance of, on the one hand, the impact of the increase in the share price of Retail Estates to 71.4 euros at year-end 2021 (2020: 59.1 euros), resulting in a positive impact of 16.6 million euros (group share: 6.1 million euros), and on the other hand 7.0 million euros in negative fair value adjustments on Nextensa’s investment property portfolio. In AvH’s Growth Capital portfolio, the participating interest in Biotalys is valued at share price as of its IPO in 2021, resulting in an upward value adjustment of 13.0 million euros. The application of a “fair value” approach to the other financial fixed assets from that portfolio led to an additional positive result of 11.5 million euros, thanks among other things to the positive value development of Medikabazaar, where a new capital round took place in 2021 at a markedly higher valuation, and the positive value development of AvH’s limited investment portfolio. In 2021, the AvH group realised capital gains of 34.7 million euros, which is considerably less than the 90.7 million euros capital gains realised in 2020. The figure for 2020 was strongly influenced by the disposal by DEME of its 12.5% interest in the German offshore wind farm Merkur, which yielded a capital gain of 63.9 million euros. As a matter of fact, that same transaction earned DEME an additional capital gain of 12.2 million euros in 2021. Together with the gain on the disposal of some vessels (including the ‘Goliath’ and the ‘Thornton’), this ex- plains most of the 16.2 million euros capital gains reported by DEME. CFE realised 9.7 million euros capital gains in 2021, such as on the sale of (participations in) real estate developments. In “AvH & Growth Capital”, Agidens realised a capital gain of 4.2 million euros on the disposal of its Infra activity, while AvH recorded a limited negative result on the disposal of some minor participations. The net interest expenses of the group decreased by 4.1 million euros over the full year 2021. DEME even reported an improvement of 5.2 million euros thanks to a further reduction of its net debt position by 96.4 million euros in 2021. The foreign currency results and other financial expenses netted a loss of 5.4 million euros in 2021, compared to a loss of 47.9 million euros in 2020. The greatest improvement (20.5 million euros) was realised in “Real Estate & Senior Care”. In 2020, Leasinvest Real Estate had incurred a loss of 20.3 million euros on the termination of a number of interest hedges. The appreciation of several foreign currencies against the euro earned DEME a total of 6.1 million euros in exchange gains, instead of losses in the previous year. The derivatives measured at fair value made a positive contribution of 6.0 million euros in 2021, as opposed to a negative fair value adjustment of 5.2 million euros in 2020. Nextensa in particular is benefiting from the increasing market value of hedging instruments that protect it against an increase of long-term interest rates. As was already the case in previous years, the share of profit (loss) from equity-accounted investments makes a substantial contribution to AvH’s group profit. This item comprises the (net) profit contribution of AvH for its share in a.o. Delen Private Bank, SIPEF, Sagar Cements and most of the Growth Capital Annual report 2021 | 169 participations, as well as the contributions of certain participations held by fully consolidated entities. Delen Private Bank made a record contribution of 132.0 mil- lion euros to the group result (+28.5 million euros compared to 2020). The “Growth Capital” participations also evolved successfully in 2021, which is re- flected in a substantially higher profit contribution of 48.7 million euros (an in- crease of 37.3 million euros) thanks to, among others, Mediahuis, Manuchar and Turbo’s Hoet Group, which each realised record results in 2021. The income taxes amounted to 79.4 million euros for the full year 2021. That is 32.7 million euros more than the previous year and is in line with the group’s higher profit. As in previous years, it should be pointed out that the profit contri- bution from the equity-accounted investments is a net contribution: the taxes borne by those entities are not visible, since these contributions from equity-ac- counted investments are reported on the basis of the net result (i.e. after tax) of the entities in question. After adjustment for these equity-accounted investments, the total tax expense of 79.4 million euros represents a tax rate of 23.6%. 170 | Your partner for sustainable growth Note 6: Segment information – assets 2021 (€ 1,000) Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Marine Engineering & Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Eliminations between segments Total 2021 I. Non-current assets 3,306,744 5,659,635 1,678,291 288,169 388,042 -18,976 11,301,905 Intangible assets 116,186 722 32,291 0 192 149,391 Goodwill 174,019 134,247 7,836 0 11,727 327,829 Tangible assets 2,464,061 54,113 214,463 0 30,208 2,762,846 Land and buildings 172,474 44,965 188,134 0 21,011 426,584 Plant, machinery and equipment 1,934,994 1,694 3,742 0 3,780 1,944,209 Furniture and vehicles 40,796 5,199 4,236 0 4,821 55,051 Other tangible assets 212 511 5,827 0 458 7,009 Assets under construction 315,585 1,745 12,524 0 139 329,992 Investment property 0 0 1,267,150 0 0 1,267,150 Participations accounted for using the equity method 267,220 805,182 44,287 288,169 242,338 1,647,196 Non-current financial assets 141,434 2,050 110,470 0 101,058 -18,976 336,038 Financial assets : shares - Fair value through P/L (FVPL) 6,890 0 97,215 0 73,245 177,351 Receivables and warranties 134,544 2,050 13,255 0 27,813 -18,976 158,687 Non-current hedging instruments 613 519 684 0 0 1,816 Deferred tax assets 143,210 3,441 1,110 0 2,519 150,279 Banks - receivables from credit institutions and clients after one year 0 4,659,360 0 0 0 4,659,360 Banks - loans and receivables to clients 0 4,634,354 0 0 0 4,634,354 Banks - changes in fair value of the hedged credit portfolio 0 25,007 0 0 0 25,007 II. Current assets 2,167,320 3,068,501 347,088 652 119,244 -2,362 5,700,443 Inventories 261,938 0 113,231 0 1,049 376,218 Amounts due from customers under construction contracts 412,240 0 63,448 0 2,811 478,499 Investments 2 527,792 0 0 48,187 575,982 Financial assets : shares - Fair value through P/L (FVPL) 2 0 0 0 48,187 48,190 Financial assets : bonds - Fair value through OCI (FVOCI) 0 507,529 0 0 0 507,529 Financial assets : shares - Fair value through OCI (FVOCI) 0 259 0 0 0 259 Financial assets - at amortised cost 0 20,005 0 0 0 20,005 Current hedging instruments 4,080 49 0 0 0 4,129 Amounts receivable within one year 655,358 3,771 90,977 76 26,779 -1,919 775,043 Trade debtors 570,349 56 39,665 0 19,810 -1,169 628,710 Other receivables 85,009 3,716 51,312 76 6,970 -750 146,332 Current tax receivables 36,238 1,895 4,111 0 351 42,595 Banks - receivables from credit institutions and clients within one year 0 2,477,238 0 0 0 2,477,238 Banks - loans and advances to banks 0 138,014 0 0 0 138,014 Banks - loans and receivables to clients 0 1,113,898 0 0 0 1,113,898 Banks - changes in fair value of the hedged credit portfolio 0 698 0 0 0 698 Banks - cash balances with central banks 0 1,224,628 0 0 0 1,224,628 Cash and cash equivalents 726,526 45,362 73,327 576 37,938 883,730 Deferred charges, accrued income and other current assets 70,938 12,393 1,993 0 2,129 -443 87,010 III. Assets held for sale 32,456 0 141,259 0 56,963 230,679 Total assets 5,506,520 8,728,136 2,166,638 288,822 564,249 -21,338 17,233,026 (€ 1,000) Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Segment information - pro forma turnover Marine Engineering & Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Eliminations between segments Total 2021 Turnover EU member states 2,370,921 522,262 218,387 51,767 633,176 -1,988 3,794,525 Other European countries 609,197 75,724 0 4,021 111,032 799,975 Rest of the world 706,362 107,334 611,664 1,425,361 Total 3,686,480 597,986 218,387 163,122 1,355,872 -1,988 6,019,860 The pro forma turnover comprises the turnover of all participations held by the AvH group, and therefore deviates from the turnover as reported in the legal IFRS consolidation drawn up on the basis of the consolidation scope reported in Note 2 and 3. In this pro forma presentation, all (exclusive) control interests are incorporated in full and the other interests proportionally. Annual report 2021 | 171 Note 6: Segment information – equity and liabilities 2021 (€ 1,000) Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Marine Engineering & Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Eliminations between segments Total 2021 I. Total equity 2,027,218 1,592,550 852,585 288,816 473,834 5,235,002 Shareholders’ equity - group share 1,238,409 1,450,856 513,092 288,816 466,055 3,957,228 Issued capital 0 0 0 0 113,907 113,907 Share capital 0 0 0 0 2,295 2,295 Share premium 0 0 0 0 111,612 111,612 Consolidated reserves 1,301,088 1,447,897 518,993 277,807 397,232 3,943,016 Revaluation reserves -62,678 2,959 -5,901 11,009 -11,833 -66,445 Financial assets : bonds - Fair value through OCI (FVOCI) 0 1,620 0 0 0 1,620 Financial assets : shares - Fair value through OCI (FVOCI) 0 126 0 0 0 126 Hedging reserves -24,778 0 -6,080 -194 2 -31,050 Actuarial gains (losses) defined benefit pension plans -26,068 -1,238 0 -1,469 4,317 -24,458 Translation differences -11,832 2,451 179 12,672 -16,152 -12,682 Treasury shares (-) 0 0 0 0 -33,251 -33,251 Minority interests 788,808 141,694 339,494 0 7,778 1,277,774 II. Non-current liabilities 1,001,586 749,813 790,873 0 14,617 -18,976 2,537,913 Provisions 36,002 6,756 1,659 0 732 45,149 Pension liabilities 77,183 4,224 16 0 316 81,739 Deferred tax liabilities 101,775 0 58,982 0 1,093 161,849 Financial debts 721,091 5,673 700,141 0 11,970 -18,976 1,419,899 Bank loans 502,059 0 514,708 0 8,806 1,025,574 Bonds 30,612 0 140,734 0 0 171,345 Subordinated loans 61,625 0 0 0 0 61,625 Lease debts 97,729 5,673 42,948 0 3,163 149,514 Other financial debts 29,065 0 1,751 0 0 -18,976 11,841 Non-current hedging instruments 26,868 26,452 20,714 0 0 74,034 Other amounts payable 38,669 22,062 9,361 0 507 70,598 Banks - debts to credit institutions, clients & securities 0 684,646 0 0 0 684,646 Banks - deposits from credit institutions 0 0 0 0 0 0 Banks - deposits from clients 0 644,663 0 0 0 644,663 Banks - debt certificates including bonds 0 39,983 0 0 0 39,983 III. Current liabilities 2,477,716 6,385,773 523,180 6 75,799 -2,362 9,460,112 Provisions 29,789 46 5,572 0 262 35,670 Pension liabilities 0 298 8 0 0 305 Financial debts 529,567 2,516 383,659 0 46,727 -750 961,720 Bank loans 367,426 0 157,362 0 2,341 527,129 Bonds 29,899 0 44,920 0 0 74,819 Subordinated loans 33,527 0 0 0 0 33,527 Lease debts 29,646 2,516 2,393 0 1,643 36,198 Other financial debts 69,070 0 178,983 0 42,744 -750 290,047 Current hedging instruments 14,080 2,234 0 0 0 16,315 Amounts due to customers under construction contracts 333,773 0 0 0 8,110 341,883 Other amounts payable within one year 1,451,567 21,240 73,864 2 19,185 -1,169 1,564,689 Trade payables 1,095,776 43 43,226 2 7,235 -1,169 1,145,112 Advances received 101,067 0 13 0 0 101,080 Amounts payable regarding remuneration and social security 183,285 12,865 13,434 0 10,501 220,085 Other amounts payable 71,439 8,332 17,191 0 1,449 98,411 Current tax payables 92,391 7 15,846 3 949 109,196 Banks - debts to credit institutions, clients & securities 0 6,354,225 0 0 0 6,354,225 Banks - deposits from credit institutions 0 425,353 0 0 0 425,353 Banks - deposits from clients 0 5,723,461 0 0 0 5,723,461 Banks - debt certificates including bonds 0 205,412 0 0 0 205,412 Accrued charges and deferred income 26,549 5,206 44,231 0 565 -443 76,108 IV. Liabilities held for sale 0 0 0 0 0 0 Total equity and liabilities 5,506,520 8,728,136 2,166,638 288,822 564,249 -21,338 17,233,026 172 | Your partner for sustainable growth Comments on the segment information - balance sheet The consolidated balance sheet total of AvH increased further in 2021 to 17,233.0 million euros, which is 1,004.3 million euros higher (+6%) than at year- end 2020. The “Private Banking” (+644.9 million euros), “Marine Engineering & Contracting” (+164.6 million euros) and “AvH & Growth Capital” (+85.6 million euros) segments account for most of this increase. As was already mentioned in previous years, the full consolidation of the 78.75% participation in Bank Van Breda has a considerable impact on both the size and the composition of the total balance sheet. Due to its specific banking activity, Bank Van Breda has a significantly larger balance sheet total than the other com- panies of the group. The full consolidation of Bank Van Breda accounts for 7,792 million euros (45%) of the balance sheet total of the AvH group. Moreover Bank Van Breda has a distinct balance sheet structure that is adapted to and structured according to its activities. Although Bank Van Breda is one of the best capitalised financial institutions in Belgium, it clearly has different balance sheet ratios than the other participations of the AvH group. The balance sheet captions of Bank Van Breda are therefore grouped under separate items for an easier understanding of the consolidated balance sheet. Bank Van Breda’s strong commercial performance in 2021 led to a substantial increase of the entrusted assets. The client deposits increased by 8% (+461 million euros) in 2021, compared to a 6% increase of the loan portfolio to 5,748.2 million euros. In 2021, Bank Van Breda drew an additional 100 million euros from the ECB’s TLTRO programme, which encourages banks to provide loans to businesses and consumers. Bank Van Breda’s cash balances with central banks increased to 1,224.6 million euros (+232.8 million euros), while its investment portfolio increased to 527.8 mil- lion euros (+32.6 million euros). The intangible assets (+1.6 million euros) and goodwill (+1.9 million euros) remained virtually unchanged in AvH’s consolidated balance sheet relative to year- end 2020. The tangible assets amounted to 2,762.8 million euros at December 31, 2021, a slight decrease by 62.7 million euros compared to the previous year. Neverthe- less, DEME continued its investment programme unabated in 2021 and invested 282.0 million euros. The cutter suction dredger ‘Spartacus’ and the maintenance vessel ‘Groene Wind’ were brought into service in 2021. On balance, however, DEME’s tangible assets decreased as a result of depreciation (ordinary depreciation and impairment losses) and of the reclassification of the offshore installation vessel ‘Thor’ to ‘Assets held for sale’. The decrease of investment property by 146.9 million euros is explained by the inclusion of three buildings in the item ‘Assets held for sale’. Two buildings (The Crescent and Monnet) have meanwhile been sold in February 2022. The participations accounted for using the equity method comprise the interests in jointly controlled participations or in participations in which no control- ling interest is held. This is the case amongst others. with Delen Private Bank, the offshore wind farms Rentel, SeaMade and C-Power, SIPEF, Sagar Cements, as well as most of the participations in the “Growth Capital” segment of AvH’s portfolio. The increase in the ‘Participations accounted for using the equity method’ by 191.1 million euros is explained by AvH’s 255.2 million euros share in the profits of those participations, less the dividends that those participations pay to AvH. Further- more, in 2021 AvH Growth Capital acquired a new participation in Van Moer Lo- gistics. In view of the announced sale of the participation in Manuchar, which is expected to be completed during the second quarter of 2022, this participation was already reclassified to ‘Assets held for sale’ at year-end 2021. Of the increase in ‘Financial assets: shares - fair value through P&L’ in the “Real Estate & Senior Care” segment, 16.6 million euros is accounted for by the increase in the market value (stock market price) of the Retail Estates shares owned by Nextensa. The increase at “AvH & Growth Capital” is primarily explained by the additional investments in a.o. the Venturi and HealthQuad funds, Medikabazaar, Biotalys and MRM Health, and by the remeasurement of the non-consolidated par- ticipations at market value (Biotalys) or valuations of recent capital rounds (Med- ikabazaar). Despite the higher level of activity in 2021, the changes in the items ‘Inventories’, ‘Amounts receivable within one year’ and the net amount of ‘Amounts due from/to customers under construction contracts’ and ‘Trade payables’ remain on balance fairly limited. This illustrates the efforts that the subsidiaries have made to keep their net working capital requirements under control. Cash and cash equivalents increased by 41.3 million euros in 2021 to 883.7 million euros, of which 726.5 million euros relates to the “Marine Engineering & Contracting” segment. This position should obviously be seen in combination with financial debts on the liabilities side. The favourable business situation did in fact allow DEME to improve its net financial position by 96.4 million euros. The evolution of the equity is explained in the Note Statement of changes in con- solidated equity. Long-term provisions remain virtually unchanged (45.1 million euros). This figure is composed of provisions that were constituted by certain participations them- selves, of provisions for participations of which the equity method value has be- come negative, as well as a contingent liability provision of 12.5 million euros for risks identified in 2013 upon the acquisition of control over CFE. In 2021, this ‘contingent liability’ provision was reduced by 2.5 million euros following the ex- tinction of the underlying risk. The long-term financial debts amounted to 1,419.9 million euros and the short- term debts came to 961.7 million euros at year-end 2021. This means a substantial decrease by 177.7 million euros in 2021, of which 189.7 million euros at DEME. Annual report 2021 | 173 Note 6: Segment information – cash flow statement 2021 (€ 1,000) Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Marine Engineering & Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Eliminations between segments Total 2021 I. Cash and cash equivalents - opening balance 778,444 17,670 34,372 370 11,552 0 842,408 Profit (loss) from operating activities 196,045 83,103 76,062 -40 1,176 784 357,130 Reclassification ‘Profit (loss) on disposal of assets' to cash flow from divestments -26,003 -492 -4,984 0 -3,221 -34,699 Dividends from participations accounted for using the equity method 23,474 78,810 0 259 9,954 112,496 Other non-operating income (expenses) 0 0 0 0 548 548 Income taxes (paid) -52,717 -18,325 -5,989 0 -1,766 -78,797 Non-cash adjustments Depreciation 326,558 7,220 11,967 0 4,808 350,553 Impairment losses 36,202 -2,129 793 0 10,995 45,861 Share based payment 0 4,115 -339 0 1,121 4,896 Profit (loss) on assets/liabilities designated at fair value through profit and loss 0 0 -9,593 0 -24,456 -34,048 (Decrease) increase of provisions 1,706 -5,681 -280 0 -13 -4,268 Other non-cash expenses (income) 562 844 0 0 -209 1,197 Cash flow 505,828 147,465 67,637 219 -1,062 784 720,869 Decrease (increase) of working capital -6,250 15,046 45,427 -46 9,100 -2,400 60,876 Decrease (increase) of inventories and construction contracts -3,574 0 16,081 0 6,288 18,796 Decrease (increase) of amounts receivable -108,191 -84,816 41,752 -45 7,553 81,000 -62,748 Decrease (increase) of receivables from credit institutions and clients (banks) 0 -538,081 0 0 0 -538,081 Increase (decrease) of liabilities (other than financial debts) 109,259 85,057 2,858 -1 -4,697 -83,400 109,076 Increase (decrease) of debts to credit institutions, clients & securities (banks) 0 555,645 0 0 0 555,645 Decrease (increase) other -3,744 -2,760 -15,264 0 -44 -21,812 Cash flow from operating activities 499,577 162,511 113,065 172 8,038 -1,616 781,745 Investments -339,715 -200,989 -55,459 -2,338 -39,796 769 -637,527 Acquisition of intangible and tangible assets -299,310 -4,001 -13,333 0 -2,374 -319,018 Acquisition of investment property 0 0 -36,479 0 0 -36,479 Acquisition of financial fixed assets (business combinations included) -22,150 0 -5,881 -2,338 -36,154 -66,523 Cash acquired through business combinations 953 0 235 0 0 1,187 New amounts receivable -19,207 -419 0 0 -1,202 769 -20,059 Acquisition of investments 0 -196,569 0 0 -66 -196,635 Divestments 53,712 157,143 28,834 0 28,192 -1,676 266,205 Disposal of intangible and tangible assets 31,817 963 1,848 0 60 34,687 Disposal of investment property 0 0 26,987 0 0 26,987 Disposal of financial fixed assets (business disposals included) 8,740 426 0 0 19,002 28,169 Cash disposed of through business disposals -35 0 0 0 -481 -517 Reimbursements of amounts receivable 13,190 0 0 0 1,678 -1,676 13,192 Disposal of investments 0 155,753 0 0 7,934 163,687 Cash flow from investing activities -286,003 -43,846 -26,624 -2,338 -11,604 -907 -371,322 Financial operations Dividends received 0 1,124 6,082 0 1,234 8,441 Interest received 8,142 16 2,493 0 2,406 -1,116 11,941 Interest paid -17,498 -62 -15,691 0 -516 1,116 -32,651 Other financial income (costs) -4,181 -1 -8,377 7 -7 -784 -13,343 Decrease (increase) of treasury shares 0 0 0 0 -3,132 -3,132 Increase of financial debts 94,243 0 111,070 0 97,268 -84,150 218,432 (Decrease) of financial debts -326,766 -5,964 -112,074 0 -90,485 87,457 -447,831 (Investments) and divestments in controlling interests 589 0 0 0 585 1,174 Dividends paid by AvH 0 0 0 0 -77,890 -77,890 Dividends paid intra group -15,721 -83,600 -9,336 0 108,657 0 Dividends paid to minority interests -11,363 -2,486 -21,717 0 -82 -35,649 Cash flow from financial activities -272,554 -90,973 -47,551 7 38,039 2,523 -370,508 II. Net increase (decrease) in cash and cash equivalents -58,979 27,692 38,890 -2,159 34,473 0 39,915 Transfer between segments 5,750 0 0 2,338 -8,088 0 Impact of exchange rate changes on cash and cash equivalents 1,311 0 65 27 1 1,406 III. Cash and cash equivalents - ending balance 726,526 45,362 73,327 576 37,938 0 883,730 174 | Your partner for sustainable growth Comments on the segment information - cash flow statement The consolidated cash flow of AvH amounted to 720.9 million euros, an increase of 252.4 million euros compared to the previous year (+53.9%). Of this increase, 133.1 million euros is accounted for by the increase in profit from operating activities, which demonstrates the solid recovery of the oper- ating profits in 2021 after the corona pandemic-afflicted year 2020. Moreover, the share in this figure of ‘profit on disposal of assets’ of 34.7 million euros, which is reclassified to cash flow from investing activities, was lower than in 2020 (90.7 million euros), as described in the comments on the income statement. In 2021, AvH received 112.5 million euros worth of dividends from participa- tions accounted for using the equity method. The strong increase compared to the figure of the previous financial year (38.0 million euros) is for the most part explained by the instructions from the ECB to the banks in the European Union (and adopted by the NBB) to protect their shareholders’ equity by not paying divi- dends in 2020. Accordingly, Delen Private Bank did not pay any dividend in 2020, as opposed to 78.8 million euros (AvH share) in 2021. In “Marine Engineering & Contracting”, DEME and CFE received 10.5 million euros and 7.9 million euros worth of dividends respectively from equity-accounted participations. AvH received a total of 10.0 million euros in dividends in 2021 from several participations in “Growth Capital” and “Energy & Resources”. Under the non-cash adjustments, depreciation and impairment losses remain the most important items. Although they have a negative impact on the reported result, they do not represent a cash expense. At 350.6 million euros, the total depreciation cost in 2021 was virtually the same as the previous year, with DEME accounting for the bulk of that amount (304.8 million euros). Impairment losses were higher in 2021, increasing to 45.9 million euros, of which 29.0 million euros reported by DEME, 7.2 million euros by CFE, and the rest by AvH & Subholdings. Bank Van Breda was able to reverse 2.2 million euros of earlier impairment losses, where in 2020 specific provisions for expected credit losses had to be constituted to allow for the potential impact of COVID-19 on the bank’s loan portfolio. The result from profits/losses on assets/liabilities designated at fair value is also taken out of the cash flow. In 2021, this revaluation had a positive impact of 34.0 million euros on the result for the financial year, as opposed to a negative impact of 3.8 million euros in 2020. Bank Van Breda respectively used and released 5.7 million euros in provisions following the end of a discussion regarding VAT and the full internalisation of its IT infrastructure. In 2021, the working capital decreased by 60.9 million euros, of which 15.0 million euros arises from balance sheet movements at Bank Van Breda. The work- ing capital decreased in every segment of the AvH group, with the exception of “Marine Engineering & Contracting” due to the high level of activity in the fourth quarter. Thanks to this 60.9 million euros lower demand of working capital on the group’s cash resources, the total cash flow from operating activities stood at a par- ticularly solid level of 781.7 million euros. At 319.0 million euros, the group’s investments in tangible and intangible as- sets remained high in 2021 too. As usual, the bulk of these investments is situated at DEME, which invested 282.0 million euros in the modernisation and expansion of its fleet, and includes 65.7 million euros for dry-docking and repair costs to extend the life of the vessels in question. In accordance with IAS16, those costs are capitalised on the balance sheet. Anima invested 10.9 million euros, of which 7.9 million euros in the new-build residence under construction on the Tour & Taxis site. The 36.5 million euros invested in investment property in 2021 relate entirely to Nextensa, of which 13,4 million euros is attributable to investments in various buildings owned on the Tour & Taxis site. In 2021, the group acquired 66.5 million euros worth of financial fixed assets. “Marine Engineering & Contracting” accounts for 22.2 million euros of that amount, and includes DEME’s investment in the Taiwanese joint venture CDWE, which will be engaged on various Taiwanese offshore wind projects and is building the installation vessel ‘Green Jade’ for that purpose. In 2021, AvH invested in a.o. Van Moer Logistics (12.5 million euros), Medikabazaar (10.1 million euros), Bio- talys (4.0 million euros), MRM Health, as well as in the HealthQuad and Venturi funds. The acquisition of 196.6 million euros worth of investments by Bank Van Breda during the course of 2021 should be seen in conjunction with a disposal of invest- ments of 155.8 million euros, resulting from transactions as part of the bank’s ALM policy. In 2021, 266.2 million euros was divested. However, the divestments only amount to 110.5 million euros if the disposals situated in the portfolio of Bank Van Breda are disregarded. This figure of 110.5 million euros is considerably lower than the comparable figure of 213.3 million euros in 2020 (which a.o. included the sale by DEME of its stake in the German offshore wind farm Merkur). Also in 2021, 13.2 million euros worth of loan repayments were received in “Marine Engineering & Contracting”, for the most part from the SeaMade, Rentel and C-Power wind farms. In the “Real Estate & Senior Care” segment, Nextensa sold a unit on Brixton Business Park, as well as the Diekirch Match property. In “Growth Capital”, Agidens completed the sale of its Infra division, while AvH sold some minor partic- ipations. In the cash flow from financial activities, the dividend of 6.1 million euros that Nextensa received from Retail Estates represents the largest component of divi- dends received. The decreasing net debt position of the group companies (and of DEME in partic- ular) explains the reduction of the (net) interest paid relative to the previous year. The decrease of other financial costs is explained by positive exchange differ- ences, as well as by the termination in 2020 by Leasinvest Real Estate of certain interest rate hedges, which resulted in a cash loss of 20.3 million euros. AvH paid its shareholders a dividend of 77.9 million euros in 2021. The dividends paid to minority interests related primarily to dividends paid to the minority share- holders of Leasinvest Real Estate, CFE and Bank Van Breda. Annual report 2021 | 175 Evolution of the financial debts (cash & non-cash) (€ 1,000) Financial debts at 31-12-2020 2,559,350 Changes in Cashflow statement -229,398 Other adjustments - Changes in consolidation scope - acquisitions 0 - Changes in consolidation scope - divestments -578 - IFRS 16 Leases 51,225 - Impact of exchange rates 915 - Others 105 Financial debts at 31-12-2021 2,381,618 Evolution of the cash position of the AvH group 2017 – 2021 (1) € Millions 2021 2020 2019 2018 2017 Treasury shares 46.0 39.6 40.8 34.7 35.5 Other investments - Portfolio shares 48.2 51.2 55.7 37.2 40.0 - Term deposits 6.0 0.0 155.9 23.9 1.3 Cash 20.3 8.1 27.0 31.2 49.7 Financial debts (commercial paper) -42.7 -31.0 -12.0 -24.0 -46.2 Net cash position 77.7 68.0 267.4 102.9 80.2 (1) Includes treasury shares, the cash and financial debts to credit institutions and to financial markets of the consolidated subholdings recorded in the segment ‘AvH & Growth Capital’ and the cash of FinAx/Finaxis. To the extent that the treasury shares are held in portfolio to cover outstanding option obligations, the value of the treasury shares is matched to those obligations. 176 | Your partner for sustainable growth Note 6: Segment information – income statement 2020 (€ 1,000) Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Marine Engineering & Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Eliminations between segments Total 2020 Revenue 3,413,486 184,440 207,424 9 106,945 -2,056 3,910,250 Rendering of services 0 0 95,819 0 1,966 -1,906 95,880 Real estate revenue 131,105 0 95,363 0 0 226,468 Interest income - banking activities 0 102,803 0 0 0 102,803 Fees and commissions - banking activities 0 77,857 0 0 0 77,857 Revenue from construction contracts 3,163,831 0 0 0 100,277 3,264,108 Other operating revenue 118,550 3,780 16,242 9 4,702 -150 143,134 Operating expenses (-) -3,394,235 -119,974 -142,824 -96 -118,756 2,839 -3,773,047 Raw materials, consumables, services and subcontracted work (-) -2,391,094 -25,452 -50,848 -96 -67,358 2,839 -2,532,009 Interest expenses Bank J.Van Breda & C° (-) 0 -22,710 0 0 0 -22,710 Employee expenses (-) -652,373 -47,396 -71,731 0 -45,089 -816,589 Depreciation (-) -326,888 -7,054 -11,511 0 -5,319 -350,772 Impairment losses (-) -1,397 -5,488 -2,613 0 -94 -9,592 Other operating expenses (-) -21,597 -10,884 -6,684 0 -631 0 -39,797 Provisions -887 -990 563 0 -264 -1,579 Profit (loss) on assets/liabilities designated at fair value through profit and loss 0 0 -2,116 0 -1,689 0 -3,805 Financial assets - Fair value through P/L (FVPL) 0 0 -33,513 0 -1,689 -35,201 Investment property 0 0 31,396 0 0 31,396 Profit (loss) on disposal of assets 83,941 -18 3,170 0 3,573 0 90,666 Realised gain (loss) on intangible and tangible assets 12,023 0 143 0 5 12,172 Realised gain (loss) on investment property 0 0 2,211 0 0 2,211 Realised gain (loss) on financial fixed assets 71,918 0 816 0 3,103 75,837 Realised gain (loss) on other assets 0 -18 0 0 464 446 Profit (loss) from operating activities 103,192 64,448 65,654 -87 -9,927 783 224,063 Financial result -41,646 -8 -33,580 -35 2,333 -783 -73,718 Interest income 7,712 0 5,183 0 1,926 -1,084 13,737 Interest expenses (-) -24,109 -7 -15,956 0 -588 1,084 -39,576 (Un)realised foreign currency results -16,485 0 -90 -34 -89 -16,698 Other financial income (expenses) -8,765 0 -22,716 -1 1,083 -783 -31,182 Derivative financial instruments designated at fair value through profit and loss 0 136 -5,378 0 0 -5,242 Share of profit (loss) from equity accounted investments 37,229 103,469 20,165 7,045 11,345 179,253 Other non-operating income 0 0 0 0 0 0 Other non-operating expenses (-) 0 0 0 0 0 0 Profit (loss) before tax 98,775 168,045 46,861 6,923 3,752 0 324,356 Income taxes -24,051 -17,270 -4,104 0 -1,317 0 -46,742 Deferred taxes 35,462 1,461 7,527 0 243 44,693 Current taxes -59,512 -18,731 -11,632 0 -1,560 -91,435 Profit (loss) after tax from continuing operations 74,724 150,775 42,757 6,923 2,434 0 277,614 Profit (loss) after tax from discontinued operations 0 0 0 0 0 0 Profit (loss) of the period 74,724 150,775 42,757 6,923 2,434 0 277,614 Minority interests 28,033 9,461 10,094 107 128 47,823 Share of the group 46,691 141,315 32,662 6,817 2,306 229,791 Annual report 2021 | 177 Note 6: Segment information – cash flow statement 2020 (€ 1,000) Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Marine Engineering & Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Eliminations between segments Total 2020 I. Cash and cash equivalents - opening balance 644,971 18,270 41,008 220 183,517 0 887,985 Profit (loss) from operating activities 103,192 64,448 65,654 -87 -9,927 783 224,063 Reclassification ‘Profit (loss) on disposal of assets' to cash flow from divestments -83,941 18 -3,170 0 -3,573 -90,666 Dividends from participations accounted for using the equity method 33,692 0 972 293 3,085 38,042 Other non-operating income (expenses) 0 0 0 0 0 0 Income taxes (paid) -38,518 -18,731 -11,632 0 -1,560 -70,441 Non-cash adjustments Depreciation 326,888 7,054 11,511 0 5,319 350,772 Impairment losses 1,397 5,548 2,613 0 94 9,652 Share based payment 0 -3,600 8 0 1,026 -2,566 Profit (loss) on assets/liabilities designated at fair value through profit and loss 0 0 2,116 0 1,689 3,805 (Decrease) increase of provisions 1,641 438 -201 0 264 2,142 Other non-cash expenses (income) 2,073 1,736 -253 0 155 3,711 Cash flow 346,422 56,911 67,618 207 -3,427 783 468,514 Decrease (increase) of working capital 122,575 16,868 -8,648 -26 -16,118 3,918 118,570 Decrease (increase) of inventories and construction contracts 82,174 0 -17,793 0 3,619 68,001 Decrease (increase) of amounts receivable 99,472 -145 13,836 -20 -19,383 3,918 97,678 Decrease (increase) of receivables from credit institutions and clients (banks) 0 -746,754 0 0 0 -746,754 Increase (decrease) of liabilities (other than financial debts) -79,757 -3,343 -2,156 -6 -654 -85,915 Increase (decrease) of debts to credit institutions, clients & securities (banks) 0 769,629 0 0 0 769,629 Decrease (increase) other 20,686 -2,519 -2,536 0 300 15,931 Cash flow from operating activities 468,997 73,779 58,970 181 -19,545 4,701 587,084 Investments -374,310 -247,496 -61,699 -22,203 -78,957 4,088 -780,577 Acquisition of intangible and tangible assets -215,955 -3,810 -12,906 0 -3,928 -236,598 Acquisition of investment property 0 0 -46,388 0 0 -46,388 Acquisition of financial fixed assets (business combinations included) -144,739 0 -2,786 -22,203 -70,749 -240,476 Cash acquired through business combinations 1,878 0 396 0 0 2,274 New amounts receivable -15,494 -309 -15 0 -4,118 4,088 -15,849 Acquisition of investments 0 -243,377 0 0 -162 -243,539 Divestments 162,625 171,964 39,007 0 12,015 -315 385,295 Disposal of intangible and tangible assets 20,664 0 399 0 7 21,071 Disposal of investment property 0 0 35,404 0 0 35,404 Disposal of financial fixed assets (business disposals included) 131,727 0 3,197 0 6,433 141,357 Cash disposed of through business disposals 0 0 0 0 0 0 Reimbursements of amounts receivable 10,234 0 7 0 315 -315 10,240 Disposal of investments 0 171,964 0 0 5,259 177,223 Cash flow from investing activities -211,685 -75,532 -22,692 -22,203 -66,942 3,773 -395,282 Financial operations Dividends received 124 880 5,946 0 889 7,838 Interest received 7,712 0 3,099 0 1,926 -1,084 11,654 Interest paid -23,791 -62 -15,956 0 -588 1,084 -39,313 Other financial income (costs) -25,399 0 -28,753 -35 106 -783 -54,864 Decrease (increase) of treasury shares 0 0 0 0 -1,635 -1,635 Increase of financial debts 225,384 3,150 195,145 0 20,642 -7,691 436,630 (Decrease) of financial debts -297,836 -2,706 -154,015 0 -5,588 0 -460,145 (Investments) and divestments in controlling interests 801 0 0 0 -18,631 -17,830 Dividends paid by AvH 0 0 0 0 -76,813 -76,813 Dividends paid intra group -4,150 0 -12,343 0 16,493 0 Dividends paid to minority interests 0 -108 -36,126 0 0 -36,234 Cash flow from financial activities -117,155 1,153 -43,004 -35 -63,198 -8,474 -230,712 II. Net increase (decrease) in cash and cash equivalents 140,157 -599 -6,726 -22,057 -149,685 0 -38,910 Transfer between segments 0 0 0 22,271 -22,271 0 Impact of exchange rate changes on cash and cash equivalents -6,684 0 90 -65 -9 -6,667 III. Cash and cash equivalents - ending balance 778,444 17,670 34,372 370 11,552 0 842,408 178 | Your partner for sustainable growth Note 6: Segment information – assets 2020 (€ 1,000) Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Marine Engineering & Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Eliminations between segments Total 2020 I. Non-current assets 3,278,940 5,311,972 1,794,612 242,598 344,631 -19,883 10,952,870 Intangible assets 115,359 1,092 31,199 0 112 147,762 Goodwill 172,127 134,247 7,836 0 11,727 325,937 Tangible assets 2,530,484 51,725 211,848 0 31,495 2,825,552 Land and buildings 154,867 43,863 195,081 0 21,604 415,415 Plant, machinery and equipment 1,826,029 2,001 4,888 0 2,505 1,835,423 Furniture and vehicles 39,529 3,564 4,367 0 6,064 53,525 Other tangible assets 263 690 3,274 0 509 4,736 Assets under construction 509,797 1,607 4,238 0 812 516,454 Investment property 0 0 1,414,057 0 0 1,414,057 Participations accounted for using the equity method 221,680 740,957 31,447 242,598 219,388 1,456,070 Non-current financial assets 108,731 1,631 90,440 0 79,493 -19,883 260,413 Financial assets : shares - Fair value through P/L (FVPL) 6,682 0 79,863 0 44,845 131,391 Receivables and warranties 102,049 1,631 10,577 0 34,648 -19,883 129,022 Non-current hedging instruments 3,222 23 33 0 0 3,279 Deferred tax assets 127,335 2,935 7,752 0 2,417 140,439 Banks - receivables from credit institutions and clients after one year 0 4,379,362 0 0 0 4,379,362 Banks - loans and receivables to clients 0 4,327,706 0 0 0 4,327,706 Banks - changes in fair value of the hedged credit portfolio 0 51,656 0 0 0 51,656 II. Current assets 2,061,320 2,771,230 311,528 400 134,031 -4,509 5,274,000 Inventories 268,621 0 112,589 0 1,241 382,451 Amounts due from customers under construction contracts 309,201 0 82,266 0 8,567 400,034 Investments 3 495,167 0 0 51,152 546,322 Financial assets : shares - Fair value through P/L (FVPL) 3 0 0 0 51,152 51,155 Financial assets : bonds - Fair value through OCI (FVOCI) 0 474,991 0 0 0 474,991 Financial assets : shares - Fair value through OCI (FVOCI) 0 173 0 0 0 173 Financial assets - at amortised cost 0 20,003 0 0 0 20,003 Current hedging instruments 7,831 568 0 0 0 8,399 Amounts receivable within one year 631,881 4,243 74,575 31 58,744 -4,306 765,168 Trade debtors 566,962 44 24,589 0 26,369 -1,156 616,808 Other receivables 64,919 4,199 49,987 31 32,376 -3,150 148,361 Current tax receivables 31,082 7 2,846 0 619 34,554 Banks - receivables from credit institutions and clients within one year 0 2,242,735 0 0 0 2,242,735 Banks - loans and advances to banks 0 163,712 0 0 0 163,712 Banks - loans and receivables to clients 0 1,086,948 0 0 0 1,086,948 Banks - changes in fair value of the hedged credit portfolio 0 269 0 0 0 269 Banks - cash balances with central banks 0 991,806 0 0 0 991,806 Cash and cash equivalents 778,444 17,670 34,372 370 11,552 842,408 Deferred charges, accrued income and other current assets 34,258 10,839 4,880 0 2,156 -203 51,930 III. Assets held for sale 1,675 0 199 0 0 1,874 Total assets 5,341,935 8,083,202 2,106,339 242,998 478,662 -24,392 16,228,744 (€ 1,000) Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Segment information - pro forma turnover Marine Engineering & Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Eliminations between segments Total 2020 Turnover EU member states 2,229,480 437,017 191,183 32,446 504,246 -1,906 3,392,467 Other European countries 602,209 66,774 758 63,458 733,199 Rest of the world 463,247 80,959 374,922 919,128 Total 3,294,936 503,792 191,183 114,163 1,045,856 -1,906 5,044,794 The pro forma turnover comprises the turnover of all participations held by the AvH group, and therefore deviates from the turnover as reported in the legal IFRS consolidation drawn up on the basis of the consolidation scope reported in Note 2 and 3. In this pro forma presentation, all (exclusive) control interests are incorporated in full and the other interests proportionally. Annual report 2021 | 179 Note 6: Segment information – equity and liabilities 2020 (€ 1,000) Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Marine Engineering & Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Eliminations between segments Total 2020 I. Total equity 1,853,790 1,482,597 810,871 242,991 391,919 4,782,169 Shareholders’ equity - group share 1,127,078 1,352,094 454,284 242,991 385,592 3,562,038 Issued capital 0 0 0 0 113,907 113,907 Share capital 0 0 0 0 2,295 2,295 Share premium 0 0 0 0 111,612 111,612 Consolidated reserves 1,211,989 1,347,724 460,848 250,265 321,447 3,592,273 Revaluation reserves -84,911 4,371 -6,564 -7,274 -18,393 -112,772 Financial assets : bonds - Fair value through OCI (FVOCI) 0 6,614 0 0 0 6,614 Financial assets : shares - Fair value through OCI (FVOCI) 0 45 0 0 0 45 Hedging reserves -38,881 0 -6,804 -391 -4 -46,080 Actuarial gains (losses) defined benefit pension plans -25,948 -2,289 0 -1,305 2,306 -27,236 Translation differences -20,082 1 240 -5,578 -20,696 -46,115 Treasury shares (-) 0 0 0 0 -31,370 -31,370 Minority interests 726,712 130,503 356,588 0 6,328 1,220,131 II. Non-current liabilities 1,263,655 1,190,170 969,928 0 10,914 -19,883 3,414,785 Provisions 31,179 11,997 2,209 0 790 46,175 Pension liabilities 76,686 6,017 32 0 516 83,250 Deferred tax liabilities 97,417 0 60,877 0 1,483 159,777 Financial debts 1,015,773 3,226 862,584 0 7,785 -19,883 1,869,486 Bank loans 758,435 0 632,460 0 4,713 1,395,608 Bonds 58,151 0 183,783 0 0 241,934 Subordinated loans 44,677 0 0 0 4 44,680 Lease debts 87,449 3,226 44,350 0 3,068 138,093 Other financial debts 67,062 0 1,992 0 0 -19,883 49,170 Non-current hedging instruments 10,095 53,015 34,213 0 0 97,324 Other amounts payable 32,506 9,854 10,012 0 341 52,713 Banks - debts to credit institutions, clients & securities 0 1,106,061 0 0 0 1,106,061 Banks - deposits from credit institutions 0 298,417 0 0 0 298,417 Banks - deposits from clients 0 767,701 0 0 0 767,701 Banks - debt certificates including bonds 0 39,943 0 0 0 39,943 III. Current liabilities 2,224,491 5,410,434 325,540 7 75,828 -4,509 8,031,790 Provisions 31,602 44 6,217 0 220 38,083 Pension liabilities 0 342 0 0 0 342 Financial debts 424,300 5,218 221,234 0 42,262 -3,150 689,864 Bank loans 213,566 0 96,955 0 9,250 319,771 Bonds 0 0 0 0 0 0 Subordinated loans 20,967 0 0 0 7 20,974 Lease debts 27,556 2,068 2,308 0 2,007 33,939 Other financial debts 162,211 3,150 121,971 0 30,998 -3,150 315,181 Current hedging instruments 7,750 1,164 0 0 0 8,914 Amounts due to customers under construction contracts 301,202 0 0 0 7,990 309,192 Other amounts payable within one year 1,341,450 19,464 71,010 4 23,250 -1,156 1,454,021 Trade payables 1,032,361 29 48,702 3 12,887 -1,156 1,092,826 Advances received 60,582 0 61 0 0 60,643 Amounts payable regarding remuneration and social security 177,090 10,201 10,098 0 9,642 207,031 Other amounts payable 71,418 9,234 12,148 0 720 93,521 Current tax payables 82,456 1,099 9,952 3 1,385 94,895 Banks - debts to credit institutions, clients & securities 0 5,378,292 0 0 0 5,378,292 Banks - deposits from credit institutions 0 28,875 0 0 0 28,875 Banks - deposits from clients 0 5,139,401 0 0 0 5,139,401 Banks - debt certificates including bonds 0 210,016 0 0 0 210,016 Accrued charges and deferred income 35,731 4,811 17,126 0 722 -203 58,187 IV. Liabilities held for sale 0 0 0 0 0 0 Total equity and liabilities 5,341,935 8,083,202 2,106,339 242,998 478,662 -24,392 16,228,744 180 | Your partner for sustainable growth Note 7: Intangible assets (€ 1,000) Develop- ment costs Concessions, patents & licences Goodwill Software Other intangible assets Advance payments Total Movements in intangible assets - financial year 2020 Intangible assets, opening balance 319 4,732 27,621 3,479 90,547 204 126,902 Gross amount 4,920 28,710 27,621 31,527 100,406 204 193,388 Cumulative depreciation & impairment (-) -4,601 -23,978 0 -28,048 -9,859 0 -66,486 Investments 385 3,166 0 1,008 69 127 4,756 Additions through business combinations 0 19,252 1,065 0 0 0 20,317 Disposals (-) 0 -188 0 -2 0 0 -191 Disposals through business disposals (-) 0 0 0 0 -11 0 -11 Depreciations & Impairments (-) -663 -1,746 0 -1,581 -401 0 -4,390 Foreign currency exchange increase (decrease) 0 -1 0 -49 -362 0 -412 Transfer from (to) other items 0 779 0 4 8 0 790 Other increase (decrease) 0 0 0 0 0 0 0 Intangible assets, ending balance 41 25,994 28,686 2,859 89,851 331 147,762 Gross amount 5,112 50,712 28,686 32,378 99,184 331 216,403 Cumulative depreciation & impairment (-) -5,071 -24,718 0 -29,519 -9,333 0 -68,641 Movements in intangible assets - financial year 2021 Intangible assets, opening balance 41 25,994 28,686 2,859 89,851 331 147,762 Gross amount 5,112 50,712 28,686 32,378 99,184 331 216,403 Cumulative depreciation & impairment (-) -5,071 -24,718 0 -29,519 -9,333 0 -68,641 Investments 65 1,696 0 1,299 388 326 3,775 Additions through business combinations 0 0 1,395 0 54 0 1,449 Disposals (-) 0 0 0 -8 0 0 -7 Disposals through business disposals (-) 0 0 0 0 0 0 0 Depreciations & Impairments (-) -30 -3,296 -268 -1,559 -838 0 -5,989 Foreign currency exchange increase (decrease) -1 2 0 15 308 0 324 Transfer from (to) other items 0 -1,308 0 0 3,391 0 2,082 Other increase (decrease) 2 -3 0 -4 0 0 -4 Intangible assets, ending balance 78 23,085 29,814 2,603 93,155 657 149,391 Gross amount 5,264 49,179 29,814 26,171 103,966 657 215,051 Cumulative depreciation & impairment (-) -5,186 -26,095 0 -23,568 -10,811 0 -65,660 The intangible assets increased in 2021 by 1.6 million euros to 149.4 million euros. The main movements concern investments in licences and software, the deprecia- tion cost, the reclassification from tangible assets and the goodwill from the ac- quisition by Anima of the residential care centre Saint-Vincent in Jumet. We refer to Note 4 Business Combinations and Disposals for more details. The intangible assets consist of 15.2 million euros of trade names and 69.3 million euros of databases which were reported in the consolidated balance sheet at year- end 2013 following the acquisition of control over DEME. These intangible assets are not amortised (indefinite life) and are included in the annual impairment test performed on the goodwill following the acquisition of control over DEME (at the end of 2013, see Note 8. Goodwill). The other intangible assets arise from the acquisitions of Anima and of software developments at Bank Van Breda. On the acquisition by DEME in 2020 of the Dutch firm SPT Offshore, part of the value was attributed to the special environ- mentally friendly suction pile technology which can be used to secure both fixed and floating structures to the seabed. Annual report 2021 | 181 Note 8: Goodwill (1,000) 2021 2020 Movements in goodwill Goodwill, opening balance 325,937 331,550 Gross amount - fully consolidated participations 349,582 349,660 Cumulative impairment losses - fully consolidated participations (-) -23,646 -18,110 Additions through business combinations 2,203 14 Disposals through business disposals (-) 0 0 Impairments through profit and loss (-) -311 -5,536 Other increase (decrease) 0 -92 Goodwill, ending balance 327,829 325,937 Gross amount - fully consolidated participations 351,785 349,582 Cumulative impairment losses - fully consolidated participations (-) -23,956 -23,646 Additions through business combinations relate entirely to the acquisition by CFE of the Polish companies of the Rolling Robotics group at year-end 2021. The good- will on the acquisition of the residential care centre Saint-Vincent (by Anima) was almost entirely allocated to the intangible assets. We refer to Note 4. Business combinations. On balance, the goodwill is mainly attributable to FinAx, DEME (following the ac- quisition of control at year-end 2013), Biolectric Group and to the subsidiaries held by DEME, CFE and Anima. It should be pointed out that this does not include the goodwill (clients) of 228.0 million euros in the consolidated balance sheet of Delen Private Bank, as Delen Private Bank is recognized according to the equity method. This goodwill mainly results from the acquisition of Capital & Finance in 2007, JM Finn in 2011, and to a limited extent Oyens & Van Eeghen (end of 2015) and Nobel (end of 2019). AvH subjects the goodwill on its balance sheet to an impairment test in case of impairment indications and at least annually. This means the goodwill that is re- ported as such in the consolidated balance sheet under the item ‘Goodwill’, as well as the goodwill that is contained in the item ‘Participations accounted for using the equity method’. Each group company of AvH is treated as a distinct cash gen- erating unit (CGU). As part of the impairment test, a fair value is determined for each CGU on the basis of publicly available market valuations (broker reports, mar- ket price of listed companies or recent transactions). If after this first step on the basis of a fair value approach it turns out that additional justification is required, a value in use will also be determined from the perspective of AvH based on a discounted cash flow (DCF) model or market multiples. If, after this second step, still no adequate justification can be given for the goodwill in the balance sheet, an ‘impairment’ will be recognized. 182 | Your partner for sustainable growth Note 9: Tangible assets (€ 1,000) Land and buildings Plant, machinery and equipment Furniture and vehicles Other tangible assets Assets under construction & advance payments Total 2020 I. Movements in tangible assets - financial year 2020 Tangible assets, opening balance 403,032 1,899,461 53,457 5,245 547,971 2,909,167 Gross amount 548,677 4,126,733 140,622 15,994 547,971 5,379,997 Cumulative depreciation & impairment (-) -145,645 -2,227,272 -87,164 -10,749 0 -2,470,831 Impact IFRS changes 0 0 0 0 0 0 Investments 42,742 99,315 23,931 489 108,134 274,611 Additions through business combinations 4,341 4,039 457 0 1,071 9,908 Disposals (-) -5,198 -1,685 -2,447 -18 -4,935 -14,282 Disposals through business disposals (-) 0 -119 0 0 -128 -247 Depreciation & impairment (-) -33,119 -288,320 -23,939 -1,027 0 -346,406 Foreign currency exchange increase (decrease) -1,467 -4,052 -209 -1 -327 -6,057 Transfer from (to) other items 5,084 126,784 2,275 49 -135,334 -1,141 Other increase (decrease) 0 0 0 0 0 0 Tangible assets, ending balance 415,415 1,835,423 53,525 4,736 516,454 2,825,552 Gross amount 592,112 4,221,775 151,275 14,993 516,454 5,496,608 Cumulative depreciation & impairment (-) -176,696 -2,386,353 -97,750 -10,257 0 -2,671,056 II. Other information Leases Net carrying amount of tangible assets under lease 121,572 7,922 36,364 165,858 Tangible assets acquired under lease 26,599 4,817 17,655 49,070 (€ 1,000) Land and buildings Plant, machinery and equipment Furniture and vehicles Other tangible assets Assets under construction & advance payments Total 2021 I. Movements in tangible assets - financial year 2021 Tangible assets, opening balance 415,415 1,835,423 53,525 4,736 516,454 2,825,552 Gross amount 592,112 4,221,775 151,275 14,993 516,454 5,496,608 Cumulative depreciation & impairment (-) -176,696 -2,386,353 -97,750 -10,257 0 -2,671,056 Impact IFRS changes 0 0 0 0 0 0 Investments 48,327 153,489 29,869 1,604 139,473 372,761 Additions through business combinations 1,985 141 52 0 0 2,178 Disposals (-) -9,021 -24,508 -664 84 -348 -34,457 Disposals through business disposals (-) 0 -106 -803 -4 0 -913 Depreciation & impairment (-) -34,055 -311,057 -25,340 -822 0 -371,273 Foreign currency exchange increase (decrease) 1,266 2,504 88 -1 404 4,262 Transfer from (to) other items 2,667 288,323 -1,675 1,412 -325,991 -35,263 Other increase (decrease) 0 0 0 0 0 0 Tangible assets, ending balance 426,584 1,944,209 55,051 7,009 329,992 2,762,846 Gross amount 624,902 4,504,531 158,421 18,604 329,992 5,636,450 Cumulative depreciation & impairment (-) -198,318 -2,560,322 -103,370 -11,595 0 -2,873,604 II. Other information Leases Net carrying amount of tangible assets under lease 130,674 9,919 38,696 179,290 Tangible assets acquired under lease 31,788 4,377 23,396 59,561 The tangible assets amounted to 2,762.8 million euros at December 31, 2021, a slight decrease by 62.7 million euros compared to the previous year. The main assets in use are the fleet of DEME (76%), the real estate of the residential care centres of Anima (8%), and for the rest the offices, machinery and vehicle fleets of CFE, Bank Van Breda, Rent-A-Port, Nextensa, Agidens, Biolectric and AvH. The assets under construction (330 million euros) primarily include vessels under construction at DEME (such as the installation vessel ‘Orion’ which is expected to be delivered in the first half of 2022) and the new-build residence of Anima on the Tour & Taxis site. Annual report 2021 | 183 DEME continued its investment programme unabated in 2021 and invested 282.0 million euros. The cutter suction dredger ‘Spartacus’ and the maintenance vessel ‘Groene Wind’ were brought into service in 2021. On balance, DEME’s tangible assets decreased as a result of depreciation (ordinary depreciation and impairment losses) and of the reclassification of the offshore installation vessel ‘Thor’ to ‘Assets held for sale’. At December 31, 2021, DEME has commitments for a remaining amount of 251.7 million euros for assets under construction to be completed, mainly related to the vessel ‘Orion’ and the upgrades of the vessels ‘Viking Neptun’ and ‘Sea Installer’. Anima invested 10.9 million euros, of which 7.9 million euros in the new-build residence under construction on the Tour & Taxis site. The total depreciation cost of the tangible assets amounted to 344.8 million euros, remaining on the same level as in 2020. DEME accounts for 301.4 million euros of that amount, which is also virtually unchanged relative to the previous year. DEME’s substantial investments in 2021 did not lead to a material increase of the depreciation cost in 2021, which is explained by the pro rata temporis depreciation of vessels that were brought into service during the course of the year (2021: ‘Spartacus’, ‘Groene Wind’ and 2020: ‘Scheldt River’, ‘Thames River’) and the ac- celerated depreciation of certain vessels in 2020. The impairment losses of 26.4 million euros are attributable for 25.5 million euros to DEME’s cutter suction dredgers 'Al Mahaar' and 'Al Jarraf', following the low anticipated utilization rates. Note 10: Investment property at fair value (€ 1,000) Leased buildings Development projects Assets held for sale Total I. Movement in investment property at fair value - financial year 2020 Investment property, opening balance 1,124,702 211,391 444 1,336,537 Gross amount 1,124,702 211,391 444 1,336,537 Investments 27,394 18,995 0 46,388 Additions through business combinations 0 0 0 0 Disposals (-) -16,118 0 -244 -16,363 Disposals through business disposals (-) 0 0 0 0 Gains (losses) from fair value adjustments 32,168 -772 0 31,396 Transfer from (to) other items 190,160 -184,859 0 5,300 Other increase (decrease) 11,017 -20 0 10,997 Investment property, ending balance 1,369,323 44,734 199 1,414,256 Gross amount 1,369,323 44,734 199 1,414,256 I. Movement in investment property at fair value - financial year 2021 Investment property, opening balance 1,369,323 44,734 199 1,414,256 Gross amount 1,369,323 44,734 199 1,414,256 Investments 30,578 5,902 0 36,479 Additions through business combinations 0 0 0 0 Disposals (-) -22,584 0 -97 -22,680 Disposals through business disposals (-) 0 0 0 0 Gains (losses) from fair value adjustments -4,509 -2,520 0 -7,029 Transfer from (to) other items -132,840 -7,929 141,157 388 Other increase (decrease) -13,005 0 0 -13,005 Investment property, ending balance 1,226,963 40,187 141,259 1,408,409 Gross amount 1,226,963 40,187 141,259 1,408,409 184 | Your partner for sustainable growth (€ 1,000) 2021 2020 Breakdown of real estate revenue in the income statement Sale of land parcels 0 1,464 Rental income 69,127 68,742 Other real estate revenue (a.o. real estate promotion revenues) 156,368 156,263 225,495 226,468 Key figures - buildings in portfolio Nextensa (excluding development projects) Rental yield (%) 5.20% 5.63% Occupancy rate (%) 89.09% 91.62% Average duration of the leases till first break (# years) 3.73 3.85 On July 19, 2021 AvH created an integrated real estate group by bringing together its controlling interests in the real estate players Leasinvest Real Estate and Extensa (We refer to Note 6. Segment information for more details). This combination of the two real estate players creates a unique market position through the combina- tion of recurring rental income from real estate investments with the capital gain potential of development activities that prioritise authenticity and sustainability. This transaction has no impact on the presentation of the investment property in AvH’s consolidated balance sheet as both controlling interests were already fully consolidated. Nextensa invested 36.5 million euros, of which 13.4 million euros is attributable to investments in several buildings owned on the Tour & Taxis site. The extension of the Knauf shopping centre in Schmiede, the repositioning/renovation of the EBBC business park (Moonar) and the construction of the Monteco office building account for the remaining balance. Nextensa accounted for 7.0 million euros in negative fair value adjustments on its investment property portfolio, primarily attributable to the Knauf shopping centres which were still feeling the impact of the Covid pandemic. In 2021, the remaining semi-industrial buildings of the Brixton Business Park and a non-strategic supermarket in Diekirch (Luxembourg) were sold. This resulted in a capital gain of 4.4 million euros. Nextensa’s strategy is aimed at aligning the portfolio to the new investment crite- ria. In this connection, sales agreements with conditions precedent were also signed for three other buildings, more particularly The Crescent (Anderlecht, Bel- gium), Monnet 4 (Kirchberg, Luxembourg) and Titanium (Cloche d’Or, Luxem- bourg). These buildings were reclassified to the item ‘Assets held for sale’. Two buildings (The Crescent and Monnet) have meanwhile been sold in February 2022. Furthermore, Anima owns a number of smaller properties held for sale. Valuation of investment properties – Nextensa Nextensa uses the following methods to define the fair value according to IFRS 13: • Net present value of estimated rental income The fair value is the result of the yield applied on the estimated rental value (capi- talisation method or market approach) corrected by the net present value of the difference between the current rent and the estimated rental value at the valuation date, and this, for the period till the next break possibility of the current rental contracts. • Discounted cash flow method The DCF method consists in defining the present value of the future cash flows. The future rental income is estimated on the basis of the existing contractual rents and the real estate market outlook for each building in the following periods. Moreover, the future maintenance costs are also estimated and taken into account. The actualisation rate applied takes into account the risk premium for the object defined by the market. The obtained value is also compared to the market on the basis of the definition of the residual land value. • Residual valuation Buildings to renovate or in the course of renovation, or planned projects are valued based on the value after renovation, under deduction of the amount for the re- mainder of the work to be carried out, including costs, interests, vacancy and risk premium. Assets and liabilities valued at fair value after their initial booking can be presented in three levels (1-3): • Level 1 inputs are quoted prices in active markets for identical assets or liabili- ties. • Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indi- rectly (i.e. deducted from prices). • Level 3 inputs are unobservable inputs for the asset or liability based on valu- ations techniques comprising data for the asset or liability. The investment properties of Nextensa fall under level 3. The valuations at the end of 2021 were carried out by external parties: Cushman & Wakefield, Stadim (Belux) and Oerag (Austria). The table below provides an overview of the valuation tech- niques applied per asset class. Annual report 2021 | 185 Asset class Fair value 2021 (€ 1,000) Fair value 2020 (€ 1,000) Valuation technique Important input data 31/12/2021 Min-Max (weighted average) 31/12/2020 Min-Max (weighted average) Retail Grand Duchy of Lux- embourg & Belgium 370,170 348,800 Actualization of estimated a) Estimated rental value spread a) [0.34 €/m² - 17.61 € /m²] a) [9.34 €/m² - 18.04 € /m²] rental income b) Average weighted estimated rental value b) [11.26 € /m²] b) [12.53 € /m²] c) Capitalization rate spread c) [1.77% - 7.58%] c) [5.29% - 7.84%] d) Weighted average cap. rate d) [6.61%] d) [6.70%] e) Remaining duration e) 2.72 years e) 3.65 years f) Number m² f) 170 731 m² f) 153 245 m² Retail Austria 185,369 181,050 DCF (discounted a) Average weighted estimated rental value a) [12.32 €/m²] a) [11.84 €/m²] cash flow) b) Capitalization rate spread b) [5.20% - 5.80%] b) [4.97% - 5.90%] c) Capitalization rate calculation c) [5.46%] c) [5.44%] terminal value after 10y d) Remaining duration d) 4.49 years d) 5.07 years e) Number m² e) 69 533 m² e) 69 533 m² Offices Grand Duchy of Lux- embourg 283,280 280,120 Actualization of estimated a) Estimated rental value spread a) [16.52 €/m² - 40.28 € /m²] a) [12.49 €/m² - 49.81 € /m²] rental income b) Average weighted estimated rental value b) [22.99 €/m²] b) [25.60 €/m²] c) Capitalization rate spread c) [3.75% - 6.10%] c) [3.75% - 6.25%] d) Weighted average cap. rate d) [4.91%] d) [5.36%] e) Remaining duration e) 2.40 years e) 2.96 years f) Number m² f) 45 433 m² f) 41 306 m² Offices Belgium 436,610 259,230 Actualization of estimated a) Estimated rental value spread a) [10.09 €/m² - 27.98 €/m²] a) [8.33 €/m² - 27.52 €/m²] rental income b) Average weighted estimated rental value b) [12.37 €/m²] b) [13.02 €/m²] c) Capitalization rate spread c) [3.60% - 8.75%] c) [3.75% - 8.75%] d) Weighted average cap. rate d) [4.56%] d) [5.46%] e) Remaining duration e) 6.76 years e) 5.58 years f) Number m² f) 132 455 m² f) 87 590 m² Other 132,490 71,990 DCF (discounted a) Estimated rental value spread a) [2.24 €/m² - 7.30 € /m²] a) [4.76 €/m² - 8.14 € /m²] cash flow or net b) Average weighted estimated rental value b) [2.24 € /m²] b) [6.46 € /m²] present value of c) Average discount rate c) 5.02% c) 5.61% cash-flows at d) Economic life d) 30 years d) 30 years discount rate) e) Remaining duration e) 2.35 years e) 2.35 years f) Number m² f) 47 057 m² f) 32 748 m² Total 1,407,919 1,141,190 Nextensa’s investment portfolio was valued at 1.4 billion euros on December 31, 2021. To Leasinvest’s original portfolio of approximately 1.1 billion euros were added the historic buildings on the Tour & Taxis site from the former Extensa port- folio. Those properties include Gare Maritime, Maison de la Poste, the Sheds, Hôtel des Douanes and the (underground) car parks on the site. As a result of this addi- tion, the share of Belgium in the portfolio increased to 42%. Nevertheless, Luxem- bourg remains the biggest market with 45%, while Austria represents 13%. Ac- cording to type of properties, the portfolio comprises 51% offices and 39% retail. The remaining 10% represents ‘Other’ real estate, such as car parks and real estate for events. Note 11: Participations accounted for using the equity method (€ 1,000) 2021 2020 Participations accounted for using the equity method Marine Engineering & Contracting 267,220 221,680 Private Banking 805,182 740,957 Real Estate & Senior Care 44,287 31,447 Energy & Resources 288,169 242,598 AvH & Growth Capital 242,338 219,388 Total 1,647,196 1,456,070 186 | Your partner for sustainable growth (€ 1,000) Equity value Goodwill allocated Total 2021 Total 2020 Movements in participations accounted for using the equity method Participations accounted for using the equity method: opening balance 1,347,679 108,390 1,456,070 1,202,477 Additions 20,897 4,832 25,729 147,924 Additions through business combinations 0 0 0 0 Disposals (-) -4,051 0 -4,051 -4,953 Disposals through business disposals (-) 139 0 139 0 Share of profit (loss) from equity accounted investments 255,191 0 255,191 179,253 Impairments through profit and loss 0 0 0 0 Foreign currency exchange increase (decrease) 35,118 0 35,118 -43,066 Impact of dividends distributed by the participations (-) -111,962 -536 -112,497 -38,040 Transfers (to) from other items -26,135 -9,370 -35,505 21,585 Other increase (decrease) 27,182 -179 27,003 -9,111 Participations accounted for using the equity method: ending balance 1,544,058 103,138 1,647,196 1,456,070 General evolution The participations accounted for using the equity method comprise the interests in jointly controlled participations or in participations in which no controlling interest is held. This is the case amongst others with Delen Private Bank, the offshore wind farms Rentel, SeaMade and C-Power, SIPEF, Sagar Cements, as well as most of the participations in the “Growth Capital” segment of AvH’s portfolio. The in- crease in the ‘Participations accounted for using the equity method’ by 191.1 mil- lion euros is explained by AvH’s 255.2 million euros share in the profits of those participations, less the dividends that those participations pay to AvH. Further- more, in 2021 AvH Growth Capital acquired a new participation in Van Moer Lo- gistics. In view of the announced sale of the participation in Manuchar, which is expected to be completed during the second quarter of 2022, this participation was already reclassified to ‘Assets held for sale’ at year-end 2021. During the past year 2021, the group invested 25.7 million euros: • In “Marine Engineering & Contracting”, DEME continued investing in the Tai- wanese joint venture CDWE, which will be engaged on various Taiwanese off- shore wind projects and is building the installation vessel ‘Green Jade’ for that purpose. Rent-A-Port subscribed to capital increases of companies which, in partnership, develop port sites in Vietnam. • The shareholding percentage in SIPEF was increased by 0.45% to 35.13% by purchasing SIPEF shares on the stock market. • In the “Growth Capital” segment, AvH invested 12.5 million euros in a capital increase of Van Moer Logistics, thereby acquiring a participation of 21.7%. Van Moer is a leading logistics player and is totally committed to multimodal transport: inland shipping combined with rail and road transport. The disposals essentially relate to the sale by CFE of a number of property devel- opments that were held in partnership with other parties. The disposal through business disposals relates to the sale by Agidens of the Agidens Infra Automation division. As was already the case in previous years, the share of profit (loss) from equity- accounted investments makes a substantial contribution to AvH’s group profit. This item comprises the (net) profit contribution of AvH for its share in a.o. Delen Private Bank, SIPEF, Sagar Cements and most of the Growth Capital participations, as well as the contributions of certain participations held by fully consolidated entities. Delen Private Bank made a record contribution of 132.0 million euros to the group result (+28.5 million euros compared to 2020). The “Growth Capital” participa- tions also evolved successfully in 2021, which is reflected in a substantially higher profit contribution of 48.7 million euros (an increase of 37.3 million euros) thanks to, among others, Mediahuis, Manuchar and Turbo’s Hoet Group, which each re- alised record results in 2021. In 2021, AvH received 112.5 million euros worth of dividends from participations accounted for using the equity method. The strong increase compared to the figure of the previous financial year (38.0 million euros) is for the most part explained by the instructions from the ECB to the banks in the European Union (and adopted by the NBB) to protect their shareholders’ equity by not paying dividends in 2020. Accordingly, Delen Private Bank did not pay any dividend in 2020, as opposed to 78.8 million euros (AvH share) in 2021. In “Marine Engineering & Contracting”, DEME and CFE received 10.5 million euros and 7.9 million euros worth of dividends respectively from equity-accounted participations. AvH received a total of 10.0 mil- lion euros in dividends in 2021 from several participations in “Growth Capital” and “Energy & Resources”. The ‘Transfer from (to) other items’ is primarily explained by the reclassification of the Manuchar participation to ‘Assets held for sale’ as a result of the announced sale. The 'Other increase (decrease)' item reflects movements in the equity of the par- ticipations, with the positive fair value evolution in 2021 of the cash flow hedges at the participations of DEME and Green Offshore in the Rentel and SeaMade off- shore wind farms, having the greatest impact. Other movements in the equity of the participations include a.o. the eliminations of results on sales of treasury shares, the impact of the buy-out of minority interests, and the impact of the meas- urement of the purchase obligation resting on certain shares. Directly held participations accounted for using the equity method AvH applies the equity method to the jointly controlled subsidiaries Delen Private Bank (78.75%), SIPEF (35.1%), Verdant Bioscience (42%), Amsteldijk Beheer (50%), Manuchar (30.0%, reclassed to ‘Assets held for sale’), Turbo’s Hoet Groep (50%) and Telemond (50%). This balance sheet item also comprises the associated interests in Sagar Cements (21.9%), Axe Investments (48.3%), Financière EMG (22.5%), Mediahuis (13.5%), OM Partners (20%) and Van Moer Logistics (21.7%). For a more detailed description of the changes in the scope, see Note 6. Segment information. Some of the group companies mentioned above are listed on the stock market. If the interests in SIPEF and Sagar Cements were to be valued at the market price at year-end 2021 those companies would represent stock market values of 211.5 million euros and 82.1 million euros respectively. If the stock market value at the end of the year was lower than the consolidated equity method value, other ele- ments were considered in the assessment as to whether an impairment was nec- essary. This was not the case at the end of 2021. Indirectly held participations accounted for using the equity method The full consolidation of CFE, DEME, Rent-A-Port and Green Offshore gives rise to the recognition of their jointly controlled subsidiaries and associated participating interests for a total amount of 267.2 million euros, the main interests being those of DEME in C-Power (6.5%), of DEME/Green Offshore in Rentel (18.9% and 12.5% respectively) and in SeaMade (13.2% and 8.75% respectively), of DEME in Annual report 2021 | 187 CDWE Taiwan, Deeprock and GEM/EMW, as well as the real estate and PPP pro- jects set up by CFE together with partners and port-related partnerships at Rent- A-Port. Note 12: Financial assets and liabilities 1. Financial assets and liabilities per category (€ 1,000) Fair value Book value 2021 2020 2021 2020 Financial assets Financial assets : shares - Fair value through P/L (FVPL) 225,541 182,546 225,541 182,546 Financial assets : bonds - Fair value through OCI (FVOCI) 507,529 474,991 507,529 474,991 Financial assets : shares - Fair value through OCI (FVOCI) 259 173 259 173 Financial assets - at amortised cost 20,005 20,003 20,005 20,003 Receivables and cash Financial fixed assets - receivables and warranties 158,687 129,022 158,687 129,022 Other receivables 146,332 148,361 146,332 148,361 Trade debtors 628,710 616,808 628,710 616,808 Cash and cash equivalents 883,730 842,408 883,730 842,408 Banks - receivables from credit institutions & clients 7,504,969 7,057,378 7,136,598 6,622,097 Hedging instruments 5,945 11,678 5,945 11,678 (€ 1,000) Fair value Book value 2021 2020 2021 2020 Financial liabilities Financial liabilities valued at amortised cost Financial debts Bank loans 1,571,234 1,722,838 1,552,702 1,715,379 Bonds 218,017 244,769 246,164 241,934 Surbordinated loans 97,344 66,714 95,152 65,655 Lease debts 235,689 172,129 185,712 172,031 Other financial debts 301,887 364,351 301,887 364,351 Other debts Trade payables 1,145,112 1,092,826 1,145,112 1,092,826 Advances received 101,080 60,643 101,080 60,643 Amounts payable regarding remuneration and social security 220,085 207,031 220,085 207,031 Other amounts payable 98,411 93,521 98,411 93,521 Banks - debts to credit institutions, clients & securities 0 6,517,445 7,038,871 6,484,353 Hedging instruments 90,348 106,237 90,348 106,237 (€ 1,000) 2021 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Financial assets Financial assets : shares - Fair value through P/L (FVPL) 173,254 52,287 136,814 45,732 Financial assets : bonds - Fair value through OCI (FVOCI) 507,529 474,991 Financial assets : shares - Fair value through OCI (FVOCI) 259 173 Financial assets - at amortised cost 20,005 20,003 Receivables and cash Banks - receivables from credit institutions & clients 1,362,479 6,142,490 1,155,432 5,901,946 Hedging instruments 5,945 11,678 Financial liabilities Financial debts Bank loans 1,571,727 1,722,838 Bonds 29,899 219,061 29,794 214,975 Surbordinated loans 97,344 66,714 Lease debts 185,713 172,129 Banks - debts to credit institutions, clients & securities 7,059,336 6,517,445 Hedging instruments 90,348 106,237 188 | Your partner for sustainable growth The fair values must be classified in three levels according to the valuation hierar- chy of IFRS 13, depending on the type of input used for the valuation of financial instruments: • Parameters for level 1 instruments are unadjusted quoted prices in active markets for identical assets and liabilities. No valuation technique (model) is used. In level 1, we find all financial assets (valued at fair value, with incorpora- tion of value changes in the unrealised results) with a public listing in an active market. • Parameters for level 2 instruments are prices quoted for similar assets and liabilities in active markets, or data based on or supported by observable market data. A valuation technique (model) is used, based on observable parameters such as:  the actual value of the future cashflows (discounted cashflow model)  the comparison with the current or recent fair value from another similar in- strument  the determination of prices by third parties, provided that the price is in line with alternative observable parameters. We find the following financial assets and liabilities in level 2:  Cash and assets with central banks: because these assets have a very short term, the fair value is equated with the book value.  Receivables from credit institutions and financial liabilities valued at amortised cost: the fair value of the above financial instruments is determined as the current value of future cash flows based on the applicable swap interest rate and the assumptions below: - Commercial margins are taken into account when repricing; - No account is taken of a percentage of credit losses.  Derivatives held for trading purposes and for hedging purposes: the fair value of these instruments is also determined as the current value of future cash flows based on the applicable swap interest rate. • Parameters for level 3 instruments are non-observable data for determining the fair value of an asset or liability. In this case, use is made of a valuation technique (model) with (partly) non-observable parameters. We find the following financial assets in level 3:  Some financial assets (valued at fair value with value changes included in the unrealised results) for which no public listing is available.  Loans and advances to customers, valued at amortised cost: the fair value thereof is determined as the current value of future cash flows based on the applicable swap interest rate and the assumptions below: - Commercial margins are taken into account when repricing; - A percentage of early repayments and cap options is taken into account; - No account is taken of a percentage of credit losses. The fair value of the securities in the investment portfolio of the Group is de- termined on the basis of the listing on the public market (level 1). The same applies to the bond issued by BPI. The bonds issued by Nextensa and Rent-A-Port are reported under level 2. The above table gives no fair value information for financial assets and liabilities that are not measured at fair value, such as receivables and warranties, other re- ceivables and payables, trade receivables and trade payables, advance payments, amounts payable regarding remuneration and social security, and cash and cash equivalents, since their carrying amount is a reasonable approximation of their fair value. 2. Credit risk Both CFE and DEME have set up procedures to limit the risk of their trade receiv- ables. To limit the credit risk, both participations constantly monitor their outstand- ing trade receivables and adjust their positions if necessary. For the purposes of major foreign contracts, for instance, DEME regularly uses the services of the Cre- dendo Group insofar as the country concerned qualifies for this service and the risk can be covered by credit insurance. A large part of the consolidated turnover is realized through public or semi-public sector customers. The level of counterparty risk is limited by the large number of customers. For large-scale infrastructure con- tracts, DEME is dependent on the ability of customers to obtain financing and can, if necessary, help to organize project financing. Although the credit risk cannot be ruled out altogether, it is still limited. Moreover, as a worldwide player, DEME is exposed to political risks and negative developments that may manifest themselves at the macroeconomic level. The credit risk of Rent-A-Port, primarily active in Vietnam, is limited by advances received on the sale of acquired rights over developed sites (industrial zones) and by the monthly invoicing and the wide spread of customers when providing utili- ties, maintenance and management services in those industrial zones. For the credit risk regarding the loan portfolio of Bank Van Breda we refer to the credit risk policy as described in note 13. Nextensa aims at a good spread both in terms of the number of tenants and the sectors in which these tenants are active in order to limit the risk of bad debts and bankruptcies by tenants. Furthermore, the solvency of the tenants is screened on a regular basis by an external rating agency, and long-term lease agreements are sought to ensure a recurrent rental income flow and increase the duration of the lease agreements. In the real estate development activity an extensive analysis of the related technical, legal and financial risks is made, prior to the signing of a new project. Anima has a limited credit risk. Most residents pay by direct debit. Rents are billed in advance and debtors are closely monitored. Government grants are an important source of income. Agidens manages its debtor risk in accordance with the relevant policy, proce- dures and checks that have been set out by the group. Outstanding receivables are periodically monitored, and large-scale projects are generally covered by bank or other similar guarantees. The same applies to Biolectric. In the AvH & Growth Capital segment the group invests for the long term in a limited number of companies with international growth potential. The diversified character of these investments contributes to a balanced spread of the economic and financial risks. Furthermore, AvH usually finances these investments with shareholders’ equity. Annual report 2021 | 189 (€ 1,000) Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Marine Engineering &Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Eliminations between segments Total 2020 Financial fixed assets - receivables and warranties 102,049 1,631 10,577 0 34,648 -19,883 129,022 Other receivables 64,919 4,199 49,987 31 32,376 -3,150 148,361 Trade debtors 566,962 44 24,589 0 26,369 -1,156 616,808 Total (net - accumulated impairments included) 733,930 5,874 85,153 31 93,392 -24,189 894,190 % 82% 1% 10% 0% 10% -3% 100% not expired 580,124 5,874 77,478 31 88,690 -24,189 728,008 expired < 30 d 20,721 0 5,084 0 2,846 0 28,651 expired < 60 d 43,122 0 346 0 1,538 0 45,006 expired < 120 d 17,982 0 525 0 113 0 18,620 expired > 120 d 71,981 0 1,719 0 205 0 73,905 Total (net - accumulated impairments included) 733,930 5,874 85,153 31 93,392 -24,189 894,190 % 82% 1% 10% 0% 10% -3% 100% Accumulated impairments Financial fixed assets - receivables and warranties (impairments) -7,479 0 0 0 0 0 -7,479 Other receivables (impairments) 0 0 -41 0 -8,711 0 -8,752 Trade debtors (impairments) -67,046 0 -1,053 0 -110 0 -68,209 -74,525 0 -1,094 0 -8,821 0 -84,439 (€ 1,000) Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Marine Engineering &Contracting Private Banking Real Estate & Senior Care Energy & Resources AvH & Growth Capital Eliminations between segments Total 2021 Financial fixed assets - receivables and warranties 134,544 2,050 13,255 0 27,813 -18,976 158,687 Other receivables 85,009 3,716 51,312 76 6,970 -750 146,332 Trade debtors 570,349 56 39,665 0 19,810 -1,169 628,710 Total (net - accumulated impairments included) 789,902 5,822 104,232 76 54,592 -20,895 933,729 % 85% 1% 11% 0% 6% -2% 100% not expired 662,973 5,822 100,964 76 51,712 -20,895 800,652 expired < 30 d 29,707 0 657 0 2,121 0 32,484 expired < 60 d 19,093 0 1,838 0 248 0 21,179 expired < 120 d 17,968 0 674 0 304 0 18,945 expired > 120 d 60,162 0 100 0 207 0 60,469 Total (net - accumulated impairments included) 789,902 5,822 104,232 76 54,592 -20,895 933,729 % 85% 1% 11% 0% 6% -2% 100% Accumulated impairments Financial fixed assets - receivables and warranties (impairments) -4,724 0 0 0 -10,985 0 -15,709 Other receivables (impairments) -117 0 -43 0 -1,981 0 -2,140 Trade debtors (impairments) -41,042 0 -1,905 0 -94 0 -43,041 -45,883 0 -1,948 0 -13,059 0 -60,890 Marine Engineering & Contracting • Financial fixed assets: receivables and warranties: loans granted to participating interests include a.o. financing granted by DEME and Green Offshore to their respective participating interests active in the development/operation of the Rentel and SeaMade wind farms, and by CFE to real estate project companies. • Trade receivables in this segment account for 91% of total trade receivables. Overdue receivables in contracting mainly relate to settlements and additional charges, but which still have to be included in the budgets or are to be covered by an overall agreement. CFE and DEME have a number of negotiations and/or pro- cedures pending. Expected losses on construction contracts are adequately pro- vided for through impairments on construction contracts, recorded in the balance sheet item ‘Construction contracts’ (Note 14). CFE values its financial fixed assets in conformity with the expected credit loss model. As such, the discounted effect of estimated losses, in case a debtor would default on its obligations, is reflected in its book value. The sale of the participation in CFE Chad resulted in the derecognition of the fully impaired receivables. The turnover of Rent-A-Port, primarily active in Vietnam, derives from (i) the sale of acquired rights over developed sites (industrial zones), (ii) the provision of utili- ties (electricity and water) and (iii) of maintenance and management services in those industrial zones: • The compensation for the sale of acquired rights over developed sites, usually varying from 40 to 50 years, is largely paid in advance (80% to 100%) by the customers of the Rent-A-Port group. Once the land is delivered to the customer, the risks and rewards of the land use rights are transferred. • The charges for the provision of utilities, maintenance and management services are invoiced on a monthly basis, and given the wide spread of customers, the credit risk is fairly limited here. Private Banking We refer to Note 13 for more details regarding the credit risk of Bank Van Breda. Real Estate & Senior Care • The other receivables relate to the advances that Nextensa grants to its real estate project companies. • Referring to the above description of the credit risk management, under normal circumstances the impairments on trade receivables are limited at Nextensa. Rent reductions that are granted exceptionally in times of economic crisis, such 190 | Your partner for sustainable growth as the COVID-19 pandemic and the related lockdown, are accounted for as a reduction of income in accordance with IFRS 9 (“impairment loss”). In 2021, Nextensa was still confronted with temporary shop closures and mandatory tel- ework due to the corona pandemic. Where in 2020 the pandemic was still re- sponsible for a loss of rental income of approximately 4 million euros, the impact in 2021 remained limited to around 1 million euros. • Most residents pay by direct debit at Anima, which justifies not setting up a simplified expected credit loss model. AvH & Growth Capital and Intercompany eliminations • the full consolidation of Agidens and Biolectric Group • financing provided by AvH & subholdings to, among others, Green Offshore in the context of the development of the Rentel and SeaMade wind farms has been eliminated in the consolidation. 3. Exchange rate risk Given the international character of its business operations and the execution of contracts in foreign currency, DEME is exposed to currency risks. DEME’s transac- tional foreign currency risk arises from commercial flows denominated in currencies other than the euro. However, 62% of DEME’s revenues (2020: 67%) related to transactions expressed in euros and, as such, represented the largest portion of DEME’s revenues realised. Turnover in foreign currency related to a.o.: US dollar, British pound, Danish krone, Russian ruble, Polish zloty, Singapore dollar, Uru- guayan peso and Indian rupee. DEME’s expenses are also predominantly in euro, except for contracts that are carried out in non-euro countries. The residual foreign currency risk is assessed on a case-by-case basis and, if necessary, DEME uses forward-exchange contracts to hedge its residual foreign currency risk on projected net commercial flows denominated in currencies other than the euro. In the case of CFE, most operations take place within the eurozone; nevertheless, exposure to foreign currency fluctuations is limited as much as possible. Rent-A-Port primarily operates in Southeast Asia and is essentially exposed to an exchange rate risk relating to the US dollar and the Vietnamese dong. Since the subsidiaries of Rent-A-Port mainly effect purchases and sales in local currencies, the group’s exposure to exchange rate fluctuations in commercial transactions is limited in a natural way. The translation of the functional currency (USD) into euros upon consolidation embodies an exchange rate risk. Nextensa operates in Belgium, Luxembourg and Austria, and is therefore not subject to exchange risks. The exchange rate risk of Bank Van Breda is limited, as the bank only operates in Belgium and the nature of its clients is such that it does not hold any significant own currency position. Agidens, with its worldwide operations, has a (limited) exchange rate exposure to the US dollar and Swiss franc, and hedges its currency risk by using the same currency as much as possible for the income and expenses in question (natural hedging). If necessary, a currency swap is concluded with approved and reputable counterparties. Biolectric has a limited GBP exposure through its branch in the United Kingdom. The strategy of AvH to look towards emerging markets resulted in investments in Indian rupees (Sagar Cements, the Healthquad I and II Funds and Medikabazaar) and in Singapore Dollar (the Venturi Partners Fund I). This risk is not hedged as it concerns long term investments. The remaining fully consolidated participations are not subject to significant ex- change rate risks since they mainly operate in the eurozone. Various non-fully consolidated participations such as Delen Private Bank, SIPEF and Verdant Bioscience, as well as Manuchar, Telemond Group, Turbo’s Hoet Groep and others, operate to a significant extent outside the eurozone. This may give rise to greater risks as a result of geopolitical developments or events. The exchange rate risk in each of these cases is followed up and controlled at the level of the participation itself. The exchange rate risk at Delen Private Bank is limited to the foreign currency subsidiaries (JM Finn and to a lesser extent Delen Suisse). The net exposure to the British Pound is currently limited as the impact of any exchange rate fluctuation on the JM Finn equity is neutralized by an opposite impact on the liquidity obligation on the remaining 7% minority stake in JM Finn. At SIPEF the majority of the costs are incurred abroad (in Indonesia and Papua New Guinea), whereas sales are re- alised in USD. This is a structural risk that is not hedged by the company and is therefore considered as a general business risk. Transactional risks are generally limited by short payment terms, and translation differences are limited by making the functional currency and reporting currency the same as much as possible. Ma- nuchar is exposed to exchange rate risk between the USD and local currencies of the countries in which the distribution activities take place. To hedge these risks, the positions are monitored and, if necessary, macro hedges are set up. At Telemond Group, production takes place in Poland while the sales are realised in the eurozone. The exchange rate risk that is run by this is not hedged and is considered as a general business risk. Turbo’s Hoet Groep, finally has developed a significant level of activity in Eastern Europe, more specifically in Bulgaria, Ro- mania, Russia and Belarus. Turbo’s Hoet Groep realizes its turnover in those mar- kets on the basis of local currency. Although Turbo’s Hoet Groep tries to pass on the impact of any depreciations in those local currencies to the final customer, market conditions do not always allow it. Some of the main exchange rates that have been used to convert the balance sheets and results of the foreign entities into euro: 1 euro = x foreign currency Closing rate Average rate Closing rate Average rate Australian Dollar 1.57 1.58 Russian Ruble 84.75 86.96 British Pound 0.84 0.86 Singapore Dollar 1.53 1.59 Egyptian Pound 17.79 18.52 Taiwan Dollar 31.55 32.89 Indian Rupee 84.75 86.96 Tunesian Dinar 3.26 3.28 Nigerian Naira 476.19 476.19 US Dollar 1.14 1.18 Polish Zloty 4.58 4.56 Vietnamese Dong 25,872 27,144 Annual report 2021 | 191 4. Financial assets: at fair value through OCI or through P/L (€ 1,000) Financial fixed assets - FVPL Investments - FVOCI Investments - FVPL Investments - at amortised cost Investments- Total Financial assets : at fair value through OCI or through P/L - financial year 2020 Financial assets: opening balance at fair value 154,418 420,796 55,717 0 476,513 Financial assets - carrying amount (including accumulated fair value adjustments through P/L - FVPL) 154,418 413,977 55,717 0 469,694 Financial assets - adjustment to fair value 5,857 5,857 Financial assets - accrued interest 962 962 Additions 15,720 130,799 162 112,578 243,539 Additions through business combinations 14 0 0 0 0 Actuarial return -1,185 -75 -1,260 Disposals (-) -3,330 -79,464 -4,795 -92,500 -176,759 Disposals through business disposals (-) 0 0 0 0 0 Increase (decrease) through changes in fair value (FVPL) -35,272 70 70 Increase (decrease) through changes in fair value (FVOCI) 5,390 5,390 Impairment losses recognized in the income statement (-) 0 0 Foreign currency exchange increase (decrease) -159 -1,103 0 0 -1,103 Transfer from (to) other items 0 0 0 0 0 Other increase (decrease) 0 -69 0 0 -69 Financial assets: ending balance at fair value 131,391 475,164 51,155 20,003 546,322 Financial assets - carrying amount (including accumulated fair value adjustments through P/L - FVPL) 131,391 463,025 51,155 20,003 534,183 Financial assets - adjustment to fair value (FVOCI) 11,246 11,246 Financial assets - accrued interest 893 893 (€ 1,000) Financial fixed assets - FVPL Investments - FVOCI Investments - FVPL Investments - at amortised cost Investments- Total Financial assets : at fair value through OCI or through P/L - financial year 2021 Financial assets: opening balance at fair value 131,391 475,164 51,155 20,003 546,322 Financial assets - carrying amount (including accumulated fair value adjustments through P/L - FVPL) 131,391 463,025 51,155 20,003 534,183 Financial assets - adjustment to fair value 11,246 11,246 Financial assets - accrued interest 893 893 Additions 24,453 88,967 66 107,601 196,635 Additions through business combinations 0 0 0 0 0 Actuarial return -1,108 -100 -1,208 Disposals (-) -14,971 -48,253 -7,770 -107,500 -163,523 Disposals through business disposals (-) 0 0 0 0 0 Increase (decrease) through changes in fair value (FVPL) 36,338 4,739 4,739 Increase (decrease) through changes in fair value (FVOCI) -8,347 -8,347 Impairment losses recognized in the income statement (-) 0 0 Foreign currency exchange increase (decrease) 140 1,505 -1 1 1,505 Transfer from (to) other items 0 0 0 0 0 Other increase (decrease) 0 -140 0 0 -140 Financial assets: ending balance at fair value 177,351 507,788 48,190 20,005 575,982 Financial assets - carrying amount (including accumulated fair value adjustments through P/L - FVPL) 177,351 504,139 48,190 20,005 572,334 Financial assets - adjustment to fair value (FVOCI) 2,895 2,895 Financial assets - accrued interest 753 753 Financial fixed assets: AvH has over the past few years invested in a number of young and promising companies, either directly or through specialist investment funds: Biotalys (11.9%), Bio Cap Invest (40%), HealthQuad Fund I (36.3%), HealthQuad Fund II (10%), Indigo Diabetes (9.1%), Medikabazaar (8.7%), MRM Health (16.2%), OncoDNA (9.8%) and Venturi Partners Fund I (20.0%). These participations are measured at ‘Fair value through Profit & Loss’ in accord- ance with IFRS 9 Financial Instruments. The participating interest of AvH in Biotalys is valued at share price as of its IPO in 2021, resulting in an upward value adjust- ment of 13.0 million euros. The application of a “fair value” approach to the other financial fixed assets from that portfolio led to an additional positive result of 11.5 million euros, thanks among other things to the positive value development of Medikabazaar, where a new capital round took place in 2021 at a markedly higher valuation, and the positive value development of AvH’s limited investment portfo- lio. 192 | Your partner for sustainable growth These are the main components of this item, along with the 10.2% interest that Nextensa holds in its industry peer Retail Estates. The increase in the share price of Retail Estates to 71.4 euros at year-end 2021 (2020: 59.1 euros), resulted in a positive impact of 16.6 million euros (group share: 6.1 million euros). In 2021, AvH invested in a.o. Medikabazaar (10.1 million euros), Biotalys (4.0 mil- lion euros), MRM Health, as well as in the HealthQuad and Venturi funds and divested some minor participations and investments. The additions and disposals of investments are largely attributable to Bank Van Breda, and relate to transactions realized as part of its Asset & Liability manage- ment (ALM). The investments consist of (€ 1,000): Number of shares Fair value Investment portfolio Bank Van Breda 527,792 Funds managed by Delen Private Bank 34,612 Ageas 278,284 12,676 Other 902 575,982 The breakdown per segment of the fair value of the investments is as follows (€ 1,000): Fair value Private Banking (Bank Van Breda) 527,792 AvH & Growth Capital 48,187 Real Estate & Senior Care 0 Marine Engineering & Contracting 2 Energy & Resources 0 575,982 Credit risk of the investment portfolio Bank Van Breda The risk profile of the investment portfolio has for years now deliberately been kept very low. The investment portfolio at year-end 2021 contains 95% government and government-guaranteed bonds with a minimum A1 rating (Moody’s rating), 4% commercial paper of the Flemish Community, and less than 1% shares and private equity. The investment framework that is submitted annually for the approval of the board of directors of Bank Van Breda determines which investments can be made and the limits that apply. The following table shows the composition of the consoli- dated investment portfolio by rating and maturity. Composition of the investment portfolio 31/12/2021 Rating Remaining duration Government bonds Aaa 33% 2022 21% Government bonds Aa1 21% 2023 19% Government bonds Aa2 7% 2024 11% Government bonds Aa3 35% 2025 4% Government bonds A2 3% 2026 10% Corporate bonds and commercial paper & other 1% >2027 34% indefinite 1% Note 13: Banks – receivable from credit institutions and clients (€ 1,000) Fair value Book value 2021 2020 2021 2020 Loans and receivables to clients 6,116,786 5,850,021 5,748,252 5,414,654 Changes in fair value of the hedged credit portfolio 25,704 51,925 25,704 51,925 Loans and advances to banks 137,851 163,626 138,014 163,712 Cash balances with central banks 1,224,628 991,806 1,224,628 991,806 7,504,969 7,057,378 7,136,598 6,622,097 (€ 1,000) 2021 2020 Loans and receivables to clients Finance lease 279,004 249,017 Investment credits and financing 2,670,776 2,534,509 Mortgage loans 2,438,038 2,260,140 Operating appropriations 371,689 380,415 Other 17,901 23,357 Subtotal - Gross loans and advances 5,777,408 5,447,439 Provisions Expected Credit Losses/write-offs -29,156 -32,785 Loans and receivables to clients 5,748,252 5,414,654 Annual report 2021 | 193 The full consolidation of Bank Van Breda results in the inclusion of the specific banking receivables and debts in the balance sheet of AvH. These items have been grouped in order to keep the balance sheet as transparent as possible. The loans and advances to clients comprise the following: • loans granted to family entrepreneurs and the liberal professions at Bank Van Breda. The many entrepreneurs and practitioners of liberal professions who have become clients in previous years entrust an ever increasing share of their bank- ing business to the bank; • car financing provided by Van Breda Car Finance, a division of the bank. The strong commercial performance of the bank explains the significant increase of loans and advances to clients. Credit risk The credit portfolio of Bank Van Breda is very widely spread throughout the local economic fabric of family businesses and liberal professions. The bank applies con- centration limits per sector and maximum credit amounts per client. The credit portfolio of the Van Breda Car Finance division consists of car loans and car finance leases, and is very widely spread. Constant fine-tuning of the acceptance criteria and proactive debtor monitoring also give this portfolio a low risk profile. The credit portfolio is divided into risk categories, each of which is monitored in its own specific way. The board of directors of Bank Van Breda periodically receives a report on credit facilities in the highest risk category. Debts which become doubtful are transferred to the Litigation department. There are specific criteria for mandatory transfer when specific events arise with clients, borrowers or guarantors. For credit facilities in the highest risk category and for debts that become doubtful, it will be determined whether impairments are re- quired. COVID-19 In 2021, the corona crisis continued to have an impact on society and on the global economy. The successful rollout of the vaccination campaign in Belgium made it possible to relax most of the corona measures in the first half of the year, allowing the economy to start a full recovery. Furthermore, the European Central Bank (ECB) kept its monetary policy highly flex- ible to support the economic revival as much as possible. Accordingly, the policy interest rates remained unchanged this year, while the various support measures (including the Pandemic Emergency Purchase Programme or PEPP) continued and were made more flexible where necessary. The economic recovery, however, was compromised again from the second half of the year by the emergence of certain variants of the virus. Although a new total lockdown could be avoided, most governments worldwide were once more obliged to take new measures. The main arrangements and decisions of the national and international authorities that had an impact on business operations and the result of Bank Van Breda are explained below. Targeted Longer-Term Refinancing Operations (TLTRO) are granted by the European Central Bank (ECB) to banks in order to give businesses and households easier access to bank financing (with the exception of mortgage loans). By offering this long-term financing on easy terms, the ECB hopes to keep stimulating the provision of credit to the real economy. Bank Van Breda had already participated in these TLTRO operations in 2020 for an amount of 300 million euros, and in 2021 participated once more in a TLTRO operation, this time for an amount of 100 million euros. The repayment deferment granted by Bank Van Breda in 2020 and 2021 ex- pired at the end of 2021, and repayments have resumed almost entirely. At 31/12/2021, the outstanding gross carrying amount of those loans amounted to 258.9 million euros, of which 0.8 million euros cancelled loans (impaired) and 3.7 million euros loans with status ‘doubtful’. Additional loans worth 50.7 million eu- ros were granted with state guarantee, which were repaid almost entirely at year- end 2021. The outstanding gross carrying amount at 31/12/2021 was 3.6 million euros. The persistent corona crisis and its impact on public health and the economy will likely still have an impact on the credit losses of the banking sector in the next few years. Although so far these losses have been fairly limited for Bank Van Breda due to the high credit rating of its clients and the government measures (temporary unemployment, repayment deferment), these uncertain future prospects have been taken into account in the bank’s ECL calculations in line with the IFRS 9 rules to make provisions for expected credit losses. The valuation rules (Note 1) offer an explanation of the methodology which Bank Van Breda uses under normal circumstances to determine the expected credit losses (stage 1 and stage 2) and the impairments (stage 3) for the whole credit portfolio. The total expected credit losses (stage 1, 2 and 3) recognised for the full year 2021 amounted to -2.2 million euros (a minus sign implies a positive impact on the re- sult) compared to 5.5 million euros in 2020. • On the one hand, in 2021 there was a net reversal of 2.8 million euros for per- forming loans (stage 1 and 2) (versus 4.5 million euros net additional provisions in 2020); • on the other hand, there was an increase of the stage 3 credit losses to the amount of 0.6 million euros in 2021 (compared to 1 million euros in 2020). By far the greatest impact is attributable to COVID-19: in 2020, 6.1 million euros in additional expected credit losses were recognised in respect of the performing loans, whereas in 2021 1.7 million euros worth of provisions in respect of the performing loans were reversed following adjustments to the macroeconomic sce- narios. The remaining ECL movements are attributable to the normal changes in the credit portfolio (with new loans granted and existing loans repaid), and to the repay- ments on loans which in view of the potential COVID-19 impact were classed in 2020 as representing a higher risk (staging of the highest risk sectors in 2020). Internal rating per category – loans and advances to clients Loans and advances to clients - internal rating per category Stage 1 Stage 2 Stage 3 2021 (€ 1,000) Individual Collective Individual Collective Performing Low risk 2,376,878 0 21,069 23,856 0 2,421,803 Medium risk 2,114,646 0 342,933 77,093 0 2,534,673 High risk 325,611 0 364,838 27,219 0 717,668 Overdue 33,601 0 15,380 649 0 49,629 Non-performing Submitted to write off 0 0 0 0 53,635 53,635 Total 4,850,736 0 744,219 128,818 53,635 5,777,408 194 | Your partner for sustainable growth Loans and advances to clients - internal rating per category Stage 1 Stage 2 Stage 3 2020 (€ 1,000) Individual Collective Individual Collective Performing Low risk 1,977,006 0 22,509 124,363 0 2,123,878 Medium risk 2,021,171 0 288,376 183,689 0 2,493,236 High risk 323,910 0 341,639 55,844 0 721,393 Overdue 30,566 0 16,234 6,988 0 53,788 Non-performing Submitted to write off 0 0 0 0 55,143 55,143 Total 4,352,654 0 668,757 370,884 55,143 5,447,439 Loans and advances to clients - evolution in 2021 Stage 1 Stage 2 Stage 3 2021 (€ 1,000) Individual Collective Individual Collective 31/12/2020 4,352,654 0 668,757 370,884 55,143 5,447,439 Impact from collective staging -28,608 28,608 242,608 -242,608 0 0 Recognition 1,508,981 0 141,822 12,661 6,837 1,670,301 Derecognition -745,301 0 -131,096 -29,679 -9,564 -915,640 Repayments -351,757 0 -51,406 -10,961 -9,582 -423,706 Transfers to stage 1 339,446 0 -339,209 0 -238 0 Transfers to stage 2 -219,042 -28,608 219,119 28,608 -77 0 Transfers to stage 3 -5,522 0 -5,781 0 11,303 0 Methodology modifications -116 0 -594 -88 -119 -916 Write offs 0 0 0 0 -69 -69 31/12/2021 4,850,736 0 744,219 128,818 53,635 5,777,408 Accumulated impairments Stage 1 Stage 2 Stage 3 2021 (€ 1,000) Individual Collective Individual Collective 31/12/2020 -4,547 0 -3,202 -1,314 -23,721 -32,784 Impact from collective staging 24 -24 -1,002 1,002 0 0 Recognition -3,816 -9 -959 -19 -1,383 -6,185 Derecognition 1,493 3 1,001 19 1,935 4,451 Repayments 1,684 11 645 38 0 2,379 Transfers to Stage 1 -1,656 -131 1,636 131 21 0 Transfers to Stage 2 149 47 -155 -55 15 0 Transfers to Stage 3 28 0 185 0 -213 0 Impact on ECL by Stage Transfer 1,403 115 -1,654 -214 -3,396 -3,746 Other adjustments to credit risk 1,045 -11 1,601 166 2,326 5,128 Methodology modifications 0 0 -21 0 39 17 Model modifications 0 0 0 0 0 0 Write-offs 0 0 0 0 1,585 1,585 31/12/2021 -4,192 0 -1,926 -245 -22,792 -29,156 Note 14: Inventories and construction contracts (€ 1,000) 2021 2020 I. Inventories, net amount 376,218 382,451 Gross carrying amount 378,412 384,221 Raw materials and consumables 50,638 88,369 Goods in progress 55,600 50,466 Finished products 4,919 6,399 Goods purchased for sale 1,107 1,320 Immovable property acquired or constructed for resale 266,149 237,666 Prepayments 0 0 Depreciation and impairments (-) -2,194 -1,771 Impairment on inventory through income statement during the financial year 1,056 298 Impairment on inventory reversed in the income statement during the financial year 0 -64 II. Construction contracts Amounts due from (to) customers under construction contracts, net 136,616 90,842 Amounts due from customers under construction contracts 478,499 400,034 Amounts due to customers under construction contracts -341,883 -309,192 Construction contracts on closing date Amount of contract costs incurred and recognized profits less losses 7,168,801 6,774,948 Amount of contract revenue -7,032,185 -6,684,106 Prepayments received (CFE-DEME) -107,147 -65,034 Annual report 2021 | 195 CFE’s real estate development projects, Nextensa’s landholdings, and the port- related developments in Vietnam by Rent-A-Port are the main components within ‘Inventories’. CFE (BPI) delivered several projects in 2021: Ernest The Park (Ixelles), the final phase of Hauts Prés (Ukkel) and Park West (European quarter). The construction and commercialisation of Patio (Erasmus Gardens, Anderlecht) and of 4 projects in Luxembourg are progressing smoothly. Planning permission for the PURE, Serenity Valley and Brouck'R projects in the Brussels Region and for John Martin’s in Ant- werp was obtained during the year. BPI completed the sale of Ernest 11, an office building of 5,000 m² in Liège, 50% of the Samaya project, an industrial site near Ottignies station that will be transformed into a mixed-purpose project, the land of project Sadowa (Gdansk, Poland) and the remaining retail space of Bulwary Ksiazece (Wroclaw, Poland). Finally, three new sites were acquired in Poland. In 2021, Rent-A-Port accelerated the development of the DEEP C Industrial Zones in Haiphong (Vietnam). At present its affiliate Infra Asia Investments already owns a land portfolio of approximately 3,400 hectares near the new deep-sea port of Lach Huyen. This represents around 25% of all the available industrial land in northern Vietnam. The construction & project contracts of CFE, DEME and Agidens are valued according to the ‘Percentage of Completion’-method, whereby results are recog- nized in accordance with the progress of the work. Expected losses are immediately recognized as an expense through in the income statement. The execution of projects always entails a certain operational risk, but also means that certain estimates of profitability need to be made at the end of such a project. This risk is inherent to the activity, as well as the risk of disagreements with cus- tomers over divergent costs or changes in execution and the collection of these receivables. DEME is involved, both as claimant and as defendant, in discussions with customers about the financial consequences of deviations in the execution of contracting projects. In a small number of cases they may result in lawsuits. In so far as the consequences of such lawsuits can be reliably estimated, provisions are made for this in the accounts. The current construction contracts of CFE-DEME will generate a turnover of 3,078 million euros in the next years, of which 1,707 million euros is estimated in 2022. Nextensa’s real estate development projects (primarily Tour&Taxis in Brussels) are also contained in this balance sheet item, as the results of the pre-sold entities that are still under construction are also recognized according to the ‘Percentage of Completion’ method. The residential developments on the Tour & Taxis site are progressing well. Of Park Lane Phase I (319 apartments), just 11 apartments are still for sale. The last apartments will be delivered in May 2022. The progress of the work is defined based on the expenditures versus the estimated cost price of the entire project. Note 15: Minorities (€ 1,000) Minority % Minority share in the Minority share in the AvH balance sheet profit for the period 2021 2020 2021 2020 2021 2020 I. Marine Engineering & Contracting CFE - DEME 37.90% 37.90% 740,856 684,344 59,045 23,229 Rent-A-Port (Infra Asia Investments) 18.95% 18.95% 49,324 46,015 957 2,583 II. Private Banking Bank Van Breda (1) 21.25% 21.25% 141,694 130,503 12,936 9,461 III. Real Estate & Senior Care Nextensa / Leasinvest Real Estate (2) 41.47% 69.99% 333,989 341,015 30,172 5,378 IV. AvH & Growth Capital Agidens (3) 15.02% 13.75% 3,464 2,418 807 179 Other 8,448 15,836 1,328 6,994 Total 1,277,774 1,220,131 105,246 47,823 (1) In 2018 the shareholder structure of Delen Private Bank and Bank Van Breda was simplified. AvH now holds, via the 100%-affiliate FinAx, a direct stake of 78.75% in Delen Private Bank, equity accounted directly. (2) Upon the creation of Nextensa, AvH contributed 100% of the shares of Extensa and LREM for a joint value of 293.4 million euros and this in exchange for the issue of 4,075,458 new Leasinvest Real Estate shares to AvH. Subsequent to this transaction, Nextensa’s capital (previously Leasinvest Real Estate) consists out of 10,002,102 issued shares, of which 5,853,817 shares (including 1,778,359 initial shares) are held by AvH, maintaining a controlling interest of 58.53%. Consequently, the minority interest decreased to 41.47%. (3) The exercise of options (by the management) at Agidens resulted in an increase of the Minority share by 1.26%. 196 | Your partner for sustainable growth Summarized income statement – 2021 (€ 1,000) CFE - DEME Bank Van Breda Rent-A-Port Nextensa Agidens Revenue 3,635,953 184,193 50,527 65,174 74,807 Profit (loss) from operating activities 196,668 84,792 6,167 53,116 7,112 Finance result -11,451 -2,819 11,828 -424 Profit (loss) before tax 195,035 84,792 6,881 64,944 6,688 Profit (loss) of the period 152,766 65,193 3,858 53,355 5,410 At the level of the individual company 152,766 65,193 3,858 53,355 5,410 - Minority interests 2,757 15 279 111 - Share of the group 150,008 65,178 3,578 53,244 5,410 At the level of AvH (1) 151,167 64,263 3,858 53,842 5,410 - Minority interests 59,045 12,936 957 30,172 807 - Share of the group 92,122 51,328 2,900 23,670 4,602 (1) Including a limited number of consolidation adjustments Summarized income statement – 2020 (€ 1,000) CFE - DEME Bank Van Breda Rent-A-Port Leasinvest Real Estate Agidens Revenue 3,221,958 162,681 72,706 61,572 91,688 Profit (loss) from operating activities 87,253 65,642 14,248 77,697 2,963 Finance result -34,348 -6,893 -69,534 -559 Profit (loss) before tax 85,145 65,643 7,272 8,163 2,266 Profit (loss) of the period 64,823 48,373 3,544 7,683 1,299 At the level of the individual company 64,823 48,373 3,544 7,683 1,299 - Minority interests 803 78 2,369 - Share of the group 64,020 48,295 1,174 7,683 1,299 At the level of AvH (1) 59,637 47,493 3,544 8,694 1,299 - Minority interests 23,229 9,461 2,583 5,378 179 - Share of the group 36,408 38,032 961 3,317 1,120 (1) Including a limited number of consolidation adjustments Summarized statement of comprehensive income – 2021 (€ 1,000) CFE - DEME Bank Van Breda Rent-A-Port Nextensa Agidens At the level of the individual company 177,382 60,359 8,151 65,642 5,146 Profit (loss) of the period 152,766 65,193 3,858 53,355 5,410 - Minority interests 2,757 15 279 111 0 - Share of the group 150,008 65,178 3,578 53,244 5,410 Other comprehensive income 24,616 -4,834 4,294 12,287 -264 - Minority interests 88 - Share of the group 24,528 -4,834 4,294 12,287 -264 At the level of AvH 175,783 59,026 8,151 66,434 5,146 Profit (loss) of the period 151,167 64,263 3,858 53,842 5,410 - Minority interests 59,045 12,936 957 30,172 807 - Share of the group 92,122 51,328 2,900 23,670 4,602 Other comprehensive income 24,616 -5,237 4,294 12,592 -264 - Minority interests 11,570 -1,113 814 11,690 -36 - Share of the group 13,046 -4,124 3,480 903 -227 Annual report 2021 | 197 Summarized statement of comprehensive income – 2020 (€ 1,000) CFE - DEME Bank Van Breda Rent-A-Port Leasinvest Real Estate Agidens At the level of the individual company 39,877 51,791 -1,186 25,749 1,657 Profit (loss) of the period 64,823 48,373 3,544 7,683 1,299 - Minority interests 803 78 2,369 0 0 - Share of the group 64,020 48,295 1,174 7,683 1,299 Other comprehensive income -24,946 3,418 -4,729 18,066 358 - Minority interests 264 - Share of the group -25,210 3,418 -4,729 18,066 358 At the level of AvH 34,691 50,767 -1,186 26,760 1,657 Profit (loss) of the period 59,637 47,493 3,544 8,694 1,299 - Minority interests 23,229 9,461 2,583 5,378 179 - Share of the group 36,408 38,032 961 3,317 1,120 Other comprehensive income -24,946 3,274 -4,729 18,066 358 - Minority interests -9,569 696 -884 12,645 48 - Share of the group -15,377 2,578 -3,846 5,421 310 Summarized balance sheet – 2021 (€ 1,000) CFE - DEME Bank Van Breda Rent-A-Port Nextensa Agidens Non-current assets 2,863,509 4,719,074 98,891 1,433,991 19,407 Current assets 2,436,490 3,072,728 155,796 461,971 30,921 Non-current liabilities 914,184 727,751 54,540 630,533 7,803 Current liabilities 2,429,789 6,385,592 74,402 474,956 19,457 Equity 1,956,026 678,459 125,746 790,473 23,068 - Group Share 1,936,335 678,459 79,555 779,970 23,068 - Minority interests 19,691 0 46,191 10,503 0 Dividend distributed to minority interests -9,594 -2,486 -1,770 -21,778 -82 Summarized balance sheet – 2020 (€ 1,000) CFE - DEME Bank Van Breda Rent-A-Port Leasinvest Real Estate Agidens Non-current assets 3,235,546 4,436,259 86,090 1,223,098 21,517 Current assets 1,901,937 2,775,111 162,189 17,449 35,729 Non-current liabilities 1,177,743 1,180,316 68,028 519,135 8,426 Current liabilities 2,154,792 5,410,680 75,719 234,202 31,237 Equity 1,804,948 620,374 104,532 487,211 17,583 - Group Share 1,787,113 620,249 60,154 487,211 17,583 - Minority interests 17,835 125 44,378 0 0 Dividend distributed to minority interests 0 0 0 -21,778 0 Note 16: Lease 1. Lessor Bank Van Breda is active in the sector of car finance and finance leasing of cars via its division Van Breda Car Finance. We refer to Note 13 for more information. 198 | Your partner for sustainable growth 2. Lessee (€ 1,000) 2021 2020 Assets Tangible assets 179,290 165,858 Land and buildings 130,674 121,572 Plant, machinery and equipment 9,919 7,922 Furniture and vehicles 38,696 36,364 Investment property 4,181 4,207 Total - Assets 183,471 170,065 Liabilities Equity - group share -2,242 -1,967 Financial debts 185,712 172,031 Non-current lease debts 149,514 138,093 Current lease debts 36,198 33,939 Total - Liabilities 183,471 170,065 As a result of the application of IFRS 16 Leases, the group recognized on December 31, 2021 a right-of-use asset of 183.5 million euros and a lease obligation of 185.7 million euros, of which 70% is attributable to CFE/DEME and 22% to An- ima. CFE has used discount rates which were set at 3.5% for buildings, 3.0% for equip- ment and 2.0% for leasing cars. DEME applied a range of discount rates for the short term leases of (0.95% - 1.7%) and for the long term leases (2.16% - 3.15%). The discount rate used for the buildings of Anima fluctuates between 0.60% and 2%. We refer to: • Acquisitions of right-of-use assets during 2021 amounted to 59.6 million euros (Note 9 Tangible assets). • Cashflow statement (Note 6. Segment information). (€ 1,000) 2021 2020 Income statement Reversal of rental charges 38,922 36,273 Depreciation -36,859 -34,887 Interest expenses -2,508 -2,902 The depreciation cost primarily relates to land and buildings. The expenses related to short-term lease contracts and low value lease contracts are considered imma- terial. There are no expenses incurred which relate to variable lease payments. Income derived from sub-leasing right-of-use assets is considered immaterial. Note 17: Provisions (€ 1,000) Warranty provisions Legal pro- ceeding provisions Environmental provisions Provisions for restructuring Provisions for contractual obligations Other provisions Total Provisions - financial year 2020 Provisions, opening balance 16,380 7,447 0 2,390 8,994 48,031 83,242 Additional provisions 1,757 1,279 0 1,542 0 2,704 7,282 Increase of existing provisions 389 0 0 0 472 1,741 2,602 Increase through business combinations 0 0 0 0 0 0 0 Amounts of provisions used (-) -1,992 -337 0 -591 -1,197 -3,040 -7,157 Reversal of unused amounts of provisions (-) 0 -87 0 0 0 -1,020 -1,107 Decrease through business disposals (-) 0 0 0 -571 0 86 -485 Foreign currency exchange increase (decrease) -113 -13 0 -42 0 -218 -387 Transfer from (to) other items 569 -430 0 581 0 -427 293 Other increase (decrease) 0 0 0 0 0 -26 -26 Provisions, ending balance 16,990 7,859 0 3,309 8,269 47,830 84,257 Annual report 2021 | 199 (€ 1,000) Warranty provisions Legal pro- ceeding provisions Environmental provisions Provisions for restructuring Provisions for contractual obligations Other provisions Total Provisions - financial year 2021 Provisions, opening balance 16,990 7,859 0 3,309 8,269 47,830 84,257 Additional provisions 1,409 393 0 1,059 209 9,628 12,698 Increase of existing provisions 0 0 0 0 20 571 590 Increase through business combinations 0 16 0 0 0 0 16 Amounts of provisions used (-) -2,060 -905 0 -2,435 -2,712 -8,093 -16,205 Reversal of unused amounts of provisions (-) -61 0 0 0 -18 -2,737 -2,815 Decrease through business disposals (-) -253 0 0 0 0 0 -253 Foreign currency exchange increase (decrease) -13 -13 0 0 0 -42 -68 Transfer from (to) other items 0 -1,000 0 0 0 3,613 2,613 Other increase (decrease) 0 0 0 0 0 -14 -14 Provisions, ending balance 16,012 6,349 0 1,933 5,768 50,757 80,819 The acquisition of control over CFE at year-end 2013 gave rise to the recognition of a contingent liability for risks of 60.3 million euros in connection with CFE’s construction and real estate development activities. In the course of 2014-2020, 45.3 million euros (group share 27.4 million euros) was reversed because the risks in question at CFE were either no longer present or were included in CFE’s own financial statements. This amount was further reduced in 2021 by 2.5 million euros (group share 1.5 million euros). Bank Van Breda respectively used and released 5.7 million euros in provisions fol- lowing the end of a discussion regarding VAT and the full internalisation of its IT infrastructure. The other evolutions are largely attributable to variations within CFE's accounts. The ‘Other provisions’ furthermore consist of provisions for negative equity method consolidation values to the amount of 12.6 million euros. Several group companies of AvH (such as DEME, CFE, Agidens...) are actively in- volved in the execution of projects. This always entails a certain operational risk, but also means that certain estimates of profitability need to be made at the end of such a project. This risk is inherent to the activity, as well as the risk of disagree- ments with customers over divergent costs or changes in execution and the collec- tion of these receivables. DEME is involved, both as claimant and as defendant, in discussions with customers about the financial consequences of deviations in the execution of contracting projects. In a small number of cases they may result in lawsuits. In so far as the consequences of such lawsuits can be reliably estimated, provisions are made for this in the accounts. Following contingent assets and liabilities are related to DEME: • As publicly known, the Public Prosecutor’s office has started an investigation in 2016 into the circumstances under which a contract was awarded in April 2014 in the context of a private tender to Mordraga, a Russian joint venture company of the DEME group, for the execution of dredging works in the port of Sabetta (Russia). The works were carried out in the summer months of 2014 and 2015. The contract was completed in 2016. The investigation was initiated after a complaint was filed by a competitor who was not awarded the contract in ques- tion, and is based exclusively on selective information provided by this compet- itor. The Public Prosecutor summoned certain companies and (former) staff members of the DEME group at the end of December 2020 to appear before the Council Chamber. The Council Chamber decided on February 21, 2022 to refer the case to the competent court. An appeal is lodged against the decision of the Council Chamber. It should be emphasised that the Council Chamber does not pronounce any judgment on the merits of the case, but merely rules on the ques- tion whether or not there are sufficient incriminating elements to have a case judged on its merits by the competent court. In light of the foregoing, DEME cannot for the time being make a reliable assessment of the possible financial impact of the pending investigation. DEME remains confident about the further development of the procedure. • In 2018, the Group was involved in a litigation against Rijkswaterstaat in the Netherlands related to the execution of the Juliana Canal widening project. Based on the available information, DEME cannot make a reliable assessment of the financial consequences of this litigation. Despite discussions about the execution of the Juliana Canal widening project taking place with the client Rijkswaterstaat, the issue has not been settled yet. • DEME is involved in legal proceedings initiated by the Dutch Waterboard (het Waterschap Vallei en Veluwe) against a consortium of which DEME is a member, due to allegedly unauthorized activities on the project Eemdijk. The outcome of the aforementioned pending legal proceedings is not expected to have a mate- rial impact. 200 | Your partner for sustainable growth Note 18: Financial debts (€ 1,000) < 1 year 1 year5 years > 5 years Total 2021 < 1 year 1 year5 years > 5 years Total 2020 Remaining term Remaining term I. Financial debts Bank loans 527,129 917,939 107,634 1,552,702 319,771 1,039,365 356,243 1,715,379 Bonds 74,819 171,345 0 246,164 0 142,363 99,571 241,934 Subordinated loans 33,527 59,995 1,630 95,152 20,974 43,050 1,630 65,655 Lease debts 36,198 73,329 76,184 185,712 33,939 68,640 69,453 172,031 Other financial debts 290,047 11,615 226 301,887 315,181 46,955 2,215 364,351 Total 961,720 1,234,224 185,675 2,381,618 689,864 1,340,373 529,113 2,559,350 The financial debts, except for a limited debt at AvH level, are attributable to the fully consolidated participations. Those participations are, taking into account their own creditworthiness, responsible for obtaining market terms from lenders. The participation should also assess on a case-by-case basis whether debt instruments, subject to variable interest rates and/or foreign currency fluctuations, require hedg- ing so as to retain an acceptable residual risk. The long-term financial debts amounted to 1,419.9 million euros and the short- term debts came to 961.7 million euros at year-end 2021. This means a substantial decrease by 177.7 million euros in 2021, of which 189.7 million euros at DEME. This debt position should be seen in conjunction with the substantial cash and cash equivalents that are held by the group. Cash and cash equivalents increased by 41.3 million euros in 2021 to 883.7 million euros, of which 726.5 million euros relates to the “Marine Engineering & Contract- ing” segment. The favourable business situation did in fact allow DEME to improve its net financial position by 96.4 million euros. At year-end 2021, the following participations had outstanding bond debts after one year: BPI (CFE Group): 29.9 million euros, Rent-A-Port 30.6 million euros and Nextensa 185.7 million euros. The subordinated loans of 95.2 million euros in the “Marine Engineering & Contracting” segment were contracted by DEME for spe- cific financing of new vessels. The other short-term financial debts include the is- sues of commercial paper, which at year-end totalled 290 million euros (DEME: 0 million euros, CFE: 69 million euros, Nextensa: 179 million euros, and AvH: 42 million euros). Liquidity risk The financial debts, after intercompany elimination, relate to the following segments: (€ 1,000) ST LT Marine Engineering & Contracting 529,567 721,091 Private Banking (IFRS 16 leases) 2,516 5,673 Real Estate & Senior Care 383,659 700,141 Energy & Resources 0 0 AvH & Growth Capital 46,727 11,970 Intercompany -750 -18,976 Total 961,720 1,419,899 Against the short-term financial debts of 961.7 million euros, there are cash and cash equivalents worth 883.7 million euros. DEME’s liquidity risk is limited by spreading the financing over several banks and by preference over the long term. DEME has major credit and guarantee lines with a whole string of international banks. Certain ratios (covenants) were agreed in the loan agreements with the relevant banks which DEME must observe. This was the case at year end 2021. In addition, it has a commercial paper programme to cover short-term financial needs. DEME predominantly invests in equipment with a long life which is depreciated over several years. For that reason, DEME seeks to schedule a substantial part of its debts over a long term. CFE finances its construction and real estate development activities with bank loans, commercial paper and the bond of 30 million euros (maturing at the end of 2022) issued in 2017 by BPI, CFE’s real estate development entity. Both DEME and CFE had a substantial cash position (cash and cash equivalents) at year-end 2021. The Rent-A-Port group is financed primarily by equity, a bond and bank and shareholder loans. Infra Asia Investment Fund, a 50%-participation accounted for using the equity method, issued in 2016 a (non-recourse) bond worth 29.2 million euros + 1.8 million USD to finance the activities in Vietnam. The bond has a seven- year maturity. Most bank and shareholder loans were taken out in the long term at fixed interest rates. During the fourth quarter, AvH and CFE increased the capital of Rent-A-Port by 11.5 million euros jointly. Rent-A-Port used this money to finance the redemption of shareholder loans to IAI. Nextensa possesses with its banks the necessary long-term credit facilities and backup lines for its commercial paper to cover present and future investment needs. Those credit facilities and backup lines serve to hedge the financing risk. The liquidity risk is limited by having the financing spread over several financial counterparties and by tapping various sources of funding, as well as by diversifying the expiration dates of the credit facilities. On November 20, 2019, Nextensa closed a private placement of bonds with seven- year maturity and a fixed annual coupon of 1.95% for an amount of 100 million euros. Its subsidiary, Extensa Group, had previously closed two private placements for an amount of 45 million euros (fixed interest rate of 3.00% and maturing on June 29, 2022) and of 40 million euros (fixed interest rate 3.38% and maturing on June 5, 2024). The amounts drawn down on the bilateral bank loans were 415.0 million euros in the long term and 134.4 million euros in the short term at year-end 2021. The expansion of Anima by the acquisition of existing residences and the con- struction of new retirement homes is financed by the company’s own cash re- sources, external financing and, where appropriate, a capital increase. The cash drain in the start-up phase is taken into account in the financing of the projects. Anima owns a large part of its real estate, which it can sell in function of its financ- ing needs. Annual report 2021 | 201 The financial debts reported by the AvH & Growth Capital segment are attributable to the debt of Agidens, Biolectric Group and AvH & subholdings. The debts of Agidens relate to the financing of the main building, the leases of cars and a straight loan regarding working capital management. The financial debts of Bio- lectric relate to its headquarters, its working capital and the biogas installations that remain in ownership of Biolectric so to operate them and to sell the electricity produced to farmers. The short term financial debts of AvH & subholdings, mainly correspond to the commercial paper issued by AvH. AvH disposes of confirmed credit lines (280 mil- lion euros), spread over different banks, which largely exceed the existing commer- cial paper liabilities. Several fully consolidated companies have agreed on certain ratios (covenants) in their credit agreements and these were respected end on December, 31 2021. (€ 1,000) 2021 2020 II. Amounts payable (or the portion thereof), which are guaranteed by real guarantees given or irrev- ocably promised on the assets of the enterprises included in the consolidation Bank loans 323,602 321,955 Bonds 30,612 28,358 Lease debts 0 0 Other financial debts 0 0 Total 354,213 350,313 Note 19: Banks – debts to credit institutions, clients and securities (€ 1,000) Fair value Book value 2021 2020 2021 2020 Debts to credit institutions and central banks 424,484 325,163 425,353 327,292 Debts to clients 6,378,531 5,929,064 6,368,123 5,907,102 - of which subordinated 10,234 10,676 9,883 9,870 Securities including bonds 256,321 263,218 245,395 249,959 - of which subordinated 50,745 53,209 40,216 40,196 7,059,336 6,517,445 7,038,871 6,484,353 (€ 1,000) 2021 2020 Debts to credit institutions and central banks Current accounts / overnight deposits 13,869 12,211 Deposits with agreed maturity 16,531 16,518 ECB TLTRO III 394,847 298,417 Accrued interests 106 146 Total 425,353 327,292 Debts to clients Current accounts / overnight deposits 4,218,578 3,589,527 Deposits with agreed maturity 1,045,537 1,243,990 Special deposits 64,876 59,255 Regulated deposits 1,029,249 1,004,459 Subordinated certificats 9,883 9,870 Total 6,368,123 5,907,102 Securities including bonds Debt certificates 205,178 209,763 Subordinated bonds 40,216 40,196 Total 245,395 249,959 Total debts to credit institutions, clients and securities 7,038,871 6,484,353 202 | Your partner for sustainable growth The full consolidation of Bank Van Breda results in the recording of specific bank receivables and debts in the balance sheet of AvH. These items were grouped for maximum transparency of the balance sheet. Liquidity risk Bank Van Breda Liquidity risk is the risk that the bank has insufficient funds available, or is unable to release funds quickly enough and at a reasonable cost to meet its short-term commitments. The commercial banking activities are the main source of liquidity risk. A bank’s sources of funding traditionally have a shorter maturity than the financed assets, resulting in a maturity mismatch. The liquidity management of Bank Van Breda constantly monitors this mismatch and works out a financing strategy to confine it within the guidelines that are set out in a liquidity control framework. In this area, too, the bank pursues a deliberately low risk profile. Bank Van Breda maintains a solid and high-quality liquidity buffer to absorb fluctuations in the treasury position. This buffer stands at 1,470 million euros and consists pri- marily of cash, placed at the ECB, and a highly liquid portfolio of bonds. The bank’s financing mix is very stable, with the deposits of the core clients as the main source of funding. The core clients use the bank for their investments and everyday banking transactions. The bank also closely watches the loan-to-deposit ratio and applies strict limits to this ratio between client credit portfolio and client deposits, which at year-end 2021 stood at 90%. Dependence on external institu- tional financing is kept to a minimum and in 2021 accounted for only 3.5% of total assets. A subordinated bond was placed within the bank's EMTN programme in November 2018. An amount of 40 million euros was raised, with the aim of diversifying pru- dential equity. In 2020 and 2021, the bank participated in “Targeted Longer-Term Refinancing Operations” programmes (TLTRO-III), ECB instruments that encourage banks to provide loans to businesses and consumers, to the amount of 300 million euros and 100 million euros respectively. Two liquidity ratios were introduced in the Basel regulations and the CRR/CRD IV directive: • The LCR (Liquidity Coverage Ratio) is a criterion for the liquidity position under an acute stress scenario over 30 days. It requires financial institutions to hold sufficient high-quality liquid assets. The regulator imposes a limit of at least 100%. • The NSFR (Net Stable Funding Ratio) contrasts the available amount of stable funding with the required amount of stable funding over a one-year period. The Basel III-guidelines impose a limit of at least 100% as from 2018. The European implementation became effective in June 2021. At year-end 2021, those ratios stood at 160% and 135% respectively. Both ratios are well above the lower limit of 100% that is imposed by the regulatory authority. The bank’s liquidity risk is monitored constantly by means of proactive treasury management, within the lines defined by the Asset & Liability Management and the investment framework. For its liquidity management, the bank uses, among other things, liquidity gap reports, ratio analysis and short- and long-term volume prognoses. In the following table the assets and liabilities are grouped by maturity period and internal assumptions for deposits without maturity date were taken into account. (€ 1,000) < 1 month 1-3 months 3-12 months 1-5 years 5-10 years > 10 years Indefinite 31/12/2021 Assets 1,686,000 209,000 870,000 2,764,000 1,588,000 553,000 39,000 Liabilities -981,000 -929,000 -2,460,000 -1,447,000 -925,000 -286,000 -63,000 Derivatives -1,000 -2,000 -7,000 -14,000 -4,000 0 0 Liquidity Gap 704,000 -722,000 -1,597,000 1,303,000 659,000 267,000 -24,000 31/12/2020 Assets 1,447,000 246,000 756,000 2,610,000 1,458,000 559,000 37,000 Liabilities -908,000 -802,000 -1,940,000 -1,800,000 -834,000 -202,000 -67,000 Derivatives -1,000 -2,000 -7,000 -30,000 -13,000 -1,000 0 Liquidity Gap 538,000 -558,000 -1,191,000 780,000 611,000 356,000 -30,000 Annual report 2021 | 203 Note 20: Financial instruments Interest rate risk Bank Van Breda Interest rate risk can be defined as the extent to which the results or value of a financial transaction are affected by a change in market interest rates. Applied to a financial institution, interest rate risk is the extent to which the (interest) earnings and/or fair value of this institution is liable to be adversely affected by a change in market interest rates. The bank opts to keep the interest rate risk at a relatively low level: • The bank uses hedging instruments to correct the mismatch. This is done with a combination of interest rate swaps (which convert variable interest rate commit- ments into fixed rate commitments) and options (which provide protection against a rise in interest rates above given levels). • Equity value sensitivity is the exposure of the company’s economic value to un- favourable interest rate fluctuations. Earnings sensitivity is the exposure of the bank’s (interest) earnings to those same unfavourable interest rate fluctuations. Its intensity can be seen in the duration gap. By this is meant the difference in duration of all assets and duration of all liabilities (mismatch), the duration being the weighted average of the maturities of a set of fixed-interest securities. equity value sensitivity and earnings sensitivity are monitored by means of scenario analyses that take account of changing market conditions, enabling the impact of stress scenarios to be analysed. This equity value and earnings sensitivity is meas- ured using the Basis Point Value (BPV) methodology which shows the value change of the portfolio being analyzed when confronted with an increase in interest rates over the entire curve. Impact of an immediate increase of the yield curve with 100 base points (1%) on: 2021 2020 The interest result 4,907 6,436 (earnings sensitivity) The faire value of the equity -47,409 -26,156 (equity value sensitivity) (= BPV) For the interest gap analysis both balance sheet and off balance sheet products are grouped together per period of maturity. In this way the mismatch structure becomes visible. (€ 1,000) ≤ 1 month 1-3 months 3-12 months 1-5 years 5-10 years > 10 years Indefinite 31/12/2021 Assets 1,786,000 414,000 1,126,000 2,775,000 1,210,000 345,000 48,000 Liabilities -979,000 -931,000 -2,457,000 -1,491,000 -894,000 -295,000 -37,000 Derivatives 270,000 515,000 -80,000 -355,000 -310,000 -40,000 0 Interest Gap 1,077,000 -2,000 -1,411,000 929,000 6,000 10,000 11,000 31/12/2020 Assets 1,541,000 466,000 1,049,000 2,718,000 992,000 301,000 43,000 Liabilities -907,000 -803,000 -1,935,000 -1,843,000 -804,000 -211,000 -41,000 Derivatives 260,000 530,000 -30,000 -330,000 -335,000 -95,000 0 Interest Gap 894,000 193,000 -916,000 545,000 -147,000 -5,000 2,000 Interest rate risk other fully consolidated participations The interest rate risk within the CFE group is managed according to the type of activity. The Contracting activities are characterized by an excess of cash which partially compensates the property commitments. Cash management is mainly cen- tralized through the cash pooling. DEME faces substantial financing levels for the acquisition of dredging vessels. DEME uses interest rate swaps to achieve the best possible balance between financing costs and the volatility of the financial results. The Rent-A-Port group is financed primarily by equity, a bond, and bank and shareholder loans with fixed interest rates, which means that the interest rate risk is fairly limited. Infra Asia Investment Fund, a 50%-participation accounted for using the equity method, issued in 2016 a (non-recourse) bond worth 29.2 million euros + 1.8 million USD to finance the activities in Vietnam. The bond has a seven- year maturity and has a fixed interest rate. A cross-currency swap, which qualifies as a cash flow hedging instrument, was concluded to cover the exchange risk (USD) on both the capital and interest flows. The hedging policy of Nextensa is to ringfence the interest rate risks for approxi- mately 75% of the financial debt for a period of 4-5 years and approximately 50% for the following 5 years. During the past few years, Nextensa issued bonds for a nominal amount of 185 million euros at fixed interest rates (1.95% for the invest- ment portfolio and 3.00%-3.38% for real estate developments). Nextensa’s other debt financing is based on a variable interest rate, where there is a risk of an in- crease in financial costs if interest rates escalate. This interest rate risk is covered by financial instruments such as interest rate swaps. At year-end 2021, the hedge ratio was 67%. Anima covers its interest rate risk by borrowing against a fixed interest rate to the maximum extent. At the end of 2021, the outstanding balance in loans with a variable interest rate represented 5% of the total financial debt. The financial debts of the AvH & Growth Capital segment consist of the com- mercial paper issued by AvH (42.0 million euros) and the debt entered into by Agidens and Biolectric for the lease of the head office and the funding of working capital. No interest hedging contracts were outstanding at the 2021 year end. Sensitivity analysis for the interest rate risk If Euribor rises by 50 base points this will mean an interest charge increase of 1.3 million euros (CFE-DEME), 0.4 million euros (Nextensa), 0.1 million euros (Anima), 0.1 million euros (Agidens), 0.1 million euros (Biolectric) and 0.2 million euros (AvH & subholdings). However, this does not take into account the impact we would observe on the assets. 204 | Your partner for sustainable growth (€ 1,000) Notional amount 2021 Book value 2021 Notional amount 2020 Book value 2020 I. Interest rate hedges Assets Fair value hedges - Bank Van Breda 40,000 568 5,000 591 Cash flow hedges 0 0 25,696 1,790 Hedging instruments that do not meet the requirements of cash flow hedging 140,000 684 130,000 33 Accrued interest 0 0 Total 1,252 2,414 Liabilities Fair value hedges - Bank Van Breda 745,000 -28,687 805,000 -54,179 Cash flow hedges 930,226 -20,454 1,151,581 -38,033 Hedging instruments that do not meet the requirements of cash flow hedging 280,000 -5,599 310,000 -10,633 Accrued interest 0 0 Total -54,740 -102,845 II. Currency hedges Assets 183,934 2,043 253,969 8,175 Liabilities 1,354,132 -35,295 373,588 -1,605 -33,252 6,570 III. Commodity risks Assets 2,651 1,088 Liabilities -314 -1,787 2,337 -699 Reconciliation with consolidated balance sheet Asset side Asset side Non-current hedging instruments 1,816 3,279 Current hedging instruments 4,129 8,399 5,945 11,678 Liability side Liability side Non-current hedging instruments -74,034 -97,324 Current hedging instruments -16,315 -8,914 -90,348 -106,237 The interest rate risk of Bank Van Breda and the other fully consolidated partic- ipations is discussed in Note 20 Financial instruments. We refer to Note 12 for a description of the currency risk. The financial instru- ments to hedge this risk are used primarily by the fully consolidated participations DEME and Bank Van Breda. The currency positions which Bank Van Breda holds through forward exchange transactions arise from the activities of its clients. The bank hedges outstanding positions on an interbank basis so that no material ex- change rate risk can arise. The table below gives an overview of the relevant financial instruments used at DEME: (€ 1,000) Notional value USD US Dollar SGD Singapore Dollar PLN Polish Zloty GBP GB Pound EGP Egyptian Pound Other Total Term purchases 42,283 50,360 74,470 0 0 16,821 183,934 Term sales 1,156,536 0 73,035 44,025 68,760 11,776 1,354,132 (€ 1,000) Fair value USD US Dollar SGD Singapore Dollar PLN Polish Zloty GBP GB Pound EGP Egyptian Pound Other Total Term purchases 561 363 943 0 0 176 2,043 Term sales 32,816 0 879 393 1,121 85 35,295 Sensitivity analysis for the currency risk DEME - 2021 (€ 1,000) Impact of the sensitivity calculation- depreciation of 5% of the euro Impact of the sensitivity calculation- appreciation of 5% of the euro Balance sheet impact (+ is debit / - is credit) Non-current interest-bearing debts (+ current portion due in the the year) after accounting hedge 0 0 Net short-term financial debts 2,593 -2,346 Outstanding trade receivables & payables after accounting hedge 294 -294 Annual report 2021 | 205 Sensitivity analysis for the currency risk DEME - 2020 (€ 1,000) Impact of the sensitivity calculation- depreciation of 5% of the euro Impact of the sensitivity calculation- appreciation of 5% of the euro Balance sheet impact (+ is debit / - is credit) Non-current interest-bearing debts (+ current portion due in the the year) after accounting hedge 0 0 Net short-term financial debts 4,605 -4,167 Outstanding trade receivables & payables after accounting hedge 440 -440 Commodity risks are also linked to DEME, which hedges against oil price fluc- tuations by entering into forward contracts. Note 21: Taxes 1. Recognized deferred tax assets and liabilities (€ 1,000) Assets 2021 Liabilities 2021 Net 2021 Assets 2020 Liabilities 2020 Net 2020 Intangible assets 27 26,470 -26,443 23 26,068 -26,046 Tangible assets 26,979 68,382 -41,403 28,365 75,305 -46,940 Investment property 167 34,768 -34,601 0 25,790 -25,790 Financial fixed assets 0 4,802 -4,802 0 0 0 Investments -686 0 -686 -2,798 0 -2,798 Employee benefits 16,134 867 15,267 16,129 1,076 15,052 Provisions 4,563 7,613 -3,050 6,336 22,602 -16,266 Financial derivative instruments 1,533 -4,942 6,474 3,801 364 3,436 Working capital items 59,500 63,394 -3,893 50,829 68,311 -17,482 Tax losses and tax credits / deduction for investment 68,841 -12,726 81,567 96,147 -1,349 97,497 Set-off -26,778 -26,778 0 -58,392 -58,392 0 Total 150,279 161,849 -11,570 140,439 159,777 -19,338 Deferred taxes are mainly due to the revaluation of assets and liabilities as a result of business combinations. The Group regularly assesses its uncertain tax positions. In accordance with IFRIC 23, and where appropriate, provisions are made which are recorded under the deferred tax liabilities. The item ‘Set-off’ reflects the set-off between deferred tax assets and liabilities per entity at DEME. 2. Unrecognized deferred tax assets (€ 1,000) 2021 2020 Unrecognized receivables following tax losses 145,645 85,631 Other unrecognized deferred tax assets (1) 0 0 Total 145,645 85,631 (1) The other unrecognized deferred tax assets principally concern amounts whose recuperation is restricted in time and dependent upon the extent to which taxable results can be achieved within this period. Claims which stem from the reclamation of unapplied taxable fixed income surplus are not mentioned in this overview. 3. Current and deferred tax expenses (income) (€ 1,000) 2021 2020 Current income tax expense, net Current period tax expense -90,272 -101,777 Adjustments to current tax of prior periods 5,199 10,342 Total -85,073 -91,435 Deferred taxes, net Origination and reversal of temporary differences 4,787 44,769 Additions (use) of tax losses 920 265 Other deferred taxes -83 -341 Total 5,624 44,693 Total current and deferred tax (expenses) income -79,449 -46,742 206 | Your partner for sustainable growth 4. Reconciliation of statutory tax to effective tax (€ 1,000) 2021 2020 Profit (loss) before taxes 591,659 324,356 Profit (loss) of participations accounted for using the equity method (-) -255,191 -179,253 Profit (loss) before taxes, excluding result from participations accounted for using the equity method 336,469 145,103 Statutory tax rate (%) 25.00% 25.00% Tax expense using the statutory tax rate -84,117 -36,276 Tax effect of rates in other jurisdictions -468 -8,250 Tax effect of tax-exempt revenues 39,386 33,085 Tax effect of non-deductible expenses -18,573 -9,158 Tax effect of tax losses -5,393 -23,999 Tax effect from (under) or over provisions in prior periods -9,765 -6,733 Other increase (decrease) -518 4,587 Tax expense using the effective tax rate -79,449 -46,742 Profit (loss) before taxes 591,659 324,356 Profit (loss) of participations accounted for using the equity method (-) -255,191 -179,253 Profit (loss) before taxes, excluding result from participations accounted for using the equity method 336,469 145,103 Effective tax rate (%) 23.61% 32.21% The income taxes amounted to 79.4 million euros for the full year 2021. That is 32.7 million euros more than the previous year and is in line with the group’s higher profit. As in previous years, it should be pointed out that the profit contri- bution from the equity-accounted investments is a net contribution: the taxes borne by those entities are not visible, since these contributions from equity-ac- counted investments are reported on the basis of the net result (i.e. after tax) of the entities in question. After adjustment for these equity-accounted investments, the total tax expense of 79.4 million euros represents a tax rate of 23.6%. Note 22: Share based payment 1. Equity settled stock option plan AvH as of 31 December 2021 Grant date Number options accepted Number options exercised Number options expired Balance Exercise price (€) Exercise period 2008 46,500 -44,500 -2,000 0 66.05 01/01/2012 - 02/01/2016 + 5Y 2009 49,500 -47,500 -2,000 0 37.02 01/01/2013 - 05/01/2017 2010 49,000 -47,000 -2,000 0 52.05 01/01/2014 - 04/01/2018 2011 49,000 -46,500 -2,500 0 60.81 01/01/2015 - 04/01/2019 2012 47,000 -47,000 0 56.11 01/01/2016 - 03/01/2020 2013 49,500 -49,500 0 61.71 01/01/2017 - 03/01/2021 2014 49,500 -45,500 4,000 82.32 01/01/2018 - 02/01/2022 2015 50,500 -2,000 48,500 100.23 01/01/2019 - 05/01/2023 2016 40,500 -3,000 37,500 130.95 01/01/2020 - 03/01/2024 2017 46,000 0 46,000 128.30 01/01/2021 - 12/01/2025 2018 46,000 0 -500 45,500 148.64 01/01/2022 - 11/01/2026 2019 46,000 0 46,000 132.52 01/01/2023 - 14/01/2027 2020 23,750 0 23,750 141.09 01/01/2024 - 13/01/2028 2021 55,000 0 55,000 124.67 01/01/2025 - 14/01/2029 647,750 -332,500 -9,000 306,250 AvH’s stock option plan, which was approved in March 1999, is intended to pro- vide long-term motivation for executive directors, members of the executive com- mittee and management whose activities are essential to the success of the group. The options give them the right to acquire a corresponding number of shares in Ackermans & van Haaren. The remuneration committee is responsible for monitoring this plan and selecting the beneficiaries. The options are provided free of charge and their exercise period is 8 years. The total value of the outstanding options of 2014-2021 (measured at the fair value when granted) amounts to 7.3 million euros and is calculated by an external party according to an adjusted Black & Scholes model of which the main compo- nents are: Annual report 2021 | 207 Year of grant Share price (€) Dividend yield Volatility Interest rate Estimated expected lifetime Black & Scholes Value (€) 2008 65.85 1.75% 20.24% 4.34% 5.90 17.78 2009 37.02 2.66% 42.84% 3.39% 6.50 15.47 2010 52.23 2.66% 34.34% 3.28% 7.29 16.53 2011 63.80 2.26% 23.42% 2.82% 7.22 15.77 2012 58.99 3.26% 31.65% 2.14% 7.40 15.13 2013 63.62 3.26% 25.00% 1.27% 7.84 11.26 2014 83.69 2.27% 21.00% 1.78% 7.79 15.35 2015 101.35 2.19% 19.00% 0.47% 7.79 13.76 2016 131.95 1.28% 23.00% 0.59% 7.79 27.72 2017 129.40 1.40% 23.00% 0.34% 7.79 25.70 2018 149.20 1.30% 20.00% 0.68% 7.79 27.32 2019 135.50 1.43% 20.40% 0.52% 7.90 24.92 2020 141.80 1.77% 21.00% -0.01% 7.90 22.43 2021 129.50 1.35% 24.00% -0.36% 7.90 26.59 In 2021, 55,000 new stock options were granted with an exercise price of 124.67 euros per share and 53,500 options were exercised. The fair value when granted was fixed at 1.5 million euros and is recorded in the profit and loss account over the vesting period of 4 years. To hedge those (and future) obligations AvH had a total of 345,250 shares in portfolio at the end of 2021. 2. Cash settled stock option plans at consolidated subsidiaries of AvH The beneficiaries of the option plans of Delen Private Bank, Bank Van Breda, An- ima, Agidens and Turbo's Hoet Groep have a put option on the respective parent companies FinAx/Promofi, AvH and AvH Growth Capital (these companies have call options and a pre-emption right to prevent the shares from being transferred to third parties). These option plans concern shares which are not listed on a stock exchange and whose value is determined in the option plan. The valuation of the option price is (depending on the option plan) based on the growth of the equity, a multiple on the growth of the consolidated profit or a market valuation of the company. These option plans are accounted for in accordance with IFRS 2, and as such a liability is recorded in the balance sheet. The liabilities are reviewed as a result of an exercise, a regranting or modification of the parameters. These in- or decreases of the liability result respectively in a loss or profit in the income statement. The total liability of the option plans of the fully consolidated subsidiaries as of 31 December 2021 amounts to 25,0 million euros, included in the other non-current liabilities. 3. Treasury shares In 2021, AvH has purchased 55,000 treasury shares in order to hedge options for the benefit of staff. Over the same period, beneficiaries of the share option plan exercised options on 53,500 AvH shares. On December 31, 2021, 306,250 options were outstanding on AvH shares. In order to hedge these (and future) obligations, AvH owned 345,250 treasury shares on that date. In addition, 211,979 AvH shares were purchased and 216,604 shares were sold in 2021 in the context of the contract that AvH entered into with Kepler Cheuvreux in order to support the liquidity of the AvH share. These transactions are initiated entirely autonomously by Kepler Cheuvreux, but as they take place on behalf of AvH, the net sale of 4,625 AvH shares has an impact on AvH’s equity. On De- cember 31, 2021, the number of treasury shares in the portfolio in the context of this liquidity agreement amounts to 1,842. Treasury shares as part of the stock option plan 2021 2020 Treasury shares as part of the liquidity contract 2021 2020 Opening balance 343,750 363,000 Opening balance 6,467 5,528 Acquisition of treasury shares 55,000 42,750 Acquisition of treasury shares 211,979 102,607 Disposal of treasury shares -53,500 -62,000 Disposal of treasury shares -216,604 -101,668 Ending balance 345,250 343,750 Ending balance 1,842 6,467 208 | Your partner for sustainable growth Note 23: Rights and commitments not reflected in the balance sheet 1. Rights and commitments not reflected in the balance sheet, excluding CFE-DEME (€ 1,000) 2021 2020 Amount of personal guarantees, given or irrevocably promised by the enterprises included in the consolidation, as security for debts or commitments 315,063 297,699 Amount of real guarantees, given or irrevocably promised by the enterprises included in the consolidation on their own assets, as security for debts and commitments of enterprises included in the consolidation 588,793 609,745 Goods and values, not disclosed in the balance sheet, held by third parties in their own name but at risk to and for the benefit of the enterprise 0 0 Commitments to acquire fixed assets 177,449 105,352 Commitments to dispose of fixed assets 291,336 255,134 Rights and commitments not reflected in the balance sheet of banks (Bank J.Van Breda & C°) - Loan commitments 489,579 428,410 - Financial guarantees 52,181 62,943 - Repo transactions + collateral 401,700 303,426 The personal guarantees in 2021 are represented by 31.7 million euros in guaran- tees for Nextensa real estate projects and 2.9 million euros in guarantees for Agidens projects. The balance of 280.5 million euros mainly concerns guarantees entered into by AvH & subholdings relating to the sale of participations. The real guarantees concern 197.6 million euros in guarantees put up by Nextensa regarding the financing of its activities in land and real estate development and 44.9 million euros in the scope of Rent-A-Port development projects. In addition, there are 337.5 million euros in guarantees from Anima for real estate financing, 4.3 million euros from Agidens and 4.5 million euros from Biolectric (regarding the financing of their respective headquarter). The commitments to acquire fixed assets concern options as part of stock option plans or options as part of shareholders’ agreements as well as the agreement that Rent-A-Port concluded at year-end 2021 to acquire an additional 32.6% stake in IAI, together totalling 177.4 million euros. The commitments to dispose of fixed assets are for call options (including condi- tional options) on the assets of AvH & Growth Capital for the amount of 291.3 million euros. The off-balance-sheet commitments of Bank Van Breda consist primarily of the unused part of loans/credit lines granted. Bank guarantees, security loans and doc- umentary credits have also been granted to clients. These off-balance-sheet com- mitments are also taken into account in the assessment of the credit risk. No higher drawdowns on the credit lines have been reported during the coronavirus crisis; the amount of unused credit lines remained stable. Bank Van Breda has also given certain real guarantees on its own behalf: a number of bonds from the investment portfolio have been pledged in the context of the TLTRO borrowings from the ECB and for the use of the Bancontact Payconiq pay- ment system. 2. Rights and commitments not reflected in the balance sheet CFE-DEME (€ 1,000) 2021 2020 Commitments Performance guarantees and performance bonds (1) 1,477,797 1,388,480 Bid bonds (2) 15,721 18,144 Repayment of advance payments (3) 0 0 Retentions (4) 36,950 19,724 Deferred payments to subcontractors and suppliers (5) 43,311 37,561 Other commitments given - including 49,554 thousand euros of corporate guarantees at DEME 51,177 102,199 Amount of real guarantees, given or irrevocably promised by the enterprises included in the consolidation on their own assets, as security for debts and commitments of enterprises included in the consolidation (6) 18,281 55,686 Total 1,643,237 1,621,794 Rights Performance guarantees and performance bonds 301,481 435,733 Other commitments received 13,101 4,361 Total 314,582 440,094 (1) Guarantees given in relation to the performance of works contracts. If the construction entity fails to perform, the bank (or insurance company) undertakes to compensate the customer to the extent of the guarantee. (2) Guarantees provided as part of tenders. (3) Guarantees provided by a bank to a customer guaranteeing the repayment of advance payments in relation to contracts (mainly at DEME). (4) Security provided by a bank to a client to replace the use of retention money. (5) Guarantee covering the settlement of a liability to a supplier or subcontractor. (6) Collateral security worth 9.4 million euros at DEME as part of the financing for the fleet. Annual report 2021 | 209 Note 24: Employment 1. Average number of persons employed 2021 2020 Employees 6,836 7,053 Workers 4,074 4,264 2. Personnel charges (€ 1,000) 2021 2020 Remuneration and social charges -846,764 -792,566 Pension expenses (defined contribution and defined benefit plans) -22,998 -22,291 Share based payment -7,928 -1,732 Total -877,690 -816,589 The personnel charges increased by approximately 7.5%. This increase is explained by the generally higher level of activity and lower economic unemployment com- pared to the (Covid) year 2020. The increased profitability at the subsidiaries also gave rise to a higher cost of the option plans. At the headquarters of AvH 37 persons are employed. A pro forma headcount of 22,653 is cited in the section '2021 at a glance' (page 8). This pro forma figure comprises the staff of all participations held by the AvH group, and therefore devi- ates from the average headcount reported above which is based on the IFRS con- solidation, which was drawn up on the basis of the consolidation scope reported in Note 2 and 3. In this pro forma presentation, all (exclusive) control interests are incorporated in full and the other interests proportionally. Note 25: Raw materials, consumables, services and subcontracted work (€ 1,000) 2021 2020 Raw materials and consumables used -2,088,071 -1,983,486 Changes in inventories of finished goods, raw materials & consumables -4,154 -25,327 General and administrative expenses, including subcontracted work -581,717 -523,196 Total -2,673,943 -2,532,009 These costs vary according to the turnover, but also depend on a number of other factors, including and more specifically in the case of DEME/CFE, the nature of the work performed (execution only, EPC, …) and its contractual structure (subcon- tractors, sole contractor or joint ventures, …). Note 26: Pension liabilities 1. Defined benefit pension plans (€ 1,000) 2021 2020 1. Amounts as recorded in the balance sheet Net funded defined benefit plan (obligation) asset -73,201 -73,049 Present value of wholly or partially funded obligations (-) -358,746 -368,346 Fair value of plan assets 285,545 295,297 Defined benefit plan (obligation) asset, total -73,201 -73,049 Liabilities (-) -76,668 -77,355 Assets 3,467 4,306 (€ 1,000) 2021 2020 Defined benefit pension plans -76,668 -77,355 Other pension obligations (early retirement) -5,376 -6,237 Total pension obligations -82,044 -83,592 Total pension assets 3,467 4,306 210 | Your partner for sustainable growth Movements in plan assets (obligations) as recorded in the balance sheet Net defined benefit plan asset (obligation) recorded in the balance sheet, opening balance -73,049 -65,984 Increase (decrease) from business combinations/disposals 0 0 Net defined benefit cost recorded in the income statement -21,382 -20,182 Net defined benefit cost recorded in ‘Other Comprehensive Income’ 687 -6,969 Contributions from employer / employee 20,336 19,947 Other increase (decrease) 208 139 Net defined benefit plan asset (obligation) recorded in the balance sheet, ending balance -73,201 -73,049 2a. Net cost recorded in the income statement -21,382 -20,182 Current service cost -21,031 -20,063 Interest cost -1,663 -2,416 Interest income on plan assets (-) 1,394 2,036 Past service cost -82 261 2b. Net cost recorded in ‘Other Comprehensive Income’ 687 -6,969 Actuarial gains/(losses) recognised in ‘Other Comprehensive Income’ 7,189 -13,476 Return on plan assets, excluding interest income (-) -6,455 5,877 Exchange differences 0 17 Other -48 614 3a. Movements in defined benefit plan obligations Defined benefit plan obligations recorded in the balance sheet, opening balance -368,346 -351,378 Increase as a result of business combinations 0 0 Decrease as a result of business disposals 3,167 0 Current service cost -21,031 -20,063 Interest cost -1,663 -2,416 Contributions from employee -913 -1,213 Benefit payments (-) 20,265 17,254 Remeasurement (gains)/losses (net) 7,189 -13,476 of which: actuarial (gains)/losses on DBO arising from changes in demographic assumptions -7,449 -176 of which: actuarial (gains)/losses on DBO arising from changes in financial assumptions 17,788 -8,647 of which: actuarial (gains)/losses on DBO arising from experience -3,150 -4,653 Past service cost 0 364 Exchange differences 0 17 Other increase (decrease) 2,586 2,565 Defined benefit plan obligations recorded in the balance sheet, ending balance -358,746 -368,346 3b. Movements in plan assets Fair value of the plan assets, opening balance 295,297 285,395 Increase as a result of business combinations 0 0 Decrease through business disposals -3,054 0 Return on plan assets excluding interest income -6,455 5,877 Interest income on plan assets 1,394 2,036 Contributions from employer / employee 21,249 21,161 Benefit payments (-) -20,265 -17,254 Exchange differences 0 0 Other increase (decrease) -2,621 -1,917 Fair value of the plan assets, ending balance 285,545 295,297 4. Principal actuarial assumptions Discount rate used 0.9% 0.5% Expected rate of salary increase 3.4% 3.2% Inflation 1.9% 1.7% Mortality tables MR/FR MR/FR 5. Other information Term (in years) 15.74 14.00 Average actual return on plan assets -1.71% 2.79% Expected contribution in next financial year 17,750 18,894 Annual report 2021 | 211 6. Sensitivity analysis Discount rate 25 base point increase -4.7% -3.6% 25 base point decrease 2.9% 3.8% Expected rate of salary increase 25 base point increase 0.8% 1.9% 25 base point decrease -2.8% -1.8% AvH took out ‘defined benefit’ as well as ‘defined contribution’ pension plans. These plans are underwritten by insurers in class 21 (life insurance policies with guaranteed interest rate). Belgian law requires that employers guarantee a minimum yield of 3.25% on their own contributions to defined contribution plans; this applies to all payments made up to 31/12/2015 and until retirement age. On January 1, 2016, the Act of De- cember 18, 2015 came into effect. The WAP (Law on Supplementary Pensions) yield guaranteed by the employer is a ‘variable’ interest rate, linked to the yield on the bond market which will be defined each year as of January 1 on the basis of a formula specified in the Law on Supplementary Pensions. For the periods 2017 up to 2021, the guaranteed yield was 1.75%. The guarantee which the employer offers under the Law on Supplementary Pen- sions is a secondary guarantee: the employer only has to make up the difference if the yield guaranteed by the insurer on plan assets is lower than the legally guar- anteed yield. For that reason, a yearly actuarial calculation for the material defined contribution plans is carried out, in accordance with IAS 19R. For the non-material defined con- tribution plans, it will be annually verified whether the accumulated (mathematical) reserves are in line with the legally guaranteed minimum reserves. The accumu- lated reserves were more than sufficient at the end of 2021. In accordance with IAS 19R, an actuarial calculation is carried out according to the Projected Unit Credit method for the defined benefit plans. The plan assets are measured at the discounted value of the reserves, taking into account the interest rates guaranteed by the insurers. Actuarial gains and losses are reported as other comprehensive income in the equity (see the item ‘Actuarial gains and losses on defined benefit pension plans’ in the statement of changes in consolidated equity). 212 | Your partner for sustainable growth Note 27: Related parties 1. Related parties, excluding CFE – DEME (€ 1,000) Financial year 2021 Financial year 2020 Subsidiaries Associated participations Other related parties TOTAL 2021 Subsidiaries Associated participations Other related parties TOTAL 2020 I. Assets with related parties - balance sheet Financial fixed assets 0 11,449 0 11,449 0 14,264 0 14,264 Receivables and warranties: gross amount 0 11,449 0 11,449 0 14,264 0 14,264 Receivables and warranties: impairments 0 0 0 0 0 0 0 0 Amounts receivable 6,913 7,932 4 14,848 50,602 1,230 0 51,832 Trade debtors 499 21 4 524 938 523 0 1,462 Other receivables: gross amount 6,414 9,891 0 16,305 56,394 2,687 0 59,081 Other receivables: impairments 0 -1,981 0 -1,981 -6,730 -1,981 0 -8,711 Banks - receivables from credit institutions & clients 5,091 0 0 5,091 7,334 1 0 7,335 Deferred charges & accrued income 8,497 609 0 9,106 5,406 121 0 5,527 Total 20,501 19,989 4 40,494 63,342 15,616 0 78,958 II. Liabilities with related parties - balance sheet Financial debts 30,787 0 0 30,787 32,308 0 0 32,308 Subordinated loans 0 0 0 0 0 0 0 0 Other financial debts 30,787 0 0 30,787 32,308 0 0 32,308 Other debts 30 150 0 180 1,899 150 0 2,049 Trade payables 12 0 0 12 1,253 0 0 1,253 Other amounts payable 18 150 0 168 646 150 0 796 Banks - debts to credit institutions, clients & securi- ties 151,033 0 0 151,033 149,496 733 0 150,229 Accrued charges and deferred income 1,209 0 0 1,209 2,486 0 0 2,486 Total 183,059 150 0 183,209 186,189 883 0 187,072 III. Transactions with related parties - income statement Revenue 61,872 445 3 62,319 45,808 710 3 46,521 Rendering of services 2,232 75 3 2,311 2,130 45 3 2,178 Real estate revenue 48 0 0 48 131 0 0 131 Interest income of banking activities 0 0 0 0 1 19 0 20 Commissions receivable of banking activities 59,567 0 0 59,567 43,546 1 0 43,547 Revenue from construction contracts 0 0 0 0 0 191 0 191 Other operating revenue 25 369 0 394 0 454 0 454 Operating expenses (-) -88 0 0 -88 -172 -3,176 0 -3,348 Raw materials, consum., services & subcontracted work (-) -88 0 0 -88 -172 -3,176 0 -3,348 Interest expenses Bank Van Breda (-) 0 0 0 0 0 0 0 0 Impairment losses (-) 0 0 0 0 0 0 0 0 Financial result -832 1,568 0 736 693 1,295 0 1,989 Interest income 1,118 1,568 0 2,686 3,321 1,295 0 4,616 Interest expenses -1,950 0 0 -1,950 -2,628 0 0 -2,628 The loans that AvH (and subholdings) have granted to participations that are not fully consolidated are included in the above table. The interest rate charged for these intra-group loans is at arm’s length. The same applies for financing loans that Nextensa, Rent-A-Port and Green Offshore grant to their equity-method par- ticipations (or receive from them, as is the case at Rent-A-Port). Through the full consolidation of Bank Van Breda and the inclusion of Delen Private Bank using the equity method, the commercial paper of Bank Van Breda held by Delen Private Bank (144.4 million euros) and the time deposits (6.6 million euros) are reported as a debt of Bank Van Breda to a related party. Annual report 2021 | 213 2. Transactions with related parties – CFE – DEME • Ackermans & van Haaren (AvH) owns 15,720,684 shares of CFE and as a result is the primary shareholder of CFE with 62.10% of the total number of shares. • Under the service contracts which DEME and CFE concluded with AvH (in 2001 and 2015 respectively), amounts were paid of 1.2 million euros and 0.7 million euros respectively. • Transactions with related parties concerned mainly transactions with companies in which CFE and DEME have a joint control or a significative influence. These transactions are concluded at arm’s length. (€ 1,000) 2021 2020 Assets with related parties CFE-DEME 144,286 133,838 Non current financial assets 109,788 86,576 Trade and other receivables 29,043 39,342 Other current assets 5,455 7,920 Liabilities with related parties CFE-DEME 35,781 38,584 Other non current liabilities 15,061 9,269 Trade and other liabilities 20,720 29,315 (€ 1,000) 2021 2020 Revenues and expenses with related parties CFE-DEME 229,758 320,669 Revenue and revenue from auxiliary activities 242,452 337,302 Purchases and other operating expenses -17,505 -22,041 Net financial income/(expense) 4,811 5,408 3. Remuneration (€ 1,000) 2021 2020 Remuneration of the directors Tantièmes at the expense of AvH 605 598 Remuneration of the members of the executive committee Fixed remuneration 3,079 2,932 Variable remuneration 3,395 1,879 Share based payment 1,059 336 Group and hospitalisation insurance 367 484 Benefits in kind (company car) 33 35 4. The auditor EY received following fees related to: (€ 1,000) AvH Subsidiaries (1) Total 2021 AvH Subsidiaries (1) Total 2020 The statutory mandate 66 2,562 2,628 63 1,058 1,121 Special missions 0 0 - Other control missions 14 212 226 0 59 59 - Tax advice 6 419 425 6 330 335 - Other missions than statutory 8 70 79 0 27 27 Total 94 3,263 3,358 68 1,474 1,542 (1) Including jointly controlled subsidiaries accounted for using the equity method. 214 | Your partner for sustainable growth Note 28: Earnings per share 1. Continued and discontinued operations (€ 1,000) 2021 2020 Net consolidated result, group share (€ 1,000) 406,814 229,791 Weighted average number of shares (1) 33,148,250 33,137,532 Earnings per share (€) 12.27 6.93 Net consolidated result, group share (€ 1,000) 406,814 229,791 Weighted average number of shares (1) 33,148,250 33,137,532 Impact stock options 34,242 43,023 Adjusted weighted average number of shares 33,182,491 33,180,554 Diluted earnings per share (€) 12.26 6.93 2. Continued activities (€ 1,000) 2021 2020 Net consolidated result from continuing operations, group share (€ 1,000) 406,964 229,791 Weighted average number of shares (1) 33,148,250 33,137,532 Earnings per share (€) 12.28 6.93 Net consolidated result from continuing operations, group share (€ 1,000) 406,964 229,791 Weighted average number of shares (1) 33,148,250 33,137,532 Impact stock options 34,242 43,023 Adjusted weighted average number of shares 33,182,491 33,180,554 Diluted earnings per share (€) 12.26 6.93 (1) Based on number of shares issued, adjusted for treasury shares in portfolio Note 29: Proposed and distributed dividends A dividend of EUR 2.75 per share will be proposed for approval to the ordinary general meeting of shareholders which will take place on 23 May 2022. 1. Determined and paid out during the year (€ 1,000) 2021 2020 Dividend on ordinary shares distributed in: - Final dividend 2020: 2.35 euros per share -77,890 -76,813 2. Proposed for approval by the general meeting of May 23, 2022 (€ 1,000) Dividend on ordinary shares: - Final dividend 2021: 2.75 euros per share (1) -92,116 (1) Maximum amount of dividend, based upon the total number of shares, without taking into account the treasury shares. 3. Dividend per share (€) 2021 2020 Gross 2.7500 2.3500 Net (witholding tax 30%) 1.9250 1.6450 Annual report 2021 | 215 Note 30: Major events after balance sheet date • Early 2022, an agreement has been signed with Lone Star Funds for the sale of 100% of the share capital of Manuchar. The realisation of the transaction, which is expected in the second quarter of 2022, will generate cash revenue for AvH of approximately 140 million euros and a capital gain estimated at approx- imately 75 million euros. • Composition of the executive committee – Succession of Jan Suykens Some time ago, Jan Suykens expressed his desire to pass on the torch as CEO- chairman of the executive committee. He will be succeeded after the general meeting of May 23 by Piet Dejonghe and John-Eric Bertrand, who will take over the leadership of the group as co-CEOs. Jan Suykens will continue to provide his expertise to the AvH group as senior advisor. In this role, he will continue to actively exercise a number of board mandates, amongst others as chairman of Bank Van Breda and as vice-chairman of Delen Private Bank. • In the present circumstances it is impossible to tell what the impact in the short and the long term may be of the Russian-Ukrainian crisis. The short-term financial impact for the AvH group is small, since our participations are not, or only to a minor extent, active in the region. Our greatest concern is for the em- ployees who work in the region or who have Ukrainian nationality. 216 | Your partner for sustainable growth STATUTORY AUDITOR’S REPORT Independent auditor’s report to the general meeting of Ackermans & van Haaren NV for the year ended 31 December 2021. As required by law and the Company’s articles of association, we report to you as statutory auditor of Ackermans & van Haaren NV (the “Company”) and its subsid- iaries (together the “Group”). This report includes our opinion on the consolidated statement of the financial position as at 31 December 2021, the consolidated statement of the realized and un-realized results, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year ended 31 December 2021 and the disclosures (all elements together the “Consolidated Financial Statements”) and includes as well our report on other legal and regula- tory requirements. These two reports are considered as one report and are insep- arable. We have been appointed as statutory auditor by the shareholders' meeting of 27 May 2019, in accordance with the proposition by the Board of Directors following recommendation of the Audit Committee. Our mandate expires at the sharehold- ers' meeting that will deliberate on the Consolidated Financial Statements for the year ending 31 December 2021. We performed the audit of the Consolidated Fi- nancial Statements of the Group during 21 consecutive years. Report on the audit of the Consolidated Financial Statements 2021 Unqualified opinion We have audited the Consolidated Financial Statements of Ackermans & van Haaren NV, that comprise of the consolidated statement of the financial position as at 31 December 2021, the consolidated statement of the realized and un-real- ized results, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year ended 31 December 2021 and the disclosures, which show a consolidated balance sheet total of € 17,233,026,(000) and of which the consolidated income statement shows a profit for the year (attributable to the owners of the Company) of € 406,814,(000). In our opinion, the Consolidated Financial Statements give a true and fair view of the consolidated net equity and financial position as at 31 December 2020, and of its consolidated results for the year then ended, prepared in accordance with the International Financial Reporting Standards as adopted by the European Union (“IFRS”) and with applicable legal and regulatory requirements in Belgium. Basis for the unqualified opinion We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those standards are further described in the “Our responsibilities for the audit of the consolidated financial statements” section of our report. We have complied with all ethical requirements that are relevant to our audit of the Consolidated Financial Statements in Belgium, including those with respect of independence. We have obtained from the Board of Directors and the officials of the Company the explanations and information necessary for the performance of our audit and we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Consolidated Financial Statements of the cur- rent reporting period. These matters were addressed in the context of our audit of the Consolidated Fi- nancial Statements as a whole and in forming our opinion thereon, and conse- quently we do not provide a separate opinion on these matters. 1. Revenue recognition and contract accounting (Marine Engineering & Contracting) Companies concerned: CFE and DEME • Description of the key audit matter For the majority of its contracts (hereafter the “contracts” or the “projects”), the Group recognizes revenue and profit on the stage of completion based on the pro- portion of contract costs incurred for the work performed to the balance sheet date, relative to the estimated total costs of the contract at completion. The recognition of revenue and profit therefore relies on estimates in relation to the forecast total costs on each contract. Cost contingencies may also be included in these estimates to take account of specific uncertain risks, or disputed claims against the Group, arising within each contract. The revenue on contracts may also include variations and claims, which are recognized on a contract-by-contract basis when the addi- tional contract revenue can be measured reliably. Revenue recognition and contract accounting often involves a high degree of judg- ment due to the complexity of projects, uncertainty about costs to complete and uncertainty about the outcome of discussions with clients on variation orders and claims. This is a key audit matter because there is a high degree of risk and related management judgement in estimating the amount of revenue and associated profit or loss to be recognized, and changes to these estimates could give rise to im- portant variances. • Summary of audit procedures performed • We obtained an understanding of the process related to the contract follow up, the revenue and margin recognition and when applicable the provisions for losses at completion, and we considered the design of the related key internal controls, including management review controls. • Based on quantitative and qualitative criteria, we selected a sample of contracts has been selected to challenge the most significant and complex project esti- mates. For this testing we gained an understanding of the current status and history of the projects and discussed the judgments inherent to these projects with senior executive and financial management. We analyzed the differences with prior project estimates and assessed consistency with the developments of the project during the year. • Determination of the proper calculation of the percentage of completion and the related revenue and margin recognized for a sample of projects. • We compared the financial performance of projects against budget and historical trends. • We completed site visits for certain projects observed the stage of completion of these projects and discusses with site personnel the status and complexities of the project that could impact it’s total forecasted cost. Annual report 2021 | 217 • We analyzed correspondence with customers : around variations and claims and considered whether this information is consistent with the estimates made by the management. • We Inspected selected contracts for key clauses. We identified relevant contrac- tual clauses impacting the (un)bundling of contracts, delay penalties, bonuses or success fees and we assessed whether these key clauses have been appropri- ately reflected in the amounts recognized in the Consolidated financial state- ments. • Reference to information or notes in the Consolidated Financial statements The methodology applied in recognizing revenue and contract accounting is set out in note 1 (IFRS valuation rules) and note 14 (Inventories and construction contracts) to the Consolidated Financial Statements. 2. Uncertain tax positions (Marine Engineering & Contracting) Company concerned: DEME • Description of the key audit matter DEME operates it’s global business across a variety of countries subject to different tax regimes. The taxation of it’s operations can be subject to judgements and might result in diverging views of local tax authorities and that may span multiple years to get resolved. Where the amount of tax payable is uncertain, management es- tablishes an accrual based on it’s best estimate of the probable amount to settle the liability. Management exercises significant judgement in assessing the liability for uncertain tax positions at balance sheet date and changes to these estimates could give rise to important variances. • Summary of audit procedures performed • We obtained an understanding of the process in respect of accounting for (de- ferred) taxes and considered the design of the related controls. • We assessed the estimated probability of the identified tax risk and challenged management’s estimate of the potential outflows trough management inquiry and inspection of a review of the supporting documentation (changes in tax legislation, correspondence with tax authorities and tax advisors, available rul- ings). • We involved our tax professionals to assist us to evaluate management’s as- sumptions and application of relevant tax laws and regulations in assessing of the Group’s uncertain tax positions. • Reference to information or notes in the Consolidated Financial statements Refer to note 1 (IFRS valuation rules) and note 21 (Taxes). 3. Revenue recognition and valuation of inventories and construction contracts (Marine Engineering & Contracting, Real Estate & Senior Care) Companies concerned: CFE and Nextensa • Description of the key audit matter The valuation of the land positions and the incurred constructions costs for resi- dential property developments are based on the historical cost or lower net realiz- able value. The assessment of the net realizable values involves assumptions relat- ing to future market developments, permit decisions of governmental bodies, dis- count rates and future changes in costs and selling prices. These estimates involve various terms and are sensitive to scenarios and assumptions used and involve as such significant management judgement. Risk exists that potential impairments of inventories are not appropriately accounted for in the Consolidated Financial State- ments. Revenues and results are recognized to the extent that components (housing units) have been sold and based on the percentage of completion of the development. The recognition of revenue and profit therefore relies on estimates in relation to the forecasted total costs on each project. This often involves a high degree of judgement due to the complexity of projects and uncertainty about costs to complete. This is a key audit matter because there is a high degree of risk associated with estimating the amount of revenue and related profit to be recognized for the period and changes to these estimates could give rise to important variances. • Summary of audit procedures performed • We obtained an understanding of the process related to the contract follow up, the revenue and margin recognition, and we considered the design of the related key internal controls, including management review controls. • We have selected a sample of project developments and verified the costs in- curred to date, relating to land purchases and work in progress. We also recal- culated the percentage of completion at balance sheet date, agreed sales values to contracts, ans verified the accuracy of the revenue recognition formula. • We performed an assessment of the calculations of net realizable values and challenged the reasonableness and consistency of the assumptions and model used by management. • We evaluated the financial performance of specific projects against budget and historical trends, specifically in view of assessing the reasonableness of the costs to complete • Reference to information or notes in the Consolidated Financial statements Refer to note 1 (IFRS valuation rules) and note 14 (inventories and construction contracts) 4. Specific allowances for loans and advances to customers (Private banking) Company concerned: Bank Van Breda • Description of the key audit matter The net portfolio of loans and advances to customers amounted to € 5,748 million as at 31 December 2021. Loans and advances to customers are measured at amor- tized cost, net of the allowance for loan losses (€ 29.95million, including commit- ted loans not (yet) recognised in the balance sheet). Certain aspects of the accounting for allowance for loan losses require significant judgement by management, such as the identification of loans and advances to customers that are deteriorating, the assessment of objective evidence for impair- ment, the value of collateral and the estimation of the recoverable amount. The use of different modeling techniques and assumptions can lead to considerably different estimates of impairments for credit losses. Due to the significance of loans and advances to customers and the related esti- mation uncertainty, the valuation of loans and advances to customers is considered as a key audit matter. • Summary of audit procedures performed The following audit procedures were performed, amongst others: • Assessing the design and evaluation of the operating effectiveness of controls around the valuation and accuracy of loans and advances and collateral data, the determination of risk ratings and the process for identifying arrears and the management thereof. • Performing risk assessment aimed at identifying higher risk portfolios, including an assessment of management’s own portfolio stress tests. • Credit file reviews on a sample basis to test the recoverability of loans and ad- vances to customers. By doing so, challenging the probability of realization, and valuation of collateral and other possible sources of repayment. • Evaluation of the most important input variables and assumptions for the models used for the determination of impairment of loans and advances to customers calculated on a collective basis and testing of the arithmetic accuracy of the models. • Comparing Management’s key assumptions against the understanding of the relevant industries and business environments. • Assessing whether disclosures appropriately reflected the exposure to credit risk, including controls over identification and disclosure of forborne loans, collateral valuation and sensitivity of key assumptions. 218 | Your partner for sustainable growth • Reference to information or notes in the Consolidated Financial statements Refer to note 1 (IFRS valuation rules) and note 13 (Banks – receivables from credit institutions and clients) 5. Valuation of the investment properties (Real Estate & Senior Care) Companies concerned: Nextensa • Description of the key audit matter As per 31 December 2021 the Group presents Investment property for a total amount of € 1,408 million on its balance sheet. In accordance with the accounting policies and IAS 40 standard “Investment prop- erty”, investment property is valued at fair value, and the changes in the fair value of investment property are recognized in the income statement. The fair value of investment properties belongs to the level 3 of the fair value hier- archy defined within the IFRS 13 standard “Fair Value Measurement”. Some pa- rameters used for valuation purposes are based on data that can be observed to a limited extent (discount rate, future occupancy rate, …) and therefore require judgment of management. The audit risk appears in the valuation of these investment properties and is there- fore a key audit matter. • Summary of audit procedures performed The group uses external appraisers to make an estimate of the fair value of the investment properties of the Group, with the support of internal real estate valua- tion specialists, the valuation reports were evaluated. More precisely we have: • assessed the objectivity, the independence and the competence of the external appraisers, • tested the integrity of source data (contractual rentals, maturities of the rental contracts, …) used in their calculations and reconciled with underlying con- tracts, • and assessed the models, assumptions and parameters used in their reports (dis- count rates, future occupancy rates, …). • Reference to information or notes in the Consolidated Financial statements Assessment of the appropriateness of the information on the fair value of the in- vestment properties disclosed in note 1 (IFRS valuation rules) and note 10 (Invest- ment property at fair value) of the Consolidated Financial Statements. 6. Valuation of financial instruments (multiple segments) • Description of the key audit matter Different companies within the group use interest rate swaps (IRS) to hedge its interest rate risk on its variable rate debts. The measurement of the derivatives at fair value is an important source of volatility of the result and/or the shareholders’ equity. As a matter of fact. In accordance with IFRS 9 “Financial Instruments: Recognition and Measurement”, these derivatives are valued at fair value (consid- ered to belong to the level 2 of the fair value hierarchy defined by IFRS 13 “Fair Value Measurement”). The changes in fair value are recognized in the income statements except for those IRS for which the Company applies hedge accounting (“cash-flow hedging”), which allows to classify most of the changes in fair value in the caption of the shareholders’ equity (“Hedge reserves”). The audit risk ap- pears on the one hand in the complexities involved in determining the fair value of these derivatives and on the other hand in the correct application of hedge ac- counting for the IRS contracts that were classified by the Group as cash flow hedges and are therefore a key audit matter. • Summary of audit procedures performed • We have compared the fair values of the derivatives with the values communi- cated by the counterparties and the credit risk adjustments calculated by an ex- ternal specialist. • We have assessed the most important assumptions and the calculations per- formed by this external specialist. • Regarding the correct application of hedge accounting , we have evaluated the effectiveness tests performed by the external specialist involved by the Group and we have compared the volume of derivatives subject to hedge accounting with the volume of the variable rate debts projected on the future accounting years in order to identify any potential over hedging any potential overhedging which could potentially jeopardize the application of hedge accounting. • Assessment of the appropriateness of the information on the financial instru- ments disclosed in note 20 (Financial instruments) to the Consolidated Financial Statements. 7. Goodwill • Description of the key audit matter As per 31 December 2021 the Group presents goodwill for a total amount of € 328 million on its balance sheet. The impairment analysis is yearly performed by management based on different factors such as (i) stock exchange share prices, (ii) equity values, (iii) discounted cash flow analysis (“DCF analysis”) of the underlying participations based on fore- casts approved by the board of directors of the companies and (iv) sales prices based on ongoing negotiations. This requires assessment and valuation of the as- sumptions used by management, such as the underlying recoverable value of the participation. The determination of the future cash flows of the cash generating units (“CGU”) and of the used discount rate is complex and subjective. Changes in these assumptions can result in material deviations in the value-in-use calcula- tions, which influences the potential impairment loss to be recorded on goodwill. • Summary of audit procedures performed • Review of management’s process to identify the impairment indicators. • Assessing management’s method to determine the recoverable value of each of the investments, along with the related goodwill to ensure this follows the IFRS guidelines. • Assessing the appropriateness of the assumptions used by management to de- termine the recoverable value (with the help of internal specialists) as well as the impact of COVID-19 on these assumptions • Comparison of the operational cash flows with historical figures and trends. • Assessing the reasonableness of future cash flows used in the valuation exercise on goodwill based on the historical results, the business plan available and the evaluation of the historical accuracy of the assumptions used by management. • Checking whether the future cash flows were based on a business plan approved by the board of directors. • Performing of mathematical accuracy checks of the valuation model. • Assessment of the sensitivity analysis performed by management. Assessment of the appropriateness of the information on the financial instruments disclosed in note 1 (IFRS valuation rules – principles of consolidation) and note 8 (Goodwill) to the Consolidated Financial Statements. 8. Risks of the companies accounted for under the equity method • Description of the key audit matter A large number of companies are accounted for using the equity method in the Consolidated Financial Statements of the Group. Per 31 December 2021 this amounts to € 1,647 million in the balance sheet and they contribute for € 255 million in the consolidated result of the year. The information on participations accounted for using the equity method is included in note 11 to the Consolidated Financial Statements. The risks exists that key audit matters are related to those companies which are significant to the Consolidated Financial Statements of the Group. Delen Private Bank has acquired clientele, as a result of several acquisitions, which are included under intangible fixed assets, the majority of the purchased clientele is considered as intangible assets with an indefinite useful life. The statistical data from the past show that only a limited part of the purchased clientele has a definite useful life. With each acquisition of clientele, on the basis of the statistics, it is determined how much of the purchased clientele is to be considered as an intan- gible fixed asset with a certain useful life, which is amortized pro rata over this useful life. The remainder is not amortized. Management conducts an annual im- pairment analysis on the basis of its own developed model for both clientele with a definite and indefinite useful life, whereby the purchased clientele is subdivided per group office. The valuation of the purchased clientele is complex and requires estimates from the management. The valuation of the clientele is based on the assets entrusted by the clientele (Assets under management, hereinafter "AuMs") that represents the purchased clientele on which a factor is applied. A change in these parameters or the use of erroneous data would have an im- portant impact on the valuation of the purchased clientele. Annual report 2021 | 219 For these reasons, the valuation of the activated, acquired clientele is a key audit matter. • Summary of the procedures performed With regard to the valuation of the activated, acquired clientele of Delen Private Bank, the following audit procedures were carried out: • Assessment of the division of the existing clientele within the group per office and discussion of any changes in relation to previous periods. • Assessment of the parameters used (such as AuMs and factors), the methodol- ogy and the model used in accordance with IAS 36. • Analysis of the breakdown of purchased customers per office. • Verification of the factors used in the model with market data and reconciliation of the AuMs with the accounting inventories and of the applied market value with the market data. • Sensitivity analysis on the most important assumptions, which is mainly the cost- income ratio. • Recalculation of the recorded depreciation on the clientele with a certain useful life. • Assessment of the adequacy and completeness of note 11 (companies ac- counted for using the equity method) of the Consolidated Financial Statements. With respect to the key audit matters in the balance sheets of the companies ac- counted for using the equity method, the following audit procedures were per- formed, amongst others: • Communication of clear audit instructions to the component auditors indicating the possible key audit matters, specific audit risks, audit procedures to be per- formed according to the materiality levels determined. • Detailed review of the reported deliverables by the component auditors. • Critical evaluation of the used audit approach in accordance with the interna- tional auditing standards. • Discussion on the key audit matters with the component auditor and assessment of the reported clarifications. • Assessment of the adequacy and completeness of note 11 (companies ac- counted for using the equity method) of the Consolidated Financial Statements. Responsibilities of the Board of Directors for the preparation of the Consolidated Financial Statements The Board of Directors is responsible for the preparation of the Consolidated Fi- nancial Statements that give a true and fair view in accordance with IFRS and with applicable legal and regulatory requirements in Belgium and for such internal con- trols relevant to the preparation of the Consolidated Financial Statements that are free from material misstatement, whether due to fraud or error. As part of the preparation of Consolidated Financial Statements, the Board of Di- rectors is responsible for assessing the Company’s ability to continue as a going concern, and provide, if applicable, information on matters impacting going con- cern, The Board of Directors should prepare the financial statements using the go- ing concern basis of accounting, unless the Board of Directors either intends to liquidate the Company or to cease business operations, or has no realistic alterna- tive but to do so. Our responsibilities for the audit of the Consolidated Financial State- ments Our objectives are to obtain reasonable assurance whether the Consolidated Fi- nancial Statements are free from material misstatement, whether due to fraud or error, and to express an opinion on these Consolidated Financial Statements based on our audit. Reasonable assurance is a high level of assurance, but not a guaran- tee that an audit conducted in accordance with the ISAs will always detect a ma- terial misstatement when it exists. Misstatements can arise from fraud or error and considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Consolidated Financial Statements. In performing our audit, we comply with the legal, regulatory and normative frame- work that applies to the audit of the Consolidated Financial Statements in Belgium. However, a statutory audit does not provide assurance about the future viability of the Company and the Group, nor about the efficiency or effectiveness with which the board of directors has taken or will undertake the Company's and the Group’s business operations. Our responsibilities with regards to the going concern as- sumption used by the board of directors are described below. As part of an audit in accordance with ISAs, we exercise professional judgment and we maintain professional skepticism throughout the audit. We also perform the following tasks: • identification and assessment of the risks of material misstatement of the Con- solidated Financial Statements, whether due to fraud or error, the planning and execution of audit procedures to respond to these risks and obtain audit evi- dence which is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting material misstatements resulting from fraud is higher than when such misstatements result from errors, since fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • obtaining insight in the system of internal controls that are relevant for the audit and with the objective to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effec- tiveness of the Company’s internal control; • evaluating the selected and applied accounting policies, and evaluating the rea- sonability of the accounting estimates and related disclosures made by the Board of Directors as well as the underlying information given by the Board of Direc- tors; • conclude on the appropriateness of the Board of Directors’ use of the going- concern basis of accounting, and based on the audit evidence obtained, whether or not a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s or Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Consoli- dated Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going-concern; • evaluating the overall presentation, structure and content of the Consolidated Financial Statements, and evaluating whether the Consolidated Financial State- ments reflect a true and fair view of the underlying transactions and events. We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the audits of the subsidiaries. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities. We provide the Audit Committee within the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may rea- sonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Audit Committee within the Board of Directors, we determine those matters that were of most significance in the audit of the Consolidated Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our report, unless the law or regulations prohibit this. Report on other legal and regulatory requirements Responsibilities of the Board of Directors The Board of Directors is responsible for the preparation and the content of the Board of Directors’ report on the Consolidated Financial Statements, the non-fi- nancial information attached to the Board of Directors’ report, and other infor- mation included in the annual report. Responsibilities of the auditor In the context of our mandate and in accordance with the additional standard to the ISAs applicable in Belgium, it is our responsibility to verify, in all material re- spects, the Board of Directors’ report on the Consolidated Financial Statements, 220 | Your partner for sustainable growth the non-financial information attached to the Board of Directors’ report, and other information included in the annual report, as well as to report on these matters. Aspects relating to Board of Director’s report and other information included in the annual report In our opinion, after carrying out specific procedures on the Board of Directors’ report, the Board of Directors’ report is consistent with the Consolidated Financial Statements and has been prepared in accordance with article 3:32 of the Code of companies and associations. In the context of our audit of the Consolidated Financial Statements, we are also responsible to consider whether, based on the information that we became aware of during the performance of our audit, the Board of Directors’ report and other information included in the annual report, being: - 2021 at a glance - page 8; - Activity report - page 78; - Key figures 2021 – appendix contain any material inconsistencies or contains information that is inaccurate or otherwise misleading. In light of the work performed, there are no material incon- sistencies to be reported. The non–financial information required by article 3:32, § 2, of the Code of compa- nies and associations has been included in the Board of Directors’ report on the Consolidated Financial Statements. The Company has prepared this non-financial information based on "Sustainable Development Goals (SDG's)". However, we do not comment on whether this non-financial information has been prepared, in all material respects, in accordance with "Sustainable Development Goals (SDG's)". Independence matters Our audit firm and our network have not performed any services that are not com- patible with the audit of the Consolidated Financial Statements and have remained independent of the Company during the course of our mandate. The fees related to additional services which are compatible with the audit of the Consolidated Financial Statements as referred to in article 3:65 of the Code of companies and associations were duly itemized and valued in the notes to the Consolidated Financial Statements. European single electronic format (“ESEF”) European single electronic format (hereinafter "ESEF"), we have carried out the audit of the compliance of the ESEF format with the regulatory technical standards set by the European Delegated Regulation No 2019/815 of 17 December 2018 (hereinafter: "Delegated Regulation"). The board of directors is responsible for the preparation, in accordance with the ESEF requirements, of the consolidated financial statements in the form of an elec- tronic file in ESEF format (hereinafter 'the digital consolidated financial state- ments') included in the annual financial report available on the portal of the FSMA (https://www.fsma.be/en/data-portal). It is our responsibility to obtain sufficient and appropriate supporting evidence to conclude that the format and markup language of the digital consolidated financial statements comply in all material respects with the ESEF requirements under the Delegated Regulation. Based on the work performed by us, we conclude that the format and tagging of information in the digital consolidated financial statements included in the annual financial report available on the portal of the FSMA (https://www.fsma.be/en/data- portal) of Ackermans & van Haaren per 31 December 2021 are, in all material respects, in accordance with the ESEF requirements under the Delegated Regula- tion. Other matters This report is consistent with our supplementary declaration to the audit committee as specified in article 11 of the regulation (EU) nr. 537/2014. Diegem, March 29, 2022 EY Bedrijfsrevisoren BV Statutory auditor, Represented by Patrick Rottiers - Partner Wim Van Gasse - Partner * Acting on behalf of a BV/SRL Annual report 2021 | 221 STATUTORY ANNUAL ACCOUNTS In accordance with article 3:17 CCA, the statutory annual accounts of Ackermans & van Haaren, are presented in short form. In accordance with article 3:10 and 3:12 CCA, the full annual accounts, the annual report of the board of directors and the report of the statutory auditor are filed with the National Bank of Belgium. The statutory auditor has given an unqualified opinion regarding the statutory ac- counts. The annual accounts, the annual report of the board of directors and the report of the statutory auditor are available at the registered office of the company upon simple request. The statutory annual accounts are prepared in accordance with the Belgian General Accounting Principles. Address: Begijnenvest 113 - 2000 Antwerp, Belgium Phone: +32 3 231 87 70 - E-mail: [email protected] Balance sheet – assets (€ 1,000) Note 2021 2020 2019 Fixed assets 2,076,142 1,916,677 1,907,604 I. Formation expenses II. Intangible assets 28 0 0 III. Tangible assets (1) 8,994 9,331 9,606 A. Land and buildings 7,559 6,024 6,230 C. Furniture and vehicles 1,435 1,450 1,418 D. Leasing and other similar rights 1 2 3 E. Other tangible assets 0 1,856 1,955 F. Assets under construction and advanced payments IV. Financial assets 2,067,120 1,907,346 1,897,998 A. Affiliated enterprises (2) 1,781,619 1,638,098 1,650,993 1. Participating interests 1,762,644 1,618,215 1,640,726 2. Amounts receivable 18,976 19,883 10,267 B. Other enterprises linked by participating interests (3) 259,568 252,080 229,209 1. Participating interests 259,568 252,080 229,209 2. Amounts receivable 0 0 0 C. Other financial assets 25,933 17,168 17,797 1. Shares 25,925 17,160 17,789 2. Amounts receivable and cash guarantees 8 8 8 Current assets 138,067 122,669 245,786 V. Amounts receivable after more than one year 0 10,000 0 A. Trade receivables B. Other amounts receivable 0 10,000 VI. Stocks and contracts in progress A. Stocks 1. Raw materials and consumables 2. Work in progress 3. Finished goods 4. Goods purchased for sale 5. Immovable property acquired or constructed for resale 6. Advance payments B. Contracts in progress VII. Amounts receivable within one year 63,986 54,585 10,808 A. Trade receivables 1,224 1,199 1,239 B. Other amounts receivable (4) 62,762 53,386 9,569 VIII. Investments (5) 54,975 51,592 210,526 A. Treasury shares 40,385 38,504 39,777 B. Other investments and deposits 14,590 13,088 170,749 IX. Cash at bank and in hand 17,882 5,216 23,329 X. Deferred charges and accrued income 1,224 1,276 1,123 Total assets 2,214,209 2,039,346 2,153,390 222 | Your partner for sustainable growth Balance sheet – liabilities (€ 1,000) Note 2021 2020 2019 Equity (6) 2,061,899 1,920,565 2,065,800 I. Capital 2,295 2,295 2,295 A. Issued capital 2,295 2,295 2,295 B. Uncalled capital (-) II. Share premium account 111,612 111,612 111,612 III. Revaluation surplus IV. Reserves 123,576 115,258 109,754 A. Legal reserve 248 248 248 B. Reserves not available for distribution 40,420 38,539 39,817 1. Own shares 40,385 38,504 39,783 2. Other 35 35 35 C. Untaxed reserves D. Reserves available for distribution 82,908 76,471 69,689 V. Profit carried forward 1,824,416 1,691,399 1,842,138 Loss carried forward (-) VI. Investment grants Provisions and deferred taxation 0 0 0 VII. A. Provisions for liabilities and charges 0 0 0 1. Pensions and similar obligations 0 0 0 2. Taxation 3. Major repairs and maintenance 4. Other liabilities and charges B. Deferred taxation Creditors 152,311 118,781 87,590 VIII. Amounts payable after more than one year 0 1 2 A. Financial debts 0 1 2 B. Trade debts C. Advances received on contracts in progress D. Other amounts payable IX. Amounts payable within one year 152,011 118,616 87,117 A. Current portion of amounts payable after more than one year 1 1 1 B. Financial debts (7) 53,506 36,758 30,107 1. Credit institutions 2. Other loans 53,506 36,758 30,107 C. Trade debts 727 225 609 1. Suppliers 727 225 609 E. Taxes, remuneration and social security 3,868 2,357 4,340 1. Taxes 73 127 84 2. Remuneration and social security 3,795 2,230 4,256 F. Other amounts payable (8) 93,909 79,275 52,060 X. Accrued charges and deferred income 300 164 471 Total liabilities 2,214,209 2,039,346 2,153,390 Annual report 2021 | 223 Income statement (€ 1,000) Note 2021 2020 2019 Charges A. Interests and other debt charges 36 176 284 B. Other financial charges 1,067 1,041 939 C. Services and other goods 10,350 8,826 10,965 D. Remuneration, social security costs and pensions 2,585 2,279 2,036 E. Other operating charges 259 213 204 F. Depreciation of and other amounts written off on formation expenses, intangible and tangible assets 682 651 603 G. Amounts written off (9) 11,011 4,540 6 1. Financial assets 0 1,571 0 2. Current assets 11,011 2,969 6 H. Provisions for liabilities and charges 0 0 0 I. Loss on disposal of (10) 46,479 7,183 11,587 1. Intangible and tangible assets 0 0 2 2. Financial assets 18,469 4,097 9,888 3. Current assets 28,010 3,086 1,697 J. Extraordinary charges 0 0 0 K. Income taxes 84 147 65 L. Profit for the period 234,382 10,321 213,548 M. Transfer to the untaxed reserves N. Profit for the period available for appropriation 234,382 10,321 213,548 Appropriation account A. Profit to be appropriated 1,925,781 1,852,459 1,851,909 1. Profit for the period available for appropriation 234,382 10,321 213,548 2. Profit brought forward 1,691,399 1,842,138 1,638,361 Total 1,925,781 1,852,459 1,851,909 224 | Your partner for sustainable growth Income statement (€ 1,000) Note 2021 2020 2019 Income A, Income from financial assets 116,124 23,572 108,235 1. Dividends (11) 114,687 22,116 106,460 2. Interests 599 544 787 3. Tantièmes 838 912 988 B. Income from current assets 2,191 1,878 2,369 C. Other financial income 0 0 1 D. Income from services rendered 2,030 1,995 1,960 E. Other operating income 359 377 330 F. Write back to depreciation of and to other amounts written off intangible and tangible assets G. Write back to amounts written off (10) 46,764 7,009 16,359 1. Financial assets 20,004 7,003 12,188 2. Current assets 26,760 6 4,171 H. Write back to provisions for liabilities and charges 0 0 0 I. Gain on disposal of (12) 139,467 196 109,349 1. Tangible and intangible assets 14 5 11 2. Financial assets 139,022 18 109,212 3, Current assets 431 172 126 J, Extraordinary income 0 348 1,633 K. Regularisation of income taxes and write back to tax provisions L. Loss for the period 0 0 0 M. Transfer from untaxed reserves N. Loss for the period available for appropriation 0 0 0 Appropriation account C. Transfers to capital and reserves 8,317 5,504 8,980 3. To other reserves 8,317 5,504 8,980 D. Result to be carried forward 1,824,416 1,691,399 1,842,138 1. Profit to be carried forward 1,824,416 1,691,399 1,842,138 F. Distribution of profit 93,048 155,556 791 1. Dividends 92,116 154,703 0 2. Tantièmes 630 605 598 3. Profit premium for employees 302 248 193 Total 1,925,781 1,852,459 1,851,909 Annual report 2021 | 225 Balance sheet Assets 1. Tangible assets mainly comprise the buildings and furnishing of the real estate located in Antwerp at Begijnenvest 113 and at Schermersstraat 44, where Ackermans & van Haaren has its registered office. The lease contract with the subsidiary Nextensa for the building at Schermersstraat 42 was terminated at the end of October. Consequently, the residual carrying amount was reclassi- fied from ‘Other tangible assets’ to ‘Land and buildings’. 2. Financial fixed assets - Affiliated enterprises: the increase by 144.4 million euros relative to 2020 is mainly due to the contribution of Extensa and LREM to Leasinvest Real Estate Management (LREM), which was converted to Nex- tensa. A capital increase took place at Rent-A-Port. Finally, the company GIB was liquidated at the year-end. 3. Financial fixed assets - Other enterprises linked by participating interests: in 2021, 2.3 million euros was invested in increasing the participation in SIPEF to 35.13%. An additional 4 million euros was invested in Biotalys and 1.2 million euros in MRM Health by capital increases. 4. The other amounts receivable within one year consist mainly of recoverable taxes and deposits granted to different subholdings. 5. The movements in the item ‘Investments’ are explained by the movement of the position in treasury shares and the value adjustments on the investment portfolio of AvH. Liabilities 6. AvH’s shareholders’ equity increased by 141.3 million euros compared to year-end 2020 (both figures include the dividend proposed to the general meeting of shareholders). This increase is primarily the result of the profit for the year of 234.4 million euros less a proposed dividend of 2.75 euros gross per share, to a total (maximum) amount of 92.1 million euros. These statutory financial statements already take account of this maximum amount by way of payable dividend (see other amounts payable). The final dividend amount will be determined on the basis of the number of shares that are entitled to a dividend, i.e. without the treasury shares that are not entitled to a dividend. 7. On December 31, 2021, AvH only had short-term financial debts in the form of commercial paper to an amount of 42.0 million euros. The balance corre- sponds to deposits received from subholdings. 8. The other amounts payable as at December 31, 2021 include the dividend payment proposed to the general meeting of shareholders. Income statement Charges 9. The impairment losses primarily relate to adjustments made in order to align the carrying value of the investment portfolio to its market value at December 31, 2021. 10. The liquidation of GIB gave rise to a loss of disposal of 18.4 million euros realised on the shares and a loss of disposal of 26.2 million euros realised on the receivables, which were nevertheless entirely compensated by reversals of previously recognised impairment losses. Income 11. AvH received 114.7 million euros in dividends from its direct participations. In 2020, no dividends had been received from a.o. CFE, FinAx, Profimolux, Green Offshore and SIPEF. 12. In 2021, the companies Extensa and LREM were contributed to Leasinvest, which was converted to Nextensa. On that occasion, a capital gain of 138.5 million euros was realised. In 2020, no significant capital gains had been re- alised. 226 | Your partner for sustainable growth GENERAL INFORMATION REGARDING THE COMPANY AND THE CAPITAL General information regarding the company Registered office - registration details Begijnenvest 113, 2000 Antwerp, Belgium 0404.616.494 RPR Antwerp - Department Antwerp Email adress : [email protected] Website : https://www.avh.be Incorporation date, last amendment bylaws The company was incorporated on 30 December 1924 by notarial deed, published in full in the Annexes to the Belgian Official Gazette of 15 January 1925 under number 566. The bylaws have been modified several times and for the last time by notarial deed of 9 November 2020, published by excerpt in the Annexes to the Belgian Official Gazette of 25 November 2020, under number 20356891, with a supplementary excerpt published in the Annexes to the Belgian Official Gazette of 16 December 2020, under number 20361786. Duration of the company Indefinite Legal form, applicable law Limited liability company under Belgian law. Statutory purpose The statutory purpose of the company includes the following: (a) the project study, supervision and management of all kinds of public and pri- vate works, mainly in the field of construction in general, as well as the or- ganization and administration of all companies or businesses and assistance to them in all forms; (b) the contracting of all sea- and land based public or private works in the area of construction and, in particular, all kinds of sea- and river-based works, ma- jor irrigation activities and the canalization of waterways, major dewatering and pumping works, dredging, drilling, sounding, wellsinking, drainage, the building of permanent structures, digging, and the general contracting of con- struction works, as well as the re-floating of boats and ships; (c) sea- and land-based prospecting for industrial extraction, mainly of crude oil or natural gas, as well as mineral products in general; (d) the operation, production, processing, distribution, purchase, sale and transport of all products derived from industrial extraction; (e) the acquisition, operation, development and transfer of land, real estate and any property entitlement; (f) the acquisition, the operation and the realization, in any form whatever, of intellectual property rights, licenses and concessions; (g) the acquisition of a participation, by way of subscription, contribution, mer- ger, cooperation, financial intervention or in any other way, in any company, enterprise, operation or association in Belgium or abroad, already existing or still to be incorporated; (h) the management, development and realization of these participations; (i) involvement, directly or indirectly, in the management, control or dissolution of any company, enterprise, business or association in which it has a partici- pation; (j) providing assistance to the board of directors or to management or support in all possible management matters of companies, businesses or associations in which it has a participation, and in general, performing all acts constituting entirely or partially, directly or indirectly, holding activities. The company may carry out all civil, commercial, industrial and financial activities as well as activities relating to real and movable property that are linked, directly or indirectly, to its statutory purpose or that may enhance the realization thereof. The company may provide securities or guarantee in favor of companies, enter- prises, businesses or associations in which it has a participation, act as representa- tive or agent, provide advances, credit facilities and mortgages or other securities. The company’s activities may be carried out both abroad and in Belgium. Consultation of documents regarding the company The statutory and consolidated annual accounts of the company are deposited with the National Bank of Belgium. A coordinated version of the company bylaws can be consulted with the clerk of the Business Court of Antwerp - Division Antwerp. The annual financial report is sent to the registered shareholders and to anyone who so requests. The coordinated version of the company bylaws and the annual financial report are also available on the company’s website (www.avh.be). Annual report 2021 | 227 General information regarding the company’s capital Subscribed capital The subscribed capital is 2,295,277.90 euros. The capital is fully paid-up and is represented by 33,496,904 shares without nominal value. Capital increases The most recent capital increase was decided upon on 11 October 1999, as part of the merger through acquisition of Belcofi NV by Ackermans & van Haaren NV. Authorized capital In accordance with the decision of the extraordinary general meeting dated 9 No- vember 2020, the board of directors is authorized to increase the capital in one or more instalments with a maximum (aggregate) amount of 500,000 euros (exclud- ing issuance premium) and this in accordance with the terms and conditions set forth in the special report of the board of directors prepared in accordance with article 7:199 CSA. The board of directors can use this authorization for a period of five years from 25 November 2020. The board of directors can also make use of the authorized capital in case of a public takeover bid on securities issued by the company, in accordance with the provisions and within the limits of article 7:202 CSA. The board of directors is allowed to use this authorization in case the notification of a public takeover bid by the Financial Services and Markets Authority to the company is received not later than three years as from 9 November 2020. The authorizations can be renewed in accordance with legal provisions. Capital increases decided pursuant to these authorizations will be carried out in accordance with the modalities specified by the board of directors, including among others by contribution in cash or in kind, with or without share premium, by incorporation of, distributable or non-distributable, reserves and share premi- ums and profits carried forward, with or without the issuance of new shares with or without voting rights, below, above or at par value, in accordance with the mandatory rules prescribed by the CCA. The board of directors may use this authorization to issue, subordinated or non- subordinated, convertible bonds, subscription rights, bonds with subscription rights or other securities, in accordance with the conditions set out in the CCA. The board of directors is authorized, when exercising its powers under the author- ized capital, to limit or cancel the statutory preferential subscription right of the shareholders in the interest of the company, including in favor of one or more specific persons or of members of the personnel of the company or of its subsidi- aries. Nature of the shares The fully paid up shares as well as other securities of the company may exist as registered or dematerialized securities. Each holder may, at any time and at his/her/its own expenses, request the conversion of his/her/its paid in securities into another form, within the limits of the law. The securities are indivisible vis-à-vis the company which can suspend the rights of any share regarding which disputes would arise as to the ownership, usufruct or naked ownership. Co-owners, usufructuaries and bare-owners must be repre- sented by a common authorized representative and notify the company accord- ingly. In case of usufruct, the usufructuary shall exercise all the rights attached to the shares, and the bare-owners of the share shall be represented vis-à-vis the com- pany by the usufructuary, except with respect to (the exercise of) the preferential subscription right, which belongs to the bare owner(s). This rule applies except as otherwise provided in an agreement between the parties or in a will. In that case, the bare owner(s) and the usufructuary(ies) must notify the company in writing of such an arrangement. ESEF INFORMATION Homepage of reporting entity www.avh.be LEI code of reporting entity 5493005E2GHATS0Z6J59 Name of reporting entity or other means of identification Ackermans & van Haaren Domicile of entity Belgium Legal form of entity Naamloze vennootschap Country of incorporation Belgium Address of entity's registered office 2000 Antwerp, Begijnenvest 113 Principal place of business Worldwide Description of nature of entity's operations and principal activities Industrial Group Name of parent entity Ackermans & van Haaren Name of ultimate parent of group Ackermans & van Haaren Explanation of change in name of reporting entity or other means of identi- fii f d f di i id N/A Length of life of limited life entity Period covered by financial statements 228 | Your partner for sustainable growth LEXICON ESG terminology • BACA (Belgian Alliance for Climate Action): a platform for Belgian organisations that want to reduce their CO 2 emissions, show climate ambition and use SBTi (Science Based Targets initiative) to define their goals. • BREEAM (Building Research Establishment Environmental Assessment Method): international sustainability benchmark and standard for the optimal realisation (new construction) or renovation (buildings in use) and exploitation of buildings with a minimal environmental impact, based on scientifically sub- stantiated sustainability metrics and indices encompassing a range of environ- mental issues, such as energy and water use assessment, the impact on health and well-being, pollution, transport, materials, waste, ecology and management processes. • Circularity: the reuse of raw materials, components and products after their useful life so that their value can be preserved. • CHCO: Chief Human Capital Officer. • CSR: corporate social responsibility. • CO 2 emissions - scope 1: all direct emissions from sources that are owned or controlled by the company (e.g. combustion of fuel and natural gas). • CO 2 emissions - scope 2: all indirect emissions from the production of elec- tricity that is purchased by the company. Scope 2 emissions physically occur in the installation where the electricity is generated. • CO 2 emissions – scope 3: indirect emissions from activities of a company, such as emissions from the production of sourced products (upstream) or from products, services or projects sold by the company (downstream). • Corporate governance: organisation & processes of the managing bodies that define the strategy and monitor its implementation. • Diversity, equity & inclusion or DEI: this relates to the involvement of differ- ent views and avoiding discrimination, by promoting diversity in various areas, such as gender, religious beliefs or background, and to the implementation of a policy of inclusion. • DNSH (Do No Significant Harm): the concept of ‘avoiding significant harm’ that is used in the EU Taxonomy as one of the conditions to classify an activity as ‘green’. • (% of) Shareholders’ equity: calculation method to indicate what percentage of the assets managed by AvH meet certain standards of the ESG policy. It in- volves determining what share the assets in question represent in the consoli- dated shareholders’ equity of AvH (group share). • EPC rating: the energy rating stated on the energy performance certificate. It is a coefficient indicating the primary energy consumption per square metre of floor area (kW/m²). The lower the EPC rating, the less energy is needed to heat, and the better the energy performance. • ESG: Environment, Social & Governance. • ESG policy: statement setting out the company’s approach to environmental, social and governance aspects, along with the plan to accomplish this mission, as well as the indicators used to measure progress made. • ESG stewardship: the influence that investors exert on participations to max- imise the overall long-term economic, social and environmental value. • EU Taxonomy: regulations that determine which investments can be classified as ‘green’ and which contribute to the realisation of the EU Green Deal. The classification is based on technical screening criteria (TSC) and minimum criteria for the avoidance of significant harm (DNSH). • GRI (Global Reporting Initiative): an international organisation that draws up guidelines for sustainability reporting. • Innovation policy: statement setting out a company’s innovation approach, and how it seeks to achieve objectives, taking into account their long-term im- pact on profitability. • Integrity code: statement that may comprise the following integrity aspects: anti-corruption policy and procedures, human rights policy, whistle-blower pol- icy and procedures, compliance policy and practices (e.g. where relevant anti- money-laundering, know your customer (KYC), etc.). • KPI: Key Performance Indicator. • Material (in materiality matrix): an aspect that (i) can have a significant positive or negative financial impact on the activities or the shareholders’ equity of a company, of which (ii) a stakeholder expects that it is carefully managed with high priority. • Human rights: the rights as enshrined in the Universal Declaration of Human Rights. • NPS (Net Promoter Score): this can be determined by putting one question to the client: How likely are you to recommend us to a friend or colleague? The respondent can reply by assigning a score from 0 to 10. The scores are divided into three groups: Promoters: respondents who gave a score of 9 or 10; Neu- trals: respondents who gave a score of 7 or 8; Critics: respondents who gave a score of 0 to 6. The score is calculated as follows: NPS = % promoters - % critics. • Reporting: relates to financial and non-financial reporting, with emphasis on material aspects. • Risk management: structured handling of risks (by audit & control, proce- dures, manuals, committees, etc.). • RSPO (Roundtable on Sustainable Palm Oil): an independent organisation that develops global standards for the production of sustainable palm oil. • SASB (Sustainability Accounting Standards Board): an international or- ganisation that sets guidelines for businesses on relevant sustainability reporting to investors. • SBTi (Science Based Targets initiative): an initiative that defines best prac- tices in the area of CO2 emission reductions and targets in line with the goals of the Paris Climate Agreement. • SDGs (Sustainable Development Goals): Sustainable Development Goals of the United Nations that constitute a call for action to promote prosperity and at the same time protect the planet against climate change. They encompass strategies that support economic growth and address social needs (education, health, social protection and employment, etc.). • SFDR (Sustainable Finance Disclosure Regulation): regulation concerning the disclosure of information on sustainability in the financial sector. The idea is Annual report 2021 | 229 to improve the disclosure of information to investors on the sustainability impact of investment policies and investment decisions. • Solvency and long-term profitability: healthy balance sheet structures, with business plans and strategies that make it possible to achieve a fair return in the long term and enable the investments required for that purpose. • Talent management: taking care of the human capital needed for the proper functioning of the company concerned (recruitment, training, personal develop- ment, appraisal, well-being, etc.), where the talents of staff members can emerge and be used in the best possible way. • TSC (Technical Screening Criteria): technical screening criteria defined for each economic activity in the EU Taxonomy, and used to determine whether a particular activity can be classified as ‘green’. • UN PRI (United Nations Principles of Responsible Investment): frame- work of the United Nations that focuses on a responsible investment policy as shareholder, where ESG factors are taken into account in order to achieve proper returns by managing risks and opportunities. • Responsible shareholding: structured monitoring as a shareholder of ESG aspects in participations (e.g. defining and monitoring an ESG strategy and re- lated processes). • Responsible products and services: products or services that match the needs of customers/users and are produced or provided in a sustainable way. • Responsible investment policy: investing with a view to a sustainable mix of activities. This means that investments are first examined in terms of whether the company is active in a sector that AvH wishes to invest in, whether in sensi- tive sectors it scores well on relevant ESG aspects, and whether it is active in a sector that has a positive impact on ESG goals. It may also lead to divestments from companies. • Value creation: the average growth (CAGR) of the consolidated shareholders’ equity (group share), including dividends, measured over a certain period of time. Financial and legal terminology • Cost-income ratio: the relative cost efficiency (cost versus income) of the banking activities. • Common Equity Tier1 capital ratio (CET1): the regulatory core capital buffer held by banks to offset any losses. • EBIT: Earnings before interest and taxes. • EBITDA: EBIT plus depreciation and amortisation on fixed assets • ESEF: the European Single Electronic Format is an electronic reporting format in which issuers on EU regulated markets must prepare their annual financial re- ports. • Rental yield based on fair value: rental yield is only calculated on buildings in operation, excluding the projects and the assets held for sale. • Net financial position: cash & cash equivalents and short-term investments minus short- and long-term financial debt. • Return on equity (ROE): the relative profitability of the group, more particu- larly the amount of net income returned as a percentage of shareholders’ equity. • SPV (Special Purpose Vehicle): a company in which a project or part of a project is contained. • TLTRO (Targeted longer-term refinancing operations): an ECB instru- ment that encourages banks to provide loans to businesses and consumers. • Real estate portfolio: the outstanding capital employed equals the sum of the shareholders’ equity and the net financial debt of the real estate division. • CCA: Code of Companies and Associations. • XBRL: An electronic language, specifically designed for the exchange of finan- cial reporting over the Internet. 230 Your partner for sustainable growth Contact Questions can be asked by phone on +32 3 231 87 70 or by e-mail [email protected] to the attention of Jan Suykens or Tom Bamelis. Ackermans & van Haaren NV Begijnenvest 113 2000 Antwerp, Belgium Phone +32 3 231 87 70 E-mail: [email protected] Website: www.avh.be RPR Antwerpen VAT: BE 0404.616.494 Photos Ackermans & van Haaren © Ian Segal Concept and design Mission to Mars nv (www.missiontomars.agency) The digital version of this annual report can be consulted at www.avh.be Dit jaarverslag is ook verkrijgbaar in het Nederlands. The Dutch version of this document should be considered as the official version. May 19, 2022 .................................................. Interim statement Q1 2022 May 23, 2022 .................................................. General meeting August 31, 2022 ......................................... Half-year results 2022 November 23, 2022 ................................ Interim statement Q3 2022 FINANCIAL CALENDAR ANNUAL REPORT 2021 Ackermans & van Haaren NV Begijnenvest 113 2000 Antwerp - Belgium Tel. +32 3 231 87 70 [email protected] www.avh.be ANNUAL REPORT 2021 YOUR PARTNER FOR SUSTAINABLE GROWTH 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